2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Zhejiang Dahua Technology Co., Ltd.
2023 Annual Report
Stock Code: 002236
Stock Abbreviation: DAHUA
Date of Disclosure: April 2024
This document is a translated version of the Chinese version 2023 Annual Report (“2023 年年度报告全文”),
and the published annual report in the Chinese version shall prevail.
The complete published Chinese 2023 Annual Report may be obtained at http://www.cninfo.com.cn.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, Directors, Supervisors and Senior
Management hereby guarantee that the information presented in this report are true,
accurate, and complete without any false records, misleading statements or material
omissions, and they will bear joint and several liability for such information.
Fu Liquan, the Company's legal representative, Xu Qiaofen, chief accountant, and
Zhu Zhuling, person in charge of accounting institution (Accounting Officer) hereby
declare and warrant that the financial statements in the annual report are authentic,
accurate, and complete. All directors attended the meeting of the Board of Directors for
deliberation of this annual report.
During the reporting period, there was no significant change in the risks faced by
the Company. The Company has been trying to identify all kinds of risks and actively
take counter-measures to avoid and reduce the risks.
(1) Risk of technology upgrading: The smart IoT industry is a typical
technology-intensive industry, featuring extremely fast upgrading. If the Company is
unable to keep up with development trends of industrial technologies, to pay full
attention to customers' diversified needs, and to devote sufficient R&D investments, it
may still face the risk of losing market competitiveness due to discontinuous innovation.
By increasing R&D investment, the Company continues to strengthen research on
such core technologies as multidimensional awareness, AI large model, video cloud,
big data, network communication, cyber security, machine vision, and reserves product,
technology, management talent resources for a broader market in the future, so as to
achieve sustainable and steady business development.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Risk of business model change: With the development of IoT, artificial
intelligence, big data, cloud computing, network communications, among other
technologies, as well as the upgrades of smart device applications, the business model
in the IoT era may have an impact on the traditional industry development. If an
enterprise fails to grasp opportunities brought about by the business model
transformation in a timely manner, it may face the risk that the original market pattern
becomes broken. The Company continues to focus on and study the major changes in
global economy, industry and technology, analyze the industry development logic, and
predict the evolution of smart IoT industry, the continuous integration of video,
information communication and digital technologies, and the diversification and
uncertainty of customer demands. While consolidating its current advantageous
market, the Company is also actively exploring and piloting new businesses and new
commercial modes, with business and technical layout.
(3) Risk of declined local fiscal payment capacity: At present, local fiscal debt
is relatively high. If the local fiscal payment capacity declines, it may slow down the
growth of industry demand, prolong the construction period of projects, extend the
collection of capital, and delay customers' payments. The Company continues to
improve the internal control system and optimize the project review methods, select
local projects carefully and assess project risks systematically with prudent
assessment of the market logic and cash flow balance logic, and reasonable control of
risks. In addition, it formulates plans to deal with potential risks such as cash flow
shortage, project delay, and payment delay.
(4) Exchange rate risk: The Company's export transactions have been mostly
settled in U.S. dollars. As our overseas business is in continuous growth, the
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
fluctuation of exchange rate may affect our profitability. The Company hedges and
avoids exchange rate risks by centralized management of foreign exchange funds and
hedging of purchase payments in line with its main use of U.S. dollars as the
settlement currency.
(5) Risk of product safety: The Company attaches great importance to and
continuously strengthens resource investment to ensure safe and reliable system
operations so as to respond to product security risks on the Internet. However, hackers
attacks, computer viruses, physical security vulnerabilities, natural disasters, accidents,
power interruptions, telecommunications failures, terrorism, and warfare events may
still occur from time to time, resulting in security vulnerabilities, system failures, or
service interruptions. The Company has founded a cyber security committee, and set
up a professional security team to develop company-level product safety plans,
ensuring product safety in the whole process from demands, design, to coding and
testing. At the same time, the Company actively carries out technical exchanges and
cooperation with mainstream safety enterprises, safety evaluation agencies and
corresponding industry associations to provide customers with safe products and
solutions.
(6) Intellectual property risk: The promotion of the Company's globalization
strategy and its own brand strategy may expose the Company to intellectual property
rights risks and patent infringement, as well as such risks as business relations,
fluctuations in the public opinion environment, increased legal proceedings and rising
costs. With a high priority on technological innovation, the Company has established a
mechanism for the protection and management of intangible assets such as innovation
achievements, own brands and trade secrets, so as to continuously gather
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
advantageous intellectual property assets; with the establishment of an intellectual
property compliance and risk control system, the Company continuously strengthens
its ability to understand and master intellectual property laws and regulations as well
as the administrative and judicial environment in the regions where it operates.
(7) Risks of international operations: The Company's products and solutions
are available in over 100 countries and regions worldwide. As a result, the Company's
international operations may face risks such as trade protectionism, local political
conflicts, increasingly complex legal compliance requirements, and a sustained
slowdown in global economic growth. The Company actively guards against and
responds to risks of international operations by establishing an overseas compliance
risk control system. It continuously strengthens the understanding and adaptability of
the laws and regulations as well as the political and economic environment of the
regions where its business is involved, and formulates differentiated business
strategies in accordance with the changes in politics and economy of different regions
to reduce operational risks.
(8) Supply chain security risks: The Company pays attention to the operating
risks of suppliers. By establishing an operating risk data management platform, it
monitors the operating conditions of suppliers in real time to avoid potential risks; it
promotes diversified supply sources to ensure supply delivery.
The profit distribution proposal approved by the board of directors is: Based on the
share capital of 3,274,649,389 shares after deducting the Company's repurchased
shares (19,819,601 shares) as of December 31, 2023, RMB 3.82 (tax included) of
cash dividend and 0 bonus share (tax included) for every 10 shares will be distributed
to all shareholders, instead of common reserve capitalizing.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Table of Contents
Section I Important Notes, Contents and Definitions ............................................................................................... 2
Section II Company Profile and Key Financial Indicators ................................................................................... 12
Section III Management Discussion and Analysis ................................................................................................... 17
Section IV Corporate Governance ................................................................................................................................. 143
Section V Environmental and Social Responsibilities ....................................................................................... 170
Section VI Significant Events ........................................................................................................................................... 171
Section VII Changes in Shares and Information about Shareholders........................................................ 197
Section VIII Information of Preferred Shares ........................................................................................................... 210
Section IX Situation on Corporate Bonds ................................................................................................................. 211
Section X Financial Report ................................................................................................................................................ 212
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Documents Available for Reference
I. Financial statements signed and sealed by the Company's person in charge, the
chief accountant, and the person in charge of accounting department (accounting
officer).
II. The original copy of the Audit Report with the seal of the Accounting Firm and
signed and stamped by Certified Public Accountants.
III. The said documents are prepared and placed at the Company's Securities
Investment Department for reference by investors.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Definitions
Item of definition Refers To Definitions
Reporting Period Refers To From January 1, 2023 to December 31, 2023
Dahua, company, the company Refers To Zhejiang Dahua Technology Co., Ltd.
Dahua System Engineering, System
Refers To Zhejiang Dahua System Engineering Co., Ltd.
Engineering Company
Dahua Vision Technology Refers To Zhejiang Dahua Vision Technology Co., Ltd.
Dahua Security Network, Operation Zhejiang Dahua Security Network Operation Service
Refers To
Company Co., Ltd.
Dahua Ju'an Refers To Zhejiang Dahua Ju'an Technology Co., Ltd.
Guangxi Dahua Information Refers To Guangxi Dahua Information Technology Co., Ltd.
Guangxi Dahua Yunlian Information Technology Co.,
Guangxi Yunlian Refers To
Ltd.
Xiaohua Technology, Hangzhou
Refers To Hangzhou Xiaohua Technology CO., LTD.
Xiaohua
Dahua Zhilian Refers To Zhejiang Dahua Zhilian Co., Ltd.
Dahua Investment, Dahua
Refers To Zhejiang Dahua Investment Management Co., Ltd.
Investment Management
Guangxi Zhicheng, Dahua Zhicheng Refers To Guangxi Dahua Zhicheng Co., Ltd.
Hangzhou Huacheng, Huacheng
Refers To Hangzhou Huacheng Network Technology Co., Ltd.
Network
Xinjiang Information Refers To Xinjiang Dahua Zhixin Information Technology Co., Ltd.
HuaRay Technology Refers To Zhejiang HuaRay Technology Co., Ltd.
Fuyang Hua'ao Refers To Hangzhou Fuyang Hua'ao Technology Co., Ltd.
Huafei Intelligent Refers To Zhejiang Huafei Intelligent Technology CO., LTD.
Huachuang Vision Refers To Zhejiang Huachuang Vision Technology Co., Ltd.
Guizhou Huayi Refers To Guizhou Huayi Shixin Technology Co., Ltd.
Xinjiang Zhihe Refers To Xinjiang Dahua Zhihe Information Technology Co., Ltd.
Guangxi Huacheng Refers To Guangxi Huacheng Technology Co., Ltd.
Guizhou Meitan Dahua Information Technology Co.,
Meitan Dahua Technology Refers To
Ltd.
Inner Mongolia Dahua Zhimeng Information Technology
Inner Mongolia Zhimeng Refers To
Co., Ltd.
Xinjiang Zhitian Refers To Xinjiang Dahua Zhitian Information Technology Co., Ltd.
Xinjiang Xinzhi Refers To Xinjiang Dahua Xinzhi Information Technology Co., Ltd.
Xinjiang Dahua Huayue Information Technology Co.,
Xinjiang Huayue Refers To
Ltd.
Leapmotor Technology Refers To Zhejiang Leapmotor Technology Co., Ltd.
Leapmotor Refers To Leapmotor Automobile Co., Ltd.
Tianjin Dahua Information, Tianjin
Refers To Tianjin Dahua Information Technology Co., Ltd.
Dahua
Hunan Dahua Zhilong, Dahua
Refers To Hunan Dahua Zhilong Information Technology Co., Ltd.
Zhilong
Huaxiao Technology Refers To Zhejiang Huaxiao Technology Co., Ltd.
Vision Technology Refers To Zhejiang Fengshi Technology Co., Ltd.
Xi'an Dahua Zhilian, Xi'an Dahua Refers To Xi'an Dahua Zhilian Technology Co., Ltd.
Huaruipin Refers To Jiangsu Huaruipin Technology Co. Ltd.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Beijing Huayue Shangcheng Information Technology
Beijing Huayue Refers To
Service Co., Ltd.
Shanghai Huashang Chengyue Information Technology
Shanghai Huashang Refers To
Service Co., Ltd.
Dahua Jinzhi Refers To Zhejiang Dahua Jinzhi Technology Co., Ltd.
Dahua Hong Kong, Dahua (HK)
Refers To Dahua Technology (HK) Limited
Limited
Zhejiang Zhoushan Digital Development Operation Co.
Zhoushan Operation Refers To
Ltd.
Yunnan Zhili Refers To Yunnan Zhili Technology Co., Ltd
Guangxi Dahua Technology Refers To Guangxi Dahua Technology Co., Ltd.
Huayixin Refers To Zhejiang Huayixin Technology Co., Ltd.
Huaruijie Refers To Zhejiang Huaruijie Technology Co., Ltd.
Chengdu Dahua Zhilian Information Technology Co.,
Chengdu Zhilian Refers To
Ltd.
Chengdu Dahua Zhian Information Technology Service
Chengdu Zhian Refers To
Co., Ltd.
Chengdu Dahua Zhishu Information Technology Service
Chengdu Zhishu Refers To
Co., Ltd.
Chengdu Zhichuang Refers To Chengdu Zhichuang Yunshu Technology Co., Ltd.
Chengdu Smart Network Refers To Chengdu Huishan Smart Network Technology Co., Ltd.
Huakong Software Refers To Zhejiang Huakong Software Co., Ltd.
Huacheng Software Refers To Hangzhou Huacheng Software Co., Ltd.
Guizhou Dahua Refers To Guizhou Dahua Information Technology Co., Ltd.
Henan Dahua Refers To Henan Dahua Zhilian Information Technology Co., Ltd.
Huajian Refers To Zhejiang Huajian Technology Co., Ltd.
Zhengzhou Dahua Zhian Information Technology Co.,
Zhengzhou Dahua Zhian Refers To
Ltd.
Dahua International Refers To Dahua Technology International Co., Ltd.
Anhui Zhilian Refers To Anhui Dahua Zhilian Information Technology Co., Ltd.
Anhui Zhishu Refers To Anhui Dahua Zhishu Information Technology Co., Ltd.
Changsha Dahua Refers To Changsha Dahua Technology Co., Ltd.
Tianjin Huajian Refers To Tianjin Huajian Technology Co., Ltd.
Wuhu Huajian Refers To Wuhu Huajian Technology Co., Ltd.
Zhejiang Pixfra Refers To Zhejiang Pixfra Technology Co., Ltd.
Yiwu Huaxi Refers To Yiwu Huaxi Technology Co., Ltd.
Zhejiang Dahua Intelligent IoT Operation Service Co.,
Dahua Operation Refers To
Ltd.
Nanyang Dahua Intelligent Information Technology Co.,
Nanyang Intelligent Refers To
Ltd.
Yibin Huahui Refers To Yibin Huahui Information Technology Co., Ltd.
Chengdu Huazhiwei Refers To Chengdu Huazhiwei Technology Co., Ltd.
IMOU Xi'an Refers To Xi'an IMOU Zhilian Technology Co., Ltd.
Luoyang Zhiyu Refers To Luoyang Dahua Zhiyu Information Technology Co., Ltd.
Huaqi Intelligence Refers To Zhejiang Huaqi Intelligent Technology Co., Ltd.
Chengdu Dahua Wisdom Information Technology Co.,
Chengdu Information Refers To
Ltd.
Huajian Technology Refers To Zhejiang Huajian Technology Co., Ltd.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Huaxiyue Refers To Guangdong Huaxiyue Intelligent Technology Co., Ltd.
Zhejiang Huajie New Energy Operation Service Co.,
Huajie Operation Refers To
Ltd.
Shuhang Intelligent Refers To Zhejiang Shuhang Intelligent Technology Co., Ltd.
Dahua USA Refers To Dahua Technology USA Inc.
Dahua Europe Refers To Dahua Europe B.V.
Dahua Middle East Refers To Dahua Technology Middle East FZE
Dahua Mexico Refers To Dahua Technology Mexico S.A. DE C.V
Dahua Chile Refers To Dahua Technology Chile SpA
Dahua Malaysia Refers To Dahua Security Malaysia SDN. BHD.
Dahua Korea Refers To Dahua Technology Korea Company Limited
Dahua Indonesia Refers To PT. Dahua Vision Technology Indonesia
Dahua Colombia Refers To Dahua Technology Colombia S.A.S
Dahua Australia Refers To Dahua Technology Australia PTY LTD
Dahua Singapore Refers To Dahua Technology Singapore Pte. Ltd.
Dahua South Africa Refers To Dahua Technology South Africa Proprietary Limited
Dahua Peru Refers To Dahua Technology Perú S.A.C
Dahua Russia Refers To Dahua Technology Rus Limited Liability Company
DAHUA TECHNOLOGY BRASIL COMRCIO
Dahua Brazil Refers To
ESERVIOS EM SEGURANA ELETRNICA LTDA
Dahua Canada Refers To Dahua Technology Canada INC.
Dahua Panama Refers To Dahua Technology Panama S.A.
Dahua Hungary Refers To Dahua Technology Hungary Kft
Dahua Poland Refers To Dahua Technology Poland Sp. z o.o.
Dahua Italy Refers To Dahua Technology Italy S.R.L.
Dahua Tunisia Refers To Dahua Technology Tunisia Limited Liability Company
Dahua Kenya Refers To Dahua Technology Kenya Limited
Dahua UK Refers To Dahua Technology UK Limited
Dahua Germany Refers To Dahua Technology GmbH
Dahua Serbia Refers To Dahua Technology SRB d.o.o.
Dahua India Refers To Dahua Technology India Private Limited
Dahua Turkey Refers To Dahua Guvenlik Teknolojileri Sanayive Ticaret A.S.
Dahua Czech Refers To Dahua Technology Czech s.r.o.
Dahua Argentina Refers To Dahua Argentina S.A.
Dahua Spain Refers To Dahua Iberia, S.L.
Dahua Kazakhstan Refers To Dahua Technology Kazakhstan LLP
Dahua Denmark Refers To Dahua Technology Denmark Aps.
Dahua France Refers To Dahua Technology France SAS
Dahua Technology Holdings Refers To Dahua Technology Holdings Limited
Dahua New Zealand Refers To Dahua Technology New Zealand Limited
Dahua Netherlands Refers To Dahua Technology Netherlands B.V.
Dahua Morocco Refers To Dahua Technology Morocco SARL
Dahua Romania Refers To Dahua Technology S.R.L
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Dahua Uzbekistan Refers To Dahua Vision LLc
Dahua Bulgaria Refers To Dahua Technology Bulgaria EOOD
Dahua Sri Lanka Refers To Dahua Technology China (Pvt) LTD
Dahua Pakistan Refers To Dahua Technology Pakistan (private) Limited
Dahua Thailand Refers To Dahua Technology (Thailand) Co.,LTD.
Dahua Nigeria Refers To Dahua Technology Nigeria Representative Ltd
Dahua Israel Refers To Dahua Technology Israel Ltd.
Dahua Mexico Service Refers To VISMEXTECH DHM SERVICIOS, S.A. DEC.V.
Huacheng Netherlands Refers To Imou Network Technology Netherlands B.V.
Dahua Japan Refers To Dahua Technology Japan LLC
Huacheng Hong Kong Refers To Huacheng Network (HK) Technology Limited
Dahua Qatar Refers To Dahua Technology QFZ LLC
Dahua Pacific Refers To Dahua Technology Pacific S.A
INTELBRAS S.A. INDSTRIA DE
INTELBRAS S.A. Refers To
TELECOMUNICAO ELETRNICA BRASILEIRA
Dahua Technology Middle East for Maintenance Single
Dahua Saudi Arabia Refers To
Person Company
Dahua Bengal Refers To Dahua Technology Bangladesh Private Limited
IMOU NETWORK TECHNOLOGY AUSTRALIA PTY
IMOU Australia Refers To
LTD
CNG TY TNHH CNG NGH IMOU NETWORK VIT
IMOU Vietnam Refers To
NAM
HuaRay Singapore Refers To HUARAY TECHNOLOGY SINGAPORE PTE. LTD.
Dahua Belgium Refers To Dahua Technology Belgium BV
Dahua Saudi Arabia Refers To Dahua Technology Regional Headquarters
Dahua Azerbaijan Refers To Dahua Technology Azerbaijan LLC
Dahua Vietnam Refers To Dahua Technology Vietnam Company Limited
HuaRay Korea Refers To HUARAY TECHNOLOGY KOREA COMPANY LIMITED
HuaRay Germany Refers To Huaray technology GmbH
Dahua Angola Refers To Dahua Technology Angola S.U. lda
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section II Company Profile and Key Financial Indicators
I. Company Information
Stock Abbreviation DAHUA Stock Code 002236
Stock Exchange Shenzhen Stock Exchange
Company Name in
浙江大华技术股份有限公司
Chinese
Company Abbreviation in
大华股份
Chinese
Company Name in Foreign
ZHEJIANG DAHUA TECHNOLOGY CO.,LTD.
Language (If any)
Legal Representative Fu Liquan
Registered Address 1187 Bin'an Road, Binjiang District, Hangzhou City
Post Code of Registered
310053
Address
Change of the Company’s On November 9, 2005, the Company’s registered address changed from the 15th floor
Registered Address of Tianyuan Building, 508 Wensan Road, Hangzhou to the present registered address.
Office Address No. 1399 Bixing Road, Binjiang District, Hangzhou City
Post Code of Office
310053
Address
Website www.dahuatech.com
E-mail zqsw@dahuatech.com
II. Contact Person and Contact Information
Secretary of the Board Representative of Securities Affairs
Name Wu Jian Li Sirui
No. 1399 Bixing Road, Binjiang No. 1399 Bixing Road, Binjiang
Contact Address
District, Hangzhou City District, Hangzhou City
Tel. 0571-28939522 0571-28939522
Fax 0571-28051737 0571-28051737
E-mail zqsw@dahuatech.com zqsw@dahuatech.com
III. Information Disclosure and Location
The stock exchange website where the Company
Shenzhen Stock Exchange (http://www.szse.cn)
discloses the annual report
The media outlets and their websites where the Company Securities Times and Juchao Information Network
discloses the annual report http://www.cninfo.com.cn/
Location for Annual Report of the Company Securities Investment Department
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
IV. Registration Change
Unified Social Credit Code 91330000727215176K
Changes in Main Business Since Listing (If any) No Change
Change of Controlling Shareholders (If any) No Change
V. Other Related Information
Accounting Firm Hired by the Company
BDO China Shu Lun Pan CPAs (special general
Name of the Accounting Firm
partnership)
4/F, New Huangpu Financial Plaza, No.61, Nanjing East
Office Address of the Accounting Firm
Road, Shanghai
Name of Signing Public Accountant Du Na, Zhang Junhui
The sponsor institution hired by the company to perform the continuous supervision in the reporting period
Applicable □ Not applicable
Name of Sponsor Office Address of Sponsor Name(s) of Sponsor Continuous Supervision
Institution Institution Representative(s) Period
5th Floor, Kaisiya Building,
No. 105 Tiyuchang Road, April 14, 2023 to December
Guosen Securities co., Ltd. Lou Yu, Sun Yu
Hangzhou City, Zhejiang 31, 2024
Province
The financial adviser hired by the company to perform the continuous supervision in the reporting period
□ Applicable Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company needs retroactive adjustment or restatement of accounting data in prior years or not
□ Yes No
Increase/Decrease
Compared with the
2023 2022 2021
Same Period of the
Previous Year
Operating revenue
32,218,317,636.77 30,565,370,012.64 5.41% 32,835,479,336.85
(RMB)
Net profit attributable
to shareholders of
7,361,892,404.52 2,324,356,092.20 216.73% 3,378,410,889.60
the listed Company
(RMB)
Net profit attributable
to shareholders of
the listed company
2,961,742,139.01 1,580,552,515.57 87.39% 3,103,383,711.14
after deducting non-
recurring gains and
losses (RMB)
Net cash flow
generated by 4,598,778,654.47 1,053,587,649.46 336.49% 1,727,560,748.01
operational activities
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(RMB)
Basic Earnings per
2.31 0.79 192.41% 1.15
Share (RMB/Share)
Diluted Earnings per
2.31 0.79 192.41% 1.15
Share (RMB/Share)
Weighted Average
22.43% 9.49% 12.94% 15.58%
ROE
Increase/Decrease at
the End of the
Current Year
End of 2023 End of 2022 End of 2021
Compared with the
End of the Previous
Year
Total assets (RMB) 52,881,927,214.00 46,252,893,804.54 14.33% 44,055,872,021.97
Net assets
attributable to
shareholders of the 34,719,173,825.42 25,836,798,918.61 34.38% 23,617,602,513.55
listed company
(RMB)
The Company’s net profits before and after deducting non-recurring profits and losses, whichever is lower, are
negative in the last three fiscal years, and the audit report of last year shows that there is uncertainty in the
Company’s ability to continue as a going concern.
□ Yes No
The net profits before and after deducting non-recurring profits and losses, whichever is lower, is negative.
□ Yes No
Ⅶ. Differences in Accounting Data Under Domestic and Foreign Accounting Standards
(1) Differences of net profits and net assets in the financial reports disclosed according to
the international accounting standards and Chinese accounting standards
□ Applicable Not applicable
During the reporting period of the company, there is no difference between the net profits and net assets in the
financial reports disclosed according to international accounting standards and Chinese accounting standards.
(2) Differences between the net profits and net assets in the financial reports disclosed
according to the overseas accounting standards and Chinese accounting standards
□ Applicable Not applicable
During the reporting period of the company, there is no difference between the net profits and net assets in the
financial reports disclosed according to overseas accounting standards and Chinese accounting standards.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Ⅷ. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 6,015,629,882.58 8,617,917,398.06 7,644,936,763.40 9,939,833,592.73
Net Profit Attributable
to Shareholders of 495,351,177.84 1,480,667,195.29 614,113,966.50 4,771,760,064.89
the Listed Company
Net profit attributable
to shareholders of
the listed company
398,105,107.61 1,356,664,722.35 647,597,255.16 559,375,053.89
after deducting non-
recurring gains and
losses
Net cash flow
generated by -1,339,410,329.62 1,602,107,075.33 1,062,555,492.77 3,273,526,415.99
operating activities
Whether the above financial indicators or their totals are significantly different from the financial indicators disclosed
in the Company’s quarterly and semi-annual reports
□ Yes No
Ⅸ. Non-recurring Gains and Losses Items and Their Amounts
Applicable □ Not applicable
Unit: RMB
Item Amount in 2023 Amount in 2022 Amount in 2021 Note
Gains or losses from disposal of
non-current assets (including the
4,778,983,828.56 694,299,856.79 47,555,142.92
write-off for the accrued impairment
of assets)
Government subsidies included in
the current profits and losses
(except for those that are closely
related to the normal business
operations of the Company, comply
199,003,183.46 245,885,438.60 217,227,114.97
with national policy regulations, are
enjoyed according to established
standards, and have a continuous
impact on the Company's profits
and losses)
Gains or losses from changes in the
fair value of financial assets and
liabilities, and from the disposal of
financial assets and liabilities, held
103,119,981.50 -14,286,907.57 81,148,682.33
by non-financial enterprises, except
for effective hedging businesses
related to the normal operating
business of the Company.
Gains or losses from investment or
1,819,647.72 -40,735,247.48 104,368,534.48
asset management entrusted to
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
others
Reversal of the receivables
depreciation reserves for separate 4,513.91 2,151,340.72
impairment test
Gains or losses from debt
-16,242,445.24 -414,996.80 -56,076.90
restructuring
Non-Operating Revenue and
-18,035,840.08 5,535,034.55 -1,402,020.22
expenses other than the above
Other gains and losses items that fit
the definition of non-recurring gains -57,989,909.93 -134,254,380.85 -40,319,290.13
and losses
Less: Impact of income tax 555,973,378.97 49,067,502.67 78,172,720.73
Impact of minority equity (after
34,539,315.42 -34,690,941.34 55,322,188.26
tax)
Total 4,400,150,265.51 743,803,576.63 275,027,178.46 --
Other gains or losses that fit the definition of non-recurring gains or losses:
□ Applicable Not applicable
The Company has no other gains or losses that fit the definition of non-recurring gains or losses.
Note for the definition of non-recurring gains and losses listed in the No. 1 Explanatory Announcement on
Information Disclosure for Companies Issuance Their Securities to the Public - Non-recurring gains and losses, as
recurring gains and losses.
□ Applicable Not applicable
The Company did not define any non-recurring gains and losses listed in the No. 1 Explanatory Announcement on
Information Disclosure for Companies Issuance Their Securities to the Public - Non-recurring gains and losses as
recurring gains and losses.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section III Management Discussion and Analysis
I. Industry Overview during the Reporting Period
In 2023, China's economy and society embarked on a path of comprehensive recovery and
normalization. Under the guidance of enhanced macroeconomic regulation, the economy
demonstrated positive momentum, with a growing number of bright spots emerging. Overall, the
economic trend was one of steady upward growth. However, the external environment became
increasingly complex and challenging, with frequent regional hotspots and growing uncertainties
surrounding global economic growth. These developments posed new challenges for the Company.
The Company forged ahead despite the fluctuations in the macro environment and intensified
market competition, and completed the goal of ''transitioning from stability to growth while
upholding high-quality development'' at the beginning of the year.
The world is witnessing an accelerated phase of technological revolution and industrial
transformation, while China's economy is undergoing a critical period of transition towards high-
quality development, economic structure optimization, and growth driver transformation. Against
this backdrop, China is vigorously promoting the digital economy, actively advancing digital
industrialization and industrial digitalization, fostering the deep integration of digital technologies
with the real economy, and deepening research and application in big data, artificial intelligence,
and other fields. Simultaneously, the sound development of data infrastructure, vigorous promotion
of data openness and sharing, and utilization are all becoming driving forces for the sustained
development of the smart IoT industry. With the continuous advancement of AI large model
technologies, the smart IoT industry, driven by business needs across a wide range of industries, is
leveraging its accumulated experience in algorithm development and scenario applications to
effectively implement visual large models in various application domains. This is leading to
synchronized improvements in generalization, accuracy, and expressiveness, and accelerating the
development of digitalization and intellgentization in the industry, further solidifying the industry's
overall competitiveness. Additionally, the smart IoT industry is continuously advancing business
enablement by collecting data through multidimensional awareness and multi-source connectivity,
fully leveraging the "multiplier effect" of data elements, and empowering efficient urban governance
and enterprise digitalization upgrades.
Digitalization and intellgentization have become crucial trends in societal development and
significant drivers of economic growth. The pervasiveness of new technologies like big data and
artificial intelligence in the smart IoT industry is fueling the demand for digital upgrades in traditional
sectors. This will inject fresh impetus into China's economic development and open up new
avenues for the growth of the smart IoT industry.
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II. Main Businesses of the Company during the Reporting Period
1. Business overview
Dahua is a world-leading video-centric smart IoT solutions and service provider. Supported by
two major technological strategies, AIoT and the IoT digital intelligence platforms, the Company
effectively integrates technologies such as artificial intelligence, big data and IoT into its products
and solutions to serve the digital innovation of cities and the digital intelligence transformation of
enterprises.
In the field of city businesses, we are committed to establishing a new smart city ecosystem
that promotes ''efficient urban governance, autonomous city operations, enhanced security
systems, and collaborative ecological management''. This ecosystem is built on the principles of
''unified architecture, backward compatibility, shared capabilities, and commercial availability''. We
are deeply engaged in city business scenarios across various industries, including transportation,
traffic management, ports, public services, and ecological environment. Our cutting-edge smart IoT
solutions empower urban sectors to embrace digital innovation and achieve a harmonious
coexistence between humans, nature, and society.
In the field of enterprise business, by leveraging AI, big data, and other cutting-edge
technologies, we seamlessly integrate them with industry-specific scenarios to gain deep insights
into industry transformation trends. We delve into a wide range of industries, uncovering the digital
and intelligent needs of enterprises, and providing each customer with high-quality digital upgrade
solutions. We are actively engaged in innovative practices across various industries, including
construction, education, manufacturing, petrochemicals, coal, power, steel, agriculture, logistics,
cultural tourism, healthcare, finance, and commercial chains. Our focus is on delivering customer
value by ensuring production safety, enhancing production capacity, promoting operational
efficiency, and optimizing service quality. We strive to be a trusted partner for enterprises seeking
digital transformation.
In the field of innovative business, by leveraging our deep understanding of diverse
customer needs and years of experience in smart IoT, we are continuously exploring emerging
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businesses. These include machine vision and mobile robotics, smart living, thermal imaging,
automotive electronics, smart security inspection, smart firefighting, and storage media.
In a relentless pursuit of industry competitiveness, the Company embarked on a
comprehensive strategic overhaul in 2023, transitioning from Think#1.0 to Think#2.0. This evolution
seamlessly integrates multimodal, industry-specific large models, graph-based computing, and
multi-source connectivity, propelling us from Intelligence to Integrated Intelligence. By establishing
a broader AIoT framework, we have strengthened our intelligent intents-based integration and
connection capabilities, unlocking the value of video-centric data elements.
In the technology field, the Company has continuously strengthened its technological
capabilities and entered stage 2.0 for its AIoT and IoT digital intelligence platforms. In the field of
AIoT, we are leveraging large models to build broader AIoT capabilities and integrating diverse
technologies to establish a wider range of connectivity options. By fusing multimodal technologies
such as image, speech, and text with the Company's industry expertise, we are constructing
industry-specific large models that further enhance video analysis capabilities. Tailored to industry-
specific business scenarios, we are developing and continuously refining industry-specific AI
systems, accumulating knowledge from generic large models to enable rapid replication across
industries. To drive the convergence of computing and networking for intelligent visual applications,
we are building integrated connectivity capabilities that cater to intelligent intent. In the field of IoT
digital intelligence platform, we are committed to unlocking the value of data elements centered on
video. We will continuously enhance our capabilities in visual data analysis and content description,
further elevating the value of sensor data and promoting data resource transformation. We will
establish a visual-centric integration of computing and network, enabling efficient collaboration
across cloud, network, edge, and device layers. Leveraging large visual models and integrating
multimodal capabilities, we will comprehensively enhance data asset's accuracy, effectiveness, and
usability, facilitating data asset transformation. We will foster a thriving data element ecosystem by
focusing on enhancing urban governance efficiency and enterprise digitalization. We will
continuously explore the value of multi-dimensional data integration, empowering partners to
unleash the potential of data and promoting data commoditization.
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In the field of business, our urban and enterprise solutions have been revamped and
upgraded, empowering industry clients to unleash their business potential. In the City Business 2.0
stage, we will build a more efficient urban governance system and actively fulfill our social
responsibility for sustainable development. Our initiatives span a wide range, from improving urban
management to efficient urban governance, from ensuring orderly operations to autonomous city
operations, from enhancing public safety to upgrading safety systems, and from ecological
environment monitoring to collaborative ecological governance. We are promoting a shift from
collaborative response to proactive governance and driving the reengineering of digital processes
in cities. In the Enterprise Business 2.0 stage, we will continue to assist businesses in all industries
with their digital transformation and upgrading, enabling the realization of value across all
scenarios. Our efforts encompass optimizing security systems, building a comprehensive security
system, improving production efficiency, establishing intelligent manufacturing capabilities,
supporting business management, and enhancing business decision-making. Our enterprise
business is gradually transitioning from peripheral support to the core of production. By deeply
interacting with core production systems, we can learn about the value of production and
management data, reduce management costs, and enhance business management capabilities
and decision-making levels.
2. Organizational structure
The Company has established five world-class research institutes: the Advanced Technology
Institute, the Big Data Institute, the Central Research Institute, the Cybersecurity Institute, and the
Future Communications Institute. These institutes provide the foundation for two major product
lines: the AloT and IoT digital intelligence platforms. These platforms, in turn, empower three
comprehensive solutions: City Business Solutions, Enterprise Business Solutions, and Overseas
Business Solutions. With our headquarters in Hangzhou, we have also established research
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centers in Xi'an, Chengdu, Europe, and Latin America. This global network of research centers
allows us to meet the ever-evolving needs of our businesses and explore the boundless
possibilities of technology. With years of dedication, our company has established a national-level
post-doctoral scientific research workstation, earning recognition as a national enterprise
technology center, national-level industrial design center, and national innovative pilot enterprise.
Driven by an unwavering commitment to innovation, we consistently make groundbreaking
contributions and lead the industry forward.
Embracing globalization, the Company has systematically expanded its domestic and
international marketing and service networks to provide customers with comprehensive lifecycle
services, including product and solution consulting, design, sales, delivery, and after-sales support.
As of today, our domestic marketing centers span 100% of provinces, municipalities, and
autonomous regions, 100% of prefecture-level cities, and over 70% of districts and counties.
Additionally, we have established 69 overseas branches in 180+ countries and regions, with a
global network of over 1,000 service partners and 170+ spare parts centers and stations.
3. Main products and capabilities
The Company continues to increase investment and construction in the foundation of its "5
Full" capabilities that include "full sensing, full intelligence, full connection, full computing, and full
ecosystem", to establish an industry-leading video-centric IoT infrastructure R&D and solution
closed-loop service, which includes "multimodal sensing of video and non-video, full coverage of
sensing cognitive intelligence, diversified connectivity, and synchronization of device, edge, and
cloud", based on an integrated technical support system from "basic IoT sensing, intelligent
synchronization, and integration of devices and edge, data intelligent processing, to full link
information security protection", thus continuously maintaining the leadership of its technologies
and products in the industry. At the same time, the Company actively creates an open, cooperative,
and win-win digital technology ecosystem to make digital infrastructure, industry paradigm
applications, algorithm capabilities and data intelligence available to partners and industry
developers.
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Full sensing: To establish an industry-leading all-round sensing system through visual, multi-
spectrum, time, space and other dimensions to maintain precise adaptation of products and
technology to scenarios, so as to faithfully present the physical world in the digital way.
Full connection: To construct a data connectivity system that meets the needs of diverse
scenarios, consolidate the foundation of data value connectivity that integrates IoT sensing and
information interconnection, and continuously improve the ability of IoT sensing access and
integration;
Full computing: To accumulate resources in image computing power, AI computing power,
general computing power, etc., and build a full-network computing architecture featuring unified
scheduling and collaborative computing power and algorithms of end-user, edge, and cloud.
Full intelligence: To meet industry needs and realize the closed loop from sensing intelligence
to data intelligence and to business Intelligence, the Company has built an autonomous system
based on algorithms, big data, and business platforms to facilitate value identification in client data
and intelligent decision-making, namely full intelligence.
Full ecosystem: To open up the ecology of business, software, algorithms, hardware, etc. for
cooperation, build an ecosystem featuring co-construction, win-win outcome and symbiosis, and
create a smart IoT community.
3.1 Full Sensing
The Company is continuously expanding its multi-dimensional sensing capabilities with video
as its core, applying sensing technologies to a wider range of product forms to adapt to the specific
scenarios of various industries. It is also continuously researching visual enhancement, scene
recognition, and multi-dimensional data integration algorithms to improve the adaptability of
sensing products to business goals and scenarios.
3.1.1 Video sensory products
Committed to delivering more realistic images and precise data in the visible spectrum, the
Company has unveiled its second-generation Dahua Zhiqiang depth sensing technology
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architecture. This innovative architecture, built upon the Visual Engine and Thinking Engine,
significantly enhances the image self-adaptation capabilities of sensing devices in extreme
environments such as night and backlight conditions. It also improves the target recognition and
analysis capabilities in complex scenarios like mixed pedestrian and vehicle traffic. Furthermore,
the deep integration of AI technology into all aspects of the video sensing system accelerates the
comprehensive intellgentization and enhancement of cameras. This ongoing commitment to
innovation has resulted in a rich portfolio of products with sustained market competitiveness,
including the full-color ultra-sensitivity, panoramic multi-details, coaxial HD, and universe
intelligence series.
(1) Full color ultra sensitivity
The 4K ultra high-definition aurora product can achieve more realistic colors and accurate
restoration of target objects. The Skyscanner PRO Series has better environmental adaptability
against adverse scenarios such as rain, snow, and ultra-low illumination. In 2023, the Company
unveiled its "Glow" series of traffic cameras, ushering in a new era of true-color night vision for the
traffic management industry and paving the way for safer and more enjoyable journeys. The
Company also introduced its Mini Skyscanner series, offering customers a more cost-effective night
vision solution. Additionally, the Company enhanced its Aura products with improved lighting and
optical systems, ensuring clear, high-aperture imaging throughout the entire zoom range, even in
low-light conditions, providing unwavering safety around the clock.
(2) Panoramic multi details
Driven by evolving application needs and technological advancements, panoramic multi-
camera systems have emerged as the prevailing trend in intelligent video products. These systems
enable seamless integration of panoramic views, detailed close-ups, and pan-tilt-zoom functionality
within a single device, offering users a broader, clearer, and more comprehensive field of view.
Intelligent high-end product forms have evolved from single-direction single-camera to single-
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direction multi-camera and multi-direction multi-camera, adapting to various application scenarios,
providing a wider and clearer view. Dahua Starship Skyline can expand the functions of radar,
multi-code and laser light filling, so as to meet the needs of customers in more dimensions. The
Mini Star series has been upgraded with 4K high-definition resolution and a longer focal length lens
to meet the needs of wider deployment in urban areas. Aura PRO is designed with full-structure
intelligence and high optical zoom to achieve the application of omnidirectional panoramic view,
panoramic details, and the linkage of gun camera and ball camera. Enhanced resolution for
Universer Hubble's dual-spectrum camera movement enables sharper close-up images, while the
panoramic upgrade supports 360° single-channel output and arbitrary target stitching, expanding
application flexibility. Mini Hubble breaks through the technical problems in the industry such as
obvious seams and large blind areas of medium-and-low altitude multi-view stitching. It's more
suitable for B end scenario. Universe MAX supports both linked and independent capture modes,
achieving both breadth and depth.
(3) Coaxial HD
The Company's HDCVI technology and products are driven by customer business scenarios
and are based on years of business understanding and continuous innovation capabilities. Dahua
has launched its full-color products, achieving 7*24 hour color image output. The time-division light
compensation technology is adopted to effectively alleviate the light pollution problem. Leveraging
Smart Dual Light technology, we introduce our dual-light products, providing around-the-clock
surveillance illumination for any environment. Our versatile solutions offer multiple functionalities in
one device, reducing customer costs. Our cutting-edge active defense products are continuously
evolving, incorporating a suite of proprietary technologies such as intelligent dual-light, time-division
multiplexing, intelligent voice recognition, two-way intercom, and interference-free alert lights.
These innovations address the potential discomfort caused by alert screens and significantly
enhance the user experience.
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(4) Universe intelligence
As industry applications continue to evolve, intelligent products need to delve deeper into
business processes, providing more specialized and precise intelligent services. For example, we
have continuously iterated on our roadside parking series products, upgrading the vehicle 3D
chassis projection and multi-dimensional target tracking model, significantly improving the accuracy
of parking space status recognition. Our 4G solar-powered wireless high-position parking camera
further advances the intelligent development of urban parking facilities. Our vehicle-road
collaboration camera propels traffic management into a new era of collaborative intelligent
transportation that is safer and more efficient. Our dual-lens high-rise littering detection cameras
employ intelligent dual-channel monitoring to identify objects being thrown from high places.
Utilizing technologies such as lens hoods and adaptive heating, these cameras effectively
counteract environmental interferences caused by strong light, rain, and snow. Our electric bicycle
identification and blocking products provide real-time monitoring of elevator operating status and
upgrade elevator door opening and closing, passenger flow, and other algorithms to meet a wider
range of business applications. We have also launched a series of products for the energy industry
such as mining, explosion-proof, and low-power transmission lines, loaded with 5G, Wi-Fi6, long-
distance transmission technology, and various intelligent applications, to meet the application
needs of explosion-proof, anti-corrosion, and high-temperature resistance scenarios.
3.1.2 Integrated Sensing Products
The Company is continuously refining its "Panoramic 6D Perception" product technology
architecture, with video as the core, integrating physical sensing layers such as tactility, and
continuously expanding multidimensional perception data such as vibration, temperature, and gas.
By incorporating AI-powered intelligent analysis, we have further enhanced our sensing
adaptability, integration, and connectivity. We are continuously launching a series of scenario-
defined sensing products to explore the value of the smart IoT industry.
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(1) Panoramic 6D Perception
Our Panoramic 6D Perception products go beyond the limitations of visible light, utilizing a
groundbreaking combination of spatial, temporal, color, brightness, and multispectral sensing
technologies to revolutionize sensing adaptability, integration, and connectivity, bringing the digital
world to life. The Panoramic Hubble Series achieves high-definition panoramic view, long-distance
target detection and tracking, and can be applied to industries such as forest fire prevention, land
and resource protection, river management, and border and coastal defense. The hyperspectral
water quality detector uses a large amount of data to stimulate AI neural network training iterations,
and multi-camera and multi-sensor modules to detect and ensure the safety of water quality in the
water area. The products of Radar Vision Series are widely used in business fields such as traffic
flow detection, safety warning, traffic event detection, and holographic display. The newly launched
Spotter speed measurement column series solves the speed measurement problems in the
scenarios where high-speed vehicles are merging or closely followed in multiple lanes, further
empowering traffic safety management.
(2) Multi-frequency domain sensing
As smart IoT applications continue to expand, single-stream video data is no longer sufficient
to meet the diverse business and scenario needs of various industries. While solidifying our
expertise in video sensing technology, we are continuously expanding our reach into vibration,
temperature, and gas sensing technologies. By integrating and applying passive infrared,
microwave, radar, vibration, audio, and video technologies, we are introducing more intelligent,
accurate, and multidimensional perception products, empowering digital transformation across
various industries in multifaceted ways.
Our alarm product line continues to break new ground, integrating passive infrared,
microwave, vibration, and audio sensing technologies to introduce a range of key products,
including the Airshield 2.0 gateway series, glass break detectors, and outdoor PIRCAMs. We have
also released the Converter software product, which has successfully connected multiple alarm
operation centers, helping our products enter professional operation channels. In addition, we are
continuously improving the interconnection of alarm, building, and CCTV systems, optimizing
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cloud-based businesses, and enhancing the overall competitiveness of our solutions. Our wired
intrusion alarm solutions are constantly evolving to provide customers with even greater value. In
the transportation sector, our dynamic vehicle scales offer high accuracy, strong resistance to
deformation, and convenient calibration, enabling precise weighing without stopping vehicles, thus
supporting the management of overloaded trucks. Our suite of solutions, including speed detection
radars, traffic flow radars, visibility detection systems, Sentinel sonar, ETC, and RFID, is deeply
integrated into real-world applications, tailored to meet the specific needs of our industry
customers, and empowering them to effectively manage road safety.
3.1.3 Audio sensing products
The Company offers a wide range of audio products and mature audio-visual product
solutions. By establishing and implementing enterprise-grade audio development processes, audio
system design specifications, and audio technology standards, we have continuously improved our
core technology stack for audio acquisition, transmission, and modulation-demodulation
processing. This has enhanced our ability to develop, verify, and manufacture a comprehensive
range of audio products and software for various acoustic environments. Leveraging a suite of
audio solutions, including audio codecs, audio quality processing, audio event detection, and
speech recognition, we meticulously ensure the audio quality and intelligence of our products, from
ideation to mass production. In the field of intelligent and interactive audio, we are constantly
breaking new ground in technology and product development, delivering highly competitive
audiovisual product solutions.
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For intelligent audio, we have developed a series of products that encompass front-end
collection, edge analytics, and central business closed-loop control. Our solutions, which
incorporate modules such as video AI, voice recognition AI, and thermal imaging, can be applied to
a wide range of business scenarios, including industrial equipment anomaly detection, pipeline
leakage monitoring, animal voice recognition, school bullying control, and vehicle horn control.
For interactive audio, we offer a full range of products and solutions, including public address
systems, professional sound reinforcement, and high-definition sound pickup. The broadcasting
system can be integrated with the platform and linked with video monitoring to achieve unified
control. The sensing of events through video monitoring, the analyzing and decision making on
business platforms, and the controlling executed by the broadcasting systems form the closed-loop
of business. The professional sound reinforcement system can be integrated with the large screen
display system to be applied in venues such as lecture halls, large, medium and small conference
rooms, opera houses, banquet halls, sports venues, etc., creating audio and video interaction and
immersive experience to meet customers' needs for high-quality audio scenarios.
3.1.4 Intelligent Interactive Products
The world of physics is rich and colorful. In many scenarios, there are rich interactions
between people and people, as well as people and things. Multidimensional awareness is applied
to refine the real world, with multivariate connection to collect data and intelligent computing to
build scenarios of digital intelligence, so as to finally make things an extension of people's touch,
improve the interaction between people and things, and bring people closer. The Company has
launched a variety of intelligent interactive products in various fields and scenarios, including smart
office, vehicle management, personnel access control, door intercom and alarm, industry, and
safety supervision, empowering the development of these industries.
(1) Residence sector
① Scenario of vehicle management and guidance
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The Company has perfectly combined video with display, and mechanical control. To improve
entrance and exit scenario solutions, we have released the "Ruijie" all-in-one barrier gate, snap-
display all-in-one machine, and entrance and exit self-service device. We have released an
intelligent sound-light police parking space detection camera that supports electric micro PTZ
platform debugging for more convenient deployment. Our new-generation parking detector
supports functions such as new energy vehicle parking space management, VIP parking space
management, and non-standard parking alarm, bringing better parking guidance experience and
more standardized parking management. For the quick closed loop of parking business, we
released a series of products such as entrance and exit management terminals, guidance
managers, and parking management terminals to help reduce costs and increase efficiency. Our
stop-and-charge integrated solution effectively improves parking operation efficiency and user
experience. By connecting the parking management service to the cloud platform, the pre-payment
and non-contact payment can be realized, and finally vehicles can enter and leave the parking lot
with a non-contact passthrough, bringing the superlative experience to users.
② Scenario of personnel entrance and exit
The Company is constantly optimizing and expanding our range of pedestrian turnstile
products, including full-height turnstiles, tripod turnstiles, wing turnstiles, and swing turnstiles, to
meet the personalized needs of various scenarios and provide customers with a new experience
and security control. We have recently launched our new intelligent integrated pedestrian turnstile,
catering to a wider range of personnel entry and exit applications.
③ Scenario of building access control
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This scenario has become deeply integrated into people's daily lives. The Company offers a
wide range of intelligent products, including access control systems, video intercoms, and
emergency alarms.
Our smart access control products comprehensively enhance the security of access control
systems, meeting the fourth-level industry system construction requirements for password
application security evaluation. Additionally, they enable one-click cloud deployment, making device
mobile configuration management more convenient and user-friendly. The devices support
advertising functions and can be used as electronic door signs or park/community announcements
and commercial advertisements, empowering the value addition of business. Our visual intercom
series products for buildings streamline the business processes among visitors, owners, and
property management centers. They effectively improve the access efficiency and security
management capabilities of community entrances and exits, bringing more convenience to owners
and enhancing property management efficiency. Our emergency assistance devices can
automatically register with the management platform or management machine, enabling remote
visual intercom assistance. Through intelligent voice recognition, emergency assistance can be
triggered, buying time for those seeking assistance, deterring criminals, and safeguarding the
safety of public places.
④ Scenario of smart office
Our "Stargaze" and "Starbright" smart tablets enhance both online and offline education
solutions, empowering a new era of educational growth. Our Deephub Board and Meeting software
deliver an unparalleled audio and video communication experience, redefining the meeting
landscape and expanding the reach of our conferencing solutions.
⑤ Scenario of display control
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Our distributed splicing controller and KVM seat management system seamlessly integrate
large-scale displays and operator workstations, meeting the high-efficiency collaboration demands
of command centers in metropolises, core hub dispatch centers, and international sporting events.
Our 8K series decoders meet the dual 8K decoding and display needs of control centers. Our all-in-
one MLED controller enables a variety of scenarios, including always-on displays and gesture
recognition. Our minimalist assembler and disassembler, deployed to the SMB market, enable
efficient and rapid business loop control for customers and users in scenarios such as conference
rooms and control rooms. Our iSee unified display control software seamlessly integrates various
forms of content onto a single display, providing a real-time visual experience and establishing a
unified display portal.
(2) Industrial sector
We are revolutionizing smart electricity with our new line of compact, all-in-one AI load
identification intelligent circuit breakers, significantly enhancing the efficiency and safety of power
systems. Our intelligent energy solution seamlessly integrates with advanced smart lighting
systems, smart IoT meters, and smart HVAC control systems. It enables real-time monitoring of
energy data across the premises, automatically adjusts energy usage strategies, and achieves fine
energy management. This not only helps buildings save energy and reduce costs but also
promotes the development of green buildings and contributes to the realization of the "dual carbon"
strategy.
(3) Safety supervision sector
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In the fields of emergency response, power, and rail transportation safety supervision, we
delve into business scenarios, gain insights into customer needs, and continuously optimize
product and business functions. We have created industry-specific products such as integrated
environmental monitoring machines, integrated data center patrol machines, IoT hosts, and power
and environmental monitoring hosts. These products enable remote monitoring and control of data,
helping enterprises achieve energy conservation and emission reduction, automated patrols,
production process optimization, and safety supervision. They also greatly improve the operational
efficiency and security of data centers and reduce operation and maintenance costs.
3.2 Full Connection
The Company's "full connection" capabilities evolved to "integrated connection" in 2023. In the
era of intelligent video, the deep integration of network products and video systems is becoming
increasingly essential. To address this need, the Company has established the Future
Communications Institute. Focusing on three key areas – network connection technology, data
exchange technology, and cutting-edge network technology – we are building a "3+N" integrated
connection capability system. This system aims to achieve more reliable, efficient, and intelligent
data processing and decision-making, thereby supporting the upgrade of the IOT to the video IoT.
The "3" represents three key technology foundations: 1) ''End user-to-network integration and
unified management" to streamline network management; 2) "A new network operating system" to
deeply integrate network systems and business systems; 3) "Open visual network integration
protocols" to enable interconnection across the cloud, network, edge, and end users. The "N"
stands for a series of innovative features tailored to specific scenarios, such as wide temperature
range, lightning protection, long-distance power supply, and port prioritization, making the network
more user friendly and ensuring smoother business operations.
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3.2.1 Wired Transmission
Industrial grade switches provided by Dahua feature high-quality industrial design standards,
an excellent fast ring network, and multi-level management functions, provide data access
capabilities in demanding scenarios, and fulfill the scenario requirements of customers for high-
power access and efficient operation and maintenance. At the same time, with the advanced
distributed switch matrix architecture, the high-performance multi-core CPUs and switching chips
are used to build integrated business control. The ultra-high switching capacity and compact body
provide more access channels to meet the demands of different scenarios.
Our new line of intelligent cloud-managed switches, launched in 2023, empowers customers to
achieve topology visualization for all connected and sensing devices in their networks, enabling
convenient delivery, unified management, and remote operation. This network product portfolio
integrates security and data, as well as end user and cloud, accelerating digital transformation
across all industries.
3.2.2 Wireless Transmission
The Company has released UWB, Bluetooth AOA, Bluetooth Beacon, GPS/BD, active/passive
RFID, LoRa, and other gateway products to realize long-distance and low-power IoT coverage, and
cooperate with video applications to form a variety of integration solutions, so as to meet diversified
application needs of customers, and support the intelligent upgrading of apps in energy, building,
retail, education and other industries.
Our wireless products, such as wireless AP/AC, Wi-Fi 6 wireless routers, industrial-grade
4G/5G routers, industrial-grade 5G CPE, and wireless bridges, solve the problem of full wireless
coverage in the 5G era, and significantly improve the wireless transmission performance under the
condition of constantly improving video resolution and increasing access quantity. We have
upgraded and optimized point-to-point and point-to-multipoint data feedback for wireless bridge
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products, separating data and video services and making the services more stable and reliable.
AP/AC enterprise wireless coverage has been integrated with routing control to provide full wireless
coverage with low latency, no wiring, and roaming Internet access for enterprise, office, and other
scenarios.
Our newly launched cloud-managed wireless products in 2023, including wireless AP/ACs and
wireless routers, enable one-click network access for wireless sensing devices, reducing
deployment costs and greatly facilitating the installation of video devices. Additionally, we offer
specialized 4G/5G router products tailored for professional scenarios such as in-vehicle and
industrial applications.
3.2.3 Industrial Scenario Transmission
For industrial scenarios, we have newly launched a full range of high-quality cloud-managed
industrial switches, which support excellent fast ring network and convenient cloud management
functions, provide users with data access capabilities in demanding scenarios, and realize the
integration of industrial Internet data and video data.
3.3 Full Computing
As intelligent computing scenarios become increasingly diverse, a single type of computing
power is no longer able to efficiently meet the ever-changing demands. Therefore, computational
diversity is becoming an inevitable trend. The Company's intelligent computing and cloud
computing have made breakthroughs in computing power construction, architectural
complementation, and digital intelligence mid-end platforms. Through virtualization,
containerization, and other deployment methods, they can quickly achieve full compatibility with
high-performance computing resources and adapt to various types of CPUs, GPUs, and NPUs,
fully realizing resource pooling. Our Company's "full-computing" architecture delivers enhanced
computing power, accelerated speeds, and robust security across diverse fields. This enables the
creation of sustainable, full-stack innovations that boost efficient urban governance and enterprise
digitalization advancements.
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3.3.1 Intelligent Computing
(1) Computing power construction: Server + AI chip is the foundation for building various
computing, as well as enabling systems and software. The Company continues to carry out
technical work related to computing power construction. As domestic and independent controllable
open-source projects become increasingly mature, we have completed the domestic adaptation of
the entire chain of end user-edge-cloud computing products based on its solid accumulation of
technical capabilities and have realized the pooling of computing resources, such as image
computing, AI computing, general computing, and special computing. Leveraging our extensive
industry experience, we collaborate with partners to drive technological innovation in areas such as
virtualized computing power slicing of chips and specialized comparison computing, providing
powerful computing support for full-chain domestication. To meet our customers' high demands for
algorithm performance, we are continuously optimizing cross-hardware model quantization and
achieving cross-hardware accuracy alignment. This enables the coordinated use of computing
power across end user, edge, and cloud layers, maximizing the value of computing resources.
(2) Complementary architecture: To address the diverse needs of long-tail scenarios, we
offer two computing architectures: a professional algorithm architecture and an open algorithm
architecture. These architectures cater to the unique requirements of different customers.
Embedded computing architecture: By improving single chip performance and combined
computing power, the Company attempts to fully unleash the performance and value of
specified algorithms, and continuously launch leading and professional AI products;
Video cloud computing architecture: By implementing the intelligent scheduling of pooled
computing power, the unified scheduling of algorithm library end-user, edge, and cloud
computing power resources across the entire network, and the access of third-party
algorithms, the Company has achieved high concurrency, high throughput, and high
efficiency computing, so as to continuously empower open and win-win AI services.
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Training algorithm service: Our algorithm training service caters to new algorithm needs
arising from business operations and incremental algorithm fine-tuning requirements
stemming from scenario differentiation. It seamlessly integrates with end user, edge, and
cloud, allowing for the seamless loading of open algorithms and enabling unified training
and inference.
(3) Digital intelligence mid-end platform: To fully leverage our computing power and
architecture strengths, the digital intelligence mid-end platform will focus on the capability layer,
providing intelligent services for the upper-layer application platform. It will connect various
capabilities such as professional algorithms, training algorithms, and data computing, enhance
open capabilities, facilitate the incubation of emerging intelligent businesses, and provide an
intelligent foundation for ecosystem partners.
For the processing of massive data in AIoT, we have comprehensively upgraded products in the
field of intelligent computing, including central intelligent products, edge intelligent boxes, storage-
intelligence integration machines, and intelligent storage EVS. We continuously enrich industry
algorithms and improve product intelligence performance to promote the implementation of various
industry businesses.
3.3.1.1 Edge Intelligent Computing
The Company is constantly exploring business norms in various fields and upgrading the
performance of deep learning algorithms. It is committed to the in-depth application of edge
computing in the industry and the realization of highlight functions such as multi-channel multi-
intelligence, intelligent round patrol, tidal intelligence, intelligent clustering, and flexible exchange of
storage intelligence. At the same time, it effectively solves the problems of massive data
processing, real-time response, and data security faced by AI in industry applications. During the
reporting period, the company released a series of industry-specific intelligent integrated machines,
expanding intelligent applications to various sub-sectors such as energy security, power,
emergency management, financial compliance, natural resources, and behavioral analysis.
Edge intelligent box IVD series integrates a variety of intelligent services, adapts to a variety of
application environments at the edge, realizes edge intelligent transformation, computing power
supplement and flexible deployment, and achieves the expansion capability of intelligent services.
Related products have a built-in high computing power chip, which can load various algorithms to
deal with intelligent management in small scenarios, so that AI can better serve as a new driving
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force for intelligent transformation.
Our intelligent NVR products continuously deepen the application of artificial intelligence in
small and medium-sized scenarios, and combine IoT to continuously enrich industry intelligence.
We are committed to creating a video-centric product solution, with intelligence, interconnection,
integration, and management as the core, and playing a role in the fields of AI, IoT, and video data
intelligence. In the field of AI, leveraging the synergy between front-end and back-end intelligence,
we are reusing intelligently processed images and feature values, maximizing device performance,
and continuously improving the efficiency and accuracy of intelligent retrieval. In the field of IoT, our
NVR products have evolved from mere video access to encompassing the connection, control, and
interaction of a full-frequency domain IoT sensing devices. By integrating IoT sensing data,
intelligent computing, and visual presentation, we show industrial data in an intuitive and user-
friendly way for easy management. Real-time analysis of videos from production work scenarios
enables timely warnings of potential anomalies, ensuring the safety and reliability of the entire
industrial system. In the field of video data intelligence, by fully utilizing the low computing power
deployment for the edge and end users, we can maximize the value of historical data. This
collaborative approach between edge and end users enables a novel approach to feature value
retrieval, achieving fast and precise retrieval of historical data for business needs. Our innovative
Acupick solution significantly enhances retrieval efficiency and reduces TCO costs.
3.3.1.2 Central Intelligent Computing
In order to quickly respond to the current trend of digital intelligence transformation in the
market, the Company has built a unified open intelligence architecture for central intelligent
computing based on the mature architecture, and improved the layout by building a 2+2+N system,
that is, two engines of view intelligence + algorithm training, as well as two directions of awareness
and cognition. In 2023, we embarked on a comprehensive upgrade of our smart view engine,
establishing an AI middle-platform framework centered on five core components: training center,
algorithm center, parsing center, application center, and operation center. This lays the foundation
for our intelligent advancement, enhances our intelligent open capacity, incubates emerging
intelligent businesses, and constructs an intelligent ecosystem. To address diverse business needs,
we are building intelligent capabilities from the following two dimensions:
In the field of specialized intelligence of storage, computing, and inspection, the
Company relies on a smart view engine, full-parsing, and full-comparison products to create a
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standard solution to optimize the data processing algorithm, provide industry-leading parsing
capabilities through heterogeneous computing, provide second-level comparison capabilities for
hundreds of billions of data through feature indexing, and provide extremely fast computing
capabilities for large-scale data processing services, realizing high-precision and high-performance
awareness parsing and retrieval comparison of various elements, and fully serving the big data
applications in various industries at the city level.
In the emerging field of long-tail intelligence, the Company aims to meet the long-tail needs
of various industries and output an intelligent hierarchical grading system from L1 to L5. Through
the combination of algorithm training engine + algorithm center + algorithm package + rule engine,
N types of algorithm packages are quickly generated based on the algorithm training engine and
incorporated into the algorithm center, realizing the unified management, scheduling, and
arrangement of smart view engine. With the configuration of rules, we can realize the fast delivery
and flexible loading of algorithms and achieve the synergy of tasks, algorithms, and computing
power among cloud, end user, and edge, which gives full play to the intelligent value. The standard
northbound interface allows us to connect with platform providers. The standard southbound
interface allows us to collaborate with algorithm ecosystem partners to create smart ecosystems.
Through in-house R&D and mainstream smart card adaptations, we offer our customers a
comprehensive range of smart cards and parsing cards, further enriching and expanding the
ecosystem compatibility in the cloud computing field. We offer a variety of product solutions to meet
the diverse needs and sales models of our customers, including integrated hardware and software
systems, pure hardware devices, and pure algorithms software. Our products fall into two main
categories: all-in-one and distributed products. All-in-one products are equipped with industry-
specific algorithms to meet the diverse needs of industries such as transportation and surveillance,
enabling closed-loop business control. Distributed products, on the other hand, allow for the
integration and deployment of various algorithms, including face recognition, vehicle detection,
structural analysis, and event detection, and support dynamic expansion to meet the requirements
of industries such as social governance.
3.3.1.3 Intelligent Storage
With the advent of the IoT information age, multidimensional perception data such as videos,
pictures, audio, and documents are growing explosively, and the diversification and complexity of
storage requirements have put forward higher requirements for data storage. Traditional storage
solutions are limited by hardware space, storage data access methods, and other factors, making
them unable to meet the increasing demand for large-scale data storage and high-performance
processing. Our intelligent storage solution is built on single-controller and dual-controller hardware
architectures and utilizes streaming storage capabilities. It integrates data redundancy, clustering
strategies, and encryption technologies to mitigate single-point-of-failure risks and ensure data
security and reliable storage. Combining technologies such as intelligent analysis, rapid data
structuring, and integration of storage, intelligence, and management, we can achieve rapid retrieval
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of target data, long-term storage of valuable data, and closed-loop edge data services, giving new
value to centralized data storage. Our products cover both standalone and cluster solutions, catering
to the ever-growing demand for data storage and integrated applications.
Our standalone storage series offers a comprehensive range of solutions, including single-
controller, dual-controller, dual-channel, and embedded video storage configurations, to meet the
long-term storage needs of diverse users while reducing overall TCO. All these products are now
made up of domestically produced components. By using a domestically developed operating
system, we have achieved independent control over core technologies. Equipped with integrated
encryption chips and utilizing domestically developed algorithms and two-way authentication
technology, our products can safeguard the confidentiality and integrity of user data. The unified
cloud cluster series, based on multi-machine cluster management technology, uniformly manages
front-end resources and storage resources. Related products can provide operation and
maintenance management functions, checking cluster recording status, hard disk and other
hardware operation information, and report fault alarms in real time, thus reducing user operation
and maintenance costs. We are also continuously optimizing our cluster fault tolerance strategies
to provide a centralized storage solution with high capacity, high performance, high reliability, and
high security for various video recording systems.
3.3.2 Cloud Computing
Traditional data centers face numerous challenges during cloud transformation, such as siloed
construction and long construction cycles. To improve resource utilization, simplify management
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and operations, and ensure the secure and stable operation of businesses, the Company has
launched a cloud computing solution that integrates underlying physical resources and provides a
rich suite of cloud services, including computing, storage, networking, and PaaS. We also provide
full lifecycle management of cloud infrastructure to help drive customers' digital transformation.
(1) Cloud platform
Our cloud platforms are next-generation, highly efficient, and agile cloud-native computing
platforms designed for diverse computing scenarios in the smart Internet of Things (IoT) era.
Powered by technologies such as Kubernetes, containers, application orchestration, and elastic
scheduling, they provide unified management of pooled infrastructure resources, mixed deployment
of big data, intelligent analysis, and application software, and meet the needs of unified
management, efficient resource utilization, flexible service deployment, and reliable disaster
recovery. Based on our deep understanding of cloud-native technologies and the video industry, we
offer a comprehensive suite of cloud products, including cloud management platforms, container
cloud platforms, hyper-converged infrastructure, and general-purpose storage. These products
cater to a wide range of needs, from standalone solutions to large-scale clusters, providing our
government and enterprise customers with cost-effective cloud solutions that empower them to
build next-generation digital infrastructure.
(2) Cloud storage
With over a decade of technological expertise, the Company provides large-scale video cloud
storage services to city-level and enterprise-level customers. We offer a variety of device access,
multi-channel large-scale video access and storage, and streaming media distribution capabilities.
Based on native distributed file system technology, field-specific optimization, software and
hardware integration, and dynamic fault tolerance, we have built an ultra-large-scale four-level
(disk-level, node-level, rack-level, and storage pool-level) reliable data storage capability. Our
diverse product portfolio, including multi-bay, single- and dual-controller, and single- and dual-
channel configurations, caters to the varied storage needs of industries such as government,
transportation, finance, energy, culture, education, health, and premises. We have successfully
delivered multiple cloud storage projects, and our petabyte-scale clusters have achieved a long-
term stable operation.
(3) Cloud database
Based on a decade of experience in real-time access, storage, and retrieval of massive sensor
data, as well as the processing demands of complex scenarios, we continue to make long-term
investments in our cloud database system in areas such as hardware and software integration,
dynamic fault tolerance, index optimization, reliability, distributed technology, and data security, and
have provided industry-specific centralized and distributed database services, enabling automatic
access to data from IoT sensing devices, automatic data balancing, and efficient retrieval services,
delivering an out-of-the-box experience that significantly reduces the development, operation, and
implementation costs of integrating databases into business platforms. Dahua Cloud Database
System is widely applicable to government and enterprise customers. We have successfully
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delivered numerous cloud database projects. Our large-scale database clusters have been running
stably, providing real-time, online data protection for our users.
3.4 Full Intelligence
As artificial intelligence and big data technologies are rapidly transforming industries, the
Company is committed to developing scenario-based applications, conducting cutting-edge
research, and exploring new technologies such as foundation models and multimodal processing.
By strengthening our AI engineering capabilities, we are continuously driving the industrialization
and commercial success of AI. We are also delving into the underlying insights of view data to
unlock its value and fully support the digital transformation of cities and enterprises. This will enable
a closed-loop control from sensing intelligence to data intelligence and finally to business
intelligence, creating business value for our customers through our "full-intelligence" capabilities.
3.4.1 Artificial Intelligence
AI is at the heart of the Company's strategy, and we are committed to being a global leader in
AI research and innovation. At present, we own national enterprise technology centers, national
post-doctoral scientific research workstations, Zhejiang Enterprise Research Institute, Zhejiang
Engineering Research Center, and Zhejiang Key Laboratory, as well as AI R&D teams with more
than 1,000 members. Dahua has won first place in more than 70 AI algorithm competitions and
evaluations at home and abroad, published more than 120 papers in core journals, applied for
more than 2,400 AI patents, and undertaken 22 national and provincial AI scientific research
projects. During the reporting period, we filed over 300 AI invention patents. Over 270 of them were
accepted for processing. We also undertook 6 national and provincial-level AI scientific research
projects.
3.4.1.1 Development Trend of AI Technology
As the new wave of technological revolution and industrial transformation deepens, data is
becoming a new factor of production, and AI is becoming an important production tool.
Digitalization and intelligent transformation has always been required in industry development. AI
technology is continuously being integrated into industry business, empowering all walks of life to
improve quality and efficiency, and driving rapid growth of the AI industry. The emergence of new
technologies such as foundation models and multimodal processing is driving innovation in AI
applications, accelerating the commercialization and value creation of new AI technologies, and
propelling AI to new heights. In the field of artificial intelligence, the Company insists to make high-
intensity investment in R&D to promote the large-scale implementation of the artificial intelligence
industry and continue to maintain its leading position in the industry.
(1) Rapid advancements in technologies like Transformer have led to significant
improvements in algorithm performance.
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Traditional small language model approaches rely heavily on supervised learning, which is
limited by the size of the training data, the structure of the network, and other factors. As a result,
these models have poor generalization ability and adaptability to new scenarios, and their accuracy
faces challenges in complex situations. Foundation models can learn rich cross-field knowledge
from vast amounts of diverse data due to their larger network parameters. This enables them to
develop general-purpose capabilities that are applicable across a wide range of scenarios and
tasks. Current mainstream foundation models are based on the Transformer architecture, which
excels at understanding and processing long sequences of text, videos, and other continuous
information. In the field of visual parsing, Transformers outperform traditional convolutional neural
networks in their ability to capture subtle nuances in data. This results in enhanced accuracy and
generalization performance for visual parsing tasks. In the field of image generation, diffusion
models solve the instability problem of GAN training and gradually become the mainstream image
generation model. Compared with other image generation models, the diffusion model can
generate better images.
(2) The learning ability of foundation models has greatly improved, greatly improving
productivity and production efficiency.
Traditional small language model approaches are trained and optimized based on individual
business scenarios. Due to the significant variations between different business scenarios, the
same model exhibits poor adaptability when applied across scenarios. This often necessitates the
development of new models tailored to specific scenarios, resulting in a substantial workload.
Foundation models have stronger scenario generalization capabilities because they are trained on
a massive amount of prior knowledge. Moreover, prompts in various modalities, such as images,
voice, and text, can stimulate the emergent intelligence of large models, enabling rapid definition of
new functionalities to cater to user needs in a personalized and differentiated manner, thereby
enhancing productivity. Fine-tuning large foundation models on small datasets for specific business
fields enables rapid capability transfer to new scenarios, effectively addressing diverse and
fragmented market demands, and enhancing development efficiency.
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(3) Foundation model technology accelerates the diversification of AI applications.
The rapid advancement of foundation model technology like Gemini and Sora has propelled AI
to new heights, achieving groundbreaking results in areas such as text generation, image
generation, and video generation. This is accelerating the diversification of AI applications. Gemini,
a multimodal foundation model, showcases exceptional capabilities in understanding images,
audio, videos, and text. It is poised to revolutionize natural language processing and multimodal
technologies, paving the way for groundbreaking advancements in text generation, search engines,
intelligent question answering, and more. Sora, a text-to-video model, possesses remarkable
comprehension and generation capabilities. It not only understands what users request in prompts,
but also understands how these things exist in the physical world, providing users with a highly
realistic and detailed visual experience.
From sensing to cognition to generation, foundation models will continuously break through
capability boundaries, understand and communicate in more modalities, and have stronger parsing
and generation capabilities. They will achieve more complex behavior recognition, image and text
data retrieval, intelligent decision-making, and human-computer intelligent interaction functions.
This will accelerate the transformation of various industries towards intellgentization and
automation, bringing higher efficiency, better services, and more innovative products. Finally, they
will work together with industry chain partners to collaborate on innovation and embark on the new
journey of AGI.
3.4.1.2 Building A "1+2" AI Capability System
AI has emerged as a crucial productivity tool, and the adoption of visual AI is rapidly gaining
momentum across diverse industries. We remain committed to our core focus on visual technology,
continuously building comprehensive and leading AI research and engineering capabilities. We are
centered on industry-specific needs, aiming to make AI accessible to all. Driven by advanced AI
technologies, we are constantly solidifying our AI industrialization capabilities.
Through years of continuous accumulation, we have established a "1+2" AI capability system,
which consists of an architectural framework and two supporting aspects: research capabilities and
engineering capabilities. Based on this AI capability system, we have enhanced our algorithm
delivery capabilities to address the vast array of fragmented demands, enabling more customers to
reap the benefits of AI and enjoy a superior user experience. This "1+2" AI capability system, based
on a four-layer technical architecture, establishes a framework for AI research and engineering
capabilities. At the scientific research level, we are establishing a comprehensive technical
framework across various algorithm domains, continuously solidifying our foundational
technologies, and actively exploring novel algorithms. At the engineering level, we have established
a research and development system centered on algorithm components, enabling flexible
customization of pipeline production and supporting efficient deployment of algorithms to the cloud,
edge, and end user. The "1+2" AI capability system has been upgraded from version 1.0, which
supports small language models, to version 2.0, which supports foundation models.
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(1) Continue to improve the four-layer architecture system to efficiently meet scenario-
based AI needs.
At the same time, a four-layered technical architecture system composed of the Jinn platform,
operator components, general algorithm solutions, and industry algorithm solutions decouples from
the technical side, providing end-to-end efficient scenario-based customization and development
capabilities, and accelerating the implementation of industry intelligence.
① Continue to upgrade the Jinn Platform and improve the algorithm solution production
line.
To realize large-scale industrialization of AI, efficient end-to-end solution development and
delivery capabilities are needed. The Company continues to focus on building the Jinn Platform, a
one-stop AI development platform. Jinn Platform is a one-stop AI development platform for
developers, covering the entire AI development workflow from data processing, model training,
optimization and porting, algorithm management, and solution development to algorithm verification
and testing. In 2017, the Company established a high-performance computing center. In 2019, we
launched a full-stack algorithm development platform, enabling closed-loop management of the
entire chain from data management to solution delivery. In 2021, we upgraded and released a
compositional solution development platform. In 2023, we developed a workflow system for
scenario-based algorithm development, which can automatically orchestrate development
workflows such as data processing, training, model conversion, and testing. This enables online
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and automated development of scenario-based algorithms, protocol-based operators, and a unified
algorithm library, providing model-as-a-service capabilities and enabling multimodal fusion analysis
and large model language service deployment.
② Standardize algorithm components to enhance algorithm replicability and
adaptability to diverse scenarios.
Based on our expertise in scenario-based capabilities, we have streamlined algorithm
solutions for different application scenarios and standardized the solutions and their associated
algorithm components. By shifting the algorithm development model from "solution-centric" to
"algorithm component-centric," we have enhanced algorithm reusability. Additionally, we have
upgraded the "algorithm release equals solution release" approach to "model release equals
solution release," further shortening the development cycle for intelligent solutions in scenario-
based applications and reducing algorithm development costs.
③ Continuously improve algorithm solutions and enhance scenario-based AI
capabilities
In 2023, we upgraded our scenario-based AI capabilities by delving into customers' production
management processes. We provided a rich array of scenario-based AI applications to help
customers enhance quality, improve efficiency, and achieve win-win outcomes. We have enhanced
the functionality of our industry-specific algorithm solutions to address industry applications and
needs. With the multimodal visual analysis capabilities of our Galaxy foundation model, we have
upgraded our visual cognition capabilities, continuously improved visual analysis accuracy,
enhanced the ability to meet long-tail demand, and developed industry-specific intelligent solutions
based on multimodal visual large models. This has further enhanced the level of intelligence in
industry-specific businesses.
(2) Research capabilities in underlying AI technologies
Dahua continues to strengthen its research on underlying AI technologies to ensure the
sustained advancement of its algorithms in the industry. By digging deep into the demand and
industry pain points, and combining the development trend of AI technologies, especially the
foundation model technology, we focus on such fields as single-model multi-tasking, small-sample
learning, deep genetic coding technology and trustworthy AI, to build the competitiveness of
intelligent products and solutions, and to accelerate the process of commercializing AI.
① Single-model multi-tasking, to maximize the utilization of computing power
In the field of vision, the technical path of unified inference through single-model multi-tasking
remains powerful in the face of high computing power costs. During the reporting period, the
Company continued to delve into single-model multi-tasking technologies. For example, the original
algorithm scheme consisting of 5 models for detection, key point, pose, attribute analysis and
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recognition can now be completed by 1 model, with substantially lower complexity of arithmetic
scheduling and task scheduling, and 30% increase in the utilization rate of computing power.
② Small sample learning, to increase the efficiency of algorithm development
The size of training samples directly affects the performance of deep learning algorithms.
Dahua proposed the RWSC-Fusion technology in 2023, which synthesizes massive samples close
to real scenes through a small number of samples to train algorithms, thus reducing the
dependence of partial algorithms on data. This technology has been applied to scenarios such as
security checks and transmission lines, with 10% improvement in the algorithmic recall rate and
30% reduction in the development cost. Related technologies were published in CVPR 2023, one
of the top conferences on computational vision.
③ Deep genetic coding, to enable end-to-end cloud feature synergy
Due to the non-interpretability of deep learning, heterogeneous feature embeddings generated
by the encoders of different models are incompatible and unmeasurable, leading to problems such
as incomplete synergy between end-edge clouds in the deployment of small and large model
products, and high cost of upgrading product models. To address these issues, Dahua has
developed deep genetic coding techniques to allow the feature representation capability of
foundation models to be inherited to sub-family models, and in the process of genetic learning, the
sub-family models can be customized for different application scenarios and different computing
power, and feature embeddings generated by models of the same lineage can be metricated
among themselves, thus realizing feature synergy in end-edge clouds, and lowering the cost of
product upgrading and O&M.
④ Trustworthy AI, to ensure system security and stability
Confronted with risky challenges to AI security, Dahua accelerates the research and
implementation of trustworthy AI technologies, such as anti-attack and defense and deep forgery
detection, to achieve AI security and trustworthiness. During the reporting period, Dahua continued
to research on anti-attack and defense technologies based on diffusion models, moving from the
digital domain to the physical domain to enhance the effectiveness of physical attacks. We also
developed robust defense methods to significantly improve system security and stability through
technologies such as forgery detection and perturbation purification. Relevant technologies have
been applied in scenarios such as entrance/exit license plate anti-counterfeiting and door access
control anti-counterfeiting detection.
(3) AI engineering capabilities
In terms of AI engineering capabilities, Dahua has continuously deepened its efforts in areas
such as model compression and scenario-based algorithm engineering implementation, to enhance
product performance and competitiveness, and expedite AI implementation.
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① Deeply tap into model compression technologies to enhance product performance
and competitiveness.
Currently, there are many chips with wide differences in capabilities; employing different model
compilers individually causes tremendous engineering investment in algorithm development.
Against this background, Dahua has developed its own adaptive model compression and tuning
tool. The self-developed hardware-aware adaptive quantization engine technology optimizes the
quantization method on the basis of hardware resources and network characteristics, assists in
achieving precision tuning with small samples, and optimizes the scale of quantization parameters
with less human involvement. Through hardware-aware adaptive model compilation, it is
compatible with different training frameworks and various chips, thus addressing the problems of
multiple platforms, multiple frameworks, and high threshold of performance tuning. Meanwhile, the
QAT quantization technology is employed to overcome the problem of traditional offline
quantization accuracy degradation, thus guaranteeing the accuracy of the model on low-bit
hardware to achieve training-as-you-get, i.e., consistent accuracy of the model deployed from
training to inference. Moreover, the enabled low-bit quantization compression significantly improves
the computing power utilization while guaranteeing the accuracy of the commercialized application.
② Enhance the efficiency of scenario-based algorithm implementation by relying on
standardized algorithm application paradigms and technical upgrades.
Continuously improve the delivery capability of three algorithmic application paradigms,
namely "rapid customization by the Company", "convenient development by users" and "general
algorithmic paradigm". In order to improve scenario-based AI response capability, we have
extracted over 10 general algorithm paradigms from fragmented demand development to improve
reproducibility and delivery efficiency. For example, based on such paradigms as "Workwear
Compliance", "Changing Event Detection", and "Action Customization", we have undertaken more
than 200 algorithm customization requirements, and realized training-free delivery of algorithms,
with the delivery efficiency increased by more than 80%.
Facing the problem of unstable algorithmic effect in complex scenes due to low accuracy of
traditional algorithms for extreme targets (extremely small targets, severely occluded targets, high
similarity targets, etc.) encountered in the process of intelligent industry transformation, we
investigate the visual cognition ability based on the Galaxy Foundation Model to enhance the
perception in complex scenarios, and deepen the level of intelligent industry transformation.
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3.4.1.3 Constructing a 1+1+N Algorithm Training System
Construct a 1+1+N algorithm training system, i.e., algorithm model training + algorithm
incremental training + algorithm orchestration. The 1+1+N algorithm training system enriches the
algorithm application scenarios, comes closer to clients' business processes, and greatly shortens
the algorithm delivery cycle. By providing clients with professional, timely and personalized training,
we can quickly build up algorithm capabilities for them, support a wide range of government
business needs, assist in corporate intelligent upgrading, renovation and transformation, and
establish good customer relations and trust.
Two core platforms, i.e. the offline training all-in-one machine and the AI training online
platform, have been launched to support such capabilities as on-demand application of training
resources, dynamic allocation, multi-person collaboration, task assignment, online verification,
online deployment and upgrade, and provide round-the-clock expert technical support. With the
training platform, customers can conveniently obtain new algorithms and enjoy professional
technical support and services, powering a number of industries such as energy and water
conservancy.
3.4.1.4 Boosting Corporate AI Capabilities with the Galaxy Foundation Model
Dahua released Galaxy Foundation Model in 2023, a vision-based foundation model that
incorporates multimodal capabilities. Foundation models currently released in the industry are
mainly generative models, whereby a common model is extended for different industries to handle
various downstream tasks. In contrast, the Galaxy Foundation Model is oriented to visual parsing
tasks; by building several typical industry visual models, a set of computational framework is
extracted, on the basis of which more industry visual models can be built.
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(1) Advantages of the Galaxy Foundation Model
① Achieve accuracy and generalizability leap, enhance business competitiveness, and
accelerate intelligent market scale expansion.
The Galaxy Foundation Model is pre-trained with tons of unlabeled data and fine-tuned on the
labeled data, so that the trained model is stable and reliable under extreme targets and extreme
scenes. For example, in various situations such as extremely small targets, multi-morphic targets,
targets with inconspicuous features, multi-angle targets, blurred images, strong backlight, complex
backgrounds, and multi-source images, the results are still stable and reliable, substantially better
than those of small models.
② Define new functions through graphic prompts to directly satisfy fragmented
functions and efficiently cover new long-tail markets.
The Galaxy Foundation Model realizes the upgrading from generalization of algorithm
components to that of algorithm solutions. Originally, for small models, the development of an
algorithm requires four steps: data annotation, data training, algorithm deployment, and product
delivery. Now, the Foundation Model turns the four steps into just one step, with no customization
required. Simply with image and text prompts, it can quickly realize new functions, thus greatly
shortening the development cycle, and efficiently satisfying the fragmented needs of the long-tailed
market. For example, foreign objects such as bird's nests, kites, or plastic bags may cause great
potential danger to electric power safety in the power sector. Previously, customized training was
required based on specific scenarios and foreign objects, incurring extremely high development
costs. Nowadays, such development can be easily achieved by simply giving the foundation model
corresponding graphic and textual hints.
③ Break through visual cognition capabilities to understand the entire process of an
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event and open up new space in the intelligent market.
Due to technical limitations, small models are unable to realize complex behaviors with many
objectives and multiple steps that are difficult to dismantle step by step, such as sweeping waste
into sewers, violently throwing objects, and regulating hand-washing. In contrast, the Galaxy
Foundation Model can not only extract image features, but fuse the features of different moments
so that it can better understand the whole process of an event and recognize complex behaviors. It
enables visual intelligence tasks to expand from the previous perceptual parsing and simple
cognitive needs to complex cognitive needs, which opens up a new space in the intelligence
market.
④ Analyze all scenes autonomously, and streamline intelligent configurations for
improved intelligence and usability.
Small models are not capable of understanding the whole scene, so rules need to be
configured for event analysis, which requires professional support and leads to time-consuming
and laborious deployment of algorithms. The Galaxy Foundation Model is capable of understanding
the whole scene, and can realize event analysis without rule configuration. Take the power sector
as an example, for climbing operation compliance business, the Galaxy Foundation Model
automatically understands the climbing scenario, without the need of configuration, which makes it
more convenient to use. The foundation model makes intelligent configuration no longer
cumbersome and improves the ease of use of intelligence.
(2) Coordinated small and foundation models to build affordable scenario-based foundation
models
In the field of vision, foundation models have made great progress in effectiveness, but with
relatively high computing power costs. The input to the visual parsing tasks is visual images, which
involve a large amount of data and need to be analyzed 24/7, resulting in high cost for each
exclusive path. The cost of using models with ultra-large-scale parameters is high, so significantly
cutting the cost of visual parsing foundation model applications is a prerequisite for successful
commercialization. Dahua focuses on the large model downsizing techniques and the synergy
between small and foundation models to build affordable scenario-based foundation models.
The large model downsizing techniques are the basis for building affordable scenario-based
large models, which can reduce the basic deployment cost of visual parsing foundation models.
The technical steps are as follows:
First, control the number of parameters of the basic foundation model, and select the
appropriate parameter size based on the task needs, to keep it at the scale of 10 billion through
structural design, training and verification, and iterative optimization of a 100 billion foundation
model. Second, with the model downsizing technology, the 10 billion parameters are reduced to the
scale of one billion through domain distillation and domain quantization, so that the computing
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power demand is reduced to about 10% of that of a mainstream foundation model. Last, due to the
stronger comprehension and generalization ability of foundation models, one foundation model is
able to substitute dozens of original models, making the overall computing power of the foundation
model business controllable.
Co-deployment of small and foundation models is the key to building an affordable foundation
model system, which ensures controllable computing power costs and accelerates
commercialization. The system consists primarily of end-side cloud computing power for computing
network fusion and co-deployment of small and large models, whose architecture mainly
encompasses the following: the bottom layer of the system consists of a large number of end-side
computing power devices with different computing power sizes on the end-side, mostly for small
model inference applications, which can be optimized by combining the hardware characteristics to
improve the utilization rate of the computing power. The middle layer is the cloud-side computing
power pool, mainly for the unified pooling management of heterogeneous computing power, which
supports the integration of training and promotion, the fine-tuning of foundation models, and the
collaborative optimization of small and foundation models. The top layer is the computing network
integrated management and scheduling platform, which carries out unified modeling of small and
foundation computing power, constructs system-level computing power network, manages small
and foundation model warehouses, and distributes models according to the computing power
capacity to complete system-level optimization and scheduling.
(3) Foundation model application
With visual parsing as the core, we follow up the development of cutting-edge technologies,
and make rapid iteration and optimization centering on real-world requirements, to realize value
realization from multiple perspectives. We actively promote localized deployment, and realize the
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application of foundation model-related technologies in industrial foundation models, development
efficiency, and small model technology upgrading.
① Pilot of industry foundation models
Foundation models for urban governance
Foundation models for urban governance help upgrade the AI capabilities of urban governance
by making the data more accurate and richer. Compared with small models, foundation models for
urban governance are more than 10% more accurate on average, with a 50% increase in the
number of functions, enabling the realization of a variety of complex cognitive functions in the
industry. With powerful comprehension capability, foundation models can simplify the deployment
and significantly reduce the deployment cost. A foundation model can replace dozens of small
models. With high accuracy of parsed data, such a foundation model is able to reproduce the real
twin of a city, which can be reconstructed in a real way, from the full view of the whole city to the
condition of each road and every passing vehicle at each intersection. Moreover, the foundation
model enable simulation and evaluation of urban road status, simulation and evaluation of urban
environment, simulation and deduction of event process, automatic generation of data report and
analysis report, among others, so as to realize efficient decision-making and analysis of urban
governance. In addition to these advantages, it also demonstrates its strengths in point
management. Daily urban management is often faced with the need to regulate numerous
decentralized points, which vary widely and thus require different functions to be configured. To
address this issue, the foundation model incorporates advanced point governance algorithms.
Based on merely one picture, it can automatically analyze and output detailed scene information,
and meanwhile intelligently recommends the appropriate function configuration for each point. The
launch of this foundation model product not only greatly enhances the functional performance, but
also greatly improves the convenience of user interaction.
Foundation models for power
Foundation models for the power sector can likewise make the data more accurate and richer,
thus boosting the upgrading of AI capabilities in the power sector. Compared with small models, the
average accuracy of foundation models for the power sector increases by more than 20%, with a
40% increase in the number of functions, which ensures the implementation of a variety of complex
cognitive functions in the power sector. Meanwhile, a foundation model not only realizes more than
80 functions of the whole industry, but enables the real twin reproduction of the power scene, from
the overall view of the entire substation scene to the operational status of transformers and other
instrumentation equipment. The foundation model can also realize functions such as the
construction operation drill training, and independent analysis and decision-making of O&M data,
so as to realize the efficient decision-making and analysis in the power sector. Moreover, it supports
all kinds of foreign object detection functions, such as birds' nests, plastic bags, and balloons.
Rather than having to do repetitive tasks such as collecting materials and re-training the model, the
corresponding foreign object recognition function can be realized simply through the corresponding
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graphic prompts.
Foundation models for more industries
In addition to foundation models for urban governance and power, Dahua is also actively
deploying algorithms in more industries, such as transportation, and advancing their scenario-
based deployments and applications.
② Automated annotation for higher development efficiency
The use of foundation models to achieve intelligent pre-annotation, intelligent auxiliary
annotation, and annotation process optimization accelerates annotation speed and saves manual
input. Currently, intelligent annotation covers various types of materials such as pictures, videos,
and audios, and supports a variety of annotation tasks such as target, attribute, segmentation, and
tracking. It has achieved satisfactory results on hundreds of annotation categories including
motorized vehicles, non-motorized vehicles, various types of animals and objects, with significantly
improved annotation efficiency. Meanwhile, intelligent annotation can also substantially improve the
annotation quality of difficult cases.
Going forward, the foundation model intelligent annotation technology will be applied to the
Genius AI open platform to upgrade the level of data processing intelligence, making data
processing more efficient and accurate, which will greatly facilitate the extraction and utilization of
information and accelerate the intelligent transformation of business processes.
③ Technical upgrading using Transformer-related technologies
While developing foundation models for industries, Dahua is actively applying Transformer's
multimodal technologies to improve the effectiveness of its algorithms with comparable computing
power. The scene adaptability is dramatically improved for such tasks as scene classification,
behavioral analysis, and generic defect detection. In the scene classification task, the multimodal
model is capable of processing and understanding images and their related descriptions, providing
excellent classification results in a variety of complex settings. This technological breakthrough
enhances the accuracy of image retrieval systems. For behavioral analysis, the joint analysis of
video frames and audio signals enables more accurate recognition of human and vehicle
behaviors. In terms of generic defect detection, the Transformer technology shows greater
advantages in fault identification by extracting data such as voice, text and images, significantly
improving production quality and efficiency. Dahua will continue to innovate based on Transformer
technologies and explore more business value from them.
④ Deployment with domestic manufacturing
Dahua actively explores technologies related to the deployment of foundation models in
domestically manufactured chips. We have introduced chips from major domestic chip companies,
migrated and verified visual and multimodal foundation models, and optimized their performance.
On this basis, we have successfully accomplished the localization of foundation models for urban
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governance and power.
⑤ Human-computer interaction
While actively promoting the R&D of foundation models for industries with vision as the core,
Dahua is also actively exploring the application of these models in human-computer interaction and
big data retrieval. Currently, large language models are not only equipped with generative
capabilities, but also with semantic understanding and reasoning capabilities, which enable them to
act as the hub of an intelligent body, and realize task planning, external tool calling, and relevant
memory querying based on external knowledge by understanding voice or text prompting
information. Based on these capabilities, foundation models can automatically understand and
execute a variety of functions in products, such as knowledge quiz, task scheduling, database
retrieval, map relationship retrieval, report generation, and tool calling, thus lowering the threshold
of user use and interaction costs, and transforming the product interaction paradigm.
3.4.2 Data Intelligence
Focusing on video IoT scenarios, Dahua is oriented to the digital intelligent transformation of
cities and enterprises, and looks into platform technologies and algorithmic capabilities that
enhance governance efficiency, mine data content, and enable data value. Relying on such
technologies as cloud native, big data framework, heterogeneous fusion computing, and data
center, Dahua provides a one-stop data intelligence base for vision and information fusion,
integration, governance, development, and services. Based on technologies such as artificial
intelligence, figure-digital fusion, data mining, and knowledge mapping, it digs deeply into the
connotation of view data, and builds figure-digital fusion high-value data warehouses, to unleash
the value of data, facilitate the digital transformation and development of cities and enterprises, and
jointly pioneer the new development of the digital society and economy.
In 2023, Dahua continued to dig deep into the value of view data. By integrating production
and business data, it comprehensively stimulated view application innovation. Taking data value
calculation as an impetus, it consolidated the basic capability of big data platforms, and built up
industry-specific capabilities such as AI+big data fusion calculation frameworks and heterogeneous
calculation of diverse data, thus empowering data application innovation and boosting the digital
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and intellectual transformation of government and enterprises.
(1) Continuously build industry-specific capabilities of big data platforms with data
value calculation as the impetus.
Focusing on data value calculation, Dahua released Big Data Platform 3.0 in 2023, covering
such products as Data Calculation Platform, Data Hub, Data Exploration Platform, Data Low-Code
Platform, and Big Data Infrastructure Platform. It provides one-stop data integration, data
governance, data development, and data service capabilities to support governments' digital
intelligent governance and businesses' digital intelligent transformation. Driven by the strategy of
focusing on the value calculation of video data and unleashing the value of view data, the self-
access capability of a variety of IoT devices is embedded in data integration, leading to a number of
industrial data standards. In terms of data governance, the algorithmic capability loaded with
intelligent governance automatically achieves data mapping, standardization, and quality detection
to significantly improve governance efficiency. In data development, real-time unified development
and scheduling of offline tasks, as well as data-oriented applications relying on the self-developed
low-code engine technology enables the rapid configuration of business applications, greatly
improving the efficiency of delivery in fragmented scenarios. In heterogeneous computing of
diversified data, Dahua has built the AI + big data fusion computing framework and figure-number
fusion computing framework, which breaks the limitations of traditional big data computing
boundaries, making computing more efficient and business innovation more convenient. Dahua's
big data platform activates data potential with value computing, and drives digital transformation
with technological innovation to continuously serve numerous industries.
(2) Stimulate the potential of view data to drive digital transformation through
technological innovation.
Dahua has accumulated extensive hands-on experience during the long-term in-depth
informatization construction process for the digital and intellectual transformation of government
and enterprise clients. Based on the video IoT data and industry insights, Dahua has thoroughly
excavated the value of data and constructed data-to-information and to-knowledge systems. As of
2023, Dahua has cumulatively developed a variety of data algorithms and industry-specific models,
and accumulated extensive data element standards and specifications. Through full-process
intelligent tools and technologies, we ensure the high quality and efficiency of technical services
such as data governance and development, and achieve high-value refining and summarization of
view data, as well as assetization and asset servicing of view data, thus contributing to the
intelligent transformation of government and enterprise clients and driving the vertical development
of businesses.
Dahua continuously launches series of products and services with technological
competitiveness and product differentiation advantages, and achieves impressive business
practices and results in the global market by leveraging the digital transformation opportunities of
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cities and enterprises.
3.5 Full Ecosystem
Ecological development is one of the most important strategic initiatives of Dahua, as we are
committed to building a win-win ecosystem and jointly creating value with our partners. Our mission
is to enable clients to fulfill their dreams. Adhering to the concept of "Full Ecosystem", we focus on
realizing clients' value, and build comprehensive open capacities from technology, business to
services. Through hardware, software, algorithms to services, business ecosystem to industrial
clients, and full openness to developers, we join hands with eco-partners to open up new fields,
shape new momentum, and create unlimited possibilities for industrial development, empowering
industries to realize digital intelligence and achieve co-creation, symbiosis, and win-win
cooperation.
3.5.1 Business Opening-up and Ecological Cooperation
3.5.1.1 Integrator Client Business Ecosystem
Dahua continues to advance the construction of and resource investment into the integrator
cooperation system. Adhering to a service-oriented approach, Dahua is always committed to
providing partners with better quality industry-wide products and solution services, with greater
emphasis on ecological cooperation with partners to achieve win-win results.
A special insight project has been launched to monitor client needs, delve into market
development trends, and focus on high-quality business, so as to upgrade the fine management of
clients and business opportunities, and enhance frontline operational capabilities. Meanwhile, a
special group has been set up to analyze and guide the business development of integrator
cooperation. Through the fine management of the Company, the focus is placed on value
customers, so that resources can be put into use more effectively and the investment-to-output
ratio can be strengthened.
Empower and train clients through client eco-conferences, industry eco-salons, special circle
activities, overseas exhibitions, and Partner Day, and enhance the service awareness of Dahua's
business and technical staff, to strengthen all-around eco-cooperation with integrator partners in
terms of technology, business, and services, thus further enhancing the depth and breadth of
cooperation with clients, and forming stronger client adhesion.
3.5.1.2 SMB Business Ecosystem
Valuing new opportunities in the channel market, Dahua has officially released the channel
ecological cooperation concept of "Employee+Partner", which serves as the standard and baseline
for cooperation, and establishes a new market order and framework rules with partners to create a
healthy and sustainable ecosystem with win-win results for all parties. Meanwhile, Dahua focuses
on innovation in cooperation and management modes, and continues to explore and delegate
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distribution business, intensify the layout of special business, innovate e-commerce business,
further enhance non-video business, and empower cloud business in both directions. Going
forward, Dahua and its partners will adhere to the concept of "Employee+Partner", and
continuously pursue the integration and development of "New Opportunity, New Idea, New Order,
New Mode, New Management, New Goal, New Responsibility" so as to achieve mutual growth and
create a prosperous ecosystem featuring co-construction, symbiosis and win-win results.
3.5.1.3 Industry Client Business Ecosystem
Facing the digital transformation of governments, Dahua focuses on industrial scenarios and
integrates the ecological advantages of niche fields, to create "end-to-end closed-loop" solutions,
and to enhance their competitiveness and perfection. In intelligent water conservancy, Dahua
carries out product solution innovation and integration in collaboration with the industry ecosystem
to enhance the scientific and precise decision-making and management; in urban traffic
management, Dahua works with the industry ecosystem to carry out product solution innovation
and integration, to enhance the comprehensive management capability under the business
scenarios of urban traffic congestion mitigation, high-speed safety control, and rural safety
management, and to further expand the industry's business boundaries.
To upgrade the digital intelligence of enterprises, Dahua centers on the goal of "Building a big
security system, constructing digitally-intelligent productivity, and boosting operational decision-
making power", and integrates the advantageous resources of each segment to create full-scene,
high-value solutions. In the energy business segment, we have launched product co-creation and
solution integration to enhance our digital intelligence solution capability in energy production safety
and efficiency improvement. In the industrial and commercial enterprise business segment, we
jointly craft specialized solutions for enterprise parks, logistics and warehousing, digital workshops,
digital stores, and digital marketing to empower corporate governance and enhance operational
efficiency. In the culture, education and healthcare business segment, we work to strengthen our
digital intelligence in this segment, so as to contribute more digital intelligence to the culture and
tourism, education and healthcare industries. In the construction business segment, we aim to
realize the closed loop of intelligent construction and operation management. In the financial
business segment, we dig deep into applications in financial scenarios, with comprehensively
improved services in outlets and enhanced user experience.
3.5.2 Technical Opening-up and Ecological Cooperation
3.5.2.1 Software Open Platform and Ecological Cooperation
As for the technical open system, the Company continues to build up core capabilities based
on the three key domains of IOT awareness, smart view and data intelligence, while expanding the
scope of open capabilities for various partners in response to their needs. Meanwhile, we continue
to improve the cooperation friendliness for cooperation scenarios and reduce the cost of technical
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integration of partners. Based on the technical requirements of partners, we keep optimizing the
form of open functions, and continuously enriching the content of eco-products and eco-solutions,
to build a flexible multi-level open system of "interface-component-module-product-solution".
Through the dual drive of "content+form", we make constant optimization to shape an integrated
open system of view functions for various cooperation scenarios.
In terms of market cooperation, we classify and differentiate cooperation for customers'
demands by factors such as region, industry and customer nature, and continuously output value
for partners through various means including business opportunity sharing, product certification for
release, marketing channel merging and brand cooperation.
Regarding the management system, we have set up a two-tier customer management
organization consisting of the headquarters and provincial districts, mobilizing all kinds of resources
and optimizing the process system internally, while extracting the value of existing partners and
analyzing and identifying new partners externally, with differentiated resources allocated to partners
of different levels. Moreover, we have made the software ecosystem management a priority for our
Company, with independent operations.
As for empowerment and support, we have launched all kinds of technical services,
empowerment support and training and certification programs for our partners to continuously
reduce their learning costs and ensure that they can efficiently access and digest the various
competency values provided by our software open system and continue to profit from them.
Through these value co-creation and sharing actions, we aim to continuously enhance the breadth
and depth of technical cooperation and ultimately form a highly trustworthy and stable technical
ecosystem.
In 2023, Dahua held the Eco-Partner Conference "Building an Integrated Ecosystem and
Creating a Digitally Intelligent Internet of Things", exploring the development direction and future
opportunities of digital intelligence for industries around the roles and values of such technologies
as AIoT, big data, and AI in urban governance and corporate management, and seeking to deepen
the concept of and cooperation on the concepts of co-construction, win-win results, and symbiosis
for the intelligent IoT. Eco-salon technical exchanges and circle activities were carried out in various
provinces and districts across China to provide partners with a shared ecological stage. We have
built a mechanism of eco-partners' rights and interests, and work closely with them to innovate their
businesses.
3.5.2.2 Hardware Open Platform and Ecological Cooperation
It mainly includes the open access to device hardware capabilities (DHOP) and third-party
platforms (device network SDK, playback SDK, HTTP API).
The Dahua Hardware Open Platform (DHOP) supports the decoupling of hardware and
software, and provides hardware resource services such as storage and computing power,
multimedia function services, AI acceleration engine services, and various basic information
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services to meet the diverse business needs of third-party developers, and offers a rich set of tools
for model conversion, compilation, packaging, debugging, and O&M, thus simplifying third-party
development.
Based on the DHOP, Dahua has self-developed dozens of industrial intelligence APPs, such
as pyrotechnic detection, helmet detection, and fire escape occupancy, to support the flexibility of
edge-side devices for dynamic intelligence loading. As of 2023, we signed cooperation with multiple
algorithmic vendors around the world to develop APPs in a variety of industrial scenarios in a
mutually beneficial way, thus quickly and effectively meeting the business needs of end-customers
and revitalizing the ecological application market of intelligent IoT.
With the opening of third-party platform access capabilities, we have established mutually
beneficial partnerships with a number of industry platforms and actively integrated into the
ecosystem of various partners.
The DHOP supports access to hardware functions of edge-side device matrices such as IPC,
PTZ, ITC, NVR, and IVSS. For exploring new intelligent scenarios, the supporting training servers
and view intelligences are also made open to realize the full-link closed-loop rapid implementation
of intelligent new scenarios.
3.5.2.3 Algorithm Opening-up and Ecological Cooperation
Empower partners with the ability to industrialize AI at scale to achieve business success and
mutual growth. In the trend of digital transformation, many clients from different industries use AI to
improve production efficiency. As AI industrialization represents a field with considerable
opportunities, the Company works together with its partners and clients to build an AI ecosystem.
The Company provides targeted empowerment tools for partners with different levels of demand,
thus accelerating the process of AI industrialization.
(1) Mature algorithms, ready to use
Through application and practices in industrial businesses, our AI algorithms have
accumulated plenty of mature algorithm solutions that are ready to use. With the following
advantages, we can help our partners expand their businesses:
More choices: For different needs of various industries, we have developed specialized
algorithmic solutions that cover specific industries.
Good results: After application and polishing in actual businesses, they not only fit the
businesses, but have strong scene generalization capabilities; these algorithms have won multiple
championships in international competitions in such fields as target detection and target
recognition.
Easy to use: Simply select the corresponding algorithm solution in the algorithm library as per
the business requirements, and then make some basic configurations. That's all you need to do to
realize corresponding functions.
Economical to deploy: By means of single-model multi-tasking, end-to-end low-bit, and
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synchronization of end-user, edge and cloud, the algorithms have minimized the hardware
requirements for memory and computing power to the optimal level, greatly reducing the cost of
use for users.
(2) AI Open Platform to build up partners' AI capabilities for independent development
It targets users with no algorithmic ability with low threshold, who can quickly realize algorithms
through open platform development and implement them into products for commercial realization.
The AI Open Platform provides a one-stop graphical AI algorithm development platform for
partners, featuring the following five major capabilities: flexible platform deployment, zero-code
development, high-efficiency training, online validation, and one-click deployment. Users can
efficiently complete the development of desired algorithmic functions with low threshold by inputting
relevant data on the AI Open Platform, thus effectively enhancing their algorithmic development
capabilities for independent development.
(3) AI open tool chain to accelerate the productization of partners' algorithms
It mainly targets clients with algorithm self-development capabilities but without product
hardware capabilities. Users can realize algorithm development through self-development, and
then deploy their completed algorithms into our hardware products by adopting the "Genius AI
Algorithm Deployment Tool"; besides, they can also use the DHOP to realize the development and
implementation of business software productization, so as to rapidly productize their algorithms.
3.5.3 Service Opening-up and Ecological Cooperation
Upholding the service concept of "Empowering Clients", Dahua has gradually built up four
service systems for the whole market and business, namely, integrated delivery system, technical
support system, O&M management system, and training and certification system. We are
committed to building the world's leading and efficient professional delivery platform, and becoming
an outstanding service value creator.
Currently, the Company has formed a three-tier service network to provide technical services
to global customers, with 69 branches worldwide covering more than 180 countries. Meanwhile, it
integrates its resources and brings together the power of ecosystems to provide the market with full
life-cycle services of products and solutions. In 2023, it debuted the regional authorized service
centers to enable its partners, speed up customer response, improve service quality, and provide
customers and markets with highly efficient service support, with continued excellent service
experience for its customers.
3.6 Software Products and Business
Data, as the fifth major factor of production after land, labor, capital and technology, will
certainly give rise to new industries, new markets and new models. It will also revolutionize the
original productivity and production relations.
With the continuous implementation of technologies such as the IoT, big data and foundation
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models, and the successive introduction of data industry norms in major countries around the
world, the technical system of data elements is gradually maturing and the circulation system
gradually taking shape. Among these data, unstructured data, mainly video images, are
characterized by diversity, mobility, scale and privacy. Facing these problems and challenges,
Dahua centers on the process of adding value to data elements, and from the aspects of multi-
dimensional awareness, multi-connectivity, view intelligence, and open platform, we upgraded the
IoT Digital Intelligence Platform 2.0 in 2023, integrating Galaxy Foundation Model and figure-digital
fusion capabilities. On this basis, we developed highly efficient software engineering capabilities
and released industrial product series for cities and enterprises, boosting efficient urban
governance and corporate digital intelligence upgrading.
Dahua continuously strengthens its "winning" ability by focusing on software products and
services, targeting at business success. In terms of products, the product team actively integrates
technical capabilities such as foundation model, digital twins, low-code, and figure-digital fusion, so
as to continuously innovate and improve product competitiveness. As for services, the development
centers in each province and region are fully integrated with front-line businesses, serving
customers closely and bolstering the development of software businesses. To quickly combine with
the industry's emerging technologies for business innovation, Dahua possesses efficient software
engineering capabilities, and provides powerful tool support in the design field such as the map
developer platform and micro-services architecture platform, based on the Hua Design design
system. It has accumulated multiple Firefly component malls throughout its operations, and by
organically combining these components, formed a low-code business engine for various scenarios
such as enterprise campus workstations and digital twins, thus making technology reuse and
business assembly a breeze. Based on the IoT Digital Intelligence Platform, we have formed three
modes of cooperation: program co-construction, product co-creation, and capability sharing around
our ecological clients, to jointly propel the upgrading of digital intelligence in industries, strengthen
our clients, and realize "co-construction, win-win results, and symbiosis".
3.6.1 Deeply Explore the Data Industry Chain to Boom the Data Market
The upstream, midstream and downstream of the video-based data element industry chain
encounters multiple challenges. Firstly, upstream data providers, responsible for data collection and
aggregation, are facing the challenges of complex and diverse sensing scenarios, complicated and
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heterogeneous protocols of IoT devices, and cross-network interconnection of massive devices.
Midstream data processing service providers, offering data governance and data computing
services, are troubled by unsatisfied smart long-tail markets, inefficient synchronization of end-user,
edge, cloud, and network, and difficulties in heterogeneous data computation. Downstream players,
mainly from governments, finance, and manufacturing industries, whose demand is mainly for data
circulation and application, have been seriously affected by weak scenario-based innovation
capabilities, difficult presentation of data value, and inactive transaction circulation. In view of these
problems and challenges, focusing on the value realization process of data elements, the Company
actively plays the roles of data resource provider, data asset practitioner, and data commodification
enabler, starting from aspects such as multidimensional perception, multi-source connectivity, view
intelligence, and open platforms. Collaborating with partners and bridging gaps, it leverages the
"multiplier effect" of data elements to empower efficient urban governance and enterprise
digitalization upgrades.
3.6.2 Upgrade the IoT Digital Intelligence Platform to Enable Efficient Urban Governance and
Corporate Digital Intelligence
Under the Think# strategic framework, Dahua released the IoT Digital Intelligence Platform in
2021, comprising an online data network and two intelligent engines of vision and data, so as to
empower the digital innovation of cities and the digital transformation of enterprises. With the rapid
development of IoT, foundation model and big data technologies, combined with our profound
thinking and accumulation in urban and enterprise business, we upgraded the IoT Digital
Intelligence Platform in 2023.
Dahua digs into data application with its capability, and runs through the whole process of data
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as an asset, a resource and a commodity, boosting the release of new power for development.
During the data as a resource stage, we rely on the Panoramic 6D multidimensional perception and
multi-source connections for aggregating full-network data; the addition of AI will further enhance
the data collection and content description capabilities. During the data as an asset stage, the
Smart View Engine integrates the Galaxy Foundation Model capability, which breaks through the
boundary of visual cognition capability and realizes independent analysis of full scenarios with
stronger generalization capability and higher accuracy, opening up a new space for industry
expansion and scenario implementation. The Smart Data Engine, a one-stop engine for data
intelligence that consolidates the figure-digital fusion computing system breaks down computational
barriers between view data and business data, enabling multi-dimensional feature exploration and
multi-modal relationship establishment. Centering on the stage of data as a commodity, we have
improved the software engineering capability, so that industrial scenario modules can be quickly
combined with technologies such as foundation models and graph-data fusion, to realize free
scheduling, and build up the product systems for cities (Tianji) and enterprises (Tianyan). Being an
enabler, we work together with our partners to diversify the industrial applications.
In terms of urban governance, Dahua is actively involved in urban governance from the four
dimensions of "secure society", "orderly city", "green city for the benefit of people", and "enhanced
governance efficiency". Coupled with the CV foundation model, computing network self-intelligence
and graph-data fusion technologies, Dahua has launched the Tianji series of products, comprising
four core products: industry model intelligent computing engine, twin scenario generation engine,
data asset management service, and data element operation center. These products enable urban
governance to realize self-optimization, self-learning and self-evolution, and gradually move
towards a new stage of cognitive intelligence and decision-making intelligence.
In terms of enterprise business, Dahua has been expanding its capability boundaries for
enterprise customer service, from integrated security, intelligent IoT to business innovation in digital
intelligence. We have launched the Tianyan series of products, designed to provide enterprises
with four engines: data operation and management, intelligent computing and decision-making,
scenario application building, and digital twin interaction. Based on over ten thousand industry
projects every year, the Tianyan series carries massive business paradigms of business operation
activities and efficiency enhancement, and combined with the Galaxy Foundation Model during
business innovation, it allows enterprises to release manpower for high-risk and high-intensity
tasks, guards safe production, and supports decision-making for managers.
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3.6.3 Software Engineering Capability, a Multiplier for Data Commoditization
In terms of data commercialization, since the launch of the very first industry software platform
product in 2010, Dahua has persisted in customer value guidance, business orientation, and
technology driving over the past 10 years, building up its understanding in industry paradigms. To
quickly integrate emerging technologies in industries to realize business innovation and build
efficient software engineering capabilities: In terms of design, we provide guidance and resources
for all design aspects based on the Hua Design design platform, which can effectively improve the
collaboration efficiency between designers and developers and reduce production costs. As for
development, we equip developers with powerful tools such as the Deepsea Microware Sharing
Platform, Map Developer Platform, and Microservice Architecture Platform, so as to build up agile
product development capabilities.
To accumulate services, Dahua has built a four-layer componentized system of "G, B, F, M",
which has accumulated multiple components layer by layer. Through the organic combination of
these components, a core value engine based on perceptual, numerical and intellectual
capabilities, a highly resilient distributed operation architecture adaptable to a variety of
heterogeneous computing requirements, an end-to-end highly available and highly secure digital
immune system, an integrated and highly sensitive R&D service performance platform, and a
scenario-based business enablement engine for sustainable empowerment have been shaped,
making technology reuse and business assembly a breeze. In the process of empowering
thousands of industries, it is found that the accumulation of business modules and development
efficiency is a "Musashi curve". At the initial stage, with the increase of modules, business reuse
becomes simple with rapid improvement in efficiency; when components reach a certain scale, the
marginal benefit decreases, as no developer can master several thousand technical components
and business modules. Therefore, Dahua has developed a development suite oriented to data,
capabilities and scenarios, which forms a low-code platform with AI-assisted development
capabilities and business knowledge association. This can greatly reduce the mental burden of
developers, and support the further enhancement of the efficiency of business software
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development and the sustained and healthy business growth.
Relying on the above software engineering capabilities, industry scenario modules can be
quickly loaded with emerging technologies, including the CV foundation model and graph-data
fusion; combined with knowledge of industry experts, these modules can be freely orchestrated to
build richer scenarios for industry applications, forming a "multiplier effect" and amplifying the value
of innovative business in the value chain of cities and enterprises in various industries. Based on
this, Dahua has released the Tianji series for cities and Tianyan series for enterprises, boosting the
efficient urban governance and digital intelligence upgrade of enterprises.
3.6.4 Dahua Public Cloud, Making Management More Efficient and Operations More
Intelligent
Based on the capabilities of the cloud mid-end platform, our public cloud business provides
rich SaaS services for various industries, forging a comprehensive and open system of cloud mid-
end platform capabilities. The cloud mid-end platform integrates six core capabilities, namely,
business, IoT, AI, data, O&M, and operation, which makes it simpler for cloud access and more
efficient for business development. Based on the cloud mid-end platform, Dahua offers public cloud
SaaS products such as Yunrui, Cloud-Link, and DoLynk. Leveraging the advantages of low-cost,
highly flexible, scalable, and configurable SaaS services, Dahua delivers a new operating model for
enterprises, upgrading and transforming from manual to "data + intelligence", and empowering the
transformation of enterprises' digital and intelligent management.
For domestic clients, Yunrui assists enterprises in optimizing management efficiency, boosting
business efficiency and avoiding operational risks through leading cloud-based intelligent
applications and open AI algorithm ecosystem. Focusing on the rapid development of various
industries, Yunrui is continuously deepening its SaaS business in chain, parking, education, and
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community scenarios to provide holistic intelligent IoT solutions. In view of the fragmentation of
intelligent IoT scenarios and demands, Yunrui further optimizes its open platform, strengthens its
low-code development capability, optimizes its cloud intelligence, and makes every effort to develop
its partners to jointly expand businesses for win-win results.
For overseas clients, Dahua offers the DoLynk overseas cloud service, dedicated to providing
an accurate, intelligent and convenient platform. From the perspective of connecting devices,
solutions and business partners, we provide clients with scenario-based application solutions such
as cloud-based video management, equipment O&M, digital networks, wireless alarms, visual
intercom, access control and attendance, and chaining, to establish connections with partners,
build marketing links directly to terminals, and enable digital transformation so as to help
enterprises cut costs and increase efficiency. Meanwhile, we offer streamlined IoT integration
capabilities to help developers quickly build their own IoT cloud platforms and realize an ecological
platform for business co-construction. Our goal is to create a world of AIoT applications for
residential operations, business management, and consumers.
3.7 Security and Privacy Protection
Dahua attaches great importance to cyber security and privacy protection. As the highest
decision-making organization, the Cyber Security Committee has been established to
comprehensively plan, coordinate, guide, supervise and review the development and
implementation of cyber security efforts from the Company's strategic level. As one of our five
major research institutes, the Cyber Security Research Institute is an independent internal organ
for cyber security supervision and capacity enhancement. With a focus on areas such as security
engineering capacity building, research and application of key security and privacy technologies,
and security incident response services, the Institute ensures the safety and reliability of its full
range of products, platforms and services through the combination of technological innovation
and engineering capabilities.
3.7.1 Security Products and Solutions
The company has launched products such as security database, video security convergence
gateway, security data border, video protection system, video encryption server and video security
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certificate, integrating such security protection service capabilities as terminal security access,
video stream integrity verification, video stream encryption, user and data security key
management, digital certificates and security authentication.
Dahua provides and implements security solutions such as level protection, confidentiality
assessment, video watermarking, and 35114. Based on the principle of "whoever collects encrypts
and whoever uses decrypts", we design and realize the end-to-end protection of user data
throughout the life cycle of data collection, transmission, storage, sharing and use, and meanwhile
achieve the security requirements for information systems in accordance with the confidentiality
evaluation standard.
3.7.2 Security Technologies and Engineering
Dahua continuously steps up its research investment in key technologies such as trustworthy
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computing, end-to-end encryption and privacy protection, with related technological achievements
already integrated into its products to further enhance their security capabilities and enable users to
enjoy better security protection.
During the product development stage, Dahua keeps improving the life cycle of security
software development, strengthening the security control requirements and capabilities during
software development, and improving and optimizing the security software development process
suitable for Dahua by carrying out in-depth maturity assessment of security activities. Meanwhile, it
optimizes and improves the correspondence between various security activities and further
deepens the automation capability of the security tool chain to ensure that security control activities
are implemented in a more refined manner.
Within the product life cycle, PSIRT, the company's product security incident response team,
provides users with 24/7 security emergency response services to optimally safeguard users'
security rights and interests. In the meantime, PSIRT is actively involved in industry and public
activities, and has joined multiple authoritative vulnerability management and technical
organizations, including the China National Vulnerability Database (CNVD), China National
Vulnerability Database of Information Security (CNNVD), and China National Industrial Cyber
Security Vulnerability Database (CICSVD). By fully leveraging the role as a member within the
organizations, Dahua has established a collaborative mechanism for sharing information on cyber
security threats.
3.7.3 Data Security and Privacy Protection
With the promulgation of the Cybersecurity Law of the People's Republic of China, the Data
Security Law of the People's Republic of China, the Personal Information Protection Law of the
People's Republic of China, and the General Data Protection Regulation of the European Union,
the regulatory and compliance requirements for cyber security, data security, and privacy protection
are becoming increasingly stringent globally. In response to these requirements, Dahua takes a
pragmatic attitude and strategy, and upholds a "positive, open, cooperative and responsible"
philosophy, to develop comprehensive security and privacy management systems. Relying on its
mature security engineering capabilities, Dahua strictly implements these systems during product
planning, design, development, and delivery stages, to ensure product security and privacy
compliance.
In addition, Dahua actively cooperates with third-party authorities, with external assessments
and certifications introduced. We have passed the ISO27001 Information Security Management
System Certification, ISO27701 Privacy Information Management System Certification, ISO27017
Security Management System Certification for Cloud Services, ISO27018 Security Management
System Certification for Personal Privacy Information in Public Clouds, ETSI EN 303645
Certification, CC EAL3+ Certification, and Commercial Cryptography Certification.
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4、Main businesses
4.1 Domestic Businesses
4.1.1 City-level Businesses
4.1.1.1 Business Overview
With the official operation of the National Data Administration and the successive
establishment of local data administrations, the construction of Digital China has entered a phase
of rapid development. As a vital component of Digital China, Digital Government provides strong
support for digital economy and digital society in terms of institutional rule innovation and digital
capacity building. Following a period of intensive development, the digital transformation of
governments has shown such trends as "scientific and unified management mechanisms,
intelligent and integrated digital platforms, upgrading government governance capacity driven by
the value of data elements, and demand-driven innovations in business and operation modes".
Under the major trend of digital transformation of governments for quality and efficiency
enhancement, Dahua closely follows the pace of industrial development in digital infrastructure
construction, data as resources, and digital application implementation, and focuses on the four
urban business sectors of secure society, orderly city, enhanced governance efficiency, and
environmental protection for the benefit of people with video IoT sensing technology as the core.
Through digital intelligence integration and application innovation, Dahua safeguards the
deployment of urban businesses, and contributes to the realization of the beautiful vision of
"harmonious coexistence of man and city, man and society, and man and nature".
4.1.1.2 Core Strategy
Dedicated to implementing digital intelligence capabilities into various urban scenarios, Dahua
focuses on the main course of the IoT business, and continues to explore the scenarios of digital
intelligence-enabled digital innovation in cities. With the focus on new opportunities in such
industries as comprehensive transportation, natural resources, intelligent water conservancy, urban
parking, and emergency management, we have deep insight into the needs of industry scenarios,
and concentrated on implementing numerical intelligence capabilities to continuously build industry-
leading products and solutions, and empower city development and governance model innovation
with digital intelligence. Besides, the Company continues to deepen its ecological cooperation
strategy, and continuously strengthens technical co-creation and business sharing with its core
customers, industry experts, and outstanding vendors in urban governance, so as to jointly
empower the efficient urban governance, and create an intelligent IoT eco-community featuring co-
construction, win-win results, and symbiosis.
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(1) Building an urban digital intelligence base
Based on the AIoT 2.0 and the IoT Digital Intelligence Platform 2.0, the city platform has been
upgraded to a unified City Tianji base that focuses on the four core capabilities of the Smart
Computing Engine for Industry Models, the Twin Scenario Generation Engine, the Data Asset
Management Service, and the Data Element Operation Center to help users build urban data
assets and chain-wide assessment of data elements around a number of urban scenarios and to
rapidly build digital twin application scenarios with comprehensive management decision-making
capabilities coupled with the best business practice paradigms of various industry domains. In this
way, we aim to contribute to the realization of self-optimization, self-learning and self-evolution of
urban governance, and gradually move towards a new stage of cognitive intelligence and decision-
making intelligence.
(2) Deepening Scenario-based Implementation
Based on the unified City Tianji base, combined with years of in-depth experience in digital
government, intelligent transportation, social governance, intelligent emergency response,
intelligent water conservancy, and natural resources, among other business areas, we have
developed scenario-based solutions for different fields in various industries, to continuously
advance the urban digital intelligence process, and empower the efficient urban governance, thus
endeavoring to realize a new picture of urban governance for secure society, orderly city, enhanced
governance efficiency, and environmental protection for the benefit of people.
4.1.1.3 Practice of Values in All Industries
Dahua adheres to the social mission of "making the society safer, cities more orderly,
governance more efficient, and life better", It has been deepening its digital intelligence practices in
business areas such as social security, urban order, governance efficiency, and green benefits to the
people, and activating the value of urban IoT data elements based on the AIoT 2.0 and IoT Digital
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Intelligence Platform 2.0, so as to empower the urban digital transformation with digital intelligence
innovations.
(1) Making the Society Safer
Focusing on the goal of ensuring a stable and orderly society, safe travel for the people, secure
life for the masses and safeguarded production for enterprises, Dahua actively fulfills its social
mission and is committed to strengthen security in China. Centering on the four business areas of
public safety, traffic safety, life safety and production safety, it connects the "urban lifelines" of water,
electricity, gas, heat and transportation, and creates a safety "immunization" system for cities.
Empowered by digital intelligence, it enables the upgrading of the overall urban security system.
In the field of public security: In the year of the national 14th Five-Year Plan for high-quality
development, Dahua put its focus on deepening the vision system and actively embraced emerging
technologies. By continuously deepening the combination of intelligent IoT technologies with public
safety scenarios, the Company provides customers with more convenient urban IoT capabilities,
smarter integration and connectivity, and more efficient social governance capabilities, delivering
security protection from cities to villages, highways to railroads, and forests to river basins, and
contributing to the modernization of the urban public security system and capabilities. In 2023, the
Company focused on the mining of view data elements, particularly with the launch of visual
computing solutions. Investing in the innovation of view data applications to activate the potential of
view data elements, the Company aims to help customers improve the depth and efficiency of data
utilization, provide strong protection for the people and social security, and contribute to
strengthening security in China.
In the field of traffic safety: Guided by the 14th Five-Year Plan for National Road Traffic
Safety, the Company further deepens the "reduction of traffic accidents and control of major ones" by
focusing on the three major scenarios of fine management of urban traffic safety, high-speed safety
prevention and control, and primary management of rural safety, so as to create a model of traffic
safety management that covers all scenarios and incorporates multiple means. Relying on
foundation models, the smart view engine is upgraded, to explore the applications of big data and
AI technologies in traffic control. Targeted at light pollution control scenarios, the "Fluorescent" series
of cameras was released in 2023 to address the problem of flashing light pollution at night. We
explored comprehensive management scenarios of electric vehicles to enhance the safety and law-
abiding awareness of electric vehicle drivers. For road hazard management scenarios, we
investigated hidden traffic hazards to achieve precise and targeted management. For high-speed
safety prevention and control scenarios, innovative products and programs for multi-scenario
monitoring were launched. Through these efforts, we have enabled traffic safety management to
transition to ex-ante prevention, and focused on solving the deep-rooted problems in traffic safety to
enhance its intrinsic safety.
In the field of life safety: Surrounding on monitoring scenarios for urban lifeline safety such as
water, electricity, gas, heat and transportation, the Company aims at enhancing intrinsic safety with
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"efficient monitoring, early warning and quick handling". By building front-end IoT sensing of urban
infrastructures, intelligent video analysis and urban safety index modeling, Dahua realizes online
monitoring of safety operation data of lifeline projects as well as intelligent analysis and judgment of
various risk elements. This can meet the integrated business closed-loop of risk classification and
warning, intelligent research and judgment of trends, and linked handling of events, thus promoting
the transformation of safety supervision from "passive response" to "active supervision", and
creating a safety "immunization" system for city life.
In the field of production safety: Taking "source management, process supervision and
graded handling" as the core principle, Dahua focuses on key supervisory fields such as hazardous
chemicals, mines, industry and trade, fireworks and explosives, as well as hazardous chemical
parks. Support is offered to front-line employees, business leaders, and supervisory authorities in
the areas of supervising major sources of danger, early warning of risks in operation processes, and
emergency rescue, so as to effectively safeguard the safety of corporate production and people's
lives and properties.
(2) Making Cities More Orderly
Oriented around urban traffic management and urban infrastructure management, the Company
integrates various digital capabilities such as holographic sensing, intelligent computing, graph-data
fusion, and visual foundation models, to provide advanced digital solutions for the business areas of
urban traffic and urban infrastructure management, thus building a standardized and orderly urban
management system with convenient travel and efficient management.
In the field of urban traffic: Together with partners, we jointly create an autonomous service
system for urban traffic, bridging the full business chain of holographic perception, graph-data
computing, simulation and deduction, intelligent decision-making, and precise services. For
intersection scenarios, we collect all traffic data from vehicles, non-vehicles, people, and
infrastructure, to actively study and analyze intersection traffic risk/congestion levels, intelligently
adjust traffic light timing, objectively and quantitatively evaluate the effect of optimized autonomy,
and improve the efficiency and safety level of intersection traffic operation. Relying on the city-level
holographic perception network, we can actively predict traffic status of urban road networks, and
realize intelligent and autonomous decision-making of city-level traffic, so as to promote the
autonomy of traffic management and intelligence of services, and ultimately drive the transformation
of urban traffic management from "manual management" to "operation autonomy".
In the field of urban infrastructure management: Taking the airport scenario as an
example, automated energy management for green airports has become the focus of airport
construction. Focusing on the four major categories of business scenarios, namely, monitoring,
controlling, analyzing, and decision-making of energy in airport energy centers, Dahua offers
intelligent energy automation management system solutions for airport energy centers by integrating
intelligent inspection robots and back-end intelligent analysis capabilities. In a 4F-class airport, the
intelligent transformation of its six 35KV substations, boiler rooms, and chiller rooms has enabled
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online collection, unmanned inspection, and automatic control of its energy management, which has
significantly improved management efficiency and reduced management costs.
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(3) Making Governance More Efficient
The company has always been practicing "business-guided, scenario-based deployment",
empowering efficient urban governance with digital intelligence. Holding on to the opportunities
arising from the modernization of urban governance systems and capabilities, the Company
provides unified solutions for management, urban governance, grassroots governance, and
community governance, solving various complex problems in urban governance with intelligent
means and real-time online data to improve urban governance efficiency and enhance public
satisfaction.
In terms of "Unified Solution for Urban Management": Dahua has built a "Unified Solution
for Urban Management" system with "comprehensive situational awareness, intelligent research and
judgment of trends, integrated scheduling of resources, and multi-sector synergy of operations", to
empower the modernization of urban governance with sensing data. The unified video IoT hub
realizes one-screen overview of the whole area, the unified algorithm supermarket for rapid
detection of urban events, the unified fusion command and scheduling system for integrated
scheduling of resources for event disposal, and the unified event center for multi-departmental
business cooperation. The "Unified Solutions for Urban Management" sensing system enables
timely detection and handling of urban governance events, effectively upgrading the intelligence
level of urban governance.
In the field of urban management: With urban governance, operation safety and serving the
people as the goal, Dahua has built the operation management system of "Intelligent, Fine and Mass
Management of Big Cities". Focusing on street management, urban sanitation, and comprehensive
governance, intelligent detection and early warning of events such as street violations, illegal waste
dumping, urban flooding, dump trucks leaking, illegal urban construction, and missing manhole
covers have been realized. Moreover, innovative scenarios such as mobile AI inspection and mobile
vendor management have been introduced to build an urban governance model that integrates "real-
time monitoring, dynamic analysis, coordination, command and supervision", aiming to make urban
governance "smarter", urban operation "safer" and public services "more targeted".
(4) Making People's Life Better
"Powered by AI, we adhere to the protection of lucid waters and lush mountains and the
enhancement of people's welfare". Focusing on two major fields of natural ecology and
administrative services, Dahua provides integrated applications of IoT sensing in industry-specific
business scenarios including biodiversity monitoring, ecological protection, arable land red line
guarding, digital twins of water conservancy, intelligent elderly care, and food safety, to boost
ecological development and make people's life better.
In the field of biodiversity protection: To realize intelligent monitoring of rare and protected
animals, Dahua's relevant industry solutions focus on business scenarios and needs, to efficiently
and accurately identify treasured species, analyze their activity patterns, manage human activities,
monitor forest and grass fires, and record data on such ecological factors as meteorology, hydrology
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and water quality, and soil, so as to give full play to and strengthen the application of ecological
perception and monitoring data fusion and analysis, and boost the construction of China's natural
protected area system. The Company has deployed biodiversity monitoring and protection solutions
in numerous national parks and nature reserves in China, loaded with hundreds of bird and mammal
identification algorithms to detect, identify and categorize wildlife protection animals, and realize real-
time accurate observation of animal habitats. Meanwhile, in response to the boundary management
requirements of various types of protected areas, we are strengthening the management and
guidance of human activities, reducing human interference with wildlife, and fully supporting
managers in carrying out more refined ecological protection efforts on the basis of abundant
monitoring data records and statistical analysis results.
In the field of forest and grassland fire prevention: To improve the efficiency of forest and
grassland fire prevention and reduce the work intensity of administrative personnel, our
corresponding industry solutions, powered by digital intelligence, can realize the real-time early
warning of fire in multi-dimensional space, the precise positioning of multiple fire points, the
secondary analysis, filtering and comprehensive judgment of fire, and the closed loop of handling.
These solutions boost the accuracy of forest and grassland fire monitoring and alerting, and
enhance the emergency response capability for fire prevention and extinguishing, with more "golden
time" secured for early and quickly suppression of any fires. Meanwhile, the wildlife is also protected
with wider free green space, thus facilitating the harmony between human and nature.
4.1.2 Enterprise-level Businesses
4.1.2.1 Business Overview
In enterprise businesses, Dahua aims to become a preferred supplier of IoT infrastructure, a
professional service provider of scenario-based digital intelligence applications, and a key builder of
the IoT ecosystem. During the enterprise business 2.0 stage, Dahua is actively engaged in
innovation and practice, and continuously facilitates the digital intelligence upgrading of enterprises
in thousands of industries, including manufacturing, construction, electric power, petrochemicals,
coal, iron and steel, finance, education, healthcare, culture and tourism, agriculture, logistics, and
retail. By empowering the value realization of all scenarios, Dahua builds a big security system for its
users, forges their digital productivity, and enhances their operational decisiveness, dedicated to
becoming a trustworthy partner for customers' digital intelligence upgrading. In this process, through
technical co-creation and commercial sharing with partners, we aim to build an intelligent IoT
ecological community of co-construction, win-win results and symbiosis, so as to jointly empower the
upgrading of corporate digital intelligence.
4.1.2.2 Core Strategy
Dahua has rapidly built extensive basic business and industrial business applications on the
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unified framework through common mid-end platform capabilities while serving the digital
intelligence upgrading of enterprises. To more efficiently serve the digital transformation of
customers in various industries, the solution framework has been upgraded to a unified "1+6+2+N"
framework, with one set of unified framework to serve the digital transformation business, 6 major
mid-end platforms to build internal engines, and 2 major platforms to support N types of applications,
thus truly accelerating the roll-out of industrial applications and the coverage of industrial customers'
scenarios and businesses.
(1) Strengthening mid-end platform capabilities of enterprises to build their digital
intelligence bases
IoT Mid-end Platform: A set of intelligent IoT architecture is used to access evolving IoT
devices in corporate business with low code, to solve the problem of unified elemental
access to multi-manufacturers, multi-systems, and multi-kinds of IOT devices, while
responding to the demand of group networking scales at the campus, provincial, regional
and national levels.
Data Mid-end Platform: It provides the ability to store, compute, explore, and secure a
wide range of data including videos, images, and structured data. It solves the problem of
continuously growing data scales and types in enterprise businesses, and mutual
integration required. Meanwhile, it transforms the scenario awareness data into more
valuable industrial business big data through comprehensive means such as big data,
expert knowledge and experience accumulation.
Smart Mid-end Platform: It provides an algorithm generation center to address the
intelligent implementation of generic and personalized scenarios for enterprise businesses.
Core algorithmic assets are managed and distributed through the algorithm asset center,
while the computing power resources of intelligent devices are given full play through the
computing power scheduling center.
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Interaction Mid-end Platform: It perfects the twin capability by means of AR display, VR
display, 3D display, real-world 3D, and video twins, improves the data expression capability
by means of low-code walls, and refines the control capability by means of large-screen
managers, so that the value of enterprise digital transformation can be materialized.
Business Mid-end Platform: A variety of engines are accumulated to build a business
mid-end platform, which improves the reusability of software, shortens the development
cycle of various types of fragmented industrial applications, and meets the personalized
business needs of customers.
Open Mid-end Platform: On the one hand, it attracts professional manufacturers in the
industry into a company's business system to jointly enhance the capability foundations; on
the other, it opens the company's capability system to empower its eco-partners and
provide services that are more convenient to its corporate customers.
(2) Promoting the application of public cloud SaaS to facilitate the upgrading of
corporate services
Targeting corporate customers, Dahua Yunrui facilitates the optimization of their management
efficiency, boosts their business efficiency, explores data value, and avoids operational risks through
leading cloud-based intelligent applications and an open AI algorithm ecosystem. Dahua Yunrui
comprises the public cloud SaaS application, the developer open platform and the AI capability
module, featuring low-cost, high-availability, easy deployment and flexible expansion, which is
instrumental to the building of the corporate software system. Focusing on the rapid development of
various industries, Yunrui is continuously deepening its SaaS business in chain, parking, education,
and community scenarios to provide holistic intelligent IoT solutions. In view of the fragmentation of
intelligent IoT scenarios and demands, Yunrui further optimizes its open platform, strengthens its
low-code development capability, optimizes its cloud intelligence, and makes every effort to develop
its partners to jointly expand businesses for win-win results.
Yunrui's product applications cover various scenarios including chain operation, community
property, logistics, construction sites, farming, cultural tourism, general education, parking and parks.
The basic capabilities of Yunrui have been comprehensively decentralized, with six mid-end
platforms established covering IoT, business, intelligence, data, O&M and operations, providing
basic SaaS services for cloud products in various industries, and enhancing business reusability and
product stability.
(3) Building a business engine pool to accelerate N types of applications
Facing the different industrial and business needs of enterprises, the Company has built a pool
of business engines to shape business mid-end platform capabilities, accelerate the N types of
corporate digital intelligence applications, and develop solutions that fit customers' business and
scenario applications. While continuing to consolidate conventional businesses, Dahua rapidly
adapts to customers' businesses, thus constantly accumulating replicable and scalable business
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scenarios for digital intelligence.
Based on the evolution of the corporate digital intelligence framework, the continuous
consolidation of corporate mid-end platform capabilities and business expansion, Dahua has
penetrated into various niche industrial scenarios such as factories, hospitals, schools, campuses,
and chemical parks, to continuously refine scenario-based solutions, and deeply extract industrial
business values, thus delivering scenario-based digital intelligence solutions that are implementable,
quantifiable, and of calculable value to customers.
4.1.2.3 Practice of Values in All Industries
With the constant mining of business scenarios, algorithms are no longer applied in business as
a generalized demand, but are deeply penetrated into production and operation scenarios and
various settings, infiltrating into daily business operations and management. Their value is gradually
recognized by customers and more widely applied, and corporate businesses are also upgraded to
2.0. Around building a large security system, casting digital intelligence productivity, and improving
operational decisiveness, we can effectively facilitate the digital intelligence transformation and
upgrading of thousands of industries, and empower the value realization in all scenarios.
(1) Building a comprehensive security system: From safety warning to security system building
Safety production is a long-term national basic policy as well as the cornerstone of corporate
production and operation. The Company continues to delve into the actual production and
operation scenarios of customers, and combines the capabilities of video IoT with scenarios to
achieve visualization, digitalization and intellgentization based on actual scenarios with the five
capabilities of "Full Sensing, Full Connection, Full Intelligence, Full Computing and Full
Ecosystem". From safety prevention to safe production, with machines replacing manual work, we
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can realize unmanned or less-manned operations in dangerous scenarios. Besides, we also build a
safety knowledge system library to optimize the safety management and production process, so as
to ensure the safety of personnel, equipment and facilities, production conditions, and public order
during business operations.
(2) Casting digital intelligence productivity: From edge assistance to core production
With the continuous development of digital economy, enterprises have an ever more clear
demand for digital transformation. Based on exceptional video technologies and intelligent IOT
capabilities, the Company applies such leading technologies as visual perception, AI intelligence, big
data, IoT, and blockchain to help enterprises realize efficient operation and management of parks
and digital upgrading of factories with digital intelligence. With deep interaction with the core
production and management systems, we empower IT+OT integration with digital intelligence,
optimize production and management business processes, and improve quality management and
production efficiency, so as to help enterprises transform and upgrade with digital intelligence.
(3) Enhancing operational decisiveness: From data aggregation to data-based decision-making
Leveraging on its capabilities in sensing, connectivity, computing, intelligence and ecology,
Dahua aims to achieve online resources, business intelligence and data-based decision-making on
the basis of data aggregation. It deeply explores the value of production and management data to
reduce the management cost, and builds the operational and decision-making value of data for
enterprises based on multi-modal and foundation models, to facilitate business management while
enhancing decision-making.
Focusing on enterprise business scenarios, the Company has been working intensively in
manufacturing, construction, education, electric power, petrochemical, coal, steel, finance,
healthcare, logistics, culture and tourism, agriculture, and retail. Particularly in the "5+X" core
scenarios (factory manufacturing, energy production, school education, healthcare and park
management), the Company provides customers with high-value digital intelligence solutions,
empowering enterprises to realize the value in all scenarios and enabling business innovation.
Factory manufacturing: Multidimensional perception integrated with digital twin,
empowering intelligent manufacturing with integrated intelligence
In industries, new-generation IT such as IoT, big data and cloud computing are employed to
digitally express, control and optimize workshop production processes, realizing production
automation, unmanned sites, data interconnection and intelligent management decision-making.
Giving full play to its advantage of multi-dimensional intelligence integration, Dahua applies
leading technologies including machine vision, automation, digitization, and AIoT, to build a human-
computer interaction platform for industrial scenarios with digital twin as the top-level presentation.
Via the digital twin platform, our factory scenario solution has expanded its coverage from single
scenario to multi-services, moving from factory security and workshop energy consumption to
production operations, thus comprehensively improving the depth and breadth of interconnection
among people, machines and systems. Through the digital integration of the product data flow,
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manufacturing control flow, and order delivery flow, we can more efficiently visualize the whole
production process from orders to finished products.
Meanwhile, based on the comprehensive management platform for business enterprises,
Dahua has established intelligent management systems for energy consumption, vehicles,
perimeters, and security-fire protection integration, to enable all-weather dynamic sensing of
intelligent manufacturing operations, accurate control of abnormalities in personnel and vehicles, as
well as effective real-time control of fire protection and security IoT facilities in factories. More
importantly, the development of video systems in tandem with business data, coupled with
completed data collection, transmission, processing and analysis, provides scientific basis for
corporate management decisions, and data support for factory business decision-making, so as to
better guide corporate strategic planning, and facilitate the building of future-oriented factories.
For a prominent photovoltaic component corporation, the Company has implemented digital twin
technology to establish a workshop information management platform. This platform showcases a
1:1 three-dimensional reproduction of the battery cell production process and equipment operation,
enabling real-time monitoring and intelligent analysis on personnel status, production lines, product
quality, equipment and facilities. This facilitates effective online remote management, leading to
improved efficiency in workshop control and ensuring adherence to production standards.
Energy production: Integrating video AI with smart IoT to establish a new model for
risk and hazard supervision
Production scenarios within energy companies often encounter various risks and hazards,
characterized by monotonous traditional regulatory methods, limited operational staff, and complex
environments. The Company has long been dedicated to leveraging video AI and smart IoT
technology, combining technological advancements and human intervention to achieve automated
online monitoring of production scenario risks and intelligently provide early warnings. This reduces
production risks, enhances operational efficiency, and greatly supports safe production practices for
energy companies.
Using comprehensive perception capabilities including observation, listening, inquiry, and tactile
feedback, the Company has developed a new model of machine-assisted online supervision.
Enhancing the AI capabilities of video processing, industrial television is revitalized, incorporating
infrared, laser, gas cloud imaging, voiceprint, and other smart IoT technologies for multidimensional
perception. This enables remote intelligent visualization monitoring of equipment operation status,
facilitating online compliance management of onsite operations and ensuring stable production
environments. In this way, it offers energy companies a novel approach to intelligent risks monitoring
and control.
The Company has already implemented this approach in various energy sub-industries. For
example, in the petrochemical sector, online visual intelligent monitoring and early warning systems
have been established based on the new supervision model. This has significantly improved safety
production supervision, reduced accident rates, and minimized labor costs. The Company will
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continue to explore deep integration of smart IoT technology with productivity to promote the
digitization and intelligence of safety production within energy companies.
School education: Providing a comprehensive solution for campus digitization
focused on being "balanced, precise, efficient, and safe"
The Company empowers digital reform in colleges and universities through digitization.
Leveraging video capabilities as a foundation, it has introduced a digital reform solution for
universities with campus multidimensional big data at its core, aiming to establish a smart campus
Internet of Things (IoT) mid-end platform. Focusing on innovative integration of university business
processes, it enables data value to support digital reform in universities. By integrating AI and big
data technology into video scenarios, the Company has developed various data analysis models
such as companion analysis, solitary individuals, absence for N days, and nocturnal activities. These
models help identify student issues such as student missing, high-frequency strangers, mental
health concerns, and abnormal returns to dormitory. With timely warnings about personal and
psychological safety issues, the Company's solution shifts from reactive responses to proactive
prevention, enabling data-driven decision-making for a safer campus environment. Simultaneously,
the Company prioritizes the development of campus-authority integrated and smart classroom-
related businesses and products. Traditional classrooms are transformed into smart classrooms to
enhance teaching efficiency, improve the learning environment, and assist in teaching evaluations,
thereby enhancing a more rewarding teaching process.
For example, at a mining university, the Company has assisted in establishing smart dormitory
management, and implemented solutions for campus vehicle overspeeding, significantly improving
logistical satisfaction. At a university of finance and economics and political science, the Company
has addressed student missing issues through campus safety big data technology. At an aviation
university, the Company's construction of smart classrooms has facilitated interactive teaching
systems, online classroom platforms, and IoT central control, promoting efficient teaching and
enhancing the overall digitization capability of the university.
Healthcare: Supporting the high-quality development of the medical industry under
the guidance of "trinity" smart hospital construction
Guided by the national standards for "integrated smart hospital" construction, the Company
supports the foundational development of smart hospitals, driving the high-quality development of
public hospitals. Comprehensively enhancing the intelligent management level of hospitals,
automating and digitizing nursing work, improving service efficiency, enhancing nursing precision,
and enhancing the patient experience are at the core in current smart hospital construction efforts.
While continuing to strengthen the construction of smart and safe hospitals, the Company actively
expands its presence in outpatient and inpatient ward scenarios, leveraging its own strengths to
support the high-quality development of the medical industry and complete its own business upgrade
and transformation.
In 2023, by focusing on its key business area of smart hospital wards, the Company, in line with
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a series of documents released by the National Health Commission and with the goal of "promoting
the improvement of hospital nursing services and continuously enhancing patients' medical
experience," leveraged its accumulated core capabilities in audiovisual technology and AI to develop
smart ward solutions. Targeting medical, nursing, patient, and administrative entities, it delved into
system data, conducted information cleansing and governance, and presented data in a more
intuitive and convenient manner across various smart terminals in different scenarios.
Simultaneously, the Company developed a smart triage solution tailored for outpatient waiting
scenarios. By reducing patient wait times, in-hospital travel time, and intermediary process steps, the
Company tapped into its expertise in algorithms and big data models to cover scenarios from patient
admission to discharge, appointment scheduling to treatment, and from waiting areas to examination
rooms. Optimal treatment paths were matched using algorithms, and guidance for patient
consultations was provided through navigation screens and smart terminals in various scenarios,
further enhancing the service quality of hospitals.
For instance, through collaboration with a 3A hospital in Hunan province, the Company
constructed an intelligent medical and nursing intercom system. It ensured data security in a large-
scale network environment during construction and usage, customized and upgraded isolation
between various wards as per requirements, facilitated effective information exchange among
medical staff, patients, and management personnel, and achieved refinement in the hospital's
general and surgical wards. This initiative served as a model for digital ward construction in the
hospital.
Park management: Harnessing AI as the core to build digital headquarters and smart
parks, giving strong support to enterprises
As the physical foundation and space for digital operations and smart city development, the
intelligence level of park management directly impacts corporate operations and management. With
the continuous advancement of technologies such as AI and smart IoT, the Company has been
expanding the scope of its smart park business from traditional security surveillance to
comprehensive digitized park solutions. This expansion has achieved the transition from single-
scenario coverage to collaborative coverage across multiple scenarios and businesses, and made
the improvement from peripheral operations to the core park management operations. The overall
park solution covers a comprehensive range of smart applications, including intelligent access
control, smart office, intelligent meetings, digital energy consumption, and smart park management
services. This approach facilitates multidimensional connections between architecture and the city,
environment and office, culture and leisure, creating a cohesive and warm intelligent architectural
ecosystem. Additionally, leveraging the park's intelligent brain, the integration of digital infrastructure
and park management is deepened, establishing a benchmark park that is "smart, efficient, safe,
and green."
Taking the five-dimensional integrated smart headquarters building in Zhangzhou, Fujian
Province as an example, the Company has provided the following significant value propositions for
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customers:
Low Energy Consumption: Centering around "source, grid, load, storage, charging, and
monitoring," the Company actively promotes energy saving and emission reduction, aligning with the
dual carbon goals and effectively reducing energy consumption in the buildings.
Smart Office Solutions: Leveraging intelligent connectivity throughout the park, the Company
optimizes the working and meeting experiences for employees, unlocking the value of physical
space.
Efficient Access Control: The Company manages complex permissions and pedestrian-vehicle
access with a comprehensive management architecture, thereby reducing administrative costs.
Intelligent Security Systems: Integrating intelligent scheduling, the Company establishes a
proactive three-dimensional security and control system, efficiently addressing potential risks and
enhancing security efficiency.
Efficient Operations: Using digital twin to build the park's "brain", the Company creates a holistic
closed-loop business system characterized by online resources, intelligent business, and data-driven
decision-making, thereby enhancing park management efficiency.
More industries: The Company is committed to engaging with various industries
under policy guidance and driven by the inherent needs of customers, actively
participating in the development of emerging opportunities across different sectors.
In the cultural and tourism industry, the Company responds proactively to the requirements of
emphasizing the digitalization of cultural relic protection efforts as outlined in the Cultural Relics
Protection Law. The Company's offerings include smart museums, intelligent cultural relics
management (including preventive protection, digital preservation, warehouse management, and
intelligent conservation), and cultural heritage protection (covering immovable cultural relic
protection, preventive protection of cultural relics and historical sites, and AI-assisted cultural relic
protection), thereby making significant contributions to the digitization of cultural heritage protection
efforts.
In the financial sector, the construction of smart branches goes beyond traditional security
services, focusing on empowering branch services through digitalization. The Company incorporates
solutions such as screen display systems, intelligent electricity usage, and video twinning, covering
six major scenarios: comprehensive reception, product release, interactive marketing, non-cash
services, wealth management, and convenience services. This comprehensive approach aims to
elevate service standards and enhance user experience across all branches.
Construction industry: The Company actively engages in affordable housing construction,
focusing on the operational management of affordable housing. Through the implementation of
"water meter, electricity meter, and door lock", the Company achieves effective management of
housing resources, beneficiary management, allocation management, and post-management
(including occupancy, lease, lease renewal, interviews, coordination, subsidies, etc.). Additionally,
leveraging general park capabilities, the Company facilitates on-site and property management,
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assisting customers in enhancing operational efficiency and increasing regulatory transparency.
4.1.3 SME Businesses
For small and medium-sized enterprises (SMEs), amidst the ongoing economic recovery in
2023 and gradual market revitalization, the Company proactively adjusts its channel strategies.
With a core focus on boosting channel confidence, the Company actively engages in market order
management, expands services to lower-tier markets, and establishes a presence in e-commerce.
Faced with the business characteristics of a "broad but fragmented" channel market, the Company
relies on "video + IoT" multidimensional intelligent applications to develop intelligent commercial
products and solutions for SMB customers. This approach aligns with the Company's philosophy of
"making society smarter and life better."
(1) Broadening channels for comprehensive business outreach
With the continuous growth in demand for intelligent applications within the IoT industry, the
Company leveraged its profound expertise in video-centric IoT technology, coupled with
outstanding capabilities in hardware integration, AI technology, and scenario solution integration,
and successfully launched solutions of multiple intelligent scenarios tailored for SMEs. These
solutions aim to delve deep into segmented markets across various industries, catering to specific
product demands while significantly enhancing the competitive advantage of terminal service
providers. Given the highly fragmented nature of the market, the key to success lies in improving
market both in width and depth. Therefore, the Company's SMB business not only focuses on
expanding market coverage and deepening market penetration but also prioritizes the expansion of
online channel operations and the establishment of a robust service provider system.
(2) Market layout and leading product strategy
In the smart hardware industry, the Company meticulously plans the market distribution of
three core sectors: security, telecommunications, and IoT applications. In the security sector, the
Company has launched three flagship series: Dahua Classic, Dahua Superpower, and Dahua
Special. These series, by refreshing the brand image, comprehensively showcase the value and
market competitiveness of the Company's security products to partners. In the digital
communication sector, the Company has strategically positioned itself with offerings in switches
and wireless network products, particularly its PoE switches which, boasting extended power
supply distances and intelligent power supply technology, demonstrates Dahua's extensive
research and technological expertise in this field accumulated over years. In the IoT applications,
the Company's product line covers access control systems, pedestrian passage gates, vehicle
barriers, conference tablets, public broadcasting systems, fire equipment, and smart charging
stations. All these showcase the Company's steadfast commitment to delivering high-quality
solutions and pursuing market growth in the realm of smart IoT.
Regarding the application of cloud computing and AI technologies, the Company has
introduced intelligent networking solutions tailored for SMBs on the basis of the cloud
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interconnection technology. This includes the highly acclaimed super MAX series of precision
search products, which have garnered widespread recognition and praise from customers.
(3) Strengthening the digital marketing system for channels and advancing the digital
transformation of partners
The Company's SMB business not only focuses on horizontally expanding market coverage
and vertically deepening market penetration but also prioritizes the expansion of online channel
operations and the establishment of a robust service provider system. By activating channels and
establishing a digital marketing system centered around "Dahua Cloud-Ecommerce," the Company
is dedicated to propelling the digital transformation of its partners. Simultaneously, it provides
support for "smart business" initiatives to partners, thus continuously expanding the network of
professional domain partners. This strategic approach not only further taps into the potential of the
SMB market but also ensures a significant enhancement in business efficiency and market
influence.
4.1.4 Operator Business
4.1.4.1 Business Overview
With the innovation of new-generation information technology, the release of the top-level
planning for Digital China, and the surge in demand for digital intelligence in the market, a wave of
digital economy is sweeping through. As a capability provider and service provider of smart IoT
infrastructure and scenario-based solutions, the Company leverages the operators' advantages in
customer scale, 5G, AI, computational power network, big data, capability mid-end platform,
security, etc. Through resource sharing and complementary advantages, the Company and its
partners jointly expand the market with an open mindset, co-create products, and load operational
services, forming a new growth curve for mutual benefit and win-win cooperation.
4.1.4.2 Core Strategy
(1) Capability complementarity to forge new information infrastructure The Company
possesses leading technologies and intelligent manufacturing capabilities in fields such as visual
IoT and connectivity, collaborating with operators' computational power network capabilities.
Together, they create deeply customized industry products such as AI terminals and integrated
industry applications.
(2) Technological complementarity to build core technical capabilities The Company and
its partners jointly build core capabilities such as foundation models and big data, promoting the
transformation of traditional communication services into digital and intelligent services and
creating new business models and growth points. Leveraging its own video capabilities, the
Company assists in the construction of operators' video IoT platforms by facilitating video
convergence access, capability platform construction, AI scenario implementation, and application
development expansion.
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(3) Resource complementarity to accelerate industrial digital development With the
construction of Digital China and the development of the digital economy, the extraction of data
value, and the digital intelligence transformation and upgrade of government and enterprise, the
Company possesses a strong R&D team and business innovation capabilities, while operators
have vast user resources and channel advantages. Both sides engage in deep cooperation in
industries such as social governance, smart transportation, education and tourism, natural
resources, industrial manufacturing, mining, and energy, jointly expanding and exploring new
opportunities.
4.2 Oversea Business
4.2.1 Business Overview
Since 2003, the Company has implemented the "Go Global" strategy to enter international
markets. Starting from 2008, it intensified efforts to strengthen its independent brand by
comprehensively deploying channel construction, technical support, and after-sales service to
ensure the healthy development of overseas business. In recent years, leveraging accumulated
experience in the domestic market, coupled with increased investment in research and
development and technological innovation, the Company has continuously improved its overseas
business in product competitiveness, solution capabilities, and localization service levels. It has
showcased professional quality and excellent service to global customers, resulting in the
continuous enhancement of brand value and laying a solid foundation for the accelerated
expansion of the Company's overseas business. At present, the Company has established 69
overseas subsidiaries in major countries across all continents, with its products and services
covering over 180 countries and regions globally. With the continuously growing demand in the
global smart IoT industry, the Company will continue to accelerate its pace, actively improve global
marketing and service construction, and further explore international markets.
4.2.2 Core Strategy
(1) Establishing professional localized operational organizations
The Company maintains a prudent business strategy, continuously strengthening its
understanding and adaptability to the regulatory, political, and economic environments of regions
where it operates. Tailored country-specific business strategies are formulated under the principle
of "one country, one strategy". By actively recruiting local talents through continuous investment in
channel penetration, expansion of business with integrators, breakthroughs and replication in
various industries, and exploration of new business lines to build professional and diversified
organizational teams, the Company endeavors to adapt products and solutions to local needs,
thereby consistently providing efficient, professional, and nearby services to frontline customers.
(2) Establishing an efficient supply and service system
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To establish an efficient supply service system, the Company has set up six regional-level
supply centers in Europe, Southeast Asia, the Middle East, Latin America, and other regions.
Additionally, it has established national warehouses in key countries globally, creating a three-tiered
supply system of headquarters, regional supply centers, and national warehouses to enhance
global supply delivery capabilities. In terms of service systems, the Company has established such
globally integrated systems as delivery system, technical support system, operation and
maintenance management system, customer service system, and training and certification system.
It has established over 100 overseas service sites, with more than half of the countries directly
providing overseas hotline services, significantly improving global service and delivery capabilities.
(3) Broadening and enriching innovative business categories
Leveraging its years of technical expertise and exploration in the smart IoT field, and in
collaboration with upstream and downstream partners, the Company is bringing the latest
digitalization products, solutions, and technological concepts from China to various regions
worldwide, catering to differentiated scenarios and demands overseas. As a prominent
representative of digitalization enterprises venturing into international markets, the Company has
continuously invested in technological innovation and product research and development,
consistently improved its service system, and gradually enhanced its localized operational
capabilities, all of which contribute to maintaining the Company's leading position in overseas
markets for products and solutions. While traditional video businesses maintain steady growth,
innovative businesses such as commercial displays, access control, alarms, and intercoms are also
experiencing rapid development, meeting the diverse business and scenario needs of different
countries and regions overseas.
(4) Providing complete scenario-based solutions
In recent years, the Company has actively expanded vertical industry markets worldwide in
collaboration with partners, providing comprehensive scenario-based solutions for industries such
as safe cities, intelligent transportation, retail, education, energy, and manufacturing. Particularly
noteworthy are the numerous successful implementations in digital urban governance, intelligent
traffic management, ecological environment protection, and digitalization of education. For
instance, at the southernmost tip of the Earth, the Company's smart IoT solutions silently safeguard
the Antarctic penguins in extreme cold environments. In many regions including the Middle East,
Latin America, and the Asia-Pacific, the deployment of the Company's intelligent traffic
management systems has led to a gradual decrease in traffic accident rates and improved road
efficiency, ensuring smoother traffic flow and enhanced travel efficiency. Simultaneously, the
Company's digitalized education solutions have contributed to the digitalization upgrade of
education in some overseas regions, enabling excellent educational resources to reach remote
areas and promoting the remote sharing of teaching resources and educational equity.
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4.2.3 Social Value Practice
(1) Providing a multicultural integrated platform for international talent development
The Company's localization rate of overseas employees has exceeded sixty percent, with over
half of the workforce sourced from talent pools in the respective countries of operation. On one
hand, they contribute significantly to the localized operations of the Company. On the other hand,
by employing them, the Company continually contributes to the local employment condition in the
form of nurturing high-tech professional talent. The Company prioritizes the growth and
development of its global workforce, continuously enhancing employee skills through knowledge
training, enriching welfare systems, and providing promotion opportunities. It is committed to
offering a fair, just, and high-quality growth system and platform for all employees worldwide.
(2) Implementing the "dual carbon" strategy to support green development
Adhering to sustainable development is a reflection of the Company's social responsibility and
commitment. The Company actively carries out innovative green design for products, reduces
product energy consumption and promotes green expansion and business upgrading in the global
market through clean technologies. All smart IoT solutions are designed to be intelligently energy-
saving and emission-reducing to promote global green solution applications, thus reducing global
carbon emissions. For instance, the Company provides solutions in various fields such as smart
supervision of natural reserves, water conservancy monitoring, and forest fire prevention, actively
participating in and promoting sustainable development. Leveraging digital intelligence to empower
environmental protection and green development, the Company contributes to building a better and
greener world. In 2022, being recognized as a national-level green supply chain and green factory,
the Company was honored with the title of "Leading Green Enterprise." In 2023, the Company
became a member of the United Nations Global Compact organization, making its own contribution
to the realization of United Nations sustainability goals. In the same year, the Company achieved a
silver rating in the global sustainability assessment conducted by the authoritative sustainability
rating agency EcoVadis, ranking among the top 15% of global enterprises.
4.3 Innovative Business
In recent years, the boundaries of the smart IoT industry have been continuously expanding.
Based on a deep understanding of diverse customer demands and years of accumulated expertise
in the field of smart IoT, the Company remains committed to expanding innovative business
ventures in the industrial IoT sector, aiming to provide customers with more comprehensive and
enriched solutions. The Company has been looking for fields with great growth potential and
enormous market size, and has developed innovated business through talent selection and
corresponding incentive mechanism. The rapid development of innovated business has greatly
broadened the channel of the Company's smart IoT, which is an important driving force for the
Company to keep moving forward at a high speed. The Company's current innovative businesses
include machine vision and mobile robots, smart living, thermal imaging, automotive electronics,
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smart security inspection, smart fire protection, and storage media.
4.3.1 Machine Vision/Mobile Robot
The Company's subsidiary, Zhejiang HuaRay Technology Co., Ltd. (hereinafter referred to as
"HuaRay Technology"), primarily engages in the research, development, production, and sales of
core components for machine vision and mobile robots. Additionally, HuaRay Technology provides
customized industry solutions to downstream customers. Driven by technological innovation,
HuaRay Technology assists customers in constructing digitalized workshops, fostering smart
factories, and enhancing manufacturing intelligence. HuaRay Technology remains steadfast in
addressing customer needs, aiming to reduce costs and create more value, thereby making
production more intelligent and operations more efficient.
As a national high-tech enterprise, HuaRay Technology consistently upholds a commitment to
technological innovation, particularly in embedded software, image optimization, recognition
algorithms, network transmission, navigational positioning, scheduling, and motion control. HuaRay
products and solutions have been widely applied across industries such as lithium batteries,
photovoltaics, logistics, and 3C. HuaRay machine vision products primarily comprise 2D industrial
cameras, 3D industrial cameras, smart cameras, intelligent code readers, and acquisition cards.
Coupled with the Company's independently developed MVP (Machine Vision Platform), these
products can be used in various scenarios such as code reading and recognition, defect detection,
measurement, and positioning, providing customers with a one-stop service from product to visual
solution. The mobile robot lineup primarily includes various types of industrial mobile robots, such as
lurking lifting, fork-type, and transfer-type robots. Leveraging its independently developed RCS
(Robots Control System) and iWMS (Intelligent Warehouse Management System), HuaRay offers
applications in transportation, stacking, and towing. With technological expertise in machine vision
and mobile robots, HuaRay Technology is capable of providing solutions to multiple key industries.
Also, HuaRay Technology continues to explore new terminal application scenarios, assisting
customers in improving quality and efficiency, reducing costs and inventory, ultimately achieving
"interconnection, human-machine collaboration, data-driving, intelligent transformation,"
empowering various industries and driving the development of a new form of global intelligent
manufacturing.
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4.3.1.1 Machine Vision
In 2023, HuaRay Technology launched a series of new machine vision products, including 150
MP large plane array cameras, 8K line-scan cameras, dual Full Cameralink acquisition cards, and
intelligent code readers. The resolution of these products ranges from 0.3 MP to 600 MP, and they
support interfaces such as GigE, USB, CameraLink, 10GigE, and CoaXPress. In the aspect of
machine vision hardware products, HuaRay Technology has transitioned from providing industrial
cameras alone to supplying core components and solutions of machine vision. The product series
cover plane array cameras, line array cameras, 3D cameras, smart cameras, code readers,
acquisition cards, lenses, and lighting sources, offering comprehensive solutions for vision
integration.
During the reporting period, HuaRay Technology released the MVP (Machine Vision Algorithm
Platform) V4.0 and the MVT (Machine Vision Training) Platform V3.0.
Developed independently by HuaRay Technology, the MVP aims to provide customers with
algorithmic tools for rapidly building vision applications. The platform integrates over a thousand
proprietary basic image algorithms and serves as the "brain" of machine vision. It connects
cameras with programmable logic controllers, robotic arms, and other devices to help form a
technological closed loop for perception, cognition, and decision-making. Simultaneously, the
platform combines deep learning algorithms for industrial component visual image perception,
cognition, and decision-making training. It establishes big data detection models capable of
achieving high-precision, high-efficiency functions such as visual positioning, image recognition,
and defect detection. With a GUI visualized interface, users can freely build vision processes
through drag-and-drop, swiftly configuring vision solutions. It supports multi-task synchronization
and multi-process asynchrony, offering a rich set of communication interfaces to meet the efficient
use of multiple products. The MVP algorithm platform provides an open deep learning interface,
supporting the inference application of AI models.
HuaRay Technology's MVT is an industrial AI vision platform based on deep learning, providing
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customers with end-to-end full-process services to efficiently and cost-effectively construct an
"industry brain." The platform integrates sample annotation, sample augmentation, and model
training, with built-in neural network models including classification, detection, semantic
segmentation, character recognition, and more. Each type of task supports large, medium, and
small models to meet the diverse feature detection requirements in complex industrial
environments. Through MVT training models, it can be easily loaded into the MVP Machine Vision
Algorithm Platform and flexibly combined with other arithmetic operators. Simultaneously, MVT
offers various application scenarios including traditional learning, deep learning, and the
combination of traditional solutions and AI, significantly enhancing the generalization and versatility
of the algorithm platform products to meet the practical usage demands of various industries.
4.3.1.2 Mobile Robot
In 2023, HuaRay Technology launched a new generation of lurking robot series products,
offering faster deployment and maintenance, higher operating accuracy, and a load range covering
60Kg, 600Kg, 1000Kg, 1500Kg, 2000Kg, and 3000Kg. These include 5G communication-enabled
forklifts, reducing control latency and expanding operations from indoor to outdoor environments. It
achieved laser SLAM navigation, visual navigation, inertial navigation, and multi-sensor fusion
navigation, compatible with visual obstacle avoidance and TOF stereo obstacle avoidance.
Accompanied by a rich variety of network systems and intelligent charging systems, the products
have been successfully applied in multiple industries such as 3C, lithium batteries, and
photovoltaics.
HuaRay Technology's independently developed RCS mobile robot dispatching system
integrates intelligent dispatching algorithms. Based on the algorithms of autonomous navigation,
high-performance cluster scheduling, trajectory planning, perception and recognition, motion
control, intelligent electronic control, high-precision intelligent electronic drive, and intelligent
electronic control, it achieves ultra-large-scale map construction and millisecond-level path
planning, supporting optimal allocation of thousands of concurrent tasks and multi-server cluster
scheduling. This enables functions such as multiple robot cluster path planning, collision avoidance
control, robot traffic management, intelligent task allocation, multi-vehicle avoidance, traffic balance
control, system load balancing, intelligent charging management, safety monitoring, warehouse
management, intelligent operation and maintenance management, and report statistics.
Additionally, HuaRay Technology has introduced the iWMS intelligent warehouse management
system, based on the RCS mobile robot dispatching system. It realizes various operational
scenarios such as goods-to-person sorting, point-to-point transportation, full-in full-out, and
automatic sorting, thereby reducing labor costs and improving operational efficiency. Various
configurable strategies, including putaway strategies, allocation strategies, wave picking strategies,
mixed placement strategies, etc., are employed to meet the business needs of different industries
and customers. Combined with algorithmic analysis such as material correlation analysis, shelf
usage rate analysis, popularity analysis, document clustering analysis, hit rate analysis, and dense
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storage reorganization analysis, they have enhanced inventory management and business
processes.
Leveraging its years of accumulated AI technology expertise in the industrial sector and its
established ecosystem of industrial IoT, HuaRay Technology steadfastly upholds a commitment to
technological innovation and accumulation, continually delivering higher-quality products and more
specialized services to global customers. This dedication aids in industrial digitization, positioning
itself as an expert in improving industrial intelligence efficiency.
4.3.2 Smart Living
Huacheng Network focuses on the intelligent home sector with visual technology as its core.
Leveraging AI capabilities and digital platform prowess, Huacheng Network has established four
major product systems: "IMOU Security, IMOU Interconnection, IMOU Robots, and IMOU Lighting."
These systems offer top-tier intelligent home products and services, including smart cameras,
smart door locks, home service robots, and routers, to millions of households and businesses
worldwide. Huacheng Network is dedicated to ensuring that every household enjoys a more
convenient and secure smart lifestyle.
As of 2023, IMOU Cloud had experienced rapid growth in both global AIoT device connections
and user numbers. Overall, AIoT device connections had increased by over 25%, while global user
registrations had grown by more than 35%. The monthly active user count on the IMOU Cloud
platform worldwide had exceeded 17 million.
4.3.2.1 Core Technologies
Huacheng Network has always adhered to a user-centric approach, responding to user needs
and fostering independent technological innovation. By integrating resources and capabilities such
as cloud computing, big data, cloud storage, and AI, Huacheng Network has built a video-centric
IoT cloud platform known as the IMOU Cloud platform. Significant research achievements have
been made in AI algorithm technology, audio-video processing technology, cloud platform
technology, and low-power consumption technology. As of December 2023, Huacheng Network had
been granted over 50 invention patents.
In the field of smart home products, Huacheng Network focuses on the intelligent upgrade and
transformation of various household devices, integrating smart technology into its products. This
includes a focus on general capabilities of devices such as visual analysis, visual interaction, and
multimodal correlation, continually iterating on technologies such as visual-text correlation, inter-
frame object correlation, action recognition, multidimensional perception, multi-camera vision,
comprehensive low-power consumption, and image adaptation. Specialized smart technology
revolves around Huacheng Network's four key smart home product categories, including camera
adaptation to home environment, smart lock structure and applications, sensor control device
capability expansion, and robot control and applications.
In the IoT cloud platform business domain, IMOU Cloud constructed a digital framework
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targeting products and users in 2023. Huacheng Network uses physical models to define smart
hardware digitally, continuously accumulating and precipitating data around the entire product
lifecycle, refining digital capabilities to achieve a seamless connection and feedback loop between
products and users, thus establishing continuous, feedback-driven digital operational capabilities.
4.3.2.2 Major Products and Services
Based on its own technological advantages in AI algorithms and digital intelligence, Huacheng
Network focuses on user-centricity, continuously iterating to meet the diverse product needs of
consumers in home scenarios, and has fully deployed IMOU smart home products.
IMOU Security: This contains categories such as home surveillance cameras, smart door
locks, smart doorbells, and smart peepholes. Through continuously upgrading its vision-centered
smart home security system, IMOU provides comprehensive protection for household safety. In
2023, Huacheng Network launched the dual-lens series home surveillance cameras and indoor
cameras with interactive screens. Additionally, outdoor battery-powered PTZs were launched,
enriching the range of home surveillance camera products. Across the board, wireless technology
has transitioned to Wi-Fi 6, with mid-to-high-end series supporting Bluetooth networking. While
meeting the rigid demands of home security, innovative enhancements have been made to improve
the user experience and richness of smart home usage.
Smart door locks: In 2023, a brand-new Spark series video lock product was developed, with
continuous upgrades in visual basic capabilities and multidimensional perception capabilities. Core
functions such as door opening and recognition have been significantly improved. Continuous
investment in visual AI has led to the introduction of functions such as child departure detection,
package detection, and package guarding. The accuracy of alarm security systems for loitering,
coercion, high temperature, and illegal users has been enhanced. Additionally, services such as 24-
hour video monitoring, call services, and intelligent weather services are provided.
IMOU interconnection: This category comprises network transmission products such as
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wireless routers, wireless relays, and wireless network cards. In 2023, targeting both domestic and
international sales channels, IMOU formed a product system featuring various specifications of
routers including Wi-Fi 4, Wi-Fi 5, and Wi-Fi 6. Simultaneously, IMOU routers, in conjunction with
IMOU IPC (Internet Protocol Camera), facilitated seamless and rapid networking, and accelerated
monitoring data transmission. While providing consumers with a stable wireless network
experience, IMOU routers also enable unique functionalities when paired with other IMOU smart
home products.
IMOU robots: In 2023, further enhancements were made to the product lineup, achieving
comprehensive coverage with editions including charging dock edition, dust collection edition, and
all-in-one self-cleaning edition. Through optimizations in core algorithms such as navigation,
recharging, and repositioning, along with product design enhancements, IMOU has significantly
improved key performance indicators of robotic vacuum cleaners including mapping efficiency,
recharging efficiency, repositioning efficiency, cleaning and dust removal rate, and coverage.
IMOU cloud platform: Tailored for ordinary consumers, IMOU Cloud offers personalized,
scenario-based paid value-added services including intelligent cloud storage, cloud space, hybrid
cloud recording, online monitoring, elderly care, telephone reminders, and device sharing. These
services are primarily focused on optimizing user experience around core functions such as device
preview, video playback, device addition, voice intercom, and smart scenarios. In 2023, based on
the usage and consumption habits of overseas users, and considering the differentiated scenarios
in different overseas regions, IMOU further consolidated its value-added service system for IMOU
Protect membership. Overseas value-added services were expanded and extended, currently
covering most major countries where cloud services are provided.
For enterprise developers, IMOU Cloud provides an open software and hardware platform. The
open software platform offers third-party partners video-centric PaaS capabilities, providing IoT
basic access capabilities, video AI capabilities, and big data analysis capabilities. The open
hardware platform facilitates the rapid integration of third-party ecological products through SDKs,
IoT modules, video modules, Zigbee gateways, and other means, making it easier for more
customer products to connect to IMOU Cloud. At present, IMOU Cloud has more than 10,000 third-
party partners all over the world, and has established an open, sharing and cooperative IoT
ecosystem.
Huacheng Network will continue to deepen its focus on users, with video technology as the
core, emphasizing home security. The aim is to ensure clear, inclusive, and accurate visibility for
safety. Additionally, efforts will be made to further enhance AI algorithm capabilities and digital
platform capabilities, providing global consumers with richer and higher-quality products and
services.
4.3.3 Thermal Imaging
Our subsidiary Pixfra Technology takes thermal imaging as its core technology and provides
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movements, modules, complete products, vision products and complete solutions worldwide. The
Company focuses on the design, R&D, production, sales and technical services of thermal imaging
pan-security equipment, industrial temperature measurement and business vision products. Its
products and solutions are widely used in numerous fields such as industrial temperature
measurement, biological temperature measurement, natural ecology, new energy, carbon neutrality,
perimeter security, outdoor sports, smart elderly care, and consumer electronics. The Company is
dedicated to sensing the world with temperature, by developing cutting-edge thermal imaging
products and solutions to serve customers worldwide.
In 2023, Pixfra Technology completed the integration of its parent company's existing thermal
imaging business, continuing to solidify its technological foundation. The Therm ISP and Smart
Thermal, two major technological pillars, were upgraded to version 4.0, further enhancing
technological competitiveness. Additionally, a series of new products were released, accompanied
by continuous penetration into segmented industries and markets and the introduction of novel
solutions.
4.3.3.1 Technological Innovations
Pixfra Technology continued to reinforce its technological foundation in 2023, maintaining its
leading position in core technology within the industry. The core imaging technologies, Thermal ISP
and the Smart Thermal algorithm family, were upgraded to the 4.0 era. In ISP 4.0, breakthroughs
were achieved in algorithms such as continuous clarity throughout zooming, super-resolution, gas
image enhancement, and image adaptive adjustment, ensuring sustained leadership in the field of
imaging. Smart Thermal 4.0 incorporates intelligent algorithms for tracking vehicles, ships, human
targets, aircraft, radar-linked tracking, and fire prevention against false alarms, thereby enhancing
the intelligence level of thermal imaging product applications.
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4.3.3.2 Product Breakthroughs
In terms of products, Pixfra Technology continues to maintain its leadership in the security field
by continuously developing new products. In 2023, it released a newly designed multidimensional
perception spherical PTZ camera, which features a spherical, low-drag exterior and a
comprehensive corrosion-resistant design, demonstrating strong adaptability to various
environments. Particularly suitable for large-scale perimeter scenarios, this product ensures normal
operation under conditions of ultra-low temperatures, strong corrosion, high altitudes, and high
wind speeds, thereby enhancing the Company's competitiveness in the field of long-range large
perimeters.
Building upon its foundation in the security sector, Pixfra Technology also continues to expand
into new product forms and application areas. In the outdoor sports sector, it has introduced a
variety of telescopes, short-range sights, and tube sights, achieving a comprehensive layout of
mainstream products and laying a solid foundation for continuous breakthroughs in business. In the
third-party integration field, a series of module products such as network cores and miniaturized
digital cores have been launched to continuously explore integrated customers, expand business
scope, and contribute proactive efforts to the thermal imaging ecosystem. Targeting areas such as
industry, energy, electronic maintenance, and scientific research, Pixfra Technology has released a
series of handheld thermal imaging thermometers, further enriching its product portfolio.
4.3.3.3 Penetration into Segmented Industries
In 2023, Pixfra Technology focused on segmented scenarios, explored customer needs,
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enhanced application effectiveness, and actively expanded the boundaries of thermal imaging
application industries and scenarios. Pixfra Technology focused on high-potential thermal imaging
application industries and segmented scenarios, conducting in-depth research into the
characteristics of industries such as petrochemicals, steel smelting, industrial manufacturing, and
new energy. It analyzed the specific production processes of each industry, summarized the
segments in which thermal imaging products could be applied, and developed standardized
professional solution promotion materials, aiming to provide better products and solutions for the
expansion and promotion of the thermal imaging market.
4.3.4 Automotive Electronics
The Company's subsidiary, Hirige, specializes in intelligent automotive electronic products and
solutions. Fully leveraging its core technologies and product advantages in areas such as video
perception, AI, and digital IoT, Hirige is committed to providing comprehensive intelligent driving
products and services to both domestic and international customers in the passenger and
commercial vehicle sectors. Its main products include in-vehicle full-range cameras, in-vehicle
millimeter-wave radar, intelligent driving domain controllers, and systems, with comprehensive
capabilities in hardware, software, algorithm, and system research and development testing, as
well as lean manufacturing capabilities.
4.3.4.1 Passenger Vehicle Market
The passenger vehicle product lineup includes in-vehicle cameras, millimeter-wave radar,
intelligent driving domain controllers, and the Hi-Pilot intelligent driving system. Hirige possesses
comprehensive capabilities in hardware, software, algorithm, and system research and
development testing, as well as manufacturing capabilities. Hirige has established deep
collaborations with multiple major OEMs, enabling the mass production of L2+ driver assistance
systems and intelligent parking systems.
Hirige has been consistently dedicated to cultivating partnerships with leading domestic
passenger vehicle brands. It has officially mass-produced fully automated parking products, driver
assistance systems, and 1R1V products based on the fusion of visual and ultrasonic radar
technologies. These achievements have led to project appointments and mass production
deliveries to numerous automotive manufacturers. Hirige will continue to increase its investment in
intelligent driving sensors, algorithms and system products, give full play to the technical
advantages of automotive electronics based on vision, ultrasonic and millimeter-wave radar
integrated with perception, and release more competitive solutions on intelligent driving and
intelligent cockpit.
Hirige incorporates cutting-edge intelligent driving technology into the factory-installed market,
introducing a forward-looking assisted driving solution. Among these offerings are the entry-level,
cost-effective L2 driving solution 1V, which includes active safety features such as AEB and L2
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ADAS functionality, while also supporting adaptation to overseas market regulations. Additionally,
the mid-range, high-cost performance driving solution 1R1V provides stable and reliable single-lane
assisted driving capabilities. For flagship configurations, the ultimate cost-effective L2+ driving
solution 5R1V supports advanced features like highway driving without visual cues (NOA), blind
spot detection, and front/rear cross-traffic detection, meeting the 2024 five-star rating criteria set by
C-NCAP. In addition, Hirige has launched a lightweight driving-parking integrated solution, thus
providing a more adaptive version of intelligent driving products for the intelligent system of
automobile enterprises. The solution realizes more complex and reliable driving-parking integrated
function, supports active safety, HWA highway assisted driving, and intelligent parking assisted
APA, and gets ready to upgrade to a higher level intelligent driving system in the future.
In the field of intelligent cockpit, Hirige determines the shifting of development orientation from
cockpit safety system to cockpit interactive system and cockpit health system. The mass production
of all kinds of vision sensors in the cockpit has been achieved, and intelligent algorithms in the
cockpit have been released to realize driver fatigue detection, dangerous driving behavior
recognition, gesture and emotion recognition, heart rate detection and other functions. Meanwhile,
360 circumnavigation algorithm has also been released in view of the performance improvement of
vehicle and engine. Hirige supports algorithm migration and adaptation for various platforms,
including Qualcomm's 8155 and 8295, assisting customers in creating intelligent cabins with
distinctive features to enhance the driving and riding experience within the vehicle.
With the accelerated improvement of intelligent driving function, products of Hirige have made
advance in development by leaps and bounds. In the field of visual sensors, Hirige has achieved
the release and application of products with different resolutions for panoramic, front-view, and
surround-view capabilities. These products have been integrated into many leading domestic OEM
manufacturers with mass production, effectively increasing market share and laying a foundation
for further market expansion. In the field of millimeter-wave radar, in line with the trend of domestic
production of automotive radar, Hirige increased investment to introduce fourth-generation forward
and blind spot radars with superior performance. Additionally, Hirige has expanded product
coverage with newly developed in-cabin radars and door collision prevention radars.
Simultaneously, Hirige has initiated research and development into imaging radar, laying the
groundwork for rapid growth in the future.
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4.3.4.2 Commercial Vehicle Market
At present, the stock of commercial vehicles in China exceeds 20 million. A large number of
commercial vehicle resources carry a large number of passenger and freight besides aviation,
railway and water transportation, making commercial vehicles closely related to people's production
and life. However, safety problems such as traffic accidents, casualties and cargo damage have
become increasingly prominent, and major traffic accidents have been reported frequently. After
speeding and fatigue driving, traffic accidents caused by blind areas of vision have significantly
increased. Front-vehicle collision alarm, lane departure alarm, fatigue driving alarm and driving
behavior analysis have gradually become the standard configurations of active safety advanced
auxiliary driving construction projects of commercial vehicle all over the country. Hirige has deeply
studied vehicle operation scenarios, combined with the actual vehicle operation environment, and
conducted in-depth exploration in the effect and efficiency of the algorithm, so as to further improve
the performance of the product system and realize the factory-installed and after-market-installed
intelligent vehicle solutions through active safety products, auxiliary driving products, 360-degree
panoramic view system and other product systems, and intelligently empower commercial vehicles.
At present, the solution has been widely applied in the freight logistics, waste residue, "tourist bus,
Class C or above passenger car, and special vehicle for the transport of hazardous chemicals,
fireworks and crackers and civil explosives", public transportation, school buses, sanitation vehicles
and other fields, providing advanced automotive electronic products and solutions to the world.
In 2023, Hirige made comprehensive efforts across various fronts in the commercial vehicle
market. Domestically, apart from enhancing traditional solutions for public transportation, taxi-
hailing services, and freight transport, Hirige expanded into emerging sectors such as sanitation
and school buses. Hirige established benchmark projects like the Guangdong Sanitation,
Hangzhou Public Transport, and Xiamen Heavy Cargo initiatives. Overseas, Hirige focused on
pivotal sectors such as public transportation, law enforcement vehicles, school buses, and freight
transport, achieving sustained high growth in 2023 and anticipating continued opportunities for
rapid expansion overseas in the next 2-3 years.
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In 2023, Hirige's strategy in the commercial vehicle market involved deploying resources
strategically to target key industries. It introduced new national standards, 1R1V systems, Euro
R151 regulations, and 360-degree surround-view systems in the factory-installed market, further
enhancing its comprehensive services. In the categories of tourist bus, Class C or above
passenger car, and special vehicle for the transport of hazardous chemicals, fireworks and crackers
and civil explosives, heavy truck transportation, and freight transport, Hirige accelerated the
coverage and implementation of the new/old national standards trilogy (Ministerial Standard
Machinery/ADAS/DSM) in accordance with local policy implementations. In the public
transportation sector, Hirige aimed for complete coverage from provincial to municipal levels
nationwide and advanced the comprehensive implementation of second-generation integrated
public transportation solutions. This included dispatch management, active safety features, blind
spot monitoring, 360-degree surround view, passenger flow statistics, illegal bus lane occupation
detection, pedestrian crossing monitoring, and electronic rear-view mirrors. In the taxi-hailing
market, Hirige launched a full suite of products and capitalized on opportunities presented by
national regulations to capture a larger share of provincial capital markets.
Hirige remains committed to investing in research and development for the commercial vehicle
market, continuously aligning its investments with customer business needs. By refining products
and solutions to deliver high-quality, high-value solutions, Hirige assists customers in overcoming
operational challenges and enhances their satisfaction, contributing to the advancement of the
transportation industry.
4.3.5 Smart Security Inspection
Zhejiang Huajian Technology Co., Ltd., a subsidiary of the Company, centers on core video
technology, AI, big data, and IoT. It is dedicated to becoming a leading provider of comprehensive
digital security solutions in China. Huajian Technology upholds a mission of "contributing to global
tranquility and enhancing peace of mind in daily life," focusing on innovative research and
development in the areas of security checks, retail theft prevention, and airspace security. With the
rapid development of technologies such as artificial intelligence, big data and IoT, these
technologies have been deeply and innovatively integrated with the security check industry, and
global users are in need of reliable, convenient and advanced smart security check equipment and
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services, making security check intelligence usher in a new round of development opportunities.
With IoT technology and AI analysis technology as the core, Huajian Technology promotes the
reform and development of the security check industry, bringing new business opportunities and
new vitality to the industry.
4.3.5.1 Security Inspection Machines
In terms of products of security-check machine, Huajian Technology takes its own research
and development capability as the industry foothold, and continues to explore and innovate in the
fields including intelligent view, substance identification, civil aviation standards and other security
products and technical standards representing the top level of the industry. Huajian Technology
independently developed a new generation of image algorithm engine "Qingkong", which greatly
improves the precision and hierarchy of the imaging picture of the security-check machine, and
optimizes the working environment of manual and machine judgment under the premise of
ensuring the localization of components. Leveraging the advantages of AI deep learning training,
Huajian Technology's security inspection machines not only accurately identify organic, inorganic,
and mixed substances but also effectively recognize certain types of highly hazardous prohibited
items.
4.3.5.2 Security Inspection Doors
With profound technical expertise and project experience in the field of security inspection
doors, Huajian Technology discovers during its independent research and development process
that high-precision magnetic field technology combined with AI deep learning can precisely identify
prohibited items such as mobile phones and cutting tools. This technology aligns perfectly with the
market trend of "strict management of examination room order and recommendation of intelligent
security doors." In 2023, Huajian Technology pioneered the introduction of a matrix imaging
millimeter-wave security door domestically, enhancing precision in human body imaging detection
in China's sophisticated security landscape. In addition, in the field of fine metal identification,
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Huajian Technology was the first to introduce the acceptance standard of half a paper clip to the
market, which has been widely recognized by customers.
Huajian Technology places great emphasis on the value and innovation of its product solutions
in practical application scenarios. Tailored for industries such as rail transit, large-scale events,
judiciary, hospitals, education, and logistics, it has launched products and solutions with strong
industry attributes, ensuring sustained high standards and multi-level competitiveness. In the
future, Huajian Technology will continue to implement the strategic policy of taking market demands
as the guide and R&D as the core productivity, and move towards the high-end security check
market. The core components of security check, quick imaging millimeter wave, CT security check
equipment and civil aviation security check equipment will be the main R&D investment directions
in the future. Huajian Technology will make full use of its own technical advantages and
characteristics to create a new generation of high-value security check equipment with unique
characteristics.
4.3.6 Smart Fire Protection
Wisualarm Technology is an advanced provider of fire protection products, solutions, and
operational services, with a focus on IoT, big data, cloud computing, video AI, and other
technologies. It is dedicated to continuously enhancing fire safety for individuals, businesses, and
governmental customers worldwide. By offering advanced fire protection products, comprehensive
solutions, and operational services across all domains, Wisualarm Technology aims to achieve
early warning, prevention, and control of fires and other disasters, thereby elevating the overall
level of social fire safety.
4.3.6.1 Fire Protection Products
Wisualarm Technology focuses on the development of the fire protection industry and
consistently adheres to the development philosophy of driving market expansion through
technological innovation. In 2023, building upon the continuous iteration and enrichment of product
lines such as smart fire protection, safe power consumption, special equipment, industrial fire
protection, and traditional firefighting, Wisualarm Technology further enhanced the integration of
video, AI, and big data capabilities in products such as integrated fire and security solutions,
enterprise software platforms, and fire protection platforms. Wisualarm Technology continues to pay
attention to the development of overseas business, gradually releasing a variety of internationally
certified products. These offerings aim to provide overseas customers with more intelligent and
secure integrated fire and security products and solutions. Consequently, the brand has gained
increasing recognition in various national markets and among customers globally.
4.3.6.2 Solutions
Wisualarm Technology addresses the pain points and practical needs of fire management
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across various industries, continually deepening its application scenario design. With integrated fire
and security capabilities at its core, it has developed three major categories of smart fire solutions:
networked supervision of fire safety, integrated management of fire and security for enterprises,
and operational management of fire safety for small-, medium-, and micro-sized enterprise venues.
In the government sector, Wisualarm Technology focuses on the social governance of fire
safety at the district and township levels. It implements smart fire perception infrastructure
construction in industrial enterprises, street-front shops, vulnerable groups, rental properties,
warehouses, and high-rise buildings. This effort aims to establish a smart fire IoT supervision
platform for government regulatory departments, enabling intelligent enhancement and
visualization of fire prevention and control capabilities across the jurisdiction.
Within the corporate domain, Wisualarm Technology primarily offers integrated management
solutions for smart fire protection and security. It progressively expands application scenarios and
integrates traditional firefighting, smart firefighting, industrial firefighting, and smart security into a
single platform. The management platform gradually incorporates application modules such as shift
handover in control rooms, a comprehensive map of electrical safety, management of hot work
operations, mobile control rooms, and inspection of hidden dangers. For large enterprises,
Wisualarm Technology develops comprehensive networked supervision solutions, implementing a
two-tier management architecture to facilitate the digital transformation of fire safety during
production, thus assisting customers in achieving intelligent upgrades.
In the domain of small-, medium-, and mirco-sized enterprises, Wisualarm Technology offers
cloud-based intelligent fire operational management solutions, containing functions such as
operational monitoring, fire maintenance, and hazard inspections. By leveraging third-party
operational service units, Wisualarm Technology minimizes end-user investments, centralizing the
scattered fire business of its customers for streamlined management. Additionally, tailored control
modules are developed to address specific business scenarios such as gas safety and smart
aging, enabling rapid and flexible responses to market demands.
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4.3.7 Storage Medium
Zhejiang Huayixin Technology Co. Ltd. (Huayixin), a subsidiary of the Company, is an
innovative technology firm dedicated to the research, development, production, and sales of
storage media products. With product lines including solid-state drives (SSDs), storage cards, USB
drives, portable SSDs, and memory modules, Huayixin's business focuses on various application
scenarios such as end-consumer electronics, industrial control, in-vehicle monitoring, and video
surveillance.
Against the backdrop of industrial development and upgrading, as well as a focus on industry-
driven research strategies, Huayixin achieved significant breakthroughs in storage product
research and technological innovation in 2023. Major strides were made in the development of
SSDs, storage cards, memory modules, USB drives, and portable solid-state drives (PSSDs).
Particularly noteworthy were the launches of flagship products in the core SSD product line,
including SSDs optimized for video surveillance and vehicle applications.
(1) SSDs
Huayixin focuses on the research and development of innovative SSDs, introducing the next-
generation V800 series video surveillance disks tailored for the monitoring sector. These products
use domestically produced controllers and storage chips, supporting the D.L.B.A intelligent
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algorithm. They boast stable video writing performance, ensuring seamless recording without
dropped frames for 24/7 surveillance, and seamless coordination with the underlying file system of
storage products. Addressing the demands of the vehicle-mounted products market, Huayixin
launches the domestically produced S820 series vehicle-mounted video surveillance SSDs,
specifically designed for vehicle-mounted video surveillance scenarios. These products are suitable
for frequent vibration environments within the automotive industry.
(2) Memory products
The X4000 series DDR5 RGB products tailored for the gaming market support speeds of up to
6800MHz and are compatible with XMP 3.0, enhancing the high-end product lineup. Additionally,
catering to the general consumer market, the C600 DDR5 RGB memory module is introduced,
boasting capacities of up to 32GB.
(3) U-disk products
Continuously rolling out a variety of mainstream USB 2.0/3.0 direct-insertion flash drives and
high-speed dual-interface protocol solid-state USB drives, supporting capacities of up to 1TB,
Huayixin meets consumers' diverse demands for high-speed and high-capacity storage solutions.
(4) Storage cards
Upgrading the existing surveillance series SD/Micro SD storage card solutions to support wide
temperature operating environments, the S100/H100 series is highly durable across the board,
catering to mainstream security surveillance and vehicle-mounted industry usage scenarios.
(5) PSSDs
Introducing the T70 and T80 series of mobile PSSDs based on the SATA and PCIe protocols
respectively, with a maximum capacity of up to 2TB, Huayixin meets the diverse mobile storage
needs of different users.
Huayixin has vigorously strengthened its market promotion and marketing network
construction. While steadily developing channel markets, it actively expands industry markets,
demonstrating remarkable performance in industries such as PCs, rail transit, vehicle-mounted
products, industrial automation, security surveillance, cloud storage, cloud computing, and
healthcare. Simultaneously, a marketing network centered in Hangzhou has been established,
extending its reach to various countries and regions worldwide, covering all provinces in China and
exporting to over a hundred countries and regions globally.
With the vision of being a "pioneer in secure storage", Huayixin is committed to providing
storage solutions with high quality, serving as the storage base of AloT development. With its global
partners, Huayixin is building an industrial ecosystem and embracing the smart upgrade of
solutions Made in China, to grow together with technologies, industries and users.
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4.4 Develop Environmental Protection and Low-carbon Business
To achieve the dual carbon goals, the Company steadfastly supports sustainable development
and environmental protection, actively implements environmental, social, and governance (ESG)
initiatives, and bases its overall strategy on "digital empowerment, low-carbon future, shared
ecology, and compliant operations." By integrating sustainable development with digital
empowerment, the Company empowers various sectors including biodiversity conservation,
environmental protection, intelligent traffic management, smart energy, smart buildings, smart
education, and safe production, thereby promoting sustainable, green, and high-quality
development across various industries.
(1) The Company's intelligent industrial park adopts the national green building three-star
standard and applies the Company's smart IoT solutions. It focuses on the aspects of source, grid,
load, storage, charging, and inspection to achieve real-time monitoring of energy data in the park.
Energy strategies can be automatically adjusted, making the entire microgrid of the park self-
adaptive. Additionally, the flow of each energy source and the carbon footprint are tracked,
achieving fine energy management and assisting enterprises in energy saving and emission
reduction to implement the "dual carbon" strategy.
With rooftop photovoltaic systems, buildings generate electricity for their own use. An
intelligent detection system for operational electricity production assists in ensuring safe and
stable equipment operation.
To establish an intelligent microgrid within the park, energy usage is flexibly scheduled based
on peak and off-peak electricity rates, transformer capacity, and predictive demand forecasts.
An intelligent air conditioning gateway covers the entire park, automatically monitoring the
operational status of all air conditioning units. It can remotely turn them on/off or set unified
temperature levels. Using big data analysis of energy usage patterns of each space, it enables
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adaptive environmental control, effectively reducing energy consumption by the air
conditioning system and computers.
The application of intelligent dimmable lighting fixtures allows for gradual brightness
adjustment and smart management. Integrated with attendance, access control, and parking
systems, each light can illuminate as needed, providing companion-style lighting.
By combining peak and off-peak loads, platform strategies are employed to facilitate orderly
charging for new energy vehicles, avoiding centralized fast charging and alleviating pressure
on the power grid.
An intelligent circuit breaker system provides round-the-clock coverage for detection,
automatically warning and swiftly responding to safety hazards such as leakage, overload, and
overvoltage, with timely traceability. Real-time tracking of energy trends further avoids energy
wastage, achieving refined energy savings in buildings.
(2) The water conservancy industry progresses towards digital transformation by enhancing
operational efficiency and bolstering water security capabilities. The Company actively participates
in formulating the "Technical Guidelines for the Construction of Digital Twin Water Networks (Trial)"
led by the Ministry of Water Resources. This initiative aims to aid in constructing digital twin
platforms, information infrastructure, operational scheduling, cyber security systems, and support
systems. By providing comprehensive technical guidance for the planning, design, construction,
and operation of water networks, it effectively promotes the digitization, networking, and
intelligence of water resources management. Drawing upon a profound understanding of water
conservancy business scenarios and long-term technological expertise, the Company has
developed sophisticated and comprehensive solutions for intelligent water resource visualization
and supervision. These solutions cater to various business scenarios such as hydrological
forecasting, river and lake patrols, sand mining regulation, and water source protection. They offer
systematic capabilities in intelligent perception, recognition, and early warning, empowering users'
business applications comprehensively.
In terms of rivers and lakes, the Company has implemented an intelligent system for
comprehensive river and lake management, aiming to streamline operations and contribute to
the protection of the Yangtze River through practical actions, thereby enhancing the efficiency
of water area management.
Regarding reservoirs, the Company has collaborated on ecological initiatives to develop
application solutions for safety and operation supervision of water conservancy projects,
including dam safety monitoring. These efforts aim to elevate the level of fine management in
water conservancy engineering.
In the realm of water environment protection, the Company has introduced a hyperspectral
water quality analyzer to enable rapid, automated monitoring and early warning of various
water quality parameters such as turbidity and pH. This facilitates timely detection of changes
in water quality, enhancing the efficiency of water quality monitoring efforts.
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The Company continues to explore new avenues in "digital and smart water governance,"
accelerating the integration of digital technology with diverse water conservancy scenarios. This
integration empowers applications in disaster prevention (flood and drought) and mitigation,
efficient and sustainable use of water resources, optimization of water resource allocation, and
ecological conservation and governance of major rivers, lakes, and water bodies.
(3) Relying on technologies, the Company continuously explores digital ecological
conservation models to actively protect biodiversity. In Antarctica, the Company has overcome the
challenges of extreme cold and donated intelligent equipment systems to multiple scientific bases,
facilitating research on animal populations and meteorology, and contributing to the protection of
Antarctic penguins. In high-altitude regions of China, the Company has developed specialized
product solutions to achieve long-term and stable observation of black-necked cranes. In Hainan,
the Company continuously trains algorithms through the Genius platform to assist in remote
detection of gibbons, providing scientific basis for understanding their population status. In Yunnan,
the Company has assisted the Yunnan Forestry and Grassland Department in implementing dual
monitoring and protection of green peacocks through video surveillance and voice recognition,
providing strong support for the research and protection of green peacocks. These initiatives not
only contribute to the protection of biodiversity but also make significant contributions to ecological
conservation and sustainable development.
III. Core Competitiveness Analysis
During expanding its services to digital transformation of cities and enterprises, the Company
is facing increasingly prominent diversity and fragmentation in the smart IoT industry. Dahua is
enhancing its capabilities in diverse applications to tackle these challenges, and upgrading its
Dahua Think# strategy of "connecting all things with cloud and creating a future with digital
intelligence". The Company will continue to broaden its product range, strengthen its marketing
models, and focus on business penetration, employing a comprehensive approach to business
development. This entails iterative and optimized processes across multiple dimensions such as
research and development, marketing, supply chain, and delivery services, thus building
competitive advantages tailored to the diverse and fragmented smart IoT market. Through
collaborative efforts with partners, sustainable and high-quality development will be pursued.
1. Invest in R&D and Innovation by Adhering to "Full Sensing, Full Connection, Full
Intelligence, Full Computing, and Full Ecosystem" as the Core Concept to Deepen Client-
Demand Orientation
As digitization and intelligence advance, continuous changes are occurring in technology
evolution, industry demands, and business models. The Company has a deep understanding of
these development trends, firmly embracing two major technological strategies: AIoT and IoT digital
intelligence platform. It constructs a comprehensive "Full Sensing, Full Connection, Full
Intelligence, Full Computing, and Full Ecosystem" capability foundation, achieving three
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enhancements in comprehensive 6D perception technology. This upgrade enhances video
perception capabilities across multiple dimensions and expands full-frequency domain perception
capabilities comprehensively. With visual analysis as the core, the Company constructs a "1+2" AI
capability system, ensuring rapid adaptation of products to specific scenarios. For visual analysis
tasks, the Company has released the integrated multi-modal Galaxy foundation model. Based on
several typical industries such as urban governance and power, it has developed a set of industry
visual foundation model computing frameworks. This framework can help continuously create more
industry visual foundation models, accelerating the expansion of the intelligent market. The
Company is building a "full-process control + full-product coverage" security assurance framework
to provide more secure and reliable products for customers. The Company provides full-domain
cloud-native, fully open, and fully-scenario-covered cloud products, fostering sharing, co-creation,
and mutual benefits with partners. Based on continuous investment in technology research and
development, the Company continuously develops competitive products such as Super Power,
Fluorescence, Cloud-Link and Yunrui. In the future, the Company will continue to strengthen
business model innovation, establish itself as the preferred brand in smart IoT, and collaborate with
partners to create new formats for the digital era.
2. Continuously Optimizing the Global Marketing and Service System Layout to Expand
Customer Coverage
The Company has a global marketing and service network. By the end of 2023, the Company
had set 32 provincial offices in China. Dahua steps up its effort at the marketing end to increase
client coverage and continues to provide service for small and medium-sized enterprises in low-
level administrative divisions, to build a win-win ecosystem. It continuously covers more industry
clients, and customers previously left behind have been reached. At the same time, the Company
focuses on building multidimensional eco-partners and comprehensive altruistic service platforms
to boost the sustainable innovation and development of our partners.
The Company possesses an extensive and in-depth distribution network overseas, laying a
solid foundation for stable growth in core business, continuously expanding the influence of the
Dahua brand. Leveraging the Company's robust technical prowess, localized sales networks,
global logistics and after-sales service system, it consistently delves into business opportunities
and strengthens solution offerings and local market adaptation, gradually increasing the proportion
of solution-based revenue in overseas markets. By nurturing an international business
development and management team and continuously enhancing local business expansion and
organizational operational capabilities, the Company further penetrates into international markets.
3、Deepen Intelligent Manufacturing and Construct a Digital Supply System Tailored to
Customer Needs
Faced with increasing complexity and diversity of customer demands, and uncertainty in
supply chain, the Company has established manufacturing centers, HUB warehouses, and national
warehouses both domestically and internationally. This has formed a global multi-level supply
network, constructing an efficient, intelligent, and reliable supply chain system tailored to global
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markets. It possesses capabilities for managing rapid market demands, mitigating order delivery
risks, and ensuring timely delivery worldwide. In the construction of supply chain ecosystems, a
stable and healthy supply chain is crucial for product and service quality assurance. Adhering to the
principles of "cooperation, win-win, transparency, and compliance", the Company continuously
optimizes its supplier management system, collaborating with suppliers to foster mutual growth.
To enhance digital delivery capabilities tailored to customer needs, the Company is committed
to realizing customer value by establishing a customer-oriented digital delivery platform. This
facilitates the transparency and visualization of business opportunities from prediction to delivery,
ultimately enhancing the delivery experience. Using a real-time visualized supply chain system, the
Company monitors the status, processes, and key data of various supply chain segments to
promptly identify and address potential delivery issues. Rational delivery plans and strategies are
formulated based on market demands and capacity planning, ensuring sufficient capacity and
resources to meet customer needs. Internal departmental and external partner collaboration is
reinforced, including real-time communication and cooperation among production, logistics, and
sales segments, ensuring the efficiency and accuracy of deliveries. Appropriate logistics channels
and service providers are selected, optimizing the logistics network to reduce transportation costs
and delivery lead times, thereby enhancing delivery speed and reliability.
Through the construction of digital supply chain capabilities, including visualizing the
manufacturing process, optimizing logistics, effectively managing suppliers, planning delivery
capacities, and fostering efficient internal collaboration, the Company achieves timely and reliable
delivery commitments to meet customer demands.
4. Improve Delivery and Service Capabilities to Shape Great Client Experience
With the customer-oriented core concepts, the Company is progressively establishing four
major service systems catering to the entire market and all business sectors. These include the
integrated delivery system, technical support system, operations and maintenance management
system, and training and certification system. Moreover, by integrating company resources and
harnessing the collective strength of the ecosystem, the Company offers full lifecycle services for
products and solutions to the market. This commitment aims to accelerate customer
responsiveness, enhance delivery efficiency, and strive towards building a globally leading,
efficient, and professional delivery platform. The ultimate goal is to provide customers with
unparalleled service and establish a distinguished brand in smart IoT services.
Under the guidance of its global business strategy, the Company makes use of the layout and
ability of its global delivery and service centers, loads digitalized and smart service tools to provide
customers with accurate and intelligent services and solutions. The Company's three-tiered service
network, comprising headquarters, branch offices, and authorized service centers, delivers high-
quality services to global customers. With a service network spanning over 180 countries, bolstered
by nine spare parts distribution centers and 173 spare parts stations (including 46 domestic
stations), as well as over 2,000 delivery and service personnel and more than 1,000 service
partners, the Company provides efficient service support worldwide, enhancing service experience
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and user perception.
As the smart IoT industry continues to evolve, leading to increasing delivery complexities, the
Company has established software capability centers in key provinces across China. These centers
provide software development support for the provinces and surrounding regions, enabling flexible
and swift responses to customers' personalized customization needs. Through efficient delivery,
Dahua aims to build its service competitiveness and enhance customer satisfaction amidst the
rising demand for software customization.
5. Adhere to the Full Ecosystem Strategy and Build a Smart IoT Ecosystem Community
featuring Co-construction, Win-win Outcome and Symbiosis
Ecological development is one of the most important strategic initiatives of Dahua, as we are
committed to building a win-win ecosystem and jointly creating value with our partners. Our mission
is to enable clients to fulfill their dreams. Adhering to the concept of "Full Ecosystem", we focus on
realizing clients' value, and build comprehensive open capacities from technology, business to
services. Through hardware, software, algorithms to services, business ecosystem to industrial
clients, and full openness to developers, we join hands with eco-partners to open up new fields,
shape new momentum, and create unlimited possibilities for industrial development, empowering
industries to realize digital intelligence and achieve co-creation, symbiosis, and win-win
cooperation.
Through DHOP, the Company facilitates device integration capability openness. Leveraging
the IoT smart platform foundation, it builds a rich array of components, transitioning from PaaS to
SaaS capability openness. The Genius AI open platform offers a one-stop solution for algorithm
training services. For service and business partners, the Company adheres to the principle of
"leaving convenience to partners and complexity to itself" in its business operations. It tailors
corresponding marketing policies, resource support, and organizational optimizations around this
principle, fostering a virtuous shared and mutually beneficial ecosystem to realize the industry
vision of "connecting all things with cloud and creating a future with digital intelligence".
6. Continuously Advance the Construction of the Company's Compliance System and
Effectively Safeguard the Compliant Operation and Steady Development of Businesses
Adhering to the principles of integrity in business operations, upholding commercial ethics, and
complying with the laws and regulations of the countries where the business operates have been
core tenets advocated and practiced by the Company. Against the backdrop of globalized business
operations, the Company places great emphasis on compliance during business development and
operation processes. It continuously enhances the construction of its governance system and the
level of risk management, further promoting mature organizational mechanisms and capabilities of
risk prevention in compliance areas such as cyber security and data protection, export control and
economic sanctions, technology ethics, antitrust, anti-money laundering, anti-bribery, and anti-
corruption. As business globalization deepens, the Company maintains a prudent business
strategy, continuously solidifying region-tailored compliance risk management mechanisms, and
consistently increasing labor and financial investment to establish and enhance risk control
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capabilities in various compliance areas, as well as risk control organizational mechanisms for
domestic and overseas branches. Through solid operations and implementation focused on
"starting compliance from the top, embedding compliance in processes, covering compliance for all,
and digitizing compliance management", the Company effectively prevents major compliance risks,
safeguarding the interests and reputable image of the Company. Simultaneously, the Company has
been committed to adhering to high standards of conduct and ethical norms, embodying the
principle of "be a clean company seeking success in the right way". It continuously optimizes
corporate governance and internal management, creating and maintaining a transparent, fair,
clean, and trustworthy business environment for employees, customers, suppliers, and partners.
7. Adhering to the Principle of "Achieving Success for Customers and Stakeholders" to
Build a Platform for Mutual Development
The Company consistently upholds "achieving success for customers and stakeholders" as its
core values. Placing customer success at the forefront, the Company is guided by customer needs,
aiming to create customer value continuously, supporting customers in achieving long-term
success, and realizing co-creation, symbiosis, and win-win results with customers. Simultaneously,
the Company serves as a platform for realizing dreams and fostering collective development. It
ensures that individuals who are committed to continuous efforts and contributions within the
platform receive deserved opportunities for development and rewards, leading to both material and
spiritual fulfillment. This fosters a collaborative environment where all stakeholders contribute to
and benefit from shared growth and development.
IV. Main Business Analysis
1. Overview
The digital economy represents a transformative shift in economics, embodying a disruptive,
comprehensive, and fundamental new form of macroeconomic structure. Led by AI, the digital
economy is rapidly altering the landscape of the global economy, industries, and societies.
According to data from the China Academy of Information and Communications Technology,
China's digital economy has grown from 16.2 trillion yuan in 2014 to 50.2 trillion yuan in 2022, with
its share of GDP increasing from 25.1% to 41.5%. The digital economy is poised to become a
driving force behind China's economic growth, serving as the primary arena for accelerating the
cultivation of new productive forces. AI stands as a critical engine for developing new productive
forces, with accelerating the advancement of the new generation of AI holding significant
importance in seizing opportunities in the digital economy era and expediting the formation of new
productive forces.
The emergence of higher value around AI-driven video applications, AI foundation models, and
IoT data underscores the continued expansion of market opportunities in the smart IoT field
centered around video applications. At present, the overall intelligent transformation and upgrading
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of industries is still at an early stage, featuring both opportunities and challenges in the face of
digital intelligence development demands from thousands of industries. It has become a general
consensus for governments and enterprises to achieve high-quality development through digital
intelligence transformation, and there are also strong demands from industries for digital
intelligence transformation. However, such demands are fragmented and differentiated among
different industries or even within industries. The current challenge is how to reduce costs, quickly
meet the fragmented and differentiated market demands in a controlled way, and enhance the
economies of scale.
With the expansion of the market room, the continuous emergence of new demands and the
acceleration of new technology upgrading and iteration, the economies of scale for the
transformation and upgrading of digital intelligence are bound to be achieved through a
continuously penetrating process. We will maintain sufficient strategic concentration and
investment, with great emphasis on the accumulation and investment in R&D innovation and the
exploration of cutting-edge technologies. On one hand, the Company persistently deepens its focus
on industry-specific solutions, maintaining a leading edge in key capabilities such as AIoT
perception, IoT digital intelligence platforms, scenario-based AI, AI foundation models, and data
elements. This expansion serves to fortify the Company's competitive advantages. On the other
hand, the Company continuously enhances its marketing and delivery service organizations,
expanding the scope of its ecosystem collaborations and closely engaging with customers to
ensure they benefit from comprehensive service experiences. In addition, we will continuously
deepen and broaden the transformation and upgrading business of industrial digital intelligence, to
satisfy and cultivate customers' business scenario habits, enhance their business adhesion,
strengthen our overall competitiveness, and consolidate our stronghold in the industry to maintain
our leading position.
During the reporting period, despite various domestic and international factors, the Company
adhered to the principles of fine management and high-quality development, achieving an
operating revenue of RMB 32.218 billion yuan, representing a year-on-year growth of 5.41%. The
Company also achieved a net profit attributable to shareholders of the listed company, excluding
non-recurring gains and losses, of RMB 2.962 billion yuan, marking a year-on-year growth of
87.39%.
1. Achieving Growth Based on Stability While Upholding High-Quality Development
The Company adheres to the principle of high-quality development, aiming to stimulate growth,
strengthen ecosystems, enhance personnel efficiency, prioritize customer-centricity, and pursue
both commercial success and customer advancement. Emphasizing ecological development, the
Company seeks to build a new ecosystem of co-construction, symbiosis, and mutual benefit,
striving to create unique and differentiated value for partners and achieve mutual growth. Through
an emphasis on efficiency in management, the Company drives improvements in personnel
efficiency and organizational effectiveness. It maintains balanced business development to lay a
solid foundation for sustainable high-quality growth, thereby better serving its customers. Moreover,
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the Company shoulders greater social responsibility by actively engaging in ESG (Environmental,
Social, and Governance), low-carbon initiatives, rural revitalization, poverty alleviation, and
technological equity, striving to complete its mission of "making society smarter and life better".
2. Upgrading the Dahua Think# Strategy to Empower Urban and Corporate Digital
Transformation
As a world-leading video-centric smart IoT solutions and service provider, the Company
upgraded its Dahua Think# 2.0 strategy in 2023. This strategic shift from intelligence to integrated
intelligence continues to focus on two core businesses: urban and corporate sectors. Firmly
committed to the AIoT and IoT digital intelligence platform strategies, the Company fully activates
the value of data elements centered around video, empowering the construction of efficient urban
governance systems and the digital transformation and upgrading of enterprises.
3. Continuously Investing Precisely in R&D and Further Improving the Capabilities of
"Full Sensing, Full Connection, Full Intelligence, Full Computing, and Full Ecosystem"
The Company takes technological innovation as the core and invests heavily in R&D to further
advance the capabilities of "Full Sensing, Full Connection, Full Intelligence, Full Computing, and
Full Ecosystem". In 2023, the Company invested RMB 3.967 billion in R&D, registering a year-on-
year increase of 2.17%, and accounting for 12.31% of the operating revenue. In addition to
maintaining investment in traditional video technology, the Company continues to strengthen its
research, development, and commercialization efforts in various technological fields, including
multidimensional perception, AI foundation models, data intelligence, intelligent computing, cloud
computing, software platforms, network communication, cyber security, and innovative businesses.
Deepening its capabilities of "Full Sensing, Full Connection, Full Intelligence, Full Computing, and
Full Ecosystem" and focusing on value business scenarios, the Company constructs industry-
leading solutions, products, and technological systems. In 2023, the Company launched the Galaxy
foundation model, which significantly enhances visual resolution capabilities by integrating multi-
modal data such as images, point clouds, text, and voice. Additionally, the Company established
the Future Communication Research Institute to focus on three aspects: network connection
technology, data exchange technology, and cutting-edge network technology. It aims to build a
"3+N" integrated connectivity system to support the upgrade from the IoT to the video IoT, enabling
more reliable, efficient, and intelligent data processing and decision-making.
4. Enhancing Software Management Capabilities and Deepening Involvement in Data
Industry Chain
Focusing on the value realization process of data elements, the Company actively plays the
roles of data resource provider, data asset practitioner, and data commodification enabler, starting
from aspects such as multidimensional perception, multi-source connectivity, view intelligence, and
open platforms. Collaborating with partners and bridging gaps, it leverages the "multiplier effect" of
data elements to empower efficient urban governance and enterprise digitalization upgrades. The
IoT digital intelligence platform undergoes a renewed upgrade, consolidating the graph-data fusion
computing system and establishing a one-stop data intelligence engine. It breaks down
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computational barriers between view data and business data, enabling multi-dimensional feature
exploration and multi-modal relationship establishment, thereby empowering efficient urban
governance and enterprise digitalization. Leveraging software engineering capabilities, the
Company's industry scenario modules can quickly integrate CV foundation models and graph-data
fusion technology, enabling the flexible construction of diverse industry applications. This amplifies
the value of innovative businesses in various urban and enterprise value chain circulation. Based
on the developer platform, Dahua's public cloud provides various industries with rich SaaS services,
including Dahua Yunrui, Dahua Cloud-Link, DoLynk, and other public cloud products. It offers
enterprises a new operational model, transitioning from manual to "data + intelligence" driven,
thereby empowering enterprise with digital management transformation.
5. Driving the Development of Innovative Businesses and Exploring New High-Growth
Points
In the field of innovative businesses, leveraging in-depth understanding of diverse customer
needs and years of accumulation in the field of intelligent IoT, the Company continues to explore
emerging business areas, including: machine vision and mobile robots, smart living, thermal
imaging, automotive electronics, smart security inspection, smart fire protection, storage media,
and other innovative businesses, aiming to continuously expand new high-growth points for the
Company.
6. Joining Hands with Partners to Grow Together, Aiming to Build a Thriving Ecosystem
of Co-Creation, Symbiosis, and Mutual Benefit
Facing unprecedented opportunities in the digital economy, the Company will continue to make
exploration and practice with its ecosystem partners, striving to build a comprehensive altruistic
service platform integrating technology, products, solutions, operations, services, and business
management consulting services. This will empower partners to innovate and develop continuously.
In China, we have accelerated front-line business response through city-based business
deployment, capacity deployment in forms of training empowerment and special support,
hierarchical management, business authority delegation, and management decision delegation.
Overseas distribution deployment has focused on customer grading, precise investment and
marketing, and brand coverage strengthening. Integrators deployment has focused on key markets
and customers, while reinforcing the deployment support system. The Company and its partners
will adhere to the "Employee + Partner" concept, continuously implementing the integrated
development of "new opportunities, new ideas, new order, new models, new management, new
goals, and new responsibilities". Upholding the altruistic mindset and strengthening the ecosystem,
the Company will comprehensively support the development of high-quality businesses.
2. Revenue and Costs
(1) Operating revenue structure
Unit: RMB
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2023 2022
Year-on-year
Proportion in Proportion in increase or
Amount Operating Amount Operating decrease
Revenue Revenue
Total Revenue 32,218,317,636.77 100.00% 30,565,370,012.64 100.00% 5.41%
By Industry
Smart IoT
32,218,317,636.77 100.00% 30,565,370,012.64 100.00% 5.41%
Industry
By Product
Smart IoT
Products and 26,644,648,182.18 82.70% 25,187,418,289.20 82.40% 5.79%
Solutions
Including:
Software 1,797,226,644.00 5.58% 1,478,048,030.19 4.84% 21.59%
Business
Innovative
4,906,653,657.98 15.23% 4,116,225,405.96 13.47% 19.20%
Business (Note)
Others 667,015,796.61 2.07% 1,261,726,317.48 4.13% -47.13%
By Region
Domestic 16,891,274,970.99 52.43% 15,799,558,052.51 51.69% 6.91%
Overseas 15,327,042,665.78 47.57% 14,765,811,960.13 48.31% 3.80%
Domestic Sub-business Segment
Unit: RMB
2023 2022
Year-on-year
Proportion in Proportion in
increase or
Amount Domestic Operating Amount Domestic Operating
decrease
Revenue Revenue
To G 4,333,197,296.68 25.65% 4,325,525,354.94 27.38% 0.18%
To B 9,087,212,028.79 53.80% 8,267,364,222.98 52.32% 9.92%
Others 3,470,865,645.52 20.55% 3,206,668,474.59 20.30% 8.24%
Total 16,891,274,970.99 100.00% 15,799,558,052.51 100.00% 6.91%
Note: Innovative businesses mainly include corresponding businesses such as machine vision and mobile
robots, smart living, thermal imaging, automotive electronics, smart security inspection, smart fire
protection, and storage media.
(2) Industry, product, region, or sales mode accounting for more than 10% of the Company's operating
revenue or profit
Applicable □ Not applicable
Unit: RMB
Increase or
Increase or
decrease
decrease of Increase and
of gross
operating decrease of
profit
Gross revenue operating cost
Operating revenue Operating Cost compared
margin compared with over the same
with the
the same period of last
same
period of last year
period of
year
last year
By Industry
Smart IoT
32,218,317,636.77 18,674,970,923.46 42.04% 5.41% -1.66% 4.17%
Industry
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By Product
Smart IoT
Products and 26,644,648,182.18 14,925,853,403.30 43.98% 5.79% -1.20% 3.96%
Solutions
Including:
Software 1,797,226,644.00 591,429,713.59 67.09% 21.59% 29.40% -1.99%
Business
Innovative
4,906,653,657.98 3,169,076,284.13 35.41% 19.20% 14.84% 2.45%
Businesses
By Region
Domestic 16,891,274,970.99 10,462,264,668.17 38.06% 6.91% -0.89% 4.87%
Overseas 15,327,042,665.78 8,212,706,255.29 46.42% 3.80% -2.62% 3.54%
Domestic Sub-
business
Segment
To G 4,333,197,296.68 2,360,838,585.93 45.52% 0.18% -10.25% 6.33%
To B 9,087,212,028.79 5,429,359,031.43 40.25% 9.92% 3.35% 3.80%
Others 3,470,865,645.52 2,672,067,050.81 23.01% 8.24% 0.01% 6.33%
When the statistical caliber of the company's main business data is adjusted in the reporting period, the company's
main business data should be subject to the one after the statistical caliber at the end of the reporting period is
adjusted in the most recent year.
□ Applicable Not applicable
(3) Is the company's physical sales income greater than the labor income?
Yes □ No
Year-on-year
Industry
Item Unit 2023 2022 increase or
Classification
decrease
Sales volume Unit/set 82,494,035 78,831,492 4.65%
Smart IoT Production
Unit/set 79,919,254 78,017,213 2.44%
Industry output
Stock Unit/set 10,493,991 13,068,772 -19.70%
Reasons for over 30% changes in related data on year-on-year basis
□ Applicable Not applicable
(4) Performance of major sales contracts and major procurement contracts signed by the Company as of
the report period
□ Applicable Not applicable
(5) Operating Cost Structure
Industry Classification
Unit: RMB
2023 2022 Year-on-
Industry Proportion to Proportion to year
Item
Classification Amount Operating Amount Operating increase or
Cost Cost decrease
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Smart IoT Operating
18,674,970,923.46 100.00% 18,989,797,670.92 100.00% -1.66%
Industry Cost
Product Classification
Unit: RMB
2023 2022 Year-on-
Product Proportion to Proportion to year
Item
Classification Amount Operating Amount Operating increase or
Cost Cost decrease
Smart IoT
Operating
Products and 14,925,853,403.30 79.92% 15,106,909,590.16 79.55% -1.20%
Cost
Solutions
Including:
Operating
Software 591,429,713.59 3.17% 457,050,171.52 2.41% 29.40%
Cost
Business
Innovative Operating
3,169,076,284.13 16.97% 2,759,497,499.20 14.53% 14.84%
Businesses Cost
Operating
Others 580,041,236.03 3.11% 1,123,390,581.56 5.92% -48.37%
Cost
(6) Has the scope of consolidation changed during the reporting period?
Yes □ No
(1) The Company has established three domestic subsidiaries in this period: Zhejiang Shuhang Intelligent
Technology Co., Ltd., Guangdong Huaxiyue Intelligent Technology Co., Ltd., and Zhejiang Huajie New Energy
Operation Service Co., Ltd. Additionally, it has established seven overseas subsidiaries: Dahua Technology
Belgium BV, Dahua Technology Regional Headquarters, Dahua Technology Azerbaijan LLC, Dahua Technology
Vietnam Company Limited, Huaray Technology Korea Company Limited, HuaRay Technology GmbH, and Dahua
Technology Angola S.U. lda. All the aforementioned subsidiaries have been consolidated into the financial reports
of the Company from their respective establishment dates.
(2) The Company's holding subsidiary, Huajian Technology, acquired 100% equity of Zhejiang Huajian Technology
Co., Ltd. in February 2023, thereby obtaining substantial control over it. Consequently, it has been consolidated into
the financial reports of the Company.
(3) The Company's subsidiary, Guizhou Dahua Information Technology Co., Ltd., was deregistered during this
period and is no longer included in the financial report of the Company from the date of deregistration.
(7) Major changes or adjustments to the company's business, products, or services during the reporting
period
□ Applicable Not applicable
(8) Major Clients and Suppliers
The Company's Major Clients
Total sales amount of the top five customers 3,524,879,758.55
Proportion of the total sales amount of the top five 10.94%
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customers to the total annual sales
Proportion of the total sales amount of the related parties
4.35%
in the top five customers to the total annual sales
Profiles of the Company's top five customers
Proportion to the annual
No. Name of customer Sales amount (RMB)
sales
1 Company 1 922,720,270.18 2.86%
2 Company 2 (related party) 865,178,578.92 2.69%
3 Company 3 755,011,698.83 2.34%
4 Company 4 (Note 1) 540,807,462.10 1.68%
5 Company 5 441,161,748.52 1.37%
Total -- 3,524,879,758.55 10.94%
Note 1: Certain entities under the same control as Company 4 are related parties of the Company. The sales to
related parties amounted to RMB 535,229,822.82 yuan.
Other Information Notes for Major Clients
□ Applicable Not applicable
Major suppliers
Total Purchase Amount of Top Five Suppliers (yuan) 2,804,668,334.92
Proportion of the total purchase amount of top five
16.00%
suppliers to the total annual purchase amount
Proportion of the total purchase amount of the related
parties in top five suppliers to the total annual purchase 0.00%
amount
Profiles of the Company's top five suppliers
Proportion to the total
No. Supplier Name Purchase amount (RMB)
annual purchase amount
1 Company 1 1,014,239,959.03 5.79%
2 Company 2 681,353,779.99 3.89%
3 Company 3 380,171,785.65 2.17%
4 Company 4 374,291,935.60 2.13%
5 Company 5 354,610,874.65 2.02%
Total -- 2,804,668,334.92 16.00%
Other Information Notes for Major Suppliers
□ Applicable Not applicable
3. Expenses
Unit: RMB
Year-on-year Statement on
2023 2022
increase or decrease Significant Changes
Sales Expenses 5,292,570,225.69 5,115,163,159.61 3.47%
Administration
1,257,429,514.27 1,143,968,823.89 9.92%
expenses
Due to fluctuations in
Financial Expenses -409,307,989.62 -510,976,797.98 19.90%
the exchange rate,
119
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
gains from foreign
exchange
decreased.
Research and
development 3,967,248,795.22 3,883,005,582.82 2.17%
expense
120
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
4. R&D Investment
R&D personnel of the Company
2023 2022 Change Ratio
Number of R&D personnel 12,372 12,219 1.25%
Percentage of R&D
52.80% 51.80% 1.00%
personnel
Education background of R&D personnel
Bachelor 8,214 7,900 3.97%
Master and above 3,056 3,242 -5.74%
Age of R&D personnel
Under 30 6,537 7,140 -8.45%
30-40 5,253 4,652 12.92%
Company's R&D investment
2023 2022 Change Ratio
R&D investment (yuan) 3,967,248,795.22 3,883,005,582.82 2.17%
The proportion of R&D
investment to operating 12.31% 12.70% -0.39%
revenue
Capitalized R&D
0.00 0.00 0.00%
investment
Proportion of capitalized
R&D investment to R&D 0.00% 0.00% 0.00%
investment
Causes and effects of significant changes in the composition of R&D personnel
□ Applicable Not applicable
The reason for the significant change in the proportion of the total amount of R&D investment to operating revenue
compared with last year
□ Applicable Not applicable
Reasons and rational explanations on the substantial change in capitalization rate of R&D investment
□ Applicable Not applicable
5. Cash Flow
Unit: RMB
Year-on-year increase or
Item 2023 2022
decrease
Subtotal of cash inflow
37,198,634,257.76 36,530,473,767.40 1.83%
from operational activities
Subtotal of cash outflow
32,599,855,603.29 35,476,886,117.94 -8.11%
from operational activities
Net cash flow generated by
4,598,778,654.47 1,053,587,649.46 336.49%
operating activities
Subtotal of cash inflow
4,824,255,692.30 2,991,957,633.76 61.24%
from investment activities
Subtotal of cash outflows 3,098,033,765.83 3,591,920,704.41 -13.75%
121
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
from investment activities
Net amount of cash flow
generated by investment 1,726,221,926.47 -599,963,070.65 387.72%
activities
Subtotal of cash inflow
8,465,159,516.11 5,909,237,490.28 43.25%
from financing activities
Subtotal of cash outflow
6,812,296,481.85 6,253,025,354.87 8.94%
from financing activities
Net cash flow generated by
1,652,863,034.26 -343,787,864.59 580.78%
financing activities
Net Increase in Cash and
8,002,194,542.32 260,888,200.31 2,967.29%
Cash Equivalents
Description of the main factors affecting the significant changes in related data over the same period of last year
Applicable □ Not applicable
1. The net cash flow generated from operating activities increased by 336.49% compared to the same period of the
previous year, mainly due to a decrease in purchasing expenses compared to the same period of the previous year.
2. The net cash flow generated from investing activities increased by 387.72% compared to the same period of the
previous year, primarily due to a higher cash inflow from equity transfers during this period.
3. The net cash flow generated from financing activities increased by 580.78% compared to the same period of the
previous year, mainly due to an increase in funds received from investment absorption during this period.
Reasons for the significant difference between the net cash flow generated by the company's operating activities in
the reporting period and the net profit in the current year
□ Applicable Not applicable
V. Non-Main Business Analysis
Applicable □ Not applicable
Unit: RMB
Percentage of
Whether it is
Amount profit Reasons
sustainable
contribution
Mainly due to the disposal of
a 7.88% equity stake in
Investment income 4,495,973,812.03 55.36% Leapmotor Technology, a No
company in which the
Company holds shares.
VI. Analysis of Assets and Liabilities
1. Significant changes in assets composition
Unit: RMB
End of 2023 Start of 2023 Proportion Statement on
Amount Proportion Amount Proportion increase Significant
122
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
To Total To Total and Changes
Assets Assets decrease
The main reason
is the receipt of
funds raised from
Cash and private
Bank 15,971,005,114.47 30.20% 8,029,878,650.77 17.36% 12.84% placements and
Balances the disposal of
equity interests in
associated
companies.
Accounts No major
16,276,803,954.03 30.78% 15,411,908,561.50 33.32% -2.54% changes.
receivable
Contract No major
86,714,216.34 0.16% 106,335,405.35 0.23% -0.07% changes.
Assets
This is primarily
due to a decrease
Inventory 5,332,608,544.02 10.08% 7,315,372,440.02 15.82% -5.74% in inventory
during the current
period.
Investment No major
129,637,004.00 0.25% 423,035,823.82 0.91% -0.66% changes.
Property
This is attributed
to the disposal of
Long-term
some equity
Equity 727,453,629.75 1.38% 1,461,099,644.55 3.16% -1.78%
interests in
Investment
associated
companies.
Fixed No major
4,937,180,876.88 9.34% 4,643,617,574.85 10.04% -0.70% changes.
Assets
Projects No major
under changes.
1,008,612,408.49 1.91% 423,535,552.03 0.92% 0.99%
Constructio
n
Right-of- No major
299,202,586.56 0.57% 314,700,977.50 0.68% -0.11% changes.
use Assets
This is primarily
Short-term due to the
957,426,330.18 1.81% 257,943,618.51 0.56% 1.25%
loan increase in bill
discounting.
Contract No major
1,194,534,307.04 2.26% 1,219,548,011.88 2.64% -0.38% changes.
liabilities
This was mainly
Long-term caused by
0.00% 453,825,000.00 0.98% -0.98%
loan repayment for the
long-term loans.
Lease No major
176,580,049.57 0.33% 196,340,654.27 0.42% -0.09% changes.
Liabilities
The proportion of overseas assets is relatively high
□ Applicable Not applicable
123
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2. Assets and liabilities measured at fair value
Applicable □ Not applicable
Unit: RMB
Changes in
At the Purchase Sales
fair value Cumulative Impairment At the end
beginning amount of amount of
gains and fair value loss of the Other of the
Item of the the the
losses in changes in reporting variations reporting
reporting reporting reporting
the current equity period period
period period period
period
Financial Assets
1. Other
Non-
931,043,13 101,037,45 500,000,00 2,971,341.3 6,633,141.0 1,535,742,3
current
0.33 5.74 0.00 7 1 85.71
Financial
Assets
2.
679,441,91 131,271,35 810,713,26
Receivable
7.62 0.24 7.86
s Financing
3. Other 1,470,000.0 1,470,000.0
events 0 0
Financial
1,611,955,0 101,037,45 500,000,00 2,971,341.3 137,904,49 2,347,925,6
assets
47.95 5.74 0.00 7 1.25 53.57
subtotal
1,611,955,0 101,037,45 500,000,00 2,971,341.3 137,904,49 2,347,925,6
Total
47.95 5.74 0.00 7 1.25 53.57
-
Financial 26,652,319.
26,590,919. 61,400.12
liabilities 25
13
Are there any significant changes in the measurement attributes of the company's main assets during the reporting
period?
□ Yes No
3. Restrictions on asset rights as of the end of the reporting period
As of December 31, 2023, restricted assets of the Company are as follows:
Item Closing balance (RMB) Cause of restrictions
Guarantee letter security deposit and
Cash and Bank Balances 75,843,683.23
other restricted funds
Pledge used to issue bank
Notes receivable and receivables
951,747,362.20 acceptance bills and endorsed or
financing
discounted notes not derecognized
Non-derecognition of supply chain
Accounts receivable 7,238,385.64
finance discounting and factoring
Total 1,034,829,431.07
124
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
VII. Investment Analysis
1. Overview
Applicable □ Not applicable
Investment in the Reporting Period Investment for the same Period of
Rate of Change
(RMB) Last Year
3,337,590,020.22 512,368,718.70 551.40%
2. Significant equity investments acquired during the reporting period
□ Applicable Not applicable
3. Major non-equity investments underway during the reporting period
Applicable □ Not applicable
For details, refer to Section 5 "Utilization of Raised Funds".
4. Financial assets investment
(1). Securities investment
□ Applicable Not applicable
No such case as securities investment during the reporting period.
(2). Derivatives investment
Applicable □ Not applicable
1) Derivative investments made during the reporting period for the purpose of hedging
Applicable □ Not applicable
Unit: RMB ten thousand
Proportion
of
Changes
investmen
in fair
Types of Cumulativ Amount Amount t amount
value
derivative Initial e fair purchased sold in the
Opening gains and Closing
s investmen value during the during the company’
balance losses in balance
investmen t amount changes reporting reporting s net
the
t in equity period period assets at
current
end of the
period
reporting
period
Foreign
514,817.4 540,120.7
exchange 55,141.49 2,659.09 29,838.25 0.86%
6 0
contract
514,817.4 540,120.7
Total 55,141.49 2,659.09 29,838.25 0.86%
6 0
Explanation of whether the The Company calculated and presented its foreign exchange derivatives trading
125
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Company’s hedging business in accordance with Accounting Standards for Business Enterprises No. 22 -
business accounting policies Recognition and Measurement of Financial Instruments, Accounting Standards for
and specific accounting Business Enterprises No. 37 - Presentation of Financial Instruments and other
principles have changed relevant provisions. Held-for-trading financial assets/held-for-trading financial liabilities
significantly during the were adopted for initial and subsequent measurements of the foreign exchange
reporting period compared contracts. The fair values of the foreign exchange contracts were basically determined
with the previous reporting by referencing the different parameters of the financial institutions based on the then
period market conditions as well as the remaining term and duration of transaction, so as to
be recognized as the held-for-trading financial assets or held-for-trading financial
liabilities. There was no significant change in the fair values of the foreign exchange
contracts compared with that in the previous reporting period.
Description of actual profit
During this reporting period, the actual profit and loss amounted to RMB -44,929,400
and loss during the reporting
yuan.
period
The Company carried out foreign exchange hedging business appropriately as the
Descriptions of the effect of
case may be, which could effectively reduce the risks in foreign exchange market and
hedging
avoid exchange rate risks.
Sources of funds for
Equity Fund
derivatives investment
Risk analysis and description
of control measures for
derivatives positions during
For specific details regarding risk analysis and control measures, see the Company's
the reporting period
announcement titled "Announcement on Carrying out Foreign Exchange Hedging
(including but not limited to
Transactions" (Announcement No. 2023-030), disclosed on April 28, 2023.
market risk, liquidity risk,
credit risk, operational risk,
legal risk, etc.)
Changes in market prices or
The Company recognized and measured its foreign exchange hedging business in
product fair value of invested
accordance with Accounting Standards for Business Enterprises No. 22 - Recognition
derivatives during the
and Measurement of Financial Instruments, Accounting Standards for Business
reporting period, and the
Enterprises No. 37 - Presentation of Financial Instruments and other relevant
analysis of the fair value of
provisions. The fair values of foreign exchange forward contracts were basically
derivatives should disclose
measured and recognized by referencing the different parameters of the financial
the specific methods used
institutions based on the then market conditions as well as the remaining term and
and the setting of related
duration of the transaction. During the reporting period, the fair value change income
assumptions and
of foreign exchange contracts was RMB 26,590,900 yuan.
parameters.
Litigation involved (if
N/A
applicable)
Disclosure date of board of
directors' announcement on
April 28, 2023
the approval of derivatives
investment (if any)
Disclosure date of
shareholder meeting's
announcement on the May 27, 2023
approval of derivatives
investment (if any)
Independent directors'
special opinions on the For details, please refer to the "Independent Opinions of Independent Directors on
Company's derivatives Related Matters" disclosed by the Company on April 28, 2023.
investment and risk control
126
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2) Derivatives investments for speculative purposes during the reporting period
□ Applicable Not applicable
The Company had no derivatives investments for speculative purposes during the reporting period.
5. Utilization of raised funds
Applicable □ Not applicable
(1) Overview of utilization of raised funds
Applicable □ Not applicable
Unit: RMB ten thousand
Total
Propor
amoun
Cumul tion of
t of
ative cumula
raised
Total total tive Amoun
Cumul funds Purpos
amoun amoun total Total t of
ative whose e and
Total Net t of t of amoun amoun raised
total purpos disposi
Metho amoun amoun raised raised t of t of funds
Year of amoun e has tion of
d of t of t of funds funds raised raised unuse
raising t of been raised
raising raised raised used whose funds funds d for
raised chang funds
funds funds during purpos whose not yet over
funds ed not
this e has purpos used two
used during used
period been e has years
the
chang been
reporti
ed chang
ng
ed
period
Non-
public Bank
509,99 508,98 389,16 389,16 124,63
2023 issuan 0 0 0.00% of 0
9.92 3.26 1.55 1.55 5.81
ce of deposit
shares
509,99 508,98 389,16 389,16 124,63
Total -- 0 0 0.00% -- 0
9.92 3.26 1.55 1.55 5.81
Explanation of overall use of raised funds
1. According to the approval issued by the China Securities Regulatory Commission in the document titled "Approval
for the Non-public Issuance of Shares by Zhejiang Dahua Technology Co., Ltd." (CSRC Permit [2022] No. 853), the
Company issued 293,103,400 shares to specific parties at a price of RMB 17.40 yuan per share. The total amount of
funds raised in this issuance was RMB 5,099,999,160.00 yuan. After deducting expenses related to the issuance
amounting to RMB 10,166,575.28 yuan (excluding value-added tax), the net amount of funds raised was RMB
5,089,832,584.72 yuan. This amount has been verified by BDO China Shu Lun Pan Certified Public Accountants LLP
(special general partnership), who issued the "Verification Report" (XKSBZ [2023] ZF10231).
2. The Company has cumulatively used raised funds totaling RMB 3,891,615,500 yuan (including the upfront
investment replacement amount of RMB 2,156,868,200 yuan). The net amount of bank interest received is RMB
48.141 million yuan. As of December 31, 2023, the remaining balance of raised funds unused is RMB 1,246,358,100
yuan (excluding unpaid issuance expenses of RMB 1.2728 million yuan).
127
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Status of projects for which the raised funds are promised to be used
Applicable □ Not applicable
Unit: RMB ten thousand
Whethe
Commit
r there Whethe
ted Total Cumula Investm
has Schedul Whethe r there
investm committ Total Amount tive ent
been a ed date Benefits r are
ent ed investm Investe amount progres
change for achieve expecte significa
projects investm ent d in the investe s as of
in projects d during d nt
and ent amount Current d as of the end
projects to reach the benefits change
allocati amount after Reporti the end of the
(includi intende reportin have s in
on of of adjustm ng of the period
ng d g period been project
excess raised ent (1) Period period (3) = (2)
partial usability realized feasibilit
raised funds (2) / (1)
change y
funds
s)
Committed investment projects
Project
of
Smart
IoT
Solution 92,990. 92,990. 92,990. 92,990. 100.00 3,391.5
No 2023 No No
R&D 00 00 00 00 % 5
and
Industri
alizatio
n
The
phase II
constru
ction
project
Not Not
of the 77,580. 77,580. 74,279. 74,279.
No 95.75% 2024 applica applica No
smart 00 00 88 88
ble. ble.
manufa
cturing
base in
Hangzh
ou
Constru
ction
Project Not Not
88,960. 88,960. 58,444. 58,444. Please
of Xi'an No 65.70% 2026 applica applica
00 00 33 33 refer to
R&D ble. ble.
Center the
(Note 1) explana
New tion of
project
significa
of
Southw nt
est change
Not Not s in
R&D 100,470 100,470 13,335. 13,335.
No 13.27% 2026 applica applica
Center .00 .00 35 35 project
ble. ble.
of feasibilit
Dahua y
Co.,
Ltd.
(Note 1)
Supple
100.76 Not Not Not
ment to 148,983 148,983 150,111 150,111
No % (Note applica applica applica No
working .26 .26 .99 .99
2) ble. ble. ble.
capital
128
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Sub-
total of
committ
508,983 508,983 389,161 389,161 3,391.5
ed -- -- -- -- --
.26 .26 .55 .55 5
investm
ent
projects
Allocation of excess funds
N/A
508,983 508,983 389,161 389,161 3,391.5
Total -- -- -- -- --
.26 .26 .55 .55 5
1. The Smart IoT Solution Research and Industrialization Project did not achieve the
expected benefits mainly due to (1) industry-wide influences resulting in lower-than-
Explanation of projects not
expected project revenue; (2) adjustments made to product structure to address
meeting planned progress or
market demands and expand into specific scenarios, leading to a decrease in gross
expected returns and
profit margin for certain product lines; (3) the Company's continued emphasis on
reasons (including reasons
research, development, and commercialization in areas such as software platforms,
for selecting "Not Applicable"
cloud computing, and big data, resulting in increased R&D expenditure.
for "Whether expected
2. The phase II construction project of the smart manufacturing base in Hangzhou is
benefits have been realized")
still in the investment period, and there are no expected benefits corresponding to this
reporting period.
The Company convened the Fourth Meeting of the Eighth Board of Directors and the
Third Meeting of the Eighth Supervisory Board on January 12, 2024, and held the
First Extraordinary General Meeting of Shareholders for the year 2024 on January 29,
2024. The meetings deliberated and approved the "Proposal on Adjusting the
Investment Amount, Investment Structure, and Increasing the Implementation Entity
and Implementation Location of Some Fundraising Projects," agreeing to adjust the
investment amount, raised fund investment amount, internal investment structure,
implementation methods and entities, implementation locations, and project names of
Explanation of significant the "Construction Project of Xi'an R & D Center" and the "New project of Southwest
changes in project feasibility R&D Center of Dahua Co., Ltd."
As a result of the aforementioned adjustments, the Company simultaneously adjusted
the construction area of the project sites and the investment amount of raised fund
required for site construction. For the amount of raised fund already invested in and
exceeding the amount required for site construction, the Company has exchanged a
total of RMB 403.882 million yuan with its own funds on February 1, 2024, to replace
the raised funds to be replaced and the interest calculated based on the raised funds
invested in each year before this adjustment, calculated at the market loan interest
rate for each respective year.
Usage and progress of
Not applicable.
excess raised funds
Changes in the
implementation locations of
Not applicable.
raised fund investment
projects
On May 19, 2023, the Company convened the Forty-third Meeting of the Seventh
Board of Directors and the Thirtieth Meeting of the Seventh Supervisory Board,
Adjustments to the approving the "Proposal on Increasing Some Fundraising Project Implementing
implementation methods of Entities," agreeing to add Chengdu Dahua Zhilian Information Technology Co., Ltd., a
raised fund investment wholly-owned subsidiary, as one of the implementing entities for the fundraising
projects project "New project of Southwest R&D Center of Dahua Co., Ltd." (now renamed as
"5G, IoT, and Multidimensional Perception Product Solution Research and
Development Project").
Advance investment and On May 19, 2023, the Company convened the Forty-third Meeting of the Seventh
replacement status of Board of Directors and the Thirtieth Meeting of the Seventh Supervisory Board,
fundraising investment approving the "Proposal on Using Raised Funds to Replace Self-raised Funds
129
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
projects Previously Invested in Fundraising Projects and Issuance Expenses Already Paid,"
agreeing to use a total of RMB 2,156.8682 million yuan of raised funds to replace self-
raised funds previously invested in fundraising projects and to use RMB 2.2211 million
yuan of raised funds to replace self-raised funds previously used to pay issuance
expenses, totaling RMB 2,159.0893 million yuan of raised funds to replace the
aforementioned previously invested and paid self-raised funds. During the reporting
period, the Company has completed the aforementioned capital replacement with
raised funds, in accordance with the regulation stipulating the replacement within six
months of the receipt of raised funds.
The temporary
supplementation of working Not applicable.
capital with idle raised funds
The amount and reasons for
the surplus of raised funds
Not applicable.
during project
implementation
Purpose and disposition of Unused raised funds (including interest income from the raised funds account) are
raised funds not used kept in the Company's special account for raised funds.
Issues or other
circumstances regarding the
N/A
use and disclosure of raised
funds
Note 1: The project names were changed in January 2024. "Construction Project of Xi'an R & D Center" was changed
to "AI Technology Research and Application Project," and "New project of Southwest R&D Center of Dahua Co., Ltd."
was changed to "5G, IoT, and Multidimensional Perception Product Solution Research and Development Project."
Note 2: The actual investment in relevant supplementary working capital projects exceeds the committed total
investment of raised funds, due to bank deposit interest income.
(3) Changes to projects for which raised funds intended to be used
□ Applicable Not applicable
There were no raised fund project changes during the reporting period.
VIII. Major Assets and Equity Sales
1. Major assets sales
□ Applicable Not applicable
No major assets sales in the reporting period of the Company
2. Major equity sales
Applicable □ Not applicable
Trans The The The Pricin Whet The Whet Whet
actio net influe propo g her it relati her her
n profit nce rtion princi is a onshi all the Date
Coun Equiti Date Discl
price s of the of the ple of relate p with the imple of
terpar es of osure
(RMB contri sale net equit d the equiti ment Discl
ty sold sale Index
ten buted on profit y trans count es ation osure
thous by the s sellin actio erpart involv proce
and) the Com contri g n y ed eded
130
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
equiti pany buted have as
es to to the been sche
the listed transf duled
listed Com erred
Com pany
pany by
from equit
the y
begin sellin
ning g in
of the the
curre total
nt net
perio profit
d to s
the
date
of
sale
(RMB
ten
thous
and)
Refer The
ence actua
shall l
be contr
made ollers
to the , Mr.
An
avera Fu
incre
ge Liqua
ase
closin n and
of
g Mrs.
RMB
price Chen
4.137
of Ailing
7.88 billion Juch
Leap , who
% yuan ao
motor are
equit in the Infor
Tech spou It was
y Com matio
STEL Nove nolog ses, imple Octo
stake - pany' n
LANT mber 320,4 56.20 y's are ment ber
in 31,08 s net Yes Yes Netw
IS 20, 38.65 % stock mem ed as 26,
Leap 9.78 profit ork
N.V. 2023 on bers plane 2023
motor attrib http://
the of the d
Tech utabl cninf
Hong large
nolog e to o.co
Kong st
y the m.cn
Stock share
paren
Exch holde
t
ange r
comp
for 60 group
any
tradin of
in
g Leap
2023
days, motor
30 Tech
tradin nolog
g y and
days, have
and no
131
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
the affiliat
previ ed
ous relati
tradin onshi
g day p with
befor the
e count
signin erpart
g the y in
agree the
ment, trans
as actio
mutu n.
ally
agree
d
upon
after
cons
ultati
on
betw
een
the
partie
s.
IX. Analysis of Major Subsidiaries and Associates
Applicable □ Not applicable
Major subsidiaries and joint-stock companies with a net profit impact of over 10%.
Unit: RMB
Main
Company Company Registere Total Net Operating Operating
businesse Net Profit
Name Type d Capital Assets Assets revenue Profit
s
Design,
constructi
on and
installation
of
constructi
on
Zhejiang projects;
Dahua technolog
System Subsidiary y 500,000,0 3,347,849, 1,269,980, 1,060,066, 4,965,954. 19,904,35
Engineeri Company developm 00.00 044.45 252.01 495.48 88 7.04
ng Co., ent,
Ltd. services,
consultati
on and
transfer;
developm
ent,
manufactu
ring,
132
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
installation
and
marketing
of
electronic
products,
safety
equipment
and
communic
ation
devices;
manufactu
ring and
marketing
of
computer
hardware
and
software;
import and
export of
goods and
technologi
es
Technolog
y
developm
ent,
services,
consultati
on, and
transfer;
manufactu
ring,
marketing
and
system
services
Zhejiang of
Dahua computer
Subsidiary 1,306,810, 23,252,03 2,492,881, 21,737,92 134,019,6 123,665,4
Vision hardware
Company 000.00 0,866.78 654.80 3,298.19 42.77 95.71
Technolog and
y Co., Ltd. software;
design,
developm
ent,
manufactu
ring and
marketing
of
electronic
products
and safety
equipment
;
marketing
and
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
technical
services
of IOT
equipment
;
warehousi
ng
services,
bonded
warehous
e
operation
Technolog
y
developm
ent,
services,
consultati
on, and
transfer;
manufactu
ring and
marketing
of
computer
hardware
and
software;
developm
ent,
manufactu
ring and
marketing
Zhejiang
of
Dahua Subsidiary 1,885,800, 7,025,248, 1,593,231, 6,732,970, 140,622,9 40,503,13
electronic
Zhilian Company 000.00 134.94 586.71 923.10 28.61 0.39
products
Co., Ltd.
and
electronic
componen
ts, safety
equipment
and
communic
ation
devices;
leasing of
self-
owned
houses;
warehousi
ng
services;
catering
services;
import and
export of
goods
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Acquisition and disposal of subsidiaries during the reporting period
Applicable □ Not applicable
Method of acquisition and disposal of
Impact on overall production
Company Name subsidiaries during the reporting
management and performance
period
No significant impact on overall
Zhejiang Huajian Technology Co.,
Purchase of equity production, operation, and
Ltd.
performance
No significant impact on overall
Zhejiang Shuhang Intelligent
Established with investment production, operation, and
Technology Co., Ltd.
performance
No significant impact on overall
Guangdong Huaxiyue Intelligent
Established with investment production, operation, and
Technology Co., Ltd.
performance
No significant impact on overall
Zhejiang Huajie New Energy
Established with investment production, operation, and
Operation Service Co., Ltd.
performance
No significant impact on overall
Dahua Technology Belgium BV Established with investment production, operation, and
performance
No significant impact on overall
Dahua Technology Regional
Established with investment production, operation, and
Headquarters
performance
No significant impact on overall
Dahua Technology Azerbaijan LLC Established with investment production, operation, and
performance
No significant impact on overall
Dahua Technology Vietnam
Established with investment production, operation, and
Company Limited
performance
HUARAY TECHNOLOGY KOREA No significant impact on overall
COMPANY Established with investment production, operation, and
LIMITED performance
No significant impact on overall
Huaray technology GmbH Established with investment production, operation, and
performance
No significant impact on overall
Dahua Technology Angola S.U.
Established with investment production, operation, and
lda
performance
No significant impact on overall
Guizhou Dahua Information
Deregistration production, operation, and
Technology Co., Ltd.
performance
X. Structured Entity Controlled by the Company
□ Applicable Not applicable
XI. Prospects for the Future Development of the Company
1. Deepening High-Quality Development
Dahua will continue to pay the most attention in the smart IoT industry, adhere to the strategic
positioning of a video-centric smart IoT solution and service provider, and focuses on two major
business directions of cities and enterprises. It will focus on two main business directions: urban and
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
enterprise sectors. With insights into industry scenarios and profound understanding of customer
needs, the Company will provide good smart IoT solutions, so as to promote high-quality, green and
innovative development of economy and society. Simultaneously, adhering to the core values of
"achieving success for customers and stakeholders", the Company upholds the mission of "making
society smarter and life better". Grounded in the market with exceptional products and services, the
Company aims to create greater value for customers, enabling various industries to enjoy the benefits
of technology and contributing tirelessly to the construction of a better and harmonious world.
In response to the rapid advancing of AI, the Company will continue to invest heavily in research
and development in relevant areas, driving the large-scale implementation of the AI industry. The
Company will deepen the research and application of its Galaxy industry model, exploring the value
of video-centric data elements, empowering efficient urban governance systems and facilitating the
transformation and upgrading of enterprises into intelligent entities. After years of accumulation, the
Company has garnered extensive business experience across various industries in government and
enterprises settings. Focusing on industry demands and leveraging multi-modal and foundation
model technology capabilities, the Company will prioritize the development and industrial
implementation of industry visual foundation models for industry-specific applications. This will further
accelerate the expansion of government and enterprise intelligence and enhance the penetration rate
of AI.
To grasp the vast opportunities in the smart IoT industry, the Company will deepen altruistic
thinking and strengthen ecological construction, creating unique and differentiated value for partners
to realize a new ecosystem of "co-construction, symbiosis, and mutual benefit." By enhancing the
Company's capability to meet the digitalization needs across various industries, increasing investment
in innovative business ventures, optimizing the construction of the Company's global marketing
network and organizational capabilities, advancing operational decentralization, and strengthening its
global compliance system, the Company aims to maintain steady growth in its operational scale while
sustaining a healthy gross profit margin, continuously improving cash flow, targeting sustained growth
in net profits, and achieving balanced development of businesses. These efforts will lay a solid
foundation for sustainable high-quality development.
2. Focus on prioritized tasks
(1) The Company is committed to continuously increasing investments in innovation and core
technologies, establishing barriers with core technological capabilities, and maintaining a focus
on AIoT and IoT digital intelligence platforms as its two main technological directions. It aims to
construct capabilities of "Full Sensing, Full Connection, Full Intelligence, Full Computing, and Full
Ecosystem" to achieve triple enhancements in the comprehensive 6D perception technology,
elevating video perception capabilities in multiple dimensions, and broadly expanding full-
frequency domain perception capabilities. The Company is also strengthening its research and
development in AI, integrating multimodal and foundation model capabilities to advance the
development and industrial application of industry-specific vision-based foundation models,
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
accelerating the AI industry upgrade, and further expanding the scale of digital and intelligent
services for cities and enterprises.
(2) The Company adheres to a full ecosystem strategy, anchoring its focus on realizing customer
value through services. By building all-round open capabilities from technology, business to
service, and opening up to industry customers and developers with hardware, software,
algorithms, services and business ecology, the Company works together with its partners to
pioneer new fields and create new dynamics, so as to jointly develop infinite possibilities for
industrial development and empower the digital transformation of various industries.
(3) The Company will optimize its global marketing network, continue to reach more customers in key
domestic cities and key overseas countries, explore customers' needs, strengthen the front-line
operation, technology and service capacity, accelerate the response in front-line business, find
accurate resources and accumulate customers with value.
(4) In the field of innovative businesses, leveraging in-depth understanding of diverse customer needs
and years of accumulation in the field of intelligent IoT, the Company continues to explore
emerging business areas, including: machine vision and mobile robots, smart living, thermal
imaging, automotive electronics, smart security inspection, smart fire protection, storage media,
and other innovative businesses, aiming to continuously expand new high-growth points for the
Company.
(5) Deepen intelligent manufacturing and construct a digital supply system tailored to customer
needs. Through the construction of digital supply chain capabilities, including visualizing the
manufacturing process, optimizing logistics, effectively managing suppliers, planning delivery
capacities, and fostering efficient internal collaboration, the Company achieves timely and
reliable delivery commitments to meet customer demands.
(6) Enhancing operational efficiency within the enterprise, the Company focuses on high-quality
business, so as to further upgrade the fine management of clients and business opportunities,
and enhance frontline operational capabilities. The supply chain implements flexible sourcing to
reduce delivery time and further lower costs. Strengthening quality management, the Company
puts in comprehensive effort to enhance product delivery and quality, promoting the practical
application of new technologies in intelligent software programming, intelligent pre-sales, and
intelligent operations and maintenance.
(7) The Company will strengthen organizational capabilities, advance the deployment of operational
talents into various operational areas; focus on employee development, cultivate a stable
workforce structure, and foster a virtuous cycle involving both management personnel and
technical professionals; advocate a high-performance culture, enhance organizational and
individual efficiency; inspire hard work for reward, and continue to promote the "Employee
Development Community Plan".
(8) The Company will continuously advance the construction of the compliance system and effectively
safeguard the compliant operation and steady development of businesses.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
XII. Reception of Visits, Communication, Interviews, and Other Activities in the Report Period
Applicable □ Not applicable
Main content
of the Index of the
Reception Reception Reception Reception Reception discussion basic
Time location Method target type objects and the information of
information research
provided
Records of
Investor
The business
A total of 24 Relations
summary in
institutions Activities on
2022 and the
February 6, Field including February 6th
Meeting room Institution development
2023 Investigation Sinolink and 8th, 2023
outlook for
Securities and (Published on
2023 for the
Bosra Funds Juchao
Company
Information
Network)
The Records of
Company's Investor
A total of 10 Investments Relations
institutions and Strategic Activities on
including Positioning in February 16th
February 16, Field
Meeting room Institution CITIC Software, and and 17th,
2023 Investigation
Securities and the Products 2023
Caitong and Intelligent (Published on
Securities Advantages of Juchao
Its Subsidiary Information
IMOU Network)
The
Records of
Company's
Investor
A total of 12 Business
Relations
institutions Development
Activities on
Field including Outlook for
March 1, 2023 Meeting room Institution March 1, 2023
Investigation Xinda Aoyin 2023 and the
(Published on
and Granford Development
Juchao
Capital Status of the
Information
Dahua Haorui
Network)
Platform
The
Records of
A total of 15 Company's
Investor
institutions, High-
Relations
including Reusability
Activities on
Topsperity Application
Field March 9th and
March 9, 2023 Meeting room Institution Securities Scenario
Investigation 10th, 2023
Asset Solutions and
(Published on
Management the Extent of
Juchao
and Essence Ecological
Information
Securities. Collaboration
Network)
Coverage
A total of 9 The Records of
institutions Company's Investor
March 13, Field
Meeting room Institution including Initiatives in Relations
2023 Investigation
China Channel Activities on
Universal Ecological March 13th
138
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Asset Cooperation and 14th,
Management, and Solutions 2023
AXA SPDB with High (Published on
Investment Reusability in Juchao
Managers, Application Information
etc. Scenarios Network)
Records of
The
Investor
Company's
Relations
A total of 7 Omni-
Activities on
institutions Ecological
March 23th
March 23, Field including Architecture
Meeting room Institution and 24th,
2023 Investigation Harvest Fund and the
2023
and First- Implementatio
(Published on
Trust Fund n of the
Juchao
Company's AI
Information
Capabilities
Network)
Records of
The Overall
Investor
A total of 282 Operational
Relations
institutions Status of the
Activities on
including Company in
Field April 28th,
April 28, 2023 Meeting room Institution CICC and 2022 and the
Investigation 2023
China Outlook for
(Published on
Merchants Cooperation
Juchao
Securities with China
Information
Mobile
Network)
The
implementatio Records of
n status of the Investor
A total of 10
Company's AI Relations
institutions
technology Activities on
including
Field and the May 11th and
May 11, 2023 Meeting room Institution Changjiang
Investigation Company's 12th, 2023
Pension and
strategy and (Published on
China Life
execution in Juchao
Security
the Information
multimodal Network)
aspect
The co-
creation of
technology Records of
with Investor
A total of 8 ecosystem Relations
institutions partners by Activities on
Field including the Company, May 16th and
May 16, 2023 Meeting room Institution
Investigation Sinolink along with 17th, 2023
Securities and specific (Published on
Efunds industry Juchao
applications of Information
intelligent Network)
manufacturing
solutions
A total of 30 The recent Records of
Institutions institutions development Investor
Field
May 26, 2023 Meeting room and including of the Relations
Investigation
individuals Harvest Fund Company's Activities on
and Orient industrial May 26th,
139
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Securities, robots and 2023
and 6 machine (Published on
individual vision Juchao
investors businesses, Information
including and the Network)
Zhen Rongjun Company's
support for
partner
business
implementatio
n in
commercial
sharing
The
development
Records of
of the
Investor
Company's
A total of 6 Relations
intelligent
institutions Activities from
manufacturing
Field including June 7th to
June 7, 2023 Meeting room Institution business and
Investigation Bosra Funds 9th, 2023
the
and Guolian (Published on
collaborative
Securities Juchao
cooperation
Information
between the
Network)
Company and
China Mobile
The
A total of 213 Records of
Company's
institutions Investor
operational
including Relations
performance
Morgan Activities on
Telephone Institutions in the first half
August 26, Stanley and August 26th,
Meeting room communicatio and of 2023 and
2023 Sequoia 2023
n individuals the outlook for
Capital, and 6 (Published on
business
individual Juchao
development
investors such Information
trends in the
as Xie Ziyou Network)
second half
Records of
The
Investor
A total of 11 Company's
Relations
institutions progress in
Activities on
including foundation
September Field September
Meeting room Institution Zheshang model
19, 2023 Investigation 19, 2023
Securities and research and
(Published on
Essence development,
Juchao
Securities and in
Information
software field
Network)
The
A total of 212 Records of
Company's
institutions Investor
operational
including Relations
performance
CICC and Activities on
Telephone Institutions in the first
October 21, Goldman October 21,
Meeting room communicatio and three quarters
2023 Sachs (Asia), 2023
n individuals of 2023 and
and 6 (Published on
the outlook for
individual Juchao
business
investors such Information
development
as Yang Yiran. Network)
trends in the
140
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
future
The recent
release of the
A total of 11 Records of
upgraded
institutions Investor
"Dahua Think
including Relations
#2.0" strategy,
China Activities on
the
International November
November 10, Field characteristics
Meeting room Institution Fund 10th and 13th,
2023 Investigation of industry
Management 2023
foundation
and China (Published on
model, and
Universal Juchao
the progress
Asset Information
of cooperation
Management Network)
with China
Mobile
The
development
of the
Company in
Records of
the field of
Investor
A total of 9 "Full
Relations
institutions Sensing", the
Activities on
including introduction of
December 1, Field December1st
Meeting room Institution Changjiang the
2023 Investigation and 4th, 2023
Pension and Company's
(Published on
Founder lightweight
Juchao
Securities Genius AI
Information
open platform,
Network)
as well as the
Galaxy
foundation
model
XIII. The Implementation of the "Quality and Returns Enhancement" Action Plan
Has the Company disclosed the "Quality and Returns Enhancement" action plan?
Yes □ No
To safeguard the interests of all shareholders and based on confidence in the Company's future
development prospects and recognition of the stock's value, the Company has formulated the
"Quality and Returns Enhancement" action plan. For specific details, see the announcement titled
"Announcement on the 'Quality and Returns Enhancement' Action Plan" disclosed on February 7,
2024, on the Juchao Information Network (announcement number: 2024-013).
The Company consistently prioritizes high-quality development, adhering to the core values of
"achieving success for customers and stakeholders", and fulfilling the mission of "making society
smarter and life better." Leveraging two major technological strategies, AloT and IoT digital
intelligence platform, the Company empowers the construction of efficient urban governance systems
and the digital intelligence transformation and upgrading of enterprises. It deeply understands
industry scenarios, comprehends customer needs, provides comprehensive smart IoT solutions, and
is committed to building the preferred brand for smart IoT, promoting high-quality, green, and
innovative economic and social development.
The Company continuously strengthens its corporate governance foundation by establishing
internal control systems and promoting the responsible performance of the shareholders meeting,
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
board of directors, board of supervisors, and the management team. It regulates the rights and
obligations of the Company and shareholders, preventing the abuse of shareholder rights and the use
of management advantages to harm the interests of small and medium investors. The Company
enhances investor relations management, expands channels for institutional investors to participate in
corporate governance, guides small and medium investors to actively participate in shareholders'
meetings, facilitates the participation of various investor entities in major decision-making, and
enhances investors' voice and sense of participation.
While solidifying its own development foundation, the Company has firmly established a sense of
rewarding the shareholders. Since its listing in 2008, it has adhered to the practice of annual cash
dividends, with the cumulative cash dividend amount exceeding RMB 5.7 billion yuan. In the fiscal
year 2023, the Company achieved a cumulative cash dividend of RMB 1.436 billion yuan through
methods such as mid-year cash dividends and share repurchases. With the aim of better rewarding
shareholders, and considering the capital needs for future business development and production
operations, the Company has formulated a plan for the distribution of profits for the fiscal year 2023. It
proposes to distribute cash dividends of RMB 3.82 yuan (including tax) per 10 shares to all
shareholders, amounting to approximately RMB 1.251 billion yuan (including tax) in cash dividends.
Taking into account the mid-term cash dividends already distributed, the amount spent on share
repurchases, and the proposed cash dividends for the fiscal year 2023, the total cash dividends for
the fiscal year 2023 amounted to RMB 2,686,469,500 yuan, accounting for 36.49% of the net profit
attributable to the shareholders of the Company for the fiscal year 2023.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section IV Corporate Governance
I. Basic Situation on Corporate Governance
Dahua has strictly established a "three meeting and one layer" corporate governance structure for the shareholders'
meeting, board of directors, supervisory board, and management by following the Company Law, Securities Law,
Code of Corporate Governance for Listed Companies and other relevant laws, regulations, and regulatory documents
of regulatory authorities. There are four special committees under the board of directors, including the Strategy
Committee, Audit Committee, Nomination Committee, and Remuneration and Appraisal Committee, with each having
clear responsibilities and coordinated operations.
During the reporting period, the Company constantly improved corporate governance structure, established a sou
internal control system, constantly improved the Company's standardized operation level, strictly performed the
information disclosure obligations, and focused on protection of the investors' interests. The actual situation of
corporate governance is in line with the laws, regulations, regulatory documents, and rules of self-regulation on the
governance of listed companies issued by China Securities Regulatory Commission and Shenzhen Stock Exchange.
(I) Shareholders and shareholder meetings
The Company strictly adheres to the provisions and requirements of the Company Law, the Company's Articles of
Association, and the Rules of Procedure for Shareholders' Meetings to convene and conduct shareholders' meetings.
This ensures equal treatment of all shareholders and guarantees shareholders' rights to information, participation, and
voting on significant company matters. During the reporting period, a total of four shareholders' meetings were
convened, where resolutions were made on matters including regular reports, board elections, equity sales, and
adjustments to equity incentive plans. The Company hires a lawyer to issue legal opinions on the convening of the
General Meeting of Shareholders, the qualifications of the attenders, the qualifications of the convener, the voting
procedure, and the voting results to ensure that the operation mechanism of the General Meeting of Shareholders
complies with relevant provisions, and protects the legitimate rights and interests of the shareholders.
(II) The Company and controlling shareholders
The Company operates independently from its controlling shareholder in terms of business, personnel, assets,
finances, and organization. Each operates with independent accounting, assuming individual responsibilities and risks.
During the reporting period, the controlling shareholders adhered strictly to regulations, exercising shareholder rights in
accordance with relevant laws, regulations, and the Company's articles of association. There were no instances of
abusing its controlling position to harm the legitimate rights and interests of the Company and other shareholders, nor
were there any cases of non-operational use of the Company's funds.
(III) Directors and the Board of Directors
The Company elects the directors and appoints the independent directors in strict accordance with the selection and
employment procedure specified in the Company Law and the Articles of Association. At present, the Company has
nine directors, including three independent directors, all of whom are experts in corporate management and financial
accounting and other fields. The number and composition of the board of directors meet the requirements of relevant
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
laws and regulations and the Articles of Association. All of the Company's directors should perform their duties with
integrity and diligence in accordance with the principles of maximizing the interests of the company and shareholders.
The Board of Directors convened board meetings and implemented the resolutions of the shareholders' meeting in
strict accordance with "Articles of Association" and "Rules of Procedure of the Board of Directors"; All the directors
were able to perform their due duties and conscientiously attended the Board meetings and shareholders' meetings to
safeguard the legitimate rights and interests of the Company and shareholders.
(IV) Supervisors and the Board of Supervisors
The Company strictly elects the supervisors by the election and appointment procedures specified in the Company
Law and the Articles of Association. The Company currently has three supervisors. The number and composition of
the board of supervisors meet the requirements of relevant laws and regulations and the Articles of Association. The
board of supervisors convenes supervisor meetings in strict accordance with the Articles of Association and the Rules
of Procedure of the Board of Supervisors. All the supervisors perform their duties conscientiously, and effectively
supervise and express independent opinions on the legitimacy and compliance of the corporate finance, directors, and
senior managers in fulfilling their duties,in an integral, diligent and conscientious manner, to safeguard the legitimate
rights and interests of the Company and shareholders.
(V) Senior Management Personnel
The responsibilities of senior management personnel within the Company are clearly defined, and they diligently fulfill
their duties in strict accordance with various management systems, including the Company's Articles of Association.
They demonstrate diligence and responsibility, effectively implementing and executing resolutions made by the board
of directors.
(VI) Performance Appraisal and Incentive and Constraint
To further establish and improve the Company's incentive mechanism and strengthen the Company's philosophy of
sustainable development of both management and core employees, the Company implements a stock option and
restricted stock incentive plan, aiming to reinforce the interest sharing and restraint mechanisms applied to
shareholders and core business personnel. It has maintained the stability of management teams and business leaders,
guaranteed the realization of the Company's development strategy and business objectives, and ensured the
Company's long-term sound development. The appointment of company executives is open, transparent and complies
with laws and regulations.
(VII) Stakeholders
The Company fully respects and safeguards the legitimate rights and interests of stakeholders. While striving for
steady growth in company performance, it earnestly treats and protects the legitimate rights and interests of all
stakeholders. The Company strengthens communication and cooperation with various parties, continuously improves
product quality, attaches importance to corporate social responsibility, and achieves a balance of interests among
shareholders, employees, and society. This is done to promote the Company's sustained, stable, and healthy
development.
(VIII) Information Disclosure and Investor Relations
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
The Company performs obligations for truthful, accurate, timely, and complete information disclosure in strict
accordance with the relevant laws and regulations, the Company's "Information Disclosure Management System" and
"Investor Relation Management System", and designates Securities Times and Juchao Information Network
(www.cninfo.com.cn) as the media channels for such disclosure; the Company strictly enforces the confidentiality of
undisclosed information. According to the Company's "Inside Information Confidentiality System", internal information
insiders have been properly registered and filed. The internal information insider filing system has been established
and submitted to the regulatory authorities for record in time as required, and the behavior of submitting company
information to external information users has been strictly regulated. During the reporting period, no incidence of stock
trading based on insider information has occurred.
At the same time, the Company actively engages in communication with investors by setting up an special column of
investor relations management on its official website, and answering investors' questions through the investor
interaction platform of Shenzhen Stock Exchange and the Company's investor hotline, so as to keep investors'
communication channels available, help investors understand and work with the Company, improve the Company's
transparency, and protect the legitimate rights and interests of all shareholders.
Whether the actual status of corporate governance significantly deviates from laws, administrative regulations and the
rules issued by the China Securities Regulatory Commission regarding the governance of listed companies.
□ Yes No
There is no significant difference between the actual situation of corporate governance and laws, administrative
regulations and the rules issued by China Securities Regulatory Commission regarding the governance of listed
companies.
II. The Company's Independence from the Controlling Shareholders, Actual Controllers in
Asset, Personnel, Finance, Organization, Business, etc.
The company and the controlling shareholders are completely separated in terms of business, personnel, assets,
organization, and finance, and has independent and complete businesses and capabilities of independent operation.
1. Business independence
The Company's business is independent of the controlling shareholders, actual controllers and other enterprises under
their control, and has an independent and complete R&D, production, procurement, and sales system; the technology
required for production and operation is legal, independently owned, or licensed for use by the Company with no asset
disputes. The company has signed all external contracts independently, and has the ability to independently make
production and operation decisions and engage in production and business activities.
2. Personnel independence
The Company's personnel are independent from the controlling shareholders, actual controllers and other companies
controlled by them. The company has an independent human resources department responsible for labor, personnel,
and payroll management. The Company has established an independent labor, personnel, and salary management
system. The production, operation, and administration are independent of the controlling shareholders, actual
controllers, and other companies controlled by them; the recommendation, election, and appointment of directors,
supervisors, and senior managers of the Company are conducted legally and independently; senior management
personnel such as the president, executive president, senior vice president, board secretary, and finance director did
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
not hold positions other than directors and supervisors for controlling shareholders, actual controllers, and other
companies controlled by them or receive salaries from them; the Company's financial staff do not have a part-time job
with the controlling shareholders, actual controllers, and other companies controlled by them.
3. Asset independence
The Company's assets are independent from the controlling shareholders, actual controllers and other companies
controlled by them. The company's main assets include the ownership and use rights of complete land, plants,
machinery and equipment, trademarks, patents, non-patented technology required for the main business, and an
independent raw material procurement and product sales system. The property rights of the above assets are clear
and completely independent of the controlling shareholders and major shareholders. There was misappropriation of
the company's assets by the controlling shareholders and major shareholders.
4. Organization independence
The Company's organizations are independent from the controlling shareholders, actual controllers and other
companies controlled by them. The Company has established decision-making, implementation, and supervision
bodies for general meeting of shareholders, board of directors and board of supervisors. It has also appointed senior
managers such as president, executive president, senior vice president, board secretary, and chief financial officer; the
Company has set up specialized departments equipped with the necessary personnel independently responsible for
domestic/overseas sales, R&D, supply chain, delivery and service, quality and service, finance, legal affairs, securities,
internal audit, human resources, administration, IT, and other functions. The internal organizations perform their
respective operational management responsibilities under the leadership of the board of directors and the president in
accordance with the rules and regulations; there have been no cases in which the controlling shareholders, actual
controllers, and other companies controlled by them are confused with their identities and duties; There is no
circumstance in which the controlling shareholder or actual controller interferes with its organizational setup.
5. Finance independence
The Company's finance is independent from the controlling shareholders, actual controllers and other companies
controlled by them. The company has established an independent financial department with full-time financial
accounting personnel, and has established an independent financial accounting system for independent financial
decisions. It has a standardized financial accounting system and financial management system for subsidiaries; the
company has independently opened a basic deposit account so that there is no sharing of bank accounts with actual
controllers, controlling shareholders, and other companies controlled by it; the company handled tax registrations with
the Zhejiang Provincial State Tax Bureau and the Zhejiang Provincial Local Tax Bureau and paid taxes independently
as required by law.
III Horizontal competition
□ Applicable Not applicable
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
IV. Relevant Situation of the Annual General Meeting of Shareholders and the Extraordinary
General Meeting of Shareholders Held in the Reporting Period
1. The shareholders' meetings for this reporting period
Percentage of
Conference Date of Date of Conference
Conference Type Investors
Session Conference Disclosure Resolution
Involved
For details, see
the
Announcement
of Resolutions at
the First
First Extraordinary
Extraordinary General Meeting
Extraordinary
General Meeting 39.75% March 6, 2023 March 7, 2023 of Shareholders
General Meeting
of Shareholders in 2023
in 2023 published on
Juchao
Information
Network
(www.cninfo.com
.cn)
For details, see
the
Announcement
of Resolutions at
the 2022 Annual
2022 Annual General Meeting
Annual General
General Meeting 52.63% May 26, 2023 May 27, 2023 of Shareholders
Meeting
of Shareholders published on
Juchao
Information
Network
(www.cninfo.com
.cn)
For details, see
the
Announcement
of Resolutions at
the Second
Second Extraordinary
Extraordinary General Meeting
Extraordinary September 11, September 12,
General Meeting 51.13% of Shareholders
General Meeting 2023 2023
of Shareholders in 2023
in 2023 published on
Juchao
Information
Network
(www.cninfo.com
.cn)
Third For details, see
Extraordinary the
Extraordinary November 6, November 7,
General Meeting 46.15% Announcement
General Meeting 2023 2023
of Shareholders of Resolutions at
in 2023 the Third
147
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Extraordinary
General Meeting
of Shareholders
in 2023
published on
Juchao
Information
Network
(www.cninfo.com
.cn)
2. Convening of the Extraordinary General Meeting of Shareholders upon request of the
preferred stockholders whose voting rights are restored
□ Applicable Not applicable
IV. Directors, Supervisors and Senior Management
1. Basic information
Numb
Numb Numb
er of
er of er of Numb
share
share share er of
Termi s held Other Reasons
Startin s s share
Positi nation at the chang for increase
Gend g date increa decre s held
Name Age Post on Date begin es and
er of sed in ased at the
status of ning (share decrease in
tenure the in the end of
tenure of the ) shares
period period the
period
(share (share period
(share
) )
)
Septe
Fu April 1,023, 1,023,
Chair Incum mber
Liqua Male 57 1, 868,9 0 0 0 868,9
man bent 10,
n 2005 80 80
2026
Septe
Vice April
Wu Incum mber 69,17 69,17
Male 52 Chair 1, 0 0 0
Jun bent 10, 2,886 2,886
man 2005
2026
Septe
April
Chen Femal Direct Incum mber 71,26 71,26
57 1, 0 0 0
Ailing e or bent 10, 2,813 2,813
2005
2026
Participatio
n in the
Company's
equity
Septe incentive
Zhao March -
Direct Incum mber 1,639, 1,312, plan, with a
Yunin Male 47 6, 0 0 326,4
or bent 10, 000 600 portion of
g 2023 00
2026 the held
shares
repurchase
d and
canceled.
148
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Septe Septe
Yuan Direct Incum mber mber
Male 57 0 0 0 0 0
Lihua or bent 11, 10,
2023 2026
Septe Septe
Zhang
Direct Incum mber mber
Xiaom Male 53 0 0 0 0 0
or bent 11, 10,
ing
2023 2026
Indep
Septe
enden Augus
Liu Incum mber
Male 61 t t 12, 0 0 0 0 0
Hanlin bent 10,
Direct 2020
2026
or
Indep
Dece Septe
Cao enden
Incum mber mber
Yanlo Male 49 t 0 0 0 0 0
bent 20, 10,
ng Direct
2021 2026
or
Indep
Septe
enden Augus
Zhang Incum mber
Male 59 t t 12, 0 0 0 0 0
Yuli bent 10,
Direct 2020
2026
or
Chair
man
Septe
Song of the April
Femal Incum mber
Maoy 42 Board 3, 0 0 0 0 0
e bent 10,
uan of 2008
2026
Super
visors
Septe
Zheng Augus
Femal Super Incum mber 50,20 50,20
Jiepin 43 t 12, 0 0 0
e visor bent 10, 0 0
g 2020
2026
Septe Septe
Super Incum mber mber
Jia Qi Male 47 0 0 0 0 0
visor bent 11, 10,
2023 2026
Febru Septe
Fu
Presid Incum ary mber
Liqua Male 57
ent bent 27, 10,
n
2020 2026
Execu Dece Septe
Zhao
tive Incum mber mber
Yunin Male 47
Presid bent 19, 10,
g
ent 2022 2026
Participatio
n in the
Company's
equity
Senior Septe
Octob - incentive
Liu Vice Incum mber 1,059, 805,5
Male 43 er 12, 0 0 254,4 plan, with a
Ming Presid bent 10, 900 00
2020 00 portion of
ent 2026
the held
shares
repurchase
d and
149
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
canceled.
Participatio
n in the
Company's
equity
Senior Febru Septe incentive
-
Li Vice Incum ary mber 1,195, 940,6 plan, with a
Male 49 0 0 254,4
Zhijie Presid bent 27, 10, 000 00 portion of
00
ent 2020 2026 the held
shares
repurchase
d and
canceled.
Participatio
n in the
Company's
equity
Senior Septe incentive
Octob -
Song Vice Incum mber 546,0 327,6 plan, with a
Male 46 er 12, 0 0 218,4
Ke Presid bent 10, 00 00 portion of
2020 00
ent 2026 the held
shares
repurchase
d and
canceled.
Participatio
n in the
Secret
Company's
ary of
equity
the
Dece Septe incentive
Board -
Wu Incum mber mber 1,879, 1,624, plan, with a
Male 50 and 0 0 254,4
Jian bent 1, 10, 335 935 portion of
Senior 00
2005 2026 the held
Vice
shares
Presid
repurchase
ent
d and
canceled.
Participatio
n in the
Company's
CFO equity
and Febru Septe incentive
Xu -
Femal Senior Incum ary mber 1,047, 828,6 plan, with a
Qiaof 52 0 0 218,4
e Vice bent 27, 10, 000 00 portion of
en 00
Presid 2020 2026 the held
ent shares
repurchase
d and
canceled.
Participatio
n in the
Company's
Senior Septe
Xu March - equity
Vice Incum mber 1,137, 882,6
Zhich Male 58 22, 0 0 254,4 incentive
Presid bent 10, 000 00
eng 2018 00 plan, with a
ent 2026
portion of
the held
shares
150
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
repurchase
d and
canceled.
Participatio
n in the
Company's
equity
Senior Septe incentive
Zhu March -
Vice Incum mber 1,330, 1,075, plan, with a
Jianta Male 42 22, 0 0 254,4
Presid bent 10, 225 825 portion of
ng 2018 00
ent 2026 the held
shares
repurchase
d and
canceled.
Septe
Zuo April
Femal Super Resig mber
Pengf 46 3, 0 0 0 0 0
e visor ned 10,
ei 2008
2023
1,174, - 1,172,
Total -- -- -- -- -- -- 188,3 0 0 2,035, 153,1 --
39 200 39
Whether there is any outgoing directors, supervisors, or dismissal of senior management in their term of office during
the reporting period.
Yes □ No
During the reporting period, Ms. Zuo Pengfei, a supervisor of the Company, left her position upon the expiration of her
term and ceased to serve as a company supervisor.
Changes of Directors, Supervisors and Senior Management of the Company
Applicable □ Not applicable
Name Title Type Date Causes
Resigned upon term
Resigned upon term expiry and no longer
Zuo Pengfei Supervisor September 11, 2023
expiry served as a
supervisor
Zhao Yuning Director Elected March 6, 2023 Elected
Yuan Lihua Director Elected September 11, 2023 Elected
Zhang Xiaoming Director Elected September 11, 2023 Elected
Jia Qi Supervisor Elected September 11, 2023 Elected
2. Positions
Professional backgrounds, major work experiences and current main responsibilities in the Company for incumbent
directors, supervisors and senior management of the Company
Mr. Fu Liquan, Chinese nationality, born in 1967, with master degree in EMBA of Zhejiang University. As one of the
main founders of the Company, he served as chairman and president of the Company, and now serves as chairman
and president of the Company. He has won the honors of "Top Ten Influential Zhejiang Entrepreneurs", "Model Worker
of Zhejiang Province", "Excellent Constructor of Socialism with Chinese Characteristics in the New Era of Non-Public
Economy in Zhejiang Province", "Excellent Enterprise Operator with Outstanding Contributions to the Information
Economy", "Outstanding Contributions Award in ‘Ingenuity for a Safe China’", Global Security Contribution Award, Top
Ten Figures in Security and Protection Industry, and the Best CEO of listed companies of Forbes, and more.
Mr. Wu Jun, Chinese nationality, born in 1972, with a bachelor's degree, engineer, served as vice chairman and vice
151
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
president of the Company and general manager of Zhejiang Dahua System Engineering Co., Ltd. He now serves as
vice chairman of the Company and executive director of Zhejiang Dahua System Engineering Co., Ltd.
Ms. Chen Ailing, Chinese nationality, born in 1967, holding a bachelor's degree. As one of the main founders of the
Company, she served as director and CFO of the Company, and now serves as director of the Company.
Mr. Zhao Yuning, Chinese nationality, was born in 1977 and graduated from National University of Singapore with a
master degree in science. From July 2017 to December 2022, he served as Vice President of the Company, General
Manager of the Overseas Marketing Center, Senior Vice President of the Company, and President of the Overseas
Marketing Center in turn. He is currently the director and executive president of the Company.
Mr. Yuan Lihua, Chinese nationality, born in 1968, holds a Master's degree. He previously served as a director and
deputy general manager of China Mobile Communications Group Terminal Co., Ltd., and deputy general manager of
the Foreign Investment Management Department of China Mobile Communications Group Co., Ltd. He currently
serves as a director of the Company, a director, deputy general manager, and the Chief Legal Counsel of China
Mobile Capital Holdings Co., Ltd.
Mr. Zhang Xiaoming, Chinese nationality, born in 1972, holds a Master's degree. He previously served as the Deputy
General Manager of the Marketing Center at China Mobile Communications Group Beijing Co., Ltd., the Manager of
the Key Customer Department at China Mobile Communications Group Co., Ltd., and the Deputy General Manager at
China Mobile Aspire Holdings Limited. He currently holds a position as a director in the Company.
Mr. Cao Yanlong, Chinese nationality, born in 1975, is a member of the Communist Party of China and holds a
doctoral degree. He has previously served as a lecturer/postdoctoral fellow at the College of Biosystems Engineering
and Food Science at Zhejiang University, a visiting scholar at the Center for Precision Measurement at the University
of Huddersfield in the United Kingdom, and an assistant director of the Hangzhou Municipal Commission of Economy
and Informatization. Currently, he holds the position of professor at the School of Mechanical Engineering at Zhejiang
University. He concurrently serves as the director of the Shandong Industrial Technology Research Institute of
Zhejiang University and an independent director of the Company.
Mr. Liu Hanlin, Chinese nationality, born in 1963, holds a postgraduate degree. He has held various positions at
Hangzhou Dianzi University, starting as an assistant, lecturer, associate professor, and eventually becoming a
professor in the field of accounting. Previously, he served as the Vice Dean of the School of Economics and the Party
Secretary of the School of Accounting at Hangzhou Dianzi University. Currently, Mr. Liu holds the position of professor
at Hangzhou Dianzi University. Additionally, he serves as a member of the Chinese Institute of Certified Public
Accountants, a director of the Electronic Branch of the Accounting Society of China, a director and committee member
of the Accounting Society of Zhejiang Province, an executive director of the Zhejiang Institute of Certified Public
Accountants, and a deputy director of the Expert Consultation Committee on Management Accounting in Zhejiang
Province. Furthermore, he acts as an independent director for Litian Pictures Holdings Ltd., Zhejiang Runyang New
Material Technology Co., Ltd., and Zhejiang Great Shengda Packaging Co., Ltd. He is Independent Director of the
Company.
Mr. Zhang Yuli, Chinese nationality, born in 1965, holds a doctoral degree. He previously served as the Executive
Deputy Director of the MBA Center, Vice Dean of the Graduate School, Vice Dean and Dean of the Business School
at Nankai University. Currently, he holds positions as a Professor and PhD Supervisor at the Nankai University Nankai
Business School, as well as the Dean of the Nankai University Innovation and Entrepreneurship Institute. Additionally,
he serves as a member of the Management Science Department of the Ministry of Education's Science and
152
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Technology Committee, the China High-Quality MBA Education Accreditation Working Committee, the Tianjin
Discipline Review Group, and the Professional Degree Education Guidance Committee. Furthermore, he holds
positions as an expert reviewer for the National Natural Science Foundation and the National Social Science
Foundation, as well as serving as an independent director for Tianjin Port Co., Ltd. and Tianjin Benefo Tejing Electric
Co., Ltd. He was awarded the Special Allowance by the State Council in 2004 and was selected as a "Changjiang
Scholar" Distinguished Professor by the Ministry of Education in 2013. He is Independent Director of the Company.
Ms. Song Maoyuan, Chinese nationality, was born in 1982, holding a bachelor's degree. She currently serves as the
President's Secretary and Chairperson of the Board of Supervisors at the Company.
Ms. Zheng Jieping, Chinese nationality, born in 1979, holds a Bachelor's degree. She currently serves as the
President of HR Center and a supervisor of the Company.
Mr. Jia Qi, Chinese nationality, born in 1978, holds a Bachelor's degree. He previously served as the General Manager
of the Comprehensive Department and Research and Development Department of China Mobile Communications
Group Terminal Co., Ltd., and as the General Manager of its Beijing Branch. He currently serves as a Departmental
General Manager of China Mobile Capital Holdings Co., Ltd. and a supervisor of the Company.
Mr. Wu Jian, Chinese nationality, born in 1974, holds a Master's degree. In the past five years, he has served as the
Secretary of the Board of Directors and Vice President of the Company. He currently serves as the Secretary of the
Board of Directors and Senior Vice President of the Company.
Ms. Xu Qiaofen, Chinese nationality, born in 1972, holds a college degree. She served as the chief financial officer of
the Company's Finance Center from January 2015 to January 2017, the deputy general manager of the Company's
Finance Center from January 2017 to December 2017, and the general manager of the Company's Finance Center
since December 2017. She now serves as the CFO, Senior Vice President, and President of the Finance Center of the
Company.
Mr. Liu Ming, Chinese nationality, born in 1981, holds a Master's degree. He joined the Company in 2006 and has
served in various roles over the past 5 years, including Director of Hardware Platform Development Department,
General Manager of R&D Center Front-end Product Line, General Manager of R&D Center Product Development
Department, and Deputy General Manager of the R&D Center. He has been a standing deputy general manager of the
R&D Center since March 2020. He now serves as a Senior Vice President of the Company and President of the R&D
Center.
Mr. Li Zhijie, Chinese nationality, born in 1975, holds a Master's degree. He served as technical engineer, director of
the Delivery and Service Department of the Representative Office, national delivery representative, and president of
Regional Delivery Department of Huawei Technologies Co., Ltd. from March 2005 to August 2017, and has been
serving as general manager of the Delivery and Service Center of the Company since September 2017. He now
serves as a senior vice president of the Company and President of Delivery and Service Center of the Company, and
President of Zhejiang Dahua Smart IoT Services Co., Ltd.
Mr. Song Ke, Chinese nationality, born in 1978, holds a master degree. He previously served as a manager of IT
Department of Hangzhou H3C Co., Ltd., the General Manager of IT Center of Zhejiang Dahua Technology Co., Ltd.,
and a supervisor of the Company. He now serves as a senior vice president of the Company and president of the
Process IT Center.
153
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Mr. Xu Zhicheng, Chinese nationality, born in 1966, holds a college degree. He successively served as deputy general
manager, general manager and supervisor of the Marketing Department of the Company from September 2013 to
June 2015, has been serving as general manager of the Internal Audit Department of the Company since June 2015,
and now serves as a senior vice president of the Company and general manager of the Company's Quality
Management Center.
Mr. Zhu Jiantang, Chinese nationality, born in 1982, holds a Bachelor's degree. From March 2012 to January 2015, he
has successively served as Product Director of R&D and Deputy General Manager of R&D Center. Since January
2015, he has been the general manager of the Company's Supply Chain Management Center. He is currently a senior
vice president of the Company and the president of the Supply Chain Management Center.
Position held in shareholders entities
□ Applicable Not applicable
Position held in other entities
Applicable □ Not applicable
Renumeration
Name of office- Position held in
Name of other entity received from
holder other entities
other entity or not
Ningbo Huayang Venture Capital Investment
Fu Liquan Executive Partner No
Partnership (Limited Partnership)
Hangzhou Gulin Equity Investment
Fu Liquan Executive Partner No
Partnership (limited partnership)
Ningbo Huaqi Investment Management
Fu Liquan Executive Partner No
Partnership (Limited Partnership)
Zhejiang Huashi Investment Management
Fu Liquan Executive Director No
Co., Ltd.
Chen Ailing Zhejiang Huanuokang Technology Co., Ltd. Chairman No
Zhejiang Huashi Investment Management
Chen Ailing General Manager No
Co., Ltd.
Executive Director
Hangzhou Huaxi Information Technology Co.,
Chen Ailing and General No
Ltd.
Manager
Ningbo Hualing Venture Capital Investment
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Ningbo Huagu Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Ningbo Huaqi Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Huayan Capital (Hangzhou) Private Equity
Chen Ailing Chairman No
Fund Management Co., Ltd.
Hangzhou Huazhen Equity Investment
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Jikang I Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Jikang II Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Jikang III Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Jikang IV Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Ruipin Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
154
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Hangzhou Huaxiao 02 Corporate
Chen Ailing Management Partnership Enterprise (limited Executive Partner No
partnership)
Hangzhou Huaxiao 01 Corporate
Chen Ailing Management Partnership Enterprise (limited Executive Partner No
partnership)
Hangzhou Huatan Corporate Management
Chen Ailing Executive Partner No
Partnership Enterprise (limited partnership)
Ningbo Huakun Venture Capital Investment
Wu Jun Executive Partner No
Partnership (Limited Partnership)
Executive Director
Zhoushan Xinhao Technology Development
Wu Jun and General No
Co., Ltd.
Manager
Central Enterprise Rural Industry Investment
Yuan Lihua Vice Chairman No
Fund Co., Ltd.
Yuan Lihua China Mobile Investment Holding Co., Ltd. Director No
Director, deputy
Yuan Lihua China Mobile Capital Holdings Co., Ltd. general manager, Yes
chief legal advisor
Zhejiang Runyang New Material Technology Independent
Liu Hanlin Yes
Co., Ltd. Director
Independent
Liu Hanlin Litian Pictures Holdings Limited Yes
Director
Independent
Liu Hanlin Zhejiang Great Shengda Packaging Co., Ltd. Yes
Director
Independent
Liu Hanlin Hangzhou Crysound Electrical Co., Ltd. No
Director
Zhang Yuli Tianjin TEDA Construction Group Co., Ltd. Director No
Independent
Zhang Yuli Tianjin Benefo Tejing Electric Co., Ltd. Yes
Director
Independent
Zhang Yuli Tianjin Port Holdings Co., Ltd. Yes
Director
Cao Yanlong Hangzhou Hanmo Industrial Group Co., Ltd. Supervisor No
Executive Director
Shandong Chuangzhi Intelligent Technology
Cao Yanlong and General No
Co., Ltd.
Manager
Cao Yanlong Hangzhou Xiaotu Technology Co., Ltd. Manager No
Hangzhou Huaxi Information Technology Co.,
Song Maoyuan Supervisor No
Ltd.
Hangzhou Huarong Investment Management
Zheng Jieping General Manager No
Co., Ltd.
Departmental
Jia Qi China Mobile Capital Holdings Co., Ltd. Yes
General Manager
Penalties imposed by CSRC on incumbent or outgoing directors, supervisors, and senior management during the
reporting period in the last three years
□ Applicable Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
The followings are the decision-making program, determination basis and actual payment of remuneration for
directors, supervisors, and senior management.
Top management of the Company shall be evaluated by the performance commitments of senior management and the
department managers and those above shall be evaluated by their work report at the end of the year. The managers
have made a system of responsibility for business objectives in their term of office, and formulated the assessment
155
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
method in which the company-level KPI index commitments are combined with individual performance commitments.
They have met these indexes, meaning that they are able to complete their respective tasks in the latest term of office.
The Company will increase their remuneration or adopt other incentive measures, as appropriate, based on their
completion of objectives.
Remuneration of directors, supervisors and senior management in the reporting period of the Company
Unit: RMB ten thousand
Total Whether to
remuneration receive
Position
Name Gender Age Post from the remuneration
status
Company from related
before tax parties or not
Fu Liquan Male 57 Chairman, President Incumbent 99.65 No
Wu Jun Male 52 Vice Chairman Incumbent 8.99 No
Chen Ailing Female 57 Director Incumbent 0 No
Director, Executive
Zhao Yuning Male 47 Incumbent 243.78 No
President
Yuan Lihua Male 57 Director Incumbent 0 Yes
Zhang
Male 53 Director Incumbent 43.07 No
Xiaoming
Liu Hanlin Male 61 Independent Director Incumbent 25.75 No
Zhang Yuli Male 59 Independent Director Incumbent 25.75 No
Cao Yanlong Male 49 Independent Director Incumbent 25.75 No
Song
Female 42 Employee Supervisor Incumbent 66.43 No
Maoyuan
Zheng Jieping Female 45 Employee Supervisor Incumbent 162.69 No
Jia Qi Male 47 Supervisor Incumbent 0 Yes
Liu Ming Male 43 Senior Vice President Incumbent 219.54 No
Li Zhijie Male 49 Senior Vice President Incumbent 206.16 No
Song Ke Male 46 Senior Vice President Incumbent 200.65 No
Senior Vice President
Wu Jian Male 50 and Secretary of the Incumbent 204.13 No
Board
Senior Vice President
Xu Qiaofen Female 52 and Chief Financial Incumbent 191.18 No
Officer
Xu Zhicheng Male 58 Senior Vice President Incumbent 216.53 No
Zhu Jiantang Male 42 Senior Vice President Incumbent 225.98 No
Zuo Pengfei Female 46 Employee Supervisor Resigned 34.92 No
Total -- -- -- -- 2,200.95 --
Other notes
□ Applicable Not applicable
VI. The Performance of the Duties of Directors During the Reporting Period
1. The Board for this reporting period
Conference Session Date of Conference Date of Disclosure Conference Resolution
For details, see the
The 39th meeting of the Announcement of
February 17, 2023 February 18, 2023
7th board of directors Resolutions at the 39th
meeting of the 7th board of
156
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 40th
The 40th meeting of the meeting of the 7th board of
March 17, 2023 March 21, 2023
7th board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 41st
The 41st meeting of the 7th meeting of the 7th board of
April 7, 2023 April 8, 2023
board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 42nd
The 42nd meeting of the meeting of the 7th board of
April 27, 2023 April 28, 2023
7th board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 43rd
The 43rd meeting of the meeting of the 7th board of
May 19, 2023 May 20, 2023
7th board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 44th
The 44th meeting of the meeting of the 7th board of
June 16, 2023 June 17, 2023
7th board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 45th
The 45th meeting of the meeting of the 7th board of
June 25, 2023 June 27, 2023
7th board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
The 46th meeting of the
August 25, 2023 August 26, 2023 Resolutions at the 46th
7th board of directors
meeting of the 7th board of
directors published on
157
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 1st
The 1st meeting of the 8th meeting of the 8th board of
September 11, 2023 September 12, 2023
board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 2nd
The 2nd meeting of the 8th meeting of the 8th board of
October 20, 2023 October 21, 2023
board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
For details, see the
Announcement of
Resolutions at the 3rd
The 3rd meeting of the 8th meeting of the 8th board of
October 26, 2023 October 26, 2023
board of directors directors published on
Juchao Information
Network
(www.cninfo.com.cn)
2. Attendance of directors at the BOD meetings and shareholders' general meetings
Attendance of directors at the BOD meetings and shareholders' general meetings
Whether
Number of Number of
absent from Number of
board Number of attendances Number of
Number of board attendance
meetings to attending of board attendances
Name of absences at meetings in of
attend the board meetings by of board
director board person for shareholder
during the meetings on means of meetings by
meetings two s' general
reporting site telecommun entrustees
consecutive meetings
period ications
times
Fu Liquan 11 10 1 0 0 No 4
Wu Jun 11 11 0 0 0 No 4
Chen Ailing 11 11 0 0 0 No 4
Zhao
10 10 0 0 0 No 4
Yuning
Yuan Lihua 3 1 2 0 0 No 2
Zhang
3 3 0 0 0 No 2
Xiaoming
Liu Hanlin 11 3 8 0 0 No 4
Zhang Yuli 11 1 10 0 0 No 3
Cao
11 3 8 0 0 No 1
Yanlong
Explanation for failure to attend the board meeting in person twice in a row
N/A
158
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
3. Objections of directors to related issues of the company
Whether the directors challenge the company's related issues?
□ Yes No
During the reporting period, no director raised objections to the company's related issues.
4. Other information on directors' performance of duties
Whether director's proposals on the company issues are accepted?
Yes □ No
Note on the acceptance or rejection of director's proposals on company issues.
During the reporting period, the directors of the Company diligently attended the board meetings and shareholder
meetings in strict accordance with relevant laws and regulations such as the "Rules Governing the Listing of Shares on
Shenzhen Stock Exchange" and the Company's Articles of Association. They conscientiously fulfilled their duties and
provided constructive opinions or suggestions on the Company's development decisions. Simultaneously, they
proactively monitored the Company's operational and financial status, as well as significant matters, to promote the
continuous, stable, and healthy development of the Company's operations.
The independent directors demonstrated diligence and dedication by actively understanding the Company's
operational status, internal control system construction, and the implementation of resolutions of the board of directors
and shareholder meetings. They particularly scrutinized matters such as related-party transactions and profit
distribution plans, offering prudent oversight and expressing professional opinions. Their active and effective
performance of directorial duties served to uphold the overall interests of the Company and the legitimate rights and
interests of all shareholders, especially minority shareholders. They played a positive role in promoting the Company's
standardized, stable, and healthy development.
VII. Performance of the Special Committee Under the Board of Directors During the Reporting
Period
Offered The
Numb
Important Perfor
Commit er of Details of
Date of Ideas mance
tee Members Meeti Meeting Content Objection
Conference and of the
Name ngs s (if any)
Suggesti Others
Held
ons Duties
Communicating with
Liu Hanlin, Chen the auditing firm
March 27, 2023
Ailing, Cao regarding the initial
Yanlong, Zhang audit draft
Yuli, (appointed Deliberating on matters
Audit for this role on such as the 2022
Commit September 11, 6 April 20, 2023 annual report, the 2023
tee 2023, Yuan first-quarter report, and
Lihua (appointed other related issues
for this role on Deliberating on matters
September 11, such as the 2023 semi-
August 23, 2023
2023) annual report and other
related issues
159
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Reviewing and verifying
the information of the
September 11,
appointed Chief
2023
Financial Officer and
Head of Internal Audit
Deliberating on the
October 18,
2023 third quarter
2023
report
December 28, Communicating on the
2023 2023 annual audit plan
Deliberated and
determined the
remunerations for the
directors, supervisors,
and the senior
April 20, 2023
executives, the
Remun repurchase and
eration cancellation of
and Zhang Yuli, Fu restricted shares under
Apprais Liquan, Liu 3 equity-based incentives
al Hanlin Deliberating on and
Commit verifying adjustments to
June 9, 2023
tee the 2022 equity
incentive plan
Reviewing the
compensation scheme
August 24, 2023 for independent
directors of the 8th
board of directors
Deliberating on the
proposal for the
nomination of
February 16,
candidates for non-
2023
independent directors
of the 7th board of
directors
Deliberating on the
Nomina proposal for the
Cao Yanlong,
tion nomination of
Liu Hanlin, Fu 3
Commit candidates for non-
Liquan August 24, 2023
tee independent directors
and independent
directors of the 8th
board of directors
Deliberating and
verifying the
September 11,
information of the
2023
senior management
candidates
Fu Liquan, Deliberating on the
Zhang Yuli, Wu 2023 development
Strateg April 20, 2023
Jun, Zhao strategy of the
y
Yuning 2 Company
Commit
(appointed for Deliberating on the
tee
this role on August 24, 2023 Company's share
March 6, 2023) repurchase plan
160
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
VIII. Performance of the Supervisory Committee
Has the supervisory board discovered any risk in the company during the supervision in the reporting period
□ Yes No
The supervisory board had no objection to the supervisory matters in the report period.
IX. Employees in the Company
1. Number, profession composition and educational background of the employees
Number of incumbent employees in the parent company
12,205
at the end of the reporting period (person)
Number of incumbent employees in major subsidiaries at
11,247
the end of the reporting period (person)
Total number of incumbent employees at the end of the
23,452
reporting period (person)
Number of employees receiving salaries in current period
23,452
(person)
Number of retired employees requiring the parent
7
company and major subsidiaries to bear their costs
Profession composition
Number of employees for profession composition
Type of profession composition
(person)
Salesperson 4,859
R&D personnel 12,372
Supply chain 3,988
Management personnel 450
Professional support staff 1,783
Total 23,452
Educational background
Type of educational background Number of employees (person)
Master and above 3,963
Bachelor 13,581
College, technical secondary school 3,172
Others 2,736
Total 23,452
2. Remuneration policies
The Company has established complete remuneration management systems and incentive mechanismsin strict
accordance with Labor Law, Labor Contract Law and other relevant laws and regulations, departmental rules, and
normative documents, providing the employees with competitive remunerations. The Company links its remuneration
system and performance appraisal system with the business performance of the Company, which fully arouses the
enthusiasm of the employees and effectively improves the executive force and responsibility consciousness of
employees, thus better attracting and retaining talents and providing guarantee for sustainable, stable development of
the Company in respect of human resources.
161
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
3. Training plan
The Company has been dedicated to the building of employee education and training system, established the internal
lecturer management measures including new employee training and in-service employee training, implemented
training credits management system, improved the comprehensive quality of the Company's employees, created good
leaning atmosphere, established learning organization and comprehensively helped employees to improve their ability
to meet challenges and reforms in the future, thus providing powerful talent guarantee and support for sustainable, fast
growth of the Company and achieving joint development of employees and the Company.
4. Labor outsourcing
□ Applicable Not applicable
X. Profits Distribution of the Company and Capitalization of Capital Reserves
Profits Distribution policies during the reporting period, especially the formulation, implementation, or adjustment of the
cash dividend policies
Applicable □ Not applicable
1. The Company held its annual shareholders' meeting for the year 2022 on May 26, 2023, and approved the profit
distribution plan for the year 2022: Based on a total share capital of 3,326,264,570 shares, a cash dividend of RMB
2.41 yuan (including tax) was distributed to all shareholders for every 10 shares held. The total cash dividend amount
was RMB 801,629,761.37 yuan. No bonus shares were issued, and no increase in share capital from reserves was
carried out. The remaining undistributed profits were carried over to the next financial year. This profit distribution plan
was successfully implemented on June 6, 2023.
2. The Company convened its third extraordinary shareholders' meeting for the year 2023 on November 6, 2023, and
approved the profit distribution proposal for the first three quarters of 2023: Based on the remaining shares
3,274,649,389 after deducting the repurchased 19,819,601 shares from a total share capital of 3,294,468,990 shares,
a cash dividend of RMB 3.101383 yuan per 10 shares (including tax) was distributed to all shareholders. The total
cash dividend amount was RMB 1,015,594,194.60 yuan. No bonus shares were issued, and no increase in share
capital from reserves was carried out. The remaining undistributed profits were retained for future distribution. This
profit distribution plan was successfully implemented on Thursday, November 16, 2023.
Special notes on cash dividend policies
Whether they comply with the requirements of the
Company's articles of incorporation or the resolutions of Yes
the General Meeting of Shareholders:
Whether the dividend standards and proportions are
Yes
distinct and clear:
Whether the relevant decision-making procedures and
Yes
mechanisms are complete:
Whether the independent directors performed their duties
Yes
and played their due role:
The Company should disclose specific reasons for not
conducting cash dividends (if so planned), and outline the Not applicable.
next steps and measures planned to enhance investor
162
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
returns.
Whether the minority shareholders have the opportunity
to fully express their opinions and appeals, and whether
Yes
their legitimate rights and interests have been fully
protected:
The Company has formulated a "Shareholder Return
Plan for the Next Three Years (2024-2026)", which
Whether relevant conditions and procedures are
involves cash dividend planning in compliance with
compliant and transparent when the cash dividend
relevant regulations and provisions of the Company's
policies are being adjusted or changed:
Articles of Association, and has undergone the required
review procedures as stipulated.
The Company's profits during the reporting period and the parent company's shareholders' profits distribution are
positive but a cash dividend distribution preplan is not proposed.
□ Applicable Not applicable
Profit Distribution and Capital Reserve Converted to Share Capital in the Reporting Period
Applicable □ Not applicable
Number of bonus shares per 10 shares (shares) 0
Number of dividend payout per 10 shares (RMB) (tax
3.82
included)
Equity base in the distribution preplan (shares) 3,274,649,389
The amount of cash dividends (yuan) (including tax) 1,250,916,066.60
The amount of cash dividends (yuan, Note 1) in other
1,435,553,405.87
ways (such as share repurchase)
The total amount of cash dividends (including in other
2,686,469,472.47
ways) (yuan)
Distributable profits (RMB) 24,448,835,337.15
The ratio of the total amount of cash dividends (including
100%
in other ways) to the total amount of profit distribution
Latest cash dividend
If the Company is in a growth stage with significant capital expenditure arrangements, the proportion of cash dividends
in the current profit distribution should be at least 20%.
Details of the preplans on profit distribution or capitalization of capital reserves
Based on a total share capital of 3,274,649,389 shares as of December 31, 2023, after deducting the Company's
repurchased shares (19,819,601 shares), a cash dividend of RMB 3.82 yuan per 10 shares (including tax) will be
distributed to all shareholders. The total amount of this cash dividend distribution is RMB 1,250,916,066.60 yuan
(including tax). No bonus shares will be issued, and no increase in share capital from reserves will be carried out. Any
remaining undistributed profits will be reserved for future distribution.
If the Company's share capital entitled to profit distribution rights changes due to convertible bond conversions, share
repurchase, exercise of stock options in equity incentives, or additional shares listed through refinancing before the
implementation of the distribution plan, the distribution ratios will be adjusted accordingly while maintaining the total
distribution amount unchanged.
Note 1: The "other forms of cash dividends" include cash dividends for the first three quarters of 2023 and the amount
spent on share repurchase in 2023.
XI. Implementation of the Company's Equity Incentive Plan, Employee Stock Ownership Plan
or Other Employee Incentive Measures
Applicable □ Not applicable
163
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
1. Equity incentive
1. On April 27, 2023, the Company held the 42nd meeting of the 7th board of directors and the 29th meeting of the 7th
board of supervisors, approving "the Proposal on the Cancellation of a Portion of Restricted Stock from the 2022 Stock
Option and Restricted Stock Incentive Plan" and "the Proposal on the Cancellation of a Portion of Stock Options from
the 2022 Stock Option and Restricted Stock Incentive Plan." In accordance with the relevant provisions of the "2022
Stock Option and Restricted Stock Incentive Plan (Draft)," due to the Company's performance for the year 2022 not
meeting the first unlocking condition as stipulated, and 208 incentive recipients leaving their positions or experiencing
changes in control at subsidiary companies leading to non-compliance with incentive conditions, the Company decided
to cancel/repurchase a total of 31,861,466 stock options and 31,795,580 restricted shares held by 4,249 incentive
recipients.
2. On June 16, 2023, the Company convened the 44th meeting of the 7th board of directors and the 31st meeting of
the 7th board of supervisors., approving "the Proposal Regarding the Company's Revised Draft of the 2022 Stock
Option and Restricted Stock Incentive Plan along with its Summary" and "the Proposal Regarding the Company's
Revised Draft of the Implementation and Assessment Management Measures of the 2022 Stock Option and Restricted
Stock Incentive Plan," aiming to better align the individual interests of incentive recipients with the interests of
shareholders and the Company and revising the performance evaluation indicators at the corporate level for the period
2023-2024 in the 2022 incentive plan.
On September 11, 2023, the Company held the second extraordinary general meeting of shareholders in 2023, ,
approving "the Proposal Regarding the Company's Revised Draft of the 2022 Stock Option and Restricted Stock
Incentive Plan along with its Summary" and "the Proposal Regarding the Company's Revised Draft of the
Implementation and Assessment Management Measures of the 2022 Stock Option and Restricted Stock Incentive
Plan."
Share incentives for the Company's directors, supervisors, and senior executives
Applicable □ Not applicable
Unit: share
The
exerc
Num
Num ise
Mark Num ber of
ber of Num Num price The Num
Num Num et ber of restri
stock ber of ber of of the granti ber of
ber of ber of price restri Num cted
optio vestin veste veste ng restri
stock stock at the cted ber of stock
ns g d d price cted
optio optio end stock unloc s
newly share share share of stock
ns ns of the s ked newly
Nam grant s s s restri s
Post held held report held share grant
e ed durin durin durin cted held
at the at the ing at the s in ed
durin g the g the g the stock at the
begin end perio begin this durin
g the report report report s end
ning of the d ning perio g the
report ing ing ing (yuan of the
of the perio (yuan of the d report
ing perio perio perio /shar perio
year d /shar perio ing
perio d d d e) d
e) d perio
d (yuan
d
/shar
e)
Zhao Direct
544,0 326,4 816,0 489,6
Yunin or, 0 0 0 0 18.45 0 0 8.16
00 00 00 00
g Exec
164
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
utive
Presi
dent
Senio
Liu r Vice 424,0 254,4 636,0 381,6
0 0 0 0 18.45 0 0 8.16
Ming Presi 00 00 00 00
dent
Senio
Li r Vice 424,0 254,4 636,0 381,6
0 0 0 0 18.45 0 0 8.16
Zhijie Presi 00 00 00 00
dent
Senio
Song r Vice 364,0 218,4 546,0 327,6
0 0 0 0 18.45 0 0 8.16
Ke Presi 00 00 00 00
dent
Secre
tary
of the
board
of
Wu 424,0 254,4 636,0 381,6
direct 0 0 0 0 18.45 0 0 8.16
Jian 00 00 00 00
ors,
senio
r vice
presi
dent
CFO,
Xu Senio
364,0 218,4 546,0 327,6
Qiaof r Vice 0 0 0 0 18.45 0 0 8.16
00 00 00 00
en Presi
dent
Senio
Zhu
r Vice 424,0 254,4 636,0 381,6
Jiant 0 0 0 0 18.45 0 0 8.16
Presi 00 00 00 00
ang
dent
Senio
Xu
r Vice 424,0 254,4 636,0 381,6
Zhich 0 0 0 0 18.45 0 0 8.16
Presi 00 00 00 00
eng
dent
3,392 2,035 5,088 3,052
Total -- 0 0 0 -- -- 0 0 --
,000 ,200 ,000 ,800
Evaluation and Incentive Mechanisms for Senior Management
Top management of the Company shall be evaluated by the performance commitments of senior management
and the department managers and those above shall be evaluated by their work report at the end of the year. The
managers have made a system of responsibility for business objectives in their term of office, and formulated the
assessment method in which the company-level KPI index commitments are combined with individual performance
commitments. They have met these indexes, meaning that they are able to complete their respective tasks in the latest
term of office. The Company will increase their remuneration or adopt other incentive measures, as appropriate, based
on their completion of objectives.
2. Implementation of employee stock ownership plan
□ Applicable Not applicable
165
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
3. Other employee incentive measures
Applicable □ Not applicable
The Company advocates for a "employee-based" philosophy, which emphasizes valuing employees who are dedicated
and hardworking. Building upon long-term incentives based on equity in the listed company, the Company has
launched an employee co-investment incentive plan centered around specific innovative business subsidiaries. The
goal is to organically align the interests of the Company and its employees, ensuring sustainable and healthy
development while fostering employees' enthusiasm for innovation and entrepreneurship.
XII. Development and Implementation of Internal Control System During the Reporting Period
1. Development and implementation of internal control system
The Company has established and effectively implemented a sound internal control system in accordance with the
"Basic Norms of Enterprise Internal Control" and its supporting guidelines, as well as other internal control regulatory
requirements, and in light of the Company's current situation. The internal control system covers all business links
related to financial reporting and information disclosure affairs in the company's business activities, including the Rules
of Procedure of the Board of Directors, Rules of Procedure of the Board of Supervisors, Supervision and Management
of Subsidiaries, Seal Management, Investment and Financing Management, Human Resources Management,
Information System Management, Capital Activities, Procurement Management, Asset Management, Sales and
Collection Management, Cost and Expense Management, Information System Security Management, and Information
Disclosure Affairs Management.
The Company has set up the Audit Committee under the board of directors, leading internal audit institutions, to
inspect and supervise the establishment and implementation of the company's internal control, and to conduct
systematic internal audit and supervision of the Company's economic activities. The Company has established a "risk-
oriented, system-based, process-bonded, control-enabled, and IT-supported" risk management system framework to
provide excellent support for the realization of corporate strategies. Through identifying risks and evaluating their
levels in terms of severity, likelihood and effectiveness of existing measures, the Company improves the hierarchical
decision-making authorization system according to the acceptable level of risks, establishes or optimizes systems and
processes, promotes the IT-supported processes and other control activities, and perfects process systems, to
comprehensively address the internal and external risks that may be foreseen in production and operation activities.
The Company emphasizes the cultivation of risk awareness and regularly organizes risk management training for all
departments, so as to strengthen the Company's risk warning and handling capabilities and develop the risk control
awareness among all staff.
According to the identification of material weaknesses in the financial reporting internal control of the Company, as of
the base date of the internal control assessment report, there is no material weakness in the internal control over
financial reports, and the Company has maintained effective internal control on financial reports in all material aspects
in accordance with the requirements of the enterprise internal control system and relevant regulations. According to
the identification of material weaknesses in non-financial reporting internal control of the Company, no material
weaknesses in non-financial reporting internal control were found as of the base date of the internal control
assessment report.
166
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2. Details of material weakness in internal control found during the reporting period
□ Yes No
XIII. Company's Management of Subsidiaries During the Reporting Period
Not applicable.
XIV. Internal Control Evaluation Report or Internal Control Audit Report
1. Internal Control Evaluation Report
Date of full-text disclosure for internal
April 16, 2024
control assessment report
Full-text disclosure index for internal
http://www.cninfo.com.cn
control assessment report
Percentage of total asset from units
included in the assessment out of the
100.00%
total asset from the company's
consolidated financial statements
The proportion of operating revenue
of parties included in the assessment
to the operating revenue from the 100.00%
Company's consolidated financial
statements
Defect identification criteria
Category Financial Report Non-financial reports
Signs of material weakness in The identification of non-financial
financial reporting include: report defects is mainly determined
(1) Corrupt practices of directors, by the extent of their influence on
supervisors, and senior managers of validity of business process and the
the Company; probability of occurrence.
(2) Material misstatements in the If the defect is less likely to occur,
current Financial Report discovered which may reduce the work efficiency
by the Certified Public Accountants or result, or with a greater
but not recognized by the internal uncertainty, or make it deviate from
control of the Company; the expected goal, then it should be
(3) Invalid internal control and defined as a common defect;
supervision of the External Financial If the defect is likely to occur and will
Report and the Financial Report of significantly lower the work efficiency
Qualitative standards
the Company by the Audit Committee or effect, significantly increase the
and the Audit Department. uncertainty, or make it deviate from
Signs of significant deficiencies in the expected goal, then it is a
financial reporting include: significant defect. If the defect is
(1) Failure to select and apply the likely to occur and will seriously lower
accounting policies in accordance the work efficiency or effect, or
with the accepted accounting seriously increase the uncertainty, or
standards; make it seriously deviate from the
(2) Failure to establish anti-fraud expected goal, then it is a major
procedure and control measures; defect.
(3) No appropriate control Signs of material weakness in non-
mechanism established or financial reporting internal control
appropriate compensating control include:
167
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
implemented for accounting 1) The decision-making procedures
treatment of irregular or special of the Company are not scientific,
transactions; such as decision-making errors,
(4) There are one or more defects in causing failure to meet the desired
the control of final financial reporting objectives after mergers and
process, and no reasonable acquisitions.
guarantee that the financial 2) Violation of national laws and
statements can achieve the goal of regulations, resulting in investigation
being true and complete. by relevant departments and
General deficiencies refer to the regulatory bodies;
control deficiencies other than the 3) Loss of management personnel or
material deficiencies and important key technical personnel;
deficiencies described above. 4) Frequent negative news in the
media;
5) The results of internal control
assessment, especially major or
important deficiencies, have not been
rectified;
6)
Institutional controls are lacking or
experiencing systemic failures in
critical business operations.
The quantitative criteria are based on
Losses which have been or may be operating revenue and total assets.
incurred due to internal control Losses which have been or may be
deficiencies and are related to the incurred due to internal control
profit statement should be measured deficiencies and are related to the
by the operating revenue indicators. profit statement should be measured
If the misreporting amount in the by the operating revenue indicators If
financial statement, which may be the misreporting amount in the
incurred by the deficiencies alone or financial statement, which may be
together with other deficiencies, is incurred by the deficiencies alone or
less than 0.5% of the operating together with other deficiencies, is
revenue, it is considered as a general less than 0.5% of the operating
defect; If it exceeds 0.5% of the revenue, it is considered as a general
operating revenue but is less than defect; If it exceeds 0.5% of the
1%, then it is an significant defect; If operating revenue but is less than
it exceeds 1% of the operating 1%, then it is an significant defect; If
revenue, then it is considered as a it exceeds 1% of the operating
Quantitative standards major defect. revenue, then it is considered as a
Losses which have been or may be major defect.
incurred due to internal control Losses which have been or may be
deficiencies and are related to the incurred due to internal control
asset management should be deficiencies and are related to the
measured by the total asset asset management should be
indicators. If the misstated amount in measured by the total asset
the financial statement, which may indicators. If the misstated amount in
be incurred by the defect alone or the financial statement, which may
together with other deficiencies, is be incurred by the defect alone or
less than 0.5% of the total asset, it is together with other defects, is less
considered as a general defect; If it than 0.5% of the total asset, it is
exceeds 0.5% of the total asset but considered as a common defect; If it
less than 1%, it is an important exceeds 0.5% of the total asset but is
defect; If it exceeds 1% of the total less than 1%, then it is considered as
asset, it is considered as a major an important defect; If it exceeds 1%
defect. of the total asset, it is considered as
a major defect.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Number of material weakness in
0
financial reports
Number of material weakness in non-
0
financial reports
Number of significant deficiency in
0
financial reports
Number of significant deficiency in
0
non-financial report
2. Internal control audit report
Applicable □ Not applicable
Deliberations Paragraph in the Internal Control Audit Report
Dahua is deemed having maintained effective internal control, in all material respects, with respect to the financial
statements in accordance with the "Basic Norms of Enterprise Internal Control" and relevant regulations, as of
December 31, 2023.
Disclosure in the internal control audit report Disclosure
Date of full-text disclosure for the internal control audit
April 16, 2024
report
Full-text disclosure index for the internal control audit
http://www.cninfo.com.cn
report
Opinion type in the internal control audit report Standard unqualified opinion
Whether there are material deficiencies in the non-
No
financial reports
Whether the accounting firm has issued an internal control audit report with modified opinions
□ Yes No
Whether the opinions in the internal control audit report issued by the accounting firm are consistent with those in the
self-evaluation report issued by the board of directors
Yes □ No
XV. Rectification of Self-inspection Problems of Special Actions for Corporate Governance of
Listed Companies
N/A
169
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section V Environmental and Social Responsibilities
I. Major Environmental Issues
Whether the listed company and its subsidiaries belong to the key pollutant discharging units announced by the
environmental protection department
□ Yes No
Administrative penalties for environmental offences during the reporting period
Not applicable.
See other environmental information disclosed by key pollutant discharge units.
Not applicable.
Measures taken during the reporting period to reduce carbon emissions and their effectiveness
Applicable □ Not applicable
See the 2023 Environmental, Social and Governance Report released on the same day on Juchao Information
Network (www.cninfo.com.cn).
Reasons for not disclosing other environmental information
During the reporting period, the Company and its subsidiaries do not fall under the category of key pollutant
discharging units announced by the environmental protection department.
II. Social Responsibilities
See the "2023 Social Responsibility Report" and "2023 Environmental, Social and Governance Report" released on
the same day on Juchao Information Network (www.cninfo.com.cn).
III. Consolidation and Expansion of Poverty Alleviation Achievements and Rural Revitalization
In the reporting period, there have been no targeted poverty alleviation and rural revitalization activities in the
Company.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section VI Significant Events
I. Performance of Commitments
1. Commitments that have been fulfilled by the Company's actual controller(s), shareholders,
related parties, acquirers, the Company and the relevant parties during the reporting period
and those that have not been fulfilled by the end of the reporting period
Applicable □ Not applicable
Perfor
Party making Commitment
Commitments Content Time Term manc
commitments Type
e
The number of shares
transferred each year during
his/her term of service shall not
exceed 25 percent of the total
number of shares he/she holds
Commitments in the Company; he/she shall Being
made during Fu Liquan, Commitment not transfer his/her shares in the fulfille
July 15, Long-
initial public Chen Ailing, on restricted Company within half a year after d
2007 term
offerings or Wu Jun shares he/she leaves the Company; norm
refinancing within the next twelve months, ally
the number of shares sold
through the stock exchange
listing transactions shall not
exceed 50% of the total shares
he/she holds.
The number of shares
transferred each year during
his/her term of service shall not
exceed 25 percent of the total
number of shares he/she holds
Commitments in the Company; he/she shall
made during Commitment not transfer his/her shares in the June
Zhu July 15, Comp
initial public on restricted Company within half a year after 17,
Jiangming 2007 leted
offerings or shares he/she leaves the Company; 2023
refinancing within the next twelve months,
the number of shares sold
through the stock exchange
listing transactions shall not
exceed 50% of the total shares
he/she holds.
Commitments Being
Commitment to practical
made during All directors fulfille
Other fulfilment of the measures for March 26, Long-
initial public and senior d
commitments return filling involved in non- 2021 term
offerings or executives norm
public offering
refinancing ally
Commitments Being
Commitment to practical
made during fulfille
Fu Liquan, Other fulfilment of the measures for March 26, Long-
initial public d
Chen Ailing commitments return filling involved in non- 2021 term
offerings or norm
public offering
refinancing ally
171
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
For a period of 36 months from
the date of completion of the
stock issuance by Dahua to
specific investors (i.e., the first
day of listing of the newly issued
shares), our company will not
Commitments transfer the Dahua shares Being
China Mobile
made during Commitment subscribed in this issuance in 36 fulfille
Communicatio April 14,
initial public on restricted any manner, nor will Dahua mont d
ns Group Co., 2023
offerings or shares repurchase these shares. After hs norm
Ltd.
refinancing this issuance is completed, any ally
additional shares our company
acquires from Dahua due to
bonus shares, capital stock
increases, or similar reasons
must also comply with the
above agreement.
(1) He/she will not directly
engage in operational activities
that constitute horizontal
competition with the stock
company's business; (2) for
companies he/she held or
indirectly held, he/she will fulfill
Other
the obligations under this Being
commitments
Commitment commitment through agencies fulfille
to minority Fu Liquan, June 30, Long-
on horizontal and personnel (including but not d
shareholders Chen Ailing 2007 term
competition limited to directors and norm
of the
managers); (3) if the stock ally
Company
company further expands its
range of products and business
scope, he/she and the company
held by him/her will not compete
with the expanded range of
products or businesses of the
stock company.
Whether the
commitment is
Yes
fulfilled on
time
Where the
commitment is
overdue, the
specific
reasons for
not
completing
Not applicable.
the
performance
and the
following work
plan shall be
explained in
detail
172
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2. If there is a profit forecast for the Company's assets or projects, and the reporting period is
still within the profit forecast period, the Company shall make an explanation on the fulfillment
and its reasons
□ Applicable Not applicable
II. Non-operational capital occupation over listed companies by controlling shareholders and
their related parties
□ Applicable Not applicable
During the reporting period, there is no non-operational capital occupation over listed companies by controlling
shareholders and their related parties.
III. Illegal external guarantees
□ Applicable Not applicable
No illegal external guarantees during the reporting period.
IV. Statement by the Board of Directors on the "Non-Standard Audit Report" of the Last Period
□ Applicable Not applicable
V. Explanations Made by the Board of Directors, the Board of Supervisors, and Independent
Directors (If Any) on the "Non-standard Audit Report" from the Accounting Firm during the
Reporting Period
□ Applicable Not applicable
VI. Changes in Accounting Policies and Accounting Estimates or Correction of Significant
Accounting Errors Compared with the Previous Year's Financial Report
Applicable □ Not applicable
For changes in accounting policies and accounting methods during the reporting period, please refer to "Section X:
Financial Reports/V: Important Accounting Policies and Accounting Estimates/38: Changes in Important Accounting
Policies and Accounting Estimates."
VII. Changes in the Scope of Consolidated Financial Statements Compared with the Previous
Year's Financial Report
Applicable □ Not applicable
(1) The Company has established three domestic subsidiaries in this period: Zhejiang Shuhang Intelligent Technology
Co., Ltd., Guangdong Huaxiyue Intelligent Technology Co., Ltd., and Zhejiang Huajie New Energy Operation Service
Co., Ltd. Additionally, it has established seven overseas subsidiaries: Dahua Technology Belgium BV, Dahua
Technology Regional Headquarters, Dahua Technology Azerbaijan LLC, Dahua Technology Vietnam Company
Limited, Huaray Technology Korea Company Limited, HuaRay Technology GmbH, and Dahua Technology Angola S.U.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
lda. All the aforementioned subsidiaries have been consolidated into the financial reports of the Company from their
respective establishment dates.
(2) The Company's holding subsidiary, Huajian Technology, acquired 100% equity of Zhejiang Huajian Technology Co.,
Ltd. in February 2023, thereby obtaining substantial control over it. Consequently, it has been consolidated into the
financial reports of the Company.
(3) The Company's subsidiary, Guizhou Dahua Information Technology Co., Ltd., was deregistered during this period
and is no longer included in the financial report of the Company from the date of deregistration.
VIII. Appointment and Dismissal of Accounting Firms
Currently appointed accounting firms
BDO China Shu Lun Pan CPAs (special general
Names of domestic accounting firms
partnership)
Remuneration to domestic accounting firms (Unit: RMB
200
ten thousand)
Years of continuous audit service of domestic accounting
20
firms
Names of Certified Public Accountants from domestic
Du Na, Zhang Junhui
accounting firms
The continuous period of audit service for certified public Du Na has been in service for 1 year and Zhang Junhui
accountants in domestic accounting firms has been in service for 4 consecutive years.
Whether to reappoint accounting firms for current period
□ Yes No
Appointment of accounting firms, financial advisers, or sponsors for internal control auditing
Applicable □ Not applicable
1. During the 2023 reporting period, the Company engaged BDO China Shu Lun Pan Certified Public Accountants LLP
(special general partnership) as the internal control audit accounting firm, with a total of internal audit expense of RMB
400,000 yuan paid.
2. During the reporting period, the Company completed the issuance of shares to specific investors and paid
underwriting fees totaling RMB 3 million yuan to the sponsor institution Guosen Securities Co., Ltd.
IX. Delisting after Disclosure of the Annual Report
□ Applicable Not applicable
X. Bankruptcy and Restructuring
□ Applicable Not applicable
No such case as bankruptcy and reorganization related event during the reporting period.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
XI. Significant Lawsuits and Arbitrations
□ Applicable Not applicable
There is no major lawsuit or arbitration during this reporting period.
XII. Penalties and Rectification
□ Applicable Not applicable
XIII. Integrity of the Company, Its Controlling Shareholders and Actual Controllers
□ Applicable Not applicable
XIV. Significant Related-party Transactions
1. Related transactions relevant to daily operations
□ Applicable Not applicable
No such case as significant related-party transactions connected with daily operations.
2. Related transactions in acquisition or sale of assets or equities
Applicable □ Not applicable
For details, see "7. Other significant related-party transactions" in this section.
3. Significant related-party transactions arising from joint investments on external parties
Applicable □ Not applicable
For details, see "7. Other significant related-party transactions" in this section.
4. Related-party creditor's rights and debts
□ Applicable Not applicable
No such case as related credits and debts during the reporting period.
5. Transactions with related financial companies
□ Applicable Not applicable
No deposit, loan, credit or other financial business between the Company and the related financial company and the
related parties.
6. Transactions between the financial company controlled by the Company and the related
parties
□ Applicable Not applicable
There are no deposit, loan, credit, or other financial business between the financial company controlled by the
Company and the related parties.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
7. Other significant related-party transactions
Applicable □ Not applicable
1. On February 17, 2023, the Company convened the 39th meeting of the 7th board of directors and the 27th meeting
of the 7th board of supervisors, during which the "Proposal on Capital Increase by Certain Senior Management and
Core Employees of the Company and Related Transactions to the Planned Spin-off Subsidiary" was deliberated and
approved. The proposal sanctioned that certain senior management and core employees of the Company would
collectively increase their investment in the holding subsidiary, Zhejiang HuaRay Technology Co., Ltd. (hereinafter
referred to as "HuaRay Technology"), by a total of RMB 6,049,190 yuan (increasing the registered capital by RMB
1,675,676 yuan , with the remaining portion allocated to capital surplus). Among them, 11 natural persons, including
senior management Zhao Yuning and Zhu Jiantang, would collectively invest RMB 4,839,353 yuan directly. Following
this capital increase, the Company's equity stake in HuaRay Technology changed from 42.2280% to 41.0878%.
HuaRay Technology continues to be a holding subsidiary within the consolidated financial statements of the Company.
2. On March 17, 2023, the Company convened the 40th meeting of the 7th board of directors, deliberating and
approving the "Proposal on Increasing Capital and Shares of Holding Subsidiaries and Introducing Investors, as well
as Related Transactions." In the meeting, the Company's holding subsidiary, HuaRay Technology, was approved to
introduce a total of 8 investors, including Yibin Green Energy Equity Investment Partnership (Limited Partnership), and
Zhu Jiangming, among others. The investors planned to inject a total of RMB 260,000,061 yuan in cash into HuaRay
Technology (RMB 8,934,710 yuan as additional registered capital, with the remainder credited to capital surplus),
thereby collectively obtaining a 12.58% equity in HuaRay Technology after capital increase. Following this capital
increase, the Company's equity stake in HuaRay Technology changed from 41.0878% to 35.9171%. HuaRay
Technology continues to be a holding subsidiary within the consolidated financial statements of the Company.
3. On April 7, 2023, the Company convened the 41st meeting of the 7th board of directors, deliberating and approving
the "Proposal on Waiving the Priority Right of First Refusal of Holding Subsidiary and Related Transactions." This
pertained to the transfer of a 20% equity stake in Zhejiang Wisualarm Technology Co., Ltd. (hereinafter referred to as
Wisualarm Technology) by its shareholder, Zhejiang Huashi Investment Management Co., Ltd., to the Wisualarm
Technology Employee Shareholding Platform and core management. The Company's board of directors agreed to
waive the aforementioned equity stake's priority right of first refusal.
4. Additionally, on April 7, 2023, the Company convened both the 41st meeting of the 7th board of directors and the
28th meeting of the 7th board of supervisors. At these meetings, during which the "Proposal on Implementing Equity
Incentives for Holding Subsidiaries and Related Transactions" was deliberated and approved. It was agreed to
implement equity incentives for certain directors, supervisors, executives, and core employees of Hangzhou Huacheng
Network Technology Co., Ltd. (hereinafter referred to as "Huacheng Network") through a capital increase. Among
these, director Zhao Yuning, supervisor Zheng Jieping, and senior executives Liu Ming, Zhu Jiantang, Li Zhijie, Xu
Zhicheng, Wu Jian, Song Ke, and Xu Qiaofen, collectively increased Huacheng Network's capital by RMB
7,881,049.75 yuan (leading to an additional registered capital of RMB 2,236,316 yuan). Following the completion of
this equity incentive implementation, the Company's equity stake in Huacheng Network changed from 51.00% to
44.61%, while Huacheng Network continues to be a holding subsidiary within the consolidated financial statements of
the Company.
5. On June 25, 2023, the Company convened the 45th meeting of the 7th board of directors and the 32nd meeting of
the 7th board of supervisors. During the meetings, the "Proposal on Capital Increase for Holding Subsidiaries,
Implementation of Equity Incentives, and Related Transactions" was deliberated and approved. The Company agreed
to increase its investment in Zhejiang Huagan Technology Co., Ltd. (hereinafter referred to as "Huagan Technology")
by valuing the assets of the thermal imaging business asset group at RMB 539,864,700 yuan and injecting the
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
business into Huagan Technology, increasing the registered capital of Huagan Technology by RMB 2,81,091,690 yuan.
Simultaneously, Huagan Technology incentivized certain directors, supervisors, executives, core employees, and their
core management team through a capital increase, priced at RMB 1 yuan per share.
6. On October 26, 2023, the Company held the 3rd meeting of the 8th board of directors and convened the third
extraordinary general meeting of shareholders of 2023 on November 6, 2023. The "Proposal on Transfer of Equity in
the Invested Company and Related Transactions" was deliberated and approved. The Company agreed to transfer 90
million shares (of which 45 million shares are "fully tradable" H shares and the other 45 million shares are domestic
shares) of Zhejiang Leapmotor Technology Co., Ltd. (hereinafter referred to as "Leapmotor") to STELLANTIS N.V. at a
price of HK$3,492.90 million. In November 2023, the Company completed the delivery of the fully tradable H shares
and domestic shares of Leapmotor involved in this transaction to STELLANTIS N.V. as agreed, and the Company no
longer holds any shares of Leapmotor.
Website for disclosing the interim report on significant related-party transactions
Announcement name Disclosure date Website for the disclosure
Announcement on the Capital Increase by
Certain Senior Management and Core
Juchao Information Network
Employees of the Company and Related February 18, 2023
http://www.cninfo.com.cn/
Transactions for the Planned Spin-off
Subsidiary
Announcement on Increasing Capital and
Juchao Information Network
Shares of Holding Subsidiaries and Introducing March 21, 2023
http://www.cninfo.com.cn/
Investors, as well as Related Transactions
Announcement on Waiving the Priority Right of
Juchao Information Network
First Refusal of Holding Subsidiary and April 8, 2023
http://www.cninfo.com.cn/
Related Transactions
Announcement on Implementing Equity
Juchao Information Network
Incentives for Holding Subsidiaries and April 8, 2023
http://www.cninfo.com.cn/
Related Transactions
Announcement on Capital Increase for Holding
Juchao Information Network
Subsidiaries, Implementation of Equity June 27, 2023
http://www.cninfo.com.cn/
Incentives, and Related Transactions
Announcement on Transfer of Equity in the Juchao Information Network
October 26, 2023
Invested Company and Related Transactions http://www.cninfo.com.cn/
XV. Significant Contracts and Performance
1. Matters on trusteeship, contracting, and leasehold
(1) Matters on trusteeship
□ Applicable Not applicable
No such case as custody during the reporting period.
(2) Contracting
□ Applicable Not applicable
No such case as contracting during the reporting period.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(3) Leasing
Applicable □ Not applicable
Explanations on leases
During the reporting period, some of the Company's own real estate properties were used for rental, and there are no
other leases of major property except for the leased real estate property used for office, warehouse, and production
workshops.
Cases that brought the profit and loss accounted for more than 10% of the Company's total profit during the reporting
period
□ Applicable Not applicable
No such leases that brought the profit and loss accounted for more than 10% of the Company's total profit during the
reporting period.
2. Significant guarantees
Applicable □ Not applicable
Unit: RMB ten thousand
External guarantees from the Company and its subsidiaries (excluding guarantees to the subsidiaries)
Guar
Announc
antee
ement Actua
for
date of l Actual Due
Guarantee Type of relate
Guaranteed party disclosur occur guarantee Term of guarantee or
amount guarantee d
e of the rence amount not
partie
guarante date
s or
e cap
not
Total amount of
Total amount of guarantees
guarantees actually
approved during the reporting
occurred during the
period (A1)
reporting period (A2)
Total amount of guarantees Total balance of
approved by the end of the guarantees at the end of
reporting period (A3) the reporting period (A4)
Company's guarantees to subsidiaries
Guar
Announc
antee
ement Actua
for
date of l Actual Due
Guarantee Type of relate
Guaranteed party disclosur occur guarantee Term of guarantee or
amount guarantee d
e of the rence amount not
partie
guarante date
s or
e cap
not
Two years after
Augu Joint
the maturity of the
st 12, 60,000.00 liability Yes No
debts in the
Zhejiang Dahua 2020 guarantee
April 28, master contract
Vision Technology 840,000.00
2023 Two years after
Co., Ltd. Augu Joint
the maturity of the
st 18, 33,000.00 liability Yes No
debts in the
2020 guarantee
master contract
178
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Augu Joint From August 1,
st 1, 3,500.00 liability 2021 to July 31, Yes No
2020 guarantee 2023
Septe Three years after
Joint
mber the maturity of the
90,000.00 liability Yes No
27, debts in the
guarantee
2021 master contract
Three years after
June Joint
the maturity of the
10, 30,000.00 liability Yes No
debts in the
2022 guarantee
master contract
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 20,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
credit extension
period
Three years after
July Joint
the maturity of the
25, 35,000.00 liability Yes No
debts in the
2022 guarantee
master contract
From the effective
date of the letter
of commitment
until three years
June Joint after the maturity
9， 20,000.00 liability date of each bill Yes No
2023 guarantee discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Two years after
Octob Joint
the maturity of the
er 13, 22,000.00 liability No No
debts in the
2017 guarantee
master contract
Septe Two years after
28,330.80 Joint
mber the maturity of the
( US$ 40 liability No No
21, debts in the
million) guarantee
2018 master contract
April Joint
From April 7, 2020
7, 53,000.00 liability No No
to March 31, 2024
2020 guarantee
Septe Five years upon
Joint
mber expiration of debt
30,000.00 liability No No
1, period of master
guarantee
2020 contract
Three years after
Febru Joint
the maturity of the
ary 4, 100,000.00 liability No No
debts in the
2021 guarantee
master contract
Three years after
July Joint
the maturity of the
26, 44,000.00 liability No No
debts in the
2021 guarantee
master contract
Octob Joint Three years after
er 20, 20,000.00 liability the maturity of the No No
2021 guarantee debts in the
179
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
master contract
Three years after
July Joint
the maturity of the
22, 20,000.00 liability No No
debts in the
2022 guarantee
master contract
Septe From September
Joint
mber 19, 2022 to
60,000.00 liability No No
19, September 18,
guarantee
2022 2024
From the effective
date of the
guarantee until
three years after
the maturity date
of each loan or
other financing
under the "Credit
Agreement," or
the maturity date
of accounts
receivable rights
acquired by the
June Joint
Hangzhou Branch
9， 40,000.00 liability No No
of China
2023 guarantee
Merchants Bank,
or the date of
each advance
payment. In the
event of any
specific credit
extension, the
guarantee period
shall extend until
three years after
the expiration of
the extension
period.
The guarantee
period extends to
three years after
June the maturity date
Joint
of each bill
25， 20,000.00 liability No No
discounted by the
2023 guarantee
Hangzhou Branch
of China
Merchants Bank in
the credit period.
From the date of
expiration of each
individual main
debt obligation
until three years
July Joint
after the expiration
24, 40,000.00 liability No No
of the
2023 guarantee
performance term
of all main debt
obligations under
the entire main
contract
From the effective
date of the
July Joint "Maximum
25, 50,000.00 liability Guarantee No No
2023 guarantee Contract" until
three years after
the expiration of
180
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
the performance
term of each debt
under the credit
business
agreement
Separately
calculated for
each individual
credit facility
arranged by
Dahua Technology
for the debtor, i.e.
from the date of
July Joint
signing the main
26, 90,000.00 liability No No
contract for the
2023 guarantee
individual credit
facility until three
years after the
expiration of the
performance term
of the debtor
under that main
contract.
Three years
starting from the
July Joint expiration of the
26, 33,000.00 liability performance term No No
2023 guarantee of the debtor as
stipulated in the
main debt contract
Three years
starting from the
day following the
Nove promise by the
Joint
mber Qingchun Branch
20,000.00 liability No No
20, of the Industrial
guarantee
2021 and Commercial
Bank of China to
make external
payment
Nove Three years after
Joint
mber the maturity of the
20,000.00 liability Yes No
10, debts in the
guarantee
2021 master contract
Marc Joint From March 25,
h 25, 8,000.00 liability 2022 to December Yes No
2022 guarantee 31, 2023
One years upon
April 42,496.20 Joint
expiration of debt
29, (US$ 60 liability Yes No
period of master
2022 million) guarantee
contract
One years upon
April Joint
expiration of debt
Zhejiang Dahua April 28, 29, 1,000.00 liability Yes No
270,000.00 period of master
Zhilian Co., Ltd. 2023 2022 guarantee
contract
May 38,954.85 Joint From May 14,
14, (US$ 55 liability 2022 to May 14, Yes No
2022 million) guarantee 2023
Three years after
June Joint
the maturity of the
10, 16,000.00 liability Yes No
debts in the
2022 guarantee
master contract
From effective
June Joint date of the
10, 16,000.00 liability Commitment Yes No
2022 guarantee Letter to three
years after the
181
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
maturity date of
each note
discounted by the
China Merchants
Bank within the
credit extension
period
Nove
15,581.94 Joint
mber 2022.11.16-
(US$ 22 liability Yes No
16, 2023.05.14
million) guarantee
2022
From the effective
date of the letter
of commitment
until three years
June Joint after the maturity
9, 16,000.00 liability date of each bill Yes No
2023 guarantee discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Septe Two years after
Joint
mber the maturity of the
30,000.00 liability No No
24, debts in the
guarantee
2020 master contract
Three years after
July Joint
the maturity of the
26, 16,500.00 liability No No
debts in the
2021 guarantee
master contract
Dece
3,541.35 Joint From December
mber
(US$ 5 liability 3, 2021 to No No
3,
million) guarantee December 2, 2024
2021
Augu Joint August 25, 2022
st 25, 20,000.00 liability to August 25, No No
2022 guarantee 2025
Septe From September
Joint
mber 19, 2022 to
15,000.00 liability No No
19, September 18,
guarantee
2022 2024
From the effective
date of the
guarantee until
three years after
the maturity date
of each loan or
other financing
under the "Credit
Agreement," or
the maturity date
of accounts
receivable rights
June Joint
acquired by the
9, 16,000.00 liability No No
Hangzhou Branch
2023 guarantee
of China
Merchants Bank,
or the date of
each advance
payment. In the
event of any
specific credit
extension, the
guarantee period
shall extend until
three years after
the expiration of
182
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
the extension
period.
June Joint
June 19, 2023 to
19, 12,000.00 liability No No
June 18, 2024
2023 guarantee
June Joint
June 19, 2023 to
19, 35,000.00 liability No No
June 18, 2024
2023 guarantee
July 8,853.38 Joint
July 13, 2023 to
13, (US$ 12.5 liability No No
July 12, 2024
2023 million) guarantee
From the date of
expiration of each
individual main
debt obligation
until three years
July Joint
after the expiration
24, 50,000.00 liability No No
of the
2023 guarantee
performance term
of all main debt
obligations under
the entire main
contract
Nove Three years after
Joint
mber the maturity of the
6,000.00 liability Yes No
10, debts in the
guarantee
2021 master contract
Three years after
June Joint
the maturity of the
10, 4,000.00 liability Yes No
debts in the
2022 guarantee
master contract
From effective
Zhejiang Dahua date of the
System April 28, Commitment
30,000.00
Engineering Co., 2023 Letter to three
Ltd. years after the
June Joint
maturity date of
10, 4,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
credit extension
period
July Joint Three years after
5,000.00 Yes No
25, liability the maturity of the
183
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2022 guarantee debts in the
master contract
Two years after
Augu Joint
the maturity of the
st 30, 1,000.00 liability No No
debts in the
2019 guarantee
master contract
Augu Joint August 25, 2022
st 25, 500.00 liability to August 25, No No
2022 guarantee 2025
From the effective
date of the
guarantee until
three years after
the maturity date
of each loan or
other financing
under the "Credit
Agreement," or
the maturity date
of accounts
receivable rights
acquired by the
June Joint
Hangzhou Branch
9, 4,000.00 liability No No
of China
2023 guarantee
Merchants Bank,
or the date of
each advance
payment. In the
event of any
specific credit
extension, the
guarantee period
shall extend until
three years after
the expiration of
the extension
period.
From the effective
date of the
"Maximum
Guarantee
Contract" until
July Joint
three years after
25, 5,000.00 liability No No
the expiration of
2023 guarantee
the performance
term of each debt
under the credit
business
agreement
One year from the
date of signing the
project contract or
Septe
Joint upon the stable
mber
160.21 liability operation of the No No
11,
guarantee system for six
2023
months
(whichever comes
later)
Marc 1,416.54 Joint
March 25, 2022 to
h 25, (US$ 2 liability Yes No
March 25, 2023
Dahua Technology April 28, 2022 million) guarantee
60,000.00
(HK) Limited 2023 April 1,416.54 Joint
April 21, 2023 to
21, (US$ 2 liability No No
April 21, 2024
2023 million) guarantee
DAHUA Septe 708.27 Joint September 1,
April 28,
TECHNOLOGY 8,000.00 mber (US$ 1 liability 2021 to December Yes No
2023
MEXICO S.A. DE 1, million) guarantee 1, 2023
184
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
C.V 2021
Octob 3,541.35 Joint October 21, 2022
er 21, (US$ 5 liability to October 20, Yes No
2022 million) guarantee 2023
Octob 708.27 Joint October 18, 2023
er 18, (US$ 1 liability to October 20, No No
2023 million) guarantee 2024
Two years after
Augu Joint
the maturity of the
st 30, 5,000.00 liability No No
debts in the
2019 guarantee
master contract
Hangzhou
Three years after
Huacheng Network April 28, July Joint
17,000.00 the maturity of the
Technology Co., 2023 26, 5,500.00 liability No No
debts in the
Ltd. 2021 guarantee
master contract
Augu Joint August 25, 2022
st 25, 6,500.00 liability to August 25, No No
2022 guarantee 2025
August 12, 2020
Augu 1,048.77 Joint
Dahua Technology April 28, to the date of
2,000.00 st 12, (GBP 1.16 liability No No
UK Limited 2023 signing
2020 million) guarantee
termination notice
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 1,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
credit extension
period
From the effective
date of the letter
of commitment
until three years
June Joint after the maturity
Zhejiang Huayixin 9, 1,000.00 liability date of each bill Yes No
April 28,
Technology Co., 4,500.00 2023 guarantee discounted by the
2023
Ltd. Hangzhou Branch
of China
Merchants Bank in
the credit period.
Three years after
April Joint
the maturity of the
29, 1,000.00 liability No No
debts in the
2022 guarantee
master contract
Three years after
May 1,416.54 Joint
the maturity of the
16, (US$ 2 liability No No
debts in the
2022 million) guarantee
master contract
Augu Joint August 25, 2022
st 25, 200.00 liability to August 25, No No
2022 guarantee 2025
Octob Joint October 21, 2022
er 21, 800.00 liability to September 18, No No
2022 guarantee 2024
From effective
date of the
Zhejiang Fengshi June Joint
April 28, Commitment
Technology Co., 15,000.00 10, 2,000.00 liability Yes No
2023 Letter to three
Ltd. 2022 guarantee
years after the
maturity date of
185
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
each note
discounted by the
China Merchants
Bank within the
credit extension
period
From the effective
date of the letter
of commitment
until three years
June Joint after the maturity
9, 2,000.00 liability date of each bill Yes No
2023 guarantee discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Augu Joint August 25, 2022
st 25, 10,000.00 liability to August 25, No No
2022 guarantee 2025
Octob Joint October 21, 2022
er 21, 2,000.00 liability to September 18, No No
2022 guarantee 2024
The guarantee
period extends to
three years after
the maturity date
June Joint
of each bill
25, 2,000.00 liability No No
discounted by the
2023 guarantee
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Three years after
Octob Joint
the maturity of the
er 20, 1,000.00 liability Yes No
debts in the
2021 guarantee
master contract
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 1,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
Jiangsu Huaruipin credit extension
April 28,
Technology Co. 4,500.00 period
2023
Ltd. From the effective
date of the letter
of commitment
until three years
June Joint after the maturity
9, 1,000.00 liability date of each bill Yes No
2023 guarantee discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Augu Joint August 25, 2022
st 25, 800.00 liability to August 25, No No
2022 guarantee 2025
186
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Octob Joint October 21, 2022
er 21, 1,500.00 liability to September 18, No No
2022 guarantee 2024
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 1,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
credit extension
period
From the effective
Zhejiang Huaxiao date of the letter
April 28,
Technology Co., 2,000.00 of commitment
2023
Ltd. until three years
June Joint after the maturity
9, 1,000.00 liability date of each bill Yes No
2023 guarantee discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Augu Joint August 25, 2022
st 25, 200.00 liability to August 25, No No
2022 guarantee 2025
Octob Joint October 21, 2022
er 21, 800.00 liability to September 18, No No
2022 guarantee 2024
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 5,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
credit extension
period
From the effective
date of the letter
of commitment
Xi'an Dahua Zhilian until three years
April 28,
Technology Co., 20,000.00 June Joint after the maturity
2023
Ltd. 9, 5,000.00 liability date of each bill Yes No
2023 guarantee discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Augu Joint August 25, 2022
st 25, 10,000.00 liability to August 25, No No
2022 guarantee 2025
Octob Joint October 21, 2022
er 21, 2,500.00 liability to September 18, No No
2022 guarantee 2024
The guarantee
June Joint
period extends to
25, 5,000.00 liability No No
three years after
2023 guarantee
the maturity date
187
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
of each bill
discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 5,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
credit extension
period
From the effective
date of the letter
of commitment
until three years
Zhengzhou Dahua June Joint after the maturity
Zhian Information April 28, 9, 5,000.00 liability date of each bill Yes No
10,000.00
Technology Co., 2023 2023 guarantee discounted by the
Ltd. Hangzhou Branch
of China
Merchants Bank in
the credit period.
Augu Joint August 25, 2022
st 25, 3,000.00 liability to August 25, No No
2022 guarantee 2025
The guarantee
period extends to
three years after
the maturity date
June Joint
of each bill
25, 5,000.00 liability No No
discounted by the
2023 guarantee
Hangzhou Branch
of China
Merchants Bank in
the credit period.
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 10,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
Chengdu Dahua
credit extension
Zhian Information April 28,
15,000.00 period
Technology Service 2023
From the effective
Co., Ltd.
date of the letter
of commitment
until three years
June Joint after the maturity
9, 8,000.00 liability date of each bill Yes No
2023 guarantee discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
188
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
The guarantee
period extends to
three years after
the maturity date
June Joint
of each bill
25, 8,000.00 liability No No
discounted by the
2023 guarantee
Hangzhou Branch
of China
Merchants Bank in
the credit period.
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 1,000.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
credit extension
period
From the effective
date of the letter
of commitment
until three years
June Joint after the maturity
9, 1,000.00 liability date of each bill Yes No
Changsha Dahua 2023 guarantee discounted by the
April 28,
Technology Co., 8,000.00 Hangzhou Branch
2023
Ltd. of China
Merchants Bank in
the credit period.
Augu Joint August 25, 2022
st 25, 3,000.00 liability to August 25, No No
2022 guarantee 2025
Octob Joint October 21, 2022
er 21, 2,000.00 liability to September 18, No No
2022 guarantee 2024
The guarantee
period extends to
three years after
the maturity date
June Joint
of each bill
25, 1,000.00 liability No No
discounted by the
2023 guarantee
Hangzhou Branch
of China
Merchants Bank in
the credit period.
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 500.00 liability Yes No
each note
2022 guarantee
discounted by the
Zhejiang Pixfra
April 28, China Merchants
Technology Co., 1,000.00
2023 Bank within the
Ltd.
credit extension
period
From the effective
date of the letter
June Joint
of commitment
9, 500.00 liability Yes No
until three years
2023 guarantee
after the maturity
date of each bill
189
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Augu Joint August 25, 2022
st 25, 500.00 liability to August 25, No No
2022 guarantee 2025
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
Zhejiang Huafei 10, 500.00 liability Yes No
each note
Intelligent April 28, 2022 guarantee
700.00 discounted by the
Technology CO., 2023
China Merchants
LTD.
Bank within the
credit extension
period
Augu Joint August 25, 2022
st 25, 200.00 liability to August 25, No No
2022 guarantee 2025
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 500.00 liability Yes No
each note
2022 guarantee
discounted by the
China Merchants
Bank within the
credit extension
period
Zhejiang Huajian
April 28, From the effective
Technology Co., 1,000.00
2023 date of the letter
Ltd.
of commitment
until three years
June Joint after the maturity
9, 500.00 liability date of each bill Yes No
2023 guarantee discounted by the
Hangzhou Branch
of China
Merchants Bank in
the credit period.
Augu Joint August 25, 2022
st 25, 200.00 liability to August 25, No No
2022 guarantee 2025
From effective
date of the
Commitment
Letter to three
years after the
June Joint
maturity date of
10, 500.00 liability Yes No
Hangzhou Xiaohua each note
April 28, 2022 guarantee
Technology CO., 700.00 discounted by the
2023
LTD. China Merchants
Bank within the
credit extension
period
Augu Joint August 25, 2022
st 25, 200.00 liability to August 25, No No
2022 guarantee 2025
190
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Zhejiang Dahua
Augu Joint August 25, 2022
Security Network April 28,
500.00 st 25, 500.00 liability to August 25, No No
Operation Service 2023
2022 guarantee 2025
Co., Ltd.
Dece
114.50 Joint From December
Dahua Technology April 28, mber
700.00 (EUR liability 7, 2023 to August No No
France SAS 2023 7,
145,700) guarantee 31, 2029
2023
Zhejiang Dahua
April 28,
Jinzhi Technology 500.00 No such case during the reporting period
2023
Co., Ltd.
Guangxi Dahua
Information April 28,
500.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Guangxi Dahua
April 28,
Technology Co., 300.00 No such case during the reporting period
2023
Ltd.
Anhui Dahua
Zhilian Information April 28,
800.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Anhui Dahua
Zhishu Information April 28,
800.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Chengdu Dahua
Zhilian Information April 28,
800.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Chengdu Dahua
Zhishu Information April 28,
800.00 No such case during the reporting period
Technology Service 2023
Co., Ltd.
Chengdu Huishan
Smart Network April 28,
800.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Chengdu
Zhichuang Yunshu April 28,
800.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Hangzhou Fuyang
April 28,
Hua'ao Technology 500.00 No such case during the reporting period
2023
Co., Ltd.
Henan Dahua
Zhilian Information April 28,
800.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Hunan Dahua
Zhilong Information April 28,
500.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Tianjin Dahua
Information April 28,
500.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Tianjin Huajian
April 28,
Technology Co., 200.00 No such case during the reporting period
2023
Ltd.
Yiwu Huaxi
April 28,
Technology Co., 500.00 No such case during the reporting period
2023
Ltd.
Zhejiang Dahua April 28,
500.00 No such case during the reporting period
Intelligent IoT 2023
191
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Operation Service
Co., Ltd.
Zhejiang Huakong April 28,
500.00 No such case during the reporting period
Software Co., Ltd. 2023
Dahua Technology April 28,
15,000.00 No such case during the reporting period
USA Inc. 2023
Dahua Technology April 28,
100.00 No such case during the reporting period
Japan LLC 2023
DAHUA EUROPE April 28,
10,000.00 No such case during the reporting period
B.V. 2023
Dahua Technology April 28,
200.00 No such case during the reporting period
Singapore Pte.Ltd. 2023
Dahua Technology April 28,
1,000.00 No such case during the reporting period
Poland Sp.Zo.O. 2023
Dahua Technology April 28,
1,000.00 No such case during the reporting period
Hungary Kft 2023
Dahua Technology
April 28,
India Private 2,000.00 No such case during the reporting period
2023
Limited
DAHUA
TECHNOLOGY
BRASIL
COMRCIO E April 28,
1,000.00 No such case during the reporting period
SERVIOS EM 2023
SEGURANA
ELETRNICA
LTDA
Dahua Technology April 28,
1,000.00 No such case during the reporting period
Middle East FZE 2023
Dahua Technology April 28,
1,000.00 No such case during the reporting period
Perú S.A.C 2023
Dahua Technology April 28,
500.00 No such case during the reporting period
Australia PTY LTD 2023
Dahua Technology
April 28,
South Africa 500.00 No such case during the reporting period
2023
Proprietary Limited
Dahua Technology April 28,
1,000.00 No such case during the reporting period
Canada INC. 2023
Dahua Guvenlik
April 28,
Teknolojileri Sanayi 1,000.00 No such case during the reporting period
2023
ve Ticaret A.S.
Dahua Technology April 28,
100.00 No such case during the reporting period
SRB d.o.o. 2023
Dahua Technology April 28,
100.00 No such case during the reporting period
Bulgaria EOOD 2023
April 28,
Dahua Iberia, S.L. 100.00 No such case during the reporting period
2023
Dahua Security
April 28,
Malaysia SDN. 100.00 No such case during the reporting period
2023
BHD.
Dahua Technology April 28,
100.00 No such case during the reporting period
Kazakhstan LLP 2023
PT. Dahua Vision
April 28,
Technology 100.00 No such case during the reporting period
2023
Indonesia
Dahua Technology
April 28,
Korea Company 100.00 No such case during the reporting period
2023
Limited
Dahua Technology April 28,
100.00 No such case during the reporting period
S.R.L. 2023
192
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
April 28,
Dahua Vision LLc 500.00 No such case during the reporting period
2023
Dahua Technology
April 28,
New Zealand 100.00 No such case during the reporting period
2023
Limited
Dahua Technology April 28,
300.00 No such case during the reporting period
GmbH 2023
Dahua Technology April 28,
500.00 No such case during the reporting period
Colombia S.A.S. 2023
Dahua Technology April 28,
100.00 No such case during the reporting period
Panama S.A. 2023
Dahua Technology April 28,
100.00 No such case during the reporting period
Chile SpA 2023
Dahua Technology
April 28,
Tunisia Limited 100.00 No such case during the reporting period
2023
Liability Company
Dahua Technology April 28,
100.00 No such case during the reporting period
Kenya Limited 2023
Dahua Technology
April 28,
Pakistan (private) 100.00 No such case during the reporting period
2023
Limited
Dahua Technology April 28,
100.00 No such case during the reporting period
Morocco SARL 2023
Dahua Argentina April 28,
100.00 No such case during the reporting period
S.A. 2023
Dahua Technology April 28,
100.00 No such case during the reporting period
Czech s.r.o. 2023
Dahua Technology April 28,
100.00 No such case during the reporting period
Denmark ApS 2023
Dahua
April 28,
Technology(Thailan 100.00 No such case during the reporting period
2023
d) Co.,LTD.
Dahua Technology April 28,
100.00 No such case during the reporting period
Italy S.R.L. 2023
Luoyang Dahua
Zhiyu Information April 28,
500.00 No such case during the reporting period
Technology Co., 2023
Ltd.
Dahua Technology April 28,
100.00 No such case during the reporting period
Belgium B.V. 2023
VISMEXTECH
April 28,
DHM SERVICIOS, 100.00 No such case during the reporting period
2023
S.A. DE C.V.
Total amount of
Total amount of guarantees to guarantees to
subsidiaries approved during 1,360,000.00 subsidiaries actually 508,252.90
the reporting period (B1) occurred during the
reporting period (B2)
Total balance of
Total amount of guarantees to guarantees actually paid
subsidiaries approved by the 1,360,000.00 to subsidiaries at the end 969,990.35
end of the reporting period (B3) of the reporting period
(B4)
Subsidiaries' guarantees to subsidiaries
Guar
Announc
antee
ement Actua
for
date of l Actual Due
Guarantee Type of relate
Guaranteed party disclosur occur guarantee Term of guarantee or
amount guarantee d
e of the rence amount not
partie
guarante date
s or
e cap
not
193
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Total amount of
Total amount of guarantees to guarantees to
subsidiaries approved during subsidiaries actually
the reporting period (C1) occurred during the
reporting period (C2)
Total of actual guarantee
Total amount of guarantees to
balance for subsidiaries
subsidiaries approved at the
at the end of the
end of the reporting period (C3)
reporting period (C4)
Total amount of company guarantees (namely sum of the previous three major items)
Total amount of
Total amount of guarantees guarantees actually
approved during the reporting 1,360,000.00 occurred during the 508,252.90
period (A1+B1+C1) reporting period
(A2+B2+C2)
Total balance of
Total amount of guarantees guarantees actually paid
approved by the end of the 1,360,000.00 at the end of the 969,990.35
reporting period (A3+B3+C3) reporting period
(A4+B4+C4)
Total amount of actual guarantees (A4+B4+C4) as a
27.94%
percentage of the Company's net assets
Including:
Balance of guarantees to the shareholders, actual
controllers and their related parties (D)
Balance of debt guarantees directly or indirectly offered
to guaranteed objects with asset-liability ratio 924,330.14
exceeding 70% (E)
Amount of the guarantees with the total volume
exceeding 50% of the net assets (F)
Total amount of the above three guarantees (D+E+F) 924,330.14
Notes on unexpired guarantees with guarantee
responsibilities occurred or possible joint liabilities
within the reporting period (if any)
Notes on providing external guarantees in violation of
specified procedures (if any)
Explanation of guarantee using a composite method
N/A
3. Entrusting Others to Manage Cash Assets
(1) Entrusted Financing
Applicable □ Not applicable
Entrusted financing during the reporting period
Unit: RMB ten thousand
Impairment
Overdue amount accrued
Entrusted Unexpired
Specific type Funding source outstanding for overdue
amount balance
amount financial
management
Financial Equity Fund 50,000.00 100,000.00
194
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
products of
securities
companies
Total 50,000.00 100,000.00
Specific matters on high-risk entrusted capital management with a large amount for a single item, or with low security
and poor liquidity
Applicable □ Not applicable
Unit: RMB ten thousand
Tr Act Wh
us ual ethe
Na te Act reco Am r
me e ual very ount ther Item
Ref Wh
of or profi of of e over
Pay ere ethe
trust ga t profi prov will vie
men nce Exp r it
ee ni St and ts isio be w
t for ecte pas
org za Capit ar loss and n entr and
Pro Termi Investme dete ann d sed
aniz tio Am al tin duri loss for uste relat
duct nation nt rmin uali ear the
atio n ount Sourc g ng es imp d ed
type date direction atio zed ning lega
n (o e da the duri airm fina que
n rate s (if l
(or r te rep ng ent ncia ry
met of any) proc
nam tr ortin the accr l inde
hod retu edu
e of us g rep ued plan x (if
rn res
trust te peri ortin (if in any)
ee) e) od g any) the
ty peri futu
pe od re
Private
Pay
equity
men
F fund
Ass t of
Guo eb products,
et prin
sen S ru fixed
Man cipa
Sec ec 100, Equit ar Febru income Une
age l 181.
uriti uri 000. y y ary 9, assets, xpir Yes No
men and 96
es tie 00 Fund 10 2031 equity ed
t inco
co., s , assets,
Pla me
Ltd. 20 public
n at
21 equity
mat
hybrid
urity
funds
100,
181.
Total 000. -- -- -- -- -- -- -- -- -- --
96
00
Cases of entrusted financing expected to be unable to recover the principal or cases that may result in impairment
□ Applicable Not applicable
(2) Entrusted Loans
□ Applicable Not applicable
No such case as entrusted loan during the reporting period.
195
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
4. Other Significant Contracts
□ Applicable Not applicable
No such case as other significant contract during the reporting period.
XVI. Explanations on Other Significant Matters
Applicable □ Not applicable
1. Repurchase of company shares through centralized competitive bidding trading
On August 25, 2023, the Company held its 46th meeting of the 7th board of directors, during which the "Proposal on
the Repurchase of Shares" was deliberated and approved. The Company planned to use its own funds to repurchase
a portion of its shares through centralized competitive bidding. This repurchase was intended for implementing equity
incentives or an employee stock ownership plan. The total amount allocated for the repurchase would be no less than
RMB 400 million yuan and no more than RMB 600 million yuan. The repurchase price per share would not exceed
RMB 31.71.
As of October 27, 2023, the Company had repurchased 19,819,601 shares through its designated securities account
via centralized competitive bidding, accounting for 0.60% of the Company's total share capital. The highest transaction
price was RMB 21.70 per share, and the lowest was RMB 19.70 yuan per share. The total transaction amount was
RMB 419,959,211.27 yuan (excluding transaction fees). This share repurchase plan has been completed.
2. Equity distribution for the first three quarters
On October 21, 2023 and November 6, 2023, the Company convened the 2nd meeting of the 8th board of directors
and the 3rd extraordinary general meeting of shareholders for the year 2023, respectively. Both meetings deliberated
and approved the "Profit Distribution Proposal for the First Three Quarters of 2023." Based on a total share capital of
3,294,468,990 shares, excluding the repurchased 19,819,601 shares, resulting in a base of 3,274,649,389 shares, the
Company proposed to distribute cash dividends of RMB 3.101383 yuan per 10 shares (including tax) to all
shareholders. The total cash dividend amount is RMB 1,015,594,194.60 yuan. No bonus shares were issued, and no
increase in share capital from reserves was carried out. The remaining undistributed profits were retained for future
distribution. This equity distribution has been fully implemented.
The announcements above have been disclosed through the designated media Securities Times and Juchao
Information Network (http://www.cninfo.com.cn).
XVII. Significant Events of the Company’s Subsidiaries
□ Applicable Not applicable
196
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section VII Changes in Shares and Information about
Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before the change Increase or decrease in the change (+, -) After the change
Shares
Shares converte
Percenta Bonus Percenta
Quantity newly d from Others Subtotal Quantity
ge shares ge
issued capital
reserves
I. Shares
with -
1,075,05 293,103, 260,405, 1,335,45
limited 35.44% 0 0 32,697,6 40.54%
3,850 400 706 9,556
sales 94
condition
1.
Shares
0 0.00% 0 0 0 0 0 0 0.00%
held by
state
2.
Shares
held by
293,103, 293,103, 293,103,
state- 0 0.00% 0 0 0 8.90%
400 400.00 400
owned
legal
persons
3.
- -
Other 1,075,05 1,042,35
35.44% 0 0 0 32,697,6 32,697,6 31.64%
domestic 3,850 6,156
94 94
shares
Of
which:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
domestic
legal
persons
Shar
es held
- -
by 1,075,05 1,042,35
35.44% 0 0 0 32,697,6 32,697,6 31.64%
domestic 3,850 6,156
94 94
natural
persons
4.
0 0.00% 0 0 0 0 0 0 0.00%
Foreign
197
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
shares
Of
which:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
foreign
legal
persons
Shar
es held
by
0 0.00% 0 0 0 0 0 0 0.00%
foreign
natural
persons
II.
Shares
1,958,10 1,959,00
without 64.56% 0 0 0 902,114 902,114 59.46%
7,320 9,434
restrictio
ns
1.
RMB 1,958,10 1,959,00
64.56% 0 0 0 902,114 902,114 59.46%
ordinary 7,320 9,434
shares
2.
Foreign
shares 0 0.00% 0 0 0 0 0 0 0.00%
listed in
China
3.
Foreign
shares
0 0.00% 0 0 0 0 0 0 0.00%
listed in
foreign
countries
4.
0 0.00% 0 0 0 0 0 0 0.00%
Other
-
3,033,16 293,103, 261,307, 3,294,46
III. Total 100.00% 0 0 31,795,5 100.00%
1,170 400 820 8,990
80
Reasons for changes in shares
Applicable □ Not applicable
1. During the reporting period, the Company successfully completed the issuance of shares to China Mobile
Communications Group Co., Ltd. The 293,103,400 shares issued became listed on April 14, 2023.
2. Throughout the reporting period, the Company repurchased and canceled a portion of the restricted shares granted
but not yet unlocked under the 2022 Stock Option and Restricted Stock Incentive Plan. The repurchase involved a
total of 31,795,580 shares.
3. According to relevant regulations, the Company shall lock the shares held by its directors, supervisors and senior
executives through reverification at the beginning of each year and shall lock the shares held by the resigned directors,
supervisors and senior executives in different proportions at different stages based on their resignation dates and
former terms of office.
Approval for changes in shares
198
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Applicable □ Not applicable
1. On April 18, 2022, the Company's application for the issuance of shares to China Mobile Communications Group
Co., Ltd was approved by the Issuance Examination Committee of the China Securities Regulatory Commission
(CSRC). Subsequently, on April 24, 2022, the Company obtained from the CSRC the "Approval for the Non-public
Issuance of Shares by Zhejiang Dahua Technology Co., Ltd." (CSRC Permit [2022] No. 853).
2. The Company's repurchase and cancellation of a portion of the restricted shares under the 2022 Stock Option and
Restricted Stock Incentive Plan have been approved at the 42nd meeting of the 7th Board of Directors and the 29th
meeting of the 7th Board of Supervisors, held on April 27, 2023, and subsequently endorsed at the 2022 Annual
General Meeting held on May 26, 2023.
Transfer for changes in shares
Applicable □ Not applicable
1. During the reporting period, the Company successfully completed the issuance of shares to China Mobile
Communications Group Co., Ltd. The 293,103,400 shares issued became listed on April 14, 2023.
2. Throughout the reporting period, the Company repurchased and canceled a portion of the restricted shares granted
but not yet unlocked under the 2022 Stock Option and Restricted Stock Incentive Plan. The repurchase involved a
total of 31,795,580 shares.
Effects of changes in shares on the basic earnings per share ("EPS"), diluted EPS, net assets per share, attributable to
common shareholders of the Company, and other financial indexes over the last year and last period
Applicable □ Not applicable
During the reporting period, changes in the Company's share capital occurred due to the issuance of shares to specific
parties and the cancellation of some restricted stock repurchases. The impact of these changes on the Company's
basic earnings per share, diluted earnings per share, and net assets per share attributable to ordinary shareholders of
the Company for the most recent year and period can be found in detail in "Section II. VI. Key Accounting Data and
Financial Indicators."
Other contents that the Company considers necessary or are required by the securities regulatory authorities to
disclose
□ Applicable Not applicable
2. Changes in restricted stocks
Applicable □ Not applicable
Unit: share
Number Of Number of Number of Number of
Shares With increased unlocked shares with
Name of Limited Sales shares with shares with limited sales Reasons for Date of
Shareholder Condition At limited sales limited sales condition at limited sales unlocking
The Beginning condition in condition in the end of the
Of The Period current period current period period
Follow
Lock-up relevant
Shares of regulations on
Directors, the
Fu Liquan 767,901,735 0 0 767,901,735
Supervisors, management
and Senior of shares held
Management by directors,
supervisors,
199
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
and senior
management
Issue
China Mobile
restricted
Communicatio
0 293,103,400 0 293,103,400 shares to April 13, 2026
ns Group Co.,
specific
Ltd.
parties
Follow
relevant
Lock-up regulations on
Shares of the
Zhu Directors, management
120,433,117 0 301,500 120,131,617
Jiangming Supervisors, of shares held
and Senior by directors,
Management supervisors,
and senior
management
Follow
relevant
Lock-up regulations on
Shares of the
Directors, management
Chen Ailing 53,447,110 0 0 53,447,110
Supervisors, of shares held
and Senior by directors,
Management supervisors,
and senior
management
Follow
relevant
Lock-up regulations on
Shares of the
Directors, management
Wu Jun 51,860,164 19,500 0 51,879,664
Supervisors, of shares held
and Senior by directors,
Management supervisors,
and senior
management
Follow
relevant
Lock-up
regulations on
Shares and
the
Restricted
management
Shares under
of shares held
Equity
Zhang by directors,
2,710,153 0 1,109,538 1,600,615 Incentive
Xingming supervisors,
Plans for
and senior
Directors,
management,
Supervisors,
as well as
and Senior
equity
Management
incentive
plans
Lock-up Follow
Shares and relevant
Restricted regulations on
Wu Jian 1,401,251 0 246,150 1,155,101 Shares under the
Equity management
Incentive of shares held
Plans for by directors,
200
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Directors, supervisors,
Supervisors, and senior
and Senior management,
Management as well as
equity
incentive
plans
Follow
relevant
Lock-up
regulations on
Shares and
the
Restricted
management
Shares under
of shares held
Equity
by directors,
Zhao Yuning 1,132,750 0 25,900 1,106,850 Incentive
supervisors,
Plans for
and senior
Directors,
management,
Supervisors,
as well as
and Senior
equity
Management
incentive
plans
Follow
relevant
Lock-up regulations on
Shares of the
Directors, management
Chen Yuqing 1,073,963 19,500 0 1,093,463
Supervisors, of shares held
and Senior by directors,
Management supervisors,
and senior
management
Follow
relevant
Lock-up
regulations on
Shares and
the
Restricted
management
Other Shares under
of shares held
executives Equity
by directors,
and equity 75,093,607 0 31,053,606 44,040,001 Incentive
supervisors,
incentive Plans for
and senior
recipients Directors,
management,
Supervisors,
as well as
and Senior
equity
Management
incentive
plans
Total 1,075,053,850 293,142,400 32,736,694 1,335,459,556 -- --
201
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
II. Issuance and listing of securities
1. Securities (excluding preferred share) issued in reporting period
Applicable □ Not applicable
Name of Number of
Issuance Transactio
the stock Quantity approved
Issue price (or Listing n Disclosure Date of
and its of listed
Date interest date terminatio Index Disclosure
derivative issuance transactio
rate) n date
securities ns
Stocks
Juchao
Informatio
March 23, 293,103,4 April 14, 293,103,4 April 12,
DAHUA 17.4 n Network
2023 00 2023 00 2023
Announce
ment
Convertible corporate bonds, separately-traded convertible corporate bonds, corporate bonds
Other derivative securities
Description of the issuance of securities (not including preferred stocks) during the reporting period
According to the approval issued by the China Securities Regulatory Commission in the document titled "Approval for
the Non-public Issuance of Shares by Zhejiang Dahua Technology Co., Ltd." (CSRC Permit [2022] No. 853), the
Company issued 293,103,400 shares to China Mobile Communications Group Co., Ltd. at a price of RMB 17.40 yuan
per share. These shared became listed on April 14, 2023 on Shenzhen Stock Exchange.
2. Explanation on changes in total number of the Company's shares & the structure of
shareholders and the structure of assets and liabilities
Applicable □ Not applicable
1. According to the approval issued by the China Securities Regulatory Commission in document "Approval for the
Non-public Issuance of Shares by Zhejiang Dahua Technology Co., Ltd." (CSRC Permit [2022] No. 853), during the
reporting period, the Company issued 293,103,400 shares to China Mobile Communications Group Co., Ltd., and
these shared were listed on April 14, 2023.
2. Upon approval at the 42nd meeting of the 7th Board of Directors, the 29th meeting of the 7th Board of Supervisors,
and the 2022 Annual General Meeting of Shareholders , the Company repurchased and canceled a portion of the
restricted shares (totaling 31,795,580 shares) held by 4,249 incentive recipients on August 15, 2023.
Following the issuance of the aforementioned shares and the cancellation of restricted shares, the total share capital
of the Company changed to 3,294,468,990 shares.
202
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
3. Existing shares held by internal staff of the Company
□ Applicable Not applicable
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: share
Total
Number of
Total Preferred
number of Sharehold
Total common ers (If
Total number of
Number of sharehold Any)
preferred shareholders
Common ers at the (Refer to
(if any) (refer to Note 8)
Sharehold end of Note 8)
with resumed voting
ers at The 141,936 previous 173,354 Whose 0 0
rights at the end of
End of month Voting
previous month before
The before the Rights
the disclosure date of
Reporting disclosure have been
the annual report
Period date of the Recovere
annual d at the
report End of the
Reporting
Period
Shareholding list of shareholders with over 5% shares or top ten shareholders (excluding shares lent through stock
pledge repos)
Number of Pledges, markings or
Number of Number of
shares freezing
Sharehold shares Changes shares
Name of Nature of held
ing held at the in the held with
Sharehold Sharehold without
Percentag end of the reporting limited State Of
er er limited Quantity
e reporting period sales Shares
sales
period conditions
condition
Domestic
1,023,868, 767,901,7 255,967,2 192,307,6
Fu Liquan Natural 31.08% 0 Pledge
980 35 45 93
Person
China
Mobile State-
Not
Communi owned 293,103,4 293,103,4 293,103,4
8.90% 0 applicable 0
cations Legal 00 00 00
.
Group Person
Co., Ltd.
Domestic Not
Zhu 160,175,4 120,131,6 40,043,87
Natural 4.86% 0 applicable 0
Jiangming 90 17 3
Person .
Domestic
Chen 71,262,81 53,447,11 17,815,70 31,800,00
Natural 2.16% 0 Pledge
Ailing 3 0 3 0
Person
Domestic Not
69,172,88 51,879,66 17,293,22
Wu Jun Natural 2.10% 0 applicable 0
6 4 2
Person .
Hong Overseas 1.95% 64,339,74 - 0 64,339,74 Not 0
203
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Kong Legal 4 93,794,86 4 applicable
Securities Person 4 .
Clearing
Co. Ltd.
National
Not
Social 54,000,00 54,000,00 54,000,00
Others 1.64% 0 applicable 0
Security 0 0 0
.
Fund 103
Domestic
China
Non-state- Not
Securities 39,611,24 39,611,24
owned 1.20% 0 0 applicable 0
Finance 1 1
Legal .
Co., Ltd.
Person
New
China Life
Insurance
Company
Ltd.－
Conventio Not
24,321,73 24,321,73 24,321,73
nal－ Others 0.74% 0 applicable 0
6 6 6
Common .
Insurance
Product-
018L-
CT001
Shenzhen
Agricultur
al Bank of
China Co.,
Ltd.-
China
Internation
al Fund Not
19,853,09 19,853,09 19,853,09
Managem Others 0.60% 0 applicable 0
4 4 4
ent .
Emerging
Power
Hybrid
Securities
Investmen
t Fund
Strategic investors or
general legal entities
becoming top 10 China Mobile Communications Group Co., Ltd. is a strategic investor in the Company and
shareholders as a result has committed not to transfer any subscribed shares of the Company in any way during the
of the placement of new 36 months following the first day of its listing.
shares (if any) (see
Note 3)
Description of the
association relationship Mr. Fu Liquan and Ms. Chen Ailing are husband and wife. The Company Is Unaware Of
or concerted action of Whether Other Shareholders Have Associated Relationship Or Are Persons Acting In
above-mentioned Concert
shareholders
Explanation of the
above shareholders
Not applicable.
involved in
proxy/trustee voting
204
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
rights and abstention
from voting rights
Special note on the
existence of repurchase
special accounts
Not applicable.
among the top 10
shareholders (if any)
(see Note 10)
Shareholding of the top ten shareholders without limited sales condition
Type of shares
Number of shares held without limited sales condition at the end
Name of Shareholder Type of
of the reporting period Quantity
shares
RMB
255,967,2
Fu Liquan 255,967,245 common
45
stock
RMB
Hong Kong Securities 64,339,74
64,339,744 common
Clearing Co. Ltd. 4
stock
RMB
National Social Security 54,000,00
54,000,000 common
Fund 103 0
stock
RMB
40,043,87
Zhu Jiangming 40,043,873 common
3
stock
RMB
China Securities 39,611,24
39,611,241 common
Finance Co., Ltd. 1
stock
New China Life
Insurance Company
RMB
Ltd.－Conventional－ 24,321,73
24,321,736 common
Common Insurance 6
stock
Product－018LCT001
Shenzhen
Agricultural Bank of
China Co., Ltd.- China
RMB
International Fund 19,853,09
19,853,094 common
Management Emerging 4
stock
Power Hybrid Securities
Investment Fund
RMB
17,815,70
Chen Ailing 17,815,703 common
3
stock
RMB
17,293,22
Wu Jun 17,293,222 common
2
stock
RMB
National Social Security 16,362,58
16,362,587 common
Fund 101 7
stock
Explanation on
associated relationship
or persons acting in
Mr. Fu Liquan and Ms. Chen Ailing are husband and wife. The Company Is Unaware Of
concert among top ten
Whether Other Shareholders Have Associated Relationship Or Are Persons Acting In
shareholders without
Concert
limited shares, and
between top ten
shareholders without
205
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
limited shares and top
ten shareholders
Explanation on Top Ten
Common Shareholders’
Participation in
N/A
Securities Margin
Trading (If Any) (see
Note 4)
Special Note Regarding
It is hereby stated that, as of December 31, 2023, the Company's securities repurchase
Repurchase Accounts
account holds 19,819,601 ordinary A shares of the Company, representing 0.60% of the
Among the Top 10
total shares outstanding. As per the requirement, these shares are not included in the list of
Unrestricted
the Company's top 10 unrestricted shareholders.
Shareholders
Participation of the Top Ten Shareholders in Lending out Shares under Stock Pledge Repo Transactions
□ Applicable Not applicable
Changes of the top 10 shareholders compared with the previous period
Applicable □ Not applicable
Unit: share
Changes of the top 10 shareholders compared with at the end of the previous period
The total quantity of shares held in
Newly added to The quantity of shares lent through shareholder's ordinary accounts,
/removed from stock pledge repo transactions at the credit accounts, and shares lent
Name of end of the period and not yet through stock pledge repo
the previous Top
Shareholder (full returned transactions at the end of the period
Ten
name) and not yet returned
Shareholders
List Proportion to Proportion to
Total quantity Total quantity
total shares total shares
China Mobile
Communications Newly added 0 0.00% 293,103,400 8.90%
Group Co., Ltd.
National Social
Security Fund Newly added 0 0.00% 54,000,000 1.64%
103
New China Life
Insurance
Company Ltd.－
Conventional－
Common Newly added 0 0.00% 24,321,736 0.74%
Insurance
Product-018L-
CT001
Shenzhen
Agricultural Bank
of China Co.,
Ltd.- China
International
Fund Newly added 0 0.00% 19,853,094 0.60%
Management
Emerging Power
Hybrid Securities
Investment Fund
China Galaxy
Removed 0 0.00% 35,914,160 1.18%
Securities Co.,
206
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Ltd.
Liu Wenhua Removed 0 0.00% 13,838,281 0.46%
China Life
Insurance
Company Ltd. －
traditional －
Removed 0 0.00% 10,799,739 0.36%
general
insurance
products-005L-
CT001 S.
PICC Life
Insurance
Company
Limited－
Removed 0 0.00% 8,621,950 0.28%
dividends－
dividends of
personal
insurance
Whether the Company's top ten common shareholders or top ten common shareholders without limited shares agree
on any repurchase transaction in the reporting period
□ Yes No
None of the Company's top ten common shareholders or top ten common shareholders without limited shares agreed
on repurchase in the reporting period.
2. Particulars about the controlling shareholder
Nature of the controlling shareholder: Natural person-owned
Type of the controlling shareholder: Natural person
Whether he/she has obtained the
Name of the controlling shareholder Nationality right of residence in another country
or region
Fu Liquan China No
Main occupation and title Chairman and President of the Company
As of December 31, 2023, Mr. Fu Liquan, the Company's controlling
shareholder, directly holds 6.82% of the shares of Leapmotor (HK.09863). In
Shares held in other listed
addition to his direct holdings, Mr. Fu Liquan, together with Mr. Zhu
companies by controlling or holding
Jiangming, Mrs. Liu Yunzhen (Mr. Zhu Jiangming's wife), and Mrs. Chen
in the reporting period
Ailing (Mr. Fu Liquan's wife), collectively and ultimately hold approximately
23.47% of Leapmotor's shares, maintaining consistent actions.
Change of the controlling shareholders in the reporting period
□ Applicable Not applicable
No change has happened to the controlling shareholder in the reporting period of the Company
3. The actual controller of the Company and persons acting in concert
Nature of the actual controller: Domestic natural person
Type of the actual controller: Natural person
Whether he/she has
Name of the actual Relationship with the actual obtained the right of
Nationality
controller controller residence in another
country or region
207
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Fu Liquan Himself China No
Chen Ailing Himself China No
Mr. Fu Liquan holds the position of the chairman and president of the Company; Ms.
Main occupation and title
Chen Ailing holds the position of the director of the Company
Information about other
listed companies at home
N/A
and abroad controlled in
the last ten years
Change of the actual controller in the reporting period
□ Applicable Not applicable
No change has happened to the actual controller in the reporting period
Block Digram for Property Right and Control Relationship between the Company and Actual Controllers
The actual controller controls the Company via trust or other ways of asset management
□ Applicable Not applicable
4. The accumulated number of shares pledged by the controlling shareholder or the first
majority shareholder of the Company and his/her persons acting in concert accounted for 80%
of all the shares held by him/her in the Company
□ Applicable Not applicable
5. Particulars about other corporate shareholders with shareholding proportion over 10%
□ Applicable Not applicable
6. Particulars on share reduction restricted for controlling shareholders, actual controller,
restructuring party or other commitment entities
□ Applicable Not applicable
IV. Specific Implementation of Share Repurchase in the Reporting Period
The progress on share repurchases
Applicable □ Not applicable
Proposal Proposed Proportion Proposed Proposed Purpose of Quantity Percentage
disclosur Repurchase to total Repurchase Repurchase Repurchase Already of
208
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
e time Quantity shares Amount Period Repurchase Repurchase
(Shares) d (Shares) d Quantity
Relative to
the Stock
Options
under
Equity
Incentive
Plan (if
applicable)
12,614,317
shares to
18,921,476 For
RMB 400
shares employee
million August 25,
(calculated stock
August 0.38%- (inclusive) 2023 to
based on the ownership 19,819,601
26, 2023 0.57% to 600 August 24,
upper limit plans or
million 2024
repurchase equity
(inclusive)
price of 31.71 incentives
RMB per
share)
The progress in reduction of re-purchase shares by means of centralized competitive bidding transaction
□ Applicable Not applicable
209
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section VIII Information of Preferred Shares
□ Applicable Not applicable
There are no preferred shares in the reporting period.
210
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section IX Situation on Corporate Bonds
□ Applicable Not applicable
211
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Section X Financial Report
I. Audit Reports
Audit opinion type Standard Unqualified Opinion
Signature Date of audit report April 15, 2024
BDO China Shu Lun Pan CPAs (special general
Name of audit institution
partnership)
Audit report ref. XKSBZ [2024] No.ZF10311
Name of Certified Public Accountant Du Na, Zhang Junhui
Audit Report Text
To the shareholders of Zhejiang Dahua Technology Co., Ltd.:
I. Opinion
We have audited the financial statements of Zhejiang Dahua Technology Co., Ltd. (hereinafter referred to as
Dahua), including the parent company's and the consolidated balance sheet dated December 31, 2023, the parent
company's and the consolidated income statement, the parent company's and the consolidated cash flow statement
and the parent company's and the consolidated statement of changes in owners' equity in 2023, as well as the notes
to relevant financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with
“Accounting Standards for Business Enterprises”, which fairly reflected the financial position of the merged companies
and the parent company as at December 31, 2023 and the operating results and cash flows of the merged companies
and the parent company in 2023.
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our
responsibilities under those standards are further described in the CPA's Responsibilities for the Audit of the Financial
Statements section of our report. According to the “Code of Ethics for Chinese Certified Public Accountants”, we are
independent of Dahua and have fulfilled our other ethical responsibilities in accordance with the Code. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The key audit matters that we identified in the audit are as follows:
Key Audit Matters How the matter was addressed in the audit
A. Recognition of revenue
The operating revenue of Dahua in 2023 was RMB The main audit procedure we implemented for the above key audit item includes:
32,218,317,600 yuan, which is an important part of Dahua's ① Understand the design and implementation of the internal control system and
profit statement. Since the revenue is one of Dahua's key the financial accounting system in relation to revenue recognition, and test the
performance indicators, there is an inherent risk that the effectiveness of their operation; ② Check the agreements of relevant contracts
212
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
management may alter the time point of revenue recognition for different sales types in accordance with the actual situation of the specific
in order to meet specific targets or expectations. Therefore, businesses, and evaluate whether the revenue recognition meets the
we identify the recognition of revenue as a key audit item. requirements of Accounting Standards for Business Enterprises; ③ Perform an
Based on the accounting policy of Dahua, the Company's analytical procedures to judge the reasonableness of the changes in sales
main products include security standard products, system revenue and gross profit margin; ④ Perform verification procedures: for the
integration and other labor services. Among them, the annual sales amount and the outstanding amount at the end of the year, sample
security standard products for domestic sales were and confirm with customers by letter, and the export sales income shall be
delivered to customers or picked up by customers based on certified by the customs; ⑤ Sampling inspection for different types of income: For
the contractual terms in the sales contract. The revenue standard products for domestic sales and overseas sales of overseas
was recognized after customers received and accepted the subsidiaries, sample the out-of-stock records, shipping orders, customer
goods and the Company obtained the evidence proving the countersign records, received payment records and so on; for standard products
customers' receipt of goods; for the security standard exported by domestic companies, check the out-of-stock records, customs
products exported by domestic companies, the revenue was declaration, bill of lading, and received payment records; for integrated system
recognized after the goods were declared and exported, sales, check the product delivery records, shipping list and contract list,
and for the security standard products sold overseas by unpacking acceptance report, acceptance report for the completion of installation
overseas subsidiaries, the revenue was recognized after the and commissioning, received payment records and so on. ⑥ Sample the
customer received and accepted the goods; the revenue transactions made before or after the balance sheet date and check their out-of-
from the system integration sales was recognized after the stock records, customs declaration, and other relevant supportive documents to
acceptance of goods by customers; the revenue from the confirm whether the revenues have been recognized in an appropriate
labor services sales was recognized when relevant labor accounting period.
services were provided. See Notes III (26) for details.
B. Recoverability of accounts receivable
At the end of 2023, Dahua’s net value of receivables was We evaluated the recoverability of accounts receivable by the following
RMB 16,276,804,000 yuan. The management needs to procedure: ① Understand the management's internal controls of key financial
make significant judgments about the identification of reporting related to credit control, account recovery and assessment of
accounts receivable impairment accounts, the likelihood of impairment provision for receivables, and evaluate the effectiveness of the design
inward cash flows of future customers. The management's and operation of the internal controls; ② Understand the Company's
estimates and assumptions are uncertain. Since the amount management procedures for customers' credit and the collection measures for
of accounts receivable is significant to the financial overdue debts; ③ For accounts receivable for which the expected credit loss is
statements as a whole and the recoverability involves the calculated based on the combination of credit risk characteristics, review the
estimation and judgment of future cash flows, we recognize management's division of the combination, and assess the reasonableness of the
the recoverability of accounts receivable as a key audit expected credit loss rate based on the estimates including historical credit loss
matter. rate, current circumstance and prediction of the future economic condition. We
assessed the reasonableness of the accrued proportion with reference to the
historical audit experience and prospective information, tested the accuracy of
the portfolio classification and aging division of the accounts receivable, and
recalculated the accuracy of the accrued amount of the expected credit loss; we
sampled the accounts receivable subject to separate bad debt provision, and
213
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
reviewed the basis for the Management’s assessment of the expected credit loss
based on the financial position and credit position of the customer, historical
repayment records and prediction of the future economic condition. We validated
the management's assessment against the evidence we have obtained during the
audit process, including background information, transaction history and payment
status of the customer, and forward-looking considerations; ④ Test the payment
received after the balance sheet date; ⑤ Perform the correspondence-based
confirmation procedure and check whether the confirmation results are
consistent; ⑥ Analyze whether there are amounts of accounts receivable that
cannot be recovered and need to be written off.
IV. Other Information
The management of Dahua (hereinafter referred to as the Management) is responsible for the other information.
The other information includes the information covered in Dahua's annual report in 2023, but excludes the financial
statements and our audit report.
Our opinion on the financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.
In combination with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of Management and Those Charged with Governance for the Financial
Statements
The Management is responsible for preparing the financial statements in accordance with the requirements of
Accounting Standards for Business Enterprises to achieve a fair presentation, and design, implement and maintain
necessary internal control to ensure that the financial statements are free from material misstatements, whether due to
frauds or errors.
In preparing the financial statements, the Management is responsible for assessing Dahua's ability to continue
operating, disclosing matters related to continuous operation (if applicable) and using the hypothesis of continuous
operation unless there is a plan to liquidate, terminate operations or no other realistic options.
The management is responsible for supervising the financial reporting process of Dahua.
VI. CPA's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
the audit standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users made on the basis of these financial statements.
214
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
As part of an audit in accordance with the audit standards, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures to address those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
(II) Understand the internal control related to the audit in order to design appropriate audit procedure.
(III) Evaluate the appropriateness of accounting policies used, and the reasonableness of accounting estimates
and related disclosures made, by the Management.
(IV) Conclude on the appropriateness of using the going concern assumption by the Management. At the same
time, draw a conclusion, based on the audit evidence obtained, on whether there is significant uncertainty in matters or
situations that may cause major doubts about Dahua's ability in continuous operation. If we conclude that a material
uncertainty exists, we are required to draw attention in our audit report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the information
available up to the date of our audit report. However, future events or conditions may result in Dahua's inability to
continue operating.
(V) Evaluate the overall presentation (including the disclosures), structure and content of the financial statements,
and whether the financial statements fairly reflect the relevant transactions and events.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business
activities within Dahua to express an opinion on the consolidated financial statements. We are responsible for guiding,
supervising, and implementing the group audit, and remain solely responsible for our audit opinion.
We have communicated with those charged with governance on such matters as the scope of audit as planned,
the schedule and material audit findings, including the defects in the internal control that are worth paying attention to
found in this audit.
We have also provided those charged with governance with a statement on observing the professional ethics
related to independence, and communicated with those charged with governance on all the relationships and other
matters that might be reasonably deemed to affect our independence, and relevant preventative measures.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit matters.
We describe these matters in our audit report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
BDO China Shu Lun Pan Certified Public Accountants LLP Chinese CPA: Du Na
(Special general partnership) (Project partner)
Chinese CPA: Zhang Junhui
Shanghai, China April 15, 2024
215
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
II. Financial Statements
Units of financial reports in the notes: yuan
1. Consolidated Balance Sheet
Prepared by: Zhejiang Dahua Technology Co., Ltd.
Unit: RMB
Item December 31, 2023 January 1, 2023
Current Assets:
Cash and Bank Balances 15,971,005,114.47 8,029,878,650.77
Deposit Reservation for Balance
Loans to Banks and Other
Financial Institutions
Trading Financial Assets 1,470,000.00 1,470,000.00
Derivative Financial Assets
Notes receivable 813,039,192.75 872,302,071.18
Accounts receivable 16,276,803,954.03 15,411,908,561.50
Receivables Financing 810,713,267.86 679,441,917.62
Prepayments 189,388,716.99 121,691,239.14
Premium Receivable
Reinsurance Accounts Receivable
Reinsurance Contract Reserves
Receivable
Other Receivables 337,524,688.36 401,849,246.88
Including: interest receivable
Dividends Receivable 5,784,225.02 8,519,063.17
Buying Back the Sale of Financial
Assets
Inventory 5,332,608,544.02 7,315,372,440.02
Contract Assets 86,714,216.34 106,335,405.35
Holding for-sale assets
Non-current Assets Due within 1
303,454,116.40 476,871,949.75
Year
Other Current Assets 939,374,868.31 1,352,406,151.72
Subtotal of Current Assets 41,062,096,679.53 34,769,527,633.93
Non-current Assets:
Granting of loans and advances
Investment in Creditor's Rights
Investment in Other Creditor's
Rights
Long-term Receivables 946,659,309.70 1,436,256,651.54
Long-term Equity Investment 727,453,629.75 1,461,099,644.55
Investment in Other Equity
Instruments
216
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Other Non-current Financial Assets 1,535,742,385.71 931,043,130.33
Investment Property 129,637,004.00 423,035,823.82
Fixed Assets 4,937,180,876.88 4,643,617,574.85
Projects under Construction 1,008,612,408.49 423,535,552.03
Productive Biological Assets
Oil and gas assets
Right-of-use Assets 299,202,586.56 314,700,977.50
Intangible Assets 594,679,018.11 557,183,251.12
Development Expenditure
Goodwill 6,615,294.18 6,615,294.18
Long-term Deferred Expenses 135,335,273.95 130,626,422.97
Deferred Income Tax Assets 1,287,903,482.65 1,014,419,944.15
Other Non-current Assets 210,809,264.49 141,231,903.57
Subtotal of Non-current Assets 11,819,830,534.47 11,483,366,170.61
Total assets 52,881,927,214.00 46,252,893,804.54
Current Liabilities:
Short-term loan 957,426,330.18 257,943,618.51
Borrowings from the Central Bank
Borrowings from Banks and Other
Financial Institutions
Transactional financial liabilities 61,400.12 26,652,319.25
Derivative Financial Liabilities
Notes Payable 3,296,294,946.26 4,364,097,761.17
Accounts Payable 5,815,123,195.55 7,340,277,388.29
Received Prepayments
Contract liabilities 1,194,534,307.04 1,219,548,011.88
Financial Assets Sold for
Repurchase
Deposit Taking and Interbank
Deposit
Receiving from Vicariously Traded
Securities
Receiving from Vicariously Sold
Securities
Payroll payable 1,933,955,631.12 1,583,203,165.43
Tax Payable 1,243,482,361.08 326,881,747.78
Other Payables 812,424,146.52 1,004,056,999.91
Including: interest payable
Dividends Payable 23,667,047.02
Service Charge and Commission
Payable
Reinsurance Accounts Payable
Holding for-sale liabilities
Non-current Liabilities Due within 1 901,722,028.75 2,558,010,785.73
217
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Year
Other Current Liabilities 155,182,705.02 166,004,612.27
Subtotal of Current Liabilities 16,310,207,051.64 18,846,676,410.22
Non-current Liabilities:
Insurance Contract Reserves
Long-term loan 453,825,000.00
Bonds Payable
Including: Preferred Stocks
Perpetual Bonds
Lease Liabilities 176,580,049.57 196,340,654.27
Long-term Payables
Long-term payroll payable
Expected Liabilities 224,542,626.90 227,764,387.93
Deferred Income 166,711,673.04 104,663,047.38
Deferred Income Tax Liabilities 737,367.19 1,168,473.33
Other Non-current Liabilities 119,054,046.66 204,084,072.08
Subtotal of Non-current Liabilities 687,625,763.36 1,187,845,634.99
Total Liabilities 16,997,832,815.00 20,034,522,045.21
Shareholders' Equity:
Share Capital 3,294,468,990.00 3,033,161,170.00
Other Equity Instruments
Including: Preferred Stocks
Perpetual Bonds
Capital Reserves 7,124,125,996.49 3,950,209,243.25
Less: Treasury Share 746,699,863.45 609,859,632.00
Other Comprehensive Incomes 65,993,020.83 36,942,339.77
Special Reserves
Surplus Reserves 1,647,234,495.00 1,553,691,005.92
General Risk Reserves
Undistributed Profits 23,334,051,186.55 17,872,654,791.67
Total Shareholders' Equity
34,719,173,825.42 25,836,798,918.61
Attributable to the Parent Company
Minority Shareholders' Equity 1,164,920,573.58 381,572,840.72
Total Shareholders' Equity 35,884,094,399.00 26,218,371,759.33
Total Liabilities and Shareholders'
52,881,927,214.00 46,252,893,804.54
Equity
Legal representative: Fu Liquan Person in charge of accounting: Xu Qiaofen Person in charge of the accounting institution: Zhu Zhuling
2. Balance Sheet of the Parent Company
Unit: RMB
Item December 31, 2023 January 1, 2023
Current Assets:
Cash and Bank Balances 9,624,679,601.93 4,022,841,447.49
Trading Financial Assets
Derivative Financial Assets
Notes receivable 368,774,122.18 178,821,430.81
218
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Accounts receivable 6,640,946,970.53 4,837,478,515.65
Receivables Financing 698,297,307.69 1,061,433,149.01
Prepayments 31,587,070.13 11,881,594.83
Other Receivables 11,736,609,900.41 13,025,162,686.64
Including: interest receivable
Dividends Receivable
Inventory 447,927,880.25 950,125,105.39
Contract Assets 12,985,980.46 27,158,633.27
Holding for-sale assets
Non-current Assets Due within 1
10,032,002.75 35,911,131.98
Year
Other Current Assets 348,700,342.87 627,219,565.83
Subtotal of Current Assets 29,920,541,179.20 24,778,033,260.90
Non-current Assets:
Investment in Creditor's Rights
Investment in Other Creditor's
Rights
Long-term Receivables 5,359,168.22 12,287,217.89
Long-term Equity Investment 8,191,802,935.85 5,482,249,288.75
Investment in Other Equity
Instruments
Other Non-current Financial Assets 1,513,272,385.71 908,573,130.33
Investment Property 1,817,925.82 317,849,081.03
Fixed Assets 1,814,451,576.60 1,627,286,403.38
Projects under Construction 3,556,445.35 34,991,576.38
Productive Biological Assets
Oil and gas assets
Right-of-use Assets 94,348,785.64 114,223,037.09
Intangible Assets 140,815,043.41 132,109,501.05
Development Expenditure
Goodwill
Long-term Deferred Expenses 66,926,895.55 69,447,374.46
Deferred Income Tax Assets 1,008,929.69 39,347,253.53
Other Non-current Assets 18,782,264.32 25,825,038.50
Subtotal of Non-current Assets 11,852,142,356.16 8,764,188,902.39
Total assets 41,772,683,535.36 33,542,222,163.29
Current Liabilities:
Short-term loan 600,266,666.67 3,632,141.60
Transactional financial liabilities
Derivative Financial Liabilities
Notes Payable 221,026,659.43 485,319,623.33
Accounts Payable 884,748,949.13 1,074,133,501.08
Received Prepayments
219
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Contract liabilities 125,050,543.58 169,956,348.75
Payroll payable 1,354,637,328.45 1,116,235,627.09
Tax Payable 1,008,009,000.74 140,279,695.45
Other Payables 1,193,481,602.34 1,328,875,885.44
Including: interest payable
Dividends Payable 23,667,047.02
Holding for-sale liabilities
Non-current Liabilities Due within 1
787,284,456.59 2,393,499,176.95
Year
Other Current Liabilities 22,753,109.13 85,397,527.74
Subtotal of Current Liabilities 6,197,258,316.06 6,797,329,527.43
Non-current Liabilities:
Long-term loan 350,000,000.00
Bonds Payable
Including: Preferred Stocks
Perpetual Bonds
Lease Liabilities 48,328,489.38 64,598,842.13
Long-term Payables
Long-term payroll payable
Expected Liabilities 1,550,020.50 2,204,024.80
Deferred Income
Deferred Income Tax Liabilities
Other Non-current Liabilities 144,070.84 392,972.39
Subtotal of Non-current Liabilities 50,022,580.72 417,195,839.32
Total Liabilities 6,247,280,896.78 7,214,525,366.75
Shareholders' Equity:
Share Capital 3,294,468,990.00 3,033,161,170.00
Other Equity Instruments
Including: Preferred Stocks
Perpetual Bonds
Capital Reserves 6,881,563,679.88 3,788,412,149.09
Less: Treasury Share 746,699,863.45 609,859,632.00
Other Comprehensive Incomes
Special Reserves
Surplus Reserves 1,647,234,495.00 1,553,691,005.92
Undistributed Profits 24,448,835,337.15 18,562,292,103.53
Total Shareholders' Equity 35,525,402,638.58 26,327,696,796.54
Total Liabilities and Shareholders'
41,772,683,535.36 33,542,222,163.29
Equity
3. Consolidated Income Statement
Unit: RMB
Item 2023 2022
I. Total Operating Revenue 32,218,317,636.77 30,565,370,012.64
Including: Operating Revenue 32,218,317,636.77 30,565,370,012.64
220
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Interest Income
Earned Premiums
Service Charge and
Commission Income
II. Total Operating Cost 29,058,697,666.07 28,808,656,031.31
Including: Operating Cost 18,674,970,923.46 18,989,797,670.92
Interest Expenditures
Service Charge and
Commission Expenses
Surrender Value
Net Claims Paid
Net Amount of Withdrawn
Reserve for Insurance Liability
Contract
Policyholder Dividend
Expense
Reinsurance Cost
Taxes and Surcharges 275,786,197.05 187,697,592.05
Sales Expenses 5,292,570,225.69 5,115,163,159.61
Administration expenses 1,257,429,514.27 1,143,968,823.89
Research and development
3,967,248,795.22 3,883,005,582.82
expense
Financial Expenses -409,307,989.62 -510,976,797.98
Including: interest
95,985,194.10 129,841,192.93
expenses
Interest Income 345,537,378.77 197,933,592.28
Add: Other income 942,767,172.83 988,838,317.21
Investment Income (Mark "-"
4,495,973,812.03 280,749,308.20
for Loss)
Including: Investment
Income from Affiliates and Joint -242,631,295.52 -399,809,570.81
Ventures
Profits from
recognition Termination of Financial -16,573,899.23 -1,731,597.86
Assets at Amortized Cost
Exchange Gains (Mark "-" for
Losses)
Profit of Net Exposure
Hedging (Mark "-" for Loss)
Incomes from changes in fair
127,628,374.87 -46,015,577.97
value (losses marked with "-")
Credit Impairment Losses
-412,457,117.43 -596,505,944.29
(Mark "-" for Loss)
Asset Impairment Losses
-174,514,315.74 -106,653,049.64
(Mark "-" for Loss)
Asset Disposal Income (Mark
2,007,798.39 2,965,788.77
"-" for Loss)
221
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
III. Operating Profit (Mark "-" for
8,141,025,695.65 2,280,092,823.61
Loss)
Add: Non-operating Revenues 13,528,994.25 17,921,304.59
Less: Non-operating Expenses 32,849,032.26 10,836,066.92
IV. Total Profit (Mark "-" for Total
8,121,705,657.64 2,287,178,061.28
Loss)
Less: Income Tax Expense 646,438,172.09 25,327,807.96
V. Net Profit (Mark "-" for Net Loss) 7,475,267,485.55 2,261,850,253.32
(I) Classified by operation
continuity
1. Net Profit as a Going Concern
7,475,267,485.55 2,261,850,253.32
(Mark "-" for Net Loss)
2. Net Profit of Discontinued
Operation (Mark "-" for Net Loss)
(II) Classified by the attribution of
ownership
1. Net Profit Attributable to
7,361,892,404.52 2,324,356,092.20
Shareholders of Parent Company
2. Minority Shareholders' Profit
113,375,081.03 -62,505,838.88
and Loss
VI. Net Amount of Other
29,150,995.25 -39,267,173.55
Comprehensive Incomes after Tax
Net Amount of Other
Comprehensive Incomes after Tax
29,050,681.06 -39,063,452.72
Attributable to the Parent Company's
Owner
(I) Other comprehensive income
that cannot be reclassified into profit
or loss
1. Re-measure the variation of
the defined benefit plan
2. Other comprehensive
income that cannot be transferred to
P/L under the equity method
3. Changes in the fair value of
investment in other equity
instruments
4. Changes in the fair value of
the credit risk of the enterprise
5. Others
(II) Other comprehensive income
29,050,681.06 -39,063,452.72
that will be reclassified as P/L
1. Other comprehensive
income that can be transferred to P/L
under the equity method
2. Changes in the fair value of
investment in other creditor's rights
3. Financial assets reclassified
into other comprehensive income
4. Provisions for the credit
impairment of investment in other
creditor's rights
5. Cash flow hedge reserves
6. Currency translation
29,050,681.06 -39,063,452.72
difference
222
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
7. Others
Net Amount of Other
Comprehensive Incomes After Tax 100,314.19 -203,720.83
Attributable to Minority Shareholders
VII. Total Comprehensive Income 7,504,418,480.80 2,222,583,079.77
Total Comprehensive Income
Attributable to the Parent Company's 7,390,943,085.58 2,285,292,639.48
Owner
Total Comprehensive Income
113,475,395.22 -62,709,559.71
Attributable to Minority Shareholders
VIII. Earnings per Share
(I) Basic Earnings per Share 2.31 0.79
(II) Diluted Earnings per Share 2.31 0.79
Legal representative: Fu Liquan Person in charge of accounting: Xu Qiaofen Person in charge of the accounting institution: Zhu Zhuling
4. Income Statement of the Parent Company
Unit: RMB
Item 2023 2022
I. Operating Revenue 10,675,914,320.02 8,458,444,111.37
Less: Operating Cost 1,691,024,232.43 1,230,036,081.64
Taxes and Surcharges 146,495,115.07 122,607,735.59
Sales Expenses 2,462,570,281.18 2,337,221,204.22
Administration expenses 680,831,535.05 615,717,298.20
Research and development
2,864,986,091.20 2,714,151,497.47
expense
Financial Expenses -91,154,399.90 -18,613,854.17
Including: interest expenses 81,261,266.60 93,567,329.76
Interest Income 213,951,362.84 110,285,473.81
Add: Other income 679,492,419.86 797,553,509.91
Investment Income (Mark "-"
4,314,965,696.38 -302,194,016.65
for Loss)
Including: Investment
Income from Affiliates and Joint -309,247,666.73 -455,385,100.70
Ventures
Profits from
Derecognition of Financial Assets at -4,044,983.67 -3,752,816.76
Amortized Cost (Mark "-" for Loss)
Profit of Net Exposure
Hedging (Mark "-" for Loss)
Incomes from changes in fair
101,037,455.74 -10,144,713.55
value (losses marked with "-")
Credit Impairment Losses
-43,204,243.79 -1,310,481.21
(Mark "-" for Loss)
Asset Impairment Losses
-449,430.51 -6,453,322.10
(Mark "-" for Loss)
Asset Disposal Income (Mark
539,633,345.30 1,109,370.89
"-" for Loss)
223
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
II. Operating Profit (Mark "-" for Loss) 8,512,636,707.97 1,935,884,495.71
Add: Non-operating Revenues 1,578,964.62 4,169,504.86
Less: Non-operating Expenses 1,596,176.55 5,180,651.11
III. Total Profit (Mark "-" for Total
8,512,619,496.04 1,934,873,349.46
Loss)
Less: Income Tax Expense 725,580,252.78 4,336,964.90
IV. Net Profit (Mark "-" for Net Loss) 7,787,039,243.26 1,930,536,384.56
(I) Net Profit as a Going Concern
7,787,039,243.26 1,930,536,384.56
(Mark "-" for Net Loss)
(II) Net Profit of Discontinued
Operation (Mark "-" for Net Loss)
V. Net Amount of Other
Comprehensive Incomes After Tax
(I) Other comprehensive income
that cannot be reclassified into profit
or loss
1. Re-measure the variation of
the defined benefit plan
2. Other comprehensive
income that cannot be transferred to
P/L under the equity method
3. Changes in the fair value of
investment in other equity
instruments
4. Changes in the fair value of
the credit risk of the enterprise
5. Others
(II) Other comprehensive income
that will be reclassified as P/L
1. Other comprehensive
income that can be transferred to P/L
under the equity method
2. Changes in the fair value of
investment in other creditor's rights
3. Financial assets reclassified
into other comprehensive income
4. Provisions for the credit
impairment of investment in other
creditor's rights
5. Cash flow hedge reserves
6. Currency translation
difference
7. Others
VI. Total Comprehensive Income 7,787,039,243.26 1,930,536,384.56
VII. Earnings per Share
(I) Basic Earnings per Share 2.45 0.65
(II) Diluted Earnings per Share 2.44 0.65
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2023 2022
I. Cash Flow Generated by
Operational Activities:
224
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Cash from Sales of Merchandise
34,442,145,403.42 33,784,604,846.55
and Provision of Services
Net Increase in Customer's Bank
Deposits and Interbank Deposits
Net Increase in Borrowings from
the Central Bank
Net Increase in Borrowings from
Other Financial Institutions
Cash Arising from Receiving
Premiums for the Original Insurance
Contract
Net Amount Arising from
Reinsurance Business
Net Increase in Deposits and
Investments from Policyholders
Cash Arising from Interests,
Service Charges and Commissions
Net Increase in Borrowings from
Banks and Other Financial
Institutions
Net Increase in Repurchase
Business Funds
Net Amount of Cash Received
from the Vicariously Traded
Securities
Tax Refund 1,297,555,479.60 1,494,092,979.78
Other Received Cashes Related to
1,458,933,374.74 1,251,775,941.07
Operational Activities
Subtotal of cash inflow from
37,198,634,257.76 36,530,473,767.40
operational activities
Cash Paid for Merchandise and
21,282,073,936.41 23,777,092,221.87
Services
Net Increase in Loans and
Advances to Customers
Net Increase in Deposits with
Central Bank and Other Financial
Institutions
Cash Paid for Original Insurance
Contract Claims
Net increase of funds lent
Cash Paid for Interests, Service
Charges and Commissions
Cash Paid for Policy Dividends
Cash Paid to and for Employees 7,048,918,522.07 7,458,518,121.11
Cash Paid for Taxes and
1,924,186,453.49 2,068,760,288.72
Surcharges
Other Paid Cashes Related to
2,344,676,691.32 2,172,515,486.24
Operational Activities
Subtotal of cash outflow from
32,599,855,603.29 35,476,886,117.94
operational activities
Net cash flow generated by operating
4,598,778,654.47 1,053,587,649.46
activities
II. Cash Flow from Investment
225
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Activities:
Cash Arising from Disposal of
4,741,623,320.96 2,264,115,058.67
Investments
Cash Arising from Investment
28,682,909.98 24,768,046.36
Incomes
Net Cash Arising from Disposal of
Fixed Assets, Intangible Assets and 4,137,565.27 11,943,847.27
Other Long-term Assets
Net Cash Arising from Disposal of
Subsidiaries and Other Business 665,433,193.86
Units
Other Received Cashes Related to
49,811,896.09 25,697,487.60
Investment Activities
Subtotal of cash inflow from
4,824,255,692.30 2,991,957,633.76
investment activities
Cash Paid for Purchase and
Construction of Fixed Assets,
1,445,917,821.13 1,295,439,929.32
Intangible Assets and Other Long-
term Assets
Cash Paid for Investments 1,566,078,364.60 2,238,484,786.11
Net Increase in Pledge Loans
Net Cash Paid for Acquisition of
Subsidiaries and Other Business
Units
Other Paid Cashes Related to
86,037,580.10 57,995,988.98
Investment Activities
Subtotal of cash outflows from
3,098,033,765.83 3,591,920,704.41
investment activities
Net amount of cash flow generated
1,726,221,926.47 -599,963,070.65
by investment activities
III. Cash Flow from Financing
Activities:
Cash Arising from Absorbing
5,835,668,662.56 642,408,134.84
Investments
Including: Cash Arising from
Subsidiaries Absorbing Investments 739,669,502.56 32,548,502.84
by Minority Shareholders
Cash Arising from Borrowings 2,629,490,853.55 5,266,376,091.63
Other Received Cashes Related to
0.00 453,263.81
Financing Activities
Subtotal of cash inflow from financing
8,465,159,516.11 5,909,237,490.28
activities
Cash Paid for Debts Repayment 4,075,180,609.51 4,841,487,732.91
Cash Paid for Distribution of
Dividends and Profits or Payment of 1,868,381,166.79 910,569,303.98
Interests
Including: Dividends and Profits
Paid to Minority Shareholders by 1,104,770.95
Subsidiaries
Other Paid Cashes Related to
868,734,705.55 500,968,317.98
Financing Activities
Subtotal of cash outflow from
6,812,296,481.85 6,253,025,354.87
financing activities
Net cash flow generated by financing
1,652,863,034.26 -343,787,864.59
activities
IV. Impact of Fluctuation in Exchange 24,330,927.12 151,051,486.09
226
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Rate on Cash and Cash Equivalents
V. Net Increase in Cash and Cash
8,002,194,542.32 260,888,200.31
Equivalents
Add: Cash and Cash Equivalents
7,878,465,052.63 7,617,576,852.32
at the Commencement of the Period
VI. Cash and Cash Equivalents at the
15,880,659,594.95 7,878,465,052.63
End of the Period
6. Cash Flow Statement of the Parent Company
Unit: RMB
Item 2023 2022
I. Cash Flow Generated by
Operational Activities:
Cash from Sales of Merchandise
9,580,658,235.54 8,412,862,445.50
and Provision of Services
Tax Refund
Other Received Cashes Related to
995,036,096.41 1,025,365,997.09
Operational Activities
Subtotal of cash inflow from
10,575,694,331.95 9,438,228,442.59
operational activities
Cash Paid for Merchandise and
894,299,605.11 805,027,908.27
Services
Cash Paid to and for Employees 4,148,209,445.47 4,335,058,098.20
Cash Paid for Taxes and
980,532,790.15 1,263,894,274.07
Surcharges
Other Paid Cashes Related to
1,218,042,054.87 1,275,450,400.47
Operational Activities
Subtotal of cash outflow from
7,241,083,895.60 7,679,430,681.01
operational activities
Net cash flow generated by operating
3,334,610,436.35 1,758,797,761.58
activities
II. Cash Flow from Investment
Activities:
Cash Arising from Disposal of
4,438,176,060.20 1,235,609,621.67
Investments
Cash Arising from Investment
5,321,510.33 9,173,028.68
Incomes
Net Cash Arising from Disposal of
Fixed Assets, Intangible Assets and 6,507,850.94 18,870,107.90
Other Long-term Assets
Net Cash Arising from Disposal of
Subsidiaries and Other Business
Units
Other Received Cashes Related to
Investment Activities
Subtotal of cash inflow from
4,450,005,421.47 1,263,652,758.25
investment activities
Cash Paid for Purchase and
Construction of Fixed Assets,
306,866,259.04 480,624,220.25
Intangible Assets and Other Long-
term Assets
Cash Paid for Investments 4,253,829,235.00 989,118,779.17
Net Cash Paid for Acquisition of
Subsidiaries and Other Business
Units
227
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Other Paid Cashes Related to
Investment Activities
Subtotal of cash outflows from
4,560,695,494.04 1,469,742,999.42
investment activities
Net amount of cash flow generated
-110,690,072.57 -206,090,241.17
by investment activities
III. Cash Flow from Financing
Activities:
Cash Arising from Absorbing
5,095,999,160.00 609,859,632.00
Investments
Cash Arising from Borrowings 1,200,000,000.00 1,893,632,141.60
Other Received Cashes Related to
1,931,048,415.78 2,488,594,518.78
Financing Activities
Subtotal of cash inflow from financing
8,227,047,575.78 4,992,086,292.38
activities
Cash Paid for Debts Repayment 2,553,632,141.60 1,393,066,910.69
Cash Paid for Distribution of
Dividends and Profits or Payment of 1,846,648,732.12 875,930,736.99
Interests
Other Paid Cashes Related to
1,363,667,384.09 2,751,592,825.48
Financing Activities
Subtotal of cash outflow from
5,763,948,257.81 5,020,590,473.16
financing activities
Net cash flow generated by financing
2,463,099,317.97 -28,504,180.78
activities
IV. Impact of Fluctuation in Exchange
-38,899,297.35 613,656.19
Rate on Cash and Cash Equivalents
V. Net Increase in Cash and Cash
5,648,120,384.40 1,524,816,995.82
Equivalents
Add: Cash and Cash Equivalents
3,933,169,520.92 2,408,352,525.10
at the Commencement of the Period
VI. Cash and Cash Equivalents at the
9,581,289,905.32 3,933,169,520.92
End of the Period
228
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
Unit: RMB
2023
Shareholders' Equity Attributable to the Parent Company's Owner
Other Equity
Instruments Gene Minority
Item Shar Other Speci Total
Pref Perp Less: ral Sharehol
e Capital Compreh al Surplus Undistribute Other Shareholders'
Treasury Risk Subtotal ders'
Capi erre etua Reserves ensive Reser Reserves d Profits s Equity
Oth Equity
d l Share Reser
tal ers Incomes ves
Stoc Bon ves
ks ds
I. Balance 3,03
at the End 3,16 3,950,209,2 609,859,63 36,942,3 1,553,691, 17,872,654,7 25,836,798,9 381,572, 26,218,371,7
of Last 1,17 43.25 2.00 39.77 005.92 91.67 18.61 840.72 59.33
Year 0.00
Add:
Changes
in
Accountin
g Policies
C
orrection
of Errors
in the
Previous
Period
O
thers
3,03
II. 3,950,209,2 609,859,63 36,942,3 1,553,691, 17,872,654,7 25,836,798,9 381,572, 26,218,371,7
3,16
Balance 43.25 2.00 39.77 005.92 91.67 18.61 840.72 59.33
1,17
229
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
at the 0.00
Start of
This Year
III.
Increases
or
Decrease 261,
s in This 307, 3,173,916,7 136,840,23 29,050,6 93,543,489 5,461,396,39 8,882,374,90 783,347, 9,665,722,63
Period 820. 53.24 1.45 81.06 .08 4.88 6.81 732.86 9.67
(Mark "-" 00
for
Decrease
s)
(I) Total
Comprehe 29,050,6 7,361,892,40 7,390,943,08 113,475, 7,504,418,48
nsive 81.06 4.52 5.58 395.22 0.80
Income
(II)
Sharehold
ers' 261,
307, 4,819,307,2 136,840,23 4,943,774,85 797,188, 5,740,962,95
Contributi
820. 62.43 1.45 0.98 107.34 8.32
on and 00
Reduction
in Capital
1． Com
mon stock 261,
307, 4,569,028,5 136,840,23 4,693,496,12 739,669, 5,433,165,62
invested
820. 34.26 1.45 2.81 502.56 5.37
by the 00
owner
2． Capit
al
Invested
by
Holders of
Other
Equity
Instrumen
230
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
ts
3． Amou
nt of
Share-
based
250,278,72 250,278,728. 57,518,6 307,797,332.
Payments
8.17 17 04.78 95
Recorded
into
Sharehold
ers' Equity
4． Other
s
(III) Profit - - -
93,543,489
Distributio 1,903,104,71 1,809,561,22 1,809,561,22
.08
n 0.27 1.19 1.19
1． Appro
-
priation of 93,543,489
93,543,489.0
Surplus .08
8
Reserves
2． Appro
priation of
General
Risk
Reserves
3． Distrib
ution to
- - -
Owners
1,809,561,22 1,809,561,22 1,809,561,22
(or 1.19 1.19 1.19
Sharehold
ers)
4． Other
s
(IV)
Internal
Carry- 2,608,700.63 2,608,700.63 2,608,700.63
forward of
Sharehold
231
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
ers' Equity
1． Capit
al
Reserves
Transferre
d into
Capital (or
Share
Capital)
2． Surpl
us
Reserves
Transferre
d into
Capital (or
Share
Capital)
3． Surpl
us
Reserves
Covering
Losses
4． Carry-
forward
retained
earnings
of the
variation
of the
defined
benefit
plan
5． Other
Carry-
forward
2,608,700.63 2,608,700.63 2,608,700.63
Retained
Earnings
of the
232
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Comprehe
nsive
Income
6. Others
(V)
Special
Reserves
1． Withd
rawal in
this period
2． Used
in This
Period
- - - -
(VI)
1,645,390,5 1,645,390,50 127,315, 1,772,706,27
Others 09.19 9.19 769.70 8.89
IV.
Balance 3,29
4,46 7,124,125,9 746,699,86 65,993,0 1,647,234, 23,334,051,1 34,719,173,8 1,164,92 35,884,094,3
at the End
8,99 96.49 3.45 20.83 495.00 86.55 25.42 0,573.58 99.00
of This 0.00
Period
Amount of Previous Period
Unit: RMB
2022
Shareholders' Equity Attributable to the Parent Company's Owner
Other Equity Oth
Instruments Less er
Spe Gene Minority Total
Item : Com
Capital cial ral Sharehold Shareholders
Share Prefer Perpe Trea preh Surplus Undistribut Oth
Reserv Res Risk Subtotal ers' Equity ' Equity
Capital red tual Oth sury ensi Reserves ed Profits ers
es erve Reser
Stock Bond ers Shar ve
s ves
s s e Inco
mes
233
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
277, 76,0
2,994,5 2,939,5
I. Balance at the End of 169, 05,7 1,553,691 16,331,012 23,617,602 552,741,99 24,170,344,5
50,730. 12,235.
Last Year 524. 92.4 ,005.92 ,273.48 ,513.55 4.59 08.14
00 75
09 9
Add: Changes in
Accounting Policies
Correction of
Errors in the Previous
Period
Others
277, 76,0
2,994,5 2,939,5
II. Balance at the Start of 169, 05,7 1,553,691 16,331,012 23,617,602 552,741,99 24,170,344,5
50,730. 12,235.
This Year 524. 92.4 ,005.92 ,273.48 ,513.55 4.59 08.14
00 75
09 9
-
III. Increases or 332,
1,010,6 39,0 -
Decreases in This 38,610, 690, 1,541,642, 2,219,196, 2,048,027,25
97,007. 63,4 171,169,15
Period (Mark "-" for 440.00 107. 518.19 405.06 1.19
50 52.7 3.87
Decreases) 91
2
-
39,0 -
(I) Total Comprehensive 2,324,356, 2,285,292, 2,222,583,07
63,4 62,709,559
Income 092.20 639.48 9.77
52.7 .71
2
332,
(II) Shareholders' 476,97
38,610, 690, 182,892,05 87,713,091 270,605,146.
Contribution and 1,722.7
440.00 107. 4.80 .86 66
Reduction in Capital 1
91
332,
278,01 - -
1． Common stock 38,610, 690,
8,905.0 16,060,762 848,502.84 15,212,260.0
invested by the owner 440.00 107.
2 .89 5
91
2． Capital Invested by
Holders of Other Equity
Instruments
3． Amount of Share- 198,95
198,952,81 86,864,589 285,817,406.
based Payments 2,817.6
7.69 .02 71
Recorded into 9
234
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Shareholders' Equity
4． Others
- - -
(III) Profit Distribution 782,713,57 782,713,57 782,713,574.
4.01 4.01 01
1． Appropriation of
Surplus Reserves
2． Appropriation of
General Risk Reserves
3． Distribution to - - -
Owners (or 782,713,57 782,713,57 782,713,574.
Shareholders) 4.01 4.01 01
4． Others
(IV) Internal Carry-
forward of Shareholders'
Equity
1． Capital Reserves
Transferred into Capital
(or Share Capital)
2． Surplus Reserves
Transferred into Capital
(or Share Capital)
3． Surplus Reserves
Covering Losses
4． Carry-forward
retained earnings of the
variation of the defined
benefit plan
5． Other Carry-forward
Retained Earnings of the
Comprehensive Income
6. Others
(V) Special Reserves
1． Withdrawal in this
235
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
period
2． Used in This Period
533,72 -
533,725,28 337,552,598.
(VI) Others 5,284.7 196,172,68
4.79 77
9 6.02
609, 36,9
3,033,1 3,950,2
IV. Balance at the End of 859, 42,3 1,553,691 17,872,654 25,836,798 381,572,84 26,218,371,7
61,170. 09,243.
This Period 632. 39.7 ,005.92 ,791.67 ,918.61 0.72 59.33
00 25
00 7
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
Unit: RMB
2023
Other Equity
Instruments Other Speci
Item Share Prefer Perpe Capital Less: Treasury Compreh al Surplus Undistributed Other Total Shareholders'
Capital red tual Oth Reserves Share ensive Reser Reserves Profits s Equity
Stock Bond ers Incomes ves
s s
I. Balance
at the End 3,033,16 3,788,412,149.0 609,859,632.0 1,553,691,005.9 18,562,292,103
26,327,696,796.54
of Last 1,170.00 9 0 2 .53
Year
Add:
Changes
in
Accountin
g Policies
C
orrection
of Errors
in the
Previous
236
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Period
O
thers
II. Balance
at the 3,033,16 3,788,412,149.0 609,859,632.0 1,553,691,005.9 18,562,292,103
26,327,696,796.54
Start of 1,170.00 9 0 2 .53
This Year
III.
Increases
or
Decreases
in This 261,307, 3,093,151,530.7 136,840,231.4 5,886,543,233.
93,543,489.08 9,197,705,842.04
Period 820.00 9 5 62
(Mark "-"
for
Decreases
)
(I) Total
Comprehe 7,787,039,243.
7,787,039,243.26
nsive 26
Income
(II)
Sharehold
ers'
261,307, 4,831,835,630.3 136,840,231.4
Contributio 4,956,303,218.94
820.00 9 5
n and
Reduction
in Capital
1． Comm
on stock
261,307, 4,569,028,534.2 136,840,231.4
invested 4,693,496,122.81
820.00 6 5
by the
owner
2． Capita
l Invested
by Holders
of Other
237
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Equity
Instrument
s
3． Amou
nt of
Share-
based
Payments 262,807,096.13 262,807,096.13
Recorded
into
Sharehold
ers' Equity
4． Others
(III) Profit -
Distributio 93,543,489.08 1,903,104,710. -1,809,561,221.19
n 27
1． Appro
priation of
93,543,489.08 -93,543,489.08
Surplus
Reserves
2． Distrib
ution to
-
Owners
1,809,561,221. -1,809,561,221.19
(or
19
Sharehold
ers)
3． Others
(IV)
Internal
Carry-
2,608,700.63 2,608,700.63
forward of
Sharehold
ers' Equity
1． Capita
l Reserves
Transferre
d into
238
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Capital (or
Share
Capital)
2． Surplu
s
Reserves
Transferre
d into
Capital (or
Share
Capital)
3． Surplu
s
Reserves
Covering
Losses
4． Carry-
forward
retained
earnings
of the
variation
of the
defined
benefit
plan
5． Other
Carry-
forward
Retained
Earnings 2,608,700.63 2,608,700.63
of the
Comprehe
nsive
Income
6. Others
(V)
239
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Special
Reserves
1． Withdr
awal in
this period
2． Used
in This
Period
-
(VI)
1,738,684,099.6 -1,738,684,099.60
Others
0
IV.
Balance at
3,294,46 6,881,563,679.8 746,699,863.4 1,647,234,495.0 24,448,835,337
the End of 35,525,402,638.58
8,990.00 8 5 0 .15
This
Period
Amount of Previous Period
Unit: RMB
2022
Other Equity Other
Instruments Compr Speci
Item Less:
Prefer Perpe Capital ehensiv al Surplus Other Total Shareholders'
Share Capital Treasury Undistributed Profits
red tual Oth Reserves e Reser Reserves s Equity
Share
Stock Bond ers Income ves
s s s
I. Balance
at the End 2,994,550,730. 2,925,020,649. 277,169,524. 1,553,691,005.9
17,370,986,709.52 24,567,079,571.03
of Last 00 68 09 2
Year
Add:
Changes
in
Accounting
Policies
C
240
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
orrection
of Errors in
the
Previous
Period
O
thers
II. Balance
at the Start 2,994,550,730. 2,925,020,649. 277,169,524. 1,553,691,005.9
17,370,986,709.52 24,567,079,571.03
of This 00 68 09 2
Year
III.
Increases
or
Decreases
in This 863,391,499.4 332,690,107.
38,610,440.00 1,191,305,394.01 1,760,617,225.51
Period 1 91
(Mark "-"
for
Decreases
)
(I) Total
Comprehe
1,930,536,384.56 1,930,536,384.56
nsive
Income
(II)
Sharehold
ers'
419,952,914.6 332,690,107.
Contributio 38,610,440.00 125,873,246.72
3 91
n and
Reduction
in Capital
1． Comm
on stock
278,018,905.0 332,690,107.
invested 38,610,440.00 -16,060,762.89
2 91
by the
owner
241
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2． Capital
Invested
by Holders
of Other
Equity
Instrument
s
3． Amoun
t of Share-
based
Payments 141,934,009.6
141,934,009.61
Recorded 1
into
Sharehold
ers' Equity
4． Others
(III) Profit
Distributio -782,713,574.01 -782,713,574.01
n
1． Appro
priation of
Surplus
Reserves
2． Distrib
ution to
Owners (or -782,713,574.01 -782,713,574.01
Sharehold
ers)
3． Others
(IV)
Internal
Carry-
forward of
Sharehold
ers' Equity
1． Capital
242
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Reserves
Transferre
d into
Capital (or
Share
Capital)
2． Surplu
s
Reserves
Transferre
d into
Capital (or
Share
Capital)
3． Surplu
s
Reserves
Covering
Losses
4． Carry-
forward
retained
earnings of
the
variation of
the defined
benefit
plan
5． Other
Carry-
forward
Retained
Earnings
of the
Comprehe
nsive
Income
243
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
6. Others
(V) Special
Reserves
1． Withdr
awal in this
period
2． Used
in This
Period
443,438,584.7
(VI) Others 43,482,583.46 486,921,168.24
8
IV.
Balance at
3,033,161,170. 3,788,412,149. 609,859,632. 1,553,691,005.9
the End of 18,562,292,103.53 26,327,696,796.54
00 09 00 2
This
Period
244
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
III. Basic Information about the Company
Zhejiang Dahua Technology Co., Ltd. (hereinafter referred to as "Company" or "the Company") was incorporated
under the official approval document No. 18 [2002] issued by Zhejiang Provincial People's Government Work Leading
Group for Enterprise Listing in June 2002, a stock corporation established on the basis of overall change of the former
Hangzhou Dahua Information Technology Co., Ltd. It was co-founded by five natural persons, including Fu Liquan,
Chen Ailing, Zhu Jiangming, Liu Yunzhen and Chen Jianfeng.
On April 22, 2008, the Company issued 16.8 million shares of common stock in RMB to the general public for the first
time under the approval document No. 573 [2008] Securities Regulatory Issuance, issued by China Securities
Regulatory Commission ("CSRC"). It was listed on Shenzhen Stock Exchange on May 20, 2008 with a registered
capital of RMB 66.8 million and the change registration filed with Administration for Industry and Commerce was
completed on May 23, 2008. The Company's unified social credit code is 91330000727215176K. The Company falls
within the intelligent Internet of Things industry.
As of December 31, 2023, the Company has issued a total of 3,294,468,990 shares, with a registered capital of RMB
3,294,468,990.00 yuan. The registered address is No.1187, Bin'an Road, Binjiang District, Hangzhou, and the
headquarters address is No.1399, Binxing Road, Binjiang District, Hangzhou.
The Company’s main operation activities include: R&D, production and sales of smart IoT products, and provision of
video-centric smart IoT solutions and services.
The actual controllers of the Company are Fu Liquan and Chen Ailing.
This financial statement has been approved by Board of Directors on April 15, 2024.
IV. Basis for Preparing the Financial Statement
1. Basis for the preparation
The Company prepares the financial statement, as a going concern, based on transactions and matters that have
actually occurred, in accordance with Accounting Standards for Business Enterprises - Basic Standards issued by the
Ministry of Finance and all specific accounting standards, application guidelines for accounting standards for business
enterprises, explanations on the accounting standards for business enterprises and other related regulations
(hereinafter referred to as "Accounting Standards for Business Enterprises" collectively), and the disclosure provisions
in the Preparation Rules for Information Disclosures by Companies Offering Securities to the Public No. 15 - General
Provisions on Financial Reports issued by CSRC.
2. Going concern
The Company has the capability to continue as a going concern for at least 12 months as of the end of current
reporting period, without any significant item affecting the capability for continuing as a going concern.
245
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
V. Significant Accounting Polices and Accounting Estimates
The following disclosures cover the specific accounting policies and accounting estimates formulated by the Company
according to the characteristics of its production and operation.
1. Statement on compliance with Accounting Standards for Business Enterprises
This financial statement is in compliance with the requirements in the “Accounting Standards for Business Enterprises”
promulgated by the Ministry of Finance and presents truly and completely the financial position of the merged
companies and the parent company as at December 31, 2023 and the operating results and cash flows of the merged
companies and the parent company in 2023.
2. Accounting period
The fiscal year of the Company is from January 1 to December 31 of each calendar year.
3. Operating cycle
The Company's operating cycle is 12 months.
4. Functional currency
For the domestic operating entities of the Company and its overseas operating entity Dahua Technology (HK) Limited,
the functional currency is Renminbi ("RMB"). The other overseas operating entities take the appropriate currency as
the functional currency on the basis of the currency in the major economic environment in which they operate. This
financial statement is presented in RMB.
5. Method for determination and basis for selection of the importance criteria
Applicable □ Not applicable
Item Importance criteria
Important accounts receivable with the bad debt provision Amount accrued based on single item accounting for
accrued based on single item 0.5% of the total asset at the end of the period
Amount of recovered or reversed bad debt provision of
Significant amount of recovered or reversed bad debt
the receivables in this period exceeding 0.5% of the total
provision of the receivables in this period
asset at the end of the period
Amount of accounts receivable written off based on single
Important accounts receivable written off item exceeding 0.5% of the total asset at the end of the
period
Project investment budget exceeding 0.5% of the total
Important projects under construction
asset
Prepayments aged over 1 year exceeding 0.1% of the
Important prepayments aged over 1 year
total asset
Payables aged over 1 year exceeding 0.5% of the total
Important accounts payable aged over 1 year
asset
Other payables aged over 1 year exceeding 0.5% of the
Other important payables aged over 1 year
total asset
Contract liabilities aged over 1 year exceeding 0.5% of
Important contract liabilities aged over 1 year
the total asset
246
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Important cash flow from investment activities Projects with cash flow exceeding 5% of the total asset
Overseas business entities with any of the total
Important overseas business entities asset/gross revenue/total profit exceeding 15% of the
Group’s total asset/gross revenue/total profit
Non-wholly owned subsidiaries with any of the total
Important non-wholly owned subsidiaries asset/gross revenue/total profit exceeding 15% of the
Group’s total asset/gross revenue/total profit
Investment income from the joint ventures or associates
Important joint ventures or associates exceeding 10% of the audited profit of the Company in
the last period
6. The accounting treatment of business combinations involving entities under common
control and business combinations involving entities not under common control
Business combination involving entities under common control: The assets and liabilities acquired by the merging
party in business combination (including goodwill incurred in the acquisition of the merged party by ultimate controlling
party) shall be measured at the book value of the assets and liabilities of the merged party in the consolidated financial
statements of the ultimate controlling party on the date of combination. The difference between the book value of the
net assets obtained and the book value of the consideration paid for the combination (or total nominal value of the
issued shares) is adjusted to capital premium in capital reserve. Adjustments shall be made to retained earnings in the
event that the share premiums in the capital reserves are not sufficient for write-down.
Business combination involving entities not under common control: The cost of combination is the fair value of the
assets paid, the liabilities incurred or assumed, and the equity securities issued by the acquirer to acquire the control
of the acquiree on the date of acquisition. Where the cost of combination is higher than the fair value of the identifiable
net assets acquired from the merging party in business combination, such difference shall be recognized as goodwill;
where the cost of combination is less than the fair value of the identifiable net assets acquired from the merging party
in business combination, such difference shall be charged to the profit or loss for the period. The identifiable assets,
liabilities and contingent liabilities of the acquiree obtained in the combination that satisfy the recognition criteria shall
be measured by the fair value on the date of acquisition.
The fees which are directly related to the business combination shall be recognized as the profit or loss in the period
when the costs are incurred; the transaction expenses of issuing equity securities or debt securities for business
merger shall be initially capitalized for equity securities or debt securities.
7. Criterion for judgment of control and preparation method of consolidated financial
statements
(1) Criterion for judgment of control
The scope of consolidation of the consolidated financial statements is based on controlling interests and includes the
Company and all the subsidiaries. Control means that the Company has the power with respect to the investee to
obtain variable returns by engaging in relevant activities of the investee, and has the ability to influence the amount of
its returns by applying its power with respect to the investee.
(2) Preparation method of consolidated financial statements
247
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
The Company treats the enterprise group as a single accounting entity and prepares the consolidated financial
statements in accordance with the unified accounting policy to reflect the Group's overall financial position, operating
results, and cash flow. The influence from the internal transactions between the Company and the subsidiaries or
between different subsidiaries shall be eliminated. Internal transactions show that impairment loss of relevant assets
shall be recognized as such loss in full. In preparing the consolidated financial statements, where the accounting
policies and the accounting periods are inconsistent between the Company and subsidiaries, the financial statements
of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Company.
The shares belonging to minority shareholders in owner's equity, the net profit or loss and the comprehensive income
of the subsidiary of the current period are presented separately under the owners' equity in the consolidated balance
sheet, the net profits, and the total comprehensive income in the consolidated income statement respectively. Where
losses attributable to the minority shareholders of a subsidiary of the current period exceed the minority shareholders'
interest entitled in the shareholders' equity of the subsidiary at the beginning of the period, the excess shall be offset
against the equity of minority shareholders.
① Acquisition of Subsidiaries or Business
For acquisition of subsidiaries or business due to business combination involving entities under common control during
the reporting period, the operating results and cash flow of such subsidiaries or business from the beginning to the end
of the reporting period when the merger occurs are included in the consolidated income statement; and the opening
balance and comparative figures of the consolidated financial statements should be adjusted simultaneously as if the
consolidated reporting entity has been in existence since the beginning of the control by the ultimate controlling party.
In connection with imposing control over the investee under common control due to additional investment and other
reasons, the equity investment held before gaining the control of the combined party is recognized as relevant profit or
loss, other comprehensive income and changes in other net assets at the later of the date of acquisition of the original
equity and the date when the combining and the merged parties are under common control, and shall be written down
to the opening balance retained earnings or current profit or loss in the comparative reporting period.
Additional subsidiaries or business due to business combination involving entities not under common control during
the reporting period will be included in the consolidated financial statements as of the date of acquisition on the basis
of the fair value of the identifiable assets, liabilities or contingent liabilities determined on the date of acquisition.
In connection with imposing control over the investee not under common control due to additional investment and
other reasons, the equity of acquiree held before acquisition date shall be remeasured at the fair value of such equity
on the acquisition date and the difference between fair value and book value shall be recognized as investment
income in current period. Other comprehensive income that may later be reclassified into profit or loss and changes in
other owner's equity accounted by equity method contained in the acquiree's equity held before the acquisition date
shall be transferred to current investment gains on the date of acquisition.
② Disposal of Subsidiaries or Business
a. General Treatment
When losing control of the investee due to partial disposal of the equity investment, or any other reasons, the
remaining equity investment is remeasured at fair value at the date in which control is lost. The sum of consideration
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received from disposal of equity investment and the fair value of the remaining equity investment, net of the difference
between the sum of the Company's previous share of the subsidiary's net assets recorded from the acquisition date or
combination date and the sum of goodwill, is recognized in investment income in the period in which control is lost.
Other comprehensive income that may later be reclassified into profit or loss and changes in other owner's equity
accounted by equity method in connection with the equity investment of the original subsidiaries shall be transferred to
the current investment gains when the control is lost.
b. Disposal of Subsidiary Achieved by Stages
When the equity investment of subsidiaries is disposed of through multiple transactions until the control is lost, such
multiple transactions are generally treated as a package deal if the terms, conditions, and economic impact of the
transactions to dispose of the subsidiary's equity investment satisfy one or more of the following conditions:
These transactions are achieved at the same time or the mutual effects on each other are considered;
A complete set of commercial results can be achieved with reference to the series of transactions as a whole;
Achieving a transaction depends on achieving of at least one of the other transaction;
One transaction recognized separately is not economical, but it is economical when considered together with other
transactions.
If multiple transactions are recognized as a package deal, these transactions shall be subject to accounting treatment
as a transaction to dispose of the subsidiaries and lose control. The differences between the price on each disposal
and disposal of investment on the subsidiary's net assets shall be recognized in other comprehensive income in the
consolidated financial statements, and included in profit or loss for the period when the control is lost.
If the transactions are not a package deal, accounting treatment for partial disposal of equity investments of the
subsidiary without losing control shall be applied before control is lost. When the control is lost, general accounting
treatment for disposal of a subsidiary shall be used.
③ Acquisition of Minority Interest of Subsidiaries
The Company shall adjust the share premium in the capital reserve of the consolidated balance sheet with respect to
any difference between the long-term equity investment arising from the purchase of minority interest and the net
assets attributing to the parent company continuously calculated on the basis of the newly increased share proportion
as of the acquisition date or date of combination or, adjust the retained earnings if the share premium in the capital
reserve is insufficient for write-down.
④ Partial Disposal of Equity Investment in Subsidiaries without Losing Control
The difference between the disposal consideration and the share of net assets in the subsidiaries calculated from
disposal of long-term equity investment as of the date of acquisition or combination date shall be adjusted to share
premium in the capital reserve in the consolidated balance sheet. Adjustments shall be made to retained earnings in
the event that the share premiums in the capital reserves are not sufficient for write-down.
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8. Classification of joint venture arrangement and accounting treatment methods for joint
operation
Joint venture arrangement is classified into joint operation and joint venture.
Joint operation means the joint venture arrangement in which the joint venture parties have the assets and assume the
liabilities related to such arrangement.
The Company recognizes the following items related to the share of interests in the joint operation:
(1) The assets separately held by the Company and assets jointly held as recognized by the share of the Company;
(2) The liabilities separately assumed by the Company and liabilities jointly assumed as recognized by the share of the
Company;
(3) Income from selling the share of the Company in the output of the joint operation;
(4) Income from joint operation of the sold output as recognized by the share of the Company;
(5) The expenses separately incurred and expenses jointly incurred as recognized by the share of the Company;
The Company adopts the equity method for the investment of the joint venture. For details, refer to this section
Financial Report - V. Significant Accounting Polices and Accounting Estimates - 20. Long-term equity investment.
9. Recognition criteria of cash and cash equivalents
Cash means the cash on hand and deposits that are available for payment at any time of the Company.
Cash equivalents mean the investments held by the Company which are short-term, highly liquid, easy to be converted
into known amounts of cash and have little risk of value change.
10. Conversion of transactions and financial statements denominated in foreign currencies
(1) Foreign currency transactions
Foreign currency transactions shall be translated into functional currency at the spot exchange rate on the day when
the transactions occurred.
The Balance of foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet
date. The resulting exchange differences are recognized in profit or loss for the current period, except for those
differences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency for
acquisitions, construction, or production of the qualified assets, which should be incuded in current profit and loss.
(2) Translation of foreign currency financial statements
All assets and liabilities in balance sheet are translated based on spot exchange rate on the balance sheet date;
owners' equity items other than "undistributed profit" are translated at a spot exchange rate when accrued. Revenue
and expense items in the income statement are translated at a spot exchange rate at the transaction occurrence date.
For disposal of overseas operation, the translation difference as stated in the foreign currency financial statements
relating to overseas operation, is accounted for in the profit and loss account in the current period from owners' equity
items.
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11. Financial instruments
A financial asset, financial liability or equity instrument is recognized when the Company becomes a party to the
financial instrument contract.
(1) Classification of the financial instruments
According to the Company's business model for management of the financial assets and the contractual cash flow
features of the financial assets, the financial assets, when initially recognized, are classified as: financial assets at
amortized cost, financial assets at fair value through other comprehensive income (debt instruments) and financial
assets at fair value through profit or loss.
The financial assets which satisfy the following conditions, and are not designated as financial assets at fair value
through profit or loss will be classified by the Company as financial assets at amortized cost:
① The business model is designed to collect the contractual cash flow;
② The contractual cash flow is only used to pay the principal and the interests based on the outstanding principal
amount.
The financial assets which satisfy the following conditions, and are not designated as financial assets at fair value
through profit or loss will be classified by the Company as the financial assets (equity instruments) at fair value through
other comprehensive income:
① The business model is designed to both collect the contractual cash flow and sell the financial assets;
② The contractual cash flow is only used to pay the principal and the interests based on the outstanding principal
amount.
For non-trading investments in equity instruments, the Company may, at the time of initial recognition, irrevocably
designate them as financial assets (equity instruments) at fair value through other comprehensive income. Such
designation is based on the individual investments, and relevant investments fall within the definition of the equity
instrument from the perspective of the issuer.
Except for the financial assets at amortized cost, and financial assets at fair value through other comprehensive
income, all the remaining financial assets are classified as the financial assets at fair value through profit or loss. At the
time of initial recognition, the financial assets which should have been classified as financial assets at amortized cost
or financial assets at fair value through other comprehensive income can be irrevocably designated by the Company
as financial assets at fair value through profit or loss if the accounting mismatch can be eliminated or significantly
reduced.
The financial liabilities, when initially recognized, are classified as: financial liabilities at fair value through profit or loss
and financial liabilities at amortized cost.
Financial liabilities which meet one of the following conditions will be, when initially measured, designated as financial
liabilities at fair value through profit or loss:
① Such designation may be able to eliminate or significantly reduce the accounting mismatch;
② The portfolio of financial liabilities or the portfolio of financial assets and financial liabilities shall be subject to
management and performance evaluation on the basis of fair value according to the enterprise risk management or
investment strategy contained in the formal documentations, and a report shall be made to the key management
personnel within the enterprise on this basis;
③ Such financial liabilities shall contain embedded derivatives to be split separately.
(2) Recognition and measurement of financial instruments
① Financial assets at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables, long-term
receivables and creditors investment, which shall be initially measured at fair value, and the relevant transaction
expenses should be initially capitalized; The accounts receivable that do not contain material financing compositions
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and those for which the Company decides to not take into account the financing compositions of no more than one
year shall be initially measured at the contract transaction price.
The interest calculated by effective interest method during the holding period is recorded into the current profit and
loss.
At the time of recovery or disposal, the difference between the price obtained and the book value shall be included in
the current profit or loss.
② Financial assets measured at fair value and whose changes are included in other comprehensive income (debt
instruments)
Financial assets measured at fair value and its changes are included in other comprehensive income (debt
instruments) include receivables financing and investments in other creditor's rights. They are initially measured at fair
value, and the relevant transaction expenses should be initially capitalized. These financial assets are subsequently
measured at fair value, and the change in fair value, other than the interest, the impairment loss or profit and the profit
or loss on foreign exchange, shall be included in other comprehensive income.
Upon derecognition, the cumulative profits or losses previously included in other comprehensive income shall be
removed from other comprehensive income and included in the profit or loss for the period.
③ Financial assets measured at fair value and whose changes are included in other comprehensive income (equity
instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include investment in other
equity instruments. They are initially measured at fair value, and the transaction expenses shall be initially capitalized.
These financial assets are subsequently measured at fair value, and the change in fair value shall be included in other
comprehensive income. The dividends obtained shall be included in the profit or loss for the period.
Upon derecognition, the cumulative profits or losses previously included in other comprehensive income shall be
removed from other comprehensive income and included in the carry-forward retained earnings.
④ Financial assets measured at fair value and whose changes are included in the current profit or loss
Financial assets at fair value through profit or loss include trading financial assets, derivative financial assets, and
other non-current financial assets. They are initially measured at fair value, and the transaction expenses related to
them are included in the current profit or loss. These financial assets are subsequently measured at fair value, and the
change in fair value shall be included in the profit or loss for the period.
⑤ Financial liabilities at fair value through profit or loss in this period
Financial liabilities at fair value through profit or loss include trading financial liabilities and derivative financial liabilities.
They are initially measured at fair value, and the transaction expenses related to them are included in the profit or loss
for the period. These financial liabilities are subsequently measured at fair value, and the change in fair value shall be
included in the profit or loss for the period.
Upon derecognition, the difference between their book value and the consideration paid is included in the profit or loss
for the period.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term loans, notes payable, accounts payable, other payables, long-
term loans, bonds payable, and long-term payables. They are initially measured at fair value, and the transaction
expenses shall be initially capitalized.
The interest calculated by effective interest method during the holding period is recorded into the current profit and
loss.
Upon derecognition, the difference between the consideration paid and the book value of these financial liabilities is
included in the current profit or loss.
(3) Derecognition and transfer of financial assets
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When one of the following conditions is met, financial assets are derecognized by the Company:
① The contractual right to receive cash flows from financial assets is terminated;
② The financial assets have been transferred and nearly all the risks and rewards related to the ownership of the
financial assets have been transferred to the transferee;
③ The financial assets have been transferred and although the Company neither transfers or retains all the risks and
rewards related to the ownership of the financial assets, the Company retains no control of the financial assets;
If the Company and the counterpary modify or re-negotiate the contract, which constitute material modifications, the
original financial assets will be derecognized and a new financial asset will be recognized according to the modified
terms.
The financial assets when transferred will not be derecognized if the Company has retained nearly all the risks and
rewards related to the ownership of the financial assets.
The substance-over-form principle shall be adopted while making judgment on whether the transfer of financial assets
satisfies the above conditions for termination of recognition.
The transfer of financial assets can be classified into entire transfer and partial transfer. If the transfer of an entire
financial asset satisfies the conditions for termination of recognition, the difference between the two amounts below
shall be recorded into profit or loss for the period:
① The book value of the financial asset transferred;
② The consideration received as a result of the transfer, plus the accumulative amount of the change in fair value
previously recorded into the owners' equity (in cases where the transferred financial assets are financial assets
measured at fair value and whose changes are included in other comprehensive income (debt instruments)).
If the partial transfer of financial assets satisfies the conditions for termination of recognition, the overall book value of
the transferred financial asset shall be apportioned according to their respective relative fair value between the
recognition terminated part and the remaining part, and the difference between the two amounts below shall be
recorded into profit or loss for the current period:
① The book value of the derecognized portion;
② The sum of consideration of the derecognized portion and the corresponding portion of accumulated change in fair
value previously recorded into owners' equity (in cases where the transferred financial assets are financial assets
measured at fair value and whose changes are included in other comprehensive income (debt instruments)).
Financial assets will still be recognized if they fail to satisfy the conditions for termination of recognition, with the
consideration received recognized as a financial liability.
(4) Derecognition of financial liabilities
When the current obligation under a financial liability is completely or partially discharged, the recognition of the whole
or relevant portion of the liability is terminated; an agreement is entered between the Company and a creditor to
replace the original financial liabilities with new financial liabilities with substantially different terms, terminate the
recognition of the original financial liabilities as well as recognize the new financial liabilities.
If all or part of the contract terms of the original financial liabilities are substantially amended, the recognition of the
original financial liabilities will be terminated in full or in part, and the financial liabilities whose terms have been
amended shall be recognized as a new financial liability.
When recognition of financial liabilities is terminated in full or in part, the difference between the book value of the
financial liabilities terminated and the consideration paid (including transferred non-cash assets or new financial liability)
is recognized in profit or loss for the current period.
Where the Company repurchases part of its financial liabilities, the book value of such financial liabilities will be
allocated according to the relative fair value between the continued recognized part and terminated part on the
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repurchase date. The difference between the book value of the financial liabilities terminated and the consideration
paid (including transferred non-cash assets or new financial liability) is recognized in profit or loss for the current period.
(5) Method of determining the fair values of financial assets and liabilities
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active
market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation
technique. The Company uses the valuation technique when it is applicable under current conditions and there are
enough available data and other information to support and the technique should maximize the use of relevant
observable. It chooses the inputs which are consistent with the asset or liability's characteristics considered by market
participants in the transaction of the relevant asset or liability and makes the maximum use of relevant observable
inputs. Unobservable inputs are used under the circumstance that the relevant observable inputs cannot be obtained
or not feasible.
(6) Test method and accounting treatment for impairment of financial assets
The Company bases its impairment accounting treatment on the expected credit loss on the financial assets at
amortized cost, the financial assets at fair value through other comprehensive income (debt instruments), and the
financial guarantee contracts.
Taking into the reasonable and well-grounded information including past matters, current situation and prediction of
future economic conditions, the Company calculates the possibly weighted amount of the present value of the
difference between the cash flows receivable under the contract and the cash flows expected to be received, taking
the risk of default as the weight, and recognizes the expected credit loss.
The Company will always measure the loss provision for the accounts receivable and contract assets arising from the
transactions regulated by "Accounting Standard for Business Enterprises No.14 - Revenue", whether they contain
material financing compositions or not, by the amount of the expected credit loss throughout the duration.
For the lease receivables arising from the transactions regulated by "Accounting Standard for Business Enterprises No.
21 - Lease", the Company will always measure the loss provision for the accounts receivable, by the amount of the
expected credit loss throughout the duration.
For other financial instruments, the Company assesses at each balance sheet date the changes in the credit risk of
relevant financial instruments since initial recognition.
By comparing the risk of default of financial instruments on the balance sheet date with the risk of default on the initial
recognition date, the Company determines the relative change in the risk of default over the expected life of financial
instruments to assess whether the credit risk of financial instruments has increased significantly since initial
recognition. If the financial instrument becomes overdue for more than 30 days, the Company believes that the credit
risk of this financial instrument has been significantly increased, unless there are concrete evidences that the credit
risk of this financial instrument has not been significantly increased upon initial recognition.
If the financial instrument carries low credit risk at the balance sheet date, the Company believes that the credit risk of
this financial instrument is not significantly increased upon initial recognition.
If the credit risk of this financial instrument has been significantly increased upon initial recognition, the Company
measures its loss provision in accordance with the amount equivalent to the expected credit loss of the financial
instrument throughout the duration; if the credit risk of this financial instrument is not significantly increased upon initial
recognition, the Company will measure the loss provision of this financial instrument by the amount of its expected
credit loss in the 12 months to come. The increased or reversed amount of the loss provision resulting therefrom is
included in the current profit or loss as the impairment loss or profit. For the financial assets measured at fair value and
whose changes are included in other comprehensive income (debt instruments), their loss reserve is recognized in
other comprehensive income and the impairment loss or gain is included in the current profit or loss without reducing
the book value of such financial assets listed in the balance sheet.
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If there are objective evidences showing that a certain account receivable has been subject to credit impairment, the
Company will accrue impairment provision for this account receivable on the individual item basis.
The Company divides the financial instruments other than the above accounts receivable with the bad debt provision
accrued based on single item into several combinations based on the credit risk characteristics, and determines the
expected credit loss on a combined basis. The combination categories of the Company for which the expected credit
loss is accrued, including notes receivable, accounts receivable, receivables financing, other receivables, contract
assets (including contract assets presented in other non-current assets) and long-term receivables (including long-
term receivables due within 1 year presented in non-current assets due within 1 year) and the basis for determination
thereof are shown as follows:
Item Combination
Basis of Determination
Category
Notes receivable With reference to the historical credit loss experience,
combined with the current situation and the prediction
Bill type of future economic conditions, the expected credit
Receivables Financing loss is calculated through the exposure at default and
the expected credit loss rate throughout the duration.
With reference to the historical credit loss experience,
combined with the current situation and the prediction
Aging
Accounts receivable, other receivables of future economic conditions, the expected credit
mechanics
loss is calculated through the exposure at default and
the expected credit loss rate throughout the duration.
Related parties With reference to the historical credit loss experience,
that are combined with the current situation and the prediction
included in the of future economic conditions, the expected credit
Accounts receivable, other receivables scope of loss is calculated through the exposure at default and
consolidated the expected credit loss rate throughout the duration.
financial
statements
With reference to the historical credit loss experience,
Contract assets (including contract combined with the current situation and the prediction
Nature of the
assets presented in other non-current of future economic conditions, the expected credit
funds
assets) loss is calculated through the exposure at default and
the expected credit loss rate throughout the duration.
With reference to the historical credit loss experience,
Long-term receivables (including long-
combined with the current situation and the prediction
term receivables due within 1 year Nature of the
of future economic conditions, the expected credit
presented in non-current assets due funds
loss is calculated through the exposure at default and
within 1 year)
the expected credit loss rate throughout the duration.
If the Company no longer reasonably expects that the cash flow of the financial asset contract can be recovered as a
whole or in part, the book balance of such financial assets will be directly reduced.
12. Notes receivable
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11. Financial
instruments
13. Accounts receivable
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11. Financial
instruments
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14. Receivables financing
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11. Financial
instruments
15. Other receivables
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11. Financial
instruments
16. Contract assets
(1) Recognition method and criteria of contract assets
The Company lists contract assets or contract liabilities in the balance sheet according to the relationship between
performance obligations and customer payments. Considerations that the Company has the right to collect for
commodities transferred or services provided to customers (and such right depends on other factors than passing of
time) are presented as contract assets. The contract assets and contract liabilities under the same contract are
presented in net amount. The Company separately presents the right possessed to collect consideration from
customers unconditionally (only depending on the passing of time) as accounts receivable.
(2) Determination method and accounting treatment method for the expected credit loss of contract assets
For details, refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11.
Financial instruments
17. Inventories
(1) Category of inventory
Inventories are classified as raw materials, commodity stocks, products in progress and materials commissioned for
processing.
The inventories are initially measured at cost, which comprises the cost of purchase, cost of conversion and other
expenditure incurred in bringing the inventories to their present location and condition.
(2) Determination of cost
Cost of inventories is determined using the weighted average method.
(3) Basis for the determination of net realizable value and different type of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. When the cost of
inventories is higher than their net realizable value, reserve for stock depreciation shall be accrued. The net realizable
value means the amount after deducting the estimated cost of completion, estimated selling expenses and relevant
taxes from the estimated selling price of inventories in the daily activities.
Net realizable value of held-for-sale commodity stocks, such as finished goods, goods-in-stock, and held-for-sale raw
materials, during the normal course of production and operation, shall be determined by their estimated sales less the
related selling expenses and taxes; the net realizable value of material inventories, which need to be processed,
during the normal course of production and operation, shall be determined by the amount after deducting the
estimated cost of completion, estimated selling expenses and relevant taxes from the estimated selling price of
finished goods; the net realizable value of inventories held for execution of sales contracts or labor contracts shall be
calculated on the ground of the contracted price. If an enterprise holds more inventories than the quantity stipulated in
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the sales contract, the net realizable value of the exceeding part shall be calculated on the ground of general selling
price.
If the Company accrues the reserve for stock depreciation based on the combination, the combination category and
the basis for determination thereof as well as the basis for determination of the net realizable value of different types of
inventories are shown as follows:
Combination category of Basis for determination of the Basis for determination of the net
inventories combination realizable value
Raw materials Inventory category Estimated selling price of inventories -
Work-in-progress Inventory category estimated cost of completion -
estimated selling expenses - relevant
Finished goods Inventory category
taxes
Contract performance costs Inventory category
If the factors influencing the write-down of the inventory value have disappeared, resulting in higher net realizable
value of inventories than their book value after the reserve for stock depreciation is accrued, a reversal shall apply in
the amount of reserve for stock depreciation previously accrued, and the reserved amount shall be included in the
current profit or loss.
(4) Inventory system
The perpetual inventory system is adopted.
(5) Amortization of low-value consumables and packaging materials
① Low-value consumables are amortized using the immediate write-off method;
② Packaging materials are amortized using the immediate write-off method.
18. Holding assets for sale
(1) Recognition criteria and accounting treatment method
An asset of which the book value is recovered mainly through sale (including exchange of non-monetary asset of a
commercial nature), rather than continuous use of a non-current asset or a disposal group, is classified as a holding
asset for sale.
A non-current asset or disposed group is classified by the Company as holding for sale if it meets the following criteria
at the same time:
① Immediate sale could be made under the current circumstances in accordance with the convention of selling such
kind of assets or disposal groups in similar transactions;
② Selling is highly likely to occur, i.e., the Company has made a resolution on a sales plan and obtained confirmed
purchase commitments, and the sales is predicted to be completed within 1 year. If required by relevant provisions that
selling shall only be made after approved by the relevant competent authority or supervision department of the
Company, such approval should have been obtained.
If the book value of the non-current assets (excluding financial assets, deferred income tax assets, and assets to
constitute payroll payable) or disposal groups classified as holding for-sale assets is higher than the net amount after
deducting the selling expenses from the book value, the book value will be written down to the net amount after
deducting the selling expenses from the fair value, and the amount written down will be recognized as the impairment
loss of assets and included in the current profit or loss. At the same time, the impairment provision for holding for-sale
assets will be accrued.
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(2) Identification criteria and presentation method for termination of business
Termination of business is a separately distinguishable constituent part that satisfies one of the following conditions
and that has been disposed of or classified by the Company as held for sale:
② This constituent part represents an independent primary business or a separate principal operating area;
② This constituent part is part of an associated plan to dispose of an independent primary business or a separate
principal operating area;
③ This constituent part is a subsidiary acquired for resale.
The profit or loss from going concern and the profit or loss from discontinued operation will be separately presented in
the income statement. The operating profit or loss and the profit or loss from disposal, including impairment loss and
reversed amount from discontinued operation, will be presented as the profit or loss from discontinued operation. For
the discontinued operation presented in the current period, the Company will present the information previously
presented as the profit or loss from going concern as the profit or loss from discontinued operation during the
comparable accounting period.
19. Long-term receivables
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11. Financial
instruments
20. Long-term equity investment
(1) Criterion of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, and exists only when requiring the
unanimous consent of the parties sharing control before making decisions about the relevant activities of the
arrangement. The Company together with the other joint venture parties can jointly control over the investee and are
entitled to the right of the net assets of the investee, as the investee is joint venture of the Company.
Significant influence refers to the power to participate in making decisions on the financial and operating policies of an
enterprise, but not the power to control, or jointly control, the formulation of such policies with other parties. Where the
Company can exercise significant influence over the investee, the investee is an associate of the Company.
(2) Determination of initial investment cost
① Long-term equity investments formed through business combination
For the long-term equity investment in the subsidiaries arising from business combination involving entities under
common control, the initial investment cost of the long-term equity investment is the share with reference to the book
value of the shareholders' equity of the combined party in the consolidated financial statements of the ultimate
controlling party on the date of combination. The share premium in the capital reserve shall be adjusted according to
the difference between the initial investment cost of the long-term equity investment and the carrying amount of the
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consideration paid; if the share premium in the capital reserve is insufficient to offset, the retained earnings shall be
adjusted. In connection with imposing control over the investee under common control as a result of additional
investment and other reasons, the share premium shall be adjusted according to the difference between the initial
investment cost of the long-term equity investment as recognized by the above principle and the carrying value of the
long-term equity investment before combination and the sum of carrying value of newly paid consideration for
additional shares acquired on the date of combination. If the share premium is insufficient for write-down, the retained
earnings shall be offset.
For the long-term equity investment in the subsidiaries arising from business combinations involving entities not under
common control, the cost of the combination ascertained on the date of acquisition shall be taken as the initial
investment cost of the long-term equity investment. In connection with imposing control over the investee not under
common control as a result of additional investment and other reasons, the initial investment cost shall be the sum of
the book value of the equity investment originally held and the newly increased initial investment cost.
② Long-term equity investments acquired by the means other than business combination
The initial cost of a long-term equity investment obtained by cash payment shall be the purchase costs actually paid.
The initial cost of investment of a long-term equity investment obtained by means of issuance of equity securities shall
be the fair value of the equity securities issued.
(3) Subsequent measurement and recognition of profit or loss
① Long-term equity investment calculated by cost method
Long-term equity investment in subsidiaries of the Company is calculated by cost method, unless the investment
meets the conditions for holding for sale. except for the actual consideration paid for the acquisition of investment or
the declared but not yet distributed cash dividends or profits which are included in the consideration, investment gains
are recognized as the Company' shares of the cash dividends or profits declared by the investee.
② Long-term equity investment accounted for by equity method
Long-term equity investments of associates and joint ventures are calculated using equity method. Where the initial
investment cost of the long-term equity investment exceeds the investor's interest in the fair value of the investee's
identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost; where the
initial investment cost is less than the investor's interest in the fair value of the investee's identifiable net assets at the
acquisition date, the difference shall be charged to the profit or loss for the current period. At the same time, the cost of
the long-term equity investment shall be adjusted.
The Company recognizes the investment income and other comprehensive income according to the shares of net
profit or loss and other comprehensive income realized by the investee which it shall be entitled or shared respectively,
and simultaneously makes adjustment to the book value of long-term equity investment; The book value of long-term
equity investment shall be reduced by attributable share of the profit or cash dividends for distribution declared by the
investee. In relation to other changes in the owner's equity except for net profits and losses, other comprehensive
income and profit distributions of the investee (hereinafter referred to as “Changes in Other Owner's Equity”), the book
value of the long-term equity investment shall be adjusted and included in owner's equity.
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When determining the amount of proportion of net profit or loss, other comprehensive income and other changes in the
owner's equity in the investee which it entitles, the fair value of each identifiable net assets of the investee at the time
when the investment is obtained shall be used as basis, and according to the accounting policies and accounting
period of the Company, adjustment shall be made to the net profit and other comprehensive income of the investee.
The unrealized profit or loss resulting from transactions between the Company and its associates or joint venture shall
be eliminated in proportion to the investor's equity interest of investee, based on which investment income or loss shall
be recognized, except for those assets invested or sold constituting a business. Any losses resulting from transactions,
which are attributable to impairment of assets, shall be fully recognized.
The net loss incurred by the Company to the joint ventures or affiliates is capped when the carrying amount of long-
term equity investment and the long-term equity that substantially constitutes the net investment in the joint ventures or
affiliates have been wrote down to zero, except to the extent that the Company has an additional loss obligation. If the
joint ventures or affiliates later realize net profit, the Company will resume recognition of the income share after the
income share makes up the unrecognized loss share.
③ Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the book value and the consideration actually
received shall be included in the current profit or loss.
If the remaining equity is still subject to the equity method in partial disposal of the long-term equity investment under
the equity method, other comprehensive income recognized in the original equity investment shall be carried forward
at the appropriate proportion on the same basis used by the investee for direct disposal of relevant assets or liabilities,
and other changes in the owner's equity shall be carried forward into the current profit or loss at the appropriate
proportion. When losing the control or material influence over the investee due to disposal of the equity investment
and other reasons, other comprehensive income recognized in the original equity investment due to adoption of the
equity method shall be subject to accounting treatment on the same basis used by the investee for direct disposal of
relevant assets or liabilities when ceasing to use the equity method, and other changes in the owner's equity shall be
carried forward into the current profit or loss in full when ceasing to use the equity method.
If the control over the investee is lost due to partial disposal of the equity investment and other reasons, and if the
remaining equities can exercise common control or material influence over the investee in preparing the individual
financial statements, the remaining equities shall be accounted by the equity method and shall be adjusted as if such
remaining equities have been accounted for under the equity method since they are obtained. Other comprehensive
income recognized before the control over the investee is obtained shall be carried forward pro rata on the same basis
used by the investee for direct disposal of relevant assets or liabilities, and other changes in the owner's equity
recognized under the equity method shall be carried forward into the current profit or loss pro rata. The remaining
equities which cannot exercise common control or material influence over the investee shall be recognized as financial
assets, and the difference between their fair value and book value on the date when the control is lost shall be
included in the current profit or loss. Other comprehensive income recognized and other changes in the owner's equity
recognized before the control over the investee is obtained shall be carried forward in full.
If the disposal of the equity investment in the subsidiaries through multiple transactions until loss of the control is a
package deal, each transaction shall be subject to accounting treatment as a transaction to dispose of the equity
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investment in the subsidiaries and to lose the control; the difference between the price for each disposal before loss of
the control and the book value of the long-term equity investment of the equity disposed of shall be first recognized as
other comprehensive income in the individual financial statements and shall then be carried forward to the profit or loss
for the very period when the control is lost. If it is not a package deal, each transaction shall be subject to accounting
treatment.
21. Investment properties
Investment property refers to the real estate held to generate rental income or capital appreciation, or both, including
leased land use rights, land use rights held for transfer after appreciation, and leased buildings (including buildings that
are leased after completion of self-construction or development activities and buildings in construction or development
that are used for rental in the future).
The Company adopts the cost mode to measure the existing investment property. The subsequent expenditure related
to the investment property will be included in the cost of the investment property when relevant economic benefits are
likely to flow in and costs can be measured reliably, or otherwise be included in the current profit or loss when
occurred. Investment property measured at cost - buildings held for leasing shall adopt the same depreciation policy
for fixed assets of the company, land use rights held for leasing shall adopt the same amortization policy for the
intangible assets.
22. Fixed assets
(1) Conditions for recognition of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to
others, or for administrative purposes; and have a service life of more than one fiscal year. Fixed asset is recognized
when it meets the following conditions at the same time: ① It is probable that the economic benefits associated with
the fixed asset will flow to the enterprise; ② Its cost can be reliably measured.
The fixed assets are initially measured at cost (with the impact of predicted discard expense taken into account).
The subsequent expenditure related to the fixed assets will be included in the cost of the fixed assets when the
economic benefits in connection therewith are likely to flow in and costs can be measured reliably; the book value of
the replaced part will be derecognized; all other subsequent expenditure will be included in the current profit or loss
when occurred.
(2) Methods for depreciation
Useful lives of Annual depreciation
Category Depreciation method Residual Ratio
depreciation rate
Housing and building Straight-line method 20 5% 4.75%
Machinery and
Straight-line method 5-10 5% 19.00%-9.50%
equipment
Means of transport Straight-line method 4-8 5% 23.75%-11.88%
Electronic and other
Straight-line method 3-5 5% 31.67%-19.00%
equipment
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Fixed assets are depreciated by categories using the straight-line method, and the annual depreciation rates are
determined by categories based upon their estimated useful lives and their estimated residual values. Where the parts
of a fixed asset have different useful lives or cause economic benefits for the enterprise in different ways, different
depreciation rates or depreciation methods shall apply, and each part is depreciated separately.
(3) Disposal of fixed assets
When fixed assets are disposed of or when no economic benefits can be expected through use or disposal thereof,
such fixed assets will be derecognized. The income from disposal of the fixed assets through sale, transfer, scrapping
or damage with the book value thereof and relevant taxes deducted is included in the current profit or loss.
23. Projects under construction
The projects under construction are measured at the actual cost. The actual cost comprises the building cost,
installation cost, borrowing cost qualified for capitalization and other necessary expenditures incurred to bring the
projects under construction to the conditions before they are made ready for the intended use. The projects under
construction will be converted into fixed assets when they are ready for intended use and will be depreciated from the
next month on. The criterion and time point for the projects under construction of the Company to be carried forward
into fixed assets are shown as follows:
Category Criterion and time point for carrying forward into fixed assets
Housing and building When the housing and buildings meet the criteria for living by people after the
completion acceptance and fire acceptance are completed and the water and
power are available
Machinery and equipment When the equipment is installed, commissioned and available for normal use
Electronic and other equipment When the equipment is installed, commissioned and available for normal use
24. Borrowing costs
(1) Criteria for recognition of capitalized borrowing costs
For borrowing costs incurred by the Company that are directly attributable to the acquisition, construction or production
of assets qualified for capitalization, the costs will be capitalized and included in the costs of the related assets. Other
borrowing costs shall be recognized as expense in the period in which they are incurred and included in the profit or
loss for the current period. Assets qualified for capitalization are assets (fixed assets, investment property, inventories,
etc.) that necessarily take a substantial period of time for acquisition, construction or production to get ready for their
intended use or sale.
(2) Capitalization period of borrowing costs
The capitalization period shall refer to the period between the commencement and the cessation of capitalization of
borrowing costs, excluding the period in which capitalization of borrowing costs is suspended. Capitalization of
borrowing costs begins when the following three conditions are fully satisfied:
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① Asset expenditures (including cash paid, transferred non-currency assets or expenditure for holding debt liability for
the acquisition, construction or production of assets qualified for capitalization) have been incurred;
② Borrowing costs have been incurred;
③ The acquisition, construction or production necessary to enable the asset reach its intended state of serviceability
or marketability have commenced. Capitalization of borrowing costs shall be suspended during periods in which the
qualifying asset under acquisition and construction or production ready for the intended use or sale.
(3) Suspension of capitalization period
Capitalization of borrowing costs shall be suspended during periods in which the acquisition, construction or
production of a qualifying asset is interrupted abnormally, when the interruption is for a continuous period of more than
3 months; if the interruption is a necessary step for making the qualifying asset under acquisition and construction or
production ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing
costs incurred during such period shall be recognized as profits and losses of the current period. When the acquisition
and construction or production of the asset resumes, the capitalization of borrowing costs commences.
(4) Calculation of capitalization rate and amount of borrowing costs
Specific borrowings for the acquisition, construction or production of assets qualified for capitalization, borrowing costs
of the specific borrowings actually incurred in the current period minus the interest income earned on the unused
borrowing loans as a deposit in the bank or as investment income earned from temporary investment will be used to
determine the amount of borrowing costs for capitalization.
General borrowings for the acquisition, construction or production of assets qualified for capitalization, the to-be-
capitalized amount of interests on the general borrowing shall be calculated and determined by multiplying the
weighted average asset disbursement of the part of the accumulative asset disbursements minus the specifically
borrowed loans by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and
determined according to the weighted average interest rate of the general borrowing.
During the capitalization, the difference between the principal and interest of special borrowings in foreign currency
shall be capitalized and included in the cost of assets qualified for capitalization. The difference between the principal
and interest of the borrowings in foreign currency other than the special borrowings in foreign currency shall be
included in the current profit or loss.
25. Intangible assets
(1) Service life and its basis of determination, estimation, amortization method or review
procedure
① Valuation method of intangible assets
a. Intangible assets are initially measured at cost upon acquisition;
The costs of an externally purchased intangible asset include the purchase price, relevant taxes and expenses paid,
and other expenditures directly attributable to putting the asset into condition for its intended use.
b. Subsequent measurement
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The service life of intangible assets shall be analyzed and judged upon acquisition.
As for intangible assets with a finite service life, they are amortized using the straight-line method over the term in
which economic benefits are brought to the firm; If the term in which economic benefits are brought to the firm by an
intangible asset cannot be estimated, the intangible asset shall be taken as an intangible asset with indefinite service
life, and shall not be amortized.
② Estimation of service life of the intangible assets with limited service life
Item Estimated useful lives Basis
Land use rights 40 or 50 years Land use certificate
Non-patented technology 5-10 years Expected benefited period
Software 2-5 years Expected benefited period
Trademark rights 6 years Expected benefited period
Software copyright 10 years Expected benefited period
For an intangible asset with a finite service life, review on its service life and amortization method is performed at the
end of each end.
Upon review, service life and amortization method for the intangible assets are the same with the previous estimate at
the end of this period.
③ The basis for the judgment of intangible assets with uncertain service life and the procedure for reviewing their
service life
As at the balance sheet date, the Company has no intangible assets with uncertain service life.
(2) Scope of accumulation and relevant accounting treatment method for R&D expenditures
① Scope of accumulation for R&D expenditures
The expenditures incurred by the Company during the research and development include employee compensations of
the personnel who are engaged in the R&D activities, costs of materials consumed, costs of depreciation and
amortization and other relevant expenditures.
② Specific criteria for the division of research phase and development phase
The expenses for internal research and development projects of the Company are divided into expenses in the
research phase and expenses in the development phase.
Research phase: Scheduled innovative investigations and research activities to obtain and understand scientific or
technological knowledge.
Development phase: Apply the research outcomes or other knowledge to a plan or design prior to a commercial
production or use in order to produce new or essentially-improved materials, devices, products, etc.
③ Specific condition for capitalizing expenditure during the development phase
Expenses in the research phase are recorded into the profits and losses for the current period when they occur. The
expenses in the development phase are recognized as intangible assets if the following conditions are fulfilled, and are
included in the current profit or loss if following conditions are not fulfilled:
a. It is technically feasible to complete such intangible asset so that it will be available for use or for sale;
b. There is intention to complete the intangible asset for use or sale;
c. The ways in which intangible asset generates economic benefits, including there is evidence that the products
produced using the intangible asset has a market or the intangible asset itself has a market; if the intangible asset is
for internal use, there is evidence that there exists usage for the intangible asset;
d. There is sufficient support in terms of technology, financial resources and other resources in order to complete the
development of the intangible asset, and there is capability to use or sell the intangible asset;
e. The expenses attributable to the development stage of the intangible asset can be measured reliably.
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If the expenses in the research phase and expenses in the development phase cannot be distinguished, all the
expenses incurred for R&D are included in the current profit or loss.
26. Impairment of long-term assets
Long-term assets, such as long-term equity investment, investment properties that are measured at cost, fixed assets,
construction in progress, intangible assets with limited service life and oil and gas assets are tested for impairment if
there is any indication that an asset may be impaired at the balance sheet date. If the result of the impairment test
indicates that the recoverable amount of the asset is less than its book value, a provision for impairment and an
impairment loss are recognized for the amount by which the asset's book value 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 to is determined. A group of assets is the smallest group of
assets that is able to generate cash inflows independently.
For the goodwill arising from business combination, intangible assets with uncertain service life, and intangible assets
which are not ready for intended use, impairment test shall be conducted at least at the end of each year, regardless
of whether there are signs of impairment or not.
When the Company carry out impairment test to goodwill, the Company shall, as of the purchasing day, allocate on a
reasonable basis the book value of the goodwill formed by merger of enterprises to the relevant asset groups, or if
there is a difficulty in allocation, to allocate it to the sets of asset groups. Relevant asset groups or the sets of asset
groups mean those can benefit from the synergy of business combination.
For the purpose of impairment test on the relevant asset groups or the sets of asset groups containing goodwill, if any
evidence shows that the impairment of asset groups or sets of asset groups related to goodwill is possible, an
impairment test will be made first on the asset groups or sets of asset groups not containing goodwill, thus calculating
the recoverable amount and comparing it with the relevant book value so as to recognize the corresponding
impairment loss. An impairment test will be made on the asset groups or sets of asset groups containing goodwill to
compare the book value of these asset groups or sets of asset groups with the recoverable amount. Where the
recoverable amount is lower than the book value, the amount of impairment loss shall set off and be apportioned to the
book value of the goodwill in the asset groups or sets of asset groups, and then set off the book value of other assets
pro rata according to the proportion of the book value of other assets other than the goodwill in the asset groups or
sets of asset groups.
Once the above asset impairment loss is recognized, it will not be reversed in the subsequent accounting periods.
27. Long-term deferred expenses
Long-term deferred expenses are expenses which have occurred but will benefit over 1 year and shall be amortized
over the current period and subsequent periods.
The amortization period and amortization method of various expenses are:
Item Amortization Amortization period
method
Improvement expenditure of fixed assets leased by operating Straight-line By period of benefit
lease method
Renovation Cost Straight-line By period of benefit
method
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28. Contract liabilities
The Company lists contract assets or contract liabilities in the balance sheet according to the relationship between
performance obligations and customer payments. The Company lists the obligation to transfer commodities or offer
services to customers for the consideration received or receivable from customers as contract liabilities. The contract
assets and contract liabilities under the same contract are presented in net amount.
29. Employee compensation
(1) Accountant treatment of short-term remuneration
During the accounting period when the staff provides service, the Company will recognize the short-term remuneration
actually incurred as liabilities, and the liabilities would be charged into current profits and loss or costs of assets.
The Company will pay social insurance and housing funds, and will make provision of trade union funds and staff
education costs in accordance with the requirements. During the accounting period when the staff provides service,
the Company will determine the relevant amount of employee benefits in accordance with the required provision basis
and provision ratios.
Employee compensation actually incurred by the Company will be included in the current profit or loss or relevant
asset costs when actually incurred, in which non-monetary benefits will be measured at the fair value.
(2) Accountant treatment of retirement benefit plan
① Defined contribution scheme
The Company will pay basic pension insurance and unemployment insurance in accordance with the relevant
provisions of the local government for the staff. During the accounting period when the staff provides service, the
Company will calculate the amount payable in accordance with the local stipulated basis and proportions which will be
recognized as liabilities, and the liabilities would be charged into current profits and loss or costs of assets.
② Defined benefit scheme
The welfare responsibilities generated from defined benefit scheme based on the formula determined by projected unit
credit method would be vested to the service period of the staff and charged into current profits and loss or costs of
assets.
(3) Accountant treatment of termination benefits
If the dismissal welfare is provided by the Company to employees, the employee compensation liabilities arising from
the dismissal welfare shall be determined at the earliest of the following two, and included in the current profits and
losses: When the company cannot unilaterally withdraw the dismissal welfare provided due to the termination of labor
relations plan or layoff proposal; When the company determines the costs or expenses associated with the
restructuring involving the payment of dismissal welfare.
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30. Estimated liabilities
The Company shall recognize the obligations related to contingencies as estimated liabilities, when all of the following
conditions are satisfied:
(1) The obligation is a present obligation of the Company;
(2) It is probable that an outflow of economic benefits will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
Estimated liabilities shall be initially measured at the best estimate of the expenditure required to settle the related
present obligation.
Factors pertaining to a contingency such as risk, uncertainties, and time value of money shall be taken into account as
a whole in reaching the best estimate. Where the effect of the time value of money is material, the best estimate shall
be determined by discounting the related future cash outflow.
The expenses required have a successive range, in which the possibilities of occurrence of each result are the same,
and the best estimate should be determined as the middle value for the range; in other circumstances, the best
estimate will be handled as follows, respectively:
(1) For the contingencies involving a single item, it will be determined according to the amount most likely to occur.
(2) For the contingencies involving several items, it will be determined according to the possible results and the
relevant possibilities.
Where some or all of the expenditure required to settle an estimated liability is expected to be reimbursed by a third
party, the reimbursement is separately recognized as an asset when it is virtually certain that the reimbursement will
be received. The amount recognized for the reimbursement is limited to the book value of the estimated liability.
The Company will review the book value of the estimated liabilities on the balance sheet date, and if there are
concrete evidences that such book value cannot reflect the current best estimate, the book value will be adjusted
according to the current best estimate.
31. Share-based payment
The Company's share-based payment refers to a transaction in which an enterprise determines the liabilities on the
basis of equity instruments granting or bearing for the acquisition of service from its employees or other parties. The
Company's share-based payment is equity-settled.
As to an equity-settled share-based payment in return for services of employees, calculation will be based on the fair
value of the equity instrument granted to the employees. The share-based payment transactions vested immediately
after the date of grant will be included in the relevant cost or expense based on the fair value of the equity instrument
on the date of grant, and the capital reserve will be increased accordingly. For the services within the waiting period or
the share-based payment transactions that may only be vested when the specified performance conditions are met
after the date of grant, the Company will include the services obtained in the current period in relevant cost or expense
and increase the capital reserve at the fair value on the date of grant according to the best estimate of the number of
the exercisable equity instruments on each balance sheet date in the waiting period.
If the terms of the equity-settled share-based payment are amended, the Company shall recognize the services
received at least based on the situation before the amendment was made. In addition, any amendment resulting in the
increase of the fair value of the equity instrument granted or changes that are beneficial to the staff on the amendment
date, will be recognized as an increase in the service received.
If the equity instruments vested are canceled during the waiting period, the Company will take the vested equity
instruments canceled as accelerated exercise, and immediately include the amount to recognized during the waiting
period in the current profit or loss. At the same time, the capital reserve will be recognized. However, if new equity
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instruments are vested and they are verified at the vesting date of new equity instrument as alternatives vested to
canceled equity instruments, the treatment on the new equity instrument is in conformity with the modified treatment
on disposal of equity instrument.
32. Revenue
(1) Accounting policies for revenue recognition and measurement
If the Company performed the obligations in the contract, revenue shall be recognized when the customer acquires the
right of control over relevant commodities or services. Acquisition of control over relevant commodities or services
means gaining the ability to direct the use of such commodities or services and obtain nearly all the economic benefits
therefrom.
If the contract contains two or more performance obligations, the Company shall apportion the transaction price to
each individual performance obligation on the contract commencement date according to the relative proportion of the
individual selling price of the commodities or services promised by each individual performance obligation. The
Company measures the revenue according to the transaction price apportioned to each individual performance
obligation.
The transaction price refers to the amount of consideration that the Company is expected to be entitled to collect due
to the transfer of commodities or services to customers, excluding the payments collected on behalf of third parties
and the payments expected to be returned to customers. The Company will determine the transaction price according
to the contract provisions and its past practices, and may take into account the impact from the variable consideration,
the major financing components in the contract, the non-cash consideration, the payable customer consideration and
other factors when determining the transaction price. The Company shall determine the transaction price containing
the variable consideration according to the amount not exceeding the amount by which the accumulative recognized
revenue is much more unlikely to be significantly reversed when relevant uncertainties are eliminated. If there are
major financing components in the contract, the Company shall determine the transaction price according to the
amount due assumed to be paid in cash when the customer acquires the control over the commodities or services,
and shall amortize the difference between such transaction price and the contract consideration using the effective
interest rate method during the contract period.
When one of the following conditions is met, it belongs to the performance obligation within a certain period of time, or
otherwise it belongs to the performance obligation at a certain point of time:
① The customer acquires and consumes the economic benefits arising from the Company's performance while the
company performs the contract;
② The customer can control the commodities in progress during the Company's performance;
③ The commodities produced by the Company during the performance possess irreplaceable usage, and the
Company has the right to collect payment for the performance part accumulated so far during the whole contract
period.
For the performance obligations performed within a certain period of time, the Company shall recognize the revenue
according to the performance progress within that period of time, except that the performance progress cannot be
reasonably determined. The Company will determine the performance progress through the output or input method by
taking into account the nature of commodities or services. If the performance progress cannot be reasonably
recognized and the costs incurred are expected to be compensated, the Company will recognize the revenue
according to the amount of costs incurred until the performance progress can be reasonably recognized.
For the performance obligations performed at a certain point of time, the Company will recognize the revenue when
the customer acquires the right of control over relevant commodities or services. While determining whether the
customer has acquired the control over the commodities or services, the Company shall take the following into
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consideration:
① The Company has the current collection right for the such commodities or services, that is, the customer has the
current payment obligation for such commodities or services;
② The Company has transferred the legal title of such commodities to the customer, that is, the customer already has
the legal title of such commodities;
③ The Company has transferred the physical commodities to the customer, that is, the customer has possessed the
physical commodities;
④ The Company has transferred the major risks and rewards of the commodity title to the customer, that is, the
customer has acquired the major risks and rewards of the commodity title;
⑤ The customer has accepted such commodities or services.
The Company will judge whether it is a principal or agent at the time of transaction based on the fact as to whether the
Company has the right of control over the commodities or services before such commodities or services are
transferred to the clients. If the Company has control over the commodities or services before such commodities or
services are transferred to the clients, the Company is a principal and the income is recognized by the total
consideration received or receivable; or otherwise, the Company is an agent, and the income is recognized by the
amount of commission or service charge that the Company is expected to be entitled to collect.
(2) Recognition and measurement of the specific income disclosed per business type
① Principle for recognizing revenue from the domestic sales of standard products: The Company's security standard
products are sold, through both direct sale and distribution, to the project clients, dealers and other customers. The
Company and customers sign sales contracts and send the goods to customers according to the contractual terms of
delivery, or the customers pick up goods. The revenue is recognized after the customer receives and accepts the
goods and the Company obtains the evidence proving the client's receipt of goods;
② Principle for recognizing revenue from the overseas sales of standard products: If the domestic company makes
direct export, the FOB and CIF terms are generally adopted and the Company recognizes the sale income after the
product is declared and exported. If a foreign subsidiary sells the goods abroad, the goods will be sent to the customer
or the customer will collect the goods according to the delivery method agreed with the customer, and the income will
be recognized when the customer receives and accepts the goods;
③ Principle for recognizing system-integrated sales revenue: The sales of the system-integrated products of the
Company include providing the supporting services such as plan design, supporting products, installation, debugging
and system trial operation. The sales income will be recognized upon acceptance;
④ Principle for recognizing the income from labor services: The income is recognized when the labor service is
provided.
33. Contract costs
The contract costs comprise the contract performance cost and the cost to obtain a contract.
The costs incurred by the Company for contract performance which fall outside the scope of the enterprise accounting
standards such as inventories, fixed assets or intangible assets will be identified as an asset of the contract
performance costs upon satisfying all of the following conditions:
(1) The costs are directly related to one existing contract or one contract that is expected to be obtained;
(2) The costs enrich the Company's resources for future contract performance;
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(3) The costs are estimated to be recovered.
The incremental costs which are incurred by the Company to obtain the contract and are expected to be recovered will
be identified as an asset of the costs to obtain a contract.
The assets related to the contract costs will be amortized on the same basis for recognition of the income from
commodities or services related to the assets; but if the amortization period of the costs to obtain the contract is no
more than 1 year, the Company will include such costs in the current profit or loss once occurred.
In case that the book value of assets related to contract costs is higher than the difference between the two items
below, the Company will accrue the impairment provision for the extra part, and recognize that part as impairment loss:
(1) Estimated residual consideration to be obtained from transfer of commodities or services related to the assets;
(2) Estimated costs incurred from transfer of relevant commodities or services.
If the factors for impairment in the previous periods are subsequently changed, making the aforesaid difference higher
than the book value of the assets, the Company will reverse the accrued impairment provision and include it in the
current profit or loss, provided that the book value of the reversed assets does not exceed the book value of the assets
without impairment provision accrued on such date of reversal.
34. Government subsidies
(1) Type
Government grants are monetary assets and non-monetary assets acquired by the Company from the government
free of charge. Government grants are classified into government grants related to assets and government grants
related to revenue.
Government grants related to assets refer to government grants acquired by the Company for the purpose of
purchasing or constructing or otherwise forming long-term assets. Government grants related to revenue refer to the
government grants other than those related to assets.
(2) Confirmation of time point
Government grants related to assets will be measured at the actual amount of money received at the time of receipt.
The assets (bank deposits) and deferred income shall be period by period included in the profits and losses of the
current period in a reasonable and systematic manner from the time the assets are available for use (those related to
the Company's daily activities shall be included in other income; those unrelated to the Company's daily activities shall
be recognized as non-operating revenue). When the relevant assets are disposed of (sold, transferred, scrapped, etc.)
at or before the end of their service life, the balance of the deferred income that has not yet been apportioned will be
transferred to the current-period income from the disposal of the assets on an one-time manner, and will not be
deferred.
For government grants related to revenue, they will be recognized as profit and loss of the current period according to
the amount receivable for government grants obtained under fixed quota standards, otherwise, they will be recognized
as profit and loss of the current period when it is actually received.
(3) Accounting treatment
Government grants related to assets shall write off the book value of relevant assets or be recognized as deferred
income. When recognized as deferred income, the government grant related to assets will be period by period credited
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to the profits and losses of the current period in a reasonable and systematic manner within the service life of relevant
assets (those related to the Company's daily activities shall be recognized as other income; those unrelated to the
Company's daily activities shall be recognized as non-operating revenue).
The revenue-related government grants shall be recognized as deferred income if they are used to compensate
relevant expenses or losses in subsequent periods, and they shall be included in profit and loss of the current period
(those related to Company's routine activities shall be included in other income; those unrelated to the Company's
routine activities shall be included in non-operating revenue) or used to offset relevant expenses or losses during the
recognition of related expenses or losses; the grants used to compensate related expenses or losses incurred shall be
included in profit and loss of the current period (those related to Company's routine activities shall be included in other
income; those unrelated to the Company's routine activities shall be included in non-operating revenue) or used to
offset relevant expenses or losses.
The policy-oriented concessional loan discount interests obtained by the Company will be subject to accounting
treatment in the following two circumstances:
① Where the finance allocates the discount interest funds to the lending bank, and the lending bank provides loans to
the Company at the policy preferential interest rate, the Company will take the actually received loan amount as the
entry value of the loan, and the relevant borrowing costs shall be calculated according to the loan principal and the
policy preferential interest rate;
② If the finance directly allocates the discount interest funds to the Company, the Company shall set off the
corresponding discount interest against the relevant borrowing costs.
35. Deferred income tax assets / deferred income tax liabilities
Income tax comprises current income tax and deferred income tax. Except for the income taxes arising from the
business combination and the transactions or matters that are directly included in the owner's equity (including other
comprehensive income), the Company will include the current income tax and deferred income tax into the current
profit or loss.
Deferred income tax assets and deferred income tax liabilities will be calculated and recognized according to the
difference (temporary difference) between the tax basis and the book value of assets and liabilities.
Deferred income tax assets are recognized to the extent that it is probable that future taxable income will be available
against which deductible temporary differences can be utilized. For deductible losses and tax credits that can be
reversed in the future period, deferred income tax assets shall be recognized to the extent that it is probable that
taxable income will be available in the future to offset the deductible losses and tax credits.
Save as the exceptions, deferred income tax liabilities shall be recognized for the taxable temporary difference.
The exceptions where deferred income tax assets and liabilities are not recognized include:
(1) Initial recognition of the goodwill;
(2) Transactions or events that are neither business combinations nor affect profit and taxable income (or deductible
loss) when occurring.
Taxable temporary difference related to investment in the subsidiaries, affiliates and joint ventures will be recognized
as deferred income tax liabilities, unless the Company can control the time to reverse such temporary difference and
such temporary difference is much more unlikely to be reversed in the predictable future. Deductible temporary
difference related to investment in the subsidiaries, affiliates and joint ventures will be recognized as deferred income
tax assets when such temporary difference is much more likely to be reversed in the predictable future and is much
more likely to be obtained to deduct the taxable income of the deductible temporary difference.
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On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities will be measured at
the tax rate applicable during the recovery of relevant assets or payment of relevant liabilities as expected according to
the provisions of the tax law.
On the balance sheet date, the Company will review the book value of the deferred income tax assets. If no sufficient
taxable income is likely to be obtained to offset the benefits of deferred income tax assets in the future, the book value
of deferred income tax assets shall be written down. The amount written down shall be reversed when it is likely to
obtain sufficient taxable income.
After granted the legal rights of net settlement and with the intention to use net settlement or obtain assets and repay
debt at the same time, the net amount after offsetting its current income tax assets and current income tax liabilities
shall be recorded.
On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities will be presented by
the net amount after offsetting when the following conditions are fulfilled:
(1) The taxpayer is granted the legal rights to settle current income tax assets and current income tax liabilities on a
net basis;
(2) Deferred income tax assets and deferred income tax liabilities are related to income tax to be paid by the same
entity liable for paying tax to the same tax collection and management authority or related to different entities liable for
paying tax, but the relevant entity liable for paying tax is intended to apply net settlement of current income tax assets
and liabilities or, at the same time, obtain assets, repay debt whenever every deferred income tax assets and liabilities
with importance would be reversed in the future.
36. Lease
Lease means the contract by which the lessor transfers the right to use the assets to the lessee for a given period to
obtain the consideration. On the commencement of the contract, the Company will assess whether the contract is a
lease or contains the lease. If a party to the contract conveys the right to control the use of one or more identified
assets for a given period to obtain a consideration, this contract is a lease or contains the lease.
If a contract contains several individual leases, the Company will split the contract and conduct accounting treatment
of each individual lease separately. If a contact contains both lease and non-lease, the lessee and the lessor will split
the lease and non-lease parts.
If all the following conditions are met, the Company will simplify all the lease options without assessing whether the
lease is changed or reassessing the lease classification:
(1) The lease consideration after reduction is less or remains substantially the same compared with the lease
consideration before reduction, and the lease consideration may either be undiscounted or discounted by the discount
rate before reduction;
(2) Other terms and conditions of lease are identified without significant change after taking the qualitative and
quantitative factors into full account.
(1) The Company as a lessee
① Right-of-use assets
The Company recognizes the right-to-use assets for the lease other than short-term lease and low-value asset lease
on the commencement of the lease term. The right-to-use assets are initially measured at cost which includes:
a. Initial measurement amount of lease liabilities;
b. For the lease payment paid on or before the commencement of the lease term, if there are lease incentives, the
relevant amount of lease incentives enjoyed shall be deducted;
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c. Initial direct cost incurred by the Company;
d. The estimated costs incurred by the Company for dismantling and removing the leased asset, restoring the site
where the leased asset is located or restoring the leased asset to the state agreed in the lease terms, but excluding
the cost incurred to produce the inventory.
The Company will depreciate the right-to-use assets through the straight-line method. If it can be reasonably
recognized that the title of the leased asset is acquired at the expiration of the lease term, the Company shall accrue
depreciation within the remaining service life of the leased asset; or otherwise, the leased asset shall be depreciated
within the shorter of the lease term and the remaining service life of the leased asset.
The Company will determine whether the right-of-use assets are impaired and conduct accounting treatment over the
identified impairment loss according to the principles set out in this section Financial Report - V. Significant Accounting
Polices and Accounting Estimates - 26. Impairment of long-term assets.
② Lease liabilities
The Company recognizes the lease liabilities for the lease other than short-term lease and low-value asset lease on
the commencement of the lease term. Lease liabilities shall be initially measured at the present value of the unpaid
lease payments. Lease payments include:
a. Fixed payment (including actual fixed payment), deducting lease incentives (if any);
b. Variable lease payment depending on the index or ratio;
c. Predicted payment on the basis of the guaranteed residual value provided by the Company;
d. Exercise price of the call option, provided that the Company will exercise such option, as reasonably determined;
e. Payment for exercise of the lease termination option, provided that the lease term reflects the Company’s future
exercise of the lease termination option.
The interest rate implicit in lease is applied by the Company as the discount rate. If the interest rate implicit in lease
cannot be reasonably determined, the Company's interest rate on incremental borrowings is applied as the discount
rate.
The Company shall calculate the interest expense of the lease liabilities during each period of the lease term at a fixed
periodic interest rate and include it in the current profit or loss or relevant asset cost.
The variable lease payment which is not included in the measurement of lease liabilities shall be included in the
current profit or loss or relevant asset cost when actually incurred.
If any of the following circumstances happens on commencement of the lease term, the Company will remeasure the
lease liabilities and adjust the corresponding right-of-use assets, and if the book value of the right-of-use assets has
been reduced to zero, but the lease liabilities still need to be further reduced, the difference shall be included in the
current profit or loss:
a. When the assessment result of the call option, renewal option or termination option is changed or the actual
exercise of the aforesaid option is inconsistent with the original assessment result, and the Company remeasures the
lease liabilities at the present value worked out according to the changed lease payment and the revised discount rate;
b. When there are changes in the actual fixed payment, the estimated payable amount of guaranteed residual value,
or the index or ratio applied to determine the amount of lease payments, the Company remeasures the lease liabilities
at the present value worked out according to the changed lease payment and the original discount rate. If the change
in the lease payment originates from the change in the floating interest rate, the present value will be calculated using
the revised discount rate.
③ Short-term lease and low-value asset lease
The Company chooses not to recognize the right-of-use assets and lease liabilities for the short-term lease and low-
value asset lease, and records relevant lease payment into the current profit or loss or relevant asset cost according to
the straight-line method in each period of the lease term. Short-term lease means the lease of no more than 12
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months and excluding the call option on the commencement of the lease term. Low-value asset lease means a lease
of lower value when the single leased asset is brand-new. If the Company sublets or is expected to sublet the leased
assets, the original lease is not a low-value asset lease.
④ Lease change
If the lease is changed and meets all of the following conditions, the Company will conduct accounting treatment with
respect to such lease change as a single lease:
a. Such lease change has expanded the scope of lease by adding the right to use one or more leased assets;
b. The increased consideration is equivalent to the amount of the separate consideration for the expanded part of the
scope of lease adjusted according to this contract.
If the lease change is not taken as a separate lease for accounting treatment, on the effective date of the lease change,
the Company will re-apportion the consideration of the changed contract, re-determine the lease term, and remeasure
the lease liabilities at the present value worked out according to the changed lease payment and the revised discount
rate.
If the lease change results in narrower scope of lease or shorter lease term, the Company will reduce the book value
of the right-of-use assets accordingly, and will include relevant gain or loss from partial or full termination of the lease
in the current profit or loss. If other lease changes result in re-measurement of the lease liabilities, the Company will
adjust the book value of the right-to-use assets accordingly.
(2) The Company as a lessor
On commencement of the lease term, the Company will divide the lease into financial lease and operating lease.
Financial lease means the lease that has substantially transferred almost all the risks and rewards related to the title of
the leased assets, whether or not the title will be finally transferred. Operating lease means any lease other than
financial lease. When the Company serves as a lessor of the sublease, the sublease will be classified on the basis of
the right-to-use assets resulting from the original lease.
① Accounting treatment of operating lease
The lease receipts for the operating lease will be recognized as the rental income according to the straight-line method
during each period of the lease term. The initial direct fee related to the operating lease to be incurred by the Company
will be capitalized and will be apportioned and included in the current profit or loss on the same basis as that for
recognition of the rental income in the lease term. The variable lease payments that are not included in the lease
receipts shall be included in the current profit or loss when they actually occur. In case of a change to the operating
lease, the Company will conduct accounting treatment with respect to the changed operating lease as a new lease as
of the effective date of the change, and the lease payments received in advance or receivable with respect to the lease
before the change will be taken as the lease receipts for the new lease.
② Accounting treatment of financial lease
On the commencement of the lease term, the Company will recognize the financial lease receivables for the financial
lease, and derecognize the financial lease assets. The Company will take the net lease investment as the entry value
of the financial lease receivables when initially measuring the financial lease receivables. The net lease investment is
the sum of the unguaranteed residual value and the present value of the unreceived lease receipts discounted
according to the interest rate implicit in lease on the commencement of the lease term.
The Company will calculate and recognize the interest income during each period of the lease term at a fixed periodic
interest rate. The derecognition and impairment of the financial lease receivables will be subject to accounting
treatment according to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11.
Financial instruments.
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The variable lease payments that are not included in the measurement of the net lease investment shall be included in
the current profit or loss when they actually occur.
If the financial lease is changed and meets all of the following conditions, the Company will conduct accounting
treatment with respect to such change as a single lease:
a. Such change has expanded the scope of lease by adding the right to use one or more leased assets;
b. The increased consideration is equivalent to the amount of the separate consideration for the expanded part of the
scope of lease adjusted according to this contract.
If the change in the financial lease is not subject to accounting treatment as a single lease, the Company will treat the
changed lease in the following circumstances:
a. If the change takes effect on commencement of the lease term and the lease is classified as operating lease, the
Company will conduct accounting treatment with respect to such lease as a new lease as of the effective date of the
lease change, and will take the net lease investment before the effective date of the lease change as the book value of
the leased asset;
b. If the change takes effect on the commencement date of the lease, and such lease is classified as the financial
lease, the Company will conduct accounting treatment according to the policy regarding modification or re-negotiation
of the contract in this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11.
Financial instruments.
(3) Sale and leaseback transaction
The Company evaluates and determines whether the asset transfer in the sale and leaseback transaction belongs to a
sale in accordance with the provisions of this section Financial Report - V. Significant Accounting Polices and
Accounting Estimates - 32. Income.
① Acting as a lessee
If the asset transfer in the sale and leaseback transaction is a sale, the Company as the lessee shall measure the
right-of-use asset arising from the sale and leaseback according to the part related to the right of use acquired from
the leaseback in the original book value of the asset, and only recognize relevant gain or loss on the rights transferred
to the lessor; if the asset transfer in the sale and leaseback transaction is not a sale, the Company as the lessee shall
continue to recognize the transferred asset, and recognize a financial liability equal to the transfer income. For
accounting treatment of the financial liabilities, refer to this section Financial Report - V. Significant Accounting Polices
and Accounting Estimates - 11. Financial instruments.
② Acting as a lessor
If the asset transfer in the sale and leaseback transaction is a sale, the Company as the lessee shall conduct
accounting treatment with respect to the asset purchase and conduct accounting treatment with respect to the asset
lease according to the policy in the foregoing "(2) The Company as a lessor"; if the asset transfer in the sale and
leaseback transaction is not a sale, the Company as the lessor shall derecognize the transferred asset, but recognize
a financial asset equal to the transfer income. For accounting treatment of the financial assets, refer to this section
Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11. Financial instruments.
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37. Other significant accounting policies and accounting estimates
(1) Repurchase of the Company's shares
The Company's shares repurchased by the Company for reducing the registered capital or rewarding employees shall
be treated as the treasury shares based on the actual amount paid, and shall be checked and registered at the same
time. If the repurchased shares are canceled, the difference between the actual amount paid for the repurchase and
the total par value of shares calculated based on the par value of the canceled shares and the number of canceled
shares will be set off against the capital reserve. If the capital reserve is insufficient, the retained earnings will be
written off; if the repurchased shares are awarded to the employees of the Company, it shall be categorized as equity-
settled share-based payment. When the Company receives the payment made by employees who exercise their rights
to purchase such shares, the amount shall be used to write off the cost of treasury shares delivered to employees and
the capital reserve in the waiting period and meanwhile, the capital reserve (stock premium) shall be adjusted
according to the difference.
(2) Debt restructuring
① The Company as a creditor
The Company will derecoginize the creditor's rights when its contractual right to collect the cash flow for the creditor's
rights is terminated. If the debts are restructured by repaying the debts with assets or converting the debts into equity
interments, the Company will recognize relevant assets within the meaning of their definitions and recognition
conditions.
If the debts are restructured by repaying the debts with assets, when initially recognized by the Company for
acceptance, the non-financial assets will be measured at cost. The costs of inventories include the fair value of the
creditor's rights abandoned and the taxes, transportation costs, handling charges, insurance premiums and other costs
directly attributable to such assets, which are incurred to realize the current position and state of such assets. The
costs of investments in the associates or joint ventures include the fair value of the creditor's rights abandoned and the
taxes and other costs directly attributable to such assets. The costs of investment properties include the fair value of
the creditor's rights abandoned and the taxes and other costs directly attributable to such assets. The costs of fixed
assets include the fair value of the creditor's rights abandoned and the taxes, transportation costs, handling charges,
installation costs, professional service fees and other costs directly attributable to such assets, which are incurred for
such assets to become ready for their intended use. The costs of biological assets include the fair value of the
creditor's rights abandoned and the taxes, transportation costs, insurance premiums and other costs directly
attributable to such assets. The costs of intangible assets include the fair value of the creditor's rights abandoned and
the taxes and other costs directly attributable to such assets, which are incurred for such assets to become ready for
their intended use. If the creditor converts its creditor’s rights into equity investments in the associates or joint ventures
arising from the debt restructuring by converting the debts into equity instruments, the Company will measure its initial
investment cost according to the fair value of the creditor's rights abandoned and the taxes and other costs directly
attributable to such assets. The difference between the fair value and the book value of the creditor’s rights abandoned
shall be included in the current profit or loss.
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If the debts are restructured by modifying other terms, the Company will recognize and measure creditor’s rights
restructured according to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates -
11. Financial instruments.
If the debts are restructured by repaying the debts with several assets or through combination, the Company will first
recognize and measure the financial assets accepted and creditor’s rights restructured according to this section
Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11. Financial instruments, then
distribute the net amount derived from deducting the recognized amount of the financial assets accepted and creditor’s
rights restructured from the fair value of the creditor’s rights abandoned according to the proportion of the fair value of
the assets other than the financial assets accepted, and on this basis, determine the costs of various assets
respectively by the aforesaid means. The difference between the fair value and the book value of the creditor’s rights
abandoned shall be included in the current profit or loss.
② The Company as a debtor
The Company will derecognize the debts when the current obligation under the debts is discharged.
If the debts are restructured by repaying the debts with assets, the Company will derecognize relevant assets and the
debts repaid within the meaning of their derecognition conditions, and the difference between the book value of the
debts repaid and the book value of the assets transferred shall be included in the current profit or loss.
If the debts are restructured by converting the debts into equity interments, the Company will derecognize the debts
repaid within the meaning of their derecognition conditions. When initially recognized by the Company, the equity
instruments will be measured at its fair value, and if the fair value of the equity instruments cannot be reliably
measured, at the fair value of the debts repaid. The difference between the book value of the debts repaid and the
recognized amount of the equity instruments shall be included in the current profit or loss.
If the debts are restructured by modifying other terms, the Company will recognize and measure the debts restructured
according to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 11. Financial
instruments.
If the debts are restructured by repaying the debts with several assets or through combination, the Company will
recognize and measure the equity instruments and debts restructured by the aforesaid means, and the difference
between the book value of the debts repaid and the sum of the book value of the assets transferred and the
recognized amount of the equity instruments and the debts restructured shall be included in the current profit or loss.
38. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
Applicable □ Not applicable
Unit: RMB
Content and Reasons for Change in Accounting Item Names of the Statements
Amount of Influence
Policies Significantly Affected
The provision of the Accounting Standards for
No effect 0.00
Business Enterprises No.16 that “The
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accounting treatment of deferred income taxes
related to the assets and liabilities arising from a
single transaction which shall not be exempted
from initial recognition”
As of January 1, 2023, the Company implemented the provision of the Accounting Standards for Business Enterprises
No.16 promulgated by the Ministry of Finance that “The accounting treatment of deferred income taxes related to the
assets and liabilities arising from a single transaction which shall not be exempted from initial recognition”, and such
change in the accounting policy has no influence on the financial statements of the Company.
(2) Changes in significant accounting estimates
□ Applicable Not applicable
(3) The first implementation of new accounting criteria from 2023 to adjust the relevant items of the financial
statements implemented at the beginning of the year for the first time
□ Applicable Not applicable
Ⅵ. Taxes
1. Major categories of taxes and tax rates
Tax Type Taxation basis Tax rate
According to the provisions of the tax
law, the sales tax shall be calculated
on the basis of the income by selling
goods and taxable services. After 13%, 9%, 6%, simple collection rate
VAT deducting the input tax that is of 5%, simple collection rate of 3%,
allowed to be deducted from the 0% and tax-free
sales tax in the current period, the
difference shall be the value added
tax
Urban Maintenance and Construction
Actually paid turnover tax 7%、5%
Tax
Enterprise Income Tax Taxable income 15%、16.5%、20%、25%
Education Surcharges Actually paid turnover tax 3%
Local Education Surcharges Actually paid turnover tax 2%
If there are multiple taxpayers with different enterprise income tax rates, specify the situation
Name of taxpayer Income tax rate
Zhejiang Dahua Technology Co., Ltd. 15%
Zhejiang Dahua System Engineering Co., Ltd. 15%
Zhejiang HuaRay Technology Co., Ltd. 15%
Zhejiang Huaxiao Technology Co., Ltd. 15%
Zhejiang Huafei Intelligent Technology CO., LTD. 15%
Zhejiang Huaruijie Technology Co., Ltd. 15%
Zhejiang Huajian Technology Co., Ltd. 15%
Hangzhou Huacheng Software Co., Ltd. 15%
Zhejiang Pixfra Technology Co., Ltd. 15%
Jiangsu Huaruipin Technology Co. Ltd. 15%
Xinjiang Dahua Zhixin Information Technology Co., Ltd. 15%
Xinjiang Dahua Zhihe Information Technology Co., Ltd. 15%
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Xinjiang Dahua Zhitian Information Technology Co., Ltd. 15%
Xinjiang Dahua Huayue Information Technology Co., Ltd. 15%
Xinjiang Dahua Xinzhi Information Technology Co., Ltd. 15%
Inner Mongolia Dahua Zhimeng Information Technology
15%
Co., Ltd.
Guangxi Dahua Zhicheng Co., Ltd. 15%
Guangxi Huacheng Technology Co., Ltd. 15%
Guizhou Meitan Dahua Information Technology Co., Ltd. 15%
Zhejiang Dahua Ju'an Technology Co., Ltd. 20%
Guangxi Dahua Technology Co., Ltd. 20%
Zhejiang Huakong Software Co., Ltd. 20%
Dahua Technology (HK) Limited 16.50%
Yunnan Zhili Technology Co., Ltd 20%
Hangzhou Xiaohua Technology CO., LTD. 20%
Chengdu Zhichuang Yunshu Technology Co., Ltd. 20%
Chengdu Huishan Smart Network Technology Co., Ltd. 20%
Guizhou Huayi Shixin Technology Co., Ltd. 20%
Zhejiang Zhoushan Digital Development Operation Co.
20%
Ltd.
Tianjin Dahua Information Technology Co., Ltd. 20%
Chengdu Dahua Zhishu Information Technology Service
20%
Co., Ltd.
Chengdu Huazhiwei Technology Co., Ltd. 20%
Chengdu Dahua Wisdom Information Technology Co.,
20%
Ltd.
Nanyang Dahua Intelligent Information Technology Co.,
20%
Ltd.
Zhejiang Huaqi Intelligent Technology Co., Ltd. 20%
Luoyang Dahua Zhiyu Information Technology Co., Ltd. 20%
Guangdong Huaxiyue Intelligent Technology Co., Ltd. 20%
Guangxi Dahua Yunlian Information Technology Co., Ltd. 20%
Zhejiang Huajie New Energy Operation Service Co., Ltd. 20%
Other domestic companies 25%
Other overseas companies Applicable to local tax rate
2. Preferential tax rate
(1) According to the Announcement on the Filing of High-tech Enterprises Certified and Reported by the Certification
Body of Zhejiang Province in 2023 issued by the Office for the Administration of the Certification of National High-tech
Enterprises on December 28, 2023, the Company was certified as a high-tech enterprise, valid for 3 years. The
corporate income tax for this year was paid at a reduced rate of 15%.
(2) According to the Announcement on the Filing of the First Batch of High-tech Enterprises of Zhejiang Province
Certified in 2021 issued by the Office for the Administration of the Certification of National High-tech Enterprises on
January 24, 2022, our subsidiaries Zhejiang HuaRay Technology Co., Ltd. and Zhejiang Wisualarm Technology Co.,
Ltd. were certified as high-tech enterprises, valid for 3 years. The corporate income tax for this year was paid at a
reduced rate of 15%.
(3) According to the Announcement on the Filing of High-tech Enterprises Certified and Reported by the Certification
Body of Zhejiang Province in 2023 issued by the Office for the Administration of the Certification of National High-tech
Enterprises on December 28, 2023, our subsidiaries Zhejiang Huafei Intelligent Technology Co., Ltd. and Zhejiang
Pixfra Technology Co., Ltd. were certified as high-tech enterprises, valid for 3 years. The corporate income tax for this
year was paid at a reduced rate of 15%.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(4) According to the Notice on the Filing and Publicity of High-tech Enterprises Certified by the Certification Body of
Zhejiang Province in 2022 issued by the Office for the Administration of the Certification of National High-tech
Enterprises on December 24, 2022, our subsidiaries Zhejiang Huaruijie Technology Co., Ltd., Zhejiang Huajian
Technology Co., Ltd., Hangzhou Huacheng Software Co., Ltd. and Zhejiang Dahua System Engineering Co., Ltd. were
certified as high-tech enterprises, valid for 3 years. The corporate income tax for this year was paid at a reduced rate
of 15%.
(5) According to the Announcement on the Filing of the Second Batch of High-tech Enterprises Certified and Reported
by the Certification Body of Jiangsu Province in 2023 issued by the Office for the Administration of the Certification of
National High-tech Enterprises on January 4, 2024, our subsidiary Jiangsu Huaruipin Technology Co. Ltd. was
certified as a high-tech enterprise, valid for 3 years. The corporate income tax for this year was paid at a reduced rate
of 15%.
(6) According to the Announcement of the Ministry of Finance and the State Taxation Administration on Further
Implementing the Preferential Income Tax Policies for Micro and Small Enterprises (CaiShui [2022] No. 13) and the
Announcement of the Ministry of Finance and the State Taxation Administration on the Preferential Income Tax
Policies for Small Low-Profit Enterprises and Individual Industrial and Commercial Households (CaiShui [2023] No. 6),
the annual taxable income of the following subsidiaries that is no more than RMB 1 million shall be taxed at a reduced
rate of 25% for tax purpose, and the enterprise income tax shall be paid at a rate of 20%; and the annual taxable
income exceeding RMB 1 million but no more than RMB 3 million shall be taxed at a reduced rate of 25% and the
enterprise income tax shall be paid at a rate of 20%: Zhejiang Dahua Ju'an Technology Co., Ltd., Guangxi Dahua
Technology Co., Ltd., Zhejiang Huakong Software Co., Ltd., Yunnan Zhili Technology Co., Ltd., Hangzhou Xiaohua
Technology Co., Ltd., Chengdu Zhichuang Yunshu Technology Co., Ltd., Chengdu Huishan Smart Network
Technology Co., Ltd., Guizhou Huayi Shixin Technology Co., Ltd., Zhejiang Zhoushan Digital Development Operation
Co. Ltd., Tianjin Dahua Information Technology Co., Ltd., Chengdu Dahua Zhishu Information Technology Service Co.,
Ltd., Chengdu Huazhiwei Technology Co., Ltd., Chengdu Dahua Wisdom Information Technology Co., Ltd., Nanyang
Dahua Intelligent Information Technology Co., Ltd., Zhejiang Huaqi Intelligent Technology Co., Ltd., Luoyang Dahua
Zhiyu Information Technology Co., Ltd., Guangdong Huaxiyue Intelligent Technology Co., Ltd., Guangxi Dahua
Yunlian Information Technology Co., Ltd. and Zhejiang Huajie New Energy Operation Service Co., Ltd.
(7) According to the Notice of the Ministry of Finance, the State Administration of Taxation and the General
Administration of Customs on Tax Policy Issues Concerning Further Implementing the Western China Development
Strategy (CaiShui [2011] No. 58) and the Announcement of the Ministry of Finance, the State Taxation Administration
and the National Development and Reform Commission on Continuing the Enterprise Income Tax Policies for the
Western China Development (CaiShui [2020] No. 23), the following subsidiaries can enjoy preferential tax policies
related to the Western China Development Program from 2011 to 2030: Xinjiang Dahua Zhixin Information Technology
Co., Ltd., Xinjiang Dahua Zhihe Information Technology Co., Ltd., Xinjiang Dahua Zhitian Information Technology Co.,
Ltd., Xinjiang Dahua Huayue Information Technology Co., Ltd., Xinjiang Dahua Xinzhi Information Technology Co.,
Ltd., Inner Mongolia Dahua Zhimeng Information Technology Co., Ltd., Guangxi Dahua Zhicheng Technology Co., Ltd.,
Guangxi Huacheng Technology Co., Ltd. and Guizhou Meitan Dahua Information Technology Co., Ltd. The corporate
income tax for this year was paid at a reduced rate of 15%.
(8) According to the Notice of the Ministry of Finance and the State Administration of Taxation on Value-added Tax
Policies for Software Products (CaiShui [2011] No.100), the sales of software products independently developed by
Zhejiang Dahua Technology Co., Ltd., Zhejiang Dahua System Engineering Co., Ltd., Hangzhou Xiaohua Technology
Co., Ltd., Zhejiang Huafei Intelligent Technology Co., Ltd., Jiangsu Huaruipin Technology Co., Ltd., Zhejiang Huaruijie
Technology Co., Ltd., Zhejiang Huajian Technology Co., Ltd., Zhejiang Wisualarm Technology Co., Ltd., Zhejiang
Pixfra Technology Co., Ltd., Hangzhou Huacheng Software Co., Ltd. and Zhejiang HuaRay Technology Co., Ltd. shall
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
be subject to a value-added tax at the rate of 13% first, and the actual tax exceeding 3% will be refunded after being
reviewed and approved by the competent tax authorities.
(9) According to the Announcement of the Ministry of Finance and the State Taxation Administration on Clarifying the
Value-Added Tax Reduction and Exemption Policies for Small-Scale Value-Added Tax Taxpayers and Other Policies
(CaiShui [2023] No. 1), in 2023, the taxpayers from the productive and consumer-oriented service sectors may
increase 5% and 10% of current deductible input tax, respectively, to offset the taxable amount (hereinafter referred to
as “Additional Deduction Policy”) The subsidiaries of the Company, Zhejiang Dahua Security Network Operation
Service Co., Ltd., Beijing Huayue Shangcheng Information Technology Service Co., Ltd., Shanghai Huashang
Chengyue Information Technology Service Co., Ltd., Chengdu Dahua Zhilian Information Technology Co., Ltd.,
Guangxi Dahua Zhicheng Co., Ltd., Tianjin Dahua Information Technology Co., Ltd. and Xinjiang Dahua Zhihe
Information Technology Co., Ltd. meet the requirements in the Additional Deduction Policy for value-added taxes and
have enjoyed preferential tax policies for additional deduction of input taxes from 2022.
(10) According to the Notice of the Ministry of Finance and the State Taxation Administration on the Additional Value-
Added Tax Deduction Policy for Advanced Manufacturing Enterprises (Announcement [2023] No. 43 of the Ministry of
Finance and the State Administration of Taxation), from January 1, 2023 to December 31, 2027, the advanced
manufacturing enterprises are allowed to increase 5% of the current deductible input tax to offset the amount subject
to value-added taxes. Zhejiang HuaRay Technology Co., Ltd. meets the requirements in the Additional Deduction
Policy for value-added taxes for advanced manufacturing enterprises and have enjoyed preferential tax policies for
additional deduction of value-added taxes for advanced manufacturing enterprises from 2023.
Ⅶ. Notes to the Items in the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB
Item Closing balance Opening balance
Cash on Hand 2,642.58 2,535.81
Digital Currency 160,820.00
Bank Balance 15,827,819,644.89 7,787,399,232.70
Other Cash and Bank Balances 143,022,007.00 242,476,882.26
Deposits with Financial Companies
Total 15,971,005,114.47 8,029,878,650.77
Including: Total Amount Deposited
930,951,357.54 1,259,307,799.53
in Overseas Banks
Other notes: The monetary funds restricted for use due to mortgage, pledge or freeze, restricted for withdrawal due to
centralized management and deposited in overseas banks and restricted for repatriation are detailed as follows:
Balance at the end of the previous
Item Closing balance
year
Bid/performance bond 68,981,082.99 110,737,143.60
Frozen funds 6,862,600.24 19,900,398.75
Total 75,843,683.23 130,637,542.35
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2. Trading Financial Assets
Unit: RMB
Item Closing balance Opening balance
Financial assets at fair value through
1,470,000.00 1,470,000.00
profit or loss in this period
Including: Financial Products 1,470,000.00 1,470,000.00
Total 1,470,000.00 1,470,000.00
3. Notes Receivable
(1) Disclosure of Notes Receivable
Unit: RMB
Item Closing balance Opening balance
Bank Acceptance Notes 665,341,998.76 631,542,296.47
Commercial Acceptance Notes 147,697,193.99 240,759,774.71
Total 813,039,192.75 872,302,071.18
(2) Categorical disclosure by methods for provision by bad debts
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Accrued Book Accrued Book
Percent value Percent value
Amount Amount proporti Amount Amount proporti
age age
on on
Notes
Receiva
ble with
the Bad
Debt
Provisio
834,798 100.00 21,758, 813,039 911,616 100.00 39,314, 872,302
n 2.61% 4.31%
,129.64 % 936.89 ,192.75 ,343.99 % 272.81 ,071.18
Accrue
d
Based
on
Combin
ations
Inclu
ding:
Bank
672,300 6,958,6 665,341 638,799 7,257,6 631,542
accepta 80.53% 1.04% 70.07% 1.14%
,691.46 92.70 ,998.76 ,974.81 78.34 ,296.47
nce bill
Comme
rcial 162,497 14,800, 147,697 272,816 32,056, 240,759
19.47% 9.11% 29.93% 11.75%
accepta ,438.18 244.19 ,193.99 ,369.18 594.47 ,774.71
nce bill
834,798 100.00 21,758, 813,039 911,616 100.00 39,314, 872,302
Total
,129.64 % 936.89 ,192.75 ,343.99 % 272.81 ,071.18
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Bad Debt Provision Accrued Based on Combinations: RMB 21,758,936.89
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Bank Acceptance Notes 672,300,691.46 6,958,692.70 1.04%
Commercial Acceptance
162,497,438.18 14,800,244.19 9.11%
Notes
Total 834,798,129.64 21,758,936.89
If the bad debt provisions of notes receivable are made according to the general model of expected credit losses:
□ Applicable Not applicable
(3) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Category Opening balance Recovered or Closing balance
Accrued Written Off Others
Reversed
Bank
Acceptance 7,257,678.34 298,985.64 6,958,692.70
Notes
Commercial
Acceptance 32,056,594.47 17,256,350.28 14,800,244.19
Notes
Total 39,314,272.81 17,555,335.92 21,758,936.89
Significant amount of recovered or reversed bad debt provision in this period:
□ Applicable Not applicable
(4) Notes receivable that the Company has pledged at the end of the period
Unit: RMB
Item Pledged amount by the end of period
Bank Acceptance Notes 384,608,856.94
Total 384,608,856.94
(5) Notes receivable that the Company has endorsed or discounted at the end of the period
and that have not yet expired on the balance sheet date
Unit: RMB
Derecognised amount at the end of Not derecognised amount at the end
Item
period of period
Bank Acceptance Notes 39,320,431.95
Total 39,320,431.95
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
4. Accounts Receivable
(1) Disclosure by age
Unit: RMB
Aging Closing balance Opening balance
Within 1 year (including 1 year) 14,458,581,851.85 13,084,171,203.70
1 to 2 years 1,675,541,614.13 2,108,343,765.62
2 to 3 years 914,682,001.04 913,526,456.01
3 years or above 2,359,337,149.65 2,367,104,303.90
3 to 4 years 627,873,130.02 1,023,194,700.91
4 to 5 years 605,039,214.61 728,883,845.46
5 years or above 1,126,424,805.02 615,025,757.53
Total 19,408,142,616.67 18,473,145,729.23
(2) Categorical disclosure by methods for provision by bad debts
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Accrued Book Accrued Book
Percent value Percent value
Amount Amount proporti Amount Amount proporti
age age
on on
Account
s
receiva
bles
with the
bad
debt 467,182 433,667 33,515, 591,779 591,779 100.00
2.41% 92.83% 3.20%
provisio ,946.91 ,151.15 795.76 ,632.41 ,632.41 %
n
accrued
based
on
single
item
Inclu
ding:
Account
s
receiva
ble with
insignifi
467,182 433,667 33,515, 591,779 591,779 100.00
cant 2.41% 92.83% 3.20%
,946.91 ,151.15 795.76 ,632.41 ,632.41 %
single
amount
but
accrued
for
284
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
separat
e
provisio
n of bad
debt
Account
s
receiva
bles
with the
bad
18,940, 2,697,6 16,243, 17,881, 2,469,4 15,411,
debt
959,669 97.59% 71,511. 14.24% 288,158 366,096 96.80% 57,535. 13.81% 908,561
provisio
.76 49 .27 .82 32 .50
n
accrued
based
on
combin
ations
Inclu
ding:
Aging
Analysi 18,940, 2,697,6 16,243, 17,881, 2,469,4 15,411,
s 959,669 97.59% 71,511. 14.24% 288,158 366,096 96.80% 57,535. 13.81% 908,561
Portfoli .76 49 .27 .82 32 .50
o
19,408, 3,131,3 16,276, 18,473, 3,061,2 15,411,
100.00 100.00
Total 142,616 38,662. 803,954 145,729 37,167. 908,561
% %
.67 64 .03 .23 73 .50
Bad Debt Provision Accrued Based on Single Item: RMB 433,667,151.15
Unit: RMB
Opening balance Closing balance
Name Reason for
Bad debt Bad debt Accrued
Book balance Book balance making bad
provision provision proportion
debt provision
Expected to
225,140,645.3 225,140,645.3 225,140,645.3 225,140,645.3
Customer 1 100.00% be unable to
6 6 6 6
recover
Expected to
Customer 2 49,001,963.55 49,001,963.55 49,001,963.55 49,001,963.55 100.00% be unable to
recover
Expected to
Customer 3 38,693,240.50 38,693,240.50 38,612,198.42 38,612,198.42 100.00% be unable to
recover
Expected to
Customer 4 20,596,426.50 20,596,426.50 100.00% be unable to
recover
Expected to
Customer 5 18,790,253.00 18,790,253.00 18,790,253.00 18,790,253.00 100.00% be unable to
recover
Expected to
260,153,530.0 260,153,530.0
Customer 6 be unable to
0 0
recover
Other 115,041,460.0 81,525,664.32 70.87% Expected to
285
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Customers 8 be unable to
recover
591,779,632.4 591,779,632.4 467,182,946.9 433,667,151.1
Total
1 1 1 5
Bad Debt Provision Accrued Based on Combinations: RMB 2,697,671,511.49
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Within 1 year (including 1 14,438,917,770.02 721,945,888.49
5.00%
year)
1 to 2 years 1,662,886,767.62 166,288,676.76 10.00%
2 to 3 years 889,329,864.90 266,798,959.48 30.00%
3 to 4 years 591,304,387.67 295,652,193.84 50.00%
4 to 5 years 557,675,433.13 446,140,346.50 80.00%
5 years or above 800,845,446.42 800,845,446.42 100.00%
Total 18,940,959,669.76 2,697,671,511.49
If the bad debt provisions of accounts receivable are made according to the general model of expected credit losses:
□ Applicable Not applicable
(3) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Written Off Others balance
Reversed
Bad debt 3,061,237,167 415,017,021.5 338,946,977.9 3,131,338,662
7,777,603.62 1,809,054.95
provision .73 5 7 .64
3,061,237,167 415,017,021.5 338,946,977.9 3,131,338,662
Total 7,777,603.62 1,809,054.95
.73 5 7 .64
Significant amount of recovered or reversed bad debt provision in this period:
N/A
(4) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Accounts receivable actually written off 338,946,977.97
Important accounts receivable written off:
N/A
(5) Accounts receivable and contract assets of the top five closing balances at the end of the
period collected by debtors
Unit: RMB
286
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Balance of Bad
Debt Provisions
Balance of As a Percentage
Balance of of Accounts
Balance of Accounts of Total Other
Accounts Receivable and
Contract Assets Receivable and Receivables and
Name of Unit Receivable at Provisions for
at the End of the Contract Assets Contract Assets
the End of the Impairment of
Period at the End of the at the End of the
Period Contract Assets
Period Period
at the End of the
Period
Customer 1 831,284,534.60 831,284,534.60 4.24% 41,564,226.73
Customer 2 476,390,669.20 476,390,669.20 2.43% 23,822,012.23
Customer 3 399,216,383.81 399,216,383.81 2.04% 19,960,819.19
Customer 4 392,685,817.67 392,685,817.67 2.00% 19,634,290.88
Customer 5 331,966,086.53 331,966,086.53 1.70% 200,044,285.91
2,431,543,491.8 2,431,543,491.8
Total 12.41% 305,025,634.94
1 1
5. Contract Assets
(1) Contract assets
Unit: RMB
Closing balance Opening balance
Item Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Completed
but unsettled 33,413,988.93 421,118.95 32,992,869.98 8,632,619.32 100,346.47 8,532,272.85
assets
O&M service 6,198,950.93 66,600.03 6,132,350.90 6,968,929.49 71,994.55 6,896,934.94
Quality 14,755,441.70 47,588,995.46
113,734,287.2
guarantee 62,344,437.16 22,828,089.70 90,906,197.56
6
deposit
101,957,377.0 15,243,160.68 86,714,216.34 129,335,836.0 106,335,405.3
Total 23,000,430.72
2 7 5
(2) Categorical disclosure by methods for provision by bad debts
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Accrued Book Accrued Book
Percent value Percent value
Amount Amount proporti Amount Amount proporti
age age
on on
Bad
Debt
Provisio
n 101,957 100.00 15,243, 86,714, 129,335 100.00 23,000, 106,335
14.95% 17.78%
Based ,377.02 % 160.68 216.34 ,836.07 % 430.72 ,405.35
on
Combin
ations
Incl
287
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
uding:
Combin
ation of
101,957 100.00 15,243, 86,714, 129,335 100.00 23,000, 106,335
Nature 14.95% 17.78%
,377.02 % 160.68 216.34 ,836.07 % 430.72 ,405.35
of the
Funds
101,957 100.00 15,243, 86,714, 129,335 100.00 23,000, 106,335
Total 14.95% 17.78%
,377.02 % 160.68 216.34 ,836.07 % 430.72 ,405.35
Bad Debt Provision Accrued Based on Combinations: RMB 15,243,160.68
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Combination of Nature of
101,957,377.02 15,243,160.68 14.95%
the Funds
Total 101,957,377.02 15,243,160.68
Bad debt provisions made according to the general model of expected credit losses
□ Applicable Not applicable
(3) Provision for bad debts accrued, recovered or reversed in this period
Unit: RMB
Recovered or
Provisions of this Write-off in this
Item reversed in this Causes
period period
period
Completed but
320,772.48
unsettled assets
O&M service 5,394.52
Quality guarantee
8,072,648.00
deposit
Total 320,772.48 8,078,042.52 ——
Significant amount of recovered or reversed bad debt provision in this period:
N/A
6. Receivables Financing
(1) Disclosure of receivables financing
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 810,713,267.86 679,441,917.62
Total 810,713,267.86 679,441,917.62
(2) Financing of accounts receivable pledged by the Company at the end of the period
Unit: RMB
Item Pledged amount by the end of period
Bank acceptance bill 527,818,073.31
Total 527,818,073.31
288
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(3) Financing of accounts receivable that the Company has endorsed or discounted at the end
of the period and that have not yet expired on the balance sheet date
Unit: RMB
Derecognised amount at the end of Not derecognised amount at the end
Item
period of period
Bank acceptance bill 92,886,786.46
Total 92,886,786.46
7. Other Receivables
Unit: RMB
Item Closing balance Opening balance
Dividends Receivable 5,784,225.02 8,519,063.17
Other Receivables 331,740,463.34 393,330,183.71
Total 337,524,688.36 401,849,246.88
(1) Dividends Receivable
1) Classification of Dividends Receivable
Unit: RMB
Project (or investee) Closing balance Opening balance
Intelbras S.A. 5,784,225.02 8,519,063.17
Total 5,784,225.02 8,519,063.17
(2) Other receivables
1) Other receivables categorized by the nature of the funds
Unit: RMB
Nature of the funds Closing balance Opening balance
Deposits 148,419,383.42 189,076,400.18
Prepaid or advance expense 129,465,778.21 117,681,402.84
Equity Transfer Fund 44,693,899.47 41,929,391.85
Export tax rebate 26,923.43 1,759,198.88
Employee home loan 89,695,884.00 108,572,799.00
Others 402,441.33 14,710,466.36
Total 412,704,309.86 473,729,659.11
2) Disclosure by age
Unit: RMB
Aging Closing balance Opening balance
Within 1 year (including 1 year) 175,351,662.59 287,714,109.96
1 to 2 years 117,075,815.72 80,884,486.86
2 to 3 years 57,728,030.61 44,394,417.54
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
3 years or above 62,548,800.94 60,736,644.75
3 to 4 years 31,838,007.64 28,019,284.25
4 to 5 years 17,297,622.38 10,600,033.09
5 years or above 13,413,170.92 22,117,327.41
Total 412,704,309.86 473,729,659.11
(3) Categorical disclosure by methods for provision by bad debts
Applicable □ Not applicable
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Accrued Book Accrued Book
Percent value Percent value
Amount Amount proporti Amount Amount proporti
age age
on on
Bad
Debt
Provisio
n 412,704 100.00 80,963, 331,740 473,729 100.00 80,399, 393,330
19.62% 16.97%
Based ,309.86 % 846.52 ,463.34 ,659.11 % 475.40 ,183.71
on
Combin
ations
Incl
uding:
Aging
Analysi
412,704 100.00 80,963, 331,740 473,729 100.00 80,399, 393,330
s 19.62% 16.97%
,309.86 % 846.52 ,463.34 ,659.11 % 475.40 ,183.71
Portfoli
o
412,704 100.00 80,963, 331,740 473,729 100.00 80,399, 393,330
Total 19.62% 16.97%
,309.86 % 846.52 ,463.34 ,659.11 % 475.40 ,183.71
Bad Debt Provision Accrued Based on Combinations: RMB 80,963,846.52
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Within 1 year (including 1
175,351,662.59 8,767,583.13 5.00%
year)
1 to 2 years 117,075,815.72 11,707,581.57 10.00%
2 to 3 years 57,728,030.61 17,318,409.18 30.00%
3 to 4 years 31,838,007.64 15,919,003.82 50.00%
4 to 5 years 17,297,622.38 13,838,097.90 80.00%
5 years or above 13,413,170.92 13,413,170.92 100.00%
Total 412,704,309.86 80,963,846.52
Bad debt provisions made according to the general model of expected credit losses:
Unit: RMB
Phase One Phase Two Phase Three
Bad debt provision Expected credit Expected credit Expected credit Total
losses in the next 12 losses for the entire losses for the entire
months extension (without extension (with credit
290
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
credit impairment) impairment)
Balance on January
42,812,272.88 36,962,447.67 624,754.85 80,399,475.40
1, 2023
Balance in the
current period on
January 1, 2023
--Transfer to phase
-3,023,125.80 3,023,125.80
two
--Transfer to phase
-104,392.42 -38,426.36 142,818.78
three
Provisions of this
783,901.43 998,508.58 1,782,410.01
period
Reversals in this
784,696.20 784,696.20
period
Write off in this
461,534.82 231,451.54 44,901.87 737,888.23
period
Other variations 304,545.54 304,545.54
Balance as of
40,311,666.81 38,930,999.37 1,721,180.34 80,963,846.52
December 31, 2023
Book balance changes with significant changes in loss provision in the current period
□ Applicable Not applicable
4) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Write-off Others balance
Reversed
Bad debt
80,399,475.40 1,782,410.01 784,696.20 737,888.23 304,545.54 80,963,846.52
provision
Total 80,399,475.40 1,782,410.01 784,696.20 737,888.23 304,545.54 80,963,846.52
Significant amount of recovered or reversed bad debt provision in this period
N/A
5) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Other accounts receivable actually written off 737,888.23
Other important accounts receivable written off:
N/A
291
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
6) Other receivables of the top five closing balances collected by debtors
Unit: RMB
As a percentage
of total other Bad debt
Nature of the
Name of Unit Closing balance Aging receivables at provision at the
funds
the end of the end of the period
period
Equity Transfer
Company 1 44,393,899.47 1-2 years 10.76% 4,439,389.95
Fund
Company 2 Deposits 11,832,000.00 2-3 years 2.87% 3,549,600.00
Prepaid or
Company 3 advance 7,815,138.70 Within 1 year 1.89% 390,756.94
expense
Prepaid or
Company 4 advance 5,500,000.00 3-4 Years 1.33% 2,750,000.00
expense
Company 5 Deposits 5,000,000.00 1-2 years 1.21% 500,000.00
Total 74,541,038.17 18.06% 11,629,746.89
8. Prepayments
(1) Aging analysis of prepayments is as follows
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 168,576,768.97 89.01% 98,788,464.16 81.18%
1 to 2 years 11,544,945.31 6.10% 11,055,223.64 9.08%
2 to 3 years 5,759,402.22 3.04% 8,871,438.20 7.29%
3 years or above 3,507,600.49 1.85% 2,976,113.14 2.45%
Total 189,388,716.99 121,691,239.14
(2) Advance payment of the top five closing balances by prepayment parties
The advance payment of the top five closing balances by the concentration of prepayment parties was summed up to
RMB 108,822,849.38, accounting for 57.46% of the total closing balance of the advance payment.
9. Inventories
Does the Company follow the disclosure requirements in the real estate industry?
No
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
Impairment of Impairment of
292
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Inventories or Inventories or
Provision for Provision for
Impairment of Impairment of
Performance Performance
Cost Cost
1,817,465,527 64,749,700.02 1,752,715,827 2,938,477,842 2,895,383,180
Raw materials 43,094,661.62
.90 .88 .47 .85
Work-in- 419,964,218.0 8,473,870.92 411,490,347.1 442,498,919.9 433,456,491.4
5 3 9,042,428.50
progress 7 7
Finished 2,305,873,410 86,615,979.53 2,219,257,430 3,045,977,790 2,993,401,370
.13 .60 52,576,420.27
goods .56 .29
Contract 727,101,492.7 22,396,500.68 704,704,992.0
6 8 756,000,501.2 746,955,840.5
performance 9,044,660.74
5 1
costs
Outsourced
244,439,946.3 244,439,946.3 246,175,556.9 246,175,556.9
work-in-
3 3 0 0
progress
5,514,844,595 182,236,051.1 5,332,608,544 7,429,130,611 113,758,171.1 7,315,372,440
Total
.17 5 .02 .15 3 .02
(2) Provision for impairment of inventories and provision for impairment of contract
performance cost
Unit: RMB
Increased in the current period Decreased in the current period
Opening Closing
Item Reversals or
balance Accrued Others Others balance
write-offs
Raw materials 43,094,661.62 89,987,465.93 68,788,994.97 -456,567.44 64,749,700.02
Work-in-
9,042,428.50 24,046,422.91 24,909,530.21 -294,549.72 8,473,870.92
progress
Finished
52,576,420.27 85,227,269.39 52,079,752.27 -892,042.14 86,615,979.53
goods
Contract
performance 9,044,660.74 23,047,899.27 9,696,059.33 22,396,500.68
costs
113,758,171.1 222,309,057.5 155,474,336.7 182,236,051.1
Total -1,643,159.30
3 0 8 5
10. Non-current Assets Due within 1 Year
Unit: RMB
Item Closing balance Opening balance
Long-term accounts receivables due
303,454,116.40 476,871,949.75
within 1 year
Total 303,454,116.40 476,871,949.75
11. Other Current Assets
Unit: RMB
293
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Item Closing balance Opening balance
Not deducted input tax 555,798,264.68 790,981,344.36
Prepaid enterprise income tax 34,017,571.59 27,989,091.94
Return cost receivable 11,228,032.04 8,005,696.54
National debt reverse repurchase 338,331,000.00 520,497,000.00
Issue expenses 4,933,018.88
Total 939,374,868.31 1,352,406,151.72
12. Long-term Receivables
(1) Long-term receivables
Unit: RMB
Closing balance Opening balance Rang
Bad e of
Item Bad debt debt disco
Book balance Book value Book balance Book value unt
provision provisi
on rate
Installme
nt
Payment 957,523,390.9 10,864,0 946,659,309.7
1,436,256,651.54 1,436,256,651.54
for 7 81.27 0
Selling
Products
Including:
3.69
Unrealize
128,884,735.8 128,884,735.8 %-
d 203,616,598.02 203,616,598.02
6 6 7.62
Financing
%
Income
957,523,390.9 10,864,0 946,659,309.7
Total 1,436,256,651.54 1,436,256,651.54 -
7 81.27 0
(2) Categorical disclosure by methods for provision by bad debts
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Accrued Book Accrued Book
Percent value Percent value
Amount Amount proporti Amount Amount proporti
age age
on on
Bad
Debt
Provisio
1,086,4 1,075,5 1,639,8 1,639,8
n 100.00 10,864, 100.00
08,126. 1.00% 44,045. 73,249. 73,249.
Based % 081.27 %
83 56 56 56
on
Combin
ations
Includin
g:
Combin 1,086,4 100.00 10,864, 1.00% 1,075,5 1,639,8 100.00 1,639,8
294
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
ation of 08,126. % 081.27 44,045. 73,249. % 73,249.
Nature 83 56 56 56
of the
Funds
1,086,4 1,075,5 1,639,8 1,639,8
100.00 10,864, 100.00
Total 08,126. 1.00% 44,045. 73,249. 73,249.
% 081.27 %
83 56 56 56
Bad Debt Provision Accrued Based on Combinations: RMB 10,864,081.27
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Combination of Nature of
1,086,408,126.83 10,864,081.27 1.00%
the Funds
Total 1,086,408,126.83 10,864,081.27
(3) Provision for bad debts accrued, recovered or reversed in this period
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Write-off Others balance
Reversed
Bad debt
0.00 10,864,081.27 10,864,081.27
provision
Total 0.00 10,864,081.27 10,864,081.27
Significant amount of recovered or reversed bad debt provision in this period:
N/A
13. Long-term equity investments
Unit: RMB
Decrease/Increase in the current period
Invest
ment Closin
Openi Adjust
profit Cash g
Openi ng ment Closin
and divide Provis balan
The ng balan on g
Invest Invest loss Other nds or ion for ce of
invest balan ce of other balan
ments ment recog chang profit impair Other provisi
ed ce provisi compr ce
increa decre nized es in declar ment s on for
entity (book on for ehens (book
sed ased under equity ed to accru declin
value) impair ive value)
the distrib ed e in
ment incom
equity ute value
e
metho
d
Ⅰ. Joint ventures
Ⅱ. Affiliates
Intelbr 570,2 145,5 67,28 20,95 9,013, 480,0
as 82,56 50,71 7,895. 2,913. 070.4 79,90
S.A. 6.46 1.48 93 24 1 8.08
Ruicit 71,17 7,055, 78,23
y 5,718. 847.2 1,566.
295
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Digital 81 9 10
Techn
ology
Co.,
Ltd.
Zhejia
ng
Leap -
650,4 392,2 2,608, 50,08
motor 310,8
70,25 62,37 700.6 1,247.
Techn 97,82
9.18 8.85 3 47
ology 8.43
Co.,
Ltd.
Hangz
hou
Juhua
nyan
Inform 723,4 723,4
ation 96.39 96.39
Techn
ology
Co.,
Ltd.
Shaox
ing
Dahu
a
Securi 504,3 504,3
ty 75.75 75.75
Servic
es
Co.,
Ltd.
Guan
gdong
Zhishi
-
Digital 333,9
333,9
Techn 95.11
95.11
ology
Co.,
Ltd.
Ningb
o
Huaya
n
Chua
ngxi
Ventur
e 63,05 4,377, 67,43
Capita 4,968. 586.7 2,554.
l 03 7 80
Invest
ment
Partn
ership
(Limit
ed
Partn
296
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
ership
)
Dezho
u
Shuzh
i
3,407, 3,444,
Inform 37,23
519.6 758.2
ation 8.63
3 6
Techn
ology
Co.,
Ltd.
Sichu
an
Hengji
Anhua
Intern
1,291, - 1,121,
et of
851.5 170,0 844.5
Thing
4 06.98 6
s
Techn
ology
Co.,
Ltd.
Guan
gxi
FTZ
Huaqi
n
Wisdo
m
Park 461,5 136,7 598,2
Techn 29.12 58.25 87.37
ology
Resea
rch
Institu
te
Co.,
Ltd.
Ningb
o Cida
Yongs
hun
1,638, - 1,163,
Intellig
200.5 474,2 912.7
ent
9 87.86 3
Techn
ology
Co.,
Ltd.
Zhejia
ng
Huach -
98,81 6,218, 95,38
uang 9,650,
2,655. 646.4 0,797.
Vision 504.0
44 2 85
Techn 1
ology
Co.,
297
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Ltd.
-
1,461, 538,3 2,608, 56,29 20,95 9,347, 727,4
Subtot 723,4 242,6 723,4
099,6 17,46 700.6 9,893. 2,913. 065.5 53,62
al 96.39 31,29 96.39
44.55 6.08 3 89 24 2 9.75
5.52
-
1,461, 538,3 2,608, 56,29 20,95 9,347, 727,4
723,4 242,6 723,4
Total 099,6 17,46 700.6 9,893. 2,913. 065.5 53,62
96.39 31,29 96.39
44.55 6.08 3 89 24 2 9.75
5.52
The recoverable amount is determined according to the net amount of the fair value less the cost of disposal
□ Applicable Not applicable
The recoverable amount is determined according to the present value of the expected future cash flow
□ Applicable Not applicable
14. Other Non-current Financial Assets
Unit: RMB
Item Closing balance Opening balance
Investment in equity instruments 478,782,601.67 375,902,994.01
Investment in financial products 1,056,959,784.04 555,140,136.32
Total 1,535,742,385.71 931,043,130.33
15. Investment Properties
(1) Investment properties measured by cost method
Applicable □ Not applicable
Unit: RMB
Buildings and Projects under
Item Land use rights Total
constructions Construction
Ⅰ. Original book
value
1. Opening
505,929,279.97 15,815,729.08 521,745,009.05
Balance
2. Increased in
207,345,187.79 13,538,219.52 220,883,407.31
the Current Period
(1) Purchase
(2) Transfer of fixed
assets\intangible 207,345,187.79 13,538,219.52 220,883,407.31
assets
(3) Acquisition
3. Decreased in
539,160,477.48 29,353,948.60 568,514,426.08
the Current Period
(1) Disposal
(2) Transfer to fixed
assets/intangible 539,160,477.48 29,353,948.60 568,514,426.08
assets
(3) Other transfer-out
298
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
4. Closing
174,113,990.28 174,113,990.28
Balance
Ⅱ. Accumulated
Depreciation and
Amortization
1. Opening
96,192,178.83 2,517,006.40 98,709,185.23
Balance
2. Increased in 53,434,070.91 2,691,276.92 56,125,347.83
the Current Period
(1) Accrual or 23,617,545.18 354,085.01 23,971,630.19
Amortization
(2) Transfer of fixed 29,816,525.73 2,337,191.91 32,153,717.64
assets\intangible
assets
(3) Acquisition
3. Decreased in
105,149,263.46 5,208,283.32 110,357,546.78
the Current Period
(1) Disposal
(2) Transfer to fixed
assets/intangible 105,149,263.46 5,208,283.32 110,357,546.78
assets
(3) Other transfer-out
4. Closing
44,476,986.28 44,476,986.28
Balance
Ⅲ. Impairment
Provision
1. Opening
Balance
2. Increased in
the Current Period
(1) Accrual
3. Decreased in
the Current Period
(1) Disposal
(2) Other Transfer-
out
4. Closing
Balance
Ⅳ. Book value
1. Closing
Balance on Book 129,637,004.00 129,637,004.00
Value
2. Opening
Balance on Book 409,737,101.14 13,298,722.68 423,035,823.82
Value
299
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Investment properties measured at fair value
□ Applicable Not applicable
(3) Investment properties with certificates of title not granted
There are no investment properties with certificates of title not granted at the end of the period.
16. Fixed Assets
Unit: RMB
Item Closing balance Opening balance
Fixed Assets 4,937,180,876.88 4,643,617,574.85
Total 4,937,180,876.88 4,643,617,574.85
(1) Fixed assets
Unit: RMB
Housing and Machinery and Means of Electronic and
Item Total
building equipment transport other equipment
Ⅰ. Original book
value:
1. Opening 4,094,635,347.7 1,709,315,308.3 6,373,267,960.8
535,141,351.73 34,175,953.10
Balance 3 2 8
2. Increased
1,128,857,350.2
in the Current 815,017,655.45 83,600,606.88 2,429,358.28 227,809,729.62
3
Period
(1) Purchase 134,418,249.12 83,600,606.88 2,429,358.28 227,809,729.62 448,257,943.90
(2) Transferred
From
141,438,928.85 141,438,928.85
Construction in
Progress
(3) Acquisition
(4) Transfer of
investment 539,160,477.48 539,160,477.48
properties
3.
Decreased in the 209,615,008.35 812,130.98 8,165,420.42 29,507,018.33 248,099,578.08
Current Period
(1) Disposal or
2,269,820.56 812,130.98 8,165,420.42 29,507,018.33 40,754,390.29
Scrapping
(2) Transfer to
investment real 207,345,187.79 207,345,187.79
estate
(3) Disposal of
subsidiaries
4. Currency
Translation 173,211.10 105,849.71 307,989.47 1,069,325.47 1,656,375.75
Difference
300
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
5. Closing 1,908,687,345.0 7,255,682,108.7
4,700,211,205.93 618,035,677.34 28,747,880.43
Balance 8 8
II. Accumulated
depreciation
1. Opening 1,074,037,853.8 1,729,650,386.0
466,625,531.84 164,408,002.72 24,578,997.58
Balance 9 3
2. Increased
in the Current 307,214,921.87 52,277,475.99 3,232,073.42 283,716,623.16 646,441,094.44
Period
(1) Accrual 202,065,658.41 52,277,475.99 3,232,073.42 283,716,623.16 541,291,830.98
(2) Transfer of
investment 105,149,263.46 105,149,263.46
properties
3.
Decreased in the 30,087,877.28 332,279.22 6,222,073.02 22,008,206.16 58,650,435.68
Current Period
(1) Disposal or
271,351.55 332,279.22 6,222,073.02 22,008,206.16 28,833,909.95
Scrapping
(2) Transfer to
investment real 29,816,525.73 29,816,525.73
estate
(3) Disposal of
subsidiaries
4. Currency
Translation 38,972.50 99,986.14 185,100.04 736,128.43 1,060,187.11
Difference
5. Closing 1,336,482,399.3 2,318,501,231.9
743,791,548.93 216,453,185.63 21,774,098.02
Balance 2 0
Ⅲ. Impairment
Provision
1. Opening
Balance
2. Increased
in the Current
Period
(1) Accrual
3.
Decreased in the
Current Period
(1) Disposal or
Scrapping
4. Closing
Balance
Ⅳ. Book value
1. Closing
3,956,419,657.0 4,937,180,876.8
Balance on Book 401,582,491.71 6,973,782.41 572,204,945.76
0 8
Value
2. Opening
3,628,009,815.8 4,643,617,574.8
Balance on Book 370,733,349.01 9,596,955.52 635,277,454.43
9 5
Value
301
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Fixed Assets Leased by Operating Lease
Unit: RMB
Item Book value at the end of the period
Buildings and constructions 329,733,097.17
Electronic and other equipment 113,479,267.18
(3) Fixed Assets with Certificates of Title Not Granted
Unit: RMB
Reasons for certificates of title not
Item Book value
granted
Marketable housing at Cisco Smart In the process of obtaining the real
107,128,926.00
Technology Park estate certificates
(4) Impairment Test of Fixed Assets
□ Applicable Not applicable
17. Construction in Progress
Unit: RMB
Item Closing balance Opening balance
Projects under Construction 1,008,612,408.49 423,535,552.03
Total 1,008,612,408.49 423,535,552.03
(1) Construction in progress
Unit: RMB
Closing balance Opening balance
Provision
Item for Provision for
Book balance Book value Book balance Book value
impairme impairment
nt
Phase I,
Urban
Intelligent
Information 37,183,163.71 37,183,163.71 37,183,163.71 37,183,163.71
Industry
Construction
Project
The phase II
construction
project of the
smart 16,685,912.78 16,685,912.78
manufacturing
base in
Hangzhou
Project of
Smart IoT 19,100,734.18 19,100,734.18
Solution R &
302
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
D and
Industrializatio
n
New project of
Southwest
R&D Center 263,076,398.23 263,076,398.23 84,276,952.86 84,276,952.86
of Dahua Co.,
Ltd.
New projects
of
Southwestern
154,424,552.6 154,424,552.6
China 335,849,207.03 335,849,207.03
7 7
Operation
Center of
Dahua
Smart IoT
Base of
111,780,241.11 111,780,241.11 36,643,528.49 36,643,528.49
Dahua in
Henan
Construction
Project of
Smart Product
101,525,907.86 101,525,907.86
Manufacturing
Base of
Dahua
Others 159,197,490.55 159,197,490.55 75,220,707.34 75,220,707.34
1,008,612,408.4 1,008,612,408.4 423,535,552.0 423,535,552.0
Total
9 9 3 3
(2) Changes in significant construction in progress
Unit: RMB
Projec
Includi
t
ng: Capita
Other accu Accu
capital lizatio
amou mulati mulat
Increa Transf ized n rate
nts ve ed
Openi sed in er Closin Projec intere of the Capita
Bu decre invest capital
Item ng the amou g t st intere l
dg ased ment ized
Name balan curren nts in balan Progr amou st in Sourc
et in as a intere
ce t this ce ess nt in the e
curren perce st
period period the curren
t ntage amou
curren t
period of the nt
t period
budge
period
t
Project of
Smart R
IoT MB 144.0 Equity
19,10 41,76 60,86
Solution 91 5% 100.0 funds/
0,734. 5,974. 6,708.
R&D 2 (Note 0% raised
18 21 39
and mill 1) funds
Industriali ion
zation
The
phase II R
constructi MB 114.0 Equity
16,68 57,96 74,65
on 82 0% 100.0 funds/
5,912. 7,128. 3,041.
project of 7 (Note 0% raised
78 63 41
the smart mill 2) funds
manufact ion
uring
303
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
base in
Hangzho
u
New
R
project of
MB Equity
Southwe 84,27 178,7 263,0
41 68.71 68.71 funds/
st R&D 6,952. 99,44 76,39
7 % % raised
Center of 86 5.37 8.23
mill funds
Dahua
ion
Co., Ltd.
New
projects
R
of
MB
Southwe 154,4 181,4 335,8
39 92.34 92.34 Equity
stern 24,55 24,65 49,20
6 % % Fund
China 2.67 4.36 7.03
mill
Operatio
ion
n Center
of Dahua
Construct
ion
R
Project of
MB
Smart 101,5 101,5
60 18.44 18.44 Equity
Product 25,90 25,90
0 % % Fund
Manufact 7.86 7.86
mill
uring
ion
Base of
Dahua
274,4 561,4 135,5 700,4
Total 88,15 83,11 19,74 51,51
2.49 0.43 9.80 3.12
Note 1: Fixed assets of RMB 1,144,353,421.58 were transferred to the project in 2022.
Note 2: Fixed assets of RMB 443,849,828.33 were transferred to the project in 2021, and fixed assets of RMB
346,497,144.84 were transferred to the project in 2022.
(3) Impairment test of construction in progress
□ Applicable Not applicable
18. Right-of-use Assets
(1) Right-of-use assets
Unit: RMB
Item Housing and building Machinery and equipment Total
Ⅰ. Original book value
1. Opening Balance 469,271,896.25 8,884,640.73 478,156,536.98
2. Increased in the
135,826,421.70 135,826,421.70
Current Period
3. Decreased in the
90,628,018.17 90,628,018.17
Current Period
4. Currency
4,267,209.05 4,267,209.05
Translation Difference
5. Closing Balance 518,737,508.83 8,884,640.73 527,622,149.56
II. Accumulated
depreciation
1. Opening Balance 162,419,018.11 1,036,541.37 163,455,559.48
304
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2. Increased in the
139,557,044.29 888,463.92 140,445,508.21
Current Period
(1) Accrual 139,557,044.29 888,463.92 140,445,508.21
3. Decreased in the
76,685,796.85 76,685,796.85
Current Period
(1) Disposal 76,685,796.85 76,685,796.85
4. Currency
1,204,292.16 1,204,292.16
Translation Difference
5. Closing Balance 226,494,557.71 1,925,005.29 228,419,563.00
Ⅲ. Impairment Provision
1. Opening Balance
2. Increased in the
Current Period
(1) Accrual
3. Decreased in the
Current Period
(1) Disposal
4. Closing Balance
Ⅳ. Book value
1. Closing Balance on
292,242,951.12 6,959,635.44 299,202,586.56
Book Value
2. Opening Balance on
306,852,878.14 7,848,099.36 314,700,977.50
Book Value
(2) Impairment test of right-to-use assets
□ Applicable Not applicable
19. Intangible Assets
(1) Details of intangible assets
Unit: RMB
Land use Paten Non-patented Software
Item Software Trademark Total
rights t right technology copyright
Ⅰ. Original
book value
1.
569,345,909.7 68,530,508.7 158,597,696.3 2,056,299.2 4,000,000.0 802,530,414.0
Opening
9 0 3 0 0 2
Balance
2.
Increased in
70,574,548.60 28,260,718.18 98,835,266.78
the Current
Period
(1)
41,220,600.00 15,946,818.69 57,167,418.69
Purchase
(2) Internal
305
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
research
and
developmen
t
(3)
Acquisition
(4) Transfer
of 12,313,899.49 12,313,899.49
construction
in progress
(5) Transfer
of
29,353,948.60 29,353,948.60
investment
properties
3.
Decreased
in the 13,538,219.52 13,079,300.22 26,617,519.74
Current
Period
(1) Disposal 13,079,300.22 13,079,300.22
(2) Transfer
to
13,538,219.52 13,538,219.52
investment
real estate
4. Currency
Translation 21,815.00 37,499.94 20,942.40 80,257.34
Difference
5.
626,404,053.8 68,530,508.7 173,816,614.2 2,077,241.6 4,000,000.0 874,828,418.4
Closing
7 0 3 0 0 0
Balance
Ⅱ.
Accumulate
d
amortization
1.
53,757,725.6 131,322,703.2 2,056,299.2 4,000,000.0 245,347,162.9
Opening 54,210,434.77
7 6 0 0 0
Balance
2.
Increased in
18,832,959.57 4,771,977.45 25,963,058.28 49,567,995.30
the Current
Period
(1) Accrual 13,624,676.25 4,771,977.45 25,963,058.28 44,359,711.98
(2) Transfer
of
5,208,283.32 5,208,283.32
investment
properties
3.
Decreased
in the 2,337,191.91 12,488,194.97 14,825,386.88
Current
Period
(1) Disposal 12,488,194.97 12,488,194.97
(2) Transfer
2,337,191.91 2,337,191.91
to
306
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
investment
real estate
4.
Currency
38,686.57 20,942.40 59,628.97
Translation
Difference
5.
58,529,703.1 144,836,253.1 2,077,241.6 4,000,000.0 280,149,400.2
Closing 70,706,202.43
2 4 0 0 9
Balance
Ⅲ.
Impairment
Provision
1.
Opening
Balance
2.
Increased in
the Current
Period
(1) Accrual
3.
Decreased
in the
Current
Period
(1) Disposal
4.
Closing
Balance
Ⅳ. Book
value
1.
Closing 555,697,851.4 10,000,805.5 594,679,018.1
28,980,361.09
Balance on 4 8 1
Book Value
2.
Opening 515,135,475.0 14,772,783.0 557,183,251.1
27,274,993.07
Balance on 2 3 2
Book Value
The intangible assets from internal research and development of the Company at the end of this period account for
0.00% of the intangible assets balance.
(2) No land use right with certificates of title not granted at the end of the period
20. Goodwill
(1) Original book value of goodwill
Unit: RMB
The invested Opening Increased in the current period Decreased in the current period Closing
307
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
entity or balance balance
Generated
matters which
from business Disposal
formed
combination
goodwill
Dahua
Technology 6,615,294.18 6,615,294.18
Italy S.R.L.
Total 6,615,294.18 6,615,294.18
(2) Impairment provision for goodwill
Unit: RMB
The invested Increased in the current period Decreased in the current period
entity or
Opening Closing
matters which
balance Accrued Disposal balance
formed
goodwill
Dahua
Technology 0.00 0.00
Italy S.R.L.
Total 0.00 0.00
(3) Information about the asset group or asset group combination where the goodwill is
located
Composition and basis of Whether it remains the
Operation subsection and
Name the asset group or same with the previous
basis
combination year
The asset group relating to
the goodwill formed by
acquisition of Dahua
Technology Italy S.R.L.,
Dahua Technology Italy that is, the long-term asset
Yes
S.R.L. group, including fixed
assets and intangible
assets, formed for Dahua
Technology Italy S.R.L. on
December 31, 2023.
(4) Specific method for determination of the recoverable amount
The recoverable amount is determined according to the net amount of the fair value less the cost of disposal
□ Applicable Not applicable
The recoverable amount is determined according to the present value of the expected future cash flow
Applicable □ Not applicable
Unit: RMB
Key Key Basis for
Years of the
Recoverabl Impairment parameters parameters determinati
Item Book value forecast
e amount amount for the for the on of key
period
forecast steady parameters
308
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
period period for the
steady
period
In the In the
In the
forecast forecast
steady
period, the period, the
period,
DahuaTech revenue revenue
96,758,357. 199,959,15 there is no
nologyItalyS 0.00 2024-2028 growth rate growth rate
72 4.35 revenue
.R.L. is 9%-10%; is 0%; the
growth, as
the discount discount
prudently
rate is rate is
forecast
15.60% 15.60%
96,758,357. 199,959,15
Total 0.00
72 4.35
(5) Fulfillment of performance commitments and impairment of corresponding goodwill
Performance commitments have been made when the goodwill is formed and the reporting period or the previous
reporting period is covered by the performance commitment period
□ Applicable Not applicable
21. Long-term Deferred Expenses
Unit: RMB
Prepaid
Increased in the Other Amounts
Item Opening balance Expenses in This Closing balance
current period Decreased
Period
Improvement
expenditure of
fixed assets 73,500,488.41 36,967,119.14 40,993,188.61 -488,464.81 69,962,883.75
leased by
operating lease
Renovation Cost 57,125,934.56 27,135,437.72 18,888,982.08 65,372,390.20
Total 130,626,422.97 64,102,556.86 59,882,170.69 -488,464.81 135,335,273.95
22. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred income tax assets not written off
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred Income Tax Deductible temporary Deferred Income Tax
difference Assets difference Assets
Provision for
2,945,448,093.79 561,492,926.21 2,926,506,726.22 578,958,458.15
Impairment of Assets
Unrealized Profit
from Internal 1,849,888,966.76 436,702,186.90 871,706,793.72 172,050,495.83
Transactions
Deductible Losses 615,050,031.87 101,761,861.84 819,688,449.21 143,540,714.98
Equity incentive 291,671,905.31 45,689,152.55 27,100,033.66 4,227,763.19
309
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
expense
Expected Liabilities 170,920,678.13 26,157,016.58 192,813,041.57 29,194,206.38
Payroll payable 253,599,826.64 41,664,283.10 255,864,043.82 42,002,714.30
Costs from Tax
Increase Due to 557,868,000.15 107,970,125.57 358,704,786.40 75,803,754.22
Absence of Invoice
Changes in fair value
1,458,799.36 364,699.84 1,458,799.36 364,699.84
gains and losses
Book-tax difference
188,753,783.73 35,399,648.53 167,625,574.63 28,803,549.48
of lease Liabilities
Investment in non-
520,408,538.53 78,061,280.78
monetary assets
Others 111,452,227.57 17,921,647.45 113,086,781.94 21,087,983.51
Total 7,506,520,851.84 1,453,184,829.35 5,734,555,030.53 1,096,034,339.88
(2) Non-offset deferred income tax liabilities
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred Income Tax Taxable temporary Deferred Income Tax
difference Liabilities difference Liabilities
The gross profit of
58,360,423.87 10,150,707.92 77,645,933.88 13,600,068.25
sales by installments
Changes in fair value
of financial 378,324,828.79 56,893,999.27 273,376,308.00 41,006,446.20
instruments
Book-tax difference
182,618,578.98 34,371,567.43 114,223,037.07 28,176,354.61
of right-of-use assets
Investment in non-
430,682,928.47 64,602,439.27
monetary assets
Total 1,049,986,760.11 166,018,713.89 465,245,278.95 82,782,869.06
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Offset
Unit: RMB
Amount of Deferred Balance of Deferred Amount of Deferred Balance of Deferred
Income Tax Assets Income Tax Assets or Income Tax Assets Income Tax Assets or
Item Offset against Liabilities after Offset Offset against Liabilities after Offset
Liabilities at the End at the End of the Liabilities at the Start at the Start of the
of the Period Period of the Period Period
Deferred Income Tax
165,281,346.70 1,287,903,482.65 81,614,395.73 1,014,419,944.15
Assets
Deferred Income Tax
165,281,346.70 737,367.19 81,614,395.73 1,168,473.33
Liabilities
(4) Deferred income tax assets or liabilities listed by net amount after offset
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 562,186,328.66 428,369,185.61
310
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Deductible Losses 1,660,894,695.64 1,228,910,987.48
Total 2,223,081,024.30 1,657,280,173.09
(5) Details of unrecognized deferred income tax assets
Unit: RMB
Year Closing balance Opening balance Notes
2023 31,938,173.71
2024 123,399,991.24 123,444,991.24
2025 260,522,250.84 260,585,329.81
2026 331,413,381.74 331,765,660.29
2027 476,126,194.63 481,176,832.43
2028 469,432,877.19
Total 1,660,894,695.64 1,228,910,987.48
23. Other Non-current Assets
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Contract
80,729,279.52 5,837,202.88 74,892,076.64 29,115,751.74 29,115,751.74
Assets
Prepayments
for purchase 129,167,069.1 129,167,069.1
50,986,092.83 50,986,092.83
of engineering 9 9
equipments
Prepayments
for acquisition 40,020,000.00 40,020,000.00
of land
Prepayments
for acquisition 5,893,664.25 5,893,664.25 21,110,059.00 21,110,059.00
of real estate
Others 856,454.41 856,454.41
216,646,467.3 210,809,264.4 141,231,903.5 141,231,903.5
Total 5,837,202.88
7 9 7 7
24. Assets with restricted ownership rights or rights to use
Unit: RMB
At the End of the Period At the Start of the Period
Item Descriptio Descriptio
Book Book Type of Book Book Type of
n of n of
balance value restriction balance value restriction
restriction restriction
Guarantee Guarantee
letter letter
Cash and
75,843,68 75,843,68 security Restricted 130,637,5 130,637,5 security Restricted
Bank
3.23 3.23 deposit for use 42.35 42.35 deposit for use
Balances
and other and other
restricted restricted
311
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
funds funds
Pledge Pledge
used to used to
issue issue
bank bank
Notes
acceptanc acceptanc
receivable
e bills and e bills and
and 951,747,3 951,747,3 Restricted 1,156,827, 1,156,827, Restricted
endorsed endorsed
receivable 62.20 62.20 for use 692.59 692.59 for use
or or
s
discounte discounte
financing
d notes d notes
not not
derecogni derecogni
zed zed
Non- Non-
derecognit derecognit
ion of ion of
supply supply
Accounts 7,238,385. 7,238,385. Restricted 7,912,141. 7,912,141. Restricted
chain chain
receivable 64 64 for use 60 60 for use
finance finance
discountin discountin
g and g and
factoring factoring
Pledge for
Long-term
120,632,0 120,632,0 bank Restricted
Receivabl
81.66 81.66 borrowing for use
es
s
Non-
Pledge for
current
27,786,15 27,786,15 bank Restricted
Assets
9.55 9.55 borrowing for use
Due within
s
1 Year
1,034,829, 1,034,829, 1,443,795, 1,443,795,
Total
431.07 431.07 617.75 617.75
25. Short-term loans
(1) Categories of short-term loan
Unit: RMB
Item Closing balance Opening balance
Pledged loans 400,000,000.00
Fiduciary loans 549,800,000.00 249,800,000.00
Factoring loans of supply chain
7,238,385.64 7,912,141.60
finance etc.
Interest payable for short-term loan 387,944.54 231,476.91
Total 957,426,330.18 257,943,618.51
Notes on categories of short-term loan:
The pledged loans are acceptance bills and letters of credit issued between the related parties included in the scope of
consolidation, and will be listed as short-term loans in the consolidated statements.
312
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Unpaid short-term loans that have been overdue
At the end of the current period, the Group has no unpaid short-term loans that have been overdue.
26. Transactional financial liabilities
Unit: RMB
Item Closing balance Opening balance
Transactional financial liabilities 61,400.12 26,652,319.25
Of which: Derivative financial
61,400.12 26,652,319.25
liabilities
Total 61,400.12 26,652,319.25
27. Notes payable
Unit: RMB
Types Closing balance Opening balance
Commercial acceptance bill 2,050,859,385.48 2,821,289,185.08
Bank acceptance bill 1,245,435,560.78 1,542,808,576.09
Total 3,296,294,946.26 4,364,097,761.17
28. Accounts payable
(1) Details of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payment for purchase of materials 5,295,784,509.14 6,577,743,073.06
Payment for engineering equipments 519,338,686.41 762,534,315.23
Total 5,815,123,195.55 7,340,277,388.29
(2) Important accounts payable aged over 1 year
There are no important accounts payable aged over 1 year.
29. Other payables
Unit: RMB
Item Closing balance Opening balance
Dividends Payable 23,667,047.02
Other Payables 788,757,099.50 1,004,056,999.91
Total 812,424,146.52 1,004,056,999.91
(1) Dividends payable
Unit: RMB
Item Closing balance Opening balance
313
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Equity Incentive Restricted Stock
23,667,047.02
Dividend
Total 23,667,047.02
(2) Other payables
1) Other payables listed by nature of funds
Unit: RMB
Item Closing balance Opening balance
Deposits 119,727,924.44 118,085,781.49
Temporarily borrowed and advance
325,491,021.42 230,952,097.15
payments
Restricted share repurchase
326,740,652.18 609,859,632.00
obligations
Others 16,797,501.46 45,159,489.27
Total 788,757,099.50 1,004,056,999.91
2） Other important payables aged over 1 year or overdue
There are no other important payables aged over 1 year or overdue.
30. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Payments for sales of goods 248,523,384.39 378,029,459.81
Pre-payments from construction 606,995,011.21
559,859,741.12
projects
Sales of points 40,987,601.52 55,754,785.19
Service expense collected in 298,028,309.92
225,904,025.76
advance
Total 1,194,534,307.04 1,219,548,011.88
31. Payroll payable
(1) Details of payroll payable
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
Ⅰ. Short-term
1,562,938,094.00 7,010,504,873.69 6,645,977,061.18 1,927,465,906.51
remuneration
Ⅱ. Dimission
benefits - defined 2,988,616.11 350,360,521.00 348,992,178.96 4,356,958.15
contribution plan
Ⅲ. Dismissal welfare 17,276,455.32 38,805,593.07 53,949,281.93 2,132,766.46
Total 1,583,203,165.43 7,399,670,987.76 7,048,918,522.07 1,933,955,631.12
314
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Details of short-term remuneration
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
1. Wages or salaries,
bonuses, allowances 1,265,686,016.61 6,169,213,457.32 5,804,204,972.24 1,630,694,501.69
and subsidies
2. Staff welfare 21,457.48 126,373,634.97 126,395,092.45
3. Social insurance
1,414,489.58 203,164,857.12 202,804,392.74 1,774,953.96
contributions
Including: medical
1,243,067.14 193,268,276.22 192,959,564.20 1,551,779.16
insurance
Work injury
171,422.44 8,915,352.27 8,864,433.03 222,341.68
insurance premium
Maternity
981,228.63 980,395.51 833.12
insurance premium
4. Housing funds 70,886.51 400,355,402.94 400,305,028.02 121,261.43
5. Labor union and
295,745,243.82 111,397,521.34 112,267,575.73 294,875,189.43
education funds
Total 1,562,938,094.00 7,010,504,873.69 6,645,977,061.18 1,927,465,906.51
(3) Details of defined contribution plans
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
1. Basic pension
2,740,907.32 334,554,328.00 333,343,909.34 3,951,325.98
insurance
2. Unemployment
247,708.79 15,806,193.00 15,648,269.62 405,632.17
insurance
Total 2,988,616.11 350,360,521.00 348,992,178.96 4,356,958.15
32. Taxes and fees payable
Unit: RMB
Item Closing balance Opening balance
VAT 363,245,736.32 174,205,171.22
Enterprise Income Tax 762,303,704.91 94,127,161.97
Individual income tax 34,441,288.75 27,792,426.06
Urban Maintenance and Construction
21,936,677.77 8,019,521.09
Tax
Stamp duty 10,066,368.59 7,984,104.22
Education surcharges (including local
15,669,021.79 5,728,229.41
education surcharges)
House property tax 30,701,891.59 8,992,842.44
Others 5,117,671.36 32,291.37
Total 1,243,482,361.08 326,881,747.78
315
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
33. Non-current liabilities due within 1 year
Unit: RMB
Item Closing balance Opening balance
Long-term debt due within one year 750,000,000.00 2,376,950,000.00
Lease liabilities due within 1 year 116,027,750.99 123,421,101.68
Interest payable due within 1 year 694,277.76 2,639,684.05
Other loans due within 1 year 35,000,000.00 55,000,000.00
Total 901,722,028.75 2,558,010,785.73
34. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
To-be-transferred sales taxes in 34,104,924.61
46,811,489.60
installments
To-be-transferred sales taxes of 81,757,348.46
94,461,157.60
contract liabilities
Notes not derecognised 39,320,431.95 24,731,965.07
Total 155,182,705.02 166,004,612.27
35. Long-term loans
Unit: RMB
Item Closing balance Opening balance
Pledged loans 77,000,000.00
Fiduciary loans 376,825,000.00
Total 453,825,000.00
36. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease payments 313,410,607.81 343,827,129.39
Less: Derecognized financing 20,802,807.25 24,065,373.44
expenses
Less: Lease liabilities due within 1 116,027,750.99 123,421,101.68
year
Total 176,580,049.57 196,340,654.27
37. Estimated liabilities
Unit: RMB
Item Closing balance Opening balance Causes
Pending litigation 27,829,629.48 1,111,463.96 Pending litigation
Others 469,642.57 135,647.46 Loss-making contract
Expected after-sales
178,727,096.75 213,524,280.22 After-sales maintenance
maintenance cost
316
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Expected return amount
17,516,258.10 12,992,996.29 Expected sales return
after the period
Total 224,542,626.90 227,764,387.93
38. Deferred income
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance Causes
current period current period
Received
Government government
104,663,047.38 61,122,500.00 13,941,174.36 151,844,373.02
subsidies subsidies related
to assets
Government
Government
29,734,600.00 14,867,299.98 14,867,300.02 subsidies related
subsidies
to income
Total 104,663,047.38 90,857,100.00 28,808,474.34 166,711,673.04 --
39. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
To-be-transferred sales taxes in
119,054,046.66 169,084,072.08
installments
Other loans 35,000,000.00
Total 119,054,046.66 204,084,072.08
40. Share capital
Unit: RMB
Increased or decreased amount in this period (+/-)
Opening Shares Closing
Shares
balance Bonus converted balance
newly Others Subtotal
shares from capital
issued
reserves
-
3,033,161,1 293,103,40 261,307,82 3,294,468,9
Total shares 31,795,580.
70.00 0.00 0.00 90.00
00
Other notes:
(1) According to the Proposal on the Company’s Plan for the Non-public Issuance of Shares in 2021 and other
issuance-related proposals reviewed and approved at the Company’s 12th, 19th, 23rd, 29th and 31st sessions of the
7th board of directors and 2020 shareholders’ general meeting as well as the Proposal on Extension of the Validity
Period of the Resolutions and Authorizations of the Shareholders' General Meeting on Non-public Issuance of Shares
reviewed and approved by the first interim shareholders' meeting in 2022, the Company issued 293,103,400 ordinary
shares (A shares) in RMB to specific objects and increased the registered capital by RMB 293,103,400.00 upon
approval by the China Securities Regulatory Commission through the Reply on Approving the Non-public Issuance of
Shares by Zhejiang Dahua Technology Co., Ltd. (Zheng Jian License [2022] No. 853). The above contribution has
been verified through Verification Report Xin Kuai Shi Bao Zi [2023] No. ZF10231 issued by BDO China Shu Lun Pan
317
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
CPAs (special general partnership), and the Company has accomplished the industrial and commercial registration of
changes in June 2023.
(2) According to the resolution of the 42nd session of the 7th board of directors of the Company held on April 27, 2023
and the amended Articles of Association and the resolution of the 2022 shareholders’ general meeting of the Company,
the Company repurchased and canceled 31,795,580 granted but locked restricted ordinary shares (A shares) in RMB
from 4,249 incentive objects, reducing the registered capital by RMB 31,795,580.00, and the registered capital after
the change was reduced to RMB 3,294,468,990.00. The above capital reduction has been verified through Verification
Report Xin Kuai Shi Bao Zi [2023] No. ZF11079 issued by BDO China Shu Lun Pan CPAs (special general
partnership), and the Company has accomplished the industrial and commercial registration of changes in August
2023.
41. Capital reserve
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
Capital premium
(capital share 1,982,401,079.59 4,967,342,743.71 247,132,716.28 6,702,611,107.02
premium)
Other capital
1,967,808,163.66 306,389,676.44 1,852,682,950.63 421,514,889.47
reserves
Total 3,950,209,243.25 5,273,732,420.15 2,099,815,666.91 7,124,125,996.49
Other notes, including increases or decreases in this period and their reasons:
(1) The amount of employee service fee that the Company received in exchange by equity payments in this period was
RMB 288,440,579.53, where the capital reserve (other capital reserve) was increased by RMB 242,983,029.13 and
the capital reserve (capital share premium) was increased by RMB 45,457,550.40; in the equity-settled share-based
payment, minority shareholders enjoyed RMB 57,518,604.78, where the capital reserve (other capital reserve) was
reduced by RMB 41,428,548.80 and the capital reserve (capital share premium) was reduced by RMB 16,090,055.98.
The impact amount of the income tax on the part that the amount deductible before tax exceeded the share-based
payment related cost which the accounting standards allows to recognize, was RMB 7,106,753.42, increasing other
capital reserves.
(2) In this period, the Company repurchased and canceled 31,795,580 granted but locked restricted shares from equity
incentive objects, reducing the share capital by RMB 31,795,580.00 and the capital reserve (capital share premium) by
RMB 227,656,352.80;
(3) According to the Proposal on the Company’s Plan for the Non-public Issuance of Shares in 2021 and other
issuance-related proposals reviewed and approved at the Company’s 12th, 19th, 23rd, 29th and 31st sessions of the
7th board of directors and 2020 shareholders’ general meeting as well as the Proposal on Extension of the Validity
Period of the Resolutions and Authorizations of the Shareholders' General Meeting on Non-public Issuance of Shares
reviewed and approved by the first interim shareholders' meeting in 2022, the Company issued 293,103,400 ordinary
shares (A shares) in RMB to specific objects and increased the capital reserve (share capital premium) by RMB
4,796,729,184.72 upon approval by the China Securities Regulatory Commission through the Reply on Approving the
Non-public Issuance of Shares by Zhejiang Dahua Technology Co., Ltd. (Zheng Jian License [2022] No. 853).
318
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(4) The impact of changes in other owners' equity of the affiliates that the Company should enjoy under the current
equity method increased other capital reserves by RMB 56,299,893.89.
(5) During the disposal of the equities in the affiliates in the current period, the owner's equities which were recognized
due to changes in other owner's equities of the investees except for net profits and losses and other comprehensive
income and profit distributions were carried over into the current investment income, reducing the capital reserve
(other capital reserve) by RMB 1,811,254,401.83.
(6) In the current period, the capital reserve (share capital premium) was reduced by RMB 3,342,009.84 in total due to
the acquisition and disposal of minority interests of the subsidiaries; the change in the net assets, which amounted to
RMB 112,906,008.59, enjoyed by the Company according to its shareholding ratio when the subsidiaries increased
their registered capital was included in the capital reserve (share capital premium), .
(7) According to the resolution of the 46th session of the 7th board of directors of the Company held on August 25,
2023, the Company repurchased its shares in a centralized competitive bidding with a total amount for repurchase of
not less than RMB 400 million (inclusive) and not more than RMB 600 million (inclusive), which will be used to
implement subsequent equity incentives or employee stock ownership plans. In the current period, the Company
repurchased 19,819,601 shares. The total repurchase cost was RMB 420,003,508.93 (including transaction costs of
RMB 44,297.66), and the capital reserve (share premium) was reduced by RMB 44,297.66.
(8) Some employees of the Company indirectly accepted part of the equities from Zhejiang Healnoc Technology Co.,
Ltd. controlled by the actual controller, where share-based payment was involved, and the share-based payment fee,
which was RMB 12,250,000.00, was included in the capital reserve (share capital premium).
42. Treasury share
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
Restricted shares 609,859,632.00 283,118,979.82 326,740,652.18
Share repurchase 419,959,211.27 419,959,211.27
Total 609,859,632.00 419,959,211.27 283,118,979.82 746,699,863.45
Other notes, including increases or decreases in this period and their reasons:
(1) In the current period, the Company repurchased 19,819,601 shares. The total repurchase cost was RMB
420,003,508.93 (including transaction costs of RMB 44,297.66), and the treasure shares were increased by RMB
419,959,211.27.
(2) In the current period, the Company repurchased 31,795,580 granted but locked restricted shares, reducing the
share capital by RMB 31,795,580.00, reducing the capital reserve (share premium) by RMB 227,656,352.80, and
reducing the corresponding treasury shares by RMB 259,451,932.80.
(3) The cash dividends allocated to restricted share holders reduced treasury shares and related liabilities. The cash
dividends allocated to related former employees were recovered due to their departure, reducing the treasure shares
by RMB 23,667,047.02 in total.
319
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
43. Other comprehensive income
Unit: RMB
Amount Occurred in the Current Period
Less:
Less: Recorded
recorded into other
into other comprehe
comprehe nsive
Attributabl
nsive incomes
Opening Less: Attributabl e to the Closing
Item Before tax incomes in
balance Income e to the minority balance
balance in in previous
Tax Company sharehold
this period previous period and
Expense after tax ers after
period and transferre
tax
transferre d to
d to P/L in retained
current earnings
period in current
period
I. Other
comprehe
nsive
36,942,33 29,150,99 29,050,68 100,314.1 65,993,02
income
9.77 5.25 1.06 9 0.83
that will be
reclassifie
d into P/L
Curre
ncy
36,942,33 29,150,99 29,050,68 100,314.1 65,993,02
conversio
9.77 5.25 1.06 9 0.83
n
difference
Other
comprehe
36,942,33 29,150,99 29,050,68 100,314.1 65,993,02
nsive
9.77 5.25 1.06 9 0.83
incomes
in total
44. Surplus reserves
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
Statutory surplus
1,553,691,005.92 93,543,489.08 1,647,234,495.00
reserve
Total 1,553,691,005.92 93,543,489.08 1,647,234,495.00
Notes on the surplus reserve, including increases or decreases in this period and their reasons:
According to the provisions in the Company Law and the Company's Articles of Association, the Company will take the
statutory surplus reserve at 10% of the net profit of the parent company, which will be no more than 50% of the share
capital of the parent company.
320
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
45. Undistributed profits
Unit: RMB
Item Current Period Previous Period
Undistributed Profit before
Adjustment at the End of Previous 17,872,654,791.67 16,331,012,273.48
Period
Undistributed Profit after Adjustment
17,872,654,791.67 16,331,012,273.48
at the Start of the Period
Add: net profit attributable to parent
7,361,892,404.52 2,324,356,092.20
company's owner in current period
Less: withdrawal for statutory surplus
93,543,489.08
reserve
Payable dividends on ordinary
1,817,223,955.97 808,528,697.10
shares
Add: Common stock dividends
corresponding to repurchase and 7,662,734.78 25,815,123.09
cancellation of restricted stocks
Others 2,608,700.63
Undistributed Profit at the End of the
23,334,051,186.55 17,872,654,791.67
Period
46. Operating revenue and operating cost
(1) Operating revenue and operating cost
Unit: RMB
Amount Occurred in the Current Period Amount Occurred in the Previous Period
Item
Income Cost Income Cost
Main Business 31,843,580,629.17 18,396,945,561.74 30,161,716,309.37 18,684,304,073.94
Other businesses 374,737,007.60 278,025,361.72 403,653,703.27 305,493,596.98
Total 32,218,317,636.77 18,674,970,923.46 30,565,370,012.64 18,989,797,670.92
Whether the lower of audited net profit before or after non-recurring gains and losses is negative
□ Yes No
(2) Information related to operating revenue and operating cost (by product)
Unit: RMB
Amount Occurred in the Current Period
Item
Income Cost
Smart IoT Products and Solutions 26,644,648,182.18 14,925,853,403.30
Including: Software Business 1,797,226,644.00 591,429,713.59
Innovative Businesses 4,906,653,657.98 3,169,076,284.13
Others 667,015,796.61 580,041,236.03
Total 32,218,317,636.77 18,674,970,923.46
(3) Information related to operating revenue and operating cost (by region)
Unit: RMB
321
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Amount Occurred in the Current Period
Item
Income Cost
Domestic 16,891,274,970.99 10,462,264,668.17
Overseas 15,327,042,665.78 8,212,706,255.29
Total 32,218,317,636.77 18,674,970,923.46
Information about performance of obligations:
The Company fulfills its performance obligations in a timely manner as agreed in the contract and recognizes the
related income when the customer obtains control of the relevant goods, which is mainly divided into fulfilling the
performance obligations at a certain point in time and fulfilling the performance obligations within a certain period of
time.
The Company recognizes income from the sales of goods when control of the goods passes, i.e., when the goods are
delivered to the counterparty's designated location, or to the counterparty's designated carrier, or when they are
delivered to the counterparty for acceptance.
The Company identifies part of the business as a performance obligation to be fulfilled within a certain period of time
according to the nature of the business. The Company shall recognize the income according to the performance
progress within that period of time, except where the performance progress cannot be reasonably recognized. The
Company employs the output method or input method to determine the performance progress. If the performance
progress cannot be reasonably recognized and the costs incurred are expected to be compensated, the income shall
be recognized according to the amount of costs incurred until the performance progress can be reasonably recognized.
47. Taxes and surcharges
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Urban Maintenance and Construction
106,501,298.77 85,046,979.25
Tax
Education Surcharges 76,094,343.54 60,753,558.66
House property tax 59,855,960.89 20,430,778.31
Land usage tax 7,903,136.79 1,722,816.00
Vehicle and vessel use tax 56,476.48 57,285.50
Stamp duty 22,285,309.84 17,295,563.62
Others 3,089,670.74 2,390,610.71
Total 275,786,197.05 187,697,592.05
48. Administrative expenses
Unit: RMB
Item Amount of this period Amount of Previous Period
Labor cost 742,212,609.53 737,894,844.39
Depreciation cost and asset 159,254,353.46 133,589,218.51
amortization
Administrative expenses 90,685,611.32 81,062,193.37
Consumables and service fees 39,845,264.04 37,687,414.35
Knowledge resource fee 147,815,551.33 88,112,477.47
322
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Transportation and vehicle expenses 3,451,347.31 3,181,164.59
Traveling expense 11,774,618.38 5,526,857.80
Business entertainment 11,246,490.69 8,796,525.93
Others 51,143,668.21 48,118,127.48
Total 1,257,429,514.27 1,143,968,823.89
49. Selling expenses
Unit: RMB
Item Amount of this period Amount of Previous Period
Labor cost 3,290,466,360.63 3,054,002,350.17
After-sales service expense 384,247,693.06 347,770,558.29
Transportation and vehicle expenses 49,041,851.21 38,162,453.78
Marketing expense 457,846,542.52 507,623,672.50
Administrative expenses 150,970,949.50 164,392,490.70
Traveling expense 287,167,778.90 242,619,313.30
Business entertainment 250,873,194.98 205,931,581.17
Taxation and insurance expense 112,356,918.50 212,677,239.07
Communication expense 25,008,755.46 24,856,805.07
Knowledge resource fee 55,724,443.18 74,744,704.72
Depreciation cost and asset 175,742,287.43 158,905,072.75
amortization
Others 53,123,450.32 83,476,918.09
Total 5,292,570,225.69 5,115,163,159.61
50. R&D expenses
Unit: RMB
Item Amount of this period Amount of Previous Period
Labor cost 3,543,375,607.63 3,436,548,913.49
Research consumables and service 172,532,981.67 216,082,660.80
fees
Depreciation cost and asset 117,315,005.47 95,196,552.16
amortization
Traveling expense 57,860,404.79 49,067,671.55
Administrative expenses 34,045,660.92 40,756,648.46
Communication expense 28,994,641.13 25,135,407.16
Others 13,124,493.61 20,217,729.20
Total 3,967,248,795.22 3,883,005,582.82
51. Financial expenses
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Interest expense 95,985,194.10 129,841,192.93
Including: interest expenses on lease 14,312,541.58 13,841,181.48
liabilities
Less: interest income 345,537,378.77 197,933,592.28
323
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
The profit or loss on foreign -180,137,872.79 -481,747,756.10
exchange
Others 20,382,067.84 38,863,357.47
Total -409,307,989.62 -510,976,797.98
52. Other incomes
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Sources of other incomes
Period Period
Government subsidies 932,712,195.04 980,662,878.33
Additional input tax deduction 134,932.81 883,220.53
Refund of individual income tax and
9,920,044.98 7,292,218.35
service charge
Total 942,767,172.83 988,838,317.21
53. Income from changes in fair value
Unit: RMB
Source of the income from changes Amount Occurred in the Current Amount Occurred in the Previous
in fair value Period Period
Trading Financial Assets -1,132,045.17
Including: gains from changes at fair
value of derivative financial -1,132,045.17
instruments
Transactional financial liabilities 26,590,919.13 -26,652,319.25
Other Non-current Financial Assets 101,037,455.74 -18,231,213.55
Total 127,628,374.87 -46,015,577.97
54. Investment income
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Long-term equity investment income
-242,631,295.52 -399,809,570.81
measured by equity method
Investment income from disposal of
4,777,818,657.97 633,376,394.76
long-term equity investment
Investment income of transactional
124,950.00
financial assets during holding period
Investment Income from Disposal
-44,929,416.02 -18,304,555.76
Trading Financial Assets
After losing control, the remaining
58,339,877.68
equity is re-measured at fair value
Gain on debt restructuring -16,242,445.24 -414,996.80
Investment income on other non-
current financial assets during the 11,870,549.61 9,173,028.68
holding period
Investment income from disposal of 10,370,120.76
324
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
other non-current financial assets
Investment income from national
1,256,871.91 791,371.25
debt reverse repurchase
Profits from recognition termination of
-1,539,231.44 -2,527,190.80
financial assets
Total 4,495,973,812.03 280,749,308.20
55. Credit impairment losses
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Bad debt losses of notes receivable 17,555,335.92 -257,089.31
Bad debt losses of accounts
-415,017,021.55 -618,126,859.84
receivable
Bad debt losses of other receivables -997,713.81 21,878,004.86
Bad debt losses of long-term
-13,997,717.99
accounts receivable
Total -412,457,117.43 -596,505,944.29
56. Asset impairment losses
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
I. Impairment Losses on Inventories
-176,434,382.90 -96,658,687.52
and Performance Cost
II. Impairment Losses on Long-term
-723,496.39
Equity Investment
III. Impairment Losses on Contract
1,920,067.16 -9,270,865.73
Assets
Total -174,514,315.74 -106,653,049.64
57. Asset disposal income
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Sources of the asset disposal income
Period Period
Income from disposal of fixed assets 1,679,018.49 1,146,254.67
Income from the disposal of right-of-
328,779.90 1,819,534.10
use assets
Total 2,007,798.39 2,965,788.77
58. Non-operating income
Unit: RMB
Item Amount Occurred in the Amount Occurred in the Amount recorded into non-
325
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Current Period Previous Period recurring profit and loss in
current period
Government subsidies 2,100,000.00
Gains and losses of non-
1,229,426.37 1,648,667.29 1,229,426.37
current asset retirement
Others 12,299,567.88 14,172,637.30 12,299,567.88
Total 13,528,994.25 17,921,304.59 13,528,994.25
59. Non-operating expenses
Unit: RMB
Amount recorded into non-
Amount Occurred in the Amount Occurred in the
Item recurring profit and loss in
Current Period Previous Period
current period
Donations 1,103,243.16 1,796,127.69 1,103,243.16
Gains and losses of non-
2,072,054.17 2,030,871.71 2,072,054.17
current asset retirement
Water conservancy fund 441,570.13 167,592.46
Others 29,232,164.80 6,841,475.06 29,232,164.80
Total 32,849,032.26 10,836,066.92 32,407,462.13
60. Income tax expense
(1) Income tax expense statement
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Current income tax expense 895,325,041.21 155,717,141.34
Deferred income tax expense -248,886,869.12 -130,389,333.38
Total 646,438,172.09 25,327,807.96
(2) Adjustment process of accounting profit and income tax expenses
Unit: RMB
Item Amount Occurred in the Current Period
Total Profit 8,121,705,657.64
Income tax expense calculated at statutory/applicable tax
1,218,255,848.65
rate
Impact by applying different tax rates to subsidiaries 65,510,669.97
Impact of income tax before adjustment in this period -31,121,028.44
Impact of the non-deductible costs, expenses and losses 32,717,362.49
Impact of additional deduction of the research and
-518,601,976.42
development expenses
Others -120,322,704.16
Income tax expense 646,438,172.09
326
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
61. Other comprehensive incomes
See Note 43 for details.
62. Items of Cash Flow Statement
(1) Cashes relating to operating activities
Other cash receipts relating to operating activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Interest Income 273,381,345.10 115,853,521.82
Government subsidies 994,760,820.70 991,467,035.95
Tender and performance guarantee
123,948,827.72 34,276,474.54
deposit
Incomings and outgoings and
42,723,390.94 96,874,605.04
advance payments
Others 24,118,990.28 13,304,303.72
Total 1,458,933,374.74 1,251,775,941.07
Other cash payments relating to operating activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Administrative expenses 336,994,816.98 355,623,778.96
Communication expense 79,071,144.89 59,345,879.58
Business entertainment 262,962,826.23 216,201,652.45
Traveling expense 360,761,388.26 296,659,094.56
Marketing expense 446,017,073.08 391,397,115.26
Transportation and vehicle expenses 78,953,292.07 44,409,896.02
Knowledge resource fee 204,781,766.16 133,575,452.95
Research and development 102,571,135.69 100,723,946.02
consumption and external inspection
fee
Taxation and insurance expense 65,040,612.10 77,631,185.38
Tender and performance guarantee 76,473,405.90 86,652,672.09
deposit
Incomings and outgoings and 17,324,949.79 131,684,066.18
advanced payments
Consumables and service fees 275,055,483.06 248,782,048.70
Others 38,668,797.11 29,828,698.09
Total 2,344,676,691.32 2,172,515,486.24
(2) Cashes relating to investing activities
Other cash receipts relating to investing activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
327
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Receipts of cash from forward
40,049,759.39 25,697,487.60
exchange contracts
Recovered frozen funds relating to
9,762,136.70
the investment
Total 49,811,896.09 25,697,487.60
Important cash receipts relating to investing activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Cashes received from equity transfer 3,505,457,225.01 29,000,000.00
Investment recovered from reverse
1,221,761,539.51 825,789,959.23
repurchase of treasury bonds
Others 14,404,556.44 1,409,325,099.44
Total 4,741,623,320.96 2,264,115,058.67
Other cash payments relating to investing activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Cash paid for forward exchange
84,979,175.41 44,002,044.90
contracts
Paid frozen funds relating to the
1,058,404.69 13,993,944.08
investment
Total 86,037,580.10 57,995,988.98
Important cash payments relating to investing activities
N/A
(3) Cashes relating to financing activities
Other cash receipts relating to financing activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Recovered loan deposits 453,263.81
Total 453,263.81
Other cash payments relating to financing activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Leasing fees paid 171,319,524.76 130,670,138.16
Listing fees paid 3,312,739.06 3,695,037.14
Cashes paid for purchasing minority
14,647,000.00 82,140,000.00
equity
Equity repurchase cash paid 679,455,441.73 284,463,142.68
Total 868,734,705.55 500,968,317.98
Notes to other cash payments relating to financing activities:
328
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
N/A
Changes in liabilities generated by financing activities
Applicable □ Not applicable
Unit: RMB
Increased in the current period Decreased in the current period
Opening Closing
Item Non-cash Non-cash
balance Cash changes Cash changes balance
changes changes
Short-term 257,943,618.5 1,528,087,858 839,701,387.2 957,426,330.1
11,096,240.93
loan 1 .03 9 8
Long-term 453,825,000.0 400,000,000.0 853,825,000.0
loan 0 0 0
Dividends 1,809,561,221 1,785,894,174
23,667,047.02
Payable .19 .17
Lease 196,340,654.2 133,919,671.7 116,053,209.6 176,580,049.5
37,627,066.77
Liabilities 7 3 6 7
Non-current
2,558,010,785 1,005,547,028 2,661,835,785 901,722,028.7
Liabilities Due
.73 .75 .73 5
within 1 Year
Other
Payables
(Restricted 609,859,632.0 259,451,932.8 326,740,652.1
23,667,047.02
Share 0 0 8
Repurchase
Obligations)
Other Non-
current 35,000,000.00 35,000,000.00
Liabilities
4,110,979,690 1,928,087,858 2,960,124,162 5,584,510,346 1,028,545,256 2,386,136,107
Total
.51 .03 .60 .76 .68 .70
63. Supplementary information on Cash Flow Statement
(1) Supplementary information about the Cash Flow Statement
Unit: RMB
Supplementary information Amount of this period Amount of Previous Period
1． Reconciliation of net profit to
cash flows from operational activities
Net Profit 7,475,267,485.55 2,261,850,253.32
Add: provision for impairment of
586,971,433.17 703,158,993.93
assets
Depreciation of fixed assets,
oil and gas assets, productive 564,909,376.16 503,479,252.70
biological assets
Depreciation of Right-of-use
140,445,508.21 132,164,519.81
Assets
Amortization of Intangible
44,713,796.99 46,736,670.60
Assets
Amortization of long-term
59,882,170.69 39,510,946.43
deferred expenses
329
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Losses on disposal of fixed
assets, intangible assets and other
-2,007,798.39 -2,965,788.77
long-term assets (mark "-" for
incomes)
Losses on scrapping of fixed
842,627.80 382,204.42
assets (mark "-" for incomes)
Losses on fair value changes
-127,628,374.87 46,015,577.97
(mark "-" for incomes)
Financial expenses (mark "-"
-84,152,678.69 -367,030,819.99
for incomes)
Losses on investment (mark "-
-4,513,755,488.71 -283,691,495.80
" for incomes)
Decrease on deferred income
-188,315,504.30 -74,076,700.95
tax assets (mark "-" for increases)
Increase on deferred income
-65,033,545.41 -60,610,031.11
tax liabilities (mark "-" for decreases)
Decrease on inventories (mark
1,804,686,410.40 -1,007,449,606.32
"-" for increases)
Decrease on operational
-650,869,567.85 -512,792,543.01
receivables (mark "-" for increases)
Increase on operational
-747,867,775.81 -656,911,190.48
payables (mark "-" for decreases)
Others 300,690,579.53 285,817,406.71
Net cash flow generated by
4,598,778,654.47 1,053,587,649.46
operating activities
2． Major investing and financing
activities that do not involve cash
receipts and payment
Conversion of Debt into Capital
Convertible corporate bond within
1 year
Fixed Assets under Finance Lease
3． Net changes in cash and cash
equivalents:
Closing balance of cash 15,880,659,594.95 7,878,465,052.63
Less: opening balance of cash 7,878,465,052.63 7,617,576,852.32
Add: closing balance of cash
equivalents
Less: opening balance of cash
equivalents
Net Increase in Cash and Cash
8,002,194,542.32 260,888,200.31
Equivalents
(2) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
Ⅰ. Cash 15,880,659,594.95 7,878,465,052.63
330
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Including: cash on hand 2,642.58 2,535.81
Bank deposit for payment at
15,806,616,028.36 7,746,722,778.16
any time
Other cash and bank balances
74,040,924.01 131,739,738.66
for payment at any time
Ⅲ. Closing balance of cash and cash
15,880,659,594.95 7,878,465,052.63
equivalents
(3) Monetary funds which are not cash and cash equivalents
Unit: RMB
Why the monetary funds
Item Amount of this period Amount of Previous Period are not cash and cash
equivalents
Other Cash and Bank Guarantee letter security
68,981,082.99 110,737,143.60
Balances deposit, restricted for use
Frozen funds, restricted for
Bank Balance 6,862,600.24 19,900,398.75
use
Unexpired bank deposits
Bank Balance 14,501,836.29 20,776,055.79 and interests, listed in the
Cash and Bank Balances
Total 90,345,519.52 151,413,598.14
64. Notes to the items in the Statement of Changes in Owners' Equity
Matters including names of “Other” items adjusting the balance at the end of the previous year and the adjusted
amount:
N/A
65. Monetary items in foreign currencies
(1) Monetary items in foreign currencies
Unit: RMB
Closing balance in foreign Exchange rate for Closing Balance Converted
Item
currencies conversion into RMB
Cash and Bank Balances
Including: USD 171,065,224.74 7.0827 1,211,603,667.27
EUR 32,733,022.04 7.8592 257,255,366.82
HKD 3,525,498,379.15 0.9062 3,194,891,052.99
INR 1,092,222,470.45 0.0851 92,998,397.59
THB 262,564,074.69 0.2074 54,445,634.98
PLN 16,904,647.15 1.8107 30,609,413.64
Total amount of other
191,328,295.44
currencies
Accounts receivable
Including: USD 533,716,357.33 7.0827 3,780,152,844.06
EUR 118,313,842.79 7.8592 929,852,153.26
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
HKD 3,022,129.24 0.9062 2,738,725.89
INR 5,758,609,355.66 0.0851 490,322,674.10
AED 117,522,588.14 1.9326 227,118,277.71
AUD 46,365,409.19 4.8484 224,798,049.92
Total amount of other
740,971,172.52
currencies
Long-term loan
Including: USD
EUR
HKD
Accounts Payable
Including: USD 103,694,084.74 7.0827 734,434,093.99
INR 2,381,510,335.43 0.0851 202,776,129.43
EUR 1,359,034.19 7.8592 10,680,921.51
AED 2,876,615.98 1.9326 5,559,204.21
HUF 198,712,875.49 0.0205 4,079,466.96
BRL 2,556,421.34 1.4596 3,731,454.84
Total amount of other
15,986,600.17
currencies
(2) Notes on overseas business entities, including that for the important overseas business
entities, the overseas main premises, functional currency and selection basis shall be
disclosed. If there are changes on its functional currency, the causes for the changes shall be
disclosed as well.
Applicable □ Not applicable
Since the overseas business entity of the Company, Dahua Technology (HK) Limited, does not have autonomy over
its business activities, which are the extension of the business activities of the Company, constituting the business
activities of the Company, RMB shall be used as its functional currency.
66. Lease
(1) The Company as a lessee
Applicable □ Not applicable
Variable lease payments not included in the measurement of lease liabilities
□ Applicable Not applicable
Simplified leasing expenses for short-term leases or low-value assets
Applicable □ Not applicable
Item Amount of this period Amount of Previous Period
Interest expenses on lease liabilities 14,312,541.58 13,841,181.48
Simplified short-term leasing expenses included in
59,174,978.85 86,310,571.91
relevant asset cost or the current profit or loss
Total cash outflows relating to lease 230,494,503.61 216,980,710.07
Information on sale and leaseback transaction
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
N/A
(2) The Company as a lessor
Operating lease as a lessor
Applicable □ Not applicable
Unit: RMB
Including: Income relating to variable
Item Rental income lease payments not included in the
lease receipts
Lease of buildings 41,297,042.90
Lease of equipment 103,366,881.74
Total 144,663,924.64
Financial lease as a lessor
□ Applicable Not applicable
Lease receipts undiscounted in each of the five years to come
□ Applicable Not applicable
(3) Recognition of profit or loss from financial lease or sale as a manufacturer or distributor
□ Applicable Not applicable
VIII. R&D Expenditure
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Labor cost 3,543,375,607.63 3,436,548,913.49
Research consumables and service 172,532,981.67
216,082,660.80
fees
Depreciation cost and asset 117,315,005.47
95,196,552.16
amortization
Traveling expense 57,860,404.79 49,067,671.55
Administrative expenses 34,045,660.92 40,756,648.46
Communication expense 28,994,641.13 25,135,407.16
Others 13,124,493.61 20,217,729.20
Total 3,967,248,795.22 3,883,005,582.82
Including: Expense-based R&D
3,967,248,795.22 3,883,005,582.82
expenditure
IX. Changes in the Scope of Consolidation
1. Consolidation not under the common control
(1) Consolidation not under the common control in this period
Unit: RMB
Name of Time Cost for Percenta Acquisiti Acquisiti Basis for Income Net Cash
333
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Acquiree Point for Equity ge on on Date Determin of Profit of Flow of
Equity Acquisiti Acquired Method ing Acquiree Acquiree Acquiree
Acquisiti on Acquisiti from the from the from the
on on Date Acquisiti Acquisiti Acquisiti
on Date on Date on Date
to the to the to the
End of End of End of
the the the
Period Period Period
Zhejiang
Huajian
February Equity February Transferr
Technolo 0.00 100.00% 0.00 0.00
24, 2023 transfer 24, 2023 ed
gy Co.,
Ltd.
Other notes:
Zhejiang Huajian Technology Co., Ltd. was established on December 7, 2022. As at the date of this equity transfer,
the original shareholder failed to make the contribution or engage in any operation. The Company purchased 100% of
its equities with zero consideration and completed the industrial and commercial change on February 24, 2023.
2. No business consolidation under common control during this period
3. Disposal of subsidiaries
Is there any transaction or matter that results in loss of control over the subsidiaries in the current period
□ Yes No
Is there any situation where disposal of investment in subsidiaries is achieved through multiple transactions in various
stages, causing loss of control in this period
□ Yes No
4. Changes in the Scope of Consolidation for Other Reasons
Explanations on the changes in the scope of consolidation caused by other reasons (for example, newly established
subsidiaries, subsidiaries clearing, etc.) and relevant information:
(1) The Company has established three domestic subsidiaries in this period: Zhejiang Shuhang Intelligent Technology
Co., Ltd., Guangdong Huaxiyue Intelligent Technology Co., Ltd., and Zhejiang Huajie New Energy Operation Service
Co., Ltd. Additionally, it has established seven overseas subsidiaries: Dahua Technology Belgium BV, Dahua
Technology Regional Headquarters, Dahua Technology Azerbaijan LLC, Dahua Technology Vietnam Company
Limited, Huaray Technology Korea Company Limited, HuaRay Technology GmbH, and Dahua Technology Angola S.U.
lda. All the aforementioned subsidiaries have been consolidated into the financial reports of the Company from their
respective establishment dates.
(2) The Company's subsidiary Guizhou Dahua Information Technology Co., Ltd. is canceled in the current period and
has not been included in the scope of consolidation from the date of cancellation.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
X. Equity in Other Entities
1. Equity in Subsidiaries
(1) Composition of the enterprise group
Name of Shareholding Percentage Acquisiti
Registered Main Place of Registered Business
Subsidiarie on
Capital Business Address Nature Direct Indirect
s Method
Dahua RMB Binjiang Binjiang Electronics
Establish
System 500,000,00 District, District, and 100.00%
ment
Engineering 0 Hangzhou Hangzhou information
Dahua RMB Binjiang Binjiang Electronics
Establish
Vision 1,306,810,0 District, District, and 100.00%
ment
Technology 00 Hangzhou Hangzhou information
Dahua RMB Binjiang Binjiang Electronics
Establish
Security 100,000,00 District, District, and 100.00%
ment
Network 0 Hangzhou Hangzhou information
Binjiang Binjiang Electronics
Dahua RMB Establish
District, District, and 51.00%
Ju'an 10,000,000 ment
Hangzhou Hangzhou information
Guangxi Electronics
RMB Youjiang Youjiang Establish
Dahua and 100.00%
66,800,000 District, Baise District, Baise ment
Information information
Qingxiu Qingxiu
Guangxi RMB Establish
District, District, Service 100.00%
Yunlian 20,000,000 ment
Nanning Nanning
Binjiang Binjiang Electronics
Hangzhou RMB 78.00% Establish
District, District, and
Xiaohua 10,000,000 (Note 1) ment
Hangzhou Hangzhou information
RMB Fuyang Fuyang Electronics
Dahua 94.1669% Establish
1,885,800,0 District, District, and
Zhilian (Note 2) ment
00 Hangzhou Hangzhou information
Investment
Dahua
RMB Fuyang Fuyang &
investment Establish
1,000,000,0 District, District, investment 75.00%
manageme ment
00 Hangzhou Hangzhou manageme
nt
nt
RMB Electronics
Guangxi Youjiang Youjiang Establish
109,542,90 and 65.00%
Zhicheng District, Baise District, Baise ment
0 information
Binjiang Binjiang Electronics
Hangzhou RMB 32.73% Establish
District, District, and
Huacheng 77,905,182 |(Note 3) ment
Hangzhou Hangzhou information
Electronics
Xinjiang RMB Shihezi, Shihezi, Establish
and 92.00%
Information 60,000,000 Xinjiang Xinjiang ment
information
Binjiang Binjiang Sci-tech
HuaRay RMB 32.58% Establish
District, District, popularizati
Technology 78,264,756 (Note 4) ment
Hangzhou Hangzhou on and
335
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
application
services
industry
Fuyang Fuyang Electronics
Fuyang RMB Establish
District, District, and 51.00%
Hua'ao 10,000,000 ment
Hangzhou Hangzhou information
Binjiang Binjiang Electronics
Huafei RMB 60.50% Establish
District, District, and
Intelligent 50,000,000 (Note 5) ment
Hangzhou Hangzhou information
Guanshanhu Guanshanhu Electronics
Guizhou RMB Establish
District, District, and 100.00%
Huayi 22,500,000 ment
Guiyang Guiyang information
Qira County, Qira County, Electronics
Xinjiang RMB Establish
Hotan, Hotan, and 97.00%
Zhihe 38,284,600 ment
Xinjiang Xinjiang information
Electronics
Guangxi RMB Wuzhou, Wuzhou, Establish
and 90.00%
Huacheng 35,800,000 Guangxi Guangxi ment
information
Meitan Electronics
RMB Zunyi, Zunyi, Establish
Dahua and 100.00%
10,000,000 Guizhou Guizhou ment
Technology information
New District, New District,
Inner Bai County, Bai County, Electronics
RMB Establish
Mongolia Chahar Right Chahar Right and 95.00%
20,000,000 ment
Zhimeng Wing Back Wing Back information
Banner Banner
Hetian Hetian
Electronics
Xinjiang RMB County, County, Establish
and 97.00%
Zhitian 25,652,600 Hetian, Hetian, ment
information
Xinjiang Xinjiang
Shache Shache
RMB County, County, Electronics
Xinjiang Establish
335,567,20 Kashgar Kashgar and 100.00%
Xinzhi ment
0 District, District, information
Xinjiang Xinjiang
Electronics
Xinjiang RMB Kashgar, Kashgar, Establish
and 100.00%
Huayue 37,841,300 Xinjiang Xinjiang ment
information
Electronics
Tianjin RMB Tianjin Binhai Tianjin Binhai Establish
and 100.00%
Dahua 36,000,000 New Area New Area ment
information
Shuangpai Shuangpai
Electronics
Dahua RMB County, County, Establish
and 90.00%
Zhilong 39,480,000 Yongzhou Yongzhou ment
information
City City
Fuyang Fuyang
District, District, Electronics
Vision RMB Establish
Hangzhou Hangzhou and 100.00%
Technology 10,000,000 ment
City, Zhejiang City, Zhejiang information
Province Province
Fuyang Fuyang
District, District, Electronics
Huaxiao RMB Establish
Hangzhou Hangzhou and 51.00%
Technology 70,000,000 ment
City, Zhejiang City, Zhejiang information
Province Province
RMB Xi'an City, Xi'an City, Electronics
Xi'an Establish
989,600,00 Shaanxi Shaanxi and 100.00%
Dahua ment
0 Province Province information
Wuxi City, Wuxi City, Electronics
RMB Establish
Huaruipin Jiangsu Jiangsu and 51.00%
50,000,000 ment
Province Province information
Beijing RMB Xicheng Xicheng Electronics Establish
100.00%
Huayue 10,000,000 District, District, and ment
336
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Beijing Beijing information
Putuo Electronics
Shanghai RMB Putuo District, Establish
District, and 100.00%
Huashang 1,000,000 Shanghai ment
Shanghai information
Wucheng Wucheng
District, District, Electronics
Dahua RMB Establish
Jinhua City, Jinhua City, and 100.00%
Jinzhi 60,000,000 ment
Zhejiang Zhejiang information
Province Province
RMB Zhoushan Zhoushan Electronics
Zhoushan Establish
100,000,00 City, Zhejiang City, Zhejiang and 58.80%
Operation ment
0 Province Province information
Lijiang City, Lijiang City, Electronics
Yunnan RMB Establish
Yunnan Yunnan and 90.00%
Zhili 50,000,000 ment
Province Province information
Liuzhou City, Liuzhou City,
Guangxi RMB Guangxi Guangxi Electronics
Establish
Dahua 100,000,00 Zhuang Zhuang and 100.00%
ment
Technology 0 Autonomous Autonomous information
Region Region
Binjiang Binjiang Electronics
RMB Establish
Huayixin District, District, and 51.00%
80,000,000 ment
Hangzhou Hangzhou information
RMB Binjiang Binjiang
Automotive Establish
Huaruijie 150,000,00 District, District, 51.00%
electronics ment
0 Hangzhou Hangzhou
RMB Longquanyi Longquanyi Electronics
Chengdu Establish
600,000,00 District, District, and 100.00%
Zhilian ment
0 Chengdu Chengdu information
RMB Longquanyi Longquanyi Electronics
Chengdu Establish
554,700,00 District, District, and 100.00%
Zhian ment
0 Chengdu Chengdu information
Longquanyi Longquanyi Electronics
Chengdu RMB Establish
District, District, and 100.00%
Zhishu 50,000,000 ment
Chengdu Chengdu information
Longquanyi Longquanyi Electronics
Chengdu RMB Establish
District, District, and 100.00%
Zhichuang 15,000,000 ment
Chengdu Chengdu information
Chengdu Electronics
RMB Dayi County, Dayi County, Establish
Smart and 90.00%
50,000,000 Chengdu Chengdu ment
Network information
Electronics
Huakong RMB Wuyi County, Wuyi County, Establish
and 100.00%
Software 50,000,000 Jinhua City Jinhua City ment
information
Binjiang Binjiang Electronics
Huacheng RMB Establish
District, District, and 100.00%
Software 30,000,000 ment
Hangzhou Hangzhou information
Electronics
Henan RMB Zhengzhou, Zhengzhou, Establish
and 100.00%
Dahua 30,000,000 Henan Henan ment
information
Binjiang Binjiang Electronics
RMB 45.00% Establish
Huajian District, District, and
50,000,000 (Note 6) ment
Hangzhou Hangzhou information
Zhengzhou Electronics
RMB Zhengzhou, Zhengzhou, Establish
Dahua and 100.00%
30,000,000 Henan Henan ment
Zhian information
Dahua Electronics
RMB Establish
Internationa Singapore Singapore and 100.00%
1,000,000 ment
l information
Electronics
Anhui RMB Establish
Hefei, Anhui Hefei, Anhui and 100.00%
Zhilian 30,000,000 ment
information
Anhui RMB Electronics Establish
Hefei, Anhui Hefei, Anhui 100.00%
Zhishu 30,000,000 and ment
337
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
information
Electronics
Wuhu RMB Establish
Wuhu, Anhui Wuhu, Anhui and 100.00%
Huajian 10,000,000 ment
information
RMB Electronics
Changsha Changsha, Changsha, Establish
100,000,00 and 100.00%
Dahua Hunan Hunan ment
0 information
Electronics
Tianjin RMB Hexi District, Hexi District, Establish
and 100.00%
Huajian 30,000,000 Tianjin Tianjin ment
information
RMB Xiaoshan Xiaoshan Electronics
Zhejiang Establish
442,140,44 District, District, and 75.11%
Pixfra ment
8 Hangzhou Hangzhou information
Yiwu City, Yiwu City, Electronics
RMB Establish
Yiwu Huaxi Zhejiang Zhejiang and 100.00%
10,000,000 ment
Province Province information
RMB Xiaoshan Xiaoshan Electronics
Dahua Establish
100,000,00 District, District, and 100.00%
Operation ment
0 Hangzhou Hangzhou information
Nanyang Nanyang City, Electronics
Nanyang RMB Establish
City, Henan Henan and 100.00%
Intelligent 10,000,000 ment
Province Province information
Yibin City, Yibin City, Electronics
Yibin RMB Establish
Sichuan Sichuan and 100.00%
Huahui 20,000,000 ment
Province Province information
Chengdu Chengdu City, Electronics
Chengdu RMB Establish
City, Sichuan Sichuan and 100.00%
Huazhiwei 10,000,000 ment
Province Province information
Xi'an City, Xi'an City, Electronics
RMB Establish
IMOU Xi'an Shaanxi Shaanxi and 100.00%
20,000,000 ment
Province Province information
Luoyang City, Luoyang City, Electronics
Luoyang RMB Establish
Henan Henan and 100.00%
Zhiyu 10,000,000 ment
Province Province information
RMB Binjiang Binjiang Electronics
Huaqi Establish
100,000,00 District, District, and 100.00%
Intelligence ment
0 Hangzhou Hangzhou information
Chongzhou Chongzhou Electronics
Chengdu RMB Establish
City, City, Chengdu and 100.00%
Information 20,000,000 ment
Chengdu City City information
Business
combinat
Binjiang Binjiang Electronics
Huajian RMB ion not
District, District, and 100.00%
Technology 20,000,000 under
Hangzhou Hangzhou information
common
control
Xiaoshan Xiaoshan Electronics
Shuhang RMB Establish
District, District, and 100.00%
Intelligent 10,000,000 ment
Hangzhou Hangzhou information
Haizhu Haizhu Electronics
RMB Establish
Huaxiyue District, District, and 100.00%
10,000,000 ment
Guangzhou Guangzhou information
Xiaoshan Xiaoshan New
Huajie RMB Establish
District, District, Energy 100.00%
Operation 50,000,000 ment
Hangzhou Hangzhou Operation
RMB Electronics
Dahua Establish
669,687,34 Hong Kong Hong Kong and 100.00%
Hong Kong ment
7 information
Electronics
USD Establish
Dahua USA USA USA and 100.00%
600,000 ment
information
Electronics
Dahua EUR Establish
Netherlands Netherlands and 100.00%
Europe 200,000 ment
information
338
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Electronics
Dahua AED United Arab United Arab Establish
and 100.00%
Middle East 1,000,000 Emirates Emirates ment
information
Electronics
Dahua MXN Establish
Mexico Mexico and 100.00%
Mexico 90,000,000 ment
information
CLP Electronics
Dahua Establish
360,000,00 Chile Chile and 100.00%
Chile ment
0 information
COP Electronics
Dahua Establish
4,616,709,0 Columbia Columbia and 100.00%
Colombia ment
16 information
Electronics
Dahua AUD Establish
Australia Australia and 100.00%
Australia 150,000 ment
information
Electronics
Dahua USD Establish
Singapore Singapore and 100.00%
Singapore 220,000 ment
information
Electronics
Dahua ZAR Establish
South Africa South Africa and 100.00%
South Africa 5,000,000 ment
information
Electronics
PEN Establish
Dahua Peru Peru Peru and 100.00%
2,200,000 ment
information
Electronics
Dahua BRL Establish
Brazil Brazil and 100.00%
Brazil 41,334,811 ment
information
Electronics
Dahua RUB Establish
Russia Russia and 100.00%
Russia 30,000,000 ment
information
Electronics
Dahua CAD Establish
Canada Canada and 100.00%
Canada 250,000 ment
information
Electronics
Dahua Establish
USD 10,000 Panama Panama and 100.00%
Panama ment
information
HUF Electronics
Dahua Establish
303,000,00 Hungary Hungary and 100.00%
Hungary ment
0 information
Electronics
Dahua PLN Establish
Poland Poland and 100.00%
Poland 2,200,000 ment
information
Electronics
Dahua Establish
USD 89,000 Tunisia Tunisia and 100.00%
Tunisia ment
information
Electronics
Dahua KES Establish
Kenya Kenya and 100.00%
Kenya 15,000,000 ment
information
Electronics
GBP Establish
Dahua UK UK UK and 100.00%
100,000 ment
information
Electronics
Dahua BGN Establish
Bulgaria Bulgaria and 100.00%
Bulgaria 350,000 ment
information
Electronics
Dahua RSD Establish
Serbia Serbia and 100.00%
Serbia 23,000,000 ment
information
Electronics
Dahua EUR Establish
Germany Germany and 100.00%
Germany 150,000 ment
information
Electronics
Dahua MYR Establish
Malaysia Malaysia and 100.00%
Malaysia 1,000,000 ment
information
KRW Electronics
Dahua Establish
1,500,000,0 South Korea South Korea and 100.00%
Korea ment
00 information
339
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
IDR Electronics
Dahua Establish
2,600,000,0 Indonesia Indonesia and 67.00%
Indonesia ment
00 information
INR Electronics
Establish
Dahua India 234,000,00 India India and 100.00%
ment
0 information
Electronics
Dahua TRY Establish
Turkey Turkey and 100.00%
Turkey 840,000 ment
information
Electronics
Dahua CZK Czech Czech Establish
and 100.00%
Czech 5,400,000 Republic Republic ment
information
Electronics
Dahua ARS Establish
Argentina Argentina and 100.00%
Argentina 27,288,503 ment
information
Electronics
Dahua EUR Establish
Spain Spain and 100.00%
Spain 150,000 ment
information
Electronics
Dahua KZT Establish
Kazakhstan Kazakhstan and 100.00%
Kazakhstan 23,000,000 ment
information
Electronics
Dahua DKK Establish
Denmark Denmark and 100.00%
Denmark 1,500,000 ment
information
Electronics
Dahua EUR Establish
France France and 100.00%
France 100,000 ment
information
Dahua Electronics
HKD Establish
Technology Hong Kong Hong Kong and 100.00%
10,000,000 ment
Holdings information
Electronics
Dahua MAD Establish
Morocco Morocco and 100.00%
Morocco 500,000 ment
information
Business
combinat
Electronics
ion not
Dahua Italy EUR 12,000 Italy Italy and 100.00%
under
information
common
control
UZS Electronics
Dahua Establish
3,200,000,0 Uzbekistan Uzbekistan and 100.00%
Uzbekistan ment
00 information
Electronics
Dahua Establish
EUR 10,000 Netherlands Netherlands and 100.00%
Netherlands ment
information
Electronics
Dahua Sri LKR Establish
Sri Lanka Sri Lanka and 100.00%
Lanka 48,000,000 ment
information
Electronics
Dahua PKR Establish
Pakistan Pakistan and 100.00%
Pakistan 20,000,000 ment
information
Electronics
Dahua New NZD Establish
New Zealand New Zealand and 100.00%
Zealand 300,000 ment
information
Electronics
Dahua THB Establish
Thailand Thailand and 99.98%
Thailand 25,000,000 ment
information
Electronics
Dahua RON Establish
Romania Romania and 100.00%
Romania 1,000,000 ment
information
Electronics
Dahua NGN Establish
Nigeria Nigeria and 100.00%
Nigeria 10,000,000 ment
information
Electronics
Dahua USD Establish
Israel Israel and 100.00%
Israel 300,000 ment
information
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Dahua Electronics
MXN Establish
Mexico Mexico Mexico and 100.00%
50,000 ment
Service information
Electronics
Huacheng EUR Establish
Netherlands Netherlands and 100.00%
Netherlands 900,000 ment
information
Electronics
Dahua JPY Establish
Japan Japan and 100.00%
Japan 6,000,000 ment
information
Electronics
Dahua QAR Establish
Qatar Qatar and 100.00%
Qatar 2,184,000 ment
information
Electronics
Huacheng HKD Establish
Hong Kong Hong Kong and 100.00%
Hong Kong 12,023,000 ment
information
Electronics
Dahua Establish
USD 10,000 Panama Panama and 100.00%
Pacific ment
information
Dahua Electronics
SAR Establish
Saudi Saudi Arabia Saudi Arabia and 100.00%
500,000 ment
Arabia information
Electronics
Dahua BDT Establish
Bangladesh Bangladesh and 100.00%
Bengal 5,000,000 ment
information
Electronics
IMOU USD Establish
Australia Australia and 100.00%
Australia 1,000,000 ment
information
VND Electronics
IMOU Establish
6,930,000,0 Vietnam Vietnam and 100.00%
Vietnam ment
00 information
Electronics
HuaRay USD Establish
Singapore Singapore and 100.00%
Singapore 100,000 ment
information
KRW Electronics
HuaRay Establish
100,000,00 South Korea South Korea and 100.00%
Korea ment
0 information
Electronics
HuaRay Establish
EUR 23,000 Germany Germany and 100.00%
Germany ment
information
Electronics
Dahua EUR Establish
Belgium Belgium and 100.00%
Belgium 100,000 ment
information
Dahua Electronics
Establish
Saudi SAR 10,000 Saudi Arabia Saudi Arabia and 100.00%
ment
Arabia information
Electronics
Dahua USD Establish
Azerbaijan Azerbaijan and 100.00%
Azerbaijan 100,000 ment
information
VND Electronics
Dahua Establish
2,363,600,0 Vietnam Vietnam and 100.00%
Vietnam ment
00 information
AOA Electronics
Dahua Establish
176,303,00 Angola Angola and 100.00%
Angola ment
0 information
Explanations on the fact that the proportion of the shares held by a subsidiary differs from that of voting rights:
(1) The Company previously held 45% equity in Hangzhou Xiaohua Technology Co., Ltd. and accepted 33% equity
from individual shareholders in 2023. After the change, the Company directly holds 78% equity in Hangzhou Xiaohua
Technology Co., Ltd. and exercises the voting rights according to its equity ratio.
341
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Based on the industrial and commercial registration data, the CDB Development Fund holds equity in the Company.
According to the cooperation agreement between the Company and CDB Development Fund, CDB Development
Fund shall not appoint senior management personnel, such as directors and supervisors, to Dahua Zhilian; regarding
its investment, the Company shall pay an annual investment profit of 1.2% to CDB Development Fund through
dividends, repurchase premiums, etc. In addition, the Company shall redeem the CDB Development Fund's equity in
Dahua Zhilian period by period from 2022 to 2024, using its amount of investment as other non-current liabilities, and
reclassifying those due within one year to "non-current liabilities due within one year". The Company effectively holds
100% voting rights and equity in Dahua Zhilian.
(3) In 2023, the registered capital of Huacheng Network was increased from RMB 50,000,000 to RMB 77,905,200
through capital increase and share expansion several times. Due to the Company's abandonment of the right to
increase capital in the same proportion, the Company's original 51.00% equity was diluted to 32.73%. After the dilution
of equity, the Company is still the largest shareholder of Huacheng Network. Huacheng Network is still a holding
subsidiary of the Company, and is included in the scope of consolidation of the Company.
(4) In 2023, the registered capital of the holding subsidiary HuaRay Technology was increased from RMB 60,386,500
to RMB 78,264,800 through capital increase, share expansion and equity transfer several times. Due to the
Company's abandonment of the right to increase capital in the same proportion and the right of preemption, the
Company's original 42.23% equity was diluted to 32.58%. After the dilution of equity, the Company is still the largest
shareholder of HuaRay Technology. The remaining shareholders have a low and dispersed shareholding ratio, and
HuaRay Technology is still a holding subsidiary of the Company, and is included the scope of consolidation of the
Company.
(5) In August 2023, the Company acquired 15.00% equity in Huafei Intelligent held by Hangzhou Hua’ao Enterprise
Management Partnership (Limited Partnership) with a consideration of RMB 13,347,000. After the acquisition of equity,
the Company’s original 45.50% equity in Huafei Intelligent was increased to 60.50%, and after the change, the
Company exercises the voting rights according to its equity ratio.
(6) The Company directly holds 45% equity in Zhejiang Huajian Technology Co., Ltd., and as agreed upon, Ningbo
Hualing Venture Capital Investment Partnership (Limited Partnership) grants its voting rights of 35% to the Company.
The Company effectively holds 80% of the voting rights in Zhejiang Huajian Technology Co., Ltd., which constitutes
working control so as to incorporate it into the scope of consolidation.
2. The transactions that lead to changes in the shareholder's equity in the subsidiaries while
still has working control over the subsidiary
(1) Explanation of the changes in the shareholder's equity in the subsidiaries
1) In June 2023, the Company acquired the 33.00% equity held by 3 individual shareholders in Hangzhou Xiaohua
Technology Co., Ltd. with a consideration of RMB 3,300,000. After the acquisition of equity, the Company’s original
45.00% equity in Hangzhou Xiaohua Technology Co., Ltd. was increased to 78.00%, and after the change, the
Company exercises the voting rights according to its equity ratio.
2) In August 2023, the Company acquired 15.00% equity in Huafei Intelligent held by Hangzhou Hua’ao Enterprise
Management Partnership (Limited Partnership) with a consideration of RMB 13,347,000. After the acquisition of equity,
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
the Company’s original 45.50% equity in Huafei Intelligent was increased to 60.50%, and after the change, the
Company exercises the voting rights according to its equity ratio.
3) In October 2023, the registered capital of the holding subsidiary Pixfra Technology was increased from RMB
100,000,000 to RMB 442,140,400 through capital increase and share expansion. The Company’s original 51.00%
equity in Pixfra Technology was changed to 75.11%, and after the change, the Company exercises the voting rights
according to its equity ratio.
4) In 2023, the registered capital of the holding subsidiary HuaRay Technology was increased from RMB 60,386,500
to RMB 78,264,800 through capital increase, share expansion and equity transfer several times. Due to the
Company's abandonment of the right to increase capital in the same proportion and the preemptive right, the
Company's original 42.23% equity was diluted to 32.58%. After the dilution of equity, the Company is still the largest
shareholder of HuaRay Technology. The remaining shareholders have a low and dispersed shareholding ratio, and
HuaRay Technology is still a holding subsidiary of the Company, and is included the scope of consolidation of the
Company.
5) In 2023, the registered capital of the holding subsidiary Huacheng Network was increased from RMB 50,000,000 to
RMB 77,905,200 through capital increase and share expansion several times. Due to the Company's abandonment of
the right to increase capital in the same proportion, the Company's original 51.00% equity was diluted to 32.73%. After
the dilution of equity, the Company is still the largest shareholder of Huacheng Network. Huacheng Network is still a
holding subsidiary of the Company, and is included in the scope of consolidation of the Company.
(2) The effect of the transactions on the equity of the minority shareholders and the shareholder's equity
attributable to the parent company
Unit: RMB
Xiaohua Huafei Xinjiang Pixfra Huacheng HuaRay
Technology Intelligent Information Technology Network Technology
Purchase
cost/Disposal
consideration
-- Cash 3,300,000.00 13,347,000.00
-- Fair value of
non-cash
assets
Purchase
cost/ Total
3,300,000.00 13,347,000.00
disposal
consideration
Less: the
share of net
assets of the
subsidiary
- 157,420,514.5
calculated 571,110.85 12,733,879.31 -254,678.93 -3,242,181.69
41,017,645.38 9
based on the
ratio of equity
obtained/disp
osed
Difference 2,728,889.15 613,120.69 254,678.93 41,017,645.38 3,242,181.69 -
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
157,420,514.5
9
Among them:
adjust the - 157,420,514.5
-2,728,889.15 -613,120.69 -254,678.93 -3,242,181.69
capital 41,017,645.38 9
reserve
Adjuste
d surplus
reserve
Adjuste
d
undistributed
profits
3. Equity in joint venture arrangements or affiliates
(1) Financial summary of non-essential joint ventures and affiliates
Unit: RMB
Closing balance / amount occurred in Opening balance / amount occurred
the current period in the previous period
Joint ventures:
The total count of the following items
based on the shareholding ratios
Affiliates:
Total book value of investments 727,453,629.75 1,461,099,644.55
The total count of the following items
based on the shareholding ratios
--Net profit -242,631,295.52 -399,809,570.81
--Other comprehensive income 9,013,070.41 -448,230.26
--Total comprehensive income -233,618,225.11 -400,257,801.07
Note: The affiliate Zhejiang Leapmotor Technology Co., Ltd. has been disposed of in the current period, and the
opening balance/amount occurred in the previous period contains the amount of Zhejiang Leapmotor Technology Co.,
Ltd.
XI. Government Subsidies
1. Government subsidies recognized as the amount receivable at the end of the reporting
period
□ Applicable Not applicable
Reasons for failure to receive the estimated amount of government subsidies at the estimated timepoint
□ Applicable Not applicable
2. Liabilities related to government subsidies
Applicable □ Not applicable
Unit: RMB
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Amount
recorded
Amount Other Related
Acco The amount of as non-
transferred to change to
unting Opening balance new subsidies operating Closing balance
other income in s in this assets/
item in this period revenue
this period period income
in this
period
Defer
Related
red
104,663,047.38 61,122,500.00 13,941,174.36 151,844,373.02 to
Incom
assets
e
Defer
Related
red
29,734,600.00 14,867,299.98 14,867,300.02 to
Incom
income
e
3. Government subsidies recorded into the current profit or loss
Applicable □ Not applicable
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Accounting item
Period Period
Other Incomes 932,712,195.04 980,662,878.33
Non-operating Revenue 2,100,000.00
XII. Risks Relating to Financial Instruments
1. Risks arising from the financial instruments
In the business operation, the Company is facing with various financial risks: credit risk, liquidity risk and market risk
(including exchange rate risk, interest rate risk and other price risks).
The overall objective of the Company's risk management is to formulate risk management policies that can minimize
risks without affecting the Company's competitiveness and adaptability to changes too much.
(I) Credit risk
The credit risk refers to the risk of financial loss to the Company as a result of a counterparty's failure to fulfill its
contractual obligations. The Company is mainly facing with the customer credit risk arising from sales on account.
Before signing a new contract, the Company will assess the new customer's credit risk, including external credit rating
and the credibility letter from a bank under some circumstances (if such information is available). The Company has
set a credit limit for sales on account for each customer. Such limit shall be the maximum amount with no additional
approval needed.
The Company ensures that the overall credit risk is within the controllable range through quarterly monitoring of credit
ratings of existing customers, and monthly review of aging analysis on accounts receivable. When monitoring
customers' credit risk, the Company groups them according to their credit characteristics. Customers rated as "high
risk" will be placed on the restricted customer list. The Company can provide them with O/A in the future period only
when additional approval is obtained. Otherwise they must make relevant payment in advance.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
For overseas customers, the Company mainly uses wire transfer as a payment method. According to the credit
evaluation of each customer, the Company gives different credit lines and credit account periods, and agrees on the
payment method and account period in the commodity procurement contract between the two parties. After the sales
of products, the Company has a dedicated person responsible for tracking, reconciliation, and payment reminding. In
addition, the Company introduced export credit insurance to ensure that the return risk from overseas customers is
within controllable range.
(II) Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligation of settlement by cash or
other financial assets.
The Company's policy is to ensure that there is sufficient cash to repay the liabilities due. The liquidity risk is under the
concentrated control of the Company's Financial Department. Through monitoring the balance of cash and securities
cashable at any time and rolling forecasting the cash flow in the next 12 months, the Financial Department ensures
that the Company has sufficient funds to repay its debts under all reasonable predictions.
The financial liabilities of the Company are listed as follows based on the undiscounted contractual cash flow:
Unit: RMB
December 31, 2023
Item
Within 1 year 1 years or above Total
Short-term
961,559,707.96 961,559,707.96
loan
Notes
3,296,294,946.26 3,296,294,946.26
Payable
Accounts
5,815,123,195.55 5,815,123,195.55
Payable
Other
812,424,146.52 812,424,146.52
Payables
Non-current
Liabilities Due 924,321,195.99 924,321,195.99
within 1 Year
Long-term
loan
Lease
187,049,189.60 187,049,189.60
Liabilities
11,809,723,192.28 187,049,189.60 11,996,772,381.88
Total
December 31, 2022
Item
Within 1 year 1 years or above Total
Short-term loan 260,776,817.68 260,776,817.68
Notes Payable 4,364,097,761.17 4,364,097,761.17
Accounts Payable 7,340,277,388.29 7,340,277,388.29
Other Payables 1,004,056,999.91 1,004,056,999.91
Non-current Liabilities 2,612,356,720.16 2,612,356,720.16
Due within 1 Year
Long-term loan 12,189,009.07 460,171,666.67 472,360,675.74
Lease Liabilities 209,266,176.61 209,266,176.61
Total 15,593,754,696.28 669,437,843.28 16,263,192,539.56
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(III) Market Risk
The market risk of financial instruments refers to the risk of fluctuation at fair value of financial instruments or future
cash flows with the change of market prices, including exchange rate risks, interest rate risks and other price risks.
1. Interest rate risk
The interest rate risk refers to the risk in which the fair value or future cash flow of financial instruments changes due
to the change of market interest rate. The interest rate risk faced with by the Company is mainly from bank loans. The
Company's assets and liabilities relating to interest rate are respectively bank deposits and short-term loans, whose
interest rate risk is low.
2. Exchange rate risk
The exchange rate risk refers to the risk in which the fair value or future cash flow of financial instruments changes due
to the change of foreign exchange rate. The Company will try its best to match the revenues with the expenses in
foreign currency, to lower the exchange rate risk. In addition, the Company may also sign forward foreign exchange
contracts or currency swap contracts to avoid exchange rate risks.
The exchange rate risk faced with by the Company is mainly from financial assets and liabilities in USD. The amounts
of assets and liabilities in foreign currencies and converted into RMB are listed as below:
Unit: RMB
Item Closing balance Opening balance
USD Other foreign Total USD Other foreign Total
currencies currencies
Cash and
Bank 1,211,603,667.27 3,821,528,161.46 5,033,131,828.73 1,014,793,102.46 593,320,421.14 1,608,113,523.60
Balances
Accounts
3,780,152,844.06 2,615,801,053.40 6,395,953,897.46 4,171,664,421.39 2,134,877,260.22 6,306,541,681.61
receivable
Accounts
734,434,093.99 242,813,777.12 977,247,871.11 1,764,995,765.35 342,688,103.07 2,107,683,868.42
Payable
Total 5,726,190,605.32 6,680,142,991.98 12,406,333,597.30 6,951,453,289.20 3,070,885,784.43 10,022,339,073.63
2. Financial assets
(1) Classification of transfer methods
Applicable □ Not applicable
Unit: RMB
Nature of financial Amount of financial Dereco Basis for judgment of
Transfer method
assets transferred assets transferred gnition derecognition
The bank acceptance bills and
commercial acceptance bills in the
notes receivable are accepted by
Unexpired bank the banks or enterprises with low
acceptance bills and Not credit ratings. The recourses of
Endorsement or
commercial 39,320,431.95 derecog the endorsed or discounted bills
discounting
acceptance bills in nised will not be impaired, but the credit
the notes receivable risks and deferred payment risks
related to the notes have not been
transferred yet. The notes are
therefore not derecognized.
Unexpired bank The bank acceptance bills in the
Endorsement or Dereco
acceptance bills in 92,886,786.46 receivables financing are
discounting gnised
the receivables accepted by the banks with high
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
financing credit ratings, incurring low credit
risks and deferred payment risks,
and the interest rate risks related
to the notes have been transferred
to the banks. It can be judged that
the major risks and rewards of the
notes title have been transferred
and the notes are therefore
derecognized.
The supply chain finance in the
accounts receivable is accepted
by enterprises. The recourses of
the discounted or factored
Unexpired supply Not accounts receivable will not be
Discounting or
chain finance in the 7,238,385.64 derecog impaired, but the credit risks and
factoring
accounts receivable nised deferred payment risks related to
the accounts receivable have not
been transferred yet. The
accounts receivable are therefore
not derecognized.
The accounts receivable
transferred in accordance with the
non-recourse accounts receivable
Factoring of Unexpired accounts Dereco
14,041,249.40 factoring agreement are
accounts receivable receivable gnised
derecognised as the majors risks
and rewards of their title have
been transferred.
Total 153,486,853.45
(2) Financial assets derecognised due to transfer
Applicable □ Not applicable
Unit: RMB
Transfer method of Amount of financial assets Gains or losses related to
Item
financial assets derecognized derecognition
Unexpired bank
acceptance bills in the Endorsement/Discounting 92,886,786.46 -1,207,777.45
receivables financing
Factoring of accounts
Accounts receivable 14,041,249.40 -331,453.99
receivable
Total 106,928,035.86 -1,539,231.44
XIII. Disclosure of Fair Values
1. Fair values of the assets and liabilities at the end of the period
Unit: RMB
Fair values at period-end
Item First level Second level Third level
measurement ata fair measurement at fair measurement at fair Total
value value value
I. Constant -- -- -- --
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
measurement at fair
value
(I) Trading Financial
1,470,000.00 1,470,000.00
Assets
1. Financial assets
measured at fair
1,470,000.00 1,470,000.00
value through profit
or loss in this period
(1) Investment in
debt instrument
(2) Investment in
equity instrument
(3) Derivative
Financial Assets
(4) Others 1,470,000.00 1,470,000.00
(II) Receivables
810,713,267.86 810,713,267.86
Financing
(III) Other Non-
current Financial 1,056,959,784.04 478,782,601.67 1,535,742,385.71
Assets
1. Financial assets
measured at fair
1,056,959,784.04 478,782,601.67 1,535,742,385.71
value through profit
or loss in this period
(1) Investment in
debt instrument
(2) Investment in
478,782,601.67 478,782,601.67
equity instrument
(3) Derivative
Financial Assets
(4) Others 1,056,959,784.04 1,056,959,784.04
2. Financial assets
that are designated
to be measured at
fair value through
profit or loss in this
period
(1) Investment in
debt instrument
(2) Others
Total assets
constantly measured 1,869,143,051.90 478,782,601.67 2,347,925,653.57
at fair value
(Ⅳ) Transactional
61,400.12 61,400.12
Financial Liabilities
Of which: Derivative
61,400.12 61,400.12
financial liabilities
Total amount of
liabilities constantly
61,400.12 61,400.12
measured at their fair
values
II. Non-constant
measurement at fair -- -- -- --
values
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2. For the continuous and non-continuous second-level fair value measurement items, the
valuation techniques adopted and the qualitative and quantitative information of important
parameters
The fair value of the derivative financial assets/derivative financial liabilities is measured and recognized with reference
to different parameters determined by the financial institutions on the basis of the market conditions then existing as
well as the remaining term and transaction term of such transaction.
Due to the short remaining term of the receivables financing, the book value is close to the fair value, and the nominal
amount is used as the fair value.
Other non-current financial assets are valued on the basis of quotations provided by financial institutions.
3. For the continuous and non-continuous third-level fair value measurement items, the
valuation techniques adopted and the qualitative and quantitative information of important
parameters
Evaluate the value and net book assets based on the income method and asset-based method.
4. The fair value of financial assets and financial liabilities not measured at fair value
The fair value of financial assets and financial liabilities measured by the Company at amortized cost is equivalent to
the book value.
XIV. Related Parties and Related-party Transactions
1. The Company's Parent Company
Proportion of
Shareholding
Name of parent Registered Registered voting rights of
Business Nature ratio of the
company Address Capital the parent
parent company
company
The controlling
Fu Liquan shareholder and 31.08% 31.08%
actual controller
The actual
Chen Ailing 2.16% 2.16%
controller
The final controllers of the Company are Mr. Fu Liquan and Ms. Chen Ailing.
2. Information about the Company's subsidiaries
For details of subsidiaries of the Company, see Note "X. Equities in Other Entities".
3. Information about the Company's joint ventures and affiliates
For details of significant joint ventures and affiliates of the Company, see Note "X. Equities in Other Entities".
Here are the information about other joint ventures and affiliates that have related-party transactions with the Company
in the current period or have balance from related-party transactions with the Company in the previous period:
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Names of joint ventures and affiliates Relationship with the Company
Intelbras S.A. Affiliate
Guangdong Zhishi Digital Technology Co., Ltd. Affiliate
Zhejiang Leapmotor Technology Co., Ltd. and its affiliates Former affiliate and enterprise where the actual controller
(Note 1) has significant influence
Ruicity Digital Technology Co., Ltd. Affiliate
Hangzhou Juhuanyan Information Technology Co., Ltd. Affiliate
Dezhou Shuzhi Information Technology Co., Ltd. Affiliate
Zhejiang Huachuang Vision Technology Co., Ltd. Affiliate
Ningbo Cida Yongshun Intelligent Technology Co., Ltd. Affiliate
Guangxi FTZ Huaqin Wisdom Park Technology Research
Affiliate
Institute Co., Ltd.
Shaoxing Dahua Security Services Co., Ltd. (Note 2) Former affiliate
Other notes:
Note 1: "Zhejiang Leapmotor Technology Co., Ltd. and its affiliates" include a total of eight companies that have
related transactions with the Company, namely Zhejiang Leapmotor Technology Co., Ltd., Leapmotor Automobile Co.,
Ltd., Hangzhou Leapmotor Automobile Sales Service Co., Ltd., Zhejiang Lingxiao Energy Technology Co., Ltd.,
Zhejiang Leapmotor Automobile Sales Service Co., Ltd., Jinhua Leapmotor New Energy Automotive Parts Technology
Co., Ltd., Zhejiang Lingsheng Power Technology Co., Ltd. and Shanghai Leapmotor Automobile Marketing Service
Co., Ltd,.
Note 2: Shaoxing Dahua Security Services Co., Ltd. ended its affiliated relationship in March 2023.
4. Information about other related parties
Relationship between the Company and other related
Names of other related parties
parties
Zhejiang Huanuokang Technology Co., Ltd. Enterprise controlled by the actual controller
Huayan Capital (Hangzhou) Private Equity Fund
Enterprise controlled by the actual controller
Management Co., Ltd.
China Mobile Communications Group Co., Ltd. and its
Shareholders with shareholding proportion over 5%
affiliates
Enterprise once controlled by the spouse of senior
Hangzhou Nuojia Technology Co., Ltd. (Note 1)
manager of the Company
Zhejiang Zhihua Internet of Things Technology Co., Ltd.
Subsidiary of a former affiliate
(Note 2)
Company A and other companies under its control Related parties
Enterprise where the actual controller served as a
Lorex Technology Inc. (Note 3)
director within 12 months
Enterprise where the actual controller served as a
Lorex Corporation (Note 3)
director within 12 months
Enterprise where the actual controller served as a
Zhejiang Lancable Technology Co., Ltd. (Note 4)
director within 12 months
Enterprise significantly influenced by the major
Hangzhou Vision Robot Technology Co., Ltd. (Note 4)
shareholder of the Company within 12 months
Enterprise controlled by the major shareholder of the
Hangzhou Xintu Technology Co., Ltd. (Note 4)
Company within 12 months
Zhejiang Huayuxin Technology Co., Ltd. Enterprise controlled by the actual controller
Other notes:
Note 1: Hangzhou Nuojia Technology Co., Ltd. was a business controlled by the spouse of a senior manager of the
Company. The spouse disposed of shares and lost the control over the business in January 2022, but it was still
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
recognized as an associated party within 12 months after the disposal, and the associated relationship ended in
January 2023. In February 2023, it was changed to “Hangzhou Nuojia Yunlian Technology Co., Ltd.”
Note 2: Zhejiang Zhihua Internet of Things Technology Co., Ltd. was a holding subsidiary of Shaoxing Dahua Security
Services Co., Ltd. and ended its affiliated relationship in March 2023.
Note 3: Lorex Technology Inc. and Lorex Corporation were subsidiaries within the scope of consolidation and 100%
equity of them was disposed of on December 27, 2022. In consideration that their actual controller was a former
director, they were still deemed to maintain an affiliated relationship within 12 months upon disposal and ended the
affiliated relationship in December 2023.
Note 4: Zhejiang Lancable Technology Co., Ltd., Hangzhou Vision Robot Technology Co., Ltd. and Hangzhou Xintu
Technology Co., Ltd. ended the affiliated relationship in April 2024.
5. Information about related-party transactions
(1) Related-party transactions involving purchase and selling of merchandise and provision
and acceptance of labor services
Merchandise purchase and acceptance of labor services
Unit: RMB
Content of the Amount Over the Amount
Approved
Related parties related - party Occurred in the transaction limit Occurred in the
transaction limit
transaction Current Period or not Previous Period
Company A and
Purchase of
other companies 220,043,806.51 No 426,715,803.76
materials
under its control
Zhejiang
Huachuang
Purchase of
Vision 86,413,751.62 No 28,553,150.81
materials
Technology Co.,
Ltd.
China Mobile Material
Communications procurement,
65,645,012.10 No 29,900,094.13
Group Co., Ltd. acceptance of
and its affiliates services
Ruicity Digital
Purchase of
Technology Co., 8,967,655.86 No 188,679.25
materials
Ltd.
Zhejiang
Material
Leapmotor
procurement,
Technology Co., 1,228,401.43 No 24,065.76
acceptance of
Ltd. and its
services
affiliates
Hangzhou Material
Xunwei Robotics procurement,
174,659.74 No 86,820.97
Technology Co., acceptance of
Ltd. services
Zhejiang Material
Huanuokang procurement,
157,371.67 No 426,548.59
Technology Co., acceptance of
Ltd. services
Hangzhou Nuojia Acceptance of
No 743,921.51
Technology Co., services
352
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Ltd.
Zhejiang
Lancable Purchase of
No 212,400.00
Technology Co., materials
Ltd.
Sales of merchandise and provision of services
Unit: RMB
Content of the related - Amount Occurred in the Amount Occurred in the
Related parties
party transaction Current Period Previous Period
Intelbras S.A. Sales of merchandise 865,178,578.92 885,573,057.86
Lorex Corporation Sales of merchandise 478,643,886.67
Zhejiang Leapmotor
Sales of merchandise and
Technology Co., Ltd. and 311,398,339.87 380,507,828.89
provision of services
its affiliates
China Mobile
Sales of merchandise and
Communications Group 196,450,005.15 296,167,428.28
provision of services
Co., Ltd. and its affiliates
Lorex Technology Inc. Sales of merchandise 56,585,936.15
Ruicity Digital Technology
Sales of merchandise 12,502,503.49 26,862,367.12
Co., Ltd.
Ningbo Cida Yongshun
Sales of merchandise and
Intelligent Technology Co., 8,905,782.27 8,809,463.47
provision of services
Ltd.
Zhejiang Huachuang Sales of merchandise and
4,227,590.71 1,820,337.98
Vision Technology Co., Ltd. provision of services
Guangdong Zhishi Digital
Sales of merchandise 3,635,895.54 13,638,759.40
Technology Co., Ltd.
Dezhou Shuzhi Information Sales of merchandise and
2,199,876.09 2,177,472.29
Technology Co., Ltd. provision of services
Zhejiang Huanuokang
Sales of merchandise 1,100,912.16 3,183,710.56
Technology Co., Ltd.
Guangxi FTZ Huaqin
Wisdom Park Technology Sales of merchandise 145,836.73
Research Institute Co., Ltd.
Company A and other
companies under its Sales of merchandise 30,913.16 152,369.23
control
Zhejiang Lancable
Sales of merchandise 22,761.06
Technology Co., Ltd.
Hangzhou Xunwei
Robotics Technology Co., Sales of merchandise 13,761.08 20,973.45
Ltd.
Hangzhou Xintu Sales of merchandise and
5,424.92 4,716.96
Technology Co., Ltd. provision of services
Hangzhou Nuojia
Sales of merchandise 1,014,877.85
Technology Co., Ltd.
Zhejiang Zhihua Internet of
Things Technology Co., Sales of merchandise 1,769.91
Ltd.
(2) Related leasing
The Company being the lessor:
Unit: RMB
353
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Rental income confirmed in Rental income confirmed in
Name of the lessee Type of the leased assets
this period the previous period
Zhejiang Huanuokang
Buildings and constructions 1,875,248.10 738,825.30
Technology Co., Ltd.
Zhejiang Huayuxin
Buildings and constructions 738,194.50
Technology Co., Ltd.
Zhejiang Leapmotor
Technology Co., Ltd. and Buildings and constructions 268,975.94 258,595.24
its affiliates
Huayan Capital
(Hangzhou) Private Equity
Buildings and constructions 93,489.58 29,766.33
Fund Management Co.,
Ltd.
Zhejiang Huachuang
Buildings and constructions 20,091.73
Vision Technology Co., Ltd.
Company A and other
companies under its Transport equipment 15,486.73
control
The Company being the lessee:
Unit: RMB
Simplified rental Variable lease
expenses for payments not
Interest expense
short-term leases included in the Increased right-
Rent paid on lease
and low-value measurement of of-use assets
liabilities borne
asset leases (if lease liabilities (if
Type applicable) applicable)
Name
of the Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun
of the
leased t t t t t t t t t t
lessor
assets Occurr Occurr Occurr Occurr Occurr Occurr Occurr Occurr Occurr Occurr
ed in ed in ed in ed in ed in ed in ed in ed in ed in ed in
the the the the the the the the the the
Curren Previo Curren Previo Curren Previo Curren Previo Curren Previo
t us t us t us t us t us
Period Period Period Period Period Period Period Period Period Period
Zhejia
ng
Leapm
otor Machin
Techno ery
1,034, 1,034, 241,04 266,40 8,884,
logy and
915.00 915.00 0.11 1.09 640.73
Co., equip
Ltd. ment
and its
affiliate
s
(3) Related guarantee
The Company being the guarantor:
Unit: RMB
Guarantee fulfilled
Secured parties Amount guaranteed Starting date Maturity date
completely or not
Zhejiang Dahua Two years after the
600,000,000.00 August 12, 2020 Yes
Vision Technology maturity of the debts
354
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Co., Ltd. in the master
contract
Two years after the
Zhejiang Dahua
maturity of the debts
Vision Technology 330,000,000.00 August 18, 2020 Yes
in the master
Co., Ltd.
contract
Zhejiang Dahua
Vision Technology 35,000,000.00 August 1, 2021 July 31, 2023 Yes
Co., Ltd.
Three years after the
Zhejiang Dahua
maturity of the debts
Vision Technology 900,000,000.00 September 27, 2021 Yes
in the master
Co., Ltd.
contract
Three years after the
Zhejiang Dahua
maturity of the debts
Vision Technology 300,000,000.00 June 10, 2022 Yes
in the master
Co., Ltd.
contract
From effective date
of the Commitment
Letter to three years
Zhejiang Dahua after the maturity
Vision Technology 200,000,000.00 June 10, 2022 date of each note Yes
Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Three years after the
Zhejiang Dahua
maturity of the debts
Vision Technology 350,000,000.00 July 25, 2022 Yes
in the master
Co., Ltd.
contract
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua
date of each note
Vision Technology 200,000,000.00 June 9, 2023 Yes
discounted by the
Co., Ltd.
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Two years after the
Zhejiang Dahua
maturity of the debts
Vision Technology 220,000,000.00 October 13, 2017 No
in the master
Co., Ltd.
contract
Zhejiang Dahua
Two years after the
Vision Technology
maturity of the debts
Co., Ltd. (guarantee 40,000,000.00 September 21, 2018 No
in the master
currency is US
contract
dollar)
Zhejiang Dahua
Vision Technology 530,000,000.00 April 7, 2020 March 31, 2024 No
Co., Ltd.
Five years upon
Zhejiang Dahua
expiration of debt
Vision Technology 300,000,000.00 August 15, 2020 No
period of master
Co., Ltd.
contract
Three years after the
Zhejiang Dahua
maturity of the debts
Vision Technology 1,000,000,000.00 February 4, 2021 No
in the master
Co., Ltd.
contract
Three years after the
Zhejiang Dahua
maturity of the debts
Vision Technology 440,000,000.00 July 26, 2021 No
in the master
Co., Ltd.
contract
Zhejiang Dahua Three years after the
Vision Technology 200,000,000.00 October 20, 2021 maturity of the debts No
Co., Ltd. in the master
355
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
contract
Three years after the
Zhejiang Dahua
maturity of the debts
Vision Technology 200,000,000.00 July 22, 2022 No
in the master
Co., Ltd.
contract
Zhejiang Dahua
Vision Technology 600,000,000.00 September 19, 2022 September 18, 2024 No
Co., Ltd.
From effective date
of the Letter of
Guarantee to three
years after the
maturity date of each
loan or any other
fund raised under the
Credit Agreement or
the creditor’s rights
in the accounts
Zhejiang Dahua receivable accepted
Vision Technology 400,000,000.00 June 9, 2023 by Hangzhou Branch No
Co., Ltd. of China Merchants
Bank or the date of
each advance
payment. If any
specific credit is
renewed, the period
of guarantee is
extended to three
years after expiration
of the renewed
period.
From the period of
guarantee to three
years after the
maturity date of each
Zhejiang Dahua
note discounted by
Vision Technology 200,000,000.00 June 25, 2023 No
the Hangzhou
Co., Ltd.
Branch of China
Merchants Bank
within the credit
extension period
From date of maturity
of each principal debt
Zhejiang Dahua to three years after
Vision Technology 400,000,000.00 July 24, 2023 the date of maturity No
Co., Ltd. of the last-to-expire
principal debt under
the master contract.
From effective date
of the Maximum
Amount Guarantee
Zhejiang Dahua
Contract to three
Vision Technology 500,000,000.00 July 25, 2023 No
years from the date
Co., Ltd.
of maturity of each
debt under the Credit
Business Agreement.
As per every single
credit business
requested by Dahua
Technology as a
Zhejiang Dahua debtor, from date of
Vision Technology 900,000,000.00 September 26, 2023 execution of the No
Co., Ltd. master contract for
each credit business
to three years after
the date of maturity
of the debts of the
356
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
debtor under such
master contract
Three years from the
date of maturity of
Zhejiang Dahua
the debts of the
Vision Technology 330,000,000.00 September 26, 2023 No
debtor set out in the
Co., Ltd.
master contract for
creditor’s rights
Three years from the
date immediately
Zhejiang Dahua following the date of
Vision Technology 200,000,000.00 November 20, 2023 honor by Qingchun No
Co., Ltd. Branch of Industrial
and Commercial
Bank of China
Three years after the
Zhejiang Dahua maturity of the debts
200,000,000.00 November 10, 2021 Yes
Zhilian Co., Ltd. in the master
contract
Zhejiang Dahua
80,000,000.00 March 25, 2022 December 31, 2023 Yes
Zhilian Co., Ltd.
Zhejiang Dahua One years upon
Zhilian Co., Ltd. expiration of debt
60,000,000.00 May 1, 2022 Yes
(guarantee currency period of master
is US dollar) contract
One years upon
Zhejiang Dahua expiration of debt
10,000,000.00 May 1, 2022 Yes
Zhilian Co., Ltd. period of master
contract
Zhejiang Dahua
Zhilian Co., Ltd.
55,000,000.00 May 14, 2022 May 14, 2023 Yes
(guarantee currency
is US dollar)
Three years after the
Zhejiang Dahua maturity of the debts
160,000,000.00 June 10, 2022 Yes
Zhilian Co., Ltd. in the master
contract
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua
160,000,000.00 June 10, 2022 date of each note Yes
Zhilian Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Dahua
Zhilian Co., Ltd.
22,000,000.00 November 16, 2022 May 14, 2023 Yes
(guarantee currency
is US dollar)
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua date of each note
160,000,000.00 June 9, 2023 Yes
Zhilian Co., Ltd. discounted by the
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Two years after the
Zhejiang Dahua maturity of the debts
300,000,000.00 March 28, 2019 No
Zhilian Co., Ltd. in the master
contract
Three years after the
Zhejiang Dahua
165,000,000.00 July 26, 2021 maturity of the debts No
Zhilian Co., Ltd.
in the master
357
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
contract
Zhejiang Dahua
Zhilian Co., Ltd.
5,000,000.00 December 3, 2021 December 2, 2024 No
(guarantee currency
is US dollar)
Zhejiang Dahua
200,000,000.00 August 25, 2022 August 25, 2025 No
Zhilian Co., Ltd.
Zhejiang Dahua
150,000,000.00 September 19, 2022 September 18, 2024 No
Zhilian Co., Ltd.
From effective date
of the Letter of
Guarantee to three
years after the
maturity date of each
loan or any other
fund raised under the
Credit Agreement or
the creditor’s rights
in the accounts
receivable accepted
Zhejiang Dahua
160,000,000.00 June 9, 2023 by Hangzhou Branch No
Zhilian Co., Ltd.
of China Merchants
Bank or the date of
each advance
payment. If any
specific credit is
renewed, the period
of guarantee is
extended to three
years after expiration
of the renewed
period.
Zhejiang Dahua
120,000,000.00 June 19, 2023 June 18, 2024 No
Zhilian Co., Ltd.
Zhejiang Dahua
350,000,000.00 June 19, 2023 June 18, 2024 No
Zhilian Co., Ltd.
Zhejiang Dahua
Zhilian Co., Ltd.
12,500,000.00 July 13, 2023 July 12, 2024 No
(guarantee currency
is US dollar)
From date of maturity
of each principal debt
to three years after
Zhejiang Dahua
500,000,000.00 July 24, 2023 the date of maturity No
Zhilian Co., Ltd.
of the last-to-expire
principal debt under
the master contract.
Three years after the
Zhejiang Dahua
maturity of the debts
System Engineering 60,000,000.00 November 10, 2021 Yes
in the master
Co., Ltd.
contract
Three years after the
Zhejiang Dahua
maturity of the debts
System Engineering 40,000,000.00 June 10, 2022 Yes
in the master
Co., Ltd.
contract
From effective date
of the Commitment
Letter to three years
Zhejiang Dahua after the maturity
System Engineering 40,000,000.00 June 10, 2022 date of each note Yes
Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Dahua Three years after the
50,000,000.00 July 25, 2022 Yes
System Engineering maturity of the debts
358
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Co., Ltd. in the master
contract
Two years after the
Zhejiang Dahua
maturity of the debts
System Engineering 10,000,000.00 August 30, 2019 No
in the master
Co., Ltd.
contract
Zhejiang Dahua
System Engineering 5,000,000.00 August 25, 2022 August 25, 2025 No
Co., Ltd.
From effective date
of the Letter of
Guarantee to three
years after the
maturity date of each
loan or any other
fund raised under the
Credit Agreement or
the creditor’s rights
in the accounts
Zhejiang Dahua receivable accepted
System Engineering 40,000,000.00 June 9, 2023 by Hangzhou Branch No
Co., Ltd. of China Merchants
Bank or the date of
each advance
payment. If any
specific credit is
renewed, the period
of guarantee is
extended to three
years after expiration
of the renewed
period.
From effective date
of the Maximum
Amount Guarantee
Zhejiang Dahua
Contract to three
System Engineering 50,000,000.00 July 25, 2023 No
years from the date
Co., Ltd.
of maturity of each
debt under the Credit
Business Agreement.
One year from
execution of the
Zhejiang Dahua project contract or 6
System Engineering 1,602,100.00 September 11, 2023 months in which the No
Co., Ltd. system runs stably
after going live
(whichever is later)
Dahua Technology
(HK) Limited
2,000,000.00 March 25, 2022 March 25, 2023 Yes
(guarantee currency
is US dollar)
Dahua Technology
(HK) Limited
2,000,000.00 April 21, 2023 April 21, 2024 No
(guarantee currency
is US dollar)
DAHUA
TECHNOLOGY
MEXICO S.A. DE
1,000,000.00 September 1, 2021 December 1, 2023 Yes
C.V (guaranteed
currency is US
dollar)
DAHUA
TECHNOLOGY
MEXICO S.A. DE
5,000,000.00 October 21, 2022 October 20, 2023 Yes
C.V (guaranteed
currency is US
dollar)
359
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
DAHUA
TECHNOLOGY
MEXICO S.A. DE
1,000,000.00 October 18, 2023 October 20, 2024 No
C.V (guaranteed
currency is US
dollar)
Two years after the
Hangzhou Huacheng
maturity of the debts
Network Technology 50,000,000.00 August 30, 2019 No
in the master
Co., Ltd.
contract
Three years after the
Hangzhou Huacheng
maturity of the debts
Network Technology 55,000,000.00 July 26, 2021 No
in the master
Co., Ltd.
contract
Hangzhou Huacheng
Network Technology 65,000,000.00 August 25, 2022 August 25, 2025 No
Co., Ltd.
Dahua Technology
UK Limited Sign the Termination
1,160,000.00 August 12, 2020 No
(guaranteed currency Notice Letter
is GBP)
Three years after the
Zhejiang Huayixin maturity of the debts
10,000,000.00 April 29, 2022 No
Technology Co., Ltd. in the master
contract
Zhejiang Huayixin Three years after the
Technology Co., Ltd. maturity of the debts
2,000,000.00 May 16, 2022 No
(guarantee currency in the master
is US dollar) contract
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huayixin
10,000,000.00 June 10, 2022 date of each note Yes
Technology Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huayixin date of each note
10,000,000.00 June 9, 2023 Yes
Technology Co., Ltd. discounted by the
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Zhejiang Huayixin
2,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
Zhejiang Huayixin
8,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Fengshi
20,000,000.00 June 10, 2022 date of each note Yes
Technology Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Zhejiang Fengshi Letter to three years
20,000,000.00 June 9, 2023 Yes
Technology Co., Ltd. after the maturity
date of each note
discounted by the
360
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Zhejiang Fengshi
100,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
Zhejiang Fengshi
20,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
From the period of
guarantee to three
years after the
maturity date of each
Zhejiang Fengshi note discounted by
20,000,000.00 June 25, 2023 No
Technology Co., Ltd. the Hangzhou
Branch of China
Merchants Bank
within the credit
extension period
Three years after the
Jiangsu Huaruipin maturity of the debts
10,000,000.00 October 20, 2021 Yes
Technology Co. Ltd. in the master
contract
From effective date
of the Commitment
Letter to three years
after the maturity
Jiangsu Huaruipin date of each note
10,000,000.00 June 9, 2023 Yes
Technology Co. Ltd. discounted by the
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Jiangsu Huaruipin
10,000,000.00 June 10, 2022 date of each note Yes
Technology Co. Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
Jiangsu Huaruipin
8,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co. Ltd.
Jiangsu Huaruipin
15,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co. Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huaxiao
10,000,000.00 June 10, 2022 date of each note Yes
Technology Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huaxiao date of each note
10,000,000.00 June 9, 2023 Yes
Technology Co., Ltd. discounted by the
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Zhejiang Huaxiao
2,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
361
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Zhejiang Huaxiao
8,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Xi'an Dahua Zhilian
50,000,000.00 June 10, 2022 date of each note Yes
Technology Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Xi'an Dahua Zhilian date of each note
50,000,000.00 June 9, 2023 Yes
Technology Co., Ltd. discounted by the
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Xi'an Dahua Zhilian
100,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
Xi'an Dahua Zhilian
25,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
From the period of
guarantee to three
years after the
maturity date of each
Xi'an Dahua Zhilian note discounted by
50,000,000.00 June 25, 2023 No
Technology Co., Ltd. the Hangzhou
Branch of China
Merchants Bank
within the credit
extension period
From effective date
of the Commitment
Letter to three years
Zhengzhou Dahua after the maturity
Zhian Information 50,000,000.00 June 10, 2022 date of each note Yes
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Zhengzhou Dahua
date of each note
Zhian Information 50,000,000.00 June 9, 2023 Yes
discounted by the
Technology Co., Ltd.
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Zhengzhou Dahua
Zhian Information 30,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
From the period of
guarantee to three
years after the
maturity date of each
Zhengzhou Dahua
note discounted by
Zhian Information 50,000,000.00 June 25, 2023 No
the Hangzhou
Technology Co., Ltd.
Branch of China
Merchants Bank
within the credit
extension period
362
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
Chengdu Dahua
after the maturity
Zhian Information
100,000,000.00 June 10, 2022 date of each note Yes
Technology Service
discounted by the
Co., Ltd.
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
Chengdu Dahua after the maturity
Zhian Information date of each note
80,000,000.00 June 9, 2023 Yes
Technology Service discounted by the
Co., Ltd. Hangzhou Branch of
China Merchants
Bank within the credit
extension period
From the period of
guarantee to three
years after the
Chengdu Dahua maturity date of each
Zhian Information note discounted by
80,000,000.00 June 25, 2023 No
Technology Service the Hangzhou
Co., Ltd. Branch of China
Merchants Bank
within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Changsha Dahua
10,000,000.00 June 10, 2022 date of each note Yes
Technology Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Changsha Dahua date of each note
10,000,000.00 June 9, 2023 Yes
Technology Co., Ltd. discounted by the
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Changsha Dahua
30,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
Changsha Dahua
20,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
From the period of
guarantee to three
years after the
maturity date of each
Changsha Dahua note discounted by
10,000,000.00 June 25, 2023 No
Technology Co., Ltd. the Hangzhou
Branch of China
Merchants Bank
within the credit
extension period
From effective date
of the Commitment
Zhejiang Pixfra
5,000,000.00 June 10, 2022 Letter to three years Yes
Technology Co., Ltd.
after the maturity
date of each note
363
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Pixfra date of each note
5,000,000.00 June 9, 2023 Yes
Technology Co., Ltd. discounted by the
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Zhejiang Pixfra
5,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
Zhejiang Huafei
after the maturity
Intelligent
5,000,000.00 June 10, 2022 date of each note Yes
Technology CO.,
discounted by the
LTD.
China Merchants
Bank within the credit
extension period
Zhejiang Huafei
Intelligent
2,000,000.00 August 25, 2022 August 25, 2025 No
Technology CO.,
LTD.
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huajian
5,000,000.00 June 10, 2022 date of each note Yes
Technology Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huajian date of each note
5,000,000.00 June 9, 2023 Yes
Technology Co., Ltd. discounted by the
Hangzhou Branch of
China Merchants
Bank within the credit
extension period
Zhejiang Huajian
2,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
Hangzhou Xiaohua after the maturity
Technology CO., 5,000,000.00 June 10, 2022 date of each note Yes
LTD. discounted by the
China Merchants
Bank within the credit
extension period
Hangzhou Xiaohua
Technology CO., 2,000,000.00 August 25, 2022 August 25, 2025 No
LTD.
Zhejiang Dahua
Security Network
5,000,000.00 August 25, 2022 August 25, 2025 No
Operation Service
Co., Ltd.
364
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Dahua Technology
France Sas
145,690.20 December 7, 2023 August 31, 2019 No
(guaranteed currency
is EUR)
The Company being the secured party
N/A
(4) Asset transfer and debt restructuring of related parties
Unit: RMB
Content of the related - Amount Occurred in the Amount Occurred in the
Related parties
party transaction Current Period Previous Period
Zhejiang Huachuang
Selling of fixed assets 612,608.16
Vision Technology Co., Ltd.
Zhejiang Huanuokang
Selling of fixed assets 2,792.34 3,078.06
Technology Co., Ltd.
Zhejiang Leapmotor
Procurement of fixed
Technology Co., Ltd. and 842,105.08
assets
its affiliates
China Mobile 1,767,786.05
Procurement of fixed
Communications Group
assets
Co., Ltd. and its affiliates
Zhejiang Huachuang Procurement of fixed 40,630.42
Vision Technology Co., Ltd. assets
(5) Remuneration to key management personnel
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Salary of key management personnel 22,009,460.55 22,367,156.79
(6) Other related-party transactions
(1) On February 17, 2023, the Company convened the 39th meeting of the 7th board of directors and the 27th meeting
of the 7th board of supervisors, during which the "Proposal on Capital Increase by Certain Senior Management and
Core Employees of the Company and Related Transactions to the Planned Spin-off Subsidiary" was deliberated and
approved. It was agreed that some senior managers and core employees of the Company increased the capital of
RMB 6,049,190 to the holding subsidiary Zhejiang HuaRay Technology Co., Ltd. (hereinafter referred to as “HuaRay
Technology”) (where the registered capital was increased by RMB 1,675,676 and the balance was included in the
capital reserves). 11 natural persons consisting of senior managers including Zhao Yuning, Zhu Jiantang, Xu Zhicheng,
Liu Ming, Wu Jian, Li Zhijie, Song Ke and Xu Qiaofen, the supervisor Zheng Jieping and core employees including
Hao Chunshan and Chenqiang increased directly the capital by RMB 4,839,353 in total, and the management team
and core employees of the Company increased the capital by RMB 1,209,837 in total through holding shares in the
platforms including Hangzhou Jurui Lingyi Enterprise Management Partnership (Limited Partnership) and Hangzhou
Jurui Lingsan Enterprise Management Partnership (Limited Partnership). After this capital increase, the equity of the
Company in HuaRay Technology is changed from 42.2280% to 41.0878%, and HuaRay Technology is still a holding
subsidiary of the Company covered by the Company’s consolidated statements.
(2) On March 17, 2023, the Proposal on Capital Increase and Share Expansion in the Holding Subsidiary to Introduce
Investors and Related Transactions was reviewed and approved at the 40th session of the 7th board of directors held
by the Company. It was agreed that the holding subsidiary of Zhejiang HuaRay Technology Co., Ltd. introduced
through capital increase and share expansion a total of 8 investors (hereinafter referred to as “Investors”) including
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Yibin Lvneng Equity Investment Partnership (Limited Partnership), Wuxi Xinchuang No.1 Venture Capital Investment
Partnership (Limited Partnership), Hefei Guoxuan High-tech Power Energy Co., Ltd. and Zhu Jiangming. The investors
planned to inject a total of RMB 260,000,061 yuan in cash into HuaRay Technology (RMB 8,934,710 yuan as
additional registered capital, with the remainder credited to capital surplus), thereby collectively obtaining a 12.58%
equity in HuaRay Technology after capital increase. Following this capital increase, the Company's equity stake in
HuaRay Technology changed from 41.0878% to 35.9171%. HuaRay Technology continues to be a holding subsidiary
within the consolidated financial statements of the Company.
(3) On April 7, 2023, the Proposal on Giving up the Holding Subsidiary's Right of First Refusal (ROFR) and Related-
party Transactions was reviewed and approved at the 41st meeting of the 7th board of directors held by the Company,
where Huashi Investment intended to transfer its 20% equity in Wisualarm Technology to the employee shareholding
platforms and core management of Wisualarm Technology. The employee shareholding platforms Hangzhou Huaxiao
01 Enterprise Management Partnership (Limited Partnership) and Huaxiao 02 Enterprise Management Partnership
(Limited Partnership) accepted the 15.5% equity of Huaxiao Technology at a total price of RMB 10,850,000; Zhu
Jiantang, who is a senior executive of the Company and the chairman of Huaxiao Technology, accepted the 2.4%
equity of Huaxiao Technology at a price of RMB 1,680,000; and Wang Feng, who is the CEO of Huaxiao Technology,
accepted the 2.10% equity of Huaxiao Technology with a price of RMB 1,470,000. The board of directors agreed to
give the ROFR of the above equity.
(4) On April 7, 2023, the Proposal on the Implementation of Equity Incentives and Related-party Transactions of the
Holding Subsidiary was reviewed and approved at the 41st session of the 7th board of directors and the 28th session
of the 7th board of supervisors, where the Company intended to implement an equity incentive for some directors,
supervisors and senior executives of the Company and the core employees of the holding subsidiary Hangzhou
Huacheng Network Technology Co., Ltd. through capital increase in Huacheng Network. In this equity incentive, the
incentive objects increased the capital of Huacheng Network by RMB 25,243,400.06 in total directly or indirectly
through the shareholding platforms (where the registered capital was increased by RMB 7,163,033 and the balance
was included in the capital reserves), where: the director of the Company Zhao Yuning, the supervisor Zheng Jieping
and the senior executives including Liu Ming, Zhu Jiantang, Li Zhijie, Xu Zhicheng, Wu Jian, Song Ke and Xu Qiaofen
increased the capital of Huacheng network by RMB 7,881,049.75 in total (where a new registered capital of RMB
2,236,316 was obtained); the core employees of the Company including Hao Chunshan and Chen Qiang increased
the capital of Huacheng Network by RMB 2,014,624.08 in total (where a new registered capital of RMB 571,667 was
obtained); the chairman of Huacheng Network Ying Yong and the general manager Xie Yun increased the capital of
Huacheng Network by RMB 11,564,937.51 (where a new registered capital of RMB 3,281,651 was obtained); the core
employees of Huacheng Network increased the capital of Huacheng Network by RMB 3,782,788.71 in total (where a
new registered capital of RMB 1,073,399 was obtained) through Hangzhou Chengyi No. 1 Enterprise Management
Partnership (Limited Partnership) (which is a shareholding entity established with the contributions of core employees
of Huacheng Network, hereinafter referred to as “Employee Shareholding Platform”). The Company gave up the
priority to subscribe for the above new registered capital. Meanwhile, in order to adjust the shareholding form of some
incentive objects in Huacheng Network, the Company intended to transfer the contribution of RMB 302,260 indirectly
held by its directors and senior directors including Zhao Yuning, Zhu Jiantang, Li Zhijie, Xu Zhicheng, Wu Jian, Song
Ke and Xu Qiaofen in Huacheng Network through Ningbo Huayu Investment Management Partnership Enterprise
(Limited Partnership) according to the Management Methods for Business Startup and Investment of Core Employees
to such directors and senior executives for their direct holding at the price of RMB 218,745.56 by which they previously
obtained such contribution. The board of directors of the Company consented to the decision of Ningbo Huayu to
transfer the equity in Huacheng Network to the above directors and senior executives, and gave up the right of
preemption. Following the completion of this equity incentive implementation, the Company's equity stake in Huacheng
Network changed from 51.00% to 44.61%, while Huacheng Network continues to be a holding subsidiary within the
consolidated financial statements of the Company.
(5) On June 25, 2023, the Proposal on the Capital Increase, Implementation of Equity Incentives and Related-party
Transactions of the Holding Subsidiary was reviewed and approved at the 45th session of the 7th board of directors
and the 32nd session of the 7th board of supervisors, where the Company intended to increase the capital of the
holding subsidiary Zhejiang Pixfra Technology Co., Ltd. by RMB 53,986.47 (where the registered capital was
increased by RMB 28,109.169) by assessing and valuing the imaging business-related asset groups. The executive
director of Pixfra Technology Jiang Xiaolai and the general manager Yang Zhiqiang directly increased the capital of
Pixfra Technology by RMB 1,238,000 and RMB 2,642,500 respectively at a price of RMB 1/registered capital. The
Company gave up the priority to subscribe for the above new registered capital. After the above transaction was
completed, the equity of the Company in Pixfra Technology is changed from 51.00% to 75.11%, and the registered
capital of Pixfra Technology is increased from RMB 100,000,000 to RMB 442,140,448. Pixfra Technology is still a
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
holding subsidiary of the Company covered by the Company’s consolidated statements.
(6) During the reporting period, the Company repurchased the equity held by the employees in the holding subsidiary
Hangzhou Xiaohua Technology Co., Ltd. with the consideration of RMB 1/registered capital based on its business
strategy and arrangement for Xiaohua Technology, where the Company accepted the 1% equity held by Zuo Pengfei
in Xiaohua at a transaction price of RMB 100,000.
(7) During the reporting period, the Company repurchased the 15% equity held by the employee shareholding platform
Hangzhou Hua’ao Enterprise Management Partnership (Limited Partnership) at a price of RMB 1.7796/registered
capital which was the original price for the employees to obtain the equity in the holding subsidiary Zhejiang Huafei
Intelligent Technology Co., Ltd. based on its business strategy and arrangement for Huafei Intelligent, and the
transaction price totaled RMB 13,347,000.
(8) During the reporting period, in consideration of the strategy and actual business development of the holding
subsidiary Huacheng, Huacheng introduced a capital of RMB 44,200,000 in total from China Mobile Capital Holdings
Co., Ltd. through capital increase and share expansion (where the corresponding new registered capital was RMB
9,717,716), and after the capital increase, China Mobile Capital Holdings Co., Ltd. held 12.82% equity in Huacheng.
(9) The Proposal on the Transfer of Equity and Related-party Transactions of the Joint-stock Companies was reviewed
and approved at the 3rd session of the 8th board of directors held by the Company on October 26, 2023 and the 3rd
interim shareholders' meeting in 2023 held on November 6, 2023. It was agreed that the Company transferred
90,000,000 shares (including 45,000,000 “Fully-tradable” H shares and 45,000,000 domestic shares) of Zhejiang
Leapmotor Technology Co., Ltd. to STELLANTIS N.V. at a price of HKD 3,492,900,000, and after the transaction was
completed, the Company no longer held any shares in Leapmotor.
6. Receivables and payables of the related parties
(1) Receivables
Unit: RMB
Closing balance Opening balance
Item Name Related parties Bad debt Bad debt
Book balance Book balance
provision provision
Accounts
Intelbras S.A. 399,216,383.81 19,960,819.19 397,867,692.70 19,895,705.61
receivable
China Mobile
Accounts Communications
140,286,722.77 15,390,276.69 169,771,631.78 13,418,528.87
receivable Group Co., Ltd.
and its affiliates
Zhejiang
Leapmotor
Accounts
Technology Co., 158,504,082.59 7,998,998.48 125,228,191.88 6,287,574.59
receivable
Ltd. and its
affiliates
Zhejiang
Huachuang
Accounts
Vision 1,503,214.40 75,211.10 66,484,746.14 6,468,047.41
receivable
Technology Co.,
Ltd.
Ruicity Digital
Accounts
Technology Co., 18,610,308.67 1,161,880.61 18,091,127.92 904,556.40
receivable
Ltd.
Ningbo Cida
Yongshun
Accounts
Intelligent 4,955,930.01 247,796.50 6,944,214.63 347,210.73
receivable
Technology Co.,
Ltd.
Accounts Guangdong 4,757,349.37 267,081.04 7,558,397.45 377,919.87
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
receivable Zhishi Digital
Technology Co.,
Ltd.
Zhejiang
Accounts Huanuokang
5,512,687.07 766,592.10 5,029,172.47 319,416.79
receivable Technology Co.,
Ltd.
Company A and
Accounts
other companies 2,708,124.52 1,194,095.64 2,703,192.68 694,554.83
receivable
under its control
Hangzhou
Juhuanyan
Accounts
Information 1,208,000.00 344,113.20
receivable
Technology Co.,
Ltd.
Zhejiang
Accounts Lancable
15,000.00 750.00
receivable Technology Co.,
Ltd.
Hangzhou Xintu
Accounts
Technology Co., 81.60 4.08 81.66 4.08
receivable
Ltd.
Huayan Capital
(Hangzhou)
Accounts Private Equity
181.50 9.08 181.50 9.08
receivable Fund
Management
Co., Ltd.
Hangzhou Nuojia
Accounts Not applicable Not applicable
Technology Co., 652,335.00 32,616.75
receivable (Note 1) (Note 1)
Ltd.
Shaoxing Dahua
Accounts Security Not applicable Not applicable
50,000.00 25,000.00
receivable Services Co., (Note 1) (Note 1)
Ltd.
Hangzhou
Accounts Xunwei Robotics
850.00 42.50
receivable Technology Co.,
Ltd.
Guangxi FTZ
Huaqin Wisdom
Accounts
Park Technology 31,200.00 1,560.00
receivable
Research
Institute Co., Ltd.
Accounts Lorex Not applicable Not applicable 421,294,479.95 22,971,174.01
receivable Corporation (Note 1) (Note 1)
Accounts Lorex Not applicable Not applicable 1,589,271.42 87,438.04
receivable Technology Inc. (Note 1) (Note 1)
China Mobile
Accounts Communications
473,044.59
Prepaid Group Co., Ltd.
and its affiliates
Company A and
Accounts
other companies 685,807.08
Prepaid
under its control
China Mobile
Contract Assets 7,708,740.44 1,807,246.75 7,126,589.32 1,219,481.49
Communications
368
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Group Co., Ltd.
and its affiliates
Ruicity Digital
Contract Assets Technology Co., 206,733.38 20,141.74 481,393.33 24,069.67
Ltd.
China Mobile
Other Communications
1,965,652.24 265,848.14 1,523,267.68 401,163.38
Receivables Group Co., Ltd.
and its affiliates
Zhejiang
Leapmotor
Other
Technology Co., 64,850.00 3,242.50
Receivables
Ltd. and its
affiliates
Note 1: It ended the affiliated relationship in 2023;
(2) Payables
Unit: RMB
Item Name Related parties Closing balance Opening balance
China Mobile
Accounts Payable Communications Group 38,418,336.92 40,781,816.94
Co., Ltd. and its affiliates
Zhejiang Huachuang
Accounts Payable 12,132,312.24 4,578,103.79
Vision Technology Co., Ltd.
Zhejiang Huanuokang
Accounts Payable 61,513.26 586,402.95
Technology Co., Ltd.
Ruicity Digital Technology
Accounts Payable 9,167,655.86 200,000.00
Co., Ltd.
Zhejiang Leapmotor
Accounts Payable Technology Co., Ltd. and 730,299.40 19,080.00
its affiliates
Zhejiang Lancable
Accounts Payable 3,970.00 175,176.90
Technology Co., Ltd.
Hangzhou Nuojia
Accounts Payable Not applicable (Note 1) 1,346,249.09
Technology Co., Ltd.
China Mobile
Contract liabilities Communications Group 12,139,953.98 7,772,167.32
Co., Ltd. and its affiliates
Zhejiang Leapmotor
Contract liabilities Technology Co., Ltd. and 1,648,066.02 491,074.23
its affiliates
Hangzhou Xintu
Contract liabilities 1,362.58 1,362.62
Technology Co., Ltd.
Dezhou Shuzhi Information
Contract liabilities 105,185.84
Technology Co., Ltd.
Zhejiang Zhihua Internet of
Contract liabilities Things Technology Co., Not applicable (Note 1) 2,830.19
Ltd.
Zhejiang Huanuokang
Contract liabilities 340,855.09
Technology Co., Ltd.
Zhejiang Huayuxin
Contract liabilities 0.02
Technology Co., Ltd.
China Mobile
Other Payables Communications Group 5,363,787.00 1,070,000.00
Co., Ltd. and its affiliates
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Zhejiang Leapmotor
Other Payables Technology Co., Ltd. and 173,520.00 173,520.00
its affiliates
Zhejiang Huanuokang
Other Payables 63,070.00 63,070.00
Technology Co., Ltd.
Note 1: It ended the affiliated relationship in 2023;
XV. Share-based Payment
1. Overview of share-based payment
Applicable □ Not applicable
Unit: RMB
Categorie Granted in the Current Exercised in the Unlocked in the Current Expired in the Current
s of Period Current Period Period Period
Objects Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Senior
managers,
other
managers 31,795,58 259,451,9
and 0.00 32.80
business
backbone
s
31,795,58 259,451,9
Total
0.00 32.80
Stock options or other equity instruments outstanding at the end of the period
Applicable □ Not applicable
Stock Options Outstanding at the End of the Other Equity Instruments Outstanding at the
Categories of Period End of the Period
Objects Range of Exercise Remaining Period of Range of Exercise Remaining Period of
Price the Contract Price the Contract
Senior managers,
other managers and RMB 16.59/share 6-30 months RMB 8.16/share 6-30 months
business backbones
Other notes:
(1) The employees of the Company and its subsidiaries hold the equity of the subsidiary HuaRay Technology through
capital increase, direct or indirect equity transfers. According to the fair value of the investors recently introduced by
the subsidiary Huaray Technology, the confirmed share-based payment fee is RMB 100,553,280.70.
(2) The employees of the Company and its subsidiaries hold the equity of Huacheng Network through capital increase,
direct or indirect equity transfers. According to the fair value of the investors recently introduced by Huacheng Network,
the confirmed share-based payment fee is RMB 5,355,507.96.
(3) The employees of the Company and its subsidiaries hold the equity of Pixfra Technology through capital increase,
direct or indirect equity transfers. According to the fair value of the investors recently introduced by Pixfra Technology,
the confirmed share-based payment fee is RMB 5,071,951.59.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
2. Situation of equity-settled share-based payment
Applicable □ Not applicable
Unit: RMB
The fair value of the restricted stocks shall be determined
based on the stock price and the grant cost of the
The method for determining the fair value of equity restricted stocks or stock price of the most recent external
instruments on the day of granting investor entry as at the grant date, while the fair value of
the stock options shall be determined under the Black-
Scholes Model
The basis for determining the amount of exercisable Estimated according to equity instruments held by the
equity instruments employees
Reason for the significant difference between the
N/A
estimation of current period and the previous period
The accumulated amount of equity-settled share-based
367,198,819.22
payment counted into the capital reserve
Amount of equity-settled share-based payment confirmed
288,440,579.53
in current period
3. Situation of cash-settled share-based payment
□ Applicable Not applicable
4. Share-based payment in the current period
Applicable □ Not applicable
Unit: RMB
Categories of Objects Equity-settled Share-based Payment Cash-settled Share-based Payment
Senior managers, other managers
288,440,579.53
and business backbones
Total 288,440,579.53
5. Modification and termination of share-based payment
According to the Proposal on the Company's Stock Option and Restricted Stock Incentive Plan in 2022 (Amended
Draft) and its Abstracts and the Proposal on the Company’s Measures for the Assessment and Administration of the
Implementation of the Stock Option and Restricted Stock Incentive Plan in 2022 (Amendment), which had been
reviewed and approved at the 44th session of the 7th board of directors and the 2nd interim shareholder’s meeting of
the Company in 2023, the Company amended the Company-level performance assessment indicators in the Stock
Option and Restricted Stock Incentive Plan in 2022.
After the amendment, the performance assessment indicators for the stock options and restricted stocks are shown in
the following table:
Period of Unlocking Performance Assessment Indicator
Based on the operating revenue in 2021, the annual revenue growth rate in
First period of unlocking 2022 was not less than 16%; or based on the net profit in 2021, the net profit
growth rate in 2022 was not less than 16%
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Based on the operating revenue in 2022, the annual revenue growth rate in
Second period of unlocking 2023 was not less than 35%; or based on the net profit in 2022, the net profit
growth rate in 2023 was not less than 35%
Based on the operating revenue in 2022, the annual revenue growth rate in
Third period of unlocking 2024 was not less than 83%; or based on the net profit in 2022, the net profit
growth rate in 2024 was not less than 83%
Note: “Operating revenue” refers to the operating revenue as applied in the audited consolidated financial statements
of listed companies; “net profit” above refers to the net profit value attributable to the shareholders of the Company as
applied in the audited consolidated financial statements of listed companies for the first period of exercise/unlocking, or
the net profit value attributable to the shareholders of the Company, less the non-recurring gains and losses, as
applied in the audited consolidated financial statements of listed companies for the second and third periods of
exercise/unlocking.
In consideration of the factors including changes in the macro market environment, the appropriate proportion
coefficient is set as follows according to the performance accomplishment rate (R) in the current period for the
assessment years of 2023 and 2024:
Performance
100% 〉
Accomplishment Rate R≥100% 90%〉R≥80% R〈80%
R≥90%
(R)
Coefficient for R 1 0.9 0.8 0
Note: 1. The performance accomplishment rate (R) in the current period refers to the higher of the accomplishment
rate of operating revenue in the current period or the accomplishment rate of net profit less the non-recurring gains
and losses in the current period.
2. Accomplishment rate of operating revenue in the current period = actual growth rate of operating revenue in the
current period/target growth rate of operating revenue in the current period * 100%; accomplishment rate of net profit
in the current period = actual growth rate of net profit in the current period/target growth rate of net profit in the current
period * 100%.
3. The Company unlocks the restricted stocks held by the incentive objects in the assessment year according to the
indicator of the performance accomplishment rate (R), and the specific number of restricted stocks unlocked is as
follows: number of restricted stocks held by the incentive objects in the corresponding assessment year * coefficient
for R; and confirms the number of exercisable stock options held by the incentive objects in the assessment year, and
the specific number of exercisable stock options is as follows: number of stock options held by the incentive objects in
the corresponding assessment year * coefficient for R.
XVI. Commitments and Contingencies
1. Significant commitments
Important commitments on the balance sheet day
As of December 31, 2023, the Company's pledge information was as follows:
(1) On June 20, 2023, the Company and Hangzhou Branch of Zheshang Bank Co., Ltd. entered into the Guarantee
Contract for Pledge of Asset Pool, with the number (33100000) Zheshang Asset Pool Quality (2023) No. 08879 (the
contract term is from June 20, 2023 to January 12, 2024), to provide a guarantee for the Asset Pool Business
Cooperation Agreement signed by the Company together with the subsidiary Zhejiang Dahua Vision Technology Co.,
Ltd., the subsidiary Zhejiang Dahua System Engineering Co., Ltd., the subsidiary Zhejiang Fengshi Technology Co.,
Ltd., the subsidiary Zhejiang Hangzhou Xiaohua Technology Co., Ltd. and Hangzhou Branch of Zheshang Bank Co.,
Ltd. The financing amount for the fund pledge pool cannot be more than RMB 2.5 billion.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Under the notes pool business, as of December 31, 2023, the Company had undue notes receivable of RMB
346,067,483.72 (where RMB 340,000,000.00 was related party notes receivable that should be included in the scope
of consolidation), the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. had undue notes receivable of RMB
329,676,985.18 (where RMB 154,679.33 was related party notes receivable that should be included in the scope of
consolidation), and the subsidiary Zhejiang Dahua System Engineering Co., Ltd. had undue notes receivable of RMB
119,000.00.
Under the pledge, the Company issued the bank acceptance bills in the amount of RMB 9,717,792.00 and the
subsidiary Zhejiang Dahua Vision Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB
420,506,020.04.
(2) On June 21, 2023, the subsidiary Zhejiang Dahua Zhilian Co., Ltd. and Hangzhou Branch of Zheshang Bank Co.,
Ltd. entered into the Guarantee Contract for Pledge of Asset Pool, with the number (33100000) Zheshang Asset Pool
Quality (2023) No. 08817 (the contract term is from June 21, 2023 to January 12, 2024), to provide a guarantee for the
Asset Pool Business Cooperation Agreement signed by Zhejiang Dahua Zhilian Co., Ltd. together with Hangzhou
Branch of Zheshang Bank Co., Ltd. The financing amount for the fund pledge pool cannot be more than RMB 0.5
billion.
Under the notes pool business, as of December 31, 2023, RMB 279,022,406.34 of undue notes receivable (of which
RMB 100,000,000.00 was related party notes that should be included in the scope of the consolidated financial
statements) of the subsidiary Zhejiang Dahua Zhilian Co., Ltd. was pledged for the issuance of acceptance bills.
Under the pledge, the subsidiary Zhejiang Dahua Zhilian Co., Ltd. issued the bank acceptance bills in the amount of
RMB 200,360,503.20.
(3) On June 1, 2022, the Company and Hangzhou Branch of China Merchants Bank Co., Ltd. signed the Credit
Agreement for Notes Pool Business (No.: 571XY2022013930), which promised a special credit limit of RMB 1.5 billion
for the notes pool, and allocated the same limit to the subsidiary Zhejiang Dahua Vision Technology Co., Ltd., the
subsidiary Zhejiang Dahua System Engineering Co., Ltd., the subsidiary Hangzhou Huacheng Network Technology
Co., Ltd., the subsidiary Zhejiang Fengshi Technology Co., Ltd., the subsidiary Zhejiang Huafei Intelligent Technology
Co., Ltd., the subsidiary Zhejiang Huayixin Technology Co., Ltd., the subsidiary Zhejiang Wisualarm Technology Co.,
Ltd.,, the subsidiary Zhejiang Huajian Technology Co., Ltd., the subsidiary Xi'an Dahua Zhilian Technology Co., Ltd.,
the subsidiary Zhejiang Dahua Intelligent IoT Operation Service Co., Ltd., and the subsidiary Zhejiang Dahua Zhilian
Co., Ltd.
Under the notes pool business, the Company had undue notes receivable of RMB 341,468,067.10 as of December 31,
2023 (where RMB 335,000,000.00 was related party notes receivable that should be included in the scope of
consolidation), the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. had undue notes receivable of RMB
193,322,790.90 (where RMB 304,460.67 was related party notes receivable that should be included in the scope of
consolidation), the subsidiary Zhejiang Fengshi Technology Co., Ltd. had undue notes receivable of RMB 151,750.00,
the subsidiary Zhejiang Dahua System Engineering Co., Ltd. had undue notes receivable of RMB 2,167,116.73, the
subsidiary Zhejiang Huaxiao Technology Co., Ltd. had undue notes receivable of RMB 623,801.31, the subsidiary
Zhejiang Huajian Technology Co., Ltd. has undue notes receivable of RMB 22,903,870.00, and the subsidiary
Zhejiang Dahua Intelligent IoT Operation Service Co., Ltd. had undue notes receivable of RMB 470,000.00 pledged for
issuing bank acceptance bills.
Under the pledge, the subsidiary Hangzhou Huacheng Network Technology Co., Ltd. issued the bank acceptance bills
in the amount of RMB 83,435,711.64, the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. issued the bank
acceptance bills in the amount of RMB 39,539,772.23, the subsidiary Zhejiang Fengshi Technology Co., Ltd. issued
the bank acceptance bills in the amount of RMB 247,734,066.84, the subsidiary Zhejiang Huajian Technology Co., Ltd.
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2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
issued the bank acceptance bills in the amount of RMB 497,374.83 and the subsidiary Zhejiang Huaxiao Technology
Co., Ltd. issued the bank acceptance bills in the amount of RMB 122,979.03.
(4) On May 26, 2021, the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. and Bank of Hangzhou Co., Ltd.
entered into the Pledge Contract for Maximum Amount of Individual Asset Management (No.:7514ATMG202100073,
the contract term is from May 26, 2021 to May 25, 2024), to provide a guarantee for the Asset Management Service
Agreement signed by the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. and Hangzhou Bank Co., Ltd. The
credit limit of the notes pool cannot be more than RMB 0.2 billion.
Under the notes pool business, as of December 31, 2023, RMB 36,192,984.00 of undue notes receivable of the
subsidiary Zhejiang Dahua Vision Technology Co., Ltd. were pledged for the issuance of acceptance bills.
Under the pledge, the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. issued the bank acceptance bills in the
amount of RMB 0.
(5) Under the Asset Pool Charge-off Agreement PPHJQZCZ 20230731 No.001 made by and between the Company
and Ping An Bank Limited Hangzhou Branch on August 18, 2023, a special credit line of RMB 1 billion in note pool
was granted and was also allocated to the subsidiary Zhejiang Dahua Vision Technology Co., Ltd., the subsidiary
Jiangsu Huaruipin Technology Co., Ltd., the subsidiary Zhejiang Pixfra Technology Co., Ltd. and the subsidiary
Changsha Dahua Technology Co., Ltd.
Under the notes pool business, as of December 31, 2023, the Company had undue notes receivable of RMB
150,000,000.00 (where RMB 150,000,000.00 was related party notes receivable that should be included in the scope
of consolidation), the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. had undue notes receivable of RMB
100,000,000.00 (where RMB 100,000,000.00 was related party notes receivable that should be included in the scope
of consolidation), and the subsidiary Jiangsu Huaruipin Technology Co., Ltd. had undue notes receivable of RMB
3,120,396.00, the subsidiary Zhejiang Pixfra Technology Co., Ltd. had undue notes receivable of RMB 1,869,905.04
pledged for issuing bank acceptance bills.
Under the pledge, the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. issued the bank acceptance bills in the
amount of RMB 98,101,540.06, the subsidiary Jiangsu Huaruipin Technology Co., Ltd. issued the bank acceptance
bills in the amount of RMB 4,937,925.81, the subsidiary Zhejiang Pixfra Technology Co., Ltd. issued the bank
acceptance bills in the amount of RMB 199,795.30 and the subsidiary Changsha Dahua Technology Co., Ltd. issued
the bank acceptance bills in the amount of RMB 5,190,022.25.
(6) The subsidiary Zhejiang HuaRay Technology Co., Ltd. and Hangzhou Branch of China Merchants Bank Co., Ltd.
entered into the Credit Agreement for Notes Pool Business, agreeing on a credit limit of RMB 0.2 billion for notes pool
business. Under the notes pool business, as of December 31, 2023, RMB 130,709,513.93 of undue notes receivable
of the subsidiary Zhejiang HuaRay Technology Co., Ltd. were pledged for the issuance of acceptance bills. Under the
pledge, the subsidiary Zhejiang HuaRay Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB
125,850,624.31.
2. Contingencies
(1) Important contingent matters on the balance sheet day
No important contingent matters on the balance sheet day.
(2) If no important contingent matter to be disclosed by the Company, it should also be noted
accordingly
No important contingent matter needs to be disclosed by the Company.
374
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
XVII. Events after the Balance Sheet Date
1. Significant non-adjustments
N/A
2. Distribution of profits
Number of dividend payout to be distributed per 10
3.82
shares (RMB)
Based on the share capital of 3,274,649,389 shares in
which the shares repurchased by the Company have
been deducted (19,819,601 shares have been
repurchased) as at December 31, 2023, the Company will
distribute RMB 3.82 (tax included) to all shareholders for
Profit Distribution Plan
every 10 shares, with a total cash dividend of RMB
1,250,916,066.60 (tax included), and no capital reserves
will be capitalized and no bonus share will be given. The
undistributed profits will be reserved for future
distribution.
3. Other events after the balance sheet date
On January 3, 2024, the subsidiary Dahua Technology (HK) Limited, Dahua Canada and CENTRAL MOTION
PICTURE USA CORPORATION entered into the Share Acquisition Agreement, in which it was agreed that CENTRAL
MOTION PICTURE USA CORPORATION accepted 100% equity in Dahua USA at a price of USD 15 million and
acquired the inventories owned by Dahua Canada with a value of USD 1 million at a price of USD 1 million. The
Company completed the corresponding equity and asset transfer procedures in January and from the date of transfer,
Dahua USA will be no longer included in the scope of consolidation.
XVIII. Other Significant Events
1. Subsection information
(1) Basis for determining the reporting subsection and the accounting policy
The Company determines the operation subsection based on internal organization structure, management
requirements, internal reporting system, etc. The Company has only one operational subsection, namely the R&D,
production, and sales of intelligent IoT products. The accounting policy of the reporting subsection is consistent with
that of the Company.
(2) Financial information of the reporting subsection
Regional subsection
Unit: RMB
Item Operating revenue Operating Cost
Domestic 16,891,274,970.99 10,462,264,668.17
Overseas 15,327,042,665.78 8,212,706,255.29
Total 32,218,317,636.77 18,674,970,923.46
375
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Product subsection
Unit: RMB
Item Operating revenue Operating Cost
Smart IoT Products and
26,644,648,182.18 14,925,853,403.30
Solutions
Including: Software Business 1,797,226,644.00 591,429,713.59
Innovative Businesses 4,906,653,657.98 3,169,076,284.13
Others 667,015,796.61 580,041,236.03
Total 32,218,317,636.77 18,674,970,923.46
XIX. Notes to Main Items in the Financial Statements of the Parent Company
1. Accounts receivable
(1) Disclosure by age
Unit: RMB
Aging Closing balance Opening balance
Within 1 year (including 1 year) 6,181,011,320.94 4,435,372,460.31
1 to 2 years 220,370,669.05 288,995,411.49
2 to 3 years 205,500,322.81 158,183,517.59
3 years or above 209,345,603.19 89,620,990.72
3 to 4 years 139,992,165.49 53,215,275.56
4 to 5 years 48,597,714.50 15,437,090.50
5 years or above 20,755,723.20 20,968,624.66
Total 6,816,227,915.99 4,972,172,380.11
(2) Categorical disclosure by methods for provision by bad debts
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Accrued Book Accrued Book
Percent value Percent value
Amount Amount proporti Amount Amount proporti
age age
on on
Account
s
receiva
bles
with the
bad 39,711, 39,711, 100.00 38,693, 38,693, 100.00
0.58% 0.78%
debt 390.05 390.05 % 240.50 240.50 %
provisio
n
accrued
based
on
376
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
single
item
Inclu
ding:
Acco
unts
receiva
ble with
insignifi
cant
single
amount 39,711, 39,711, 100.00 38,693, 38,693, 100.00
0.58% 0.78%
but 390.05 390.05 % 240.50 240.50 %
accrued
for
separat
e
provisio
n of bad
debt
Account
s
receiva
bles
with the
bad
6,776,5 6,640,9 4,933,4 4,837,4
debt 135,569 96,000,
16,525. 99.42% 2.00% 46,970. 79,139. 99.22% 1.95% 78,515.
provisio ,555.41 623.96
94 53 61 65
n
accrued
based
on
combin
ations
Inclu
ding:
Portfoli
o 1:
5,668,8 5,668,8 3,990,0 3,990,0
Related
00,812. 83.17% 00,812. 54,640. 80.25% 54,640.
Parties
35 35 72 72
Portfoli
o
Portfoli
o 2:
Aging 1,107,7
135,569 972,146 943,424 96,000, 847,423
Analysi 15,713. 16.25% 12.24% 18.97% 10.18%
,555.41 ,158.18 ,498.89 623.96 ,874.93
s 59
Portfoli
o
6,816,2 6,640,9 4,972,1 4,837,4
100.00 175,280 100.00 134,693
Total 27,915. 46,970. 72,380. 78,515.
% ,945.46 % ,864.46
99 53 11 65
Bad Debt Provision Accrued Based on Single Item: RMB 39,711,390.05
Unit: RMB
Name Opening balance Closing balance
377
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Reason for
Bad debt Bad debt Accrued
Book balance Book balance making bad
provision provision proportion
debt provision
Expected to
Customer 1 38,693,240.50 38,693,240.50 38,612,198.42 38,612,198.42 100.00% be unable to
recover
Expected to
Other
1,099,191.63 1,099,191.63 100.00% be unable to
Customers
recover
Total 38,693,240.50 38,693,240.50 39,711,390.05 39,711,390.05
Bad Debt Provision Accrued Based on Combinations: RMB 135,569,555.41
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Within 1 Year 737,681,101.35 36,884,055.08 5.00%
1 to 2 years 169,801,648.93 16,980,164.89 10.00%
2 to 3 years 131,736,024.38 39,520,807.31 30.00%
3 to 4 years 49,384,226.64 24,692,113.32 50.00%
4 to 5 years 8,101,487.38 6,481,189.90 80.00%
5 years or above 11,011,224.91 11,011,224.91 100.00%
Total 1,107,715,713.59 135,569,555.41
If the bad debt provisions of accounts receivable are made according to the general model of expected credit losses:
□ Applicable Not applicable
(3) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Written Off Others balance
Reversed
Bad debt 134,693,864.4 175,280,945.4
47,376,642.70 4,513.91 6,785,047.79
provision 6 6
134,693,864.4 175,280,945.4
Total 47,376,642.70 4,513.91 6,785,047.79
6 6
Significant amount of recovered or reversed bad debt provision in this period:
N/A
(4) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Accounts receivable actually written off 6,785,047.79
Important accounts receivable written off:
N/A
378
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(5) Accounts receivable and contract assets of the top five closing balances at the end of the
period collected by debtors
Unit: RMB
Balance of Bad
Debt Provisions
Balance of As a Percentage
Balance of of Accounts
Balance of Accounts of Total Other
Accounts Receivable and
Contract Assets Receivable and Receivables and
Name of Unit Receivable at Provisions for
at the End of the Contract Assets Contract Assets
the End of the Impairment of
Period at the End of the at the End of the
Period Contract Assets
Period Period
at the End of the
Period
4,972,055,767.8 4,972,055,767.8
Customer 1 72.55%
2 2
Customer 2 260,115,233.75 260,115,233.75 3.80%
Customer 3 171,008,953.76 4,972,876.68 175,981,830.44 2.57% 27,271,001.90
Customer 4 102,942,991.14 102,942,991.14 1.50%
Customer 5 81,501,834.21 81,501,834.21 1.19%
5,587,624,780.6 5,592,597,657.3
Total 4,972,876.68 81.61% 27,271,001.90
8 6
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other Receivables 11,736,609,900.41 13,025,162,686.64
Total 11,736,609,900.41 13,025,162,686.64
(1) Other receivables
1) Other receivables categorized by the nature of the funds
Unit: RMB
Nature of the funds Closing balance Opening balance
Deposits 42,885,100.54 42,975,357.36
Prepaid or advance expense 55,413,467.31 42,425,892.12
Employee home loan 70,683,455.00 84,743,250.00
Incomings and outgoings 11,602,342,723.04 12,872,094,567.04
Others 401,773.49 14,709,388.90
Total 11,771,726,519.38 13,056,948,455.42
2) Disclosure by age
Unit: RMB
Aging Closing balance Opening balance
Within 1 year (including 1 year) 11,151,113,722.07 11,740,672,677.06
1 to 2 years 152,050,338.67 880,224,982.17
2 to 3 years 103,271,253.97 190,441,001.10
3 years or above 365,291,204.67 245,609,795.09
379
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
3 to 4 years 156,024,115.87 57,005,895.73
4 to 5 years 38,468,597.33 185,039,868.32
5 years or above 170,798,491.47 3,564,031.04
Total 11,771,726,519.38 13,056,948,455.42
(3) Categorical disclosure by methods for provision by bad debts
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Accrued Book Accrued Book
Percent value Percent value
Amount Amount proporti Amount Amount proporti
age age
on on
Bad
Debt
Provisio
11,771, 11,736, 13,056, 13,025,
n 100.00 35,116, 100.00 31,785,
726,519 0.30% 609,900 948,455 0.24% 162,686
Based % 618.97 % 768.78
.38 .41 .42 .64
on
Combin
ations
Inclu
ding:
Portfoli
o 1:
11,602, 11,602, 12,872, 12,872,
Related
342,723 98.56% 342,723 094,567 98.58% 094,567
Parties
.04 .04 .04 .04
Portfoli
o
Portfoli
o 2:
Aging
169,383 35,116, 134,267 184,853 31,785, 153,068
Analysi 1.44% 20.73% 1.42% 17.20%
,796.34 618.97 ,177.37 ,888.38 768.78 ,119.60
s
Portfoli
o
11,771, 11,736, 13,056, 13,025,
100.00 35,116, 100.00 31,785,
Total 726,519 609,900 948,455 162,686
% 618.97 % 768.78
.38 .41 .42 .64
Bad Debt Provision Accrued Based on Combinations: RMB 35,116,618.97
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Within 1 year (including 1
79,434,455.19 3,971,722.76 5.00%
year)
1 to 2 years 35,281,870.59 3,528,187.06 10.00%
2 to 3 years 21,337,446.21 6,401,233.86 30.00%
3 to 4 years 21,025,938.31 10,512,969.16 50.00%
4 to 5 years 8,007,899.55 6,406,319.64 80.00%
5 years or above 4,296,186.49 4,296,186.49 100.00%
Total 169,383,796.34 35,116,618.97
Bad debt provisions made according to the general model of expected credit losses:
380
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Unit: RMB
Phase One Phase Two Phase Three
Expected credit Expected credit
Bad debt provision Expected credit Total
losses for the entire losses for the entire
losses in the next 12
extension (without extension (with credit
months
credit impairment) impairment)
Balance on January
25,225,412.46 6,120,196.70 440,159.62 31,785,768.78
1, 2023
Balance in the
current period on
January 1, 2023
--Transfer to phase
-1,344,040.03 1,344,040.03
two
--Transfer to phase
-22,153.40 -2,520.00 24,673.40
three
Provisions of this
3,776,967.83 1,013,206.77 4,790,174.60
period
Reversals in this
917,816.38 917,816.38
period
Write off in this
511,508.03 11,000.00 19,000.00 541,508.03
period
Balance as of
22,429,894.62 11,227,684.56 1,459,039.79 35,116,618.97
December 31, 2023
Book balance changes with significant changes in loss provision in the current period
□ Applicable Not applicable
4) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Write-off Others balance
Reversed
Bad debt
31,785,768.78 4,790,174.60 917,816.38 541,508.03 35,116,618.97
provision
Total 31,785,768.78 4,790,174.60 917,816.38 541,508.03 35,116,618.97
Significant amount of recovered or reversed bad debt provision in this period:
N/A
5) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Other accounts receivable actually written off 541,508.03
Other important accounts receivable written off:
N/A
381
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
6) Other receivables of the top five closing balances collected by debtors
Unit: RMB
As a percentage
of total other Bad debt
Name of Nature of the
Closing balance Aging receivables at provision at the
Unit funds
the end of the end of the period
period
Incomings RMB 7,701,619,823.45
Company
and 7,702,205,020.30 within 1 year, RMB 65.43%
1
outgoings 585,196.85 for 1-2 years
Incomings
Company
and 2,391,792,112.16 Within 1 year 20.32%
2
outgoings
RMB 507,415,321.86
within 1 year, RMB
Incomings 4,400,100.00 for 1-2
Company
and 554,210,671.85 years, RMB 5,100,400.00 4.71%
3
outgoings for 2-3 years, RMB
37,294,849.99 for 3-4
years
RMB 271,440,813.99
within 1 year, RMB
Incomings
Company 73,400,000.00 for 1-2
and 392,450,907.34 3.33%
4 years, RMB
outgoings
47,610,093.35 for 2-3
years
RMB 9,080,630.14 within
1 year, RMB
10,170,475.10 for 1-2
years, RMB 8,757,718.98
Incomings
Company for 2-3 years, RMB
and 205,295,149.55 1.74%
5 8,822,249.05 for 3-4
outgoings
years, RMB 9,052,406.35
for 4-5 years, RMB
159,411,669.93 for five
years or above
11,245,953,861.2
Total 95.53%
0
3. Long-term equity investment
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in 8,003,642,515 8,003,642,515 4,651,487,417 4,651,487,417
subsidiaries .21 .21 .05 .05
Investment in
188,883,917.0 188,160,420.6 831,485,368.0 830,761,871.7
affiliates and 723,496.39 723,496.39
3 4 9 0
joint ventures
8,192,526,432 8,191,802,935 5,482,972,785 5,482,249,288
Total 723,496.39 723,496.39
.24 .85 .14 .75
382
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(1) Investment in subsidiaries
Unit: RMB
Opening Decrease/Increase in the current period
Closing
Opening balance of Closing
The Provision balance of
balance provision Investmen Investmen balance
invested for provision
(book for ts t Others (book
entity impairmen for decline
value) impairmen increased decreased value)
t accrued in value
t
Zhejiang
Dahua
System 535,013,1 9,704,750. 544,717,8
Engineeri 30.42 46 80.88
ng Co.,
Ltd.
Zhejiang
Dahua
Security
102,150,0 102,235,9
Network 85,918.92
77.26 96.18
Operation
Service
Co., Ltd.
Zhejiang
Dahua
5,100,000. 5,100,000.
Ju'an
00 00
Technolog
y Co., Ltd.
Guangxi
Dahua
Informatio 6,159,547. 6,221,853.
62,305.92
n 73 65
Technolog
y Co., Ltd.
Dahua
Technolog 668,941,1 746,235.0 669,687,3
y (HK) 12.00 0 47.00
Limited
Zhejiang
Dahua
1,295,016, 6,479,861. 1,301,496,
Vision
312.10 97 174.07
Technolog
y Co., Ltd.
Guangxi
Dahua
Yunlian
20,002,58 20,002,58
Informatio
0.76 0.76
n
Technolog
y Co., Ltd.
Hangzhou
Xiaohua
5,851,433. 3,612,386. 9,463,819.
Technolog
47 32 79
y CO.,
LTD.
Zhejiang
1,001,657, 852,225,0 1,853,882,
Dahua
517.59 70.39 587.98
Zhilian
383
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Co., Ltd.
Zhejiang
Dahua
Investmen
62,175,00 62,175,00
t
0.00 0.00
Managem
ent Co.,
Ltd.
Guangxi
Dahua 71,262,26 71,342,56
80,300.04
Zhicheng 4.85 4.89
Co., Ltd.
Hangzhou
Huacheng
30,102,81 3,350,008. 33,452,82
Network
4.35 98 3.33
Technolog
y Co., Ltd.
Zhejiang
HuaRay 33,919,74 9,122,776. 43,042,52
Technolog 8.87 49 5.36
y Co., Ltd.
Hangzhou
Fuyang
5,110,520. 5,131,561.
Hua'ao 21,041.28
63 91
Technolog
y Co., Ltd.
Zhejiang
Huafei
Intelligent 25,619,30 13,401,49 39,020,80
Technolog 9.34 9.89 9.23
y CO.,
LTD.
Guizhou
Huayi
1,800,000. 1,800,000.
Shixin
00 00
Technolog
y Co., Ltd.
Zhejiang
Fengshi 9,028,975. 9,076,201.
47,226.24
Technolog 38 62
y Co., Ltd.
Dahua
Technolog 8,102,000. 8,102,000.
y Holdings 00 00
Limited
Zhejiang
Huaxiao 38,317,40 1,185,790. 39,503,19
Technolog 5.37 16 5.53
y Co., Ltd.
Xi'an
Dahua
100,718,7 890,684,8 991,403,6
Zhilian
98.71 94.39 93.10
Technolog
y Co., Ltd.
Jiangsu
17,927,21 139,029.1 18,066,24
Huaruipin
1.61 2 0.73
Technolog
384
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
y Co. Ltd.
Beijing
Huayue
Shangche
ng
10,675,12 311,131.4 10,986,25
Informatio
5.73 9 7.22
n
Technolog
y Service
Co., Ltd.
Zhejiang
Dahua
60,000,00 60,000,00
Jinzhi
0.00 0.00
Technolog
y Co., Ltd.
Shanghai
Huashang
Chengyue
Informatio 1,931,398. 693,288.6 2,624,687.
n 93 4 57
Technolog
y Service
Co., Ltd.
Zhejiang
Zhoushan
Digital
17,640,00 17,640,00
Developm
0.00 0.00
ent
Operation
Co. Ltd.
Guangxi
Dahua 30,000,00 30,000,00
Technolog 0.00 0.00
y Co., Ltd.
Yunnan
Zhili 4,500,000. 4,500,000.
Technolog 00 00
y Co., Ltd
Zhejiang
-
Huayixin 41,380,25 41,057,90
322,352.6
Technolog 8.10 5.45
5
y Co., Ltd.
Zhejiang
Huaruijie 52,349,27 2,410,090. 54,759,36
Technolog 8.69 33 9.02
y Co., Ltd.
Chengdu
Dahua
Zhilian
50,346,03 550,621,6 600,967,7
Informatio
2.57 78.60 11.17
n
Technolog
y Co., Ltd.
Chengdu
Dahua 100,000,0 454,700,0 554,700,0
Zhian 00.00 00.00 00.00
Informatio
385
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
n
Technolog
y Service
Co., Ltd.
Chengdu
Huishan
Smart 5,800,000. 5,800,000.
Network 00 00
Technolog
y Co., Ltd.
Zhejiang
Huajian 23,520,80 1,917,792. 25,438,59
Technolog 2.07 17 4.24
y Co., Ltd.
Xinjiang
Dahua
Zhixin
Informatio 2,055.08 2,055.08
n
Technolog
y Co., Ltd.
Guangxi
Huacheng 123,727.0 181,131.0
57,404.04
Technolog 3 7
y Co., Ltd.
Hangzhou
Huacheng 1,838,147. 2,699,065. 4,537,212.
Software 19 42 61
Co., Ltd.
Dahua
Technolog
72,864.00 72,864.00
y Canada
Inc.
Chengdu
Dahua
Zhishu
Informatio 10,000,00 10,000,00
n 0.00 0.00
Technolog
y Service
Co., Ltd.
Zhengzho
u Dahua
Zhian
30,000,00 30,000,00
Informatio
0.00 0.00
n
Technolog
y Co., Ltd.
Dahua
Technolog
y 1,000,000. 1,000,000.
Internation 00 00
al Pte.
Ltd.
Changsha
100,009,8 100,029,5
Dahua 19,716.48
58.24 74.72
Technolog
386
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
y Co., Ltd.
Zhejiang
Pixfra 50,982,18 541,528,5 592,510,7
Technolog 1.36 83.84 65.20
y Co., Ltd.
Zhejiang
Dahua
Intelligent
15,285,36 764,843.2 16,050,20
IoT
0.32 0 3.52
Operation
Service
Co., Ltd.
Henan
Dahua
Zhilian
109,134.6 163,701.9
Informatio 54,567.30
0 0
n
Technolog
y Co., Ltd.
Yibin
Huahui
Informatio
26,184.84 26,184.84
n
Technolog
y Co., Ltd.
Luoyang
Dahua
Zhiyu
10,000,00 10,000,00
Informatio
0.00 0.00
n
Technolog
y Co., Ltd.
Xi'an
IMOU
Zhilian 43,251.72 43,251.72
Technolog
y Co., Ltd.
Guangdon
g
Huaxiyue 126,189.8 126,189.8
Intelligent 7 7
Technolog
y Co., Ltd.
4,651,487, 3,356,655, 4,500,000. 8,003,642,
Total
417.05 098.16 00 515.21
(2) Investment in affiliates and joint ventures
Unit: RMB
Openi Decrease/Increase in the current period Closin
Openi Closin
ng Invest Adjust Cash Provis g
The ng g
balan Invest Invest ment ment Other divide ion for balan
invest balan balan
ce of ments ment profit on chang nds or impair Other ce of
ed ce ce
provisi increa decre and other es in profit ment s provisi
entity (book (book
on for sed ased loss compr equity declar accru on for
value) value)
impair recog ehens ed to ed declin
387
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
ment nized ive distrib e in
under incom ute value
the e
equity
metho
d
Ⅰ. Joint ventures
Ⅱ. Affiliates
Ruicit
y
Digital 71,17 7,055, 78,23
Techn 5,718. 847.2 1,566.
ology 81 9 10
Co.,
Ltd.
Zhejia
ng
Leap -
650,4 392,2 2,608, 50,08
motor 310,8
70,25 62,37 700.6 1,247.
Techn 97,82
9.18 8.85 3 47
ology 8.43
Co.,
Ltd.
Hangz
hou
Juhua
nyan
Inform 723,4 723,4
ation 96.39 96.39
Techn
ology
Co.,
Ltd.
Ningb
o
Huaya
n
Chua
ngxi
Ventur
e
Capita 63,05 4,377, 67,43
l 4,968. 586.7 2,554.
Invest 03 7 80
ment
Partn
ership
(Limit
ed
Partn
ership
)
Dezho
u 3,407, 3,444,
37,23
Shuzh 519.6 758.2
8.63
i 3 6
Inform
388
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
ation
Techn
ology
Co.,
Ltd.
Sichu
an
Hengji
Anhua
Intern
1,291, - 1,121,
et of
851.5 170,0 844.5
Thing
4 06.98 6
s
Techn
ology
Co.,
Ltd.
Zhejia
ng
Huach
-
uang 41,36 6,218, 37,92
9,650,
Vision 1,554. 646.4 9,696.
504.0
Techn 51 2 92
1
ology
Co.,
Ltd.
-
830,7 392,2 2,608, 56,29 188,1
Subtot 723,4 309,2 723,4
61,87 62,37 700.6 9,893. 60,42
al 96.39 47,66 96.39
1.70 8.85 3 89 0.64
6.73
-
830,7 392,2 2,608, 56,29 188,1
723,4 309,2 723,4
Total 61,87 62,37 700.6 9,893. 60,42
96.39 47,66 96.39
1.70 8.85 3 89 0.64
6.73
The recoverable amount is determined according to the net amount of the fair value less the cost of disposal
□ Applicable Not applicable
The recoverable amount is determined according to the present value of the expected future cash flow
□ Applicable Not applicable
4. Operating revenue and operating cost
Unit: RMB
Amount Occurred in the Current Period Amount Occurred in the Previous Period
Item
Income Cost Income Cost
Main Business 10,606,267,041.51 1,653,964,589.27 8,401,027,073.37 1,188,553,267.61
Other businesses 69,647,278.51 37,059,643.16 57,417,038.00 41,482,814.03
Total 10,675,914,320.02 1,691,024,232.43 8,458,444,111.37 1,230,036,081.64
389
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
5. Investment income
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Long-term equity investment income
1,149,863.64
calculated by cost method
Long-term equity investment income
-309,247,666.73 -455,385,100.70
measured by equity method
Investment income from disposal of
4,603,860,940.85 147,553,843.81
long-term equity investment
Investment income on other non-
current financial assets during the 11,870,549.61 9,173,028.68
holding period
Investment income from disposal of
10,370,120.76
other non-current financial assets
Investment income from national
1,256,871.91 791,371.25
debt reverse repurchase
Profits from recognition termination of
-4,294,983.66 -4,157,038.98
financial assets
Gain on debt restructuring -170,120.71
Total 4,314,965,696.38 -302,194,016.65
XX. Supplementary Information
1. Breakdown of non-recurring gains and losses for this period
Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains and losses from disposal of
4,778,983,828.56
non-current assets
Government subsidies included in
the current gains and losses (except
for those that are closely related to
the regular business operations of
the Company, in line with national 199,003,183.46
policies, received according to
established standards, and having a
continuous impact on the Company's
gains and losses)
Gains or losses from changes in the
fair value of financial assets and
liabilities, and from the disposal of
financial assets and liabilities, held by
103,119,981.50
non-financial enterprises, except for
effective hedging businesses related
to the regular business operations of
the Company.
Gains or losses from investment or
1,819,647.72
asset management entrusted to
390
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
others
Reversal of the receivables
depreciation reserves for separate 4,513.91
impairment test
Gains or losses from debt
-16,242,445.24
restructuring
Non-Operating Revenue and
-18,035,840.08
expenses other than the above
Other gains and losses items that fit
the definition of non-recurring gains -57,989,909.93
and losses
Less: Impact of income tax 555,973,378.97
Impact of minority equity (after
34,539,315.42
tax)
Total 4,400,150,265.51 --
Other gains or losses that fit the definition of non-recurring gains or losses:
□ Applicable Not applicable
The Company has no other gains or losses that fit the definition of non-recurring gains or losses.
Note for the definition of non-recurring gains and losses listed in the No. 1 Explanatory Announcement on Information
Disclosure for Companies Issuance Their Securities to the Public - Non-recurring gains and losses, as recurring gains
and losses.
□ Applicable Not applicable
2. Return on net assets and earnings per share
Earnings per share
Profit for the reporting
Weighted Average ROE Basic Earnings per Share Diluted Earnings per Share
period
(RMB/Share) (RMB/Share)
Net profit attributable to
common shareholders of 22.43% 2.31 2.31
the Company
Net profit attributable to
common shareholders of
the Company after 9.03% 0.93 0.93
deducting non-recurring
gains and losses
3. Differences in accounting data between domestic and overseas accounting standards
(1) Differences of net profits and net assets in the financial reports disclosed according to the
international accounting standards and Chinese accounting standards
□ Applicable Not applicable
(2) Differences of net profits and net assets in the financial reports disclosed according to the
overseas accounting standards and Chinese accounting standards
□ Applicable Not applicable
391
2023 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(3) Reasons for accounting data differences under domestic and overseas accounting
standards. For difference adjustment on the data already audited by an overseas audit
institution, name of the audit institution should be noted.
□ Applicable Not applicable
Zhejiang Dahua Technology Co., Ltd.
Legal representative: Fu Liquan
April 16, 2024
392
