Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Suzhou Dongshan Precision Manufacturing Co., Ltd.
Annual Report 2023
April 18, 2024
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Annual Report 2023
Section I Important Note, Table of Contents and Definitions
The Board of Directors, the Board of Supervisors, directors, supervisors and senior executives of
the Company hereby warrant that the information contained in this Annual Report is true, accurate
and complete and this Annual Report is free from any misrepresentation, misleading statement or
material omission, and agree to assume joint and several liabilities for this Annual Report.
YUAN Yonggang, Principal of the Company, CFO WANG Xu and Accounting Supervisor ZHU
Deguang hereby represent that the financial statements contained in this Annual Report are true,
accurate and complete.
All directors of the Company attended the meeting of the Board of Directors reviewing this
Report.
The Company has fully disclosed the potential risks associated with the concentration of
customers, rapid upgrading and iteration of industrial technologies, fluctuations in exchange rates,
etc. in this Report. Please see “XI. Prospects for Future Development of the Company” under
“Section III. Management’s Discussion and Analysis”.
According to the profit distribution proposal approved by the Board of Directors, the Company
will distribute a cash dividend of RMB 2.5 (inclusive of tax) per 10 shares to all shareholders on
the basis of 1,701,276,209 shares (excluding the treasury shares), and will not distribute any
bonus shares or transfer any capital reserve to the share capital.
Note:
This document is a translated version of the Chinese Annual Report 2023 ("2023 年年度报告"). In case of any
discrepancies, the Annual Report 2023 published in the Chinese version shall prevail. The full Chinese Annual
Report 2023 is available at www.cninfo.com.cn.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Table of Contents
Section I Important Note, Table of Contents and Definitions .............................................................. 2
Section II Company Profile and Financial Highlights ......................................................................... 8
Section III Management’s Discussion and Analysis.......................................................................... 12
Section IV Corporate Governance ..................................................................................................... 35
Section V Environmental and Social Responsibilities ....................................................................... 49
Section VI Significant Matters ........................................................................................................... 53
Section VII Changes in Shares and Shareholders .............................................................................. 62
Section VIII Preferred Shares ............................................................................................................ 67
Section IX Bonds ............................................................................................................................... 68
Section X Financial Report ................................................................................................................ 69
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
List of References
1. Financial statements signed and chopped by Mr. YUAN Yonggang, legal representative, Mr.
WANG Xu, CFO, and Mr. ZHU Deguang, Accounting Supervisor of the Company;
2. Originals of all documents of the Company publicly disclosed during the reporting period and
related announcements;
3. Original of the Annual Report 2023 stamped with the seal and signed by the legal
representative of the Company; and
4. Place keeping such documents for inspection: Securities Department of the Company at
Building 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road, Wuzhong District,
Suzhou.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Definitions
Term means Definition
Company, we or DSBJ means Suzhou Dongshan Precision Manufacturing Co., Ltd.
one of our three major business segments, including research and
Printed circuit board (PCB) means development (R&D), design, manufacturing and sale of FPCs, rigid
PCBs, rigid-flex PCBs and other products.
one of our three major business segments, including R&D, design,
Photoelectric display means manufacturing and sale of LED devices, touch panels, liquid crystal
display modules and other products.
one of our three major business segments, including design,
Precision manufacturing means manufacturing and sale of precision metal structural components and
assemblies and other products.
Suzhou Yongchuang Metal Science and Technology Co., Ltd., a
Yongchuang Tech means
wholly owned subsidiary of the Company.
Hong Kong Dongshan Precision Union Optoelectronic Co., Limited,
Hong Kong Dongshan means
a wholly owned subsidiary of the Company.
Dragon Electronix Holdings Inc., a wholly owned subsidiary of Hong
Dragon Holdings means
Kong Dongshan.
Multi-Fineline Electronix, Inc., a wholly owned subsidiary of Dragon
MFLEX means
Holdings.
MFLEX Suzhou means MFLEX Suzhou Co., Ltd., a wholly owned subsidiary of MFLEX.
MFLEX Yancheng means MFLEX Yancheng Co., Ltd., a wholly owned subsidiary of MFLEX.
Hong Kong Dongshan Holding Limited, a wholly owned subsidiary
Hong Kong Dongshan Holding means
of the Company.
Multek Group (Hong Kong) Limited, a wholly owned subsidiary of
Multek Group means
Hong Kong Dongshan Holding.
Multek Industries Limited, a wholly owned subsidiary of Multek
Multek Industries means
Group.
Multek Electronics Limited, a wholly owned subsidiary of Multek
Multek Electronics means
Group.
Multek Zhuhai means Multek Zhuhai Limited, a wholly owned subsidiary of Multek Group.
Multek China means Multek China Ltd., a wholly owned subsidiary of Multek Group.
Yancheng Dongshan Precision Manufacturing Co., Ltd., a wholly
Yancheng Dongshan means
owned subsidiary of the Company.
Mutto Optronics Technology Co., Ltd., a wholly owned subsidiary of
Mutto Optronics means
the Company
Suzhou RF Top Electronic Communication Co., Ltd., a controlled
RF Top Electronic means
subsidiary of the Company
Suzhou JDI means Suzhou JDI Electronics Inc.
Aranda Tooling, Inc., AutoTech Production Services, Inc. and
Aranda means
Autotech Production de Mexico S. de R. L. de C.V.
JDI means Japan Display Inc.
5G means the 5th generation mobile communication technology.
artificial intelligence, the simulation of human intelligence using
AI means
computer programs.
augmented reality, a technology that combines and integrates the
virtual world on screen with the real world, based on precise
AR means
calculation of position and angle of camera images and image
analysis technology.
virtual reality, a computer-simulated 3D virtual world with scenes
VR means
and objects that appear to be real.
Internet of Things, a system of interrelated computing devices,
IoT means mechanical and digital machines, that has a unique identifier (UID)
and is capable of transmitting data over the network.
printed circuit board, a finished product with insulated substrates and
conductors as materials, designed and made into printed circuits,
PCB means
printed components or a combination of conductive patterns
according to the pre-designed circuit schematic diagram.
FPC means flexible printed circuit.
light-emitting diode, a conductor diode that emits incoherent light
when current flows through it, and the recombination of electrons and
LED or LED device means
electron holes in the semiconductor produces radiation, for the
purpose of this Report, including LED particles, LED light bars, LED
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
backlight modules, LED lighting devices and other LED products.
sub-millimeter light emitting diode, an LED device with a grain size
Mini LED means
of about 50-200μm.
LCD module or LCD display module, formed by assembling LCD
display device with the relevant connectors, control, driver and other
LCM means
peripheral circuits, PCB circuit board, backlight source, structural
components and other components.
a device under the protection of transparent glass that detects touches
Touch panel means
using sensors, and processes and transmits the relevant information.
the Articles of Association of Suzhou Dongshan Precision
AOA means
Manufacturing Co., Ltd.
CSRC means the China Securities Regulatory Commission.
SZSE means the Shenzhen Stock Exchange.
Reporting period means the period from January 1, 2023 to December 31, 2023.
RMB and RMB0’000 means Renminbi and ten thousand Yuan respectively.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section II Company Profile and Financial Highlights
I. Company Profile
Stock short name DSBJ Stock code 002384
Original stock short name (if any) None
Stock exchange Shenzhen Stock Exchange
Chinese name 苏州东山精密制造股份有限公司
Chinese short name 东山精密
English name (if any) Suzhou Dongshan Precision Manufacturing Co., Ltd.
English short name (if any) DSBJ
Legal representative YUAN Yonggang
Registered address No. 88 Tangdong Road, Wuzhong Economic Development Zone, Suzhou
Postal code of the registered address 215124
History of changes in the registered Our registered address was at Shangwan Village, Dongshan, Wuzhong District,
address Suzhou, Jiangsu when we were reorganized from Suzhou Dongshan Sheet Metal Co.,
Ltd. into Suzhou Dongshan Precision Manufacturing Co., Ltd. in 2007, and was
changed into No. 88 Tangdong Road, Wuzhong Economic Development Zone, Suzhou
on December 27, 2019.
Building 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road,
Office address
Wuzhong District, Suzhou
Postal code of office address 215128
Company website www.dsbj.com
Email dsbj@dsbj.com
II. Contact Person and Contact Information
Board Secretary Securities Affairs Representative
Name MAO Xiaoyan ZHOU Hao
Building 12#, Yunhe Town Headquarters Industrial
Building 12#, Yunhe Town Headquarters Industrial Park, 99
Address Park, 99 East Taihu Road, Wuzhong District,
East Taihu Road, Wuzhong District, Suzhou, Jiangsu
Suzhou, Jiangsu
Telephone 0512-80190019 0512-80190019
Facsimile 0512-80190029 0512-80190029
Email maoxy@dsbj.com hao.zhou@dsbj.com
III. Media for Information Disclosure and Place for Keeping Annual Report
Website of the stock exchange disclosing the
www.szse.cn
Company’s annual report
Media and website disclosing the Company’s annual The Securities Times, the China Securities Journal, the Shanghai
report Securities News, the Securities Daily and www.cninfo.com.cn
Place for keeping the Company’s annual report Securities Department of the Company
IV. Changes in Registration Particulars
Organization code 91320500703719732P
Since our IPO and listing, we have strategically included PCB, photoelectric
display and other electronic businesses in our industrial mix. We focus on the
Changes in primary business since the listing of
R&D and manufacturing of technologically advanced core components for the
the Company (if any)
intelligently interconnected world, and the provision of comprehensive
intelligent interconnection solutions to customers throughout the world.
Changes in controlling shareholder (if any) None
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
V. Other Related Information
Accounting firm engaged by the Company:
Name of accounting firm Pan-China Certified Public Accountants LLP
31/F, Block B, China Resources Building, No. 1366 Qianjiang Road, Jianggan
Office address of accounting firm
District, Hangzhou, Zhejiang
Name of accountants signing this report ZHANG Yang and FU Zhenlong
Sponsor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period:
□ Applicable N/A
Financial advisor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting
period:
□ Applicable N/A
VI. Key Accounting Data and Financial Indicators
Did the Company need to retrospectively adjust or restate any accounting data of prior years?
Yes □No
Reason for retrospective adjustment or re-statement:
Changes in accounting policies
Y/Y %
2022 2021
change
2023
After
Before adjustment After adjustment Before adjustment After adjustment
adjustment
Operating revenue (RMB) 33,651,205,468.80 31,580,146,732.58 31,580,146,732.58 6.56% 31,793,147,908.12 31,793,147,908.12
Net profit attributable to
shareholders of the Listed 1,964,525,269.65 2,367,519,530.91 2,368,347,970.02 -17.05% 1,862,481,138.84 1,862,481,138.84
Company (RMB)
Net profit attributable to
shareholders of the Listed
Company after deduction of 1,614,534,226.22 2,125,754,423.71 2,126,582,862.82 -24.08% 1,576,650,669.18 1,576,650,669.18
non-recurring gain or loss
(RMB)
Net cash flow from
5,172,419,470.20 4,629,884,011.38 4,629,884,011.38 11.72% 3,209,544,484.21 3,209,544,484.21
operating activities (RMB)
Basic earnings per share
1.15 1.39 1.39 -17.27% 1.09 1.09
(RMB/share)
Diluted earnings per share
1.15 1.39 1.39 -17.27% 1.09 1.09
(RMB/share)
Weighted average return on
11.38% 15.33% 15.33% -3.95% 13.46% 13.46%
net assets
Y/Y %
December 31, 2022 December 31, 2021
change
December 31, 2023
After
Before adjustment After adjustment Before adjustment After adjustment
adjustment
Total assets (RMB) 44,371,719,028.28 40,531,361,181.17 40,802,606,803.61 8.75% 37,951,408,787.25 37,951,408,787.25
Net assets attributable to
shareholders of the Listed 18,143,026,745.54 16,359,429,480.45 16,378,630,871.35 10.77% 14,576,500,325.15 14,576,500,325.15
Company (RMB)
Reason for changes in accounting policies and correction of accounting errors:
Since January 1, 2023, we have applied the provisions contained in the Interpretation of the China Accounting Standards for
Business Enterprises (“CASBE”) No. 16 issued by the Ministry of Finance, regarding the “accounting treatment of deferred taxes
related to assets and liabilities arising from single transactions to which the initial recognition exemption does not apply”, and
adjusted the single transactions to which such provisions apply that occurred during the period from the beginning of the earliest
period in which we applied such provisions in the presentation of financial statements for the first time, till the date of initial
application of such provisions as follows: with respect to the taxable temporary difference and deductible temporary differences
arising from lease liabilities and right-of-use assets, provisions related to retirement obligations and corresponding assets
recognized in connection with the single transactions to which such provisions apply, at the beginning of the earliest period in
which we applied such provisions in the presentation of financial statements for the first time, the cumulative effect is treated as an
adjustment to the opening retained earnings and other related financial statement items for that period in accordance with such
provisions and the provisions of CASBE No. 18 “Income Tax”.
Whether the lower of the net profit before and after the deduction of non-recurring gain or loss in the past three accounting years
has been negative and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concern
is uncertain?
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
□ Yes No
Whether the lower of net profit before and after the deduction of non-recurring gain or loss is negative?
□ Yes No
VII. Differences in Accounting Data under the Chinese Accounting Standards for
Business Enterprises (the “CASBEs”) and Overseas Accounting Standards
1. Differences in net profit and net assets disclosed in the financial report prepared under the CASBEs
and the International Financial Reporting Standards (IFRS)
□ Applicable N/A
There was no difference in net profit and net assets disclosed in the financial report for the reporting period prepared under the
CASBEs and the IFRS.
2. Differences in net profit and net assets disclosed in the financial report prepared under the CASBEs
and overseas accounting standards
□ Applicable N/A
There was no difference in net profit and net assets disclosed in the financial report for the reporting period prepared under the
CASBEs and overseas accounting standards.
VIII. Key Financial Indicators by Quarter
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 6,511,602,610.15 7,155,485,214.91 8,833,566,429.51 11,150,551,214.23
Net profit attributable to shareholders of
471,650,134.12 352,898,518.86 508,139,505.69 631,837,110.98
the Listed Company
Net profit attributable to shareholders of
the Listed Company after deduction of 280,096,313.63 297,524,494.89 459,019,794.35 577,893,623.35
non-recurring gain or loss
Net cash flows from operating activities 1,799,383,005.75 814,517,830.27 1,089,030,694.96 1,469,487,939.22
Whether there’s any material difference between the financial metrics or aggregate amounts thereof set out above and the
corresponding financial metrics set out in any quarterly report or semi-annual report of the Company already disclosed?
□ Yes No
IX. Items and Amounts of Non-recurring Gains or Losses
Applicable □ N/A
In RMB
Items 2023 2022 2021 Remark
Gain or loss on disposal of non-current
assets (including allowance for impairment -26,367,874.21 -14,220,918.02 13,783,433.93
of assets that has been written off)
Government grants recognized in profit or
loss (excluding the government grants that
are closely related to the business of the
Company, conform to the applicable polices
249,253,139.50 317,926,133.80 268,965,326.25
of the country, are provided in accordance
with the established standards, and
continuously affect the Company’s profit or
loss)
Gain or loss on changes in fair value of
financial assets and financial liabilities held 14,283,973.00 -63,657,229.48 17,766,609.82
by non-financial entities, and gain or loss
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
on disposal of financial assets and financial
liabilities, except for effective hedges held
in the ordinary course of business
Fund occupation fees received from non-
financial entities and recorded in profit or 19,777,467.66
loss
Gain or loss on assets under entrusted
10,408,683.62 11,913,618.63
investment or management
Reversal of impairment loss on accounts
receivable assessed for impairment 1,250,000.00 9,500,583.33 22,451,468.46
individually
Investment income on
business combinations
Other non-operating revenues and expenses -398,583.47 3,073,832.45 -1,909,316.59
involving entities not
under common control
Other gain or loss within the meaning of
134,812,863.84 956,961.84 722,866.99
non-recurring gain or loss
Less: Effect on income tax 22,244,723.86 21,900,816.79 65,906,713.13
Effect on minority interests
597,751.37 322,123.55 1,734,292.36
(exclusive of tax)
Total 349,991,043.43 241,765,107.20 285,830,469.66 --
Other items of gain or loss within the meaning of non-recurring gains or losses:
□ Applicable N/A
We do not have any other item of gain or loss within the meaning of non-recurring gains or losses.
Classification of any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on Information
Disclosure by Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss:
□ Applicable N/A
We have not classified any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on Information
Disclosure by Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section III Management’s Discussion and Analysis
I. Situations of our industry during the Reporting Period
1. PCBs
Our printed circuit board (PCB) products include FPCs, which are important components for the PCB industry, and account for
over 20% of PCB products. As substrates carrying electronic components and key connectors, the manufacturing quality of PCBs
not only directly affects the reliability of electronic products, but also affects the overall competitiveness of system products, and
therefore are referred to as the “mother of electronic system products”.
PCBs are widely used in consumer electronics, new energy vehicles, communication equipment, industrial control, medical and
other fields throughout the world. Along with intensive research and development (R&D) and continuous technology upgrading,
PCB products are developing towards high density, small aperture and large capacity, and becoming lighter and thinner. The
functional innovations of smart phones, including the continuous growth of foldable phones, drive the rapid increase in the use of
FPCs per unit. Along with the application of artificial intelligence-generated content (AIGC) on mobile phones and computers, the
year 2024 is expected to become the first year for AI phones and AI PCs. The new smart eyeglass-type products launched by the
leading manufacturers will drive the maturity of the metaverse industry. In addition, the new energy vehicle industry also enters a
market-driven rapid growth period. According to a report released by the CITIC Securities Research Institute and the data
published by the China Association of Automobile Manufacturers, the total global sales volume of electric vehicles is expected to
reach 24.70 million units by 2025, representing a compounded annual growth rate (CAGR) of 32.20% between 2022 and 2025,
where the total sales volume of new energy vehicles in China will reach 15.60 million units by 2025; and by 2030, the total sales
volume of new energy vehicles is expected to reach 46.70 million units in the world, and 23.20 million units in China. The
growing demands of these industries are expected to start a new innovation cycle in the PCB industry.
2. Precision components
Our precision component products mainly are precision metal structural components, including heat dissipaters for new energy
vehicles, battery casings, domain control casings, body in white, battery structural components, as well as base station antennas,
filters and other structural components and assemblies for mobile communication. Our precision components are primarily used in
new energy vehicles, communication equipment, and other fields having strict requirements for the processing precision and
production quality of structural components. In recent years, driven by the demands for green and low-carbon transition, the global
new energy vehicle industry has been growing rapidly, bringing new development opportunities for manufacturers of precision
metal structural components.
3. Touch panel modules
Our touch panel modules are widely used in laptop, tablet, smart watch, on-board display and other fields, which develop along
with the development of the relevant downstream industries.
(1) Consumer electronics
As consumers have formed a habit of touch operation, all major laptop brands have launched laptops with touch panels. The
emergence of convertible laptops, 2 in 1 laptops and other innovative products will continuously increase the penetration of
laptops with touch panels, and further drive the market demands for touch panel module products.
(2) Automobile
On-board displays mainly include central control displays, dashboards, and emerging head-up displays (HUD), electronic rearview
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
mirrors, passenger/rear seat displays, which are key interactive hardware for automotive intelligentization. New energy vehicle
manufacturers actively strive to improve their brand competencies through intelligentization, driving the rapid development of on-
board display modules. According to the CITIC Securities Research Institute, the global on-board display market size is expected
to reach USD 13.84 billion by 2025, representing a CAGR of 19.96% between 2022 and 2025. With the advancement of new
energy vehicles, automotive intelligence is on the rise, leading to a trend of larger screens, multiple displays, and higher
resolutions in on-board displays.
4. LED display devices
Our LED device products mainly include small-pitch LEDs, Mini LEDs and other products packaged in granule form. Along with
the development of Mini LED technology, LED display technology is continuously expanding into emerging applications, with
products entering display screen, XR virtual shooting, outdoor naked-eye 3D, all-in-one conference equipment, mobile phones,
tablets and other fields. As leading terminal manufacturers continuously launch new Mini LED products, the Mini LED market
size will grow continuously.
II. Situations of our Primary Business during the Reporting Period
(I) During the reporting period, our primary business has not undergone any material change.
We focus on the R&D and manufacturing of core components for the intelligently interconnected world, and the provision of
comprehensive intelligent interconnection solutions to customers all over the world. We are primarily engaged in the R&D,
manufacturing and sale of PCBs, precision components, touch panel modules and LED display devices, which are widely used in
consumer electronics, new energy vehicles, communication equipment, industrial equipment, AI, medical appliances and other
fields.
(II) During the reporting period, our main business model has not undergone any material change.
We leverage our complete business chain to provide our customers with comprehensive, one-stop, industrial-leading services,
continuously increase the depth of cooperation and adhesion with our customers, and maintain long-term, stable cooperation with
premium customers taking the lead in the global consumer electronics, new energy vehicle and communication equipment
industries.
We manufacture main products based on market demands, and adopt the production model that determines production according
to sales, under which we develop production plans and deliver products taking into account the purchase orders placed by
customers, the product quantities demanded by the customers under such purchase orders, as well as our production capacity and
supply of raw materials.
(1) Our main products and their applications
Product
No. Product name Product features Application scenarios
category
FPCs are printed circuit boards made of flexible substrates,
composed of metal conductor foils, adhesives and insulating
base films, which are light, thin, bendable and suitable for
FPC
three-dimensional assembly, and optimal for electronic
Consumer electronics,
products with requirements for miniaturization, lightweight,
new energy vehicles,
and mobility.
communication
1 PCBs Rigid circuit boards are classified into single-layer boards,
equipment, industrial
double-layer boards, ordinary multi-layer boards, high-layer
equipment, AI, servers,
boards, HDI boards and ELIC boards. Ordinary multi-layer
medical devices, etc.
Rigid PCB boards typically have four or more layers; high-layer boards
typically have more than 18 layers; HDI boards refer to high-
density interconnect boards, which are capable of high-density
wiring; ELIC boards refer to Every Layer Interconnection
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
boards, which are high-end products in HDI boards. Generally,
the more layers a PCB has, the better it is for achieving fast
signal transmission and improving data processing
performance.
Rigid-flex PCBs combine FPCs and rigid PCBs through
lamination and other processes according to the relevant
process requirements, and have the features of both FPCs and
Rigid-flex PCB rigid PCBs. Rigid-flex PCBs can be used in products with
special requirements. As they have both flexible area and rigid
areas, they can save internal space, reduce volume, and greatly
improve the performance of the finished products.
Precision metal components are formed through die casting,
stamping, panel beating, precision machining and other New energy vehicles,
Precision Precision metal processes to meet the customers’ demand for precision, energy storage,
2
components products including functional structural components for new energy communication
vehicles, base station antennas and filters for mobile equipment, etc.
communication, etc.
Touch panel Touch panels and LCMs are important components for display
modules of smart phones, tablets and other consumer
Smart phones, tablets,
electronic products. We are able to provide customers with
LCM smart watches, etc.
touch panels, and LCMs as separate components, or complete
Touch panel
3 touch display modules.
modules
On-board display modules are used in display devices for Automotive
On-board vehicles. They are typically assemblies integrating display dashboards, rearview
display module screen and control circuits, and used to display various mirrors, central control
information and images inside vehicles. screens, etc.
Indoor and outdoor
LED display devices are products formed by packaging LED small-pitch, high-
chips and brackets with epoxy resin or organic silicon. Our definition displays, and
4 LED display devices
LED display devices include 0606, 0808, 1010, 1515, 2121, other professional
1921, 2525, 2727, and other models. display and commercial
fields
(2) Applications of our products in new energy vehicles
Cold plates (automatic HUDs, dashboards, and Body in white Automotive electronics
drive and central control) central control displays Seat framework (BMS, MCU, ECU, etc.)
Heat dissipation modules Passenger/rear seat assembly
entertainment displays,
and multi-connected
displays
Streaming electronic
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
rearview mirrors, and
armrest displays
Electric drive and Rigid PCBs and rigid-
electric control casings flex PCBs for central
Domain control casings control system/GPS
Rigid PCBs and rigid-
flex PCBs for
information &
entertainment systems/
Internet of Vehicles
Camera brackets and Casings and rigid PCBs Cell casings Charging station
assemblies for laser radars and Battery pack trays and framework and casing
Rigid PCBs and rigid- millimeter wave radars assemblies assemblies
flex PCBs for cameras Rigid PCBs for Rigid PCBs and CCS for
advanced driving battery packs
assistance system and
central computing unit
(3) Situations of our industry
In the field of PCB, according to the research data published by Prismark, in terms of sales revenues in 2023, we are ranked
second in the field of FPC and third in the field of PCB in the world. We have strong technology R&D, quality control, and smart
factory management capabilities in the PCB industry, and are able to provide customers with high-quality products and services.
Our major PCB customers are well-known global consumer electronics and new energy vehicle manufacturers, so we have a good
customer base, and strong competitiveness.
In the field of precision components, we are one of the largest specialized precision component suppliers in China, provide
structural components for new energy vehicles, communication equipment and other fields, and mainly serve well-known global
new energy vehicle and communication equipment manufacturers. We have strong competencies in the industry, and are one of the
few vendors able to provide the new energy vehicle manufacturers with PCBs (including FPCs), on-board displays, functional and
structural components, and other products and integrated solutions. In the future, we will leverage our advantages in the coverage
of multiple industry chains and the provision of integrated solutions to further improve customer adhesion.
In the field of touch panel modules and LED display devices, we are one of the largest touch panel modules and LED display
device manufacturers in China. Our successful acquisition of Suzhou JDI in January 2023 will further expand our on-board display
module business, and enhance our overall competence in the field of touch panel modules.
III. Core Competencies of DSBJ
(I) Advantage in customers: Premium domestic and foreign customer base
Our products find favor with top customers in different areas throughout the world and have a premium customer base, which has
a good demonstration effect, and will help us further enhance our capability to develop new customers, and acquire larger market
shares in the future competition. Our customers come from consumer electronics, new energy vehicles, communication equipment
and other industries. Such diversified customer base enables us to fend off the impact of seasonal and cyclical fluctuations of
different industries, and improve our core competencies while maintaining stable growth of business.
(II) Advantage in products: Wide range of products and integrated industry chain
In recent years, we have continuously improved our industrial and product mix through acquisitions and internal development,
broken development bottlenecks, and introduced superior businesses to build up new growth drivers. At present, our product
offerings cover three business segments, namely PCB, photoelectric display and precision manufacturing. We are able to provide
consumer electronics and new energy vehicle manufacturers with a variety of basic and core components for intelligent
interconnection. In the field of PCB, we have grown into a leading company in the industry. We actively leverage the synergistic
effect of all business segments in R&D, technology, supply chain, products, marketing and other areas, through the integration of
15
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
internal resources and coordinated development, gradually achieve the synergy advantage of a vertically integrated industry chain,
and strive to provide comprehensive, one-stop and technologically advanced integrated product solutions to our customers, and
satisfy their customization requirements to the maximum extent.
(III) Advantage in technology: Stick to the principle that technological innovation capability is the primary production factor
We attach great importance to technological innovation in our business development, and drive our development through
innovation. Through participation in the preliminary development projects of the industry-leading customers, we keep in step with
the development of cutting-edging technologies, and have built a complete open R&D system and efficient R&D mechanisms, and
a global R&D team with outstanding professional level, rich industrial experience and strong innovation capabilities. Through
continuous funding for R&D of new materials, new technologies and new production processes, we have vigorously explored
frontier production technologies for core components in the field of intelligent interconnection, and laid solid foundations for
serving emerging businesses, such as AR/VR, IoT, Mini LED and new energy vehicles. While improving product technologies, we
attach great importance to the innovation and upgrading of production technologies, and have gained certain effects in the
integrated development of informatization and industrialization. By promoting the integrated development of informatization and
industrialization, we have vigorously implemented intelligent manufacturing and built smart factories.
(IV) Advantage in management: Advanced concept, complete system and efficient execution
We advocate the corporate spirit of “openness, inclusion and pragmatism”, stick to the management principle of “overall planning,
the delegation of powers in business operation, support by the platform and centralized supervision”, give full play to the initiative
and creativity of all organizations, and have built a scientific and efficient management system. Our management team has
practical experience in the management of the advanced manufacturing industry, has wide global visions, is able to make accurate
strategic judgments and decisions on the trends of industry and opportunities for development, and has strong cohesion and
executive ability. We are practical and keep forging ahead in day-to-day management and operation, make periodic benchmarking
analyses to compare our performance against historic data, budget targets and the results of outstanding peers, and effectively
improve our operational quality and efficiency by setting examples and objectives, identifying breakthrough points, focusing on
implementation and reviewing what has been done, to lay solid foundations for our sustainable high-quality development.
(V) Advantage in scale: Promote development in reliance on advantage in scale and increase benefits based on synergistic effect
Our customers are well-known domestic and international hi-tech companies that have high purchase quantities, strict
requirements for the delivery of products, and high requirements for the scale of production and production efficiency of suppliers.
Through years of development and accumulation, we have grown into a supplier of core components for intelligent
interconnection with relatively strong overall capabilities in China. Our large scale of production can satisfy the purchase demands
of major downstream customers, creating a big advantage in scale. Our advantage in scale provides us with strong bargaining
power in the purchase of raw materials, resulting in the reduction of the unit production costs. On the other hand, through effective
integration of internal resources, we can reduce operating costs, thereby increasing our superiority over our competitors, further
consolidating and enhancing our position in the industry, and improving our core competencies.
(VI) Advantage in internationalization: Promote the establishment of a “dual circulation” development pattern
We closely follow the national development strategies, actively take part in global economic competitions, and continuously
enhance the integration of high-quality resources of the industry. After the completion of two overseas acquisitions, we have
successfully entered the PCB industry that has broader prospects for development, optimized our industrial structure, and laid solid
foundations for our high-quality development. We have achieved growth in both scale of operation and results of operations
through such lead-forward development. In recent years, we have established operating entities with different functions in North
America, Europe, Southeast Asia and other countries and regions. In 2022, in order to implement our new-round development
strategy and grasp the development opportunities brought about by the new energy vehicle industry, we established the “two-
16
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
wheel drive” strategy, and decided to focus our efforts on the two core fields, namely consumer electronics and new energy
vehicles. In order to actively respond to the demands of customers, we have accelerated the development of overseas production
bases. In 2023, our Mexico production base successfully went into production, and our Thai production base commenced
construction. These actions will further improve our global operating capabilities, promote the establishment of a “dual circulation”
development pattern, and enable us to actively cope with the complicated competition environment.
IV. Analysis of Primary business
1. Overview
During the reporting period, under the leadership of our Board of Directors, with joint efforts of our management and all
employees, we further focused on the “two-wheel drive” strategy, and achieved stable growth of our core business. In 2023, we
overcame a variety of unfavorable factors, such as imbalance between supply and demand in the photoelectric display market,
declining demands in the communication equipment industry, and adjustment of supply chain strategies by certain overseas
customers, and earned a total operating revenue of RMB33.651 billion, an increase of 6.56% compared to the previous year; of
which, the sales revenue of the PCB segment was RMB23.261 billion, an increase of 6.61% compared to the previous year, and
the sales revenue of the new energy vehicle segment increased 168.39% compared to the previous year, showing a strong
momentum of growth. In 2023, our LED segment recorded a temporary loss due to the production capacity utilization ratio and
selling prices of LED and other photoelectric display devices and modules falling short of expectations. However, in reliance on
the stable operating revenue and profit contributed by our core business, and the strong resilience and competencies demonstrated
by our PCB business in the context of a sluggish consumer electronics market, and by further promoting integrated development of
informatization and industrialization, we still earned a net profit of RMB1.965 billion attributable to the shareholders of the Listed
Company, representing a decrease of 17.05% compared to the previous year. During the reporting period, we continued to
implement the prudent financial strategy, and further enhanced management of net working capital, and recorded a cash flow of
RMB5.172 billion from operating activities, representing an increase of 11.72% compared to the previous year. Below is a
summary of our main business activities in 2023:
(1) Focus on core fields and products, and further enhance business cooperation with major customers of the industry
In the field of PCB, we enhanced our efforts to improve customer satisfaction, increased our funding for R&D and technology
innovation, actively promoted integrated development of informatization and industrialization and construction of smart factories,
and vigorously improved our core competencies, resulting in a growth of both operating revenue and profit in the context of a
sluggish market. On the other hand, we accelerated the development and deployment of the component production lines for new
energy vehicles, and made steady progress in the investment in new production bases, validation by new customers, and mass
production of new products, among others. In addition, through optimizing the internal allocation of resources, we continuously
enhanced internal integration and coordination, and taking into account the requirements of the new energy vehicle industry for
products with high quality and high reliability, and the requirements of the consumer electronics industry for rapid response and
rapid iteration, fully leveraged our advantages and capabilities, further enhanced business cooperation with major customers of the
industry, and actively satisfied customer demands. In 2023, we advanced our global deployment through acquisition and self-
construction. A number of our overseas production bases have commenced construction or gone into production, which will
provide a guarantee of production capacity for our strategy to focus on core fields and products.
(2) Continuously optimize the organization structure and talent training system, and create a sound corporate culture
Implementation of strategies requires the support of organization, while building of organizational capability is the key to the
implementation of strategies. During the reporting period, we further adjusted and optimized the organization structure of our
headquarters and business units, and accelerated the close-down, suspension, merger, transfer or otherwise adjustment of the
17
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
production bases managed by certain business units, to improve our organizational efficiency in an all-round way. In addition, we
recruited research, applied, professional and technical talents from all over the world, enhanced the training of young and reserve
talents, and continuously improved the density and quality of talents. We further optimized our talent pipeline training and
employee development plans, employee incentives and other related management mechanisms, and used our digital human
resources platform system to build a more flexible organization system, and provide organizational and personnel guarantees for
the fulfillment of our strategic objectives. We also intensively integrated officers’ leading roles, engineer culture, employee care
and other cultures with our corporate culture of openness, inclusion, pragmatism and enterprising, to create a sound working
environment.
(3) Improve the management system and tools, and increase the management efficiency
Our headquarters continuously improved our management system, maintained a balance between delegation of powers and
supervision, between platform support and collaboration, and between management and control on the one hand and enabling on
the other hand, further enhanced system governance and data governance, refined a number of normative documents, increased our
management efficiency in an all-round way, and built a management ecosystem with defined roles and duties, reasonable division
of work and efficient collaboration. In addition, we gave full play to the digital management tools, to provide efficient and
accurate management decision-making in our business management. In 2023, we integrated the ERP management system of all
subsidiaries, and built a functional information management platform for the financial, human resources, procurement and other
functional departments of the headquarters that connects with the headquarters and all business units. The business units built or
upgraded their production management system, to ensure services, supervision and alert covering the entire production process.
We also introduced AI technologies on a trial basis, which produced good effects in defect detection, behavior management,
intelligent files and advanced planning and scheduling (APS), and realized data analysis, risk alert and resources coordination
covering the entire process from the warehousing of raw materials to the dispatch of products, thereby ensuring the delivery of
high-quality products on schedule.
(4) Continue to adhere to the moderate financial strategy, to support the fulfillment of our strategic objectives
We adhered to the “cash-first” strategy. During the reporting period, our net cash flows from operating activities reached
RMB5.172 billion, hitting a record high, which provided a solid capital guarantee for the optimization of our industrial
deployment. In addition, by reference to the target capital structure conforming to our current situations, we further reduced
financial leverage, lowered the debt to asset ratio to a certain extent, and significantly improved the debt structure, by increasing
the proportion of long-term borrowings (including those due within one year) to the total interest-bearing liabilities to over 60%
for the first time in our history, indicating that we had a more reasonable debt maturity structure. In addition, we further enhanced
the rolling budget management, significantly increased the predictability of business operations, and gradually established
comprehensive and systemic budget-related performance appraisal mechanisms. In the risk management related to foreign
exchange rates and commodities, we adhered to the risk neutrality principle, and hedged market fluctuation risks using effective
hedging tools. Finally, we vigorously explored a financial management system in line with our global deployment, and
continuously enhanced the training and awareness of compliance of our overseas officers, to ensure that our financial risks were
under control.
2. Revenue and costs
(1) Components of operating revenue
In RMB
2023 2022
Y/Y %
% of operating % of operating change
Amount Amount
revenue revenue
Total operating revenue 33,651,205,468.80 100% 31,580,146,732.58 100% 6.56%
By segment
Computer, communication and other 33,475,973,831.47 99.48% 31,450,821,150.93 99.59% 6.44%
18
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
electronics
Others 175,231,637.33 0.52% 129,325,581.65 0.41% 35.50%
By product
PCBs 23,261,396,022.09 69.13% 21,819,200,095.46 69.09% 6.61%
LED display devices 1,190,456,597.34 3.54% 1,682,433,257.88 5.33% -29.24%
Touch panels and LCMs 4,861,904,092.14 14.45% 3,402,832,979.40 10.78% 42.88%
Precision components 4,162,217,119.90 12.37% 4,546,354,818.19 14.40% -8.45%
Other businesses 175,231,637.33 0.52% 129,325,581.65 0.41% 35.50%
By region
Domestic market 5,649,268,947.33 16.79% 5,622,124,424.21 17.80% 0.48%
Overseas market 28,001,936,521.47 83.21% 25,958,022,308.37 82.20% 7.87%
By sales model
Direct sales 33,651,205,468.80 100.00% 31,580,146,732.58 100.00% 6.56%
Note: In 2023, our revenue from the new energy vehicle business was about RMB6.361 billion, an increase of 168.39% compared
to the previous year.
(2) Segments, products, regions or sales models representing more than 10% of operating revenue or profit
Applicable □ N/A
In RMB
Y/Y % Y/Y % Y/Y %
Gross change in change in change
Operating revenue Operating cost
margin operating operating in gross
revenue cost margin
By segment
Computer, communication and
33,475,973,831.47 28,425,160,342.65 15.09% 6.44% 9.49% -2.37%
other electronics
By product
PCBs 23,261,396,022.09 18,425,150,842.03 20.79% 6.61% 6.90% -0.22%
LED display devices 1,190,456,597.34 1,507,938,317.36 -26.67% -29.24% -1.71% -35.48%
Touch panels and LCMs 4,861,904,092.14 4,775,718,915.14 1.77% 42.88% 42.20% 0.47%
Precision components 4,162,217,119.90 3,716,352,268.12 10.71% -8.45% -3.04% -4.98%
By region
Domestic market 5,649,268,947.33 5,395,391,756.69 4.49% 0.48% 9.62% -7.96%
Overseas market 28,001,936,521.47 23,146,249,286.05 17.34% 7.87% 9.70% -1.38%
By sales model
Direct sales 33,651,205,468.80 28,541,641,042.74 15.18% 6.56% 9.69% -2.42%
1. The sales revenue of LED display devices decreased by 29.24% compared to the previous year, primarily due to the declining
demands on the LED display market. The gross margin of LED display devices decreased by 35.48% compared to the previous
year, primarily due to declining market demands, decrease in output, inadequate production capacity utilization ratio, rising unit
fixed costs, and declining unit selling prices caused by fiercer market competition in 2023.
2. The gross margin of sales on the domestic market decreased by 7.96% compared to the previous year, primarily due to a
decrease in the gross margin of LED display devices.
In case of any adjustment to the statistic scale for primary business data, the primary business data of the most recent reporting
period as adjusted according to the statistic scale applied at the end of the reporting period:
□ Applicable N/A
(3) Whether the Company’s revenue from the sale of tangible goods is higher than the revenue from labor services?
Yes □ No
Segment Item Unit 2023 2022 Y/Y % change
Sales volume m2 3,978,943.86 3,480,443.01 14.32%
PCBs
Output m2 3,952,946.76 3,478,056.19 13.65%
19
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Inventories m2 108,882.00 134,879.10 -19.27%
Sales volume PC 11,373,591.00 10,577,698.00 7.52%
LCMs Output PC 11,318,183.00 10,566,760.00 7.11%
Inventories PC 3,820,609.00 3,876,017.00 -1.43%
Sales volume PC 139,815,431,644.00 174,462,497,331.00 -19.86%
LED display devices Output PC 133,986,681,041.00 168,183,812,209.00 -20.33%
Inventories PC 19,701,743,832.00 25,530,494,435.00 -22.83%
Sales volume PC 106,339,767.00 100,447,048.00 5.87%
Precision components Output PC 106,794,715.00 118,717,426.00 -10.04%
Inventories PC 30,807,396.00 30,352,448.00 1.50%
Analysis of changes in the relevant data over 30% compared to the previous year:
Applicable □ N/A
1. The sales volume and output of LED display devices decreased by 19.86% and 20.33% respectively compared to the previous
year, primarily due to the declining demands on the small-pitch LED display market. The inventories of LED display devices
decreased by 22.83% compared to the previous year, primarily due to an increase in inventory turnover rate resulting from our
improvement of inventory management.
(4) Performance of material sales contracts and material purchase contracts by the Company as of the end of the
reporting period
□ Applicable N/A
(5) Components of operating costs
In RMB
2023 2022
Category of
Item % of % of Y/Y %
products Amount operating Amount operating change
costs costs
Computer, Direct material costs 21,024,091,679.66 73.96% 19,293,122,426.37 74.15% 8.97%
communication Direct labor costs 1,967,953,288.58 6.92% 1,784,170,333.27 6.86% 10.30%
and other Manufacturing and
electronics 5,433,115,374.42 19.11% 4,943,386,573.60 19.00% 9.91%
other costs
(6) Changes in the scope of consolidation during the reporting period
Yes □ No
1. Subsidiaries newly included in the scope of consolidation
Method of Date of Percentage of
Company name acquisition of acquisition of Registered capital capital
shares shares contribution
Aranda Acquisition February 1, 2023 100.00%
Suzhou JDI Electronics Inc. Acquisition February 1, 2023 RMB1,043,692,731 100.00%
Suzhou Dongdi Holding Limited Established February 13, 2023 RMB10,000,000 100.00%
Hong Kong Dongdi Holding Limited Established July 28, 2023 HKD10,000 100.00%
Multek Zhuhai Enterprise Management Co.,
Established April 27, 2023 RMB1,000,000 100.00%
LTD
Multi-Fineline Electronics (Thailand) Co., Ltd. Established June 30, 2023 USD50,000,000 100.00%
2. Subsidiaries removed from the scope of consolidation
Method of Net assets at the Net profit from
Date of disposal of
Company name disposal of date of disposal January 1, 2023
shares
shares (RMB) to the date of
20
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
disposal (RMB)
Zhuhai Dii Information Technology Consulting
Deregistration September 7, 2023
Co., Ltd.
Hainan Chengjia Technology Consulting Co.,
Deregistration November 1, 2023 -206,048.28 12,320,966.42
Ltd.
Suzhou Yuanshi Electronic Technology Co.,
Deregistration August 4, 2023 -12,592,979.40 -468,295.88
Ltd.
DSBJ Norway AS Deregistration December 27, 2023 345,205.52 18,211,422.23
(7) Material changes or adjustments in respect of business, products or services of the Company during the reporting
period
□ Applicable N/A
(8) Major customers and suppliers
Major customers of the Company:
Aggregate sales revenue from top 5 customers (RMB) 24,734,549,479.35
Proportion of aggregate sales revenue from top 5 customers to
73.50%
annual sales revenue
Proportion of aggregate sales revenue from related parties among
0.00%
top 5 customers to annual sales revenue
Particulars of top 5 customers:
No. Name of customer Sales revenue (RMB) % of annual sales revenue
1 Customer 1 18,781,202,461.72 55.81%
2 Customer 2 2,521,127,522.26 7.49%
3 Customer 3 1,514,071,372.55 4.50%
4 Customer 4 1,166,354,975.61 3.47%
5 Customer 5 751,793,147.21 2.23%
Total -- 24,734,549,479.35 73.50%
Other information of major customers:
□ Applicable N/A
Major suppliers of the Company:
Aggregate purchase amount from top 5 suppliers (RMB) 5,975,433,472.01
Proportion of aggregate purchase amount from top 5 suppliers to
25.82%
annual purchase cost
Proportion of aggregate purchase amount from related parties
0.00%
among top 5 suppliers to annual purchase cost
Particulars of top 5 suppliers:
No Name of supplier Purchase amount (RMB) % of annual purchase cost
1 Supplier 1 2,034,482,529.18 8.79%
2 Supplier 2 1,162,381,570.97 5.02%
3 Supplier 3 1,048,230,389.79 4.53%
4 Supplier 4 871,822,590.04 3.77%
5 Supplier 5 858,516,392.03 3.71%
Total -- 5,975,433,472.01 25.82%
3. Expenses
In RMB
2023 2022 Y/Y % change Reason of material changes
Selling expenses 362,094,101.76 352,993,453.50 2.58%
Administrative expenses 957,323,918.86 815,662,486.89 17.37%
21
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Financial expenses 189,131,736.69 199,633,104.49 -5.26%
R&D expenses 1,161,190,274.48 940,085,451.98 23.52%
4. R&D expenses
Applicable □ N/A
Description of major R&D Expected effect on the future
Purpose Progress
project development of the Company
Development of the new-type The technology and market
To improve the efficiency of the press-fit
press-fit technology for super- Completed competitiveness of the relevant
process for multi-layer boards and overlay films.
efficient FPCs products will be improved.
Optimization of the drying To optimize the distribution of air flow and The technology and market
system on the development temperature at the drying section of the Completed competitiveness of the relevant
line and etching line manufacturing process based on simulation. products will be improved.
The technology and market
Research and development of To develop fluorine materials, and build
Completed competitiveness of the relevant
a new-type fluoro resin FPC fluororesin FPC processing capability.
products will be improved.
To improve high-speed product design The technology and market
Simulation and design of
capability and efficiency, and reach the leading Completed competitiveness of the relevant
56/112 Gbps transmission line
level of the industry products will be improved.
To narrow the frames of LCMs and connect The technology and market
Development of LCM three-
LCMs with the enclosures more closely, to Completed competitiveness of the relevant
side sealing technology
produce a better sealing effect. products will be improved.
To optimize the structure of the energy storage The technology and market
Optimization of the structure
cabinet, improve the manufacturability, and Completed competitiveness of the relevant
of the energy storage cabinet
reduce costs. products will be improved.
Development of the process
technology for producing The technology and market
To provide the customers with buried resistance
buried resistance using thin Completed competitiveness of the relevant
solutions.
film buried resistance foil products will be improved.
TCR
Research and development of The technology and market
To provide the customers with outdoor charging
21KW outdoor charging Completed competitiveness of the relevant
station solutions.
stations products will be improved.
Reduction of the length of The technology and market
To simplify the process by eliminating the back
through-hole back drilling In progress competitiveness of the relevant
drilling step.
stubs products will be improved.
The technology and market
Embedded vertical To provide the customers with buried
In progress competitiveness of the relevant
components components solutions.
products will be improved.
Particulars of R&D personnel:
2023 2022 Y/Y % change
Number of R&D personnel 4,148 3,944 5.17%
Ratio of R&D personnel to the
18.39% 18.76% -0.37%
total number of employees
Education background of R&D personnel
Undergraduate 1,639 1,856 -11.69%
Master 84 55 52.73%
Age of R&D personnel
Below 30 1,085 1,950 -44.36%
30-40 1,996 552 261.59%
Particulars of R&D expenses:
2023 2022 Y/Y % change
Amount of R&D expenses (RMB) 1,161,190,274.48 940,085,451.98 23.52%
Ratio of R&D expenses to operating
3.45% 2.98% 0.47%
revenue
Amount of R&D expenses capitalized 0.00 0.00
22
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(RMB)
Ratio of capitalized R&D expenses to
0.00% 0.00%
total R&D expenses
5. Cash flows
In RMB
Item 2023 2022 Y/Y % change
Cash provided by operating activities 34,941,233,653.10 32,948,819,791.38 6.05%
Cash used in operating activities 29,768,814,182.90 28,318,935,780.00 5.12%
Net cash flows from operating activities 5,172,419,470.20 4,629,884,011.38 11.72%
Cash provided by investing activities 1,064,753,668.60 679,476,885.00 56.70%
Cash used in investing activities 5,903,655,994.11 4,438,468,040.34 33.01%
Net cash flows from investing activities -4,838,902,325.51 -3,758,991,155.34 28.73%
Cash provided by financing activities 14,694,460,630.69 12,967,955,013.11 13.31%
Cash used in financing activities 14,937,008,144.70 12,464,334,940.01 19.84%
Net cash flows from financing activities -242,547,514.01 503,620,073.10 -148.16%
Net increase in cash and cash equivalents 187,460,195.61 1,517,725,695.91 -87.65%
1. The cash provided by investing activities increased by 56.70% compared to the previous year, primarily due to an increase in
the wealth management products becoming mature during the reporting period and corresponding interest received.
2. The net cash flows from financing activities decreased by 148.16% compared to the previous year, primarily due to the steady
growth of net cash provided by operating activities and a decrease in net cash provided by bank loans during the reporting period.
3. The net increase in cash and cash equivalents decreased by 87.65% compared to the previous year, primarily due to a significant
increase in the capital expenditures on additional PCB production capacity and new energy business compared to the previous year,
and increase in cash used in investing activities in connection with the acquisition of Suzhou JDI and Aranda for the purpose of
improving our industrial deployment.
V. Analysis of Non-primary Business
□ Applicable N/A
VI. Analysis of Assets and Liabilities
1. Material changes in the components of assets
In RMB
December 31, 2023 January 1, 2023
Y/Y %
% of total % of total Reason for significant change
Amount Amount change
assets assets
Cash and bank
7,190,036,231.06 16.20% 7,131,202,817.72 17.48% -1.28%
balances
Accounts receivable 7,713,164,772.05 17.38% 7,006,411,466.74 17.17% 0.21%
Inventories 6,293,879,276.54 14.18% 6,165,738,409.09 15.11% -0.93%
Investment properties 1,038,840.26 0.00% 1,296,551.42 0.00% 0.00%
Long-term equity
155,406,879.89 0.35% 139,767,215.41 0.34% 0.01%
investment
Fixed assets 12,415,251,689.80 27.98% 10,673,700,468.47 26.16% 1.82%
Construction in
1,842,525,188.54 4.15% 1,813,183,815.67 4.44% -0.29%
progress
Right-of-use assets 1,252,668,050.83 2.82% 951,068,254.01 2.33% 0.49%
Short-term Primarily due to our efforts to optimize the debt structure
5,156,100,217.01 11.62% 7,794,409,944.68 19.10% -7.48%
borrowings in order to mitigate debt risks.
Contract liabilities 28,982,676.07 0.07% 26,193,456.12 0.06% 0.01%
Primarily due to additional loans obtained for our
Long-term
4,706,280,338.76 10.61% 3,197,821,643.49 7.84% 2.77% acquisition, fixed assets and other projects, and our
borrowings
efforts to optimize the debt maturity structure.
23
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Lease liabilities 1,842,799,193.80 4.15% 1,647,319,046.20 4.04% 0.11%
Analysis of the high proportion of overseas assets:
Applicable □ N/A
In RMB
Whether it
Proportion involves
Controls for
Method of Mode of of overseas risk of
Assets Amount Location guaranteeing the Income
acquisition operation assets to material
security of assets
net assets impairment
loss
Hong Its manufacturing
R&D and
Dragon Holdings Established 25,712,962,545.42 Kong, entity is located in 669,556,434.20 35.93% No
sales
China China
Hong Its manufacturing
R&D and
Multek Group Established 4,158,208.897.11 Kong, entity is located in 95,917.983.30 11.43% No
sales
China China
2. Assets and liabilities at fair value
Applicable □ N/A
In RMB
Impair
ment
Aggregate loss
Gain or loss on Amount acquired
Opening changes in fair recogni Amount sold in
Items changes in fair in the current Other changes Closing balance
balance value recorded in zed in the current period
value period
equity the
current
period
Financial assets
1. Financial assets held for
trading (excluding derivative 359,139,037.24 3,944,665.68 -508,364,940.64 720,272,169.56 527,548,893.23 47,442,038.61
financial assets)
2. Derivative financial assets 159,865,619.03 -9,375,883.80 -131,384,014.73 373,366,920.00 365,552,455.00 26,920,185.50
4. Investment in other equity
56,779,147.66 15,000,000.00 71,779,147.66
instruments
Subtotal of financial assets 575,783,803.93 -5,431,218.12 -631,934,490.37 735,272,169.56 527,548,893.23 146,141,371.77
Total 575,783,803.93 -5,431,218.12 -631,934,490.37 735,272,169.56 527,548,893.23 146,141,371.77
Financial liabilities 91,517,116.89 4,309,561.55 8,553,306.86 70,827,000.00 71,032,909.07 104,174,076.23
3. Encumbrances on assets as of the end of the reporting period
Closing carrying value
Items Type of encumbrance Reason for restriction
(RMB)
Cash and bank balances 1,315,351,783.39 Pledge Security deposit for notes, etc.
Notes receivable 130,000,000.00 Pledge Discounted and not mature
Accounts receivable 96,168,092.66 Pledge Factoring
Accounts receivable financing 172,685,965.02 Pledge Pledge of notes
Security for loans, sales and
Fixed assets 418,641,701.59 Mortgage
leaseback
Right-of-use assets 1,252,668,050.83 Mortgage Finance lease
Total 3,385,515,593.49
VII. Analysis of Investments
1. Overview
Applicable □ N/A
Amount of investment in 2023 (RMB) Amount of investment in 2022 (RMB) Y/Y % change
2,016,314,450.00 3,151,530,715.00 -36.02%
24
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
2. Major equity investments acquired during the reporting period
□ Applicable N/A
3. Major non-equity investments that have not yet been completed in the current period
□ Applicable N/A
4. Investment in financial assets
(1) Investment in securities
□ Applicable N/A
We have not invested in any securities during the reporting period.
(2) Investment in derivatives
Applicable □ N/A
1) Investment in derivatives for hedging purposes during the reporting period
Applicable □ N/A
In RMB0’000
Aggregate
Type of Initial Gain or loss Amount Amount sold % of net assets
Opening changes in fair Closing
investment in investment on changes in acquired in the in the current at the end of the
balance value recorded in balance
derivatives amount fair value current period period reporting period
equity
Commodity
187.3 7,604.46 1,554.25 0 37,336.69 36,555.25 9,940.16 0.55%
futures
Total 187.3 7,604.46 1,554.25 0 37,336.69 36,555.25 9,940.16 0.55%
Hedge
accounting
policies and
principles
adopted for the
reporting period
and significant None
changes in such
policies and
principles
compared to the
previous
reporting period
Actual profit or
loss for the The loss on commodity futures transactions recorded in profit or loss was RMB15,542,500.
reporting period
We conduct hedging transactions for the purpose of leveraging the hedging function of futures, mitigating the effect of market price
Effect of
fluctuations of raw materials and products on our production and operating costs, and prices of our main products, enhancing our overall
hedging
risk resistance capacity, and improving our financial soundness.
Source of funds
for investment Self-owned funds
in derivatives
Analysis of
risks associated
with the
derivatives held
in the current
period Refer to the Announcement of Commodity Futures Hedging Transactions disclosed by us for the relevant risk analysis and controls.
(including
without
limitation
market risk,
liquidity risk,
25
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
credit risk,
operational risk
and legal risk)
and related risk
control
measures
Changes in the
market price or
fair value of the
derivatives held
in the current
period (in the
analysis of the
We are mainly engaged in hedging transactions with mainstream products on major domestic futures markets. The derivatives traded by
fair value of
us have a transparent and active market, and their transaction prices and settlement prices can fully reflect their fair value.
derivatives, the
specific
approaches,
assumptions
and parameters
used shall be
disclosed)
Litigations
involved (if None
applicable)
Disclosure date
of the
announcement
of the board of
directors December 31, 2022
approving the
investment in
derivatives (if
any)
Special opinion
issued by the
independent
The hedging transactions conducted by the Company with commodity futures can leverage the hedging function of futures, mitigate the
directors
effect of market price fluctuations of raw materials and products on the production and operating costs and the prices of main products
regarding the
of the Company, enhance its overall risk resistance capacity and improve its financial soundness. The relevant transactions have been
Company’s
considered and decided in accordance with the provisions of the applicable laws, regulations and normative documents and the relevant
investment in
policies of the Company, and will not prejudice the interests of the Company and its shareholders. Therefore, we consent to the conduct
derivatives and
of the hedging transactions by the Company with commodity futures.
related risk
control
measures
5. Use of offering proceeds
Applicable □ N/A
(1) Summary of use of offering proceeds
Applicable □ N/A
In RMB0’000
Total Total
Aggregate
Total amount of Percentage amount of
amount of
amount of Aggregate offering of offering Total Purpose and offering
offering
Total offering amount of proceeds the proceeds the amount of whereabouts proceeds
Year of Method of Net offering proceeds the
offering proceeds offering purpose of purpose of unused of unused that has
offering offering proceeds purpose of
proceeds used in the proceeds which was which has offering offering remained
which has
current already used changed in been proceeds proceeds unused for
been
period the current changed more than
changed
period two years
To be
Private invested in
2020 289,225.58 286,395.39 49,252.37 261,135.36 0 61,565.47 21.29% 26,730.68 0
placement the relevant
projects
Total -- 289,225.58 286,395.39 49,252.37 261,135.36 0 61,565.47 21.29% 26,730.68 -- 0
Description of the overall use of offering proceeds
With the approval of the CSRC under the Reply on Approval of Private Placement of Shares by Suzhou Dongshan Precision Manufacturing
Co., Ltd. (Zheng Jian Xu Ke [2020] No. 980), we privately offered 103,294,850 RMB-denominated ordinary A-shares at the offer price of
RMB28.00 per share to specified investors through the lead underwriter Tianfeng Securities Co., Ltd., and raised RMB2,892,255,800 in total,
and after deduction of the underwriter’s fee and sponsor’s fee totaling RMB22,169,800 (exclusive of tax), the balance of the offering
proceeds, RMB2868755800, was remitted to our supervisory account of offering proceeds by Tianfeng Securities Co., Ltd. on July 13,
26
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
2020. After the deduction of the accountant’s fee, attorney’s fee, legal information disclosure fee and other external costs directly relating to
the offering of equity securities, totaling RMB6,132,100 (exclusive of tax), the amount of net offering proceeds was RMB2863953900
(exclusive of tax). Pan-China Certified Public Accountants LLP verified the receipt of such offering proceeds, and issued the Capital
Verification Report (PCCPA Capital Verification [2020] No. 5-9).
(2) Committed investment projects using offering proceeds
Applicable □ N/A
In RMB0’000
Aggregate Whether
Progress of
Whether the amount there’s any
Committed investment Date that Whether the
project has Total Total Amount already Income significant
investment as of the the project project has
been committed investment invested in invested as earned in change in
project and end of the is ready for produced
changed or investment amount as the current of the end the current the
use of over- reporting its intended the desired
partially amount adjusted (1) period of the period feasibility of
raised funds period (3) use result
changed reporting the project
=(2)/(1)
period (2)
Committed investment project
400,000 m2
fine line
FPC
production
January 5,
and No 80,338.48 80,338.48 79,798.34 99.33% 26,790.14 Yes No
2022
assembly
capacity
expansion
project
Multek 5G
high-speed
high-
frequency
and high- No 65,958.46 65,958.46 7,647.99 39,689.71 60.17% 4,856.72 No No
density PCB
technology
upgrading
project
Multek PCB
production
line April 19,
No 72,805.89 72,805.89 6,167.3 71,858.33 98.70% 9,418.2 Yes No
technology 2023
upgrading
project
FPC for
new energy
application
and August 24,
Yes 61,565.47 35,437.08 61,368.3 99.68% 2,739.23 Yes No
assembly 2023
project of
MFLEX
Yancheng
Wireless
module
production
and
construction
project of
Yes 70,122.75 8,557.28 8,420.68 98.40% N/A Yes
Yancheng
Dongshan
Communica
tion
Technology
Co., Ltd.
Subtotal -- 289,225.58 289,225.58 49,252.37 261,135.36 -- -- 43,804.29 -- --
Use of over-raised funds
None
Total -- 289,225.58 289,225.58 49,252.37 261,135.36 -- -- 43,804.29 -- --
Failure to
meet the
scheduled
progress
Due to the construction of the 5G network falling short of expectations, the changes in the macro-economic environment in recent years and other unfavorable
and produce
factors, the “Multek 5G high-speed high-frequency and high-density PCB technology upgrading project” has proceeded slowly and produced relatively poor
the desired
results. In recent years, the digital economy has developed vigorously in China, and become a main driving force for building the new development pattern and new
result and
competitive advantages of the country. As the key to leading the development of new-generation information technology and new-type infrastructure, 5G is an
reason
important engine driving the development of digital economy, and provides enormous potential for pushing society into the era of intelligent interconnection. We
thereof
believe that the prospects of the 5G market are promising in the long run, and will adjust and advance the relevant investment projects taking into account the
(please
changes in market demands. Therefore, according to the market conditions and the progress of the construction and funding of the investment project, we plan to
describe on
extend the date that the project is ready for its intended use to October 31, 2024, without changing the use of offering proceeds and amount of offering proceeds to
a project-
be invested in the project. Such extension has been approved at the 33rd meeting of the 5th Board of Directors and the 20th meeting of the 5th Board of Supervisors
by-project
held on April 19, 2023.
basis,
including
the reason
for selecting
27
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
N/A in the
column
“whether
the project
has
produced
the desired
result”)
Reason for
Due to the bottleneck in the development of 5G communication, weak downstream demands and other unfavorable factors, the progress of the “Wireless module
significant
production and construction project of Yancheng Dongshan Communication Technology Co., Ltd.” fell short of expectations. In light of the rapid development of
change in
the new energy vehicle market and rising demands of the on-board FPC market, as a component supplier for the international leading new energy vehicle
the
manufacturers, we need to further improvement our industrial deployment, capability to serve the downstream customers, and overall competencies. Therefore, in
feasibility
order to ensure the efficient use of offering proceeds, we have decided to change the “wireless module production and construction project of Yancheng Dongshan
of the
Communication Technology Co., Ltd.” into the “FPC for new energy application and assembly project of MFLEX Yancheng”.
project
Amount and
use of over-
raised
offering
N/A
proceeds
and
progress of
use thereof
Change in
the place of
the
N/A
committed
investment
project
Adjustment
of the
method of
implementat
N/A
ion of the
committed
investment
project
Funds pre- Applicable
invested in
the
investment At the 3rd meeting of the 5th Board of Directors, the Proposal for Replacing the Self-raised Funds Pre-invested in the Committed Investment Projects with the Idle
project and Offering Proceeds was considered and adopted, approving the replacement of the funds of RMB 399,591,400 pre-invested in the committed investment projects
replacement with the offering proceeds. The replacement was completed in 2020.
thereof
Temporary Applicable
replenishme
nt of
working At the 2nd meeting of the 6th Board of Directors held on June 12, 2023, the Proposal for Temporary Replenishment of Working Capital with the Idle Offering
capital with Proceeds was considered and adopted, approving the temporary replenishment of working capital with the idle offering proceeds up to RMB250 million. As of
the idle December 31, 2023, we used the idle offering proceeds of RMB230 million to temporarily replenish the working capital.
offering
proceeds
Amount of Applicable
surplus The “400,000 m2 fine line FPC production and assembly capacity expansion project”, the “Multek PCB production line technology upgrading project” and the
offering “FPC for new energy application and assembly project of MFLEX Yancheng” have been completed with the investment as committed. RMB6,651,800, or 0.23%,
proceeds of the offering proceedings designated for these projects were left unused. Such surplus was achieved because we followed the principle of reasonableness,
and reason economy and effectiveness, used the offering proceeds prudently, enhanced control, supervision and management of all kinds of expenses, reasonably allocated and
thereof optimized all kinds of resources, and reasonably reduced the relevant costs and expenses. In addition, we earned certain interest income from the offering proceeds.
Purpose and
whereabouts As of December 31, 2023, the amount of unused offering proceeds was RMB267,306,800, of which, RMB230000000 was used to temporarily replenish the
of unused working capital, RMB30,655,000 was deposited in the dedicated account of offering proceeds, and the surplus offering proceeds of RMB6,651,800 after the
offering completion of projects was used to permanently replenish the working capital.
proceeds
Adjustment
of the
method of
implementat
None
ion of the
committed
investment
project
(3) Changes in the committed investment projects using offering proceeds
Applicable □ N/A
In RMB0’000
Aggregate
Amount of Progress of Whether
amount
offering Amount investment as Date that the Whether the there’s any
Original already Income
proceeds to invested in of the end of project is project has significant
New project committed invested as of earned in the
be invested in the current the reporting ready for its produced the change in the
project the end of the current period
the new period period (3) intended use desired result feasibility of
reporting
project (1) =(2)/(1) the project
period (2)
FPC for new Wireless
energy module August 24,
61,565.47 35,437.08 61,368.3 99.68% 2,739.23 Yes No
application production 2023
and assembly and
28
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
project of construction
MFLEX project of
Yancheng Yancheng
Dongshan
Communicati
on
Technology
Co., Ltd.
Total -- 61,565.47 35,437.08 61,368.3 -- -- 2,739.23 -- --
Due to the bottleneck in the development of 5G communication, weak downstream demands and other unfavorable factors,
the progress of the “wireless module production and construction project of Yancheng Dongshan Communication
Technology Co., Ltd.” fell short of expectations. In light of the rapid development of the new energy vehicle market and
rising demands of the on-board FPC market, as a component supplier for the international leading new energy vehicle
Reason for change, decision-making procedures manufacturers, we need to further improvement our industrial deployment, capability to serve the downstream customers,
and information disclosure (please describe on a and overall competencies. Therefore, in order to ensure the efficient use of offering proceeds, we have decided to change the
project-by-project basis) “wireless module production and construction project of Yancheng Dongshan Communication Technology Co., Ltd.” into the
“FPC for new energy application and assembly project of MFLEX Yancheng”. Such change in the use of offering proceeds
was approved at the 19th meeting of the 5th Board of Directors and the 13th meeting of the 5th Board of Supervisors held on
February 17, 2022, and the first extraordinary general meeting in 2022 held on March 8, 2022, and disclosed on
www.cninfo.com.cn, and our designated newspapers for information disclosure.
Failure to meet the scheduled progress and produce
the desired result and reason thereof (please None
describe on a project-by-project basis)
Reason for significant change in the feasibility of
None
the project
VIII. Sale of Material Assets and Equities
1. Sale of material assets
□ Applicable N/A
No material asset has been sold during the reporting period.
2. Sale of material equities
□ Applicable N/A
IX. Analysis of Major Subsidiaries and Associates
Applicable □ N/A
Major subsidiaries and associates representing more than 10% of the net profit of the Company:
In RMB
Type of
Company name Primary business Registered capital Total assets Net assets Operating revenue Operating profit Net profit
company
Design, R&D, sale and after-sale
Dragon Holdings Subsidiary services in respect of PCBs; USD113,450,100 25,712,962,545.42 6,518,291,595.07 38,257,371,211.10 864,700,364.95 669,556,434.20
investment holding
R&D, sale and after-sale services in
Multek Group Subsidiary USD218,248,360.27 4,158,208,897.11 2,073,178,232.57 3,914,420,317.70 121,760,866.23 95,917,983.30
respect of PCBs; investment holding
Subsidiaries acquired or disposed of during the reporting period:
Applicable □ N/A
Method of acquisition or Effect on overall production, operation
Company name
disposal and results
No material effect on our operating results
Aranda Acquisition
in the current period
No material effect on our operating results
Suzhou JDI Electronics Inc. Acquisition
in the current period
No material effect on our operating results
Suzhou Dongdi Holding Limited Established
in the current period
No material effect on our operating results
Hong Kong Dongdi Holding Limited Established
in the current period
No material effect on our operating results
Multek Zhuhai Enterprise Management Co., LTD Established
in the current period
No material effect on our operating results
Multi-Fineline Electronics (Thailand) Co., Ltd. Established
in the current period
No material effect on our operating results
Zhuhai Dii Information Technology Consulting Co., Ltd. Deregistration
in the current period
29
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
No material effect on our operating results
Hainan Chengjia Technology Consulting Co., Ltd. Deregistration
in the current period
No material effect on our operating results
Suzhou Yuanshi Electronic Technology Co., Ltd. Deregistration
in the current period
No material effect on our operating results
DSBJ Norway AS Deregistration
in the current period
X. Structured Entities Controlled by the Company
□ Applicable N/A
XI. Prospects for Future Development of the Company
(I) Our development strategy
Our strategy emphasizes high-quality development through systematic planning and a well-designed overarching strategy. We are
committed to maintaining operational integrity while adapting to market changes, focusing on consumer electronics and new
energy vehicles. We aim to strengthen our business deployment by increasing R&D funding and leveraging internal resources and
potential to enhance our performance in the new energy sector. Our approach includes comprehensive budget management and
prioritizing key customers and products. We adhere to prudent operations to sustain a healthy financial position. Additionally, we
optimize our organizational structure and enhance personnel training. We actively integrate information technology with industrial
processes to drive the transformation from traditional manufacturing to intelligent manufacturing.
(II) 2024 business plan
(1) Implement the “two-wheel drive” strategy, and promote R&D of, and increase funding for, frontier products;
(2) adhere to the business strategy of “increasing revenues, income and ROE”;
(3) Optimize the layout and improve the operating capability of the production bases;
(4) Maintain a healthy financial position, and continuously optimize the capital structure;
(5) Enhance system governance and data governance, and promote high-quality development of the Company;
(6) Continuously optimize the organization structure and personnel training; and
(7) Increase ESG values and sustainability, and actively pursue green and low-carbon development and sustainable development.
(III) Main risk factors
1. Risk of concentration of customers
We have good customer resources. Our major customers are well-known domestic and international companies in the relevant
industries that are of sound credit and have established stable cooperation relationships with us. However, our top 5 customers
constitute a large proportion of our total sales revenue, which may further increase in the future. Any material adverse change in
the business situation of such major customers could have an adverse effect on our business.
We will give full play to our advantages, make active deployment in the new energy and other emerging industries and strive to
develop new customers, in order to mitigate the adverse effect of the relative concentration of customers on us.
2. Risks brought by rapid technology upgrading of the industry
Our business covers PCB, photoelectric display, precision manufacturing and other technology-intensive industries, and our
products are widely applied in consumer electronics, new energy vehicles, communication equipment, industrial equipment, AI,
medical appliances and other fields, all of which are characterized by rapid technology upgrading. If our R&D and manufacturing
30
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
capabilities fail to keep pace with the rapid technology upgrading of downstream products, our products and technologies may
become obsolete.
We will follow up on the new technologies and new processes of the industry from the strategic perspective, and strive to keep our
technologies and processes at the advanced level through continuous and effective R&D funding.
3. Risk of changes in the global trade environment
Our major customers include some well-known international companies, and our export sales have grown steadily for years.
Though China has established good economic and trade cooperation relationships with major countries in the world, the
increasingly fierce regional frictions in recent years may cause uncertainties in the applicable trade policies, which could affect our
international trade.
We will follow up on the development of international trade frictions, strenthen communication with our customers, and continue
to foster our competencies and customer adhesion.
4. Risk of market exploitation
We are a strong R&D and manufacturing enterprise in the fields of PCB, photoelectric display and precision manufacturing. Due
to our stable product quality and efficient customer services, we have remarkable competencies, and are able to provide the
downstream enterprises with “one-stop” products and services, and satisfy their demands for systemic manufacturing solutions.
However, our downstream industries are characterized by rapid upgrading and rapid changes in the preferences of consumers,
among others. If our major customers are at a disadvantage in the market, or we are unable to satisfy the demands of customers or
fail to acquire new customers, the sales and margin rate of our products may decrease.
We will continue to increase R&D funding, optimize our product mix and process structure, enhance our competencies, and
actively cope with market competition.
5. Environmental risk
In our production, the electroplating, etching and other processes produce waste water, waste gases and solid wastes, and therefore
are subject to strict requirements for environmental protection. We cannot exclude the possibility that environmental incidents may
happen during our production due to negligence in management, force majeure or otherwise. If we meet with any environmental
incident, cause pollution to the environment or violate the applicable environmental protection laws and regulations, our reputation
and operations could be adversely affected. Along with the vigorous development of a green and low-carbon circular economic
development system and improvement of people’s living standard in China, and increasingly enhanced awareness of
environmental protection of people, the country attaches increasingly great importance to environmental protection. If the country
puts forward stricter environmental protection requirements, we may need to increase the funding for environmental protection,
which would increase our environmental protection costs and in turn affect our results.
We have set the building of an environment-friendly enterprise as a key goal of our sustainable development strategy, attached
great importance to and increased the funding for environmental protection in our production and operation, actively responded to
the requirements of the latest environmental protection laws and regulations, enhanced environmental protection training and
employees’ awareness of environmental protection, taken control measures at source, established and improved the environmental
management system, and implemented the requirements related to environmental safety in all of our key business activities, to
reduce the environmental risks.
6. Foreign exchange risk
Export sales constitute a large proportion of our total sales revenue. Because our day-to-day operation involves transactions in
USD and other foreign currencies, and our consolidated accounts are presented in RMB, the changes in the exchange rate between
RMB and USD may cause foreign exchange risk to our future operations.
31
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
We will pay close attention to the changes in the relevant foreign exchange rates, strive to control the exposure to foreign
exchange risk at a reasonable level, and hedge or otherwise reduce exposure to such risk.
XII. Investigation, Research, Communication, Interview and Other Activities during the
Reporting Period
Applicable □ N/A
Particulars of the
Method of Main topics of discussion
Date Place Type of guests Guests investigation and research
communication and information provided
activity available at
Meeting Development of our new
Aegon-Industrial Fund
February 3, room of On-site Institutional energy business, and
and other 23 www.cninfo.com.cn
2023 the investigation investors situations of our factories in
institutional investors
Company different locations
Communication
PCB, LED and new energy
April 27, 2023 Online through the Others Investors www.cninfo.com.cn
business
online platform
Haitong Securities and
Communication Institutional Interpretation of our semi-
August 31, 2023 Online other 280 institutional www.cninfo.com.cn
by telephone investors annual report
investors
Hong Corporate governance, new
September 26, Institutional CoreView, Dantai,
Kong, Others energy, LED and other www.cninfo.com.cn
2023 investors Dymon, etc.
China business segments
Hua Chuang Securities
October 25, Communication Institutional New energy and other
Online and other 412 www.cninfo.com.cn
2023 by telephone investors business segments
institutional investors
Our “two-wheel drive”
October 25, Shanghai, strategy, mergers and
Others Others Investors www.cninfo.com.cn
2023 China acquisitions, and new energy
business
XIII. Implementation of the Action Plan to Improve the Quality and Returns
Whether the Company has disclosed its action plan to improve the quality and returns?
Yes No
I. Focus on the primary business, and adhere to the “two-wheel drive” strategy
For decades, we have focused on expanding and optimizing our primary business through internal development and acquisitions,
and gradually formed three industrial segments, namely PCB, photoelectric display and precision manufacturing. Our products are
widely used in consumer electronics, new energy vehicles, communication equipment, industrial equipment, AI, servers, medical
appliances and other fields. In recent years, leveraging our technical advantages accumulated in the fields of consumer electronics
and communication equipment, we have actively explored the wholly new field of new energy vehicles with a view to making
contributions to the green transition of the global energy structure, and built an industrial development pattern with consumer
electronics and new energy vehicle business at the core.
In the field of consumer electronics, we have closely followed the steps of leading customers in strategic innovation, actively
expanded global deployment while maintaining superior products, and through the improvement of technical capabilities,
increased the application of our PCB products in emerging fields. In the field of new energy vehicles, in response to the demands
of our customers, we have actively promoted the construction of domestic and overseas production bases, completed the
acquisition of Suzhou JDI and US Aranda, continuously expanded our production lines, and strived to provide the customers with
one-stop products and services. Between January and September 2023, we recorded an operating revenue of RMB22.501 billion
and a net profit of RMB1.333 billion attributable to the shareholders of the Listed Company, maintaining strong profitability; we
also continuously optimized the structure of our core business, recorded a sales revenue of about RMB4.5 billion from the new
energy business, and further increased the proportion of products with higher growth potentials in our operating revenues and
32
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
profits. In the future, in order to promote our long-term and high-quality development and implement our corporate strategy to
focus on the two key fields of consumer electronics and new energy vehicles, we will further increase the production capacity of
high-end PCB products and precision structural component products, strive to satisfy the customer demands for supply chain
management and innovative products in the fields of consumer electronics and new energy vehicles, supply core products to key
customers to seize the opportunities for rapid growth, continuously create values for our customers, and actively enhance our core
competencies.
II. Persist in innovation-driven development, and continuously promote digital transition
We have adhered to the long-termism, promoted innovation-driven development, closely followed the frontier technologies,
continuously increased R&D funding, and improved our R&D system; through participation in the preliminary development
projects of leading customers of the industry, enhanced technical innovation, improved production technologies and process
capabilities, and continuously cultivated new quality productive forces, to promote our high-quality development; further explored
the frontier manufacturing technologies for core components in the field of intelligent interconnection, to lay a solid foundation for
serving the future innovative business fields, and further respond to customer demands; continuously promoted the integration of
informatization and industrialization, focused on the application of cutting-edge big data and AI technologies, vigorously
promoted intelligent manufacturing and built smart factories. In 2023, some of our subsidiaries were named “National Model
Factory for Intelligent Manufacturing” and “5G Factory of Jiangsu”, and awarded other honorary titles. While promoting the
integration of informatization and industrialization, we have also improved system and data governance, fully aroused the
initiative and creativity of all organizations, established and improved a scientific and efficient management system, and enhanced
our core competencies in an all-around way from the system and organization levels.
III. Enhance corporate governance and improve the level of operational compliance
We have continuously consolidated the basis of corporate governance, actively improved the level of corporate governance, and
promoted the sound operation of general meetings of shareholders, board of directors, board of supervisors and management;
established and improved the internal control system, enhanced risk management, and improved the decision-making level, to
enter into a virtuous circle in our development, and vigorously protect the legitimate rights and interests of our shareholders. Our
Board of Directors has seriously implemented all resolutions of shareholders, and faithfully performed their duty of loyalty. Our
management has seriously performed all duties assigned by the Board of Directors, further improved their management
capabilities, and continuously enhanced our core competencies, profitability and overall risk management capabilities, to achieve
sustainable development and strive to maximize returns to our shareholders.
IV. Put investors first, and attach great importance to returns to investors
(I) Attach great importance to the quality of information disclosures. We have strictly complied with the information disclosure
principles of “truthfulness, accuracy, completeness, timeliness and fairness”, strived to satisfy the demands of investors,
continuously improved the quality and effectiveness of information disclosures, and disclosed complete information related to our
business and other affairs at multiple layers and from multiple perspectives. In the future, we will, taking into account our actual
business situations and development characteristics, perform our information disclosure obligations with high quality,
continuously optimize the ways to disclose our business information, proactively disclose useful information for the investors to
make their investment decisions, emphasize on the disclosure of important and well-targeted information, enhance the disclosure
of critical information related to industrial competition, business operation and risk factors, and reduce the disclosure of redundant
information.
(II) Enhance communications with investors. We have attached great importance to the management of investor relations,
continuously improved the working mechanisms and content of the management of investor relations, through performance
briefings, teleconferences, on-site visits and investigations or otherwise, deepened the investors’ understanding of our production
and business situations and other activities, and enhanced their acceptance of and confidence in us, to achieve the objectives of
33
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
respecting investors, offering returns to investors and protecting investors. In the future, we will continue to build the ecosystem
for active interactions with investors, provide conveniences for all kinds of investors to participate in the decision-making on
material matters, and create long-term values for investors.
(III) Attach great importance to returns to investors. While focusing on our own development, we have attached great importance
to returns to investors, and always put investors first. Since our listing, we have distributed cash dividends in strict accordance
with the profit distribution policy set forth in our Articles of Association, and shared our development results with the investors. In
the future, we will maintain a dynamic balance among our development, performance growth and returns to shareholders,
according to the profit distribution principle taking into account our development stage, seriously implement the mechanism of
“long-term, stable and sustainable” returns to shareholders, and continuously enhance the investors’ sense of gain.
We will remain true to our original aspiration, consolidate the foundation of our enterprise, keep pace with the times, and start a
new journey. We will always bear in mind returns to shareholders, put investors first, actively implement the action plan to
improve the quality and returns, strive to improve our operating quality and investment value, effectively enhance the investors’
sense of gain, and make positive contributions to the stabilization of market and confidence.
34
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section IV Corporate Governance
I. Overview of Corporate Governance
During the reporting period, we have continuously improved our corporate governance structure, operated in compliance with the
regulations, and enhanced information disclosure in strict accordance with the Company Law, the Securities Law, the Code of
Corporate Governance for Listed Companies, the Rules Governing the Listing of Shares on the Shenzhen Stock Exchange and
other applicable laws and regulations. We have established a corporate governance structure that sets forth well-defined powers
and responsibilities, and mutual restraint mechanisms, and operates in a coordinated manner. Our general meeting, Board of
Directors and Board of Supervisors have duly performed their duties and exercised their functions, operated in compliance with
the regulations, and seriously protected the legitimate rights and interests of the investors and the Company.
Is there any significant difference between the actual circumstance of corporate governance of the Company and the applicable
laws, administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies?
□ Yes No
There isn’t any significant difference between the actual circumstance of our corporate governance and the applicable laws,
administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies.
II. The Company’s Independence of its Controlling Shareholders and Actual Controllers in
Assets, Personnel, Finance, Organization and Business
We are independent of our controlling shareholders in business, personnel, assets, organization and finance, and have our own
independent and complete business, and are independent in management.
1. Independence in business operation: We are independent of our shareholders and other affiliates in business operation, have
complete production, R&D, management, procurement and sales systems, and are able to do business independently on the market.
2. Independence in personnel: We have a sound corporate governance structure in place, and our directors, supervisors and senior
executives have been appointed in strict accordance with the Company Law and the AOA, and do not hold any concurrent post in
contravention of the applicable laws and regulations. We are independent of our shareholders in personnel and payroll
management, and all of our employees receive their salaries from us. We have developed stringent employee, performance
appraisal, promotion and other labor management policies, and entered into a Labor Contract with each employee. We are fully
independent in labor, personnel and payroll management.
3. Independence in assets: We have a clear property right relationship with our controlling shareholders, own or have the right to
use the premises and land necessary for our production and operating activities, and have complete auxiliary production systems
and supporting facilities. None of our controlling shareholders or the business entities controlled by them has occupied any of our
funds, assets or other resources.
4. Independence in organization: We have established a sound corporate governance structure in accordance with the requirements
of the Company Law and the AOA, and our general meeting, Board of Directors and Board of Supervisors exercise their respective
functions in strict accordance with applicable laws and regulations. We have set up internal bodies suitable for our development,
defined their respective functions, and developed corresponding internal management and control systems. All of our functional
departments operate independently, free from any interference by any shareholders, other departments, entities or individuals, and
do not engage in any mixed operation or share office space with other departments.
35
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
5. Independence in finance: We have an independent finance department, and full-time financial personnel, established a sound
accounting system and financial management and decision-making policies, and implemented strict financial supervision and
administration. We open independent bank accounts, and control our funds and assets independently, free from any interference by
our shareholders. We are an independent taxpayer, pay taxes independently according to law, and do not mix our tax payment with
any shareholder.
III. Horizontal Competition
□ Applicable N/A
IV. Particulars of Annual General Meeting and Extraordinary General Meetings Held
during the Reporting Period
1. General meetings held during the reporting period
Percentage of
investors
Session Type of meeting Date of meeting Disclosure date Resolution of the meeting
attending the
meeting
1st extraordinary general Extraordinary Announcement of the resolutions of the 1st extraordinary
46.86% March 31, 2023 April 1, 2023
meeting in 2023 general meeting general meeting in 2023 (Announcement No.: 2023-016)
2nd extraordinary general Extraordinary Announcement of the resolutions of the 2nd extraordinary
48.80% April 19, 2023 April 20, 2023
meeting in 2023 general meeting general meeting in 2023 (Announcement No.: 2023-022)
2022 annual general Annual general Announcement of the resolutions of the 2022 annual general
49.82% June 6, 2023 June 7, 2023
meeting meeting meeting (Announcement No.: 2023-048)
3rd extraordinary general Extraordinary Announcement of the resolutions of the 3rd extraordinary
48.89% June 15, 2023 June 16, 2023
meeting in 2023 general meeting general meeting in 2023 (Announcement No.: 2023-056)
V. Directors, Supervisors and Senior Executives
1. Particulars
No. of Changes
No. of
End addition in the
Beginning shares i
date of Opening al shares number Closing
date of the disposed d
Name Sex Age Title Status the balance of acquired of shares balance of
term of of in the t
term of shares held in the held due shares held
office current
office current to other
period
period reasons
June 6, June 5,
YUAN Yonggang Male 45 Chairman Active 202,226,196 202,226,196
2023 2026
Male 47
Director & General June 6, June 5, 222,388,153 222,388,153
YUAN Yongfeng Active
Manager 2023 2026
Male 61
June 6, June 5,
ZHAO Xiutian Vice Chairman Active
2023 2026
Male 48
Director & Executive June 6, June 5, 553,700 553,700
SHAN Jianbin Active
President 2023 2026
Female 44
Director, Deputy General June 6, June 5, 391,600 391,600
MAO Xiaoyan Active
Manager & Board Secretary 2023 2026
Male 42
Director, Deputy General June 6, June 5, 560,000 560,000
WANG Xu Active
Manager & CFO 2023 2026
WANG June 6, June 5,
Male 61 Independent director Active
Zhangzhong 2023 2026
Male 60
June 6, June 5,
SONG Liguo Independent director Active
2023 2026
Male 56
June 6, June 5,
GAO Yongru Independent director Active
2023 2026
Chairman of the Board of June 6, June 5,
MA Liqiang Male 43 Active 3,000 3,000
Supervisors 2023 2026
Male 46
Employee representative June 6, June 5,
JI Yachun Active
supervisor 2023 2026
Male 38
Employee representative June 6, June 5,
HUANG Yongxin Active
supervisor 2023 2026
Total -- -- -- -- -- -- 426,122,649 426,122,649
Whether any director or supervisor retired or any executive was removed during the reporting period?
□ Yes No
36
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Changes in directors, supervisors and senior executives:
□ Applicable N/A
2. Profile
Professional background, main work experience and main duties of our current directors, supervisors and senior executives:
(1) Members of the Board of Directors
Mr. YUAN Yonggang: PRC citizen, having permanent residency in Singapore, bachelor’s degree, one of the controlling
shareholders and actual controllers of the Company. He has served as the Director of the Marketing Department, Deputy Manager
and Vice Chairman of the Company since October 1998, and is now Chairman of the Company, Vice Chairman of the Jiangsu
General Chamber of Commerce, Vice Chairman of the Suzhou Association of Industry and Commerce, and member of the 17 th
People’s Congress of Suzhou.
Mr. YUAN Yongfeng: PRC citizen, bachelor’s degree, one of the controlling shareholders and actual controllers of the Company.
He has served as the Director of the Manufacturing Department and Supervisor of the Company since October 1998, and is now
director and General Manager of the Company, Chairman of the Yancheng Electronic Information Industry Association, and
member of the 5th CPPCC Wuzhong District Committee of Suzhou.
Mr. ZHAO Xiutian: US citizen, postgraduate. He has served in Feichuang, Hughes Network Systems, MCE, Celiant and Andrew,
and is now Vice Chairman of the Company.
Mr. SHAN Jianbin: PRC, bachelor’s degree. He has served in Mektec Manufacturing Corporation (Zhuhai) Ltd., and is now
director and Executive President of the Company, and Vice Chairman of the Executive Council of the China Printed Circuit
Association.
Ms. MAO Xiaoyan: PRC citizen, postgraduate, and economist. She has served in Suzhou Huacheng Group Company Limited and
Jiangsu Wuzhong Pharmaceutical Development Co., Ltd., and is now the director, Deputy General Manager and Board Secretary
of the Company.
Mr. WANG Xu: PRC citizen, postgraduate, certified public accountant (non-practitioner). He has served in Kunshan Fengrui
United Accounting Firm and Suzhou Good-ark Electronics Co., Ltd., and is now director, Deputy General Manager and CFO of
the Company, part-time tutor for postgraduates in accounting of the Soochow University Dongwu Business School, part-time tutor
for postgraduates in accounting and audit of the Nanjing University of Information Science & Technology School of Business, and
part-time tutor for postgraduates in accounting of the Jiangsu Normal University School of Business.
Mr. WANG Zhangzhong: PRC citizen, postgraduate. He has served in the Nanjing Institute of Technology School of Materials
Science and Engineering as a teacher, office director, secretary of the Party committee, chief of the division of science and
technology, dean and professor since August 1983, and is now independent director of the Company, Director of the Nanjing
Institute of Technology Institute of New Material Technology, Director of the Jiangsu Key Laboratory of Advanced Structural
Materials and Application Technology, member of the Executive Council of the China Heat Treatment Association, Chairman of
the Executive Council of the Industrial Furnace Branch of Jiangsu Mechanical Engineering Society, Vice Chairman of the New
Metal Materials Branch of Jiangsu Metallurgical Industry Association, and independent director of Suzhou Huike Technology Co.,
Ltd.
Mr. SONG Liguo: Hong Kong citizen, PhD candidate. He has served in CITIC Securities Tianjin Business Department, the
Tianjin Equity Exchange, Anhui Antai Law Firm, China Baoan Group, Hong Kong Heng Feng Group International Investment
Limited, CHAN & Co., ARTHUR K.H. and Denton Wilde Sapte (Hong Kong), and is now independent director of the Company,
counsel of Jones Day International Law Firm (Hong Kong), visiting associate professor of the Anhui University Law School, and
37
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
arbitrator of the China International Economic and Trade Arbitration Commission, the Cross-Straits Arbitration Center, and the
Xiamen Arbitration Commission.
Mr. GAO Yongru: PRC citizen, PhD candidate, senior accountant. He has served in Panda Electronic Group, Jiangsu Jinling
Accounting Firm, the Nanjing Municipal Bureau of Labor, Huatai Securities Co., Ltd., Nanjing Transportation Holding Co., Ltd.,
Yincheng Properties Group Co., Ltd., Jinling Resort Nanjing Co., Ltd., Shenwu Energy Saving Co., Ltd., Hefei Genius Advanced
Material Co., Ltd., Guangzhou Haozhi Industrial Co., Ltd. and Jiangsu Limin Paper Packaging Co., Ltd., and is now independent
director of the Company, director of Nanjing Borun Intelligent Technology Co., Ltd., CFO of Nanjing Borun Brain Intelligent
Technology Co., Ltd., director of Jiangsu Sunlant Bioengineering Co., Ltd., independent director of Nanjing CompTech
Composites Corp., director of Jiangsu Binhai Rural Commercial Bank Co., Ltd., supervisor of Jiangsu Xinruide System
Integration Engineering Co., Ltd., Deputy General Manager of Yongtuo Certified Public Accountants LLP Jiangsu Office,
managing director of Shengkun Business Service (Nanjing) Co., Ltd., part-time tutor for postgraduates in accounting of the
Nanjing University of Information Science & Technology, and part-time tutor for postgraduates in accounting of the Shenyang
University.
(2) Members of the Board of Supervisors
Mr. MA Liqiang: PRC citizen, bachelor’s degree. He has served in Suzhou Dayin Electronic Telecommunications Equipment Co.,
Ltd., Suzhou Jinhuasheng Paper Co., Ltd. and Dongshan Optronics (Suzhou) Co., Ltd., and is now Chairman of the Board of
Supervisors of the Company, and COO, President of China Region, and President of Touch & Display Business Unit of Multek.
Mr. JI Yachun: PRC citizen, postgraduate. He has served in the Central Committee of the Communist Youth League of China, and
is now the employee representative supervisor and Public Relations President (Yancheng) of the Company, Secretary of the Party
Committee and Chairman of the Management Committee of the Yancheng Dongshan Precision Industrial Park, and member of the
14th People’s Congress of Jiangsu Province.
Mr. HUANG Yongxin: PRC citizen, bachelor’s degree. He has served in Everlight Electronics (China) Co., Ltd., and is now
employee representative supervisor of the Company, and General Manager of Yancheng Dongshan Precision Manufacturing Co.,
Ltd.
(3) Senior executives
The resume of Mr. YUAN Yongfeng (General Manager), Mr. SHAN Jianbin (Executive President), Ms. MAO Xiaoyan (Deputy
General Manager and Board Secretary) and Mr. WANG Xu (Deputy General Manager and CFO) are set forth in “Members of
Board of Directors” above.
Positions held in shareholders:
□ Applicable N/A
Positions held in other entities:
Applicable □ N/A
Name Entity Position
YUAN Yonggang Suzhou Dongyang Investment Co., Ltd. Supervisor
YUAN Yonggang Anhui Landun Photoelectron Co., Ltd. Chairman
YUAN Yonggang Shanghai Corkuna New Material Technologies Co., Ltd. Chairman
YUAN Yonggang Jingbaiyue Investment Development (Suzhou) Co., Ltd. Managing Director
YUAN Yonggang Shenzhen National Star Vision Technology Co., Ltd. Director
YUAN Yonggang Suzhou Dongding Tea Shop Co., Ltd. Supervisor
YUAN Yonggang Shanghai Xinhuarui Semiconductor Technology Co., Ltd. Director
YUAN Yonggang Jiangsu Xinhuarui Semiconductor Technology Co., Ltd. Director
YUAN Yonggang Ningbo Qixiang Information Technology Co., Ltd. Director
YUAN Yonggang Brave Pioneer International Limited Managing director
38
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
YUAN Yonggang Hong Kong Dongshan Investment Holdings Co., Ltd. Managing Director
YUAN Yonggang Fujian Nanping Nanfu Battery Co., Ltd. Director
YUAN Yonggang Jiangsu General Chamber of Commerce Vice Chairman
YUAN Yonggang Suzhou Association of Industry and Commerce Vice Chairman
YUAN Yongfeng Suzhou Dongyang Investment Co., Ltd. Managing Director
YUAN Yongfeng Yancheng Electronic Information Industry Association Chairman
YUAN Yongfeng CPPCC Wuzhong District Committee of Suzhou Member
ZHAO Xiutian Suzhou Langsheng Communication Technology Co., Ltd. Director
Vice Chairman of the Executive
SHAN Jianbin China Printed Circuit Association
Council
MAO Xiaoyan Dotwil Radio Frequency (Anhui) Technology Co. Ltd. Director
Part-time tutor for postgraduates in
WANG Xu Soochow University Dongwu Business School
accounting
Nanjing University of Information Science & Technology School Part-time tutor for postgraduates in
WANG Xu
of Business accounting and audit
Part-time tutor for postgraduates in
WANG Xu Jiangsu Normal University School of Business
accounting
Nanjing Institute of Technology Institute of New Material
WANG Zhangzhong Dean
Technology
Nanjing Institute of Technology School of Materials Science and
WANG Zhangzhong Professor
Engineering
Jiangsu Key Laboratory of Advanced Structural Materials and
WANG Zhangzhong Director
Application Technology
WANG Zhangzhong China Heat Treatment Association Member of the Executive Council
Industrial Furnace Branch of Jiangsu Mechanical Engineering
WANG Zhangzhong Chairman of the Executive Council
Society
New Metal Materials Branch of Jiangsu Metallurgical Industry
WANG Zhangzhong Vice Chairman
Association
WANG Zhangzhong Suzhou Huike Technology Co., Ltd. Independent director
SONG Liguo Jones Day International Law Firm (Hong Kong) Counsel
SONG Liguo Anhui University Law School Visiting associate professor
SONG Liguo China International Economic and Trade Arbitration Commission Arbitrator
SONG Liguo Cross-Straits Arbitration Center Arbitrator
SONG Liguo Xiamen Arbitration Commission Arbitrator
GAO Yongru Yongtuo Certified Public Accountants LLP Jiangsu Office Deputy General Manager
GAO Yongru Nanjing CompTech Composites Corp. Independent Director
GAO Yongru Jiangsu Sunlant Bioengineering Co., Ltd. Independent Director
GAO Yongru Jiangsu Binhai Rural Commercial Bank Co., Ltd. Independent Director
GAO Yongru Jiangsu Xinruide System Integration Engineering Co., Ltd. Supervisor
GAO Yongru Shengkun Business Service (Nanjing) Co., Ltd. Managing Director
GAO Yongru Nanjing Borun Intelligent Technology Co., Ltd. Director
GAO Yongru Nanjing Borun Brain Intelligent Technology Co., L CFO
Part-time tutor for postgraduates in
GAO Yongru Nanjing University of Information Science & Technology
accounting
Part-time tutor for postgraduates in
GAO Yongru Shenyang University
accounting
Punishments imposed by the securities regulatory authorities in the past three years on the directors, supervisors and senior
executives of the Company currently in office or leaving office during the reporting period:
□ Applicable N/A
3. Remunerations of directors, supervisors and senior executives
Decision-making process, criteria for determination and actual amount in respect of remunerations of directors, supervisors and
senior executives:
The remunerations of our directors, supervisors and senior executives are determined in accordance with the provisions of the
AOA as follows: the amount and terms of payment of remuneration of the members of the Board of Directors and the Board of
Supervisors are determined by the general meeting; the amount and terms of payment of remuneration of the senior executives are
determined by the Board of Directors; the remunerations of the directors, supervisors and senior executives are determined based
on their respective job responsibilities, and achievement of annual performance indicators for those holding key operational
39
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
positions concurrently, or fulfillment of job responsibilities and annual tasks for those holding key managerial positions
concurrently. The remunerations paid by us to our directors, supervisors and senior executives conform to our remuneration
policies and the fulfillment of their job responsibilities.
Remunerations of directors, supervisors and senior executives paid in the current period:
In RMB0’000
Total Whether or not
remuneration receiving
Name Sex Age Title Status received from the remunerations
Company from any affiliate
(inclusive of tax) of the Company
YUAN Yonggang Male 45 Chairman Active 301.56 No
YUAN Yongfeng Male 47 Director & General Manager Active 301.56 No
ZHAO Xiutian Male 61 Vice Chairman Active 410.00 No
SHAN Jianbin Male 48 Director & Executive President Active 361.65 No
Director, Deputy General
MAO Xiaoyan Female 44 Active 121.89 No
Manager & Board Secretary
Director, Deputy General
WANG Xu Male 42 Active 186.25 No
Manager & CFO
WANG Zhangzhong Male 61 Independent Director Active 12.00 No
SONG Liguo Male 60 Independent Director Active 12.00 No
GAO Yongru Male 56 Independent Director Active 12.00 No
Chairman of the Board of
MA Liqiang Male 43 Active 218.93 No
Supervisors
Employee representative
JI Yachun Male 46 Active 110.66 No
supervisor
Employee representative
HUANG Yongxin Male 38 Active 147.80 No
supervisor
Total -- -- -- -- 2,196.30 --
Other information:
□ Applicable N/A
VI. Performance of Duties by the Directors during the Reporting Period
1. Meetings of the Board of Directors held during the reporting period
Session Date of meeting Disclosure date Resolution of the meeting
31st meeting of the 5th Board Announcement of the resolutions of the 31st meeting of the 5th Board of
March 15, 2023 March 16, 2023
of Directors Directors (Announcement No.: 2023-012)
32nd meeting of the 5th Board Announcement of the resolutions of the 32nd meeting of the 5th Board of
April 3, 2023 April 4, 2023
of Directors Directors (Announcement No.: 2023-017)
33rd meeting of the 5th Board Announcement of the resolutions of the 33rd meeting of the 5th Board of
April 19, 2023 April 21, 2023
of Directors Directors (Announcement No.: 2023-023)
34th meeting of the 5th Board
April 24, 2023 April 25, 2023 The First Quarter Report 2023 was adopted.
of Directors
35th meeting of the 5th Board Announcement of the resolutions of the 35th meeting of the 5th Board of
May 25, 2023 May 26, 2023
of Directors Directors (Announcement No.: 2023-041)
1st meeting of the 6th Board of Announcement of the resolutions of the 1st meeting of the 6th Board of
June 6, 2023 June 7, 2023
Directors Directors (Announcement No.: 2023-049)
2nd meeting of the 6th Board Announcement of the resolutions of the 2nd meeting of the 6th Board of
June 12, 2023 June 13, 2023
of Directors Directors (Announcement No.: 2023-053)
3rd meeting of the 6th Board of Announcement of the resolutions of the 3rd meeting of the 6th Board of
July 7, 2023 July 8, 2023
Directors Directors (Announcement No.: 2023-059)
4th meeting of the 6th Board of Announcement of the resolutions of the 4th meeting of the 6th Board of
August 29, 2023 August 31, 2023
Directors Directors (Announcement No.: 2023-063)
5th meeting of the 6th Board of
October 24, 2023 October 25, 2023 The Third Quarter Report 2023 was adopted.
Directors
6th meeting of the 6th Board of Announcement of the resolutions of the 6th meeting of the 6th Board of
December 28, 2023 December 30, 2023
Directors Directors (Announcement No.: 2023-073)
2. Attendance of the directors at meetings of the Board of Directors and general meetings
Attendance of the directors at meetings of the Board of Directors and general meetings
No. of board No. of board No. of board No. of board No. of board Whether or not having
No. of general
Director meetings attended meetings present meetings present meetings present meetings absent been absent from two
meeting attended
during the in person by means of by proxy from consecutive board
40
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
reporting period communication meetings
equipment
YUAN Yonggang 11 3 8 0 0 No 4
YUAN Yongfeng 11 6 5 0 0 No 4
ZHAO Xiutian 11 1 10 0 0 No 4
SHAN Jianbin 11 6 5 0 0 No 4
MAO Xiaoyan 11 6 5 0 0 No 4
WANG Xu 11 6 5 0 0 No 4
WANG
11 1 10 0 0 No 4
Zhangzhong
SONG Liguo 11 1 10 0 0 No 4
GAO Yongru 11 1 10 0 0 No 4
Reason for absence from two consecutive board meetings: None.
3. Objections raised by the directors regarding matters of the Company
Whether any director has raised any objection regarding matters of the Company?
□ Yes No
No director has raised any objection regarding matters of the Company during the reporting period.
4. Other information regarding the performance of duties by the directors
Whether the suggestions put forward by the directors have been adopted by the Company?
Yes □ No
Explanation of the adoption or rejection by the Company of the suggestions put forward by the directors:
During the reporting period, no director has raised any objection to our matters.
VII. Activities of the Committees of the Board of Directors during the Reporting Period
No. of Important
Performance
Committee Members meetings Date of meeting Subject opinions and
of other duties
held suggestions
The relevant
proposals were
Considered the Proposal for Provision of Guarantee by the approved and
March 15, 2023 Company for the Financing Obtained by its Subsidiaries from submitted to the
Banks and other Financial Institutions. Board of
Directors for
consideration.
Considered the Summary of Internal Audit in 2022 and the
Audit Plan 2023, the Annual Report 2022 and Summary of the
The Audit
Report, the Annual Financial Report 2022, the 2022 Profit
Committee has
Distribution Proposal, the Proposal for Re-engagement of the
actively
Auditor for 2023, the 2022 Self-assessment Report on Internal The relevant
communicated
Controls, the 2022 Special Report on the Deposit and Use of proposals were
with the
Offering Proceeds, the Proposal Regarding Application for approved and
auditor of our
April 19, 2023 Facilities from Banks and other Financial Institutions in 2023, submitted to the
GAO Yongru, annual report,
the Proposal Regarding External Guarantees, the Proposal Board of
WANG Zhangzhong to effectively
Regarding External Investments, the Proposal Regarding Directors for
and YUAN supervise the
Audit Committee 9 Completion of Certain Committed Investment Projects and consideration.
Yonggang (SHAN conduct of the
Permanent Replenishment of Working Capital with Surplus
Jianbin before June annual audit of
Offering Funds, the Proposal Regarding Extension of Certain
6, 2023) the Company.
Committed Investment Projects, and the Proposal Regarding
Changes in Accounting Policies.
The relevant
proposals were
approved and
April 24, 2023 Considered the First Quarter Report 2023. submitted to the
Board of
Directors for
consideration.
The relevant
proposals were
Considered the Proposal Regarding the Report on the approved and
May 25, 2023
Application of the Previous Offering Proceeds. submitted to the
Board of
Directors for
41
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
consideration.
The relevant
proposals were
approved and
Considered the Proposal for the Appointment of the Audit
June 6, 2023 submitted to the
Manager of the Company.
Board of
Directors for
consideration.
The relevant
proposals were
approved and
Considered the Proposal for Temporary Replenishment of
June 12, 2023 submitted to the
Working Capital with the Idle Offering Proceeds.
Board of
Directors for
consideration.
The relevant
proposals were
Considered the Semi-annual Report 2023 and Summary of the approved and
August 29, 2023 Report, and the Special Report on the Deposit and Use of submitted to the
Offering Proceeds in the First Half of 2023. Board of
Directors for
consideration.
The relevant
proposals were
approved and
October 24, 2023 Considered the Third Quarter Report 2023. submitted to the
Board of
Directors for
consideration.
The relevant
Considered the Proposal Regarding Commodity Futures
proposals were
Hedging Transactions, the Feasibility Report on Commodity
approved and
December 28, Futures Hedging Transactions, the Proposal Regarding Foreign
submitted to the
2023 Exchange Hedging Transactions, the Feasibility Report on
Board of
Foreign Exchange Hedging Transactions, and the Proposal for
Directors for
Amending the AOA and its Exhibits.
consideration.
The relevant
proposals were
Considered the Proposal Regarding the Repurchase of the approved and
April 3, 2023 Company’s Shares and the Proposal Regarding External submitted to the
Investments. Board of
Directors for
consideration.
The relevant
proposals were
approved and
April 19, 2023 Considered the Proposal Regarding External Investments. submitted to the
Board of
Directors for
consideration.
Considered the Proposal Regarding the Company’s
Qualification for Offering Convertible Corporate Bonds to
Unspecified Investors, the Proposal for Offering by the
Company of Convertible Corporate Bonds to Unspecified
Investors, the Proposal Regarding the Plan on Offering by the
Company of Convertible Corporate Bonds to Unspecified
Investors, the Proposal Regarding the Feasibility Report on the
Offering by the Company of Convertible Corporate Bonds to
Unspecified Investors, the Proposal Regarding the Feasibility
The relevant
Report on the Application of Proceeds from the Offering by the
YUAN Yonggang, proposals were
Company of Convertible Corporate Bonds to Unspecified
WANG approved and
Investors, the Proposal Regarding the Report on the
Strategy Committee Zhangzhong, SONG 5 May 25, 2023 submitted to the
Application of the Previous Offering Proceeds, the Proposal
Liguo, GAO Yongru Board of
Regarding the Dilution of Current Earnings Caused by the
and SHAN Jianbin Directors for
Offering by the Company of Convertible Corporate Bonds to
consideration.
Unspecified Investors, Corresponding Remedial Measures, and
Covenants Made by the Relevant Persons, the Proposal
Regarding the Rules of Meetings of Convertible Corporate
Bond Holders, the Proposal Regarding the Three-year Plan for
Returns to Shareholders (2024-2026), and the Proposal for
Requesting the General Meeting of Shareholders to Authorize
the Board of Directors and its Authorized Personnel to Handle
the Affairs Related to the Offering of Convertible Corporate
Bonds to Unspecified Investors.
The relevant
proposals were
approved and
Considered the Proposal Regarding Investment in MFLEX
July 7, 2023 submitted to the
Suzhou and Other Wholly-owned Subsidiaries.
Board of
Directors for
consideration.
The relevant
proposals were
approved and
December 28, Considered Proposal Regarding Repurchase of the Company’s
submitted to the
2023 Shares.
Board of
Directors for
consideration.
WANG Considered the Proposal Regarding the Election of the Non- The relevant
Nomination Zhangzhong, SONG independent Directors of the 6th Board of Directors, and the proposal was
2 April 19, 2023
Committee Liguo, YUAN Proposal Regarding the Election of Independent Directors of approved and
Yonggang, YUAN the 6th Board of Directors. submitted to the
42
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Yongfeng and GAO Board of
Yongru Directors for
consideration.
The relevant
Considered the Proposal Regarding the Election of the proposals were
Chairman and Vice Chairman of the 6th Board of Directors, the approved and
June 6, 2023 Proposal Regarding the Appointment of Senior Executives of submitted to the
the Company, and the Proposal Regarding the Appointment of Board of
the Audit Manager of the Company. Directors for
consideration.
The relevant
SONG Liguo,
proposals were
WANG
approved and
Compensation and Zhangzhong, GAO Considered the Proposal Regarding the Remunerations of the
1 April 19, 2023 submitted to the
Appraisal Committee Yongru, YUAN Directors and Senior Executives of the Company in 2023.
Board of
Yonggang and
Directors for
YUAN Yongfeng
consideration.
VIII. Activities of the Board of Supervisors
Whether the Board of Supervisors has identified any risk involving the Company in its supervisory activities during the reporting
period?
□ Yes No
The Board of Supervisors has not raised any objection to the supervisory matters during the reporting period.
IX. Employees
1. Number, structure of profession and education of employees
Number of current employees of the parent at the end of the
1,848
reporting period
Number of current employees of the major subsidiaries at the
20,710
end of the reporting period
Total number of current employees at the end of the reporting
22,558
period
Total number of salaried employees during the reporting period 22,558
Total number of retired employees to or for whom the parent
0
and the major subsidiaries are obligated to make payments
Structure of profession
Categories of profession Number of employees
Production staff 16,413
Sales staff 412
Technical staff 4,148
Financial staff 140
Administrative staff 495
Management staff 950
Total 22,558
Education
Degree of education Number of employees
PhD 3
Master 155
Undergraduate 2,923
College 4,375
Below college 15,102
Total 22,558
2. Compensation policies
We advocate the creation of values, and give priority to high-performance teams and individuals in compensation and incentives.
We have sound compensation and incentive policies in place, which are designed to attract and retain outstanding technical and
43
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
management talents with competitive compensation, and give long-acting incentives to our employees through the combination of
short-, medium- and long-term incentives taking into account our overall operating results and the employees’ performance, in
order to enhance our core competencies.
3. Training programs
We actively recruit, seek and train talents, and make efforts to build an efficient and systemic talent training system, to
continuously improve our employees’ comprehensive capabilities; conduct capability improvement and training programs in
various forms focusing on cadre fostering, management of engineers and other professional personnel and building of talent pools,
to improve our employees’ professional quality, skills and management capabilities; actively provide our employees with learning
and growth opportunities, encourage them to strive for progress, and build talent pools, to promote the achievement of our
strategic objectives.
4. Outsourced workers
□ Applicable N/A
X. Profit Distribution and Transfer of Capital Reserve to the Share Capital
Establishment, implementation or adjustment of profit distribution policy, in particular, cash dividend policy, during the reporting
period:
Applicable □ N/A
We attach great importance to the return to our shareholders. In order to maintain a continuous and stable profit distribution policy,
pursuant to the Regulatory Guidance for Listed Companies No. 3 – Distribution of Cash Dividends by the Listed Companies, the
AOA and other relevant provisions, we have developed the Three-year Plan for Return to Shareholders (2022-2024), which sets
forth the specific principles and plans for return to shareholders. During the reporting period, we developed the 2023 Profit
Distribution Proposal taking into account our actual business situations and development plans, and the needs to ensure normal
business operation and long-term development.
Special explanation about the cash dividend policy
Whether or not comply with the provisions of the articles of association or requirements of
Yes
resolutions of the general meeting of the Company?
Whether the standard and ratio of cash dividend distribution are clear and definite? Yes
Whether the relevant decision-making processes and mechanisms are sound? Yes
Whether the independent directors have performed their duties and exercised their
Yes
functions?
If the Company has not distributed cash dividends, explain the reason, and describe the
N/A
measures to be taken in order to increase the returns to investors in the future:
Whether the minority shareholders have sufficient opportunities to express their opinions
Yes
and requests and their legitimate rights and interests are fully protected?
Whether the conditions and procedures in respect of any adjustment or amendment of the
Yes
cash dividend policy comply with the applicable regulations and are transparent?
Whether the Company has made a profit in the current period and the parent has profits available for distribution to the
shareholders, but the Company does not propose to distribute cash dividends?
□ Applicable N/A
Particulars of profit distribution and transfer of capital reserve to the share capital for the reporting period:
Applicable □ N/A
44
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Number of bonus shares per 10 shares 0
Amount of cash dividends per 10 shares (inclusive of tax) 2.5
Share capital based on which the distribution proposal was made 1,701,276,209.00
Amount of cash dividends (inclusive of tax) 425,319,052.25
Amount of cash dividends distributed in other ways (such as share
0.00
repurchase) (RMB)
Total amount of cash dividends (RMB) 425,319,052.25
Distributable profit (RMB) 482,854,237.57
Ratio of total cash dividends to the distributable profit 100%
Particulars of cash dividends distributed for the reporting period
If we are at the growth stage and have certain material capital expenditure arrangements, at least 20% of the distributable profit
will be distributed in cash.
Particulars of the proposal of profit distribution or for transfer of capital reserve to share capital
Our 2023 Profit Distribution Proposal is as follows: to distribute to all shareholders a cash dividend of RMB2.50 (inclusive of tax)
per 10 shares on the basis of the total share capital of 1,701,276,209 shares (excluding treasury shares), or RMB425,319,052.25 in
total, without distribution of any bonus shares or transfer of any capital reserve to the share capital. (Note: As of the date of this
Report, we had a total share capital of 1,709,867,327 shares, of which, 8,591,118 shares held in the dedicated securities account
for repurchase would not participate in the profit distribution.)
XI. Share Incentive Plans, Employee Stock Ownership Plans or Other Employee Incentives
Applicable □ N/A
1. Share incentives
We have not granted any share incentive during the reporting period.
Share incentives granted to directors and senior executives:
□ Applicable N/A
Performance appraisal and incentives in respect of senior executives: N/A.
2. Employee stock ownership plans (ESOPs)
Applicable □ N/A
Effective ESOPs in the current period:
% of total
No. of Total shares
Scope of employees Changes share Source of funds
employees held
capital
Certain directors, supervisors and senior executives of the Company, and mid- Legal remunerations of the employees,
and high-level officers and key employees at the level of director or above self-raised funds or otherwise permitted
119 21,914,118 None 1.28%
who do full-time jobs for, receive salaries from and have valid employment by the applicable laws and administrative
contracts with the Company or its controlled subsidiaries (2021 ESOP)1 regulations
Legal remunerations of the employees,
Certain key officers and technical personnel of the Company or its controlled
self-raised funds or otherwise permitted
subsidiaries, excluding directors, supervisors and senior executives of the 308 1,366,120 None 0.08%
by the applicable laws and administrative
Company (2022 ESOP for key officers and technical personnel)2
regulations
Certain employees who do full-time jobs for, receive salaries from and have Legal remunerations of the employees,
valid employment contracts with the Company or its controlled subsidiaries, self-raised funds or otherwise permitted
366 4,847,178 None 0.28%
excluding directors, supervisors and senior executives of the Company (2022 by the applicable laws and administrative
second ESOP) 3 regulations
Note: 1. As of February 24, 2023, the shares held under the 2021 ESOP were sold and the 2021 ESOP was terminated.
2. As of the date of this Report, The vesting period for the 2022 ESOP for key officers and technical personnel has expired, under
which, the first installment of shares, representing 50% of the total shares granted thereunder were already vested, and the second
installment of shares, representing 50% of the total shares granted thereunder, has entered the vesting period.
3. As of the date of this Report, the 2022 second ESOP was still within the lock-up period.
Shares held by the directors, supervisors and senior executives under the ESOPs during the reporting period:
Name Title Opening balance of shares held Closing balance of % of total
45
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(share) shares held (share) share capital
SHAN Jianbin Director & Executive President 1,753,128 0 0.00%
Director, Deputy General
WANG Xu 1,314,846 0 0.00%
Manager & CFO
Director, Deputy General
MAO Xiaoyan 525,938 0 0.00%
Manager & Board Secretary
Chairman of the Board of
MA Liqiang 525,938 0 0.00%
Supervisors
JI Yachun Supervisor 525,938 0 0.00%
HUANG
Supervisor 525,938 0 0.00%
Yongxin
Changes in asset manager during the reporting period:
□ Applicable N/A
Changes in equity due to disposal of shares by the holders or otherwise during the reporting period:
□ Applicable N/A
Exercise of shareholder rights during the reporting period: None.
Other information related to the ESOPs during the reporting period and the relevant explanation:
□ Applicable N/A
Changes in the members of the ESOP management committee during the reporting period:
□ Applicable N/A
The financial effect of the ESOPs on the Listed Company during the reporting period and the relevant accounting treatment:
□ Applicable N/A
Termination of the ESOPs during the reporting period:
□ Applicable N/A
Other information:
1. During the reporting period, our directors, supervisors and senior executives only held shares under the 2021 ESOP, and did not
participate in any other ESOP.
2. As of February 24, 2023, the shares held under the 2021 ESOP were sold and the 2021 ESOP terminated.
XII. Establishment and Implementation of Internal Controls during the Reporting
Period
1. Establishment and implementation of internal controls
Pursuant to the requirements of the Company Law, the Basic Internal Control Standards for Enterprises and the relevant
guidelines, we have established a sound internal control system according to our actual situations and needs of management.
During the reporting period, we have continuously improved the internal control system, carried out internal control self-
assessment, and identified deficiencies in internal control, risks and hazards, to further improve the effectiveness of our internal
controls.
According to the assessment of material weakness in internal control over financial reporting, as of the reference date for the
assessment report on internal controls, there’s no material weakness in our internal control over financial reporting. We have
maintained effective internal control over financial reporting in all material respects pursuant to the requirements of the Basic
Internal Control Standards for Enterprises and other relevant provisions. According to the assessment of material weakness in
internal control over non-financial reporting, as of the reference date for the assessment report on internal controls, there’s no
material weakness in our internal control over non-financial reporting.
46
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
2. Material weaknesses in internal controls identified during the reporting period
□ Yes No
XIII. Management and Control of Subsidiaries during the Reporting Period
XIV. Assessment Report on Internal Controls or Auditor’s Report on Internal Controls
1. Assessment report on internal controls
Disclosure date of the full copy of the
April 18, 2024
assessment report on internal controls
Full copy of the assessment report on
http://www.cninfo.com.cn
internal controls available at
Ratio of total assets of the entities
covered by the assessment to total assets
100.00%
recorded in the consolidated financial
statements of the Company
Ratio of total operating revenue of the
entities covered by the assessment to
total operating revenue recorded in the 100.00%
consolidated financial statements of the
Company
Criteria for determination of deficiencies
Type Financial reporting Non-financial reporting
Indicators of material weaknesses in
internal control over financial reporting
include: (i) any fraud on the part of
directors, supervisors and senior
executives of the Company; (ii) any
correction of a financial report already
disclosed; (iii) any material misstatement
in the financial report for the current
period that was found by the public
certified accountants but failed to be
identified through internal controls; and
Indicators of material weaknesses in
(iv) ineffective supervision by the Audit
internal control over non-financial
Committee and the Internal Audit
reporting include: (i) any violation of the
Department of the Company over the
applicable laws, regulations or normative
financial reports disclosed externally or
documents of the country; (ii)
internal control over financial reporting.
unscientific procedure in making any
Indicators of significant deficiencies in
major decision; (iii) absence of any
internal control over financial reporting
regulations which may result in systemic
Qualitative criteria include: (i) failure to correctly select and
failure; (iv) failure to rectify any material
apply accounting policies pursuant to the
weakness or significant deficiency; and
generally accepted accounting principles;
(v) any other circumstance that has a
(ii) failure to establish anti-fraud
material adverse effect on the Company.
procedures and controls; (iii) failure to
Other deficiencies are classified as
establish or implement controls over the
significant or general deficiencies
accounting treatment of extraordinary or
depending on the degree of effect.
special transactions, and failure to
establish corresponding compensatory
controls; and (iv) one or more
deficiencies existing in control over the
preparation of financial report at the end
of the period, and inability to reasonably
ensure the truthfulness and completeness
of the financial statements. General
deficiencies in internal control over
financial reporting include deficiencies
in control other than material weakness
and significant deficiency.
47
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Material weakness: amount of
misstatement ≥ 0.5% of the operating Material weakness: direct loss > 0.5% of
revenue; significant deficiency: 0.3% of the total assets; significant deficiency:
the operating revenue ≤ amount of 0.2% of the total asset < direct loss ≤
Quantitative criteria
misstatement ＜ 0.5% of the operating 0.5% of the total asset; general
revenue; general deficiency: amount of deficiency: direct loss ≤ 0.2% of the total
misstatement ＜ 0.3% of the operating asset.
revenue.
Number of material weaknesses in
0
financial reporting
Number of material weaknesses in non-
0
financial reporting
Number of significant deficiencies in
0
financial reporting
Number of significant deficiencies in
0
non-financial reporting
2. Auditor’s report on internal controls
Applicable □ N/A
Auditor’s opinion expressed in the auditor’s report on internal controls
In our opinion, DSBJ has maintained effective internal control over financial reporting in all material respects as of December 31,
2023 in accordance with the Guide on Self-regulatory Supervision for Companies Listed on the Shenzhen Stock Exchange No. 1 –
Code of Operations for Companies Listed on the Main Board (Shen Zheng Shang [2023] No. 1145).
Disclosure of the auditor’s report on internal controls Disclosed
Disclosure date of the full copy of the auditor’s report on internal
April 18, 2023
controls
Full copy of the auditor’s report on internal controls available at http://www.cninfo.com.cn
Type of opinion expressed in the auditor’s report on internal controls Standard unqualified opinion
Whether there’s any material weakness in non-financial reporting No
Whether the accounting firm issued a modified auditor’s report on internal controls?
□ Yes No
Whether the auditor’s report on internal controls issued by the accounting firm is consistent with the opinion expressed in the self-
assessment report of the Board of Directors?
Yes □ No
XV. Rectification of Non-Compliance Found in the Special Self-Examination of Corporate
Governance of the Listed Company
N/A
48
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section V Environmental and Social Responsibilities
I. Material Environmental Issues
Whether the Listed Company and its subsidiaries have been identified as major polluters by the environmental protection
authorities?
Yes □ No
Policies and industrial standards related to environmental protection:
During the reporting period, we and our subsidiaries identified as major polluters have strictly complied with the Environmental
Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on Prevention and Control of
Atmospheric Pollution, the Law of the People’s Republic of China on Prevention and Control of Water Pollution, the Law of the
People’s Republic of China on Prevention and Control of Environmental Pollution by Solid Wastes, the Law of the People’s
Republic of China on Prevention and Control of Noise Pollution, the Law of the People’s Republic of China on Prevention and
Control of Soil Pollution, the Law of the People’s Republic of China on Environmental Impact Assessment, the Work Safety Law of
the People’s Republic of China, the Fire Protection Law of the People’s Republic of China and other laws and regulations related
to environmental protection, and implemented the Emission Standard for Odor Pollutants (GB14554-93), the Integrated Emission
Standard for Air Pollutants (DB32/4041-2021), the Emission Standard of Air Pollutants for Boilers (GB13271-2014), the
Emission Standard of Air Pollutants for Industrial Furnaces and Kilns (DB32/3728-2021), the Standard for Pollution Control on
Hazardous Waste Storage (GB18597-2001), the Emission Standard for Pollutants from Electroplating (GB21900-2008), the
Emission Standard for Industrial Enterprises Noise at Boundary (GB12348-2008), the Standard for Fugitive Emission of Volatile
Organic Compounds (GB37822-2019), the Discharge Standard of Water Pollutants for Electronic Industry (GB39731-2021), the
Integrated Wastewater Discharge Standard (GB8978-1996), the Wastewater Quality Standards for Discharge to Municipal Sewers
(GB/T31962-2015), the Standard for Pollution Control on the Non-Hazardous Industrial Solid Waste Storage and Landfill
(GB18599-2020) and other national and industrial standards related to environmental protection.
Environmental Permits of the Company
Environmental permits held by the Company and its subsidiaries identified as major polluters during the reporting period:
Company name No. Validity period
Suzhou Dongshan Precision Manufacturing Co., Ltd. 91320500703719732P001U From January 15, 2023 to January 14, 2028
Multek Technologies (Zhuhai) Co., Ltd. 914404007718663989001X From November 28, 2022 to November 27, 2027
Multek Industries Limited 91440400714732019J001W From August 17, 2023 to August 16, 2028
Multek Zhuhai Limited 9144040061749918XX001Y From April 12, 2022 to April 11, 2027
Multek China Limited 914404006182559377001W From December 20, 2021 to December 19, 2026
Suzhou Chengjia Precision Manufacturing Co., Ltd. 913205065754151948001X From April 8, 2020 to April 7, 2025
Suzhou Yongchuang Metal Science and Technology Co., Ltd. 9132050675271409XG001U From December 14, 2022 to December 13, 2027
Yancheng Dongshan Precision Manufacturing Co., Ltd. 91320903MA1P7PG85D001X From October 8, 2023 to October 7, 2028
MFLEX Yancheng Co., Ltd. 91320903MA1P7PLE6D001T From October 8, 2023 to October 7, 2028
MFLEX Suzhou Co., Ltd. 91320500738277671B001V From August 14, 2023 to August 13, 2028
MFLEX Suzhou Co., Ltd. 91320500738277671B002U From January 31, 2022 to January 30, 2027
Suzhou JDI Electronics Inc. 913205056082373800001C From June 27, 2022 to June 26, 2027
Industrial discharge standards and the pollutants discharged in our production and operating activities:
Category of Description
Applicable
main of main No. of Location of Total Approved
Method of Pollutant pollutant Excessive
Company name pollutants pollutants discharge discharge volume total volume
discharge concentration discharge discharge
and specific and specific outlets outlets discharged dischargeable
standard
pollutants pollutants
Multek
Wastewater
Industries,
from the Within
Multek Continuous
general COD 1 factory 15.75mg/L 160mg/L 41t 242.36t No
Electronics and discharge
discharge boundary
Multek
outlet
Technologies
Multek Wastewater Ammonia Continuous Within
1 2.42 mg/L 30mg/L 5.19t 45.44t No
Industries, from the nitrogen discharge factory
49
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Multek general boundary
Electronics and discharge
Multek outlet
Technologies
Multek
Wastewater
Industries,
from the Within
Multek Total Continuous
general 1 factory 13.57 mg/L 40mg/L 29.46t 60.59t No
Electronics and nitrogen discharge
discharge boundary
Multek
outlet
Technologies
Multek
Wastewater
Industries,
from Class I Within
Multek Intermittent
waste Total nickel 1 factory 0.1 mg/L 0.5mg/L 0.0026t 0.055t No
Electronics and discharge
discharge boundary
Multek
outlet
Technologies
Wastewater
from the Within
Continuous
Multek Zhuhai general COD 1 factory 14.75mg/L 160mg/L 3.28t 33.643t No
discharge
discharge boundary
outlet
Wastewater
from the Within
Ammonia Continuous
Multek Zhuhai general 1 factory 1.82 mg/L 30mg/L 0.385t 6.308t No
nitrogen discharge
discharge boundary
outlet
Wastewater
from the Within
Total Continuous
Multek Zhuhai general 1 factory 6.56 mg/L 40mg/L 1.44t 28.6748t No
nitrogen discharge
discharge boundary
outlet
Wastewater
from Class I Within
Intermittent
Multek Zhuhai waste Total nickel 1 factory 0 mg/L 0.5mg/L 0t 0.358t No
discharge
discharge boundary
outlet
Wastewater
from the Within
Continuous
Multek China general COD 1 factory 25.547mg/L 160mg/L 11.13t 216.372t No
discharge
discharge boundary
outlet
Wastewater
from the Within
Ammonia Continuous
Multek China general 1 factory 10.797mg/L 30mg/L 4.6t 40.5697t No
nitrogen discharge
discharge boundary
outlet
Wastewater
from the Within
Total Continuous
Multek China general 1 factory 19.21mg/L 40mg/L 7.71t 54.093t No
nitrogen discharge
discharge boundary
outlet
Wastewater
from Class I Within
Intermittent
Multek China waste Total nickel 1 factory 0.0122mg/L 0.5mg/L 0.000068t 1.3523t No
discharge
discharge boundary
outlet
Wastewater
from Class I Within
Intermittent
Multek China waste Total silver 1 factory 0.0067mg/L 0.1mg/L 0.0000127t 0.270465t No
discharge
discharge boundary
outlet
Yongchuang Continuous Southwest of
Waste gas Particles 1 4.6mg/m 20 mg/m 0.336057 / No
Tech discharge the factory
Yongchuang Nitrogen Continuous Southwest of
Waste gas 1 4mg/m 180 mg/m 0.292225 / No
Tech oxide discharge the factory
Yongchuang Sulfur Continuous Southwest of
Waste gas 1 6mg/m 80 mg/m 0.438337 / No
Tech dioxide discharge the factory
East of the
Suzhou Organized roof of
Waste gas NmHc 1 1.98 mg/m3 120 mg/m3 0.021 0.18 No
Chengjia discharge factory
buildings
General
wastewater
Yancheng Indirect discharge
Wastewater COD 1 32.57mg/L 500mg/L 4.783526t 232.467t No
Dongshan discharge outlet at the
southeast of
the factory
General
wastewater
Yancheng Ammonia Indirect discharge
Wastewater 1 5.66mg/L 35mg/L 0.562892t 14.058t No
Dongshan nitrogen discharge outlet at the
southeast of
the factory
General
wastewater
Yancheng Total Indirect discharge
Wastewater 1 0.36mg/L 3.5mg/L 0.083336t 1.743t No
Dongshan phosphorus discharge outlet at the
southeast of
the factory
General
Yancheng Total Indirect
Wastewater 1 wastewater 18.99mg/L 40mg/L 1.871285t 19.054t No
Dongshan nitrogen discharge
discharge
50
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
outlet at the
southeast of
the factory
General
wastewater
Yancheng Indirect discharge
Wastewater Total silver 1 0.0082mg/L 0.3mg/L 0.000527t 0.022t No
Dongshan discharge outlet at the
southeast of
the factory
General
wastewater
Yancheng Indirect discharge
Wastewater Total nickel 1 0.091mg/L 0.5mg/L 0.000637t 0.033t No
Dongshan discharge outlet at the
southeast of
the factory
Roof of
Yancheng Organized
Waste gas VOCs 5 buildings 4# 1.2 mg/m3 60mg/m3 0.625t 12.04t No
Dongshan discharge
and 5#
General
MFLEX Total Indirect discharge
Wastewater 1 18.5mg/L 40mg/L 14.88t 84.183t No
Yancheng nitrogen discharge outlet at east
of the factory
General
MFLEX Ammonia Indirect discharge
Wastewater 1 12.1mg/L 35mg/L 4.29t 75.729t No
Yancheng nitrogen discharge outlet at east
of the factory
General
MFLEX Indirect discharge
Wastewater COD 1 28mg/L 500mg/L 33.57t 844.263t No
Yancheng discharge outlet at east
of the factory
General
MFLEX Total Indirect discharge
Wastewater 1 0.14mg/L 3.5mg/L 0.472t 7.744t No
Yancheng phosphorus discharge outlet at east
of the factory
General
MFLEX Indirect discharge
Wastewater Nickel 1 0.01mg/L 0.5mg/L 0.019t 0.085t No
Yancheng discharge outlet at east
of the factory
Wastewater
from the Within
MFLEX Continuous
general COD 1 factory 50.232mg/L 500mg/L 73.744t 471.035t No
Suzhou discharge
discharge boundary
outlet
Wastewater
from the Within
MFLEX Ammonia Continuous
general 1 factory 1.046mg/L 25mg/L 1.535t 26.020t No
Suzhou nitrogen discharge
discharge boundary
outlet
Wastewater
from the Within
MFLEX Continuous
general Total copper 1 factory 0.018mg/L 2.0mg/L 0.026t 0.9405t No
Suzhou discharge
discharge boundary
outlet
Wastewater
from Class I Within
MFLEX Continuous
waste Total nickel 1 factory ND 0.5mg/L / 0.057t No
Suzhou discharge
discharge boundary
outlet
Wastewater
from the Within
MFLEX Continuous
general COD 1 factory 18mg/L 500mg/L 2.111t 92.893t No
Suzhou discharge
discharge boundary
outlet
Wastewater
from the Within
MFLEX Ammonia Continuous
general 1 factory 6.05mg/L 30mg/L 0.709t 7.963t No
Suzhou nitrogen discharge
discharge boundary
outlet
Treatment of pollutants
With respect to the wastewater, waste gas, solid wastes and other wastes generated during our production, we have a complete set
of pollution treatment facilities in place, which are operated and maintained by ourselves or the service providers engaged by us.
We designate special personnel to monitor the operation of equipment and discharge of pollutants, and maintain and repair the
equipment and facilities on a regular basis, to ensure the discharge and disposal of all kinds of pollutants in accordance with the
applicable standards and regulations, and minimize the environmental impact of our production. During the reporting period, our
discharge of pollutants complied with the applicable standards and regulations.
Environmental self-monitoring plans
We have developed environmental self-monitoring plans in accordance with the applicable laws and regulations, and installed
automatic monitoring equipment or engaged qualified third-party inspection institutions to monitor the wastewater, waste gas,
51
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
noise and other pollutants on a regular basis. During the reporting period, the results of our environmental monitoring complied
with the applicable standards and regulations.
Environmental emergency response plans
We have developed environmental emergency response plans in accordance with the National Environmental Emergency
Response Plan, filed the same with the local environmental protection authority, and carried out exercises on a regular basis, to
improve our capability to respond to environmental emergencies, and reduce harm to the environment and impact on the society.
Expenditures on environmental governance and protection, and payment of environmental protection tax
We have made continuous investments in environmental governance and protection, regularly maintained the waste gas,
wastewater and solid waste treatment and other environmental protection facilities to ensure their effective operation, and
discharge of all kinds of pollutants in conformity with the applicable standards, and promote our sustainable development.
Measures taken for reducing carbon emission during the reporting period and their effect:
Applicable □ N/A
Refer to our Social Responsibility Report 2023 disclosed on www.cninfo.com.cn.
Environment-related administrative penalties the Company has been subject to during the reporting period: N/A.
Other environmental information that should be disclosed: N/A.
Refer to our Social Responsibility Report 2023 disclosed on www.cninfo.com.cn for other information related to environmental
protection.
II. Social Responsibility
Refer to our Social Responsibility Report 2023 disclosed on www.cninfo.com.cn.
III. Consolidating and Expanding the Result of Poverty Alleviation and Rural Revitalization
Refer to our Social Responsibility Report 2023 disclosed on www.cninfo.com.cn.
52
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section VI Significant Matters
I. Fulfillment of Covenants
1. Covenants made by the actual controllers, shareholders, affiliates and acquirer of the Company, the
Company itself and other related parties that have been fulfilled during the reporting period or have not
yet been completely fulfilled as of the end of the reporting period
Applicable □ N/A
Validity
Background of Type of Time of Status of
Covenantor Content of covenant period of the
covenant covenant covenant fulfillment
covenant
Each of the shareholders YUAN Yongfeng
and YUAN Yonggang, as director and
senior executive of the Company, covenants
that so long as I remain a director and senior
As of the end of
executive of the Company, I will not
the reporting
YUAN Covenants transfer more than 25% of the total shares
period, the
Yongfeng and related to held by me in the Company each year; and April 9, Permanently
covenantors
YUAN restrictions on if I cease to be a director and senior 2010 binding
have complied
Yonggang the sale of shares executive of the Company, I will not
with such
transfer any shares held by me in the
covenants.
Company within half a year, and will not
transfer more than 50% of the total shares
held by me in the Company through the
stock exchange within 12 months thereafter.
Covenants
Covenants related to horizontal As of the end of
related to
YUAN Fugen, competition: Each of the shareholders the reporting
horizontal
YUAN YUAN Yongfeng and YUAN Yonggang period, the
competition, April 9, Permanently
Yongfeng and covenants that I will not, directly or covenantors
related-party 2010 binding
YUAN indirectly, engage in any business in have complied
transactions and
Yonggang competition with the business actually with such
occupation of
conducted by the Company. covenants.
funds
Covenants related to horizontal
competition: Each of the shareholders
YUAN Yongfeng and YUAN Yonggang
covenants that after the completion of this
material asset restructuring, I will not,
Covenant relating directly or through any affiliate, participate
to initial public or engage in any business that substantially
offering or competes or might compete with the
subsequent business of the Company; and if any
fundraisings product manufactured or business
Covenants
conducted by any entity wholly owned, As of the end of
related to
YUAN Fugen, controlled or invested by me in the future the reporting
horizontal
YUAN competes or might compete with the period, the
competition, June 11, Permanently
Yongfeng and Company, at the request of the Company, I covenantors
related-party 2018 binding
YUAN will transfer all of the investment or shares have complied
transactions and
Yonggang held by me in such entity, give priority to with such
occupation of
the Company or its wholly-owned covenants.
funds
subsidiary in the acquisition of such
investment or shares subject to the
applicable laws and regulations, and use my
best efforts to procure that the transfer price
will be determined on an arm length’s basis;
and if I or any of my affiliates breaches any
covenant set forth above, I will indemnify
the Company and other shareholders for the
damages arising therefrom according to
law.
Covenants related to the regulation and
Covenants reduction of related-party transactions: Each
As of the end of
related to of the shareholders YUAN Yongfeng,
YUAN Fugen, the reporting
horizontal YUAN Yonggang and YUAN Fugen
YUAN period, the
competition, covenants that: (i) I and my affiliates will June 11, Permanently
Yongfeng and covenantors
related-party avoid and reduce related-party transactions 2018 binding
YUAN have complied
transactions and with the Company to the maximum extent
Yonggang with such
occupation of practicable; (ii) with respect to the related-
covenants.
funds party transactions that are unavoidable or
necessary, I will abide by the principle of
53
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
justice, fairness and openness, enter into the
relevant agreements according to law,
perform the legal procedures pursuant to the
applicable laws, regulations, normative
documents, the Articles of Association and
other relevant provisions of the Company,
ensure that such related-party transactions
are fair, comply with the regulations, and
will not damage the legitimate rights and
interests of the Company and other
shareholders, and make the relevant
information disclosures promptly in
accordance with the requirements of the
applicable laws, regulations and normative
documents; and (iii) I will exercise the
shareholder rights in strict accordance with
the Company Law and other the applicable
laws and regulations, and the relevant
provisions of the Articles of Association of
the Company, and abstain from the voting
on the related-party transactions involving
me and other entities controlled by me at
the general meeting of the Company in
accordance with the relevant provisions.
Covenant regarding the remedial measures
against dilution of current earnings caused
by the private placement: Each of the
directors and senior executives of the
Company covenants that: (i) I will not
transfer benefits to any other entity or
individual without compensation or on
unfair terms, or otherwise damage the
interest of the Company; (ii) I will exercise
self-discipline in consumption in
performing my duties; (iii) I will not use the
assets of the Company to engage in any
investment or consumption activities not in
YUAN connection with my duties; (iv) I will link
Yongfeng, the compensation system adopted by the As of the end of
YUAN Board of Directors or the Compensation the reporting
Yonggang, Committee with the implementation of the period, the
October Permanently
ZHAO Xiutian, Other covenants Company’s remedial measures against covenantors
10, 2019 binding
SHAN Jianbin, dilution of current earnings; (v) if the have complied
WANG Xu, Company implements any share incentive with such
MAO Xiaoyan plan in the future, I will link the vesting covenants.
and MA Liqiang conditions under such share incentive plan
with the implementation of the Company’s
remedial measures against dilution of
current earnings; and (vi) I will seriously
implement the Company’s remedial
measures against dilution of current
earnings, and abide by the relevant
covenants made by me; and if I breach any
covenant set forth above, I will indemnify
the Company and other shareholders for the
losses arising therefrom according to law,
and accept the punishments that the
competent regulatory authorities may
impose on me.
Covenant regarding the remedial measures
against dilution of current earnings caused
by the private placement: Each of the
controlling shareholders and actual
As of the end of
controllers of the Company covenants that I
YUAN Fugen, the reporting
will not interfere with the management and
YUAN period, the
operation of the Company beyond my October Permanently
Yongfeng and Other covenants covenantors
powers, or infringe on the interest of the 17, 2019 binding
YUAN have complied
Company; and as the person responsible for
Yonggang with such
the serious implementation of the remedial
covenants.
measures against dilution of current
earnings, if I breach or refuse to fulfill any
covenant set forth above, I will assume the
relevant liabilities according to law.
To ensure the effective implementation of As of the end of
YUAN Fugen, the remedial measures against dilution of the reporting
YUAN earnings to be taken by the Company, each period, the
March Permanently
Yongfeng and Other covenants of the controlling shareholders and actual covenantors
12, 2024 binding
YUAN controllers of the Company covenants that: have complied
Yonggang (i) I will not interfere with the management with such
and operation of the Company beyond my covenants.
54
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
powers, or infringe on the interest of the
Company; (ii) from the date of this Letter of
Undertaking till the completion of this
offering, in case of any new regulatory
provisions promulgated by the SCRC, the
SZSE or other competent securities
authorities regarding the remedial measures
against dilution of earnings and related
covenants, as a result of which the
covenants set forth above no longer comply
with such new provisions, I will make
additional covenants in accordance with
such new provisions; and (iii) I will
seriously implement the remedial measures
against dilution of earnings adopted by the
Company and fulfill my covenants in
connection therewith, and if I breach or
refuse to fulfill any covenant set forth
above, accept the penalties or other
regulatory actions that may be imposed or
taken by the SCRC, the SZSE or other
competent securities authorities against me,
and indemnify the Company or the
investors for the losses arising therefrom
according to law.
To ensure the effective implementation of
the remedial measures against dilution of
earnings to be taken by the Company, each
of the directors and senior executives of the
Company covenants that: (i) I will not
transfer benefits to any other entity or
individual without compensation or on
unfair terms, or otherwise damage the
interest of the Company; (ii) I will exercise
self-discipline in consumption in
performing my duties; (iii) I will not use the
assets of the Company to engage in any
investment or consumption activities not in
connection with my duties; (iv) I will link
the compensation system adopted by the
Board of Directors or the Compensation
Committee with the implementation of the
Company’s remedial measures against
dilution of current earnings; (v) if the
Company implements any share incentive
YUAN plan in the future, I will link the vesting
As of the end of
Yongfeng, conditions under such share incentive plan
the reporting
YUAN with the implementation of the Company’s
period, the
Yonggang, remedial measures against dilution of March Permanently
Other covenants covenantors
ZHAO Xiutian, current earnings; (vi) from the date of this 12, 2024 binding
have complied
SHAN Jianbin, Letter of Undertaking till the completion of
with such
WANG Xu and this offering, in case of any new regulatory
covenants.
MAO Xiaoyan provisions promulgated by the SCRC, the
SZSE or other competent securities
authorities regarding the remedial measures
against dilution of earnings and related
covenants, as a result of which the
covenants set forth above no longer comply
with such new provisions, I will make
additional covenants in accordance with
such new provisions; and (vii) I will
seriously implement the remedial measures
against dilution of earnings adopted by the
Company and fulfill my covenants in
connection therewith, and if I breach or
refuse to fulfill any covenant set forth
above, accept the penalties or other
regulatory actions that may be imposed or
taken by the SCRC, the SZSE or other
competent securities authorities against me,
and indemnify the Company or the
investors for the losses arising therefrom
according to law.
Whether the
covenants have
Yes
been fulfilled on
time
If any covenant
fails to be N/A
fulfilled on time,
55
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
please explain the
reason and the
relevant actions
to be taken in
detail
2. If the Company has made any profit forecast on its assets or project and the reporting period falls
within the period of such profit forecast, explanation about whether the goal has been achieved and the
related reasons
□ Applicable N/A
II. Occupation by the Controlling Shareholders and their Affiliates of the Funds of the
Company for Non-Operating Purpose
□ Applicable N/A
Our controlling shareholders and their affiliates have not occupied our funds for non-operating purposes during the reporting
period.
III. External Guarantees in Violation of the Regulations
□ Applicable N/A
We have not provided any external guarantee in violation of the applicable regulations during the reporting period.
IV. Explanation by the Board of Directors about the Most Recent Modified Auditor’s
Report
□ Applicable N/A
V. Explanation by the Board of Directors, the Board of Supervisors and the Independent
Directors (if any) about the Modified Auditor’s Report Issued by the Accounting Firm for
the Reporting Period
□ Applicable N/A
VI. Changes in the Accounting Policies and Accounting Estimates Compared with the
Financial Report for the Previous Year or Correction of Material Accounting Errors
□ Applicable N/A
During the reporting period, there wasn’t any change in the accounting policies or accounting estimates, or correction of material
accounting errors.
VII. Explanation of Changes in the Scope of Consolidation Compared with the Financial
Report for the Previous Year
Applicable □ N/A
1. Subsidiaries newly included in the scope of consolidation
56
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Method of Date of
Ratio of capital
Company name acquisition of acquisition of Registered capital
contribution
shares shares
Aranda Acquisition February 1, 2023 100.00%
Suzhou JDI Electronics Inc. Acquisition February 1, 2023 RMB1,043,692,731 100.00%
Suzhou Dongdi Holding Limited Established February 13, 2023 RMB10,000,000 100.00%
Hong Kong Dongdi Holding Limited Established July 28, 2023 HKD10,000 100.00%
Multek Zhuhai Enterprise Management Co.,
Established April 27, 2023 RMB1,000,000 100.00%
LTD
Multi-Fineline Electronics (Thailand) Co., Ltd. Established June 30, 2023 USD50,000,000 100.00%
2. Subsidiaries removed from the scope of consolidation
Net profit from
Method of Net assets at the
Date of disposal of January 1, 2023
Company name disposal of date of disposal
shares to the date of
shares (RMB)
disposal (RMB)
Zhuhai Dii Information Technology Consulting
Deregistration September 7, 2023
Co., Ltd.
Hainan Chengjia Technology Consulting Co.,
Deregistration November 1, 2023 -206,048.28 12,320,966.42
Ltd.
Suzhou Yuanshi Electronic Technology Co.,
Deregistration August 4, 2023 -12,592,979.40 -468,295.88
Ltd.
DSBJ Norway AS Deregistration December 27, 2023 345,205.52 18,211,422.23
VIII. Engagement and Termination of Engagement of Accounting Firm
Accounting firm currently engaged:
Name of domestic accounting firm Pan-China Certified Public Accountants LLP
Remuneration of domestic accounting firm (in RMB0’000) 240
Consecutive years in which the domestic accounting firm has
13
provided auditing service
Certified public accountants of the domestic accounting firm ZHANG Yang and FU Zhenlong
Consecutive years in which the certified public accountants of
2, 2
the domestic accounting firm have provided auditing service
Name of foreign accounting firm (if any) N/A
Remuneration of foreign accounting firm (if any) (in
0
RMB0’000)
Consecutive years in which the foreign accounting firm (if any)
N/A
has provided auditing service
Certified public accountants of the foreign accounting firm (if
N/A
any)
Consecutive years in which the certified public accountants of
the foreign accounting firm (if any) have provided auditing N/A
service
Whether a new accounting firm was engaged during the reporting period?
□ Yes No
Engagement of accounting firm for auditing internal controls, financial advisor or sponsor:
Applicable □ N/A
During the reporting period, we engaged Pan-China Certified Public Accountants LLP as the auditor of internal controls,
responsible for the audit of our internal controls in 2023.
IX. Risk of Delisting after Disclosure of the Annual Report
□ Applicable N/A
57
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
X. Matters Relating to Bankruptcy and Reorganization
□ Applicable N/A
We have not been involved in any bankruptcy or reorganization proceedings during the reporting period.
XI. Material Litigations and Arbitrations
□Applicable N/A
We have not been involved in any material litigation or arbitration proceedings during the reporting period.
XII. Punishments and Rectifications
□ Applicable N/A
We have not been involved in any punishment and rectification during the reporting period.
XIII. Credit Standing of the Company and its Controlling Shareholders and Actual
Controllers
□ Applicable N/A
XIV. Material Related-party Transactions
1. Related-party transactions relating to day-to-day operation
□ Applicable N/A
There has been no related-party transaction relating to day-to-day operation during the reporting period.
2. Related-party transactions involving the acquisition or sale of assets or equities
□ Applicable N/A
There has been no related-party transaction involving the acquisition or sale of assets or equities during the reporting period.
3. Related-party transactions involving joint external investment
□ Applicable N/A
There has been no related-party transaction involving joint external investment during the reporting period.
4. Debts owed by and to related parties
□ Applicable N/A
There has been no debt owed by or to related parties during the reporting period.
5. Dealings with affiliated financial companies
□ Applicable N/A
There has been no deposit, loan, facility or other financial business between us and any of our affiliated financial companies.
6. Dealings with financial companies controlled by the Company and its affiliates
58
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
□ Applicable N/A
There has been no deposit, loan, facility or other financial business between any of our controlled financial companies and
affiliates.
7. Other material related-party transactions
□ Applicable N/A
There has been no other material related-party transaction during the reporting period.
XV. Particulars and Performance of Material Contracts
1. Trusteeship, contracting and leases
(1) Trusteeship
□ Applicable N/A
No such case during the reporting period.
(2) Contracting
□ Applicable N/A
No such case during the reporting period.
(3) Leases
□ Applicable N/A
No such case during the reporting period.
2. Material guarantees
Applicable □N/A
In RMB0’000
External guarantees provided by the Company and its subsidiaries (excluding those provided for the subsidiaries)
Whether
Disclosure date of
Counter or not
announcement of Maximum Effective Actual Collateral Whether
Type of guarantee Term of provided
Obligor the maximum amount date of amount (if or not
guarantee (if guarantee for a
amount guaranteed guarantee guaranteed applicable) expired
applicable) related
guaranteed
party
Suzhou Toprun
18
Electric Equipment April 20, 2023 3,000 2,500 No Yes
months
Co., Ltd.
Suzhou LEGATE
Intelligent
April 20, 2023 3,000
Equipment Corp.,
Ltd.
Shanghai Fu Shan
Precision 18
April 20, 2023 3,000 3,000 No Yes
Manufacturing Co., months
Ltd.
Total amount of external
Total amount of external guarantee guarantee actually provided
9,000 8,000
approved during the reporting period (A1) during the reporting period
(A2)
Total amount of external
Total amount of external guarantee
guarantee actually provided
approved as at the end of the reporting 9,000 5,500
as at the end of the reporting
period (A3)
period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure date of Whether
Counter
announcement of Maximum Effective Actual Collateral Whether or not
Type of guarantee Term of
Obligor the maximum amount date of the amount (if or not provided
guarantee (if guarantee
amount guaranteed guarantee guaranteed applicable) expired for a
applicable)
guaranteed related
59
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
party
Dragon Holdings
18
and its controlled April 20, 2023 280,000 228,862.81 No No
months
subsidiaries
Hong Kong
April 20, 2023 60,000
Dongshan Holding
Yancheng 18
April 20, 2023 150,000 83,385.08 No No
Dongshan months
Multek Group and
18
its controlled April 20, 2023 150,000 48,000.89 No No
months
subsidiaries
18
Mutto Optronics April 20, 2023 100,000 31,210.94 No No
months
18
Yongchuang Tech April 20, 2023 80,000 32,589.46 No No
months
Chaowei
Microelectronics
April 20, 2023 80,000 20,000
(Yancheng) Co.,
Ltd.
Shanghai Dongxin
New Energy
April 20, 2023 40,000
Technology Co.,
Ltd.
Yancheng
Dongshan
18
Communication April 20, 2023 30,000 5,100 No No
months
Technology Co.,
Ltd.
18
RF Top Electronic April 20, 2023 30,000 1,411.88 No No
months
Hong Kong
April 20, 2023 10,000 No
Dongshan
Suzhou Chengjia
Precision 18
April 20, 2023 8,000 4,554.95 No No
Manufacturing Co., months
Ltd.
Suzhou Dongbo
Precision 18
April 20, 2023 3,000 200 No No
Manufacturing Co., months
Ltd.
Suzhou Dongyue
New Energy
April 20, 2023 20,000 No No
Technology Co.,
Ltd.
Yancheng
Dongchuang
18
Precision April 20, 2023 50,000 46,278.42 No No
months
Manufacturing Co.,
Ltd.
Total amount of guarantee
Total amount of guarantee approved to be
actually provided for
provided for subsidiaries during the 1,091,000 873,399.48
subsidiaries during the
reporting period (B1)
reporting period (B2)
Total amount of guarantee
Total amount of guarantee approved to be
actually provided for
provided for subsidiaries as at the end of 1,091,000 501,594.43
subsidiaries as at the end of
the reporting period (B3)
the reporting period (B4)
Guarantees provided by subsidiaries for each other
Whether
Disclosure date of
Counter or not
announcement of Maximum Effective Actual Collateral Whether
Type of guarantee Term of provided
Obligor the maximum amount date of the amount (if or not
guarantee (if guarantee for a
amount guaranteed guarantee guaranteed applicable) expired
applicable) related
guaranteed
party
Total amount of guarantee
Total amount of guarantee approved to be
actually provided for
provided for subsidiaries during the 0 0
subsidiaries during the
reporting period (C1)
reporting period (C2)
Total amount of guarantee
Total amount of guarantee approved to be
actually provided for
provided for subsidiaries as at the end of 0 0
subsidiaries as at the end of
the reporting period (C3)
the reporting period (C4)
Total amount of guarantee provided by the Company
Total amount of guarantee
Total amount of guarantee approved
1,100,000 actually provided during the 881,399.48
during the reporting period (A1+B1+C1)
reporting period (A2+B2+C2)
Total amount of guarantee
Total amount of guarantee approved as at
actually provided as at the
the end of the reporting period 1,100,000 507,094.43
end of the reporting period
(A3+B3+C3)
(A4+B4+C4)
Ratio of the total amount of guarantee actually provided (A4+B4+C4) to
27.95%
the net assets of the Company
Where:
Outstanding guarantees provided for shareholders, actual controllers and
5,500
their affiliates (D)
Outstanding guarantees directly or indirectly provided for obligors whose
432,581.66
debt-to-assets ratio exceeds 70% (E)
Portion of the total amount of guarantee in excess of 50% of the net assets
0
(F)
60
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Total (D+E+F) 432,581.66
Explanation about the joint and several liability that have been or might
be incurred in respect of outstanding guarantees during the reporting N/A
period (if any)
Explanation about external guarantees provided in contravention of the
N/A
established procedures (if any)
3. Entrusted management of cash assets
(1) Entrusted wealth management
Applicable □ N/A
Particulars of entrusted wealth management during the reporting period:
In RMB0’000
Impairment loss recognized
Overdue
Type Source of funds Total amount Outstanding amount for overdue wealth
amount
management products
Bank wealth
Self-owned funds 244,779.79 1,674.49 0 0
management product
Total 244,779.79 1,674.49 0 0
High-risk entrusted wealth management products that are significant individually, illiquid or not principal protected:
□ Applicable N/A
Entrusted wealth management products the principal of which may be unrecoverable or which may otherwise be impaired:
□ Applicable N/A
(2) Entrusted loans
□ Applicable N/A
No such case during the reporting period.
4. Other material contracts
□ Applicable N/A
We have not entered into any other material contract during the reporting period.
XVI. Other significant Matters
□ Applicable N/A
There’s no other significant matter needing to be explained for the reporting period.
XVII. Significant Matters of Subsidiaries
□ Applicable N/A
61
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section VII Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Shares
Before the change ＋/- After the change
New Bonus Capitalization of capital
Number % Others Subtotal Number %
shares shares reserves
I. Non-tradable shares 319,591,987 18.69% 319,591,987 18.69%
1. Shares held by the State
2. Shares held by State-owned corporations
3. Shares held by other domestic investors 319,591,987 18.69% 319,591,987 18.69%
Incl.: Shares held by domestic non-State-owned
corporations
Shares held by domestic natural persons 319,591,987 18.69% 319,591,987 18.69%
4. Shares held by foreign investors
Incl.: Shares held by foreign corporations
Shares held by foreign natural persons
II. Tradable shares 1,390,275,340 81.31% 1,390,275,340 81.31%
1. RMB-denominated ordinary shares 1,390,275,340 81.31% 1,390,275,340 81.31%
2. Foreign currency-denominated shares listed
domestically
3. Foreign currency-denominated shares listed
overseas
4. Others
III. Total shares 1,709,867,327 100.00% 1,709,867,327 100.00%
2. Changes in non-tradable shares
□ Applicable N/A
II. Offering and Listing of Securities
1. Offering of securities (other than preferred shares) during the reporting period
□ Applicable N/A
2. Changes in the total number of shares, shareholding structure, and structure of assets and liabilities
of the Company
□ Applicable N/A
3. Outstanding employee shares
□ Applicable N/A
III. Shareholders and Actual Controllers
1. Number of shareholders and shareholding structure of the Company
Unit: Shares
Total number Total number of Total number of preferred
Total number of ordinary of ordinary preferred shareholders whose voting rights had
shareholders at the end of the 91,686 shareholders 107,091 shareholders 0 been restituted at the end of the month 0
reporting period at the end of whose voting immediately preceding the disclosure
the month rights had been date of this annual report (if any)
62
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
immediately restituted at the (Note 8)
preceding the end of the
disclosure reporting period
date of this (if any) (Note 8)
annual report
Shareholding by shareholders holding more than 5% of the shares or top 10 shareholders (excluding the shares lent via refinancing)
No. of Pledge, attachment or freeze
shares held Changes in
No. of non- No. of
Status of Shareholding at the end of shareholding
Name of shareholder tradable shares tradable
shareholder percentage the during the Status of shares Number
held shares held
reporting reporting period
period
Domestic natural
YUAN Yongfeng 13.01% 222,388,153 0 166,791,115 55,597,038 Pledged 109,600,000
person
Domestic natural
YUAN Yonggang 11.83% 202,226,196 0 151,669,647 50,556,549 Pledged 90,790,000
person
Hong Kong Securities Clearing Foreign
3.86% 66,012,602 5,346,736 0 66,012,602 N/A 0
Company Limited corporation
Domestic natural
YUAN Fugen 3.44% 58,796,052 0 0 58,796,052 N/A 0
person
Schroder Investment
Management (Hong Kong)
Limited- Schroder Global Fund Others 1.30% 22,181,428 22,181,428 0 22,181,428 N/A 0
Series Chinese A-shares
(Exchange)
China Everbright Bank -
Aegon-Industrial Business
Model Selection Hybrid Others 1.10% 18,856,074 18,856,074 0 18,856,074 N/A 0
Securities Investment Fund
(LOF)
Industrial Bank - Aegon-
Industrial New Vision Flexible
Allocation, Periodic Opening Others 1.03% 17,657,030 17,657,030 0 17,657,030 N/A 0
Hybrid Sponsored Securities
Investment Fund
Taikang Life Insurance –
Traditional – General
Others 0.90% 15,473,215 518,500 0 15,473,215 N/A 0
Insurance Product -019L-
CT001 Shenzhen
China Merchants Bank –
Ruiyuan Growth Value Hybrid Others 0.89% 15,295,548 15,295,548 0 15,295,548 N/A 0
Securities Investment Fund
Ping An Anying Stock-oriented
Pension Product – Bank of Others 0.88% 15,012,151 4,104,654 0 15,012,151 N/A 0
China
Strategic investors or general corporations becoming
top 10 shareholders as a result of rights issue (if any) N/A
(Note 3)
Among the shareholders listed above, YUAN Yonggang and YUAN Yongfeng are sons of YUAN Fugen, and YUAN Yongfeng is the
Affiliates or concert parties among the shareholders elder brother of YUAN Yonggang. YUAN Fugen, YUAN Yongfeng and YUAN Yonggang are our actual controllers. We are not
listed above aware whether there are affiliates or concert parties within the meaning of the Administrative Measures for Information Disclosure by
the Listed Companies Relating to Changes in Shares Held by Shareholders among other shareholders listed above.
Delegation or waiver of voting rights or ownership of
N/A
voting rights by or to the shareholders listed above
Special explanation about any dedicated account for
repurchase opened by any top 10 shareholder (if any) N/A
(Note 10)
Shareholding by the top 10 holders of tradable shares
Type and number of shares
Name of shareholder Number of tradable shares held at the end of the reporting period
Type Number
RMB-denominated
Hong Kong Securities Clearing Company Limited 66,012,602 66,012,602
ordinary share
RMB-denominated
YUAN Fugen 58,796,052 58,796,052
ordinary share
RMB-denominated
YUAN Yongfeng 55,597,038 55,597,038
ordinary share
RMB-denominated
YUAN Yonggang 50,556,549 50,556,549
ordinary share
Schroder Investment Management (Hong Kong)
RMB-denominated
Limited- Schroder Global Fund Series Chinese A- 22,181,428 22,181,428
ordinary share
shares (Exchange)
China Everbright Bank - Aegon-Industrial Business
RMB-denominated
Model Selection Hybrid Securities Investment Fund 18,856,074 18,856,074
ordinary share
(LOF)
Industrial Bank - Aegon-Industrial New Vision
RMB-denominated
Flexible Allocation, Periodic Opening Hybrid 17,657,030 17,657,030
ordinary share
Sponsored Securities Investment Fund
Taikang Life Insurance – Traditional – General RMB-denominated
15,473,215 15,473,215
Insurance Product -019L-CT001 Shenzhen ordinary share
China Merchants Bank – Ruiyuan Growth Value RMB-denominated
15,295,548 15,295,548
Hybrid Securities Investment Fund ordinary share
Ping An Anying Stock-oriented Pension Product – RMB-denominated
15,012,151 15,012,151
Bank of China ordinary share
Affiliates or concert parties among the top 10 holders Among the shareholders listed above, YUAN Yonggang and YUAN Yongfeng are sons of YUAN Fugen, and YUAN Yongfeng is the
elder brother of YUAN Yonggang. YUAN Fugen, YUAN Yongfeng and YUAN Yonggang are our actual controllers. We are not
of tradable ordinary shares, and among the top 10 aware whether there are affiliates or concert parties within the meaning of the Administrative Measures for Information Disclosure by
holders of tradable ordinary shares and top 10 the Listed Companies Relating to Changes in Shares Held by Shareholders among other shareholders listed above.
63
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
ordinary shareholders
Securities margin trading conducted by top 10
N/A
ordinary shareholders (if any) (Note 4)
Share lending by top 10 shareholders via refinancing:
□ Applicable N/A
Changes in top 10 shareholders compared to the previous period:
Applicable □N/A
Unit: Shares
Changes in top 10 shareholders compared to the end of the previous period
Number of shares held in ordinary
Number of outstanding shares
New or account and margin trading account and
lent via refinancing at the end of
withdrawn in outstanding shares lent via refinancing
Full name of shareholder the current period
the current at the end of the current period
period % of total % of total
Total number Total number
share capital share capital
Schroder Investment Management (Hong Kong) Limited-
New 0 0.00% 22,181,428 1.30%
Schroder Global Fund Series Chinese A-shares (Exchange)
China Everbright Bank - Aegon-Industrial Business Model
New 0 0.00% 18,856,074 1.10%
Selection Hybrid Securities Investment Fund (LOF)
Industrial Bank - Aegon-Industrial New Vision Flexible
Allocation, Periodic Opening Hybrid Sponsored Securities New 0 0.00% 17,657,030 1.03%
Investment Fund
Taikang Life Insurance – Traditional – General Insurance
New 0 0.00% 15,473,215 0.90%
Product -019L-CT001 Shenzhen
China Merchants Bank – Ruiyuan Growth Value Hybrid
New 0 0.00% 15,295,548 0.89%
Securities Investment Fund
Ping An Anying Stock-oriented Pension Product – Bank of
New 0 0.00% 15,012,151 0.88%
China
Industrial and Commercial Bank of China Limited – GF
Multi-factor Flexible Commingled Securities Investment Withdrawn 0 0.00% 0 0.00%
Fund
Shaanxi International Trust Co., Ltd.－SITI-DSBJ ESOP
Withdrawn 0 0.00% 0 0.00%
Collective Trust Plan II
Pension Fund Portfolio 15022 Withdrawn 0 0.00% 11,900,000 0.70%
Zhangjiagang Industrial Capital Investment Co., Ltd. Withdrawn 0 0.00% 10,998,700 0.64%
Pension Fund Portfolio 1204 Withdrawn 0 0.00% 2,548,100 0.15%
GF Fund Management Co., Ltd. Social Security Fund
Withdrawn 0 0.00% 9,799,012 0.57%
Portfolio 402
No top 10 ordinary shareholder or top 10 holders of tradable ordinary shares has conducted any transaction under the repurchase
agreement during the reporting period.
2. Controlling shareholders of the Company
Nature of controlling shareholders: Natural persons.
Type of controlling shareholders: Natural persons.
Name of controlling
Nationality Whether or not having obtained residency in any other country or region
shareholder
YUAN Yongfeng China No
YUAN Yonggang China Yes
YUAN Fugen China No
Main occupation and YUAN Yonggang is our Chairman, YUAN Yongfeng is our director and General Manager, and YUAN Fugen is our senior
title advisor.
(1) YUAN Yonggang holds 23.94% shares in Anhui Landun Photoelectron Co., Ltd. (stock short name: Landun Photoelectron;
stock code: 300862) directly, and Anhui Gaoxin Jintong Anyi Venture Capital Fund II (L.P.), which is jointly controlled by
YUAN Yonggang and his wife WANG Wenjuan, holds 7.45% in Landun Photoelectron, so YUAN Yonggang and his wife
Shares held in other WANG Wenjuan hold 31.39% shares of Landun Photoelectron in aggregate and are its actual controllers.
domestic or foreign
listed companies (2) YUAN Yonggang and his wife WANG Wenjuan hold 95% shares of Shenzhen Qinghai Rongyao Capital Management Co.,
controlled or invested Ltd. (“Rongyao Capital”) through Jintong Zhihui Investment Management Co., Ltd. (an investment company operated and
by the controlling managed by a professional management team, whose investment capital was primarily raised from the public), and Rongyao
shareholders during Capital is the Managing Partner of Hefei Rongxin Equity Investment Fund Partnership (L.P.) (“Hefei Rongxin”). On November
the reporting period 21, 2019, Hefei Rongxin became the controlling shareholder of Anhui Anfu Battery Technology Co., Ltd. (stock short name:
Anfu Technology; stock code: 603031). At present, Hefei Rongxin holds 22.41% shares of Anfu Technology together with its
concert parties, and is the controlling shareholder of Anfu Technology, so YUAN Yonggang and his wife WANG Wenjuan are
actual controllers of Anfu Technology.
Change in the controlling shareholders during the reporting period:
64
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
□ Applicable N/A
There has been no change in our controlling shareholders during the reporting period.
3. Actual controllers of the Company and their concerted parties
Nature of actual controllers: Natural persons.
Type of actual controllers: Natural persons.
Relationship with the Whether or not having obtained residency in
Name of the actual controller Nationality
actual controller any other country or region
YUAN Yongfeng Himself China No
YUAN Yonggang Himself China Yes
YUAN Fugen Himself China No
See “III. Shareholders and Actual Controllers – 2. Controlling shareholders of the
Main occupation and title
Company” above.
Domestic or foreign listed companies that have been controlled See “III. Shareholders and Actual Controllers – 2. Controlling shareholder of the
by the actual controllers in the past 10 years Company” above.
Change in the actual controllers during the reporting period:
□ Applicable N/A
There has been no change in our actual controllers during the reporting period.
Diagram of ownership and control relationship between the Company and its actual controllers:
Persons acting in concert
YUAN Fugen YUAN Yonggang YUAN Yongfeng
(3.44% shares) (11.83% shares) (13.01% shares)
Suzhou Dongshan Precision Manufacturing Co., Ltd.
4. Whether the controlling shareholder or largest shareholder of the Company and its concert parties
have pledged more than 80% of shares held by them in the Company in aggregate?
□Applicable N/A
5. Other corporate shareholders owning over 10% of shares in the Company
□Applicable N/A
6. Restrictions on the sale of shares by the controlling shareholder, actual controller, parties involved in
restructuring, and other covenantors
□Applicable N/A
IV. Share Repurchases Effected during the Reporting Period
Progress of share repurchases
65
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Applicable □ N/A
Amount of shares
Number of shares Number of shares
Disclosure date of % of total share proposed to be Proposed period of Use of shares
proposed to be already
the repurchase plan capital repurchased (in repurchase repurchased
repurchased (share) repurchased
RMB0’000)
12 months following
the date that the share Implementation
4545500-
April 27, 2022 0.27%-0.53% 10000-20000 repurchase plan was of ESOP or 3,048,700
9090900
approved by the share incentives
Board of Directors
Progress of sale or repurchase of shares by aggregate auction:
Applicable □ N/A
1. As of April 4, 2023, we repurchased 3,048,700 shares in total by aggregate auction through the dedicated securities account for
repurchase, representing 0.18% of our total share capital.
2. As our stock fared well on the secondary market and stock prices continuously exceeded the upper price limit for repurchase,
and the window for share repurchase was limited due to the restriction period in respect of annual report or otherwise, and the
expiration of the share repurchase plan on April 25, 2023, through careful consideration, we decided to terminate the share
repurchase plan, which termination of was approved at the 2nd extraordinary general meeting of shareholders in 2023. Please refer
to the relevant announcement disclosed on www.cninfo.com.cn, and our designated newspapers for information disclosure.
66
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section VIII Preferred Shares
□ Applicable N/A
We did not have any preferred share during the reporting period.
67
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section IX Bonds
□ Applicable N/A
68
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Section X Financial Report
I. Financial Report
Audit opinion Standard unqualified opinion
Signing date of the auditor’s report April 16, 2024
Auditor Pan-China Certified Public Accountants LLP
Document number of the auditor’s report PCCPA Audit [2024] No. 5-24
Name of certified public accountants ZHANG Yang and FU Zhenlong
Text
Auditor’s Report
PCCPA Audit [2024] No. 5-24
To shareholders of Suzhou Dongshan Precision Manufacturing Co., Ltd.,
I. Opinion
We have audited the financial statements of Suzhou Dongshan Precision Manufacturing Co., Ltd. (the “Company”), which
comprise the consolidated and standalone balance sheets as of December 31, 2023, consolidated and standalone income statements,
consolidated and standalone cash flow statements, and consolidated and standalone statements of changes in owners’ equity for the
year ended December 31, 2023, and notes to the financial statements.
In our opinion, the accompanying financial statements are prepared and present fairly, in all material respects, the consolidated and
standalone financial positions of the Company as of December 31, 2023 and its consolidated and standalone results of operations
and cash flows for the year ended December 31, 2023 in accordance with the Accounting Standards for Business Enterprises (the
“CASBEs”).
II. Basis for opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilities
under those standards are further described in “Responsibilities of the certified public accountants for the audit of the financial
statements” below. We are independent of the Company in accordance with the Code of Ethics for Certified Public Accountants of
China, and have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
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 for 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.
(I) Revenue recognition
1. Description
See Notes III(XXV) and V(II)1 to the financial statements for details.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
The operating revenue of the Company was primarily generated from the sale of PCBs, LED display devices, touch panels and
LCMs, precision components and other products, which amounted to RMB33,651,205,500 in 2023.
Since operating revenue is a key performance indicator of the Company, and there is an inherent risk that the management of the
Company (the “Management”) may attempt to achieve the specific objectives or expectations through improper revenue
recognition, we identified revenue recognition as a critical audit matter.
2. Audit response
Our audit procedures related to revenue recognition included the following, among others:
(1) Obtained an understanding of the key internal controls related to revenue recognition, assessed the design of such controls,
determined whether such controls have been implemented, and tested the effectiveness of the relevant internal controls;
(2) Examined the sales contracts, obtained an understanding of the main contract terms and conditions, and assessed the
appropriateness of the method of revenue recognition;
(3) With respect to the revenue from domestic sales, examined on a sample basis the sales contracts, sales invoices, delivery
orders, delivery notes and other supporting documents related; with respect to the revenue from export, obtained the relevant
information from the China Electronic Port, checked the same against the book records kept by the Company, and examined on a
sample basis the sales contracts, sales invoices, delivery orders, export declaration forms, bills of lading and other supporting
documents;
(4) Analyzed the operating revenues and gross margin by month, product and customer, identified major or abnormal
fluctuations, and found out the causes;
(5) With respect to accounts receivable confirmation, selected sampled items to confirm the sales amounts via confirmation
letters;
(6) Conducted cut-off tests on the operating revenues recognized around the balance sheet date to check whether the operating
revenues were recognized in the proper period; and
(7) Examined whether the information related to operating revenues has been properly presented in the financial statements.
(II) Impairment of accounts receivable
1. Description
See Notes III(XI), III(XII) and V(I)4 to the financial statements for details.
As of December 31, 2023, the Company’s book balance of accounts receivable was RMB8,194,146,400, allowance for doubtful
accounts was RMB480,981,700, and carrying value of accounts receivable was RMB7,713,164,800.
The Management measures the lifetime expected credit losses on accounts receivable and contract assets individually or
collectively according to their credit risk characteristics, and recognizes an equal amount as allowance for impairment losses. Due
to the significant amount of accounts receivable and contract assets, and the impairment of accounts receivable involves significant
management judgment, we identified impairment of accounts receivable and contract assets as a critical audit matter.
2. Audit response
Our audit procedures related to impairment of accounts receivable included the following, among others:
(1) Obtained an understanding of the key internal controls related to impairment of accounts receivable, assessed the design of
such controls, determined whether such controls have been implemented, and tested the effectiveness of the relevant internal
controls;
(2) With respect to the allowance for doubtful accounts estimated by the Management in prior years, reviewed the relevant
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
results or subsequent re-estimates made by the Management;
(3) Reviewed the considerations and objective evidence used by the Management in assessing the credit risk of accounts
receivable, and assessed whether the Management has properly identified the credit risk characteristics of all accounts receivable;
(4) With respect to the accounts receivable and contract assets assessed individually, reviewed the estimated future cash flows
forecast by the Management, assessed the appropriateness of the material assumptions and the appropriateness, relevance and
reliability of the data used in such forecasts, and checked the same against the external evidence available;
(5) With respect to the accounts receivable and contract assets assessed collectively, assessed the reasonableness of grouping by
the Management according to credit risk characteristics, and the reasonableness of the expected credit loss ratios determined by the
Management, including the appropriateness of the material assumptions and the appropriateness, relevance and reliability of the
data used by the Management, and tested the accuracy of the allowance for doubtful accounts and for impairment loss calculated
by the Management;
(6) Examined the confirmation requests and subsequent recovery in respect of accounts receivable, to assess the reasonableness
of the allowance for impairment loss on accounts receivable recognized by the Management; and
(7) Examined whether the information related to the impairment of accounts receivable has been properly presented in the
financial statements.
(III) Goodwill impairment
1. Description
See Notes III(XX) and V(I)18 to the financial statements for details.
As of December 31, 2023, the Company’s original value of goodwill was RMB2289,543,600, allowance for goodwill impairment
was RMB80,344,100, and carrying value of goodwill was RMB 2209,199,500.
The Management assesses the goodwill for impairment together with the relevant asset group or combination of asset groups,
whose recoverable amount is determined according to the present value of its estimated future cash flows. Due to the significant
amount of goodwill, and the goodwill impairment assessment involving significant management judgment, we identified goodwill
impairment as a critical audit matter.
2. Audit response
Our audit procedures related to goodwill impairment included the following, among others:
(1) Obtained an understanding of the key internal controls related to goodwill impairment, assessed the design of such controls,
determined whether they have been executed, and tested the effectiveness of such internal controls;
(2) With respect to the present value of future cash flows estimated by the Management in prior years, reviewed the relevant
results or subsequent re-estimates made by the Management;
(3) Inquired about and assessed the competencies, professional quality and objectivity of the external appraisers engaged by the
Management;
(4) Assessed the appropriateness and consistency of the approaches adopted by the Management in impairment tests;
(5) Assessed the appropriateness of the material assumptions used by the Management in impairment tests and whether the
relevant assumptions were consistent with the overall economic environment, industrial conditions, operating situations, historical
experience, business plans, approved budgets, and other assumptions used by the Management in relation to the financial
statements;
(6) Tested the appropriateness, relevance and reliability of the data used by the Management in impairment tests and reviewed
the consistency of inputs in impairment tests;
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(7) Tested the accuracy of the calculation of the estimated present value of future cash flows by the Management; and
(8) Examined whether the information related to goodwill impairment has been properly presented in the financial statements.
IV. Other information
The Management is responsible for the other information. The other information comprises the information included in the Annual
Report, but does not include the financial statements and our Auditor’s Report.
Our opinion in the financial statements does not cover the other information, and we will not express any form of assurance
conclusions thereon.
In connection 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 we conclude that there is a material misstatement therein, we are required to communicate such matter. We have nothing to
report in this regard.
V. Responsibilities of the Management and those charged with governance for the financial statements
The Management is responsible for the preparation and fair presentation of the financial statements in accordance with the
CASBE, and the design, implementation and maintenance of internal controls that are necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing (as applicable) matters relating to going concerned, and using the going concern basis of accounting unless the
Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance of the Company are responsible for overseeing the financial reporting process of the Company.
VI. Responsibilities of the Certified Public Accountants 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 auditor’s 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 taken on the basis of these financial
statements.
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 responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances;
(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 the Management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
72
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required by the audit
standards to draw attention in our auditor’s 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 audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Company to cease to continue as a going concern;
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation; and
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities
within the Company, to express an opinion in the financial statements. We are responsible for the direction, supervision and
performance of the audit of the Group, and solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any noteworthy deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
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 critical audit matters. We describe these matters in
our auditor’s 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.
Pan-China Certified Public Accountants LLP Certified Public Accountant of China (Engagement Partner): ZHANG Yang
Hangzhou, China Certified Public Accountant of China: FU Zhenlong
Date: April 16, 2024
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
II. Financial statements
The amounts in the statements contained in the notes to the financial statements are presented in RMB.
1. Consolidated balance sheet
Prepared by: Suzhou Dongshan Precision Manufacturing Co., Ltd.
December 31, 2023
In RMB
Item December 31, 2023 January 1, 2023
Current assets:
Cash and bank balances 7,190,036,231.06 7,131,202,817.72
Settlement deposit
Loans to banks and other financial institutions
Financial assets held for trading 146,141,371.77 575,783,803.93
Derivative financial assets
Notes receivable 3,407,623.49 48,401,430.82
Accounts receivable 7,713,164,772.05 7,006,411,466.74
Accounts receivable financing 290,477,095.22 644,057,382.41
Advances to suppliers 79,782,739.11 161,512,824.53
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other receivables 77,134,897.39 35,793,851.22
Incl.: Interest receivable
Dividends receivable
Financial assets held under resale agreements
Inventories 6,293,879,276.54 6,165,738,409.09
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 651,719,745.68 504,573,874.64
Total current assets 22,445,743,752.31 22,273,475,861.10
Non-current assets:
Loans and advances to clients
Debt investments
Other debt investments
Long-term receivable 30,000,000.00 30,000,000.00
Long-term equity investments 155,406,879.89 139,767,215.41
Investments in other equity instruments 278,157,110.00 171,322,110.00
Other non-current financial assets
Investment properties 1,038,840.26 1,296,551.42
Fixed assets 12,415,251,689.80 10,673,700,468.47
Construction in progress 1,842,525,188.54 1,813,183,815.67
Productive biological assets
Oil and gas assets
Right-of-use assets 1,252,668,050.83 951,068,254.01
Intangible assets 863,692,421.74 302,589,719.92
Development expenses
Goodwill 2,209,199,500.98 2,191,939,940.60
Long-term deferred expenses 866,872,191.21 501,517,044.33
Deferred tax assets 1,078,140,428.38 880,233,046.10
Other non-current assets 933,022,974.34 872,512,776.58
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Total non-current assets 21,925,975,275.97 18,529,130,942.51
Total assets 44,371,719,028.28 40,802,606,803.61
Current liabilities:
Short-term borrowings 5,156,100,217.01 7,794,409,944.68
Borrowings from Central Bank
Borrowings from banks and other financial
institutions
Financial liabilities held for trading 104,174,076.23 91,517,116.89
Derivative financial liabilities
Notes payable 909,171,215.93 2,008,405,860.19
Accounts payable 8,039,107,176.52 5,986,286,590.32
Advances from clients
Contract liabilities 28,982,676.07 26,193,456.12
Financial assets sold under repurchase agreements
Deposits from clients and other banks
Funds received as stock broker
Funds received as underwriter of securities
Employee benefits payable 553,178,980.68 500,125,315.30
Taxes payable 475,576,206.83 412,289,780.94
Other payables 80,188,628.54 54,324,601.72
Incl.: Interest payable
Dividends payable
Fees and commissions payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year 2,496,716,906.35 1,189,744,866.13
Other current liabilities 6,556,017.38 4,476,657.36
Total current liabilities 17,849,752,101.54 18,067,774,189.65
Non-current liabilities:
Provision for insurance contracts
Long-term borrowings 4,706,280,338.76 3,197,821,643.49
Bonds payable
Incl.: Preferred shares
Perpetual bonds
Lease liabilities 1,842,799,193.80 1,647,319,046.20
Long-term payables 296,995,789.48
Long-term employee benefits payable
Provisions 60,785,210.44 69,202,183.16
Deferred income 733,456,685.17 747,587,634.12
Deferred tax liabilities 691,293,111.83 647,343,610.25
Other non-current liabilities
Total non-current liabilities 8,331,610,329.48 6,309,274,117.22
Total liabilities 26,181,362,431.02 24,377,048,306.87
Owners’ equity:
Share capital 1,709,867,327.00 1,709,867,327.00
Other equity instruments
Incl.: Preferred shares
Perpetual bonds
Capital reserve 8,063,768,409.73 8,054,894,080.77
Less: Treasury shares 125,906,811.33 125,906,811.33
Other comprehensive income -714,664,578.64 -692,976,005.21
Special reserve
Surplus reserve 184,866,869.73 135,347,835.10
General risk reserve
Retained profits 9,025,095,529.05 7,297,404,445.02
Total owners’ equity attributable to the parent company 18,143,026,745.54 16,378,630,871.35
Minority interests 47,329,851.72 46,927,625.39
75
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Total owners’ equity 18,190,356,597.26 16,425,558,496.74
Total liabilities and owners’ equity 44,371,719,028.28 40,802,606,803.61
Legal Representative: YUAN Yonggang CFO: WANG Xu Accounting Supervisor: ZHU Deguang
2. Standalone balance sheet
In RMB
Item December 31, 2023 January 1, 2023
Current assets:
Cash and bank balances 1,121,824,500.79 1,412,679,165.36
Financial assets held for trading 5,339,600.00
Derivative financial assets
Notes receivable 182,944.04 561,448.01
Accounts receivable 2,084,703,275.22 1,941,106,338.87
Accounts receivable financing 16,445,639.29 12,405,985.23
Advances to suppliers 264,702,649.93 398,743,645.61
Other receivables 5,252,635,539.56 3,245,530,947.12
Incl.: Interest receivable
Dividends receivable 2,203,111,413.70 1,210,095,256.90
Inventories 1,299,182,931.81 1,009,877,418.76
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 50,271,463.84 95,208,426.22
Total current assets 10,089,948,944.48 8,121,452,975.18
Non-current assets:
Debt investments
Other debt investments
Long-term receivables 30,000,000.00 30,000,000.00
Long-term equity investments 9,466,303,266.56 7,580,547,437.18
Investments in other equity instruments 171,322,110.00 171,322,110.00
Other non-current financial assets
Investment properties
Fixed assets 1,292,621,445.22 1,224,723,019.96
Construction in progress 237,324,474.45 482,015,287.67
Productive biological assets
Oil and gas assets
Right-of-use assets 4,566,101.24 6,523,001.84
Intangible assets 61,083,591.40 61,782,911.44
Development expenses
Goodwill
Long-term deferred expenses 87,384,070.37 156,467,709.39
Deferred tax assets 189,735,608.41 190,241,689.38
Other non-current assets 163,595,104.57 110,280,926.88
Total non-current assets 11,703,935,772.22 10,013,904,093.74
Total assets 21,793,884,716.70 18,135,357,068.92
Current liabilities:
Short-term borrowings 2,911,521,728.06 3,239,724,817.50
Financial liabilities held for trading
Derivative financial assets
Notes payable 449,069,523.81 1,433,148,316.04
Accounts payable 1,326,777,885.36 725,307,838.44
Advances from clients
Contract liabilities 11,196,344.94 261,978,225.55
Employee benefits payable 53,045,775.35 36,013,112.32
Taxes payable 3,260,417.40 2,676,526.20
76
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Other payables 3,680,367,551.64 1,527,486,936.57
Incl.: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one year 834,828,298.62 216,525,360.27
Other current liabilities 3,373,087.29 2,052,903.93
Total current liabilities 9,273,440,612.47 7,444,914,036.82
Non-current liabilities:
Long-term borrowings 2,405,437,622.23 1,106,033,055.55
Bonds payable
Incl.: Preferred shares
Perpetual bonds
Lease liabilities 2,741,061.12 4,746,572.24
Long-term payables 226,168,789.48
Long-term employee benefits payable
Provisions 1,852,066.56 3,414,342.70
Deferred income 19,403,333.49 22,333,333.41
Deferred tax liabilities 920,551.61 2,214,274.41
Other non-current liabilities
Total non-current liabilities 2,656,523,424.49 1,138,741,578.31
Total liabilities 11,929,964,036.96 8,583,655,615.13
Owners’ equity:
Share capital 1,709,867,327.00 1,709,867,327.00
Other equity instruments
Incl.: Preferred shares
Perpetual bonds
Capital reserve 7,962,239,056.77 7,953,356,366.17
Less: Treasury shares 125,906,811.33 125,906,811.33
Other comprehensive income -350,000,000.00 -345,461,340.00
Special reserve
Surplus reserve 184,866,869.73 135,347,835.10
Retained profits 482,854,237.57 224,498,076.85
Total owners’ equity 9,863,920,679.74 9,551,701,453.79
Total liabilities and owners’ equity 21,793,884,716.70 18,135,357,068.92
3. Consolidated income statement
In RMB
Item 2023 2022
I. Total operating revenue 33,651,205,468.80 31,580,146,732.58
Incl.: Operating revenue 33,651,205,468.80 31,580,146,732.58
Interest income
Premiums earned
Fee and commission income
II. Total operating costs 31,334,350,168.82 28,434,705,720.60
Incl.: Operating costs 28,541,641,042.74 26,020,679,333.24
Interest expenses
Fee and commission expenses
Surrenders
Net payments for insurance claims
Net insurance claim reserves
Policyholder dividends
Reinsurance expenses
Taxes and surcharges 122,969,094.29 105,651,890.50
Selling expenses 362,094,101.76 352,993,453.50
Administrative expenses 957,323,918.86 815,662,486.89
77
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Research and development expenses 1,161,190,274.48 940,085,451.98
Financial expenses 189,131,736.69 199,633,104.49
Incl.: Interest expenses 463,688,943.50 302,704,601.47
Interest income 225,593,949.55 42,128,725.22
Add: Other income 249,881,956.51 318,574,095.64
Investment income (loss expressed with “-”) 4,158,524.35 -922,388.82
Incl.: Investment income from associates and
-10,820,910.91 -3,353,804.37
joint ventures
Gain on derecognition of financial
assets at amortized cost
Exchange gain (loss expressed with “-”)
Net exposure hedging income (loss expressed
with “-”)
Gain on changes in fair value (loss expressed
-9,740,779.67 -66,613,459.50
with “-”)
Credit loss (loss expressed with “-”) -39,436,689.63 -76,228,643.25
Impairment loss on assets (loss expressed with
-438,676,762.78 -468,204,563.83
“-”)
Gain on disposal of assets (loss expressed with
-18,240,640.06 -5,513,221.27
“-”)
III. Operating profit (loss expressed with “-”) 2,064,800,908.70 2,846,532,830.95
Add: Non-operating revenue 141,478,735.80 12,212,345.74
Less: Non-operating expenses 15,191,689.58 17,846,210.04
IV. Profit before tax (loss expressed with “-”) 2,191,087,954.92 2,840,898,966.65
Less: Income tax expenses 226,037,787.50 472,836,462.81
V. Net profit (loss expressed with “-”) 1,965,050,167.42 2,368,062,503.84
(I) Classified by continuity of operation
1. Net profit from continuing operation (loss
1,965,050,167.42 2,368,062,503.84
expressed with “-”)
2. Net profit from discontinued operation (loss
expressed with “-”)
(II) Classified by attribution
1. Net profit attributable to owners of the parent
1,964,525,269.65 2,368,347,970.02
company (loss expressed with “-”)
2. Profit attributable to minority interests (loss
524,897.77 -285,466.18
expressed with “-”)
VI. Other comprehensive income, net -21,688,573.43 -173,374,048.73
Other comprehensive income attributable to owners
-21,688,573.43 -173,349,939.00
of the parent company, net after tax
(I) Other comprehensive income that cannot be
reclassified to profit or loss
1. Changes arising from remeasurement of defined
benefit plans
2. Other comprehensive income that cannot be
reclassified to profit or loss under equity method
3. Change in fair value of investments in other
equity instruments
4. Change in fair value of the corporation’s credit
risk
5. Others
(II) Other comprehensive income that will be
-21,688,573.43 -173,349,939.00
reclassified to profit or loss
1. Other comprehensive income that can be
reclassified to profit or loss under equity method
2. Change in fair value of other debt investments
3. Financial assets reclassified to other
comprehensive income
4. Provision for credit impairment of other debt
investments
5. Reserves for cash flow hedge 39,915,469.78 -112,225,912.41
6. Differences in translation of foreign currency
-61,604,043.21 -61,124,026.59
financial statements
7. Others
78
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Other comprehensive income attributable to minority
-24,109.73
interests, net after tax
VII. Total comprehensive income 1,943,361,593.99 2,194,688,455.11
Total comprehensive income attributable to owners
1,942,836,696.22 2,194,998,031.02
of the parent company
Total comprehensive income attributable to minority
524,897.77 -309,575.91
interests
VIII. Earnings per share:
(I) Basic earnings per share 1.15 1.39
(II) Diluted earnings per share 1.15 1.39
Legal Representative: YUAN Yonggang CFO: WANG Xu Accounting Supervisor: ZHU Deguang
4. Standalone income statement
In RMB
Item 2023 2022
I. Operating revenue 3,737,530,873.50 3,877,913,051.67
Less: Operating costs 3,381,377,455.45 3,478,568,986.55
Taxes and surcharges 7,671,794.48 7,784,720.56
Selling expenses 65,003,786.00 63,703,774.98
Administrative expenses 264,117,661.70 354,137,272.59
Research and development expenses 252,953,031.98 149,446,571.49
Financial expenses 244,140,628.33 145,208,675.20
Incl.: Interest expenses 355,406,845.27 272,353,140.97
Interest income 97,881,674.07 71,430,377.19
Add: Other income 5,526,956.76 10,684,111.51
Investment income (loss expressed with “-”) 1,097,355,440.91 589,880,146.37
Incl.: Investment income from associates and
-7,147,658.81 -2,530,300.44
joint ventures
Gain on derecognition of financial
assets at amortized cost
Net exposure hedging income (loss expressed
with “-”)
Gain on changes in fair value (loss expressed
-14,434,367.40
with “-”)
Credit loss (loss expressed with “-”) -53,563,010.03 -14,517,058.05
Impairment loss on assets (loss expressed with
-73,708,230.19 -34,480,575.88
“-”)
Gain on disposal of assets (loss expressed with
932,378.60 102,024.93
“-”)
II. Operating profit (loss expressed with “-”) 498,810,051.61 216,297,331.78
Add: Non-operating revenue 94,150.75 205,398.99
Less: Non-operating expenses 3,700,557.85 9,176,319.82
III. Profit before tax (loss expressed with “-”) 495,203,644.51 207,326,410.95
Less: Income tax expenses 13,298.17 -29,158,019.65
IV. Net profit (loss expressed with “-”) 495,190,346.34 236,484,430.60
(I) Net profit from continuing operation (loss
495,190,346.34 236,484,430.60
expressed with “-”)
(II) Net profit from discontinued operation (loss
expressed with “-”)
V. Other comprehensive income, net -4,538,660.00 4,538,660.00
(I) Other comprehensive income that cannot be
reclassified to profit or loss
1. Changes arising from remeasurement of defined
benefit plans
2. Other comprehensive income that cannot be
reclassified to profit or loss under equity method
3. Change in fair value of investments in other
equity instruments
4. Change in fair value of the corporation’s credit
79
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
risk
5. Others
(II) Other comprehensive income that will be
-4,538,660.00 4,538,660.00
reclassified to profit or loss
1. Other comprehensive income that can be
reclassified to profit or loss under equity method
2. Change in fair value of other debt investments
3. Financial assets reclassified to other
comprehensive income
4. Provision for credit impairment of other debt
investments
5. Reserves for cash flow hedge -4,538,660.00 4,538,660.00
6. Differences in translation of foreign currency
financial statements
7. Others
VI. Total comprehensive income 490,651,686.34 241,023,090.60
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
In RMB
Item 2023 2022
I. Cash flows from operating activities
Proceeds from sale of goods and rendering of
32,739,066,437.34 30,689,737,979.37
services
Net increase in deposits from clients and other banks
Net increase in borrowings from Central Bank
Net increase in borrowings from other financial
institutions
Proceeds from premiums under prior insurance
contracts
Net proceeds from reinsurance business
Net increase in insured’s deposits and investments
Proceeds from interest, fees and commissions
Net increase in borrowings from banks and other
financial institutions
Net increase in receipts under repurchase
transactions
Net cash received as stock broker
Tax refunds received 1,137,521,361.97 1,402,945,080.65
Other proceeds relating to operating activities 1,064,645,853.79 856,136,731.36
Subtotal of cash inflows from operating activities 34,941,233,653.10 32,948,819,791.38
Payments for purchase of goods and receipt of
23,717,207,870.38 22,311,360,256.76
services
Net increase in loans and advances from clients
Net increase in deposits in Central Bank and other
banks
Payment of claims under prior insurance contracts
Net increase in loans to banks and other financial
institutions
Payment of interest, fees and commissions
Payment of policyholder dividends
Payments to and for employees 4,361,937,171.07 4,177,722,088.02
Taxes paid 605,774,751.89 492,638,579.06
Other payments relating to operating activities 1,083,894,389.56 1,337,214,856.16
Subtotal of cash outflows from operating activities 29,768,814,182.90 28,318,935,780.00
Net cash flows from operating activities 5,172,419,470.20 4,629,884,011.38
80
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
II. Cash flows from investing activities
Proceeds from disposal of investments 456,515,984.16 424,159,710.89
Proceeds from return on investments 130,859,749.94 10,968,187.55
Net proceeds from the disposal of fixed assets,
37,557,278.12 8,924,465.56
intangible assets and other long-term assets
Net proceeds from the disposal of subsidiaries and
other business entities
Other proceeds relating to investing activities 439,820,656.38 235,424,521.00
Subtotal of cash inflows from investing activities 1,064,753,668.60 679,476,885.00
Payments for the acquisition of fixed assets,
3,466,863,364.13 3,375,029,627.94
intangible assets and other long-term assets
Payments for investments 664,445,169.56 608,374,219.69
Net increase in mortgage loans
Net Payments for the acquisition of subsidiaries and
863,778,442.89
other business entities
Other cash payments relating to investing activities 908,569,017.53 455,064,192.71
Subtotal of cash outflows from investing activities 5,903,655,994.11 4,438,468,040.34
Net cash flows from investing activities -4,838,902,325.51 -3,758,991,155.34
III. Cash flows from financing activities
Proceeds from investors
Incl.: Proceeds of subsidiaries from minority
shareholders’ investments
Cash receipts from borrowings 13,365,424,866.08 10,828,761,291.26
Other proceeds relating to financing activities 1,329,035,764.61 2,139,193,721.85
Subtotal of cash inflows from financing activities 14,694,460,630.69 12,967,955,013.11
Repayment of borrowings 12,628,310,459.03 9,629,498,697.60
Payment of distribution of dividends and profits or
566,998,901.47 642,139,429.34
for interest
Incl.: Dividends and profits distributed by
131,033.08 36,408.79
subsidiaries to minor shareholders
Other payments relating to financing activities 1,741,698,784.20 2,192,696,813.07
Subtotal of cash outflows from financing activities 14,937,008,144.70 12,464,334,940.01
Net cash flows from financing activities -242,547,514.01 503,620,073.10
IV. Effect of exchange rate changes on cash and cash
96,490,564.93 143,212,766.77
equivalents
V. Net increase in cash and cash equivalents 187,460,195.61 1,517,725,695.91
Add: Opening balance of cash and cash equivalents 5,457,026,822.70 3,939,301,126.79
VI. Closing balance of cash and cash equivalents 5,644,487,018.31 5,457,026,822.70
6. Standalone cash flow statement
In RMB
Item 2023 2022
I. Cash flows from operating activities
Proceeds from the sale of goods and rendering of
3,599,977,055.52 3,930,357,686.47
services
Tax refunds received 170,635,154.61 238,277,121.92
Other proceeds relating to operating activities 2,473,918,043.84 2,118,216,199.44
Subtotal of cash inflows from operating activities 6,244,530,253.97 6,286,851,007.83
Payments for purchase of goods and receipt of
3,993,122,870.14 4,440,683,078.94
services
Payments to and for employees 408,725,850.72 337,116,177.01
Taxes paid 25,001,677.19 19,309,238.75
Other payments relating to operating activities 1,209,977,998.48 639,515,727.10
Subtotal of cash outflows from operating activities 5,636,828,396.53 5,436,624,221.80
Net cash flows from operating activities 607,701,857.44 850,226,786.03
II. Cash flows from investing activities
Proceeds from disposal of investments 15,357,541.22 121,461,752.60
81
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Proceeds from return on investments 115,022,537.63 573,504,702.64
Net proceeds from the disposal of fixed assets,
15,584,415.51 15,670,927.06
intangible assets and other long-term assets
Net proceeds from the disposal of subsidiaries and
other business entities
Other proceeds relating to investing activities 72,539,552.45
Subtotal of cash inflows from investing activities 218,504,046.81 710,637,382.30
Payments for the acquisition of fixed assets,
218,313,936.35 797,364,143.36
intangible assets and other long-term assets
Payments for investments 1,671,525,214.35 458,359,760.00
Net payments for the acquisition of subsidiaries and
other business entities
Other payments relating to investing activities 557,893,589.63
Subtotal of cash outflows from investing activities 2,447,732,740.33 1,255,723,903.36
Net cash flows from investing activities -2,229,228,693.52 -545,086,521.06
III. Cash flows from financing activities
Proceeds from investors
Proceeds from borrowings 5,892,310,572.50 4,553,408,751.02
Other proceeds relating to financing activities
Subtotal of cash inflows from financing activities 5,892,310,572.50 4,553,408,751.02
Repayment of borrowings 4,307,827,399.66 3,991,741,102.36
Payment of distribution of dividends and profits or
386,091,836.92 606,951,054.50
for interest
Other payments relating to financing activities 153,521,804.76 120,819,536.78
Subtotal of cash outflows from financing activities 4,847,441,041.34 4,719,511,693.64
Net cash flows from financing activities 1,044,869,531.16 -166,102,942.62
IV. Effect of exchange rate changes on cash and cash
21,358,018.36 -35,276,962.44
equivalents
V. Net increase in cash and cash equivalents -555,299,286.56 103,760,359.91
Add: Opening balance of cash and cash equivalents 1,034,143,525.12 930,383,165.21
VI. Closing balance of cash and cash equivalents 478,844,238.56 1,034,143,525.12
7. Consolidated statement of changes in owners’ equity
2023
In RMB
2023
Owners’ equity attributable to the parent
Item Total
Other Minority
Other equity instruments Less: General owners’
Share Capital compreh Special Surplus Retained interests
Treasury risk Others Subtotal equity
capital Preferred Perpetual reserve ensive reserve reserve profit
Others shares reserve
shares bonds income
I.
Balance
at the - 16,378,6 16,425,5
1,709,86 8,054,89 125,906, 135,347, 7,297,40 46,927,6
end of 692,976, 30,871.3 58,496.7
7,327.00 4,080.77 811.33 835.10 4,445.02 25.39
the 005.21 5 4
previous
year
Add:
Changes
in
accounti
ng
policies
Correctio
n of
previous
period
errors
Others
II.
Balance
at the - 16,378,6 16,425,5
1,709,86 8,054,89 125,906, 135,347, 7,297,40 46,927,6
beginnin 692,976, 30,871.3 58,496.7
7,327.00 4,080.77 811.33 835.10 4,445.02 25.39
g of the 005.21 5 4
current
year
III.
Increase/
(decrease
) in the
-
current 8,874,32 49,519,0 1,727,69 1,764,39 402,226. 1,764,79
21,688,5
period 8.96 34.63 1,084.03 5,874.19 33 8,100.52
73.43
(decrease
expresse
d with “-
”)
82
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(I) Total
-
compreh 1,964,52 1,942,83 524,897. 1,943,36
21,688,5
ensive 5,269.65 6,696.22 77 1,593.99
73.43
income
(II)
Investme
nt/(divest 8,874,32 8,874,32 8,882,69
8,361.64
ment) by 8.96 8.96 0.60
sharehol
ders
1.
Contribut
ions
from
holders
of
ordinary
shares
2.
Contribut
ions
from
holders
of other
equity
instrume
nts
3. Share-
based
payments
8,874,32 8,874,32 8,882,69
recorded 8,361.64
8.96 8.96 0.60
in
owners’
equity
4. Others
(III)
- - - -
Distributi 49,519,0
236,834, 187,315, 131,033. 187,446,
on of 34.63
185.62 150.99 08 184.07
profits
1. -
49,519,0
Surplus 49,519,0
34.63
reserve 34.63
2.
General
risk
reserve
3.
Distributi
- - - -
ons to
187,315, 187,315, 131,033. 187,446,
owners
150.99 150.99 08 184.07
(sharehol
ders)
4. Others
(IV)
Internal
transfer
of
owners’
equity
1.
Transfer
of capital
reserve
to (share)
capital
2.
Transfer
of
surplus
reserve
to (share)
capital
3. Make-
up of
losses by
surplus
reserve
4.
Transfer
of
changes
in
defined
benefit
plans to
retained
earnings
5.
Transfer
of other
compreh
ensive
income
to
retained
earnings
6. Others
(V)
Special
reserve
1.
Appropri
ated in
the
current
year
2. Used
in the
current
year
(VI)
Others
IV.
Balance - 18,143,0 18,190,3
1,709,86 8,063,76 125,906, 184,866, 9,025,09 47,329,8
at the 714,664, 26,745.5 56,597.2
7,327.00 8,409.73 811.33 869.73 5,529.05 51.72
end of 578.64 4 6
the
83
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
current
year
2022
In RMB
2022
Owners’ equity attributable to the parent
Item Total
Other Minority
Other equity instruments Less: General owners’
Share Capital compreh Special Surplus Retained interests
Treasury risk Others Subtotal equity
capital Preferred Perpetual reserve ensive reserve reserve profit
Others shares reserve
shares bonds income
I.
Balance
at the - 14,576,5 14,670,3
1,709,86 8,099,52 100,479, 111,698, 5,275,51 93,842,2
end of 519,626, 00,325.1 42,539.1
7,327.00 4,872.90 794.32 315.15 5,670.63 14.03
the 066.21 5 8
previous
year
Add:
Changes
in 18,372,9 18,372,9 35,116.0 18,408,0
accounti 51.79 51.79 6 67.85
ng
policies
Correctio
n of
previous
period
errors
Others
II.
Balance
at the - 14,594,8 14,688,7
1,709,86 8,099,52 100,479, 111,698, 5,293,88 93,877,3
beginnin 519,626, 73,276.9 50,607.0
7,327.00 4,872.90 794.32 315.15 8,622.42 30.09
g of the 066.21 4 3
current
year
III.
Increase/
(decrease
) in the
- - -
current 25,427,0 23,649,5 2,003,51 1,783,75 1,736,80
44,630,7 173,349, 46,949,7
period 17.01 19.95 5,822.60 7,594.41 7,889.71
92.13 939.00 04.70
(decrease
expresse
d with “-
”)
(I) Total
- -
compreh 2,368,34 2,194,99 2,194,68
173,349, 309,575.
ensive 7,970.02 8,031.02 8,455.11
939.00 91
income
(II)
Investme
- - - -
nt/(divest 25,427,0
44,630,7 70,057,8 46,603,7 116,661,
ment) by 17.01
92.13 09.14 20.00 529.14
sharehol
ders
1.
Contribut
ions
from
holders
of
ordinary
shares
2.
Contribut
ions
from
holders
of other
equity
instrume
nts
3. Share-
based
payments
16,730,2 16,730,2 16,734,9
recorded 4,703.42
12.08 12.08 15.50
in
owners’
equity
- - - -
25,427,0
4. Others 61,361,0 86,788,0 46,608,4 133,396,
17.01
04.21 21.22 23.42 444.64
(III)
- - - -
Distributi 23,649,5
364,832, 341,182, 36,408.7 341,219,
on of 19.95
147.42 627.47 9 036.26
profits
1. -
23,649,5
Surplus 23,649,5
19.95
reserve 19.95
2.
General
risk
reserve
3.
Distributi
- - - -
ons to
341,182, 341,182, 36,408.7 341,219,
owners
627.47 627.47 9 036.26
(sharehol
ders)
4. Others
(IV)
Internal
transfer
of
owners’
equity
1.
Transfer
of capital
reserve
to (share)
84
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
capital
2.
Transfer
of
surplus
reserve
to (share)
capital
3. Make-
up of
losses by
surplus
reserve
4.
Transfer
of
changes
in
defined
benefit
plans to
retained
earnings
5.
Transfer
of other
compreh
ensive
income
to
retained
earnings
6. Others
(V)
Special
reserve
1.
Appropri
ated in
the
current
year
2. Used
in the
current
year
(VI)
Others
IV.
Balance
at the - 16,378,6 16,425,5
1,709,86 8,054,89 125,906, 135,347, 7,297,40 46,927,6
end of 692,976, 30,871.3 58,496.7
7,327.00 4,080.77 811.33 835.10 4,445.02 25.39
the 005.21 5 4
current
year
8. Standalone statement of changes in owners’ equity
2023
In RMB
2023
Item Other equity instruments Less: Other Total
Capital Special Surplus Retained
Share capital Treasury comprehensi Others owners’
Preferred Perpetual reserve reserve reserve profit
Others shares ve income equity
shares bonds
I. Balance at
-
the end of 1,709,867,32 7,953,356,36 125,906,811. 135,347,835. 224,498,076. 9,551,701,45
345,461,340.
the previous 7.00 6.17 33 10 85 3.79
00
year
Add:
Changes in
accounting
policies
Correction
of previous
period errors
Others
II. Balance
at the -
1,709,867,32 7,953,356,36 125,906,811. 135,347,835. 224,498,076. 9,551,701,45
beginning of 345,461,340.
7.00 6.17 33 10 85 3.79
the current 00
year
III.
Increase/(de
crease) in
the current - 49,519,034.6 258,356,160. 312,219,225.
8,882,690.60
period 4,538,660.00 3 72 95
(decrease
expressed
with “-”)
(I) Total
- 495,190,346. 490,651,686.
comprehensi
4,538,660.00 34 34
ve income
(II)
Investment/(
divestment) 8,882,690.60 8,882,690.60
by
shareholders
1.
Contribution
s from
holders of
ordinary
shares
2.
Contribution
s from
85
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
holders of
other equity
instruments
3. Share-
based
payments
8,882,690.60 8,882,690.60
recorded in
owners’
equity
4. Others
(III) - -
49,519,034.6
Distribution 236,834,185. 187,315,150.
3
of profits 62 99
-
1. Surplus 49,519,034.6
49,519,034.6
reserve 3
3
2.
Distributions - -
to owners 187,315,150. 187,315,150.
(shareholder 99 99
s)
3. Others
(IV) Internal
transfer of
owners’
equity
1. Transfer
of capital
reserve to
(share)
capital
2. Transfer
of surplus
reserve to
(share)
capital
3. Make-up
of losses by
surplus
reserve
4. Transfer
of changes
in defined
benefit plans
to retained
earnings
5. Transfer
of other
comprehensi
ve income to
retained
earnings
6. Others
(V) Special
reserve
1.
Appropriate
d in the
current year
2. Used in
the current
year
(VI) Others
IV. Balance
-
at the end of 1,709,867,32 7,962,239,05 125,906,811. 184,866,869. 482,854,237. 9,863,920,67
350,000,000.
the current 7.00 6.77 33 73 57 9.74
00
year
2022
In RMB
2022
Item Other equity instruments Less: Other Total
Capital Special Surplus Retained
Share capital Treasury comprehensi Others owners’
Preferred Perpetual reserve reserve reserve profit
Others shares ve income equity
shares bonds
I. Balance at
-
the end of 1,709,867,32 7,961,185,28 100,479,794. 111,698,315. 352,818,601. 9,685,089,73
350,000,000.
the previous 7.00 9.83 32 15 06 8.72
00
year
Add:
Changes in
27,192.61 27,192.61
accounting
policies
Correction
of previous
period errors
Others
II. Balance
at the -
1,709,867,32 7,961,185,28 100,479,794. 111,698,315. 352,845,793. 9,685,116,93
beginning of 350,000,000.
7.00 9.83 32 15 67 1.33
the current 00
year
III.
Increase/(de
crease) in
- -
the current - 25,427,017.0 23,649,519.9
4,538,660.00 128,347,716. 133,415,477.
period 7,828,923.66 1 5
82 54
(decrease
expressed
with “-”)
(I) Total
236,484,430. 241,023,090.
comprehensi 4,538,660.00
60 60
ve income
(II)
Investment/( -
- 25,427,017.0
divestment) 33,255,940.6
7,828,923.66 1
by 7
shareholders
1. 49,990,856.1 -
Contribution 7 49,990,856.1
86
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
s from 7
holders of
ordinary
shares
2.
Contribution
s from
holders of
other equity
instruments
3. Share-
based
payments 16,734,915.5 16,734,915.5
recorded in 0 0
owners’
equity
- -
4. Others 24,563,839.1 24,563,839.1
6 6
(III) - -
23,649,519.9
Distribution 364,832,147. 341,182,627.
5
of profits 42 47
-
1. Surplus 23,649,519.9
23,649,519.9
reserve 5
5
2.
Distributions - -
to owners 341,182,627. 341,182,627.
(shareholder 47 47
s)
3. Others
(IV) Internal
transfer of
owners’
equity
1. Transfer
of capital
reserve to
(share)
capital
2. Transfer
of surplus
reserve to
(share)
capital
3. Make-up
of losses by
surplus
reserve
4. Transfer
of changes
in defined
benefit plans
to retained
earnings
5. Transfer
of other
comprehensi
ve income to
retained
earnings
6. Others
(V) Special
reserve
1.
Appropriate
d in the
current year
2. Used in
the current
year
(VI) Others
IV. Balance
-
at the end of 1,709,867,32 7,953,356,36 125,906,811. 135,347,835. 224,498,076. 9,551,701,45
345,461,340.
the current 7.00 6.17 33 10 85 3.79
00
year
III. General Information of the Company
Suzhou Dongshan Precision Manufacturing Co., Ltd. (the “Company”) is a company limited by shares converted from Suzhou
Dongshan Sheet Metal Co., Ltd., and registered with the Suzhou Municipal Administration for Industry and Commerce of Jiangsu
on December 24, 2007, and is headquartered in Suzhou, Jiangsu, holds a business license with unified social credit code of
91320500703719732P, and has a registered capital of RMB1709867327.00, divided into 1,709,867,327 shares with a par value
of RMB 1 each, of which, 319,591,987 shares are non-tradable A-shares, and 1,390,275,340 shares are tradable A-shares. The
Company’s shares have been listed and traded on the Shenzhen Stock Exchange since April 9, 2010.
The Company belongs to the computer, communication and other electronic equipment manufacturing industry, and is primarily
engaged in the provision of core devices for intelligent interconnection, including PCBs, LED display devices, touch panels,
LCMs, precision components, etc.
These financial statements are published with the approval of the 9th meeting of the 6th Board of Directors of the Company on
April 16, 2024.
87
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
IV. Basis for Preparation of the Financial Statements
1. Basis for preparation
These financial statements have been prepared on the assumption that the Company is a going concern.
2. Going concern
No event or fact may cast significant doubts on the Company’s ability to remain a going concern within 12 months after the end of
the reporting period.
V. Significant Accounting Policies and Accounting Estimates
Note about specific accounting policies and accounting estimates:
Important note: The Company has established specific accounting policies and made specific accounting estimates with respect to
the impairment of financial instruments, inventories, depreciation of fixed assets, construction in progress, intangible assets,
recognition of revenues and other transactions and events according to its actual production and operation characteristics.
1. Statement of compliance with the Accounting Standards for Business Enterprises (“CASBEs”)
The financial statements prepared by the Company conform to the requirements of the CASBEs, and truly and completely reflect
the Company’s financial condition, operating results, cash flows and other related information.
2. Accounting period
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
The Company has a relatively short operating cycle, and determines the liquidity of assets and liabilities on the basis of 12 months.
4. Functional currency
The Company adopts RMB as its functional currency, MFLEX adopts USD as its functional currency, and the subsidiaries of
MFLEX, Multek and other companies adopt the currencies of the main economic environment in which they operate as their
functional currencies.
5. Determination and basis for selection of materiality criteria
Applicable □N/A
Item Materiality criteria
Significant accounts receivable Individual accounts receivable accounting for over 0.5% of the total assets of the
assessed for impairment loss Company are recognized as significant accounts receivable.
individually
Significant written off accounts Individual written off accounts receivable accounting for over 0.5% of the total assets of
receivable the Company are recognized as significant written off accounts receivable.
Significant dividends receivable aged Individual dividends receivable aged over one year and accounting for over 0.5% of the
over one year total assets of the Company are recognized as significant dividends receivable aged over
88
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
one year.
Significant constructions in progress Individual constructions in progress accounting for over 0.5% of the total assets of the
Company are recognized as significant constructions in progress.
6. Accounting treatment of business combinations involving entities under common control and not
under common control
(1) Accounting treatment of business combinations involving entities under common control
Assets and liabilities acquired from a business combination by the Company are measured at the carrying value of the assets and
liabilities of the acquiree in the consolidated financial statements of the ultimate controller at the combination date. The difference
between the carrying value of the owners’ equity of the acquiree as stated in the consolidated financial statements of the ultimate
controller and the carrying value of the total consideration paid or total par value of the shares issued in connection with the
combination is treated as an adjustment to the capital reserve. In case the capital reserve is not sufficient to absorb the difference,
the remaining balance is charged against the retained earnings.
(2) Accounting treatment of business combinations involving entities not under common control
Where the cost of the combination exceeds the Company’s share of the fair value of the acquiree’s net identifiable assets, the
difference is recognized as goodwill at the acquisition date. Where the cost of combination is lower than the Company’s share of
the fair value of the acquiree’s net identifiable assets, the Company reviews the measurement of the fair value of each of the
identifiable assets, liabilities and contingent liabilities acquired from the acquiree and the cost of combination, and if the cost of
combination as reviewed is still lower than the Company’s share of the fair value of the acquiree’s net identifiable assets, the
difference is recognized in profit or loss.
7. Determination of control and method of preparation of consolidated financial statements
(1) Determination of control
Control means that the Company has power over the investee, exposure or rights to variable returns from its involvement with the
investee and the ability to use its power to affect the amount of those returns.
(2) Method of preparation of consolidated financial statements
The parent includes all of its controlled subsidiaries in its consolidated financial statements. The consolidated financial statements
are prepared by the parent in accordance with CASBE 33 “Consolidated Financial Statements”, on the basis of the respective
financial statements of the parent and its subsidiaries, by reference to other relevant data.
8. Classification of joint arrangements and accounting treatment of joint operations
(1) Joint arrangements are classified as joint operations and joint ventures.
(2) When the Company is a party to a joint operation, the Company recognizes the following items relating to its interest in the
joint operation:
1) the assets individually held by the Company, and the Company’s share of the assets held jointly;
2) the liabilities incurred individually by the Company, and the Company’s share of the liabilities incurred jointly;
3) the Company’s revenue from the sale of its share of the output of the joint operation;
4) the Company’s share of revenue from the sale of assets by the joint operation; and
5) the expenses incurred individually by the Company, and the Company’s share of the expenses incurred jointly.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
9. Recognition of cash and cash equivalents
For the purpose of the statement of cash flows, cash comprises cash on hand and demand deposits, and cash equivalents comprise
short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
10. Translation of foreign currency transactions and foreign currency financial statements
(1) Translation of foreign currency transactions
Upon initial recognition, foreign currency transactions are translated into RMB using the approximate exchange rates of spot
exchange rates at the transaction dates. At the balance sheet date, monetary items denominated in foreign currencies are translated
into RMB using the spot exchange rates then prevailing. Exchange differences arising from such translations are recognized in
profit or loss, except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition
or construction of qualifying assets and accrued interest. Non-monetary items denominated in foreign currencies that are measured
at historical cost are translated using the approximate exchange rates of spot exchange rates at the transaction dates, without
adjusting the amounts in RMB. Non-monetary items denominated in foreign currencies that are measured at fair value are
translated using the foreign exchange rates prevailing at the dates the fair value was determined, with the exchange differences
arising from such translations recognized in profit or loss or other comprehensive income.
(2) Translation of foreign currency financial statements
The asset and liability items in the balance sheet are translated at the spot exchange rates prevailing at the balance sheet date. The
owners’ equity items other than “retained profits” are translated at the spot exchange rates prevailing at the transaction dates. The
income and expense items in the income statement are translated at the approximate exchange rates of spot exchange rates at the
transaction dates. The differences arising from such translation of foreign currency financial statements are recognized in other
comprehensive income.
11. Financial instruments
1. Classification of financial assets and financial liabilities
Upon initial recognition, financial assets are classified as: (i) financial assets at amortized cost; (ii) financial assets at fair value
through other comprehensive income; and (iii) financial assets at fair value through profit or loss.
Upon initial recognition, financial liabilities are classified as: (i) financial liabilities at fair value through profit or loss; (ii)
financial liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or continuing
involvement in the financial assets transferred; (iii) financial guarantee contracts not falling under items (i) and (ii), and loan
commitments not falling under item (i) and below market interest rate; and (iv) financial liabilities at amortized cost.
2. Recognition, measurement and derecognition of financial assets and financial liabilities
(1) Recognition and initial measurement of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, a financial asset or liability is recognized. Financial assets
and liabilities are initially measured at fair value. Transaction costs relating to financial assets or liabilities at fair value through
profit or loss are directly recognized in profit or loss. Transaction costs relating to other kinds of financial assets or liabilities are
included in their initially recognized amount. However, the accounts receivable that do not contain any significant financing
component or are recognized by the Company without taking into consideration the significant financing components under the
contracts with a term of less than one year upon initial recognition are initially measured at transaction price as defined in CASBE
90
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
14 “Revenue”.
(2) Subsequent measurement of financial assets
1) Financial assets at amortized cost
Financial assets at amortized cost are subsequently measured at amortized cost using the effective interest method. Gains or losses
on financial assets at amortized cost that do not belong to any hedging relationship are recognized in profit or loss upon
derecognition, reclassification, amortization using the effective interest method, or recognition of impairment.
2) Investments in debt instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequently measured at fair value.
Interest, impairment losses or gains and exchange gains or losses calculated using the effective interest method are recognized in
profit or loss, while other gains or losses are recognized in other comprehensive income. Upon derecognition, the aggregate gains
or losses previously recognized in other comprehensive income are transferred to profit or loss.
3) Investments in equity instruments at fair value through other comprehensive income
Investments in equity instruments at fair value through other comprehensive income are subsequently measured at fair value.
Dividends received (other than those received as recovery of investment cost) are recognized in profit or loss, while other gains or
losses are recognized in other comprehensive income. Upon derecognition, the aggregate gains or losses previously recognized in
other comprehensive income are transferred to retained earnings.
4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are subsequently measured at fair value. Gains or losses thereon, including
interest and dividend income, are recognized in profit or loss, except the financial assets belonging to any hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading (including derivatives classified
as financial liabilities), and financial liabilities directly designated as at fair value through profit or loss. Such financial liabilities
are subsequently measured at fair value. Changes in the fair value of financial liabilities designated as at fair value through profit
or loss arising out of changes in the Company’s credit risk are recognized in other comprehensive income, unless such treatment
will result in or increase any accounting mismatch in profit or loss. Other gains or losses on such financial liabilities, including
interest expenses and changes in fair value not arising out of changes in the Company’s credit risk, are recognized in profit or loss,
except the financial liabilities belonging to any hedging relationship. Upon derecognition, the aggregate gains or losses previously
recognized in other comprehensive income are transferred to retained earnings.
2) Financial liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or continuing
involvement in the financial assets transferred
Such financial liabilities are measured in accordance with CASBE 23 “Transfer of Financial Assets”.
3) Financial guarantee contracts not falling under items 1) and 2), and loan commitments not falling under item 1) and below the
market interest rate
Such financial liabilities are subsequently measured at the higher of (i) allowance for impairment losses determined according to
the policy for impairment of financial instruments; and (ii) balance of the initially recognized amount after deduction of the
accumulated amortization determined in accordance with CASBE 14 “Revenue”.
4) Financial liabilities at amortized cost
Financial liabilities at amortized cost are subsequently measured at amortized cost using the effective interest method. Gains or
91
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
losses on financial liabilities at amortized cost that do not belong to any hedging relationship are recognized in profit or loss upon
derecognition or amortization using the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
① the contractual right to receive cash flows from the financial assets has expired; or
② the financial assets have been transferred and such transfer meets the criteria for derecognition of financial assets as set forth in
CASBE 23 “Transfer of Financial Assets”.
2) A financial liability (or part thereof) is derecognized when all or part of the outstanding obligations thereunder have been
discharged.
3. Determination and measurement of financial assets transferred
When a financial asset of the Company is transferred, if substantially all the risks and rewards incidental to the ownership of the
financial asset have been transferred, the financial asset is derecognized, and the rights and obligations incurred or retained in such
transfer are separately recognized as assets or liabilities (as the case may be); if the Company has retained substantially all the
risks and rewards incidental to the ownership of the financial asset, the Company continues to recognize the financial asset
transferred. If the Company neither transferred nor retained a substantial portion of all risks and rewards incidental to the
ownership of the financial asset, then: (i) if the Company does not retain control over the financial asset, the financial asset is
derecognized, and the rights and obligations incurred or retained in such transfer are separately recognized as assets or liabilities
(as the case may be); or (ii) if the Company retains control over the financial asset, the financial asset continues to be recognized to
the extent of the Company’s continuing involvement in the financial asset transferred, and a corresponding liability is recognized.
If an entire transfer of a financial asset meets the criteria for derecognition, the difference between (i) the carrying value of the
financial asset transferred at the date of derecognition; and (ii) the sum of the consideration received from the transfer and the
portion of the cumulative amount of changes in fair value directly recorded as other comprehensive income originally that
corresponds to the part derecognized (where the financial asset transferred is an investment in debt instruments at fair value
through other comprehensive income) is recognized in profit or loss. If part of a financial asset is transferred and the part
transferred entirely meets the criteria for derecognition, the total carrying value of the financial asset immediately prior to the
transfer is allocated between the part derecognized and the part not derecognized in proportion to their relative fair value at the
date of transfer, and the difference between (i) the carrying value of the part derecognized; and (ii) the sum of the consideration
received from the transfer of the part derecognized and the portion of the cumulative amount of changes in fair value directly
recorded as other comprehensive income originally that corresponds to the part derecognized (where the financial asset transferred
is an investment in debt instruments at fair value through other comprehensive income) is recognized in profit or loss.
4. Determination of fair value of financial assets and financial liabilities
The Company adopts the valuation techniques applicable to the current situations and with sufficient data available and support of
other information, to determine the fair value of financial assets and financial liabilities. The Company classifies the inputs used by
the valuation techniques in the following levels and uses them in turn:
(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset or liability available at the date of
measurement;
(2) Level 2 inputs: inputs other than inputs included within Level 1 that are observable directly or indirectly. This category
includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in
inactive markets, observable inputs other than quoted prices (such as interest rate and yield curves observable during regular
intervals of quotation), and inputs validated by the market;
92
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(3) Level 3 inputs: inputs that are unobservable. This category includes interest rate or stock volatility that cannot be directly
observed or validated by observable market data, future cash flows from retirement obligations incurred in business combinations,
and financial forecasts made using own data.
5. Impairment of financial instruments
The Company determines the impairment and assesses allowance for impairment of financial assets at amortized cost, investments
in debt instruments at fair value through other comprehensive income, contract assets, lease payments receivable, loan
commitments other than financial liabilities designated at fair value through profit or loss, and financial guarantee contracts other
than financial liabilities designated at fair value through profit or loss and financial liabilities arising as a result of the transfer of
financial assets not meeting the criteria for derecognition or continuing involvement in the financial assets transferred, on the basis
of expected credit losses.
Expected credit loss is the weighted average of credit losses on financial instruments taking into account the possibility of default.
Credit loss is the present value of the difference between all contractual cash flows receivable under the contract and estimated
future cash flows discounted at the original effective interest rate, i.e. the present value of all cash shortages, where the Company’s
purchased or originated financial assets that have become credit impaired are discounted at their credit-adjusted effective interest
rate.
With respect to purchased or originated financial assets that have become credit impaired, at the balance sheet date, the Company
recognizes an impairment loss equal to the cumulative amount of changes in lifetime expected credit losses since initial
recognition.
With respect to lease payments receivable, accounts receivable arising from transactions within the meaning of CASBE 14
“Revenue”, the Company uses the simplified measurement method and recognizes an impairment loss equal to the lifetime
expected credit losses.
With respect to financial assets not using the measurement methods stated above, at each balance sheet date, the Company assesses
whether the credit risk has increased significantly since initial recognition, and recognizes an impairment loss equal to the lifetime
expected credit losses if the credit risk has increased significantly since initial recognition, or to the expected credit losses within
the next 12 months if the credit risk has not increased significantly since initial recognition.
The Company uses reasonable and supportable information, including forward-looking information, and compares the possibility
of default at the balance sheet date with the possibility of default upon initial recognition, to determine whether the credit risk of
the financial instruments has increased significantly since initial recognition.
At the balance sheet date, if the Company determines that a financial instrument has low credit risk, the Company assumes that its
credit risk has not increased significantly since initial recognition.
The Company assesses expected credit risk and measures expected credit losses of financial instruments individually or
collectively. When assessing the financial instruments collectively, the Company includes the financial instruments in different
groups according to their common risk characteristics.
At each balance sheet date, the Company re-assesses the expected credit losses, with the amount of increase in or reversal of
impairment loss recognized in profit or loss as impairment losses or gains. With respect to a financial asset at amortized cost, its
carrying value recorded in the balance sheet is written off against the impairment loss. With respect to an investment in debt
instruments at fair value through other comprehensive income, the Company recognizes the impairment loss in other
comprehensive income, without reducing its carrying value.
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and presented on a net basis in the balance sheet only if: (i) the Company has a
currently enforceable legal right to offset the recognized amounts; and (ii) the Company has an intention to settle on a net basis, or
93
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
realize the assets and settle the liabilities simultaneously. Except as stated above, financial assets and financial liabilities are
presented in the balance sheet separately, without offsetting each other.
With respect to the transfer of financial assets not meeting the criteria for derecognition, the Company does not offset the financial
assets transferred against the relevant liabilities.
(XII). Determination and recognition of expected credit losses on accounts receivable
1. Accounts receivable for which the allowance for expected credit losses is recognized collectively according to credit risk
characteristics
Group type Basis for grouping Method for measuring expected credit losses
Banker’s acceptance bills receivable By reference to historical credit loss experience, and
taking into account the current situations and
Type of bills prediction of future economic conditions, calculate the
Commercial acceptance bills receivable
expected credit losses according to the default risk
exposure and rate of lifetime expected credit loss.
By reference to historical credit loss experience, and
taking into account the current situations and
prediction of future economic conditions, prepare a
Accounts receivable – aging group Age
comparison table of the age of accounts receivable and
rate of lifetime expected credit loss, and calculate the
expected credit losses.
By reference to historical credit loss experience, and
taking into account the current situations and
prediction of future economic conditions, prepare a
Other receivables – aging group Age
comparison table of the age of other receivables and
rate of lifetime expected credit loss, and calculate the
expected credit losses.
By reference to historical credit loss experience, and
taking into account the current situations and
Long-term receivables – group of security
Nature of accounts prediction of future economic conditions, calculate the
deposits
expected credit losses according to the default risk
exposure and rate of lifetime expected credit loss.
(2) Comparison table of the age and rate of expected credit loss
Rate of expected credit loss on accounts Rate of expected credit loss on other
Age
receivable (%) accounts receivable (%)
Within 6 months (inclusive, the same 5
0.5
below)
7-12 months 5 5
1-2 years 20 10
2-3 years 60 50
Over 3 years 100 100
The age of an account receivable, other account receivable or commercial acceptance bill receivable is calculated from the month
it actually occurred.
3. Determination of accounts receivable for which the allowance for expected credit losses is recognized individually
With respect to the accounts receivable whose credit risk is significantly different from that of the relevant group, an allowance for
expected credit losses is recognized individually.
12. Notes receivable
See Note 11 “Financial instruments”.
13. Accounts receivable
See Note 11 “Financial instruments”.
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14. Accounts receivable
See Note 11 “Financial instruments”.
15. Other receivables
See Note 11 “Financial instruments”.
16. Contract assets
Contract assets or contract liabilities are presented in the balance sheet according to the relationship between the relevant
performance obligations and payment by the customer. Contract assets and contract liabilities under the same contract are
presented on a net basis.
The right of the Company to payment that is unconditional, except for the passage of time, is presented as an account receivable.
The right of the Company to payment for goods already transferred to a customer is presented as a contract asset if that right to
payment is conditional on something other than the passage of time.
The Company’s obligation to transfer goods to a customer in exchange for the consideration paid or payable by the customer is
presented as a contract liability.
17. Inventories
1. Classification of inventories
Inventories include finished products or goods held for sale in the ordinary course of business, work in progress and materials and
goods consumed in the process of production or rendering of services.
2. Valuation of inventories dispatched
The value of inventories dispatched is determined using the weighted average method at the end of the month in which they were
dispatched.
3. Inventory system
The perpetual inventory system is adopted.
5. Amortization of low-value consumables and packing materials
(1) Low-value consumables
Low-value consumables are amortized using the immediate write-off method.
(2) Packing materials
Packing materials are amortized using the immediate write-off method.
5. Inventory provision
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. An amount equal to the cost of an
inventory in excess of its net realizable value is recognized as an inventory provision. The net realizable value of inventories held
directly for sale is the estimated selling price of such inventories less the estimated selling expenses and related taxes in the
ordinary course of business. The net realizable value of inventories to be further processed is the estimated selling price of finished
goods less the estimated cost of completion, estimated selling expenses and related taxes in the ordinary course of business. At the
balance sheet date, if part of an inventory has a contract price while the remaining part thereof does not have a contract price, the
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net realizable value is determined separately, which is compared with their cost, to determine the amount of the inventory
provision recognized or reversed (as applicable).
18. Assets held for sale
None.
19. Debt investments
See Note 11 “Financial instruments”.
20. Other debt investments
See Note 11 “Financial instruments”.
21. Long-term receivable
None.
22. Long-term equity investments
1. Determination of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial
and operating policy-making of an entity, but is not control or joint control over those policies.
2. Determination of investment cost
(1) For an equity investment acquired through a business combination involving entities under common control, if the acquirer
pays consideration for the business combination by cash, transfer of non-monetary assets, assumption of liabilities or issuance of
equity securities, the initial investment cost of the long-term equity investment is the Company’s share of the carrying value of the
owners’ equity of the acquiree in the consolidated financial statements of the ultimate controller at the combination date. The
difference between: (i) the initial investment cost of the long-term equity investment; and (ii) the carrying value of the
consideration paid for the combination or the total par value of the shares issued (as applicable) is treated as an adjustment to the
capital reserve. In case the capital reserve is not sufficient to absorb the difference, the remaining balance is charged against the
retained earnings.
If a business combination is effected through multiple transactions by steps that constitute a package deal, the Company accounts
for such transactions as one deal to gain control. If such transactions do not constitute a package deal, the initial investment cost is
the Company’s share of the carrying value of the owners’ equity of the acquiree in the consolidated financial statements of the
ultimate controller at the combination date; and the difference between: (i) the initial investment cost of the long-term equity
investment at the combination date; and (ii) the sum of the carrying value of long-term equity investment before the combination
and the carrying value of the consideration paid for acquisition of the additional shares at the combination date is treated as an
adjustment to the capital reserve. In case the capital reserve is not sufficient to absorb the difference, the remaining balance is
charged against the retained earnings.
(2) For an equity investment acquired through a business combination involving entities not under common control, the initial
investment cost is the fair value of the aggregate consideration paid at the date of acquisition.
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With respect to a long-term equity investment acquired through a business combination involving entities under common control
that is effected through multiple transactions by steps, the accounting thereof in the standalone financial statements is different
from that in the consolidated financial statements as stated below:
1) In the standalone financial statements, the sum of the carrying value of the equity investment originally held in the acquiree and
the additional investment cost incurred is recorded as the initial investment cost of the equity investment changed into the cost
method.
2) In the consolidated financial statements, if the transactions constitute a package deal, the Company accounts for such
transactions as one deal to gain control. If such transactions do not constitute a package deal, the equity held in the acquiree prior
to the acquisition date is remeasured at its fair value at the acquisition date, with the difference between its fair value and carrying
value recognized as an investment income for the current period; if the equity held in the acquiree prior to the acquisition date
involves other comprehensive income under the equity method, such other comprehensive income is transferred to the income for
the period in which the acquisition date falls, except for other comprehensive income arising from remeasurement of changes in
net liabilities or net assets of defined benefit plans.
(3) For an equity investment not acquired through business combination, the initial investment cost is the purchase price actually
paid if it is acquired by cash, or the fair value of the equity securities issued if it is acquired through issuance of equity securities,
or in accordance with CASBE 12 “Debt Restructuring” if it is acquired through debt restructuring, or CASBE 7 “Exchange of
Non-monetary Assets” if it is acquired through exchange of non-monetary assets.
3. Subsequent measurement and recognition of profit or loss
Long-term equity investments in investees over which the Company exercises control are accounted for using the cost method.
Long-term equity investments in associates and joint ventures are accounted for using the equity method.
4. Disposal of investment in a subsidiary through multiple transactions by steps until loss of control over the subsidiary
(1) Criteria for determining a package deal
Where the Company loses control over a subsidiary due to the disposal of equity investment in the subsidiary through multiple
transactions by steps, the Company determines whether such transactions constitute a package deal taking into account the
transaction contract terms, consideration received, the transferee of the equity sold, method of disposal, time of disposal and other
information in respect of each step.
If the terms, conditions and financial effect of such transactions fall under one or more of the circumstances set forth below, such
transactions are accounted for as a package deal generally:
1) such transactions are concluded simultaneously or in consideration of their mutual effect;
2) such transactions will achieve a complete business result only as a whole;
3) the occurrence of a transaction depends on the occurrence of at least another transaction; and/or
4) a transaction may be uneconomical when considered individually, but is economical when considered together with other
transactions.
(2) Accounting treatment of transactions not constituting a package deal
1) Standalone financial statements
The difference between the carrying value of the equity disposed of and the disposal proceeds actually received is recognized in
profit or loss. If the remaining equity empowers the Company to exercise significant influence or joint control over the investee,
the remaining equity is accounted for using the equity method; if the remaining equity does not empower the Company to exercise
control, joint control or significant influence over the investee, the remaining equity is accounted for in accordance with CASBE
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22 “Recognition and Measurement of Financial Instruments”.
2) Consolidated financial statements
Before the loss of control, the difference between the disposal proceeds and the Company’s share of the net assets of the subsidiary
corresponding to the long-term equity investment disposed of as calculated continuously from the acquisition date or combination
date is treated as an adjustment to the capital reserve (capital premium). In case the capital premium is not sufficient to absorb the
difference, the remaining balance is charged against the retained earnings.
Upon loss of control, the remaining equity is remeasured at its fair value at the date of loss of control. The sum of the
consideration received from the disposal of the equity and the fair value of the remaining equity, net of the Company’s share of the
net assets of the subsidiary as calculated continuously from the acquisition date according to the original shareholding ratio, is
included in the investment income for the period during which the control was lost, and charged against goodwill. Other
comprehensive income related to the equity investment in the subsidiary is transferred to the investment income for the period
during which the control was lost.
(3) Accounting treatment of transactions constituting a package deal
1) Standalone financial statements
The Company accounts for such transactions as one deal to dispose of and lose control over the subsidiary; however, in the
standalone financial statements, the difference between the proceeds from each disposal before loss of control and the carrying
value of the long-term equity investment corresponding to the equity disposed of is recognized in other comprehensive income,
which is wholly transferred to profit or loss in the period during which the control was lost.
2) Consolidated financial statements
The Company accounts for such transactions as one deal to dispose of and lose control over the subsidiary; however, in the
consolidated financial statements, the difference between the proceeds from each disposal before loss of control and the
Company’s share of the net assets of the subsidiary corresponding to the equity disposed of is recognized in other comprehensive
income, which is wholly transferred to profit or loss in the period during which the control was lost.
23. Investment property
Measurement model for investment property
Measured at cost
Method of depreciation or amortization
1. Investment properties include land use rights leased out or held for appreciation and buildings and structures leased out.
2. An investment property is measured initially at cost, and subsequently using the cost model, and depreciated or amortized using
the same method as fixed assets and intangible assets.
24. Fixed assets
(1) Criteria for recognition
Fixed assets are tangible assets held for the production of goods, rendering of service, lease or operation and management with a
useful life of more than one accounting year. A fixed asset is recognized if the economic benefits relating to it are very likely to
flow to the Company and its cost can be reliably measured.
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(2) Depreciation
Estimated useful Rate of residual Annual rate of
Category Method of depreciation
life (years) value (%) depreciation
Buildings and structures Straight line method 20-30 5% 3.17%-4.75%
Machinery and equipment Straight line method 5-10 5% 9.50%-19.00%
Transportation equipment Straight line method 5 5% 19.00%
Office equipment and others Straight line method 5 5% 19.00%
25. Construction in progress
(1) A construction in progress is recognized if the economic benefits relating to it are very likely to flow to the Company and its
cost can be reliably measured. Construction in progress is measured at the actual cost incurred before it is completed and ready for
the intended use.
(2) When a construction in progress is ready for intended use, it is transferred to fixed assets at its actual construction cost. A
construction in progress that is ready for intended use but the final settlement of which has not yet been completed is transferred to
fixed assets at estimated value first, and after the completion of the final settlement, the estimated value is adjusted according to
the actual cost, without adjusting the accumulated depreciation.
Category Criteria and time for transfer of construction in progress to fixed assets
Machinery and equipment Meet the design requirements or agreed standards after installation and commissioning
Buildings and structures Meet the building completion acceptance criteria
26. Borrowing costs
1. Recognition of capitalization of borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as
part of the cost of the asset when they meet the condition for capitalization. Other borrowing costs are expensed when they are
incurred and recognized in profit or loss.
2. Period of capitalization of borrowing costs
(1) A borrowing cost is capitalized when all of the following conditions are satisfied: (i) the expenditures on the asset have already
been incurred; (ii) the borrowing cost has already been incurred; and (iii) the acquisition, construction or production activities
necessary to prepare the asset for its intended use or sale have already commenced.
(2) Capitalization of borrowing costs is suspended during the period of abnormal interruption of acquisition, construction or
production of a qualifying asset which lasts for more than three consecutive months. The borrowing costs incurred during the
period of suspension are recognized as expenses for the current period. The capitalization of borrowing costs is suspended until the
resumption of acquisition, construction or production activities.
(3) Capitalization of borrowing costs ceases when a qualifying asset acquired, constructed or produced gets ready for its intended
use or sale.
3. Rate and amount of capitalization of borrowing costs
For borrowings obtained specially for the acquisition, construction or production of a qualifying asset, the amount of capitalization
of the borrowing costs is the cost of the borrowings actually incurred in the current period (including amortized discount or
premium determined using the effective interest method) less the interest income from the part of borrowings that has not yet been
utilized and is deposited in banks or investment income from temporary investment of the borrowings. For general borrowings
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occupied for the acquisition, construction or production of a qualifying asset, the amount of borrowing costs eligible for
capitalization is determined by multiplying the weighted average of the excess of cumulative expenditures on the asset over the
special-purpose borrowings by the capitalization rate of the general borrowings occupied.
27. Biological assets
None.
28. Oil and gas assets
None.
29. Intangible assets
(1) Useful life and basis for determination of useful life, estimates, method of amortization or review procedure
1. Intangible assets, including land use right, patents, non-patent technologies, etc., are initially measured at cost.
2. An intangible asset with a finite useful life is amortized in a systematic and reasonable manner according to the pattern in which
the economic benefits related to the intangible asset are expected to be realized, or if that pattern cannot be determined reliably,
using the straight line method as follows:
Useful life and basis for
Item Method of amortization
determination of useful life (years)
Land use right 50 Straight line method
Development expenses 5 Straight line method
Software 3 Straight line method
Trademarks and patents 10 Straight line method
Customer resources 10 Straight line method
(2) Intangible asset with indefinite useful life is not amortized, but its useful life is reviewed annually.
(3) Scope and accounting treatment of research and development (R&D) expenses
Scope of R&D expenses
(1) Labor costs
Labor costs comprise the wages, salaries, basic pension insurance, basic medical insurance, unemployment, worker’s
compensation insurance, maternity insurance and housing provident fund contributions paid to or for the R&D personnel, and
service fees of the outsourced R&D personnel.
With respect to the R&D personnel serving a number of R&D projects concurrently, their labor costs are allocated to the relevant
R&D projects on a pro-rata basis according to the record of working hours spent by them in such R&D projects as provided by the
administrative department.
With respect to the Company’s own R&D personnel and outsourced R&D personnel who are directly engaged in R&D activities
and also engaged in non-R&D activities, their labor costs actually incurred are allocated between R&D expenses and production
and business expenses on a pro-rata basis in proportion to the percentage of working hours spent by them on different posts as
recorded, or otherwise reasonably.
(2) Direct costs
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Direct costs refer to the costs actually incurred by the Company in connection with R&D activities, including (i) costs of materials,
fuels and powers directly consumed; (ii) costs of development and fabrication of molds and process equipment used in pilot trials
and trial production, purchasing costs of samples, prototypes and general testing methods not classified as fixed assets, and
inspection costs of trial produces; and (iii) operation, maintenance, calibration, inspection, testing, repair and other costs of
instruments and equipment used in R&D activities.
(3) Depreciation expenses and long-term deferred expenses
Depreciation expenses refer to the depreciation expenses of instruments, equipment and buildings used in R&D activities.
With respect to the instruments, equipment and buildings used in both R&D activities and non-R&D activities, the depreciation
expenses actually incurred are allocated between R&D expenses and production and business expenses according to the actual
working hours and area used as recorded, or otherwise reasonably.
Long-term deferred expenses refer to the long-term deferred expenses incurred in the alteration, modification, renovation and
repair of R&D facilities, which are recorded according to the amounts actually spent, and amortized on a straight line basis over
the defined period.
(4) Amortization expenses of intangible assets
Amortization expenses of intangible assets refer to the amortization expenses of software, intellectual properties, and non-patented
technologies (know-how, licenses, designs, computing methods, etc.) used in R&D activities.
(5) Design costs
Design costs refer to the costs incurred in the design of processes, technical specifications, rules of operation and operating
features in connection with the concept, development and manufacturing of new products and new processes, including the costs
of creative design activities conducted for the purpose of developing innovative, creative and breakthrough products.
(6) Equipment commissioning costs and testing costs
Equipment commissioning costs refer to the costs incurred during the equipment preparation phase of R&D activities, including
the costs of developing special-purpose production machines, changing production and quality control procedures, developing new
approaches and standards, etc.
The costs incurred for general equipment preparation and industrial engineering in connection with large-scale mass and
commercial production are excluded from the scope of aggregation.
Testing costs include clinical trial costs for the development of new drugs, field trial costs for exploration and development
technologies, field experiment costs, etc.
(7) Outsourced R&D expenses
Outsourced R&D expenses refer to the expenses of R&D activities that the Company engages external entities or individuals at
home or abroad to conduct, provided that the results of such R&D activities will be owned by the Company and such R&D
activities are closely related to the primary business of the Company.
(8) Other expenses
Other expenses refer to the expenses that are not set forth above and directly related to R&D activities, including the expenses of
technical documents and data, translation, advisors and consultants, high and new technology R&D insurance, retrieval,
verification, evaluation, appraisal and acceptance inspection of R&D achievements, application, registration and agency service in
respect of intellectual properties, meetings, travel, communication, etc.
4. Expenditures on an internal R&D project at the research phase are recognized in profit or loss in the period in which they are
incurred. Expenditures on an internal R&D project at the development phase are recognized as an intangible asset if: (i) it is
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technically feasible to complete the intangible asset so that it will be available for use of sale; (ii) it is intended to complete the
intangible asset so that it will be available for use of sale; (iii) the pattern in which the intangible asset will generate economic
results can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself, or if it is to be
used internally, the usefulness of the intangible asset; (iv) there are sufficient technical, financial and other resources available to
complete the development activities and to use or sell the intangible asset; and (v) the expenditures attributable to the development
of the intangible asset can be reliably measured.
30. Impairment of long-term assets
With respect to long-term equity investments, investment properties at cost, fixed assets, construction in progress, productive
biological assets at cost, oil and gas assets, right-of-use assets, intangible assets with a finite useful life and other long-term assets,
if there’s an indication of impairment at the balance sheet date, the Company assesses their recoverable amount. Goodwill arising
from business combinations and intangible assets with an infinite useful life are tested for impairment every year regardless of
whether there’s an indication of impairment. Goodwill is tested for impairment together with the relevant groups of assets or
combinations of groups of assets.
If the recoverable amount of a long-term asset is less than its carrying value, the difference is measured as impairment loss on the
asset and recognized in profit or loss.
31. Long-term deferred expenses
Long-term deferred expenses are expenses that have already been incurred but should be amortized over a period of more than one
year. Long-term deferred expenses are stated as the amount actually incurred, and equally amortized over the benefit period or
established period. If an item of long-term deferred expenses will not benefit the subsequent periods, the remaining unamortized
balance of the item is wholly transferred to profit or loss.
32. Contract liabilities
Contract assets or contract liabilities are presented in the balance sheet according to the relationship between the relevant
performance obligations and payment by the customer. Contract assets and contract liabilities under the same contract are
presented on a net basis.
The Company’s obligation to transfer goods to a customer in exchange for the consideration paid or payable by the customer is
presented as a contract liability.
33. Employee benefits
(1) Accounting treatment of short-term employee benefits
The short-term employee benefits actually incurred are recognized as liabilities in the accounting period during which employee
services are rendered, and included in profit or loss or the cost of related assets.
(2) Accounting treatment of post-employment benefits
Post-employment benefits are classified as defined contribution plans and defined benefit plans.
(1) In the accounting period during which employee services are rendered, the amount contributable as calculated according to the
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defined contribution plan is recognized as liabilities and included in profit or loss or the costs of related assets.
(2) The accounting treatment of a defined benefit plan generally involves the following steps:
1) According to the projected unit credit method, use unbiased and consistent actuarial assumptions to estimate demographic
variables and financial variables, measure the obligation arising from the defined benefit plan and determine the period to which
the relevant obligation belongs. Meanwhile, discount the obligation arising from the defined benefit plan, in order to determine the
present value of the benefit plan obligation and the current service cost;
2) If the defined benefit plan has assets, the deficit or surplus resulting after reducing the present value of the defined benefit
obligation by the fair value of the defined benefit plan is recognized as a net liability or asset of the defined benefit plan. If the
defined benefit plan has a surplus, the net assets of the defined benefit plan are measured at the lower of surplus in the defined
benefit plan and asset ceiling;
3) At the end of the current period, the cost of employee benefits arising from the defined benefit plan is recorded as service cost,
net interest on the net liabilities or net assets of the defined benefit plan, and changes arising from remeasurement of the net
liabilities or net assets of the defined benefit plan, where the service cost and the net interest on the net liabilities or net assets of
the defined benefit plan are included in profit or loss or the cost of related assets, and the changes arising from remeasurement of
the net liabilities or net assets of the defined benefit plan are included in other comprehensive income, which will not be reversed
to profit or loss in subsequent periods, but may be transferred within the scope of equity.
(3) Accounting treatment of termination benefits
When the Company can no longer withdraw the offer of termination benefits as a result of termination of employment or
redundancy, or recognizes the restructuring costs or expenses relating to payment of termination benefits, whichever the earlier, the
employee benefit liabilities arising from recognition of termination benefits are recognized in profit or loss.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits are accounted for in accordance with the provisions applicable to defined contribution plans if
they are qualified as defined contribution plans, otherwise, are accounted for in accordance with the provisions applicable to
defined benefit plans. In order to simplify the accounting, the total net amount of the cost of employee benefits arising from the
defined benefit plans that is recorded as service cost, net interest on the net liabilities or net assets of the defined benefit plan,
changes arising from remeasurement of the net liabilities or net assets of the defined benefit plan and other components is included
in profit or loss or the cost of related assets.
34. Provisions
1. Provisions are recognized when the Company has a present obligation as a result of any external guarantee, litigations, product
quality warranty, onerous contract or other contingencies, and it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, and the amount of the obligation can be reliably measured.
2. Provisions are initially measured according to the best estimates of the expenditures required to settle the related present
obligations. The carrying value of provisions is reviewed at the balance sheet date.
35. Share-based payments
1. Types of share-based payments
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Share-based payments include equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment of implementation, amendment and termination of share-based payment plans
(1) Equity-settled share-based payment
With respect to an equity-settled share-based payment that is granted in exchange for the services of employees, if the right can be
immediately exercised after the grant, at the date of the grant, the fair value of the equity instruments is included in the relevant
costs or expenses, and the capital reserve is adjusted accordingly; if the right may not be exercised until the vesting period comes
to an end or until the specified performance conditions are met, at each balance sheet date within the vesting period, the services
received in the current period are, based on the best estimate of the exercisable equity, included in the relevant costs or expenses at
the fair value of the equity instruments at the date of grant, and the capital reserve is adjusted accordingly.
An equity-settled share-based payment that is granted in exchange for the services of any other party is measured at fair value at
the date of receipt of such services if the fair value of such services can be reliably measured, or at the fair value of the equity
instruments at the date of receipt of such services if the fair value of such services cannot be reliably measured but the fair value of
the equity instruments can be reliably measured. The services are included in the relevant costs or expenses, and the owners’ equity
is increased accordingly.
(2) Cash-settled share-based payment
With respect to a cash-settled share-based payment that is granted in exchange for the services of employees, if the right can be
immediately exercised after the grant, at the date of grant, the fair value of the liability undertaken by the Company is included in
the relevant costs or expenses, and the liabilities are increased accordingly; if the right may not be exercised until the vesting
period comes to an end or until the specified performance conditions are met, at each balance sheet date within the vesting period,
the services received in the current period are, based on the best estimate about the exercisable right, included in the relevant costs
or expenses and the corresponding liabilities at the fair value of the liability undertaken by the Company.
(3) Amendment and termination of share-based payment plans
If such amendment results in an increase in the fair value of the equity instruments granted, the Company recognizes a
corresponding increase in the services received according to the increase in the fair value of the equity instruments. If such
amendment results in an increase in the number of the equity instruments granted, the Company recognizes a corresponding
increase in the services received according to the fair value of the additional equity instruments granted. If the Company amends
the vesting conditions in a manner favorable to the employees, the Company will take into account the vesting conditions as
amended in the accounting thereof.
If such amendment results in a decrease in the fair value of the equity instruments granted, the Company continues to recognize
the services received based on the fair value of the equity instruments at the date of grant, without taking into account the decrease
in the fair value of the equity instruments. If such amendment results in a decrease in the number of the equity instruments granted,
the portion of the equity instruments reduced is deemed canceled. If the Company amends the vesting conditions in a manner
unfavorable to the employees, the Company will not take into account the vesting conditions as amended in the accounting
thereof.
If, during the vesting period, the Company cancels or settles any equity instruments granted (except for those canceled due to
failure to satisfy the vesting conditions), such cancellation or settlement is treated as an acceleration of vesting, and the amount
that would have been recognized in the remaining vesting period is recognized immediately.
36. Preferred shares, perpetual bonds and other financial instruments
None.
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37. Revenue
Accounting policies for recognition and measurement of revenue disclosed by business type
1. Revenue recognition principle
At contract commencement, the Company assesses a contract to identify each single performance obligation included in the
contract and whether such performance obligation shall be satisfied over time or at a point in time.
A performance obligation shall be satisfied over time if it meets one of the following conditions, otherwise, it shall be satisfied at a
point in time: (i) the customer simultaneously receives and consumes the benefits provided by the Company’s performance; (ii) the
customer can control the work in process created during the Company’s performance; or (iii) the Company’s performance does not
create the goods with an alternative use to the Company and the Company has an enforceable right to payment for performance
completed to date.
With respect to a performance obligation satisfied over time, the Company recognizes revenue over time by measuring the
progress toward complete satisfaction of that performance obligation. If the Company is unable to reasonably measure the progress
of a performance obligation, but expects to recover the costs incurred in satisfying the performance obligation, the Company
recognizes revenue only to the extent of the costs incurred until such time that it can reasonably measure the progress of the
performance obligation. With respect to a performance obligation satisfied at a point in time, the Company recognizes revenue
when the customer obtains control of the relevant goods or services. In determining whether the customer has obtained control of
any goods, the Company considers the following indicators: (i) the Company has a present right to payment for the goods, i.e. the
customer presently is obliged to pay for the goods; (ii) the Company has transferred the legal title to the goods to the customer, i.e.
the customer has the legal title to the goods; (iii) the Company has transferred physical possession of the goods to the customer,
i.e. the customer physically possesses the goods; (iv) the Company has passed the significant risks and rewards of ownership of the
goods to the customer, i.e. the customer has the significant risks and rewards of ownership of the goods; (v) the customer has
accepted the goods; and (vi) other indicators showing that the customer has obtained control of the goods.
2. Revenue measurement principle
(1) The Company measures revenue according to the transaction price allocated to each performance obligation. Transaction price
is the amount of consideration to which the Company expects to be entitled in exchange for transferring the relevant goods or
services to a customer, excluding the amounts collected on behalf of third parties or expected to be returned to the customer.
(2) If a contract has any variable consideration, the Company determines the best estimate of the variable consideration according
to the expected value or the most likely amount, but the Company shall include in the transaction price some or all of an amount of
variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue
recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
(3) If a contract contains a significant financing component, the Company determines the transaction price according to the
amount that the customer would have paid for the goods or services if it had paid cash when it obtained control of the goods or
services. The difference between such transaction price and the contract consideration is amortized over the term of the contract
using the effective interest method.
(4) If a contract includes two or more performance obligations, at contract commencement, the Company allocates the transaction
price to each performance obligation on a relative standalone selling price basis.
3. Methods of revenue recognition
The Company is primarily engaged in the sale of PCBs, LED display devices, touch panels and LCMs, precision components and
other products, the revenues from which constitute performance obligations to be satisfied at a point in time. Revenue from sale of
products on the domestic market is recognized when the Company has delivered the products to the agreed place of delivery which
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
has been accepted by the customer, has received or has a present right to payment for the products, and it is probable that the
economic benefits associated with the transaction will flow to the Company. Revenue from sale of products on the overseas market
is recognized when the products delivered by the Company pursuant to the contract have been cleared through customs, and the
Company has received the relevant export declaration form and bill of lading, has received or has a present right to payment for
the products, and it is probable that the economic benefits associated with the transaction will flow to the Company.
Different methods of revenue recognition and measurement for the same business type that adopts different business models.
38. Contract costs
Contract acquisition costs, i.e. the incremental cost of acquiring a contract, are recognized as an asset if they are expected to be
recovered, and if the amortization period is no more than one year, are directly recorded in profit or loss in the period in which
they are incurred.
Contract performance costs, i.e. the costs of fulfilling a contract, are recognized as an asset if they are not addressed by the
standards on inventories, fixed assets and intangible assets and meet all of the following conditions:
1. the costs relate directly to a contract or to an anticipated contract, including direct labor, direct material, manufacturing costs (or
similar costs), costs that are explicitly chargeable to the relevant customer under the contract and other costs incurred solely in
connection with the contract;
2. the costs enhance the resources of the Company that will be used in satisfying the performance obligations in the future; and
3. the costs are expected to be recovered.
The assets related to contract costs are amortized on the same basis as the recognition of revenues from goods or services related to
such assets, and recognized in profit or loss.
The portion of the carrying value of an asset related to contract costs in excess of the remaining consideration receivable from the
transfer of goods or services related to such asset less the estimated costs that are expected to be incurred is recognized as an
impairment loss. If, as a result of changes in the factors of impairment in the previous periods, the remaining consideration
receivable from the transfer of goods or service related to such asset less the estimated costs that are expected to be incurred
exceeds the carrying value of such asset, the impairment loss is reversed through profit or loss, provided that the carrying value of
the reversed asset shall not exceed its carrying value at the reversal date assuming such impairment loss were not recognized.
39. Government grants
1. Government grants are recognized if (i) the Company meets the conditions attached to the government grants; and (ii) the
Company will receive the government grants. Government grants in the form of monetary assets are measured at the amount
received or receivable. Government grants in the form of non-monetary assets are measured at fair value, or if their fair value is
unavailable, at a nominal amount.
2. Determination and accounting treatment of government grants related to assets
Government grants related to assets are government grants which are offered for purchasing, constructing or otherwise acquiring
long-term assets as provided by the applicable government documents, or in the absence of such express provision in the
applicable government documents, whose primary condition is that the Company should purchase, construct or otherwise acquire
long-term assets. Government grants related to assets are offset against the carrying value of the relevant assets or recognized as
deferred income. Government grants related to assets recognized as deferred income are included in profit or loss over the service
life of the relevant assets on a reasonable and systemic basis. Government grants measured at nominal amount are directly
recognized in profit or loss. In case of a sale, transfer, retirement or damage of the relevant assets before the end of the intended
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service life, the balance of the unallocated deferred income is transferred to profit or loss for the period in which the assets are
disposed of.
3. Determination and accounting treatment of government grants related to income
Government grants related to income are government grants other than those related to assets. Government grants related to both
assets and income where it is difficult to make a distinction between the portion related to assets and the portion related to income
are wholly classified as government grants related to income. Government grants related to income as compensation for expenses
or losses to be incurred in subsequent periods are recognized as deferred income and in the period for recognizing the relevant
costs, expenses or losses, included in profit or loss or offset against the relevant costs. Government grants related to income as
compensation for expenses or losses already incurred are directly included in profit or loss or offset against the relevant costs.
4. Government grants related to day-to-day operations of the Company are recognized in other income or offset against the
relevant costs and expenses depending on the nature of economic business. Government grants not related to day-to-day operations
of the Company are recognized in non-operating revenues or expenses.
5. Accounting treatment of policy loan interest subsidy
If the financial authority directly appropriates any interest subsidy to the Company, the interest subsidy is recognized as a
reduction in the borrowing cost.
40. Deferred tax assets and deferred tax liabilities
1. The difference between the tax base of an asset or liability and its carrying value, or in case of an item not recognized as an asset
or liability whose tax base can be determined according to the applicable tax law, the difference between its tax base and carrying
value, is recognized as a deferred tax asset or deferred tax liability according to the tax rate applicable to the period in which the
asset or liability is expected to be recovered or settled.
2. Deferred tax assets are recognized to the extent of the amount of income tax payable that will be available in future periods
against which deductible temporary differences are deductible. At the balance sheet date, deferred tax assets not recognized in
previous periods are recognized if there’s conclusive evidence that it is probable that sufficient taxable income will be available in
future periods against which the deductible temporary differences are deductible.
3. At the balance sheet date, the carrying value of deferred tax assets is reviewed and written down to the extent that it is no longer
probable that sufficient taxable income will be available in future periods to allow the benefit of the deferred tax assets to be
utilized. If it is probable that sufficient taxable income will be available, the amount of write-down is reversed.
4. The income taxes and deferred income taxes are included in profit or loss as income tax expenses or gains, except the income
taxes arising from any: (i) business combination; or (ii) transaction or event directly recognized in owners’ equity.
5. Deferred income tax assets and deferred income tax liabilities are offset and presented on a net basis if: (i) the Company has a
legal right to settle current tax assets and current tax liabilities on a net basis; and (ii) the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same tax authority on either the same taxable entity or different taxable entities
which intend either to settle current tax assets and current tax liabilities on a net basis or to realize the assets and liabilities
simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be reversed.
41. Leases
(1) Accounting treatment of leases under which the Company is lessee
The Company as the lessee:
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At the lease commencement date, a lease that has a lease term of 12 months or less and does not contain a purchase option is a
short-term lease. A lease of an asset with a low value when new is a lease of a low-value asset. Where the Company subleases or
expects to sublease a leased asset, the original lease is not classified as a lease of a low-value asset.
Except short-term leases and leases of low-value assets, at the lease commencement date, the Company recognizes right-of-use
assets and lease liabilities for the lease.
(1) Right-of-use assets
A right-of-use asset is a lessee’s right to use an asset over the life of a lease.
At the lease commencement date, a right-of-use asset is initially measured at cost, which comprises: (i) the amount of the lease
liability initially measured; (ii) any lease payments made at or before the commencement date, less any lease incentives received;
(iii) any initial direct costs incurred by the lessee; and (iv) estimated costs to be incurred by the lessee in dismantling and removing
the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms
and conditions of the lease.
The Company depreciates the right-of-use assets using the straight-line method. If it is reasonable to be certain that the ownership
of an underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset over its
remaining useful life. Otherwise, the Company depreciates the right-of-use asset over the shorter of the lease term and its
remaining useful life.
(2) Lease liabilities
At the lease commencement date, the Company measures a lease liability at the present value of the lease payments that have not
been paid at that date. The present value of lease payments is determined using the interest rate implicit in the lease as the discount
rate. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used. The difference between the lease
payments and their present value is unrecognized financing costs. Interest expenses are measured for each period within the lease
term using the discount rate for determining the present value of lease payments, and recognized in profit or loss. Variable lease
payments not included in the measurement of lease liabilities are recognized in profit or loss in the period during which they are
incurred.
At the lease commencement date, if there are changes in the in-substance fixed lease payments, amounts expected to be payable
under residual value guarantee, the index or rate used to determine the lease payments, the result of an assessment of purchase
option, renewal option or termination option or the actual exercise of such options, the Company re-measures the lease liability
based on the present value of lease payments as adjusted, and adjusts the carrying value of the right-of-use assets accordingly. If
the carrying value of the right-of-use asset is reduced to zero, but the lease liability needs to be further reduced, the balance is
recognized in profit or loss.
(2) Accounting treatment of leases under which the Company is lessor
The Company as the lessor:
At the lease commencement date, the Company classifies a lease that transfers substantially all the risks and rewards incidental to
ownership of an underlying asset to the lessee as a finance lease, and all other leases as operating leases.
(1) Operating lease
Lease receipts are recognized as lease income using the straight-line method over the lease term. Initial direct costs incurred are
capitalized, amortized on the same basis as the recognition of lease income, and recognized in profit or loss by installments.
Variable lease payments related to the operating lease which are not included in the lease receipts are recognized in profit or loss in
the period during which they are incurred.
(2) Finance lease
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At the lease commencement date, the Company recognizes the finance lease payments receivable based on the net investment in
the lease (equal to the sum of unguaranteed residual value and the present value of lease receipts that are not received at the lease
commencement date and discounted using the Company’s incremental interest rate), and derecognizes the assets held under the
finance lease. The Company calculates and recognizes interest income using the interest rate implicit in the lease over the lease
term.
Variable lease payments that are not included in the measurement of the net investment in a lease are recognized in profit or loss
when they are incurred.
42. Other Significant accounting policies and accounting estimates
1. Basis for the adoption of hedge accounting and its accounting treatment
(1) Cash flow hedge.
(2) A hedging relationship qualifies for hedge accounting if all of the following conditions are met: (i) the hedging relationship
consists only of eligible hedging instruments and eligible hedged instruments; (ii) at the commencement of the hedge there is
formal designation of hedging instruments and hedged item, and documentation of the hedging relationship and the Company’s
risk management objective and strategy for undertaking the hedge; and (iii) the hedging relationship meets the hedging
effectiveness requirements.
The Company recognizes that the hedging relationship meets effectiveness requirements if all of the following conditions are met:
(i) there is an economic relationship between the hedged item and the hedging instruments; (ii) the effect of credit risk does not
dominate the value changes that result from the economic relationship between the hedged item and the hedging instruments; and
(iii) the hedge ratio of the hedging relationship is the same as the ratio of the quantity of the hedged item that the Company
actually hedges to the number of hedging instruments that the Company actually uses to hedge such hedged item, but does not
reflect an imbalance between the weightings of the hedged item and the hedging instrument.
The Company assesses whether a hedging relationship meets the hedge effectiveness requirements at commencement and on an
ongoing basis. If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk
management objective for that designated hedging relationship remains the same, the hedging relationship will be rebalanced.
(3) Hedge accounting
1) Fair value hedge
① The gain or loss on a hedging instrument is recognized in profit or loss (or other comprehensive income, if the hedging
instrument hedges a non-trading equity instrument (or a component thereof) at fair value through other comprehensive income).
② The gain or loss on a hedged item arising from risk exposure is recognized in profit or loss, with a corresponding adjustment to
the book balance of the hedged item not measured at fair value. If the hedged item is a financial asset (or a component thereof) that
is measured at fair value through other comprehensive income in accordance with Article XVIII of CASBE 22 “Financial
Instruments: Recognition and Measurement”, the gain or loss arising from the risk exposure on the hedged item is recognized in
profit or loss, without adjusting its book balance which has already been measured at fair value; if the hedged item is a non-trading
equity instrument (or a component thereof) for which the Company has elected to present changes at fair value through other
comprehensive income, the gain or loss arising from the risk exposure on the hedged item is recognized in profit or loss, without
adjusting its book balance which has already been measured at fair value.
When a hedged item is an unrecognized firm commitment (or a component thereof), the cumulative change in fair value of the
hedged item subsequent to its designation is recognized as an asset or a liability with a corresponding gain or loss recognized in
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
profit or loss. When a firm commitment is performed to acquire an asset or assume a liability, the initial book balance of the asset
or the liability is adjusted to include the cumulative change in fair value of the hedged item that was previously recognized.
For a hedged item that is a financial instrument (or a component thereof) measured at amortized cost, any adjustment on the book
balance of the hedged item is amortized to profit or loss based on a recalculated effective interest rate at the date that amortization
begins. For a financial asset (or a component thereof) that is a hedged item and measured at fair value through other
comprehensive income in accordance with Article XVIII of CASBE 22 “Financial Instruments: Recognition and Measurement”,
the cumulative gain or loss previously recognized thereon is amortized in the same manner, and recognized in profit or loss,
without adjusting its book balance.
2) Cash flow hedges
① The portion of the gain or loss on a hedging instrument that is determined to be an effective hedge is recognized in other
comprehensive income as cash flow hedge reserve, while the ineffective portion is recognized in profit or loss. The cash flow
hedge reserve is recognized at the lower of the following (in absolute amount): (i) the cumulative gain or loss on the hedging
instrument from the commencement of the hedge; and (ii) the cumulative change in the present value of the estimated future cash
flows of the hedged item from the commencement of the hedge.
② If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a
hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair value
hedge accounting is applied, the Company transfers out the amount of cash flow hedge reserve previously recognized in other
comprehensive income, and includes it in the initial cost of the asset or the liability.
③ For other cash flow hedges, the amount of cash flow hedge reserve previously recognized in other comprehensive income is
transferred to profit or loss in the same period the hedged forecast sale affects profit or loss.
3) Hedges of a net investment in a foreign operation
The portion of the gain or loss on a hedging instrument that is determined to be an effective hedge is recognized in other
comprehensive income, and reclassified from other comprehensive income into profit or loss on the disposal of the foreign
operation, while the ineffective portion is recognized in profit or loss.
2. Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital, rewarding its employees or otherwise,
if the purchased shares are to be held as treasury shares, the treasury shares are recorded at the amount actually paid and the
relevant filing procedures are performed; if the repurchased shares are to be retired, the difference between the total book value of
the shares retired and the amount actually paid therefore is recognized as a reduction in capital reserve, and if the capital reserve is
not sufficient to absorb the difference, the remaining balance is charged against the retained earnings. If the repurchased shares are
granted to the employees as equity-settled share-based payments, the purchase price paid by the employees upon exercise of their
rights is recognized as a reduction in the cost of the relevant treasury shares vested in the employees and capital reserve (other
capital reserve) accumulated within the vesting period, with a corresponding adjustment to capital reserve (share premium).
43. Significant changes in accounting policies and accounting estimates
(1) Significant changes in accounting policies
Applicable □ N/A
In RMB
Financial statement items
Content and reason for changes in accounting policies Amount affected
significantly affected
Since January 1, 2023, the Company has applied the provisions The Proposal Regarding See the table below
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
contained in the Interpretation of the Accounting Standards for Business Changes in Accounting
Enterprises (“CASBE”) No. 16 issued by the Ministry of Finance, Policies was considered and
regarding the “accounting treatment of deferred taxes related to assets adopted at the 9th meeting of
and liabilities arising from single transactions to which the initial the 6th Board of Directors and
recognition exemption does not apply”, and adjusted the single the 7th meeting of the 6th
transactions to which such provisions apply that occurred during the Board of Supervisors on April
period from the beginning of the earliest period in which the Company 16, 2024. This change in
applied such provisions in the presentation of financial statements for the accounting policies is not
first time, till the date of initial application of such provisions as follows: subject to approval of the
with respect to the taxable temporary difference and deductible general meeting of
temporary differences arising from lease liabilities and right-of-use shareholders.
assets, provisions related to retirement obligations and corresponding
assets recognized in connection with the single transactions to which
such provisions apply, at the beginning of the earliest period in which the
Company applied such provisions in the presentation of financial
statements for the first time, the cumulative effect is treated as an
adjustment to the opening retained earnings and other related financial
statement items for that period in accordance with such provisions and
the provisions of CASBE No. 18 “Income Tax”.
The table shows the specific adjustments:
Financial statement items significantly affected Amount affected (RMB) Remark
Items of the balance sheet on December 31, 2022
Deferred tax assets 271,245,622.44
Deferred tax liabilities 252,034,574.31
Minority interests 9,657.23
Retained profits 19,201,390.90
Items of the income statement for the year ended December 31, 2022
Income tax expenses -802,980.28
Profit or loss attributable to minority interests -25,458.83
(2) Changes in significant accounting estimates
□ Applicable N/A
(3) Adjustment of the opening balance of related financial statement items due to the initial adoption of new accounting
standards since 2023
Applicable □N/A
Adjustments:
See Note 43 (1) “Significant changes in accounting policies”.
44. Miscellaneous
(1) Sale and leaseback
1) The Company as lessee
In accordance with CASBE 14 “Revenue”, the Company assesses and determines whether the transfer of any asset in a sale and
leaseback transaction should be accounted for as a sale of that asset.
If the transfer of an asset is accounted for as a sale of the asset, the Company measures the right-of-use asset arising from the
leaseback at the proportion of the original carrying value of the asset that relates to the right of use retained by the Company.
Accordingly, the Company recognizes only the amount of any gain or loss that relates to the rights transferred to the lessor.
Otherwise, the Company continues the recognition of the transferred asset, and recognizes a financial liability equal to the amount
of transfer proceeds in accordance with CASBE 22 “Financial Instruments: Recognition and Measurement” at the same time.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
2) The Company as lessor
In accordance with CASBE 14 “Revenue”, the Company assesses and determines whether the transfer of any asset in a sale and
leaseback transaction should be accounted for as a sale of that asset.
If the transfer of an asset is accounted for as a sale of the asset, the Company accounts for the purchase of assets in accordance
with other applicable standards, and accounts for the lease of assets in accordance with CASBE 21 “ Leases”.
Otherwise, the Company does not recognize the transferred asset, instead, recognizes a financial asset equal to the amount of
transfer proceeds in accordance with CASBE 22 “Financial Instruments: Recognition and Measurement”.
VI. Taxation
1. Main categories of taxes and tax rates
Category of tax Tax base Tax rate
The output tax is calculated based on revenue from sales of
13%, 6% or 7%-25% (for the Company’s
Value-added tax goods or rendering of services in accordance with the tax law,
overseas subsidiaries)
net of the input tax deductible in the current period
Sales tax Taxable sale revenue Taxable sale revenue
Urban
maintenance and Amount of turnover tax actually paid 5% or 7% (China)
construction tax
15%, 16.50%, 25%, 0, 21%, 0.75%-
Enterprise income
Amount of taxable income 8.84%, 17%, 10%, 20%, 20.6%, 24% or
tax
30%
If levied on the basis of price, 1.2% * 70% of the original value
Property tax of the property; if levied on the basis of rental, 12% of the lease 1.2% or 12% (China)
income
Education
Amount of turnover tax actually paid 3% (China)
surcharge
Local education
Amount of turnover tax actually paid 2% (China)
surcharge
Different rates of enterprise income tax applicable to the taxpayers:
Taxpayer Income tax rate
The Company, Yongchuang Tech, Mutto Optronics, MFLEX
Yancheng, Yancheng Dongshan, Dongguan Dongshan Precision
Manufacturing Co., Ltd., RF Top Electronic, Suzhou Chengjia, 15.00%
Yancheng Mutto Optronics Science and Technology Co., Ltd. and
Suzhou Dongdai Electronic Tech Co Ltd.
Hong Kong Dongshan and other companies incorporated in Hong
16.50%
Kong
Mutto Optronics Group Limited, Mflex Delaware, Inc., The Dii
0
Group (BVI) Co. Limited
Multi-Fineline Electronix, Inc. and other companies incorporated in Federal corporate income tax rate, 21%; state corporate
the United States income tax rate, 0.75%-8.84%
Multi-Fineline Electronix Singapore Ptd. Ltd. and other companies
17% (Singapore)
incorporated in Singapore
Multek Technologies Limited 15% (enjoying an 80% tax exemption)
Multek Technology Sweden AB 20.6% (Sweden)
Multek Technology Malaysia SDN.BHD 24% (Malaysia)
DSBJ Mexico, S.DER.L.DEC.V. and other companies in Mexico 30.00%
Other taxpayers not listed above 25.00%
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
2. Tax preferences
1. Pursuant to the Notice on Publishing the Filing of the Third Batch of High and New Technology Enterprises Recognized by the
Recognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for Recognition
Management of High and New Technology Enterprises, the Company and its subsidiaries Mutto Optronics, Yancheng Dongshan,
Yancheng Dongshan Communication Technology Co., Ltd. and MFLEX Yancheng passed the high and new technology enterprise
qualification review with a term of three years from 2022 to 2024, and therefore are subject to an enterprise income tax rate of 15%
for the current period.
2. Pursuant to the Notice on Publishing the Filing of the Fourth Batch of High and New Technology Enterprises Recognized by the
Recognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for Recognition
Management of High and New Technology Enterprises, the Company’s wholly-owned subsidiary Suzhou Chengjia passed the
high and new technology enterprise qualification review with a term of three years from 2022 to 2024, and therefore is subject to
an enterprise income tax rate of 15% for the current period.
3. Pursuant to the Notice on Publishing the Filing the Second Batch of High and New Technology Enterprises Recognized by the
Recognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for Recognition
Management of High and New Technology Enterprises, the Company’s subsidiary EF Top Electronic passed the high and new
technology enterprise qualification review with a term of three years from 2022 to 2024, and therefore is subject to an enterprise
income tax rate of 15% for the current period.
4. Pursuant to the Notice on the Filing of the Third Batch of High and New Technology Enterprises of Jiangsu Province in 2021,
the Company’s wholly-owned subsidiary Yancheng Mutto Optronics Science and Technology Co., Ltd. passed the high and new
technology enterprise qualification review with a term of three years from 2021 to 2023, and therefore is subject to an enterprise
income tax rate of 15% for the current period.
5. The Company’s subsidiary Suzhou Dongdai Electronic Tech Co., Ltd. was listed in the Notice on Publishing the Filing of the
Second Batch of High and New Technology Enterprises Recognized by the Recognition Authority of Jiangsu Province in 2023
issued by the Office of the National Leading Group for Recognition Management of High and New Technology Enterprises, and
temporarily paid enterprise income tax at the rate of 15% for the current period.
6. Multek Technologies Limited is subject to a corporate income tax rate of 15% under the Mauritius Corporate Income Tax Act,
and as a global Class I company incorporated in Mauritius but operating abroad, enjoys an 80% tax exemption, so its effective
corporate income tax rate is 3%.
VII. Notes to items of the consolidated financial statements
1. Cash and bank balances
In RMB
Item Closing balance Opening balance
Cash on hand 559,941.39 340,651.93
Bank deposits 5,874,124,506.28 5,456,686,170.77
Other cash and bank balances 1,315,351,783.39 1,674,175,995.02
Total 7,190,036,231.06 7,131,202,817.72
Incl.: Total amounts deposited abroad 1,917,732,423.09 2,247,517,164.32
Note: See Notes to the Financial Statements for cash and cash equivalents subject to restrictions on use, and cash and bank
balances not classified as cash and cash equivalents.
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
2. Financial assets held for trading
In RMB
Item Closing balance Opening balance
Financial assets at fair value through
146,141,371.77 575,783,803.93
profit or loss
Incl.:
Investments in equity instruments 71,779,147.66 56,779,147.66
Derivatives 26,920,185.50 159,865,619.03
Wealth management products 47,442,038.61 359,139,037.24
Total 146,141,371.77 575,783,803.93
3. Derivative financial assets
4. Notes receivable
(1) Notes receivable by category
In RMB
Item Closing balance Opening balance
Commercial acceptance bills 3,407,623.49 48,401,430.82
Total 3,407,623.49 48,401,430.82
(2) Notes receivable by method of recognition of allowance for doubtful accounts
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Item Book balance Book balance
accounts Carrying value accounts Carrying
value
Amount % Amount % Amount % Amount %
Incl.:
Allowance
recognized 3,424,747.23 100.00% 17,123.74 0.50% 3,407,623.49 48,644,654.09 100.00% 243,223.27 0.50% 48,401,430.82
collectively
Incl.:
Commercial
acceptance 3,424,747.23 100.00% 17,123.74 0.50% 3,407,623.49 48,644,654.09 100.00% 243,223.27 0.50% 48,401,430.82
bills
Total 3,424,747.23 100.00% 17,123.74 0.50% 3,407,623.49 48,644,654.09 100.00% 243,223.27 0.50% 48,401,430.82
Allowance for doubtful accounts recognized collectively:
In RMB
Closing balance
Item Allowance for doubtful
Book balance %
accounts
Group of commercial acceptance bills 3,424,747.23 17,123.74 0.50%
Total 3,424,747.23 17,123.74
Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
□ Applicable N/A
(3) Allowance for doubtful accounts recognized, recovered or reversed in the current period
Allowance for doubtful accounts recognized in the current period:
In RMB
Opening Changes in the current period
Item Closing balance
balance Recognized Recovered Written Others
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
or reversed off
Allowance recognized collectively 243,223.27 -226,099.53 17,123.74
Total 243,223.27 -226,099.53 17,123.74
Significant amount of allowance for doubtful accounts recovered or reversed in the current period:
□Applicable N/A
(4) Notes receivable pledged at the end of the current period
(5) Notes receivable already endorsed or discounted but not yet become due at the balance sheet date
In RMB
Amount derecognized at December 31, Amount not derecognized at December
Item
2023 31, 2023
Commercial acceptance bills 10,645,152.55 3,424,747.23
Total 10,645,152.55 3,424,747.23
5. Accounts receivable
(1) Accounts receivable by age
In RMB
Age Closing book balance Opening book balance
Within 1 year (inclusive) 7,522,771,106.29 6,943,154,404.27
Within 6 months 7,444,151,188.36 6,527,619,977.21
7-12 months 78,619,917.93 415,534,427.06
1-2 years 285,296,373.77 79,131,332.02
2-3 years 16,989,211.39 147,646,312.40
Over 3 years 369,089,730.68 827,282,581.21
3-4 years 275,176,513.49 780,916,195.14
4-5 years 53,209,221.21 29,163,991.48
Over 5 years 40,703,995.98 17,202,394.59
Total 8,194,146,422.13 7,997,214,629.90
(2) Accounts receivable by method of recognition of allowance for doubtful accounts
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Item Book balance Carrying Book balance Carrying
accounts accounts
value value
Amount % Amount % Amount % Amount %
Allowance
221,542,640 220,877,891 619,864,657 619,864,657
recognized 2.70% 99.70% 664,748.70 7.75% 100.00%
.42 .72 .18 .18
individually
Incl.:
Allowance
7,972,603,7 260,103,758 7,712,500,0 7,377,349,9 370,938,505 7,006,411,4
recognized 97.30% 3.26% 92.25% 5.03%
81.71 .36 23.35 72.72 .98 66.74
collectively
Incl.:
8,194,146,4 480,981,650 7,713,164,7 7,997,214,6 990,803,163 7,006,411,4
Total 100.00% 5.87% 100.00% 12.39%
22.13 .08 72.05 29.90 .16 66.74
Allowance for doubtful accounts recognized individually:
Significant accounts receivable for which allowance for doubtful accounts was recognized individually
In RMB
Opening balance Closing balance
Name Allowance for Allowance for
Book balance Book balance % Reason
doubtful accounts doubtful accounts
Dongguan Baofeng The company was ordered to close
Intelligent 169,582,771.72 169,582,771.72 169,582,771.72 169,582,771.72 100.00% down, so an amount equal to the
Technology Co., Ltd. account receivable was already
115
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
recognized as an impairment loss
in 2019.
Total 169,582,771.72 169,582,771.72 169,582,771.72 169,582,771.72
Allowance for doubtful accounts recognized collectively: Aging group
In RMB
Closing balance
Item Allowance for doubtful
Book balance %
accounts
Within 6 months 7,443,314,172.22 37,216,570.84 0.50%
7-12 months 77,177,359.99 3,858,868.00 5.00%
1-2 years 285,232,629.47 57,046,525.89 20.00%
2-3 years 12,244,565.99 7,346,739.59 60.00%
Over 3 years 154,635,054.04 154,635,054.04 100.00%
Total 7,972,603,781.71 260,103,758.36
Basis for grouping: None.
Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
□ Applicable N/A
(3) Allowance for doubtful accounts recognized, recovered or reversed in the current period
Allowance for doubtful accounts recognized in the current period:
In RMB
Changes in the current period
Opening
Item Recovered or Closing balance
balance Recognized Written off Others
reversed
Allowance
recognized 619,864,657.18 2,828,114.52 401,778,317.42 -36,562.56 220,877,891.72
individually
Allowance
recognized 370,938,505.98 35,757,413.60 149,160,663.65 2,568,502.43 260,103,758.36
collectively
Total 990,803,163.16 38,585,528.12 550,938,981.07 2,531,939.87 480,981,650.08
(4) Accounts receivable actually written off in the current period
In RMB
Item Amount written off
Accounts receivable actually written off 550,938,981.07
Significant amount of accounts receivable written off:
In RMB
Whether or not
Write-off
Nature of Amount written Reason for write- arising from
Company name procedure
account off off related-party
performed
transactions
Major customers written Trade The company has Resolution of the
401,778,317.42 No
off receivable gone bankrupt Board of Directors
Total 401,778,317.42
(5) Top 5 debtors in terms of closing balance of accounts receivable and contract assets
In RMB
Total closing % of total closing Closing balance of
Closing balance of Closing balance of balance of accounts balance of accounts allowance for
Company name
accounts receivable contract assets receivable and receivable and doubtful accounts
contract assets contract assets receivable and
116
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
impairment of
contract assets
Debtor 1 3,410,937,382.67 3,410,937,382.67 41.63% 20,307,235.19
Debtor 2 492,675,037.13 492,675,037.13 6.01% 2,463,375.19
Debtor 3 457,362,240.53 457,362,240.53 5.58% 2,449,319.44
Debtor 4 316,423,534.67 316,423,534.67 3.86% 1,582,117.67
Debtor 5 250,948,110.69 250,948,110.69 3.06% 3,897,485.94
Total 4,928,346,305.69 4,928,346,305.69 60.14% 30,699,533.43
6. Contract assets
7. Accounts receivable financing
(1) Accounts receivable financing by category
In RMB
Item Closing balance Opening balance
Banker’s acceptance bills 290,477,095.22 644,057,382.41
Total 290,477,095.22 644,057,382.41
(2) Accounts receivable financing by method of recognition of allowance for doubtful accounts
In RMB
Closing balance Opening balance
Allowance for Allowance for
Item Book balance Book balance
doubtful accounts Carrying value doubtful accounts Carrying value
Amount % Amount % Amount % Amount %
Incl.:
Allowance
recognized 290,477,095.22 100.00% 290,477,095.22 644,057,382.41 100.00% 644,057,382.41
collectively
Incl.:
Banker’s
acceptance 290,477,095.22 100.00% 290,477,095.22 644,057,382.41 100.00% 644,057,382.41
bills
Total 290,477,095.22 100.00% 290,477,095.22 644,057,382.41 100.00% 644,057,382.41
(3) Allowance for doubtful accounts recognized, recovered or reversed in the current period
(4) Accounts receivable financing pledged at the end of the current period
In RMB
Item Amount pledged at December 31, 2023
Banker’s acceptance bills 172,685,965.02
Total 172,685,965.02
(5) Accounts receivable financing already endorsed or discounted but not yet become due at the balance sheet date
In RMB
Amount derecognized at December 31, Amount not derecognized at December
Item
2023 31, 2023
Banker’s acceptance bills 694,778,744.58
Total 694,778,744.58
(6) Other information
117
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
As the acceptors of banker’s acceptance bills are commercial banks that have high credit ratings, banker’s acceptance bills are less
likely to be dishonored when they become due. Therefore, the Company derecognizes the banker’s acceptance bills already
endorsed or discounted. However, if such bills fail to be paid when they become due, the Company will assume joint and several
liability to the holders thereof pursuant to the Law on Negotiable Instruments.
8. Other receivables
In RMB
Item Closing balance Opening balance
Other receivables 77,134,897.39 35,793,851.22
Total 77,134,897.39 35,793,851.22
(1) Interest receivable
(2) Dividends receivable
(3) Other receivables
1) Other receivables by nature
In RMB
Nature of account Closing balance Opening balance
Loan and reserve fund 3,008,693.20 7,767,360.70
Security deposit 24,179,943.43 25,463,197.09
Temporary payment receivable and others 63,320,215.31 17,415,911.41
Total 90,508,851.94 50,646,469.20
2) Other receivables by age
In RMB
Age Closing book balance Opening book balance
Within 1 year (inclusive) 71,736,165.38 32,992,896.42
1-2 years 8,616,817.34 3,233,448.86
2-3 years 2,464,429.36 3,764,903.27
Over 3 years 7,691,439.86 10,655,220.65
3-4 years 3,078,691.14 3,360,841.55
4-5 years 1,718,689.00 508,660.00
Over 5 years 2,894,059.72 6,785,719.10
Total 90,508,851.94 50,646,469.20
3) Other receivables by the method of recognition of allowance for doubtful accounts
Applicable □ N/A
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Item Book balance Book balance
accounts Carrying value accounts Carrying
value
Amount % Amount % Amount % Amount %
Allowance
recognized 2,340,704.91 2.59% 2,340,704.91 100.00% 3,590,704.91 7.09% 3,590,704.91 100.00%
individually
Incl.:
Allowance
recognized 88,168,147.03 97.41% 11,033,249.64 12.51% 77,134,897.39 47,055,764.29 92.91% 11,261,913.07 23.93% 35,793,851.22
collectively
118
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Incl.:
Total 90,508,851.94 100.00% 13,373,954.55 14.78% 77,134,897.39 50,646,469.20 100.00% 14,852,617.98 29.33% 35,793,851.22
Allowance for doubtful accounts recognized collectively: Aging group
In RMB
Closing balance
Item Allowance for doubtful
Book balance %
accounts
Within 1 year 71,736,165.38 3,586,808.28 5.00%
1-2 years 8,616,817.34 861,681.73 10.00%
2-3 years 2,460,809.36 1,230,404.68 50.00%
Over 3 years 5,354,354.95 5,354,354.95 100.00%
Total 88,168,147.03 11,033,249.64
Basis for grouping: None.
Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
In RMB
Stage 1 Stage 2 Stage 3
Allowance for doubtful Lifetime expected Lifetime expected
12-month expected Total
accounts credit loss (not credit credit loss (credit
credit loss
impaired) impaired)
Balance at January 1,
1,649,644.86 322,982.88 12,879,990.24 14,852,617.98
2023
In the current period:
- Transferred to stage 2 -430,842.82 430,842.82
- Transferred to stage 3 -246,395.36 246,395.36
Recognized 2,759,838.66 107,856.03 -540,433.65 2,327,261.04
Reversed 1,250,000.00 1,250,000.00
Written off 2,164,092.05 2,164,092.05
Other changes -391,832.42 -391,832.42
Balance at December
3,586,808.28 861,681.73 8,925,464.54 13,373,954.55
31, 2023
Basis for classification of stages and percentage of allowance for doubtful accounts recognized: None.
Significant changes in the book balance of allowance for doubtful accounts in the current period:
□ Applicable N/A
4) Allowance for doubtful accounts recognized, recovered or reversed in the current period
5) Other receivables actually written off in the current period
6) Top 5 debtors in terms of closing balance of other receivables
In RMB
% of total closing Closing balance of
Company
Nature of account Closing balance Age balance of other allowance for
name
receivables doubtful accounts
Debtor 1 Government grants 37,648,885.00 Within 1 year 41.60% 1,882,444.25
Temporary payment
Debtor 2 9,860,000.00 Within 1 year 10.89% 493,000.00
receivable and others
Debtor 3 Export rebates 3,192,435.52 Within 1 year 3.53% 159,621.78
Debtor 5 Security deposit 2,855,772.00 1-2 years 3.16% 285,577.20
Temporary payment
Debtor 5 2,340,704.91 Over 3 years 2.59% 2,340,704.91
receivable and others
Total 55,897,797.43 61.77% 5,161,348.14
119
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
9. Advances to suppliers
(1) Advances to suppliers by age
In RMB
Closing balance Opening balance
Age
Amount % Amount %
Within 1 year 72,605,597.90 91.00% 144,831,544.38 89.67%
1 to 2 years 5,581,589.38 7.00% 9,311,244.44 5.77%
2 to 3 years 21,100.35 0.03% 3,378,241.58 2.09%
Over 3 years 1,574,451.48 1.97% 3,991,794.13 2.47%
Total 79,782,739.11 161,512,824.53
Reason of failure to timely settle the significant advances to suppliers aged more than one year:
(2) Top 5 suppliers in terms of closing balance of advances to suppliers
% of the total balance of advances to
Company name Book balance (RMB)
suppliers
Supplier 1 5,551,132.74 6.46
Supplier 2 4,813,400.00 5.60
Supplier 3 3,732,167.64 4.35
Supplier 4 3,697,195.15 4.30
Supplier 5 3,624,803.07 4.22
Subtotal 21,418,698.60 24.93
10. Inventories
Does the Company need to comply with the disclosure requirements for the real estate industry? No.
(1) Categories of inventories
In RMB
Closing balance Opening balance
Inventory Inventory
provision or provision or
Item allowance for allowance for
Book balance Carrying value Book balance Carrying value
impairment of impairment of
contract fulfilling contract fulfilling
costs costs
Raw materials 1,137,854,380.40 144,036,638.90 993,817,741.50 1,054,142,552.20 52,636,496.51 1,001,506,055.69
Work in progress 891,174,574.36 125,226,289.12 765,948,285.24 839,758,226.64 29,797,143.67 809,961,082.97
Goods on hand 4,974,174,253.58 449,989,021.71 4,524,185,231.87 4,710,817,179.86 366,785,710.02 4,344,031,469.84
Circulating
9,966,532.81 38,514.88 9,928,017.93 10,278,315.47 38,514.88 10,239,800.59
materials
Total 7,013,169,741.15 719,290,464.61 6,293,879,276.54 6,614,996,274.17 449,257,865.08 6,165,738,409.09
(2) Inventory provision or allowance for impairment of contract fulfilling costs
In RMB
Increase in the current period Decrease in the current period
Opening
Item Reversed or Closing balance
balance Recognized Others Others
written off
Raw materials 52,636,496.51 99,844,978.15 8,444,835.76 144,036,638.90
Work in progress 29,797,143.67 97,273,963.88 1,844,818.43 125,226,289.12
Goods on hand 366,785,710.02 200,096,019.26 5,037,473.33 121,930,180.90 449,989,021.71
120
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Circulating materials 38,514.88 38,514.88
Total 449,257,865.08 397,214,961.29 5,037,473.33 132,219,835.09 719,290,464.61
Reason for reversing the Reason for writing off the inventory
Item Basis for determining the net realizable value
inventory provision provision
The net realizable value is the estimated selling price The inventories for which an The net realizable value is the estimated
of finished goods less the estimated cost of inventory provision was selling price of finished goods less the
Raw materials
completion, estimated selling expenses and related recognized at the beginning of the estimated cost of completion, estimated
taxes. current period have been used. selling expenses and related taxes.
The net realizable value is the estimated selling price The inventories for which an The net realizable value is the estimated
Work in of finished goods less the estimated cost of inventory provision was selling price of finished goods less the
progress completion, estimated selling expenses and related recognized at the beginning of the estimated cost of completion, estimated
taxes. current period have been used. selling expenses and related taxes.
The inventories for which an The net realizable value is the estimated
The net realizable value is the estimated selling price
inventory provision was selling price of finished goods less the
Goods on hand of finished goods less the estimated selling expenses
recognized at the beginning of the estimated selling expenses and related
and related taxes.
current period have been used. taxes.
The net realizable value is the estimated selling price The inventories for which an The net realizable value is the estimated
Other
of finished goods less the estimated cost of inventory provision was selling price of finished goods less the
circulating
completion, estimated selling expenses and related recognized at the beginning of the estimated cost of completion, estimated
materials
taxes. current period have been used. selling expenses and related taxes.
11. Assets held for sale
12. Non-current assets due within one year
13. Other current assets
In RMB
Item Closing balance Opening balance
Cost of returned goods receivable 29,832,976.30 21,651,650.92
Deductible input tax 340,312,673.44 153,399,758.40
Prepaid enterprise income tax 35,892,887.21 76,293,525.58
Deferred expenses and others 245,681,208.73 253,228,939.74
Total 651,719,745.68 504,573,874.64
14. Debt investments
15. Other debt investments
16. Investment in other equity instruments
In RMB
Aggregate
Aggregate loss
Income income Reason for
Loss recognized recognized in Dividend
recognized in recognized in designation as at
in other other income
Opening other other fair value
Item Closing balance comprehensive comprehensive recognized in
balance comprehensive comprehensive through other
income in the income at the the current
income in the income at the comprehensive
current period end of the period
current period end of the income
current period
current period
Jiangsu Bohua
Equity
Investment 150,000,000.00 150,000,000.00
Partnership
(L.P.)
Hai Dixin
Semiconductor
21,322,110.00 21,322,110.00
(Nantong) Co.,
Ltd.
Hostar
Intelligence
28,800,000.00
Technology
Co., Ltd.
Dyness Digital
Energy
50,000,000.00
Technology
Co., Ltd.
Shinwu
22,035,000.00
Optronics
121
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(Suzhou) Co.,
Ltd.
Jinan
Moviebook 6,000,000.00
Co., Ltd.
Total 278,157,110.00 171,322,110.00
Other information:
Reason for designation as an investment in equity instruments at fair value through other comprehensive income
1) Hai Dixin Semiconductor (Nantong) Co., Ltd. was established on April 6, 2012, with a registered capital of RMB36,152,329.00,
in which the Company holds 10.2345% shares. In consideration that the Company has a close business relationship with Hai Dixin
Semiconductor (Nantong) Co., Ltd., the shares held by the Company in it will help the Company improve its business
competencies and the investment is not held for trading, the Company designated this investment as a financial asset at fair value
through other comprehensive income on January 1, 2019.
2) Jiangsu Bohua Equity Investment Partnership (L.P.) was established on September 27, 2021, with a registered capital of
RMB3.3 billion, and is primarily engaged in venture capital investment (in non-listed companies only). In consideration that this
investment will bring a good return to the Company and provide the Company with opportunities to invest in premium fields and
assets, and is not held for trading, the Company designated this investment as a financial asset at fair value through other
comprehensive income.
3) Hostar Intelligence Technology Co., Ltd. was established on April 2, 2011, with a registered capital of RMB42,660,000, in
which the Company holds 3.038% shares. In consideration that the shares held by the Company in it will help the Company
improve its business competencies, including procuring raw materials/equipment, and developing and strengthening market and
sales teams, and the investment is not held for trading, the Company designated this investment as a financial asset at fair value
through other comprehensive income in February 2023.
4) Dyness Digital Energy Technology Co., Ltd. was established on August 17, 2017, with a registered capital of RMB112,023,809,
in which the Company holds 1.7016% shares. In consideration that the shares held by the Company in it will help the Company
improve its business competencies and the investment is not held for trading, the Company designated this investment as a
financial asset at fair value through other comprehensive income in March 2023.
5) Shinwu Optronics (Suzhou) Co., Ltd. was established on October 19, 2006, with a registered capital of RMB57,754,000, in
which the Company holds 1.7169% shares. In consideration that the shares held by the Company in it will help the Company
improve its business competencies and the investment is not held for trading, the Company designated this investment as a
financial asset at fair value through other comprehensive income in May 2023.
6) Jinan Moviebook Co., Ltd. was established on September 6, 2019, with a registered capital of RMB10,000,000, in which the
Company holds 0.1995% shares. In consideration that the shares held by the Company in it will help the Company improve its
business competencies and the investment is not held for trading, the Company designated this investment as a financial asset at
fair value through other comprehensive income in October 2023.
17. Long-term receivables
(1) Particulars of long-term receivables
In RMB
Closing balance Opening balance Range of
Item Allowance for Carrying Allowance for Carrying discount
Book balance Book balance rate
doubtful accounts value doubtful accounts value
Security deposit for
30,000,000.00 30,000,000.00 30,000,000.00 30,000,000.00
finance lease
Account receivable from
10,703,905.76 10,703,905.76 10,703,905.76 10,703,905.76 7.5
Powerwave Technologies
122
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(Thailand) Co., Ltd.
Total 40,703,905.76 10,703,905.76 30,000,000.00 40,703,905.76 10,703,905.76 30,000,000.00
(2) Long-term receivables by method of recognition of allowance for doubtful accounts
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Item Book balance Book balance
accounts Carrying value accounts Carrying
value
Amount % Amount % Amount % Amount %
Allowance
recognized 10,703,905.76 100.00% 10,703,905.76 100.00% 10,703,905.76 100.00% 10,703,905.76 100.00%
individually
Incl.:
Incl.:
Total 10,703,905.76 100.00% 10,703,905.76 100.00% 10,703,905.76 100.00% 10,703,905.76 100.00%
18. Long-term equity investments
In RMB
Changes in the current period
Opening Closing
Declared
Opening balance of Investment Closing balance of
Adjustment Other cash Allowance
balance allowance Reduced income or balance allowance
Investee Additional to other change dividends for
(carrying for investme loss under Others (carrying for
investment comprehensi s in or profit impairment
value) impairment nt equity value) impairment
ve income equity distributio loss
loss method loss
n
I. Joint ventures
II. Associates
Suzhou
Toprun
24,240,829.4 51,487,204.0 - 19,335,028.6 51,487,204.0
Electric
8 5 4,905,800.86 2 5
Equipment
Co., Ltd.
Shenzhen
Nanfang Blog
17,507,056.4 17,507,056.4
Technology
7 7
Development
Co., Ltd.
Shanghai Fu
Shan
Precision
Manufacturin
g Co., Ltd.
Suzhou
LEGATE
23,193,983.4 23,507,176.1
Intelligent 313,192.68
7 5
Equipment
Co., Ltd.
Suzhou
Dongcan
Optoelectroni 3,750,632.95 46,625.40 3,797,258.35
cs Technology
Co., Ltd.
Jiangsu
Nangao
Intelligent
Equipment 4,133,295.48 126,074.14 4,259,369.62
Innovation
Center Co.,
Ltd.
Jiaozuo
Songyang
28,198,390.7 - 26,753,781.0
Optoelectric
6 1,444,609.69 7
Technology
Co., Ltd.
Suzhou
Yongxin
Jingshang
14,521,584.8 15,000,000.0 - 25,915,794.0
Venture
0 0 3,605,790.74 6
Capital
Partnership
(L.P.)
Isotek
9,319,087.5 779,662.8
Microwave 8,539,424.61 8,539,424.61
0 9
Limited
BVF (BVI) 33,189,073.8 32,358,873.1
-830,200.69
Holding L.P. 6 7
Shanghai
Xinhuarui
20,000,000.0 19,479,598.8
Semiconducto -520,401.15
0 5
r Technology
Co., Ltd.
-
139,767,215. 68,994,260.5 35,000,000.0 9,319,087.5 779,662.8 155,406,879. 77,533,685.1
Subtotal 0.00 10,820,910.9 0.00 0.00 0.00
41 2 0 0 9 89 3
1
-
139,767,215. 68,994,260.5 35,000,000.0 9,319,087.5 779,662.8 155,406,879. 77,533,685.1
Total 0.00 10,820,910.9 0.00 0.00 0.00
41 2 0 0 9 89 3
1
123
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Recoverable amount determined based on fair value net of disposal cost:
□ Applicable N/A
Recoverable amount determined based on the present value of estimated future cash flows:
□ Applicable N/A
Reason for significant differences between the information set out above and the information used in the prior year’s impairment
assessment or external information: None.
Reason for significant differences between the information used in the prior year’s impairment assessment and the actual situation
of the current year: None.
Other information: None.
19. Other non-current financial assets
20. Investment properties
(1) Investment properties at cost
Applicable □ N/A
In RMB
Buildings and Construction in
Item Land use right Total
structures progress
I. Original value
1. Opening balance 5,309,132.17 5,309,132.17
2. Increase
(1) Acquired
(2) Transferred from inventories/ fixed assets/
construction in progress
(3) Increased due to business combinations
3. Decrease
(1) Disposed
(2) Other transfer-out
4. Closing balance 5,309,132.17 5,309,132.17
II. Accumulated depreciation and amortization
1. Opening balance 4,012,580.75 4,012,580.75
2. Increase 257,711.16 257,711.16
(1) Recognized or amortized 257,711.16 257,711.16
3. Decrease
(1) Disposed
(2) Other transfer-out
4. Closing balance 4,270,291.91 4,270,291.91
III. Allowance for impairment loss
1. Opening balance
2. Increase
(1) Recognized
3. Decrease
(1) Disposed
(2) Other transfer-out
4. Closing balance
124
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
IV. Carrying value
1. Closing balance 1,038,840.26 1,038,840.26
2. Opening balance 1,296,551.42 1,296,551.42
Recoverable amount determined based on fair value net of disposal cost:
□ Applicable N/A
Recoverable amount determined based on the present value of estimated future cash flows:
□ Applicable N/A
(2) Investment properties measured at fair value
□ Applicable N/A
21. Fixed assets
In RMB
Item Closing balance Opening balance
Fixed assets 12,415,251,689.80 10,673,700,468.47
Disposal of fixed assets
Total 12,415,251,689.80 10,673,700,468.47
(1) Particulars of fixed assets
In RMB
Buildings and Machinery and Transport Office equipment
Item Total
structures equipment equipment and others
I. Original value
1. Opening
3,553,903,845.69 17,071,961,591.82 85,461,560.03 710,439,770.77 21,421,766,768.31
balance
2. Increase 1,599,985,827.00 3,312,937,588.05 8,003,493.92 332,375,822.33 5,253,302,731.30
(1) Acquired 40,127,058.41 86,944,488.06 535,192.54 23,272,946.81 150,879,685.82
(2) Transferred
from
782,891,265.98 2,468,814,935.86 6,490,251.57 52,196,060.31 3,310,392,513.72
construction in
progress
(3) Increased
due to business 776,947,298.06 735,744,640.81 978,049.81 256,764,704.88 1,770,434,693.56
combinations
(4) Differences
in translation of
foreign
20,204.55 142,110.33 162,314.88
currency
financial
statements
(5) Acquisition
of assets under 21,433,523.32 21,433,523.32
finance lease
3. Decrease 21,736,488.30 587,738,052.73 3,839,031.88 27,252,924.66 640,566,497.57
(1) Disposed or
21,736,488.30 574,889,143.65 3,839,031.88 26,870,924.66 627,335,588.49
retired
(2) Transferred
to construction 12,848,909.08 382,000.00 13,230,909.08
in progress
4. Closing
5,132,153,184.39 19,797,161,127.14 89,626,022.07 1,015,562,668.44 26,034,503,002.04
balance
II. Accumulated
depreciation
1. Opening
1,363,250,836.30 8,841,977,675.42 59,378,769.89 467,938,526.96 10,732,545,808.57
balance
2. Increase 877,611,038.91 2,133,335,285.57 6,505,312.64 268,975,559.99 3,286,427,197.11
(1) Recognized 185,600,274.02 1,559,316,868.68 5,627,554.36 77,708,641.89 1,828,253,338.95
125
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(2) Differences
in translation of
foreign
11,023.13 111,143.77 122,166.90
currency
financial
statements
(3) Increased
due to business 691,999,741.76 561,840,474.99 877,758.28 191,155,774.33 1,445,873,749.36
combinations
(4) Acquisition
of assets under 12,177,941.90 12,177,941.90
finance lease
3. Decrease 20,586,201.75 372,425,436.83 3,660,584.71 20,391,884.21 417,064,107.50
(1) Disposed or
20,586,201.75 366,420,754.97 3,660,584.71 20,230,595.25 410,898,136.68
retired
(2) Transferred
to construction 6,004,681.86 161,288.96 6,165,970.82
in progress
4.Closing
2,220,275,673.46 10,602,887,524.16 62,223,497.82 716,522,202.74 13,601,908,898.18
balance
III. Allowance for
impairment loss
1. Opening
14,962,205.52 558,285.75 15,520,491.27
balance
2. Increase 4,570,236.72 640,129.99 148,431.45 5,358,798.16
(1) Recognized
(2) Increased
due to business 4,570,236.72 640,129.99 148,431.45 5,358,798.16
combinations
3. Decrease 3,524,128.48 12,746.89 3,536,875.37
(1) Disposed or
3,524,128.48 12,746.89 3,536,875.37
retired
4.Closing
4,570,236.72 12,078,207.03 693,970.31 17,342,414.06
balance
IV. Carrying value
1. Closing
2,907,307,274.21 9,182,195,395.95 27,402,524.25 298,346,495.39 12,415,251,689.80
balance
2. Opening
2,190,653,009.39 8,215,021,710.88 26,082,790.14 241,942,958.06 10,673,700,468.47
balance
(2) Temporary idle fixed assets
(3) Fixed assets leased out under operating leases
(4) Fixed assets whose property title certificates have not yet been obtained
In RMB
Reason for not obtaining the property
Item Carrying value
title certificate
Factory buildings of Multek 62,075,953.78 Pending review
(5) Impairment assessment of fixed assets
□ Applicable N/A
22. Construction in progress
In RMB
126
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Item Closing balance Opening balance
Construction in progress 1,842,525,188.54 1,813,183,815.67
Total 1,842,525,188.54 1,813,183,815.67
(1) Particulars of construction in progress
In RMB
Closing balance Opening balance
Item Allowance for Allowance for
Book balance Carrying value Book balance Carrying value
impairment loss impairment loss
Multek 5G high-speed high-
frequency and high-density
20,138,126.54 20,138,126.54 8,726,174.90 8,726,174.90
PCB technology upgrading
project
Multek PCB production line
22,910,222.23 22,910,222.23
technology upgrading project
400,000 m2 fine line FPC
production and assembly 30,000,000.00 30,000,000.00
capacity expansion project
FPC for new energy
application and assembly 15,994,322.82 15,994,322.82 15,615,783.77 15,615,783.77
project of MFLEX Yancheng
IC substrate project of Chaowei
212,665,663.7
Microelectronics (Yancheng) 75,645,464.25 75,645,464.25 212,665,663.71
1
Co., Ltd.
Large-sized die-casting project 429,683,425.5
658,090,750.03 658,090,750.03 429,683,425.58
of Yancheng Dongchuang 8
Kunshan new energy
manufacturing base-related 425,232,448.52 425,232,448.52 97,518,667.74 97,518,667.74
project
Mexico new energy
manufacturing base-related 999,896.91 999,896.91 11,656,038.90 11,656,038.90
project
MFLEX Yancheng Phase II 228,417,694.0
35,619,454.33 35,619,454.33 228,417,694.07
project 7
MFLEX Suzhou Guoxiang
372,710,903.3
Phase II and other production 82,215,960.20 82,215,960.20 372,710,903.38
8
expansion projects
LCM business unit 46,535,180.88 46,535,180.88
Installation equipment in 383,279,241.3
482,053,584.06 482,053,584.06 383,279,241.39
progress and others 9
1,813,183,815.
Total 1,842,525,188.54 1,842,525,188.54 1,813,183,815.67
67
(2) Changes in significant constructions in progress in the current period
In RMB
% of Aggregat Incl.: Rate of
Amount
project e amount Capitaliz interest
Opening transferre Other Closing Source of
Project Budget Increase costs to Progress of ed capitaliza
balance d to fixed decreases balance funds
the capitalize interest tion this
assets
budget d interest this year year
Large-sized
die-casting
1,500,0
project of 429,683,4 635,330,7 108,557,0 298,366,3 658,090,7
00,000. 71.00% 71% Others
Yancheng 25.58 66.92 77.46 65.01 50.03
00
Dongchuan
g
Kunshan
new energy
1,800,0
manufacturi 97,518,66 455,486,5 127,772,8 425,232,4
00,000. 30.72% 30.72% Others
ng base- 7.74 87.72 06.94 48.52
00
related
project
3,300,0
527,202,0 1,090,817 236,329,8 298,366,3 1,083,323
Total 00,000.
93.32 ,354.64 84.40 65.01 ,198.55
00
127
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
23. Productive biological assets
(1) Productive biological assets at cost
□ Applicable N/A
(2) Impairment assessment of productive biological assets at cost
□ Applicable N/A
(3) Productive biological assets at fair value
□ Applicable N/A
24. Oil and gas assets
□ Applicable N/A
25. Right-of-use assets
(1) Particulars of right-of-use assets
In RMB
Buildings and Machinery and Transportation
Item Land Total
structures equipment equipment
I. Original value
1. Opening balance 1,051,602,685.11 21,511,443.18 93,200,186.63 1,166,314,314.92
2. Increase 370,660,463.87 32,269,798.63 345,470.00 475,280.00 403,751,012.50
(1) Leased 7,664,485.13 30,676,878.28 38,341,363.41
(2) Transferred
from construction 213,875,394.21 213,875,394.21
in progress
(3) Differences in
translation of
foreign currency 6,755,038.85 6,755,038.85
financial
statements
(4) Increased due
to business 142,365,545.68 1,592,920.35 345,470.00 475,280.00 144,779,216.03
combinations
3. Decrease 8,737,522.93 23,104,363.53 475,280.00 32,317,166.46
(1) Disposed 8,737,522.93 1,670,840.21 475,280.00 10,883,643.14
(2) Transferred to
21,433,523.32 21,433,523.32
fixed assets
4.Closing balance 1,413,525,626.05 30,676,878.28 345,470.00 93,200,186.63 1,537,748,160.96
II. Accumulated
depreciation
1. Opening balance 198,953,601.81 10,773,943.44 5,518,515.66 215,246,060.91
2. Increase 86,621,585.81 4,046,273.17 269,898.56 1,957,876.72 92,895,634.26
(1) Recognized 70,451,623.47 3,950,698.54 129,551.28 1,482,596.72 76,014,470.01
(2) Differences in
translation of
foreign currency 822,374.04 822,374.04
financial
statements
(3) Increased due 15,347,588.30 95,574.63 140,347.28 475,280.00 16,058,790.21
128
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
to business
combinations
3. Decrease 8,737,522.93 13,848,782.11 475,280.00 23,061,585.04
(1) Disposed 8,737,522.93 1,670,840.21 475,280.00 10,883,643.14
(2) Acquisition of
assets under 12,177,941.90 12,177,941.90
finance lease
4.Closing balance 276,837,664.69 971,434.50 269,898.56 7,001,112.38 285,080,110.13
III. Allowance for
impairment loss
1. Opening balance
2. Increase
(1) Recognized
3. Decrease
(1) Disposed
4. Closing balance
IV. Carrying value
1. Closing balance 1,136,687,961.36 29,705,443.78 75,571.44 86,199,074.25 1,252,668,050.83
2. Opening balance 852,649,083.30 10,737,499.74 87,681,670.97 951,068,254.01
(2) Impairment assessment of right-of-use assets
□ Applicable N/A
26. Intangible assets
(1) Particulars of intangible assets
In RMB
Unpatented Trademark and Development Customer
Item Land use right Patent Software Total
technology patent costs resources
I. Original value
1. Opening
249,003,308.43 232,519,348.24 140,567,942.35 6,733,029.45 628,823,628.47
balance
2. Increase 380,091,277.46 131,169,220.17 14,150,943.41 207,803,629.23 733,215,070.27
(1) Acquired 205,681,870.87 3,011,984.82 208,693,855.69
(2) Internal
R&D
(3) Increased
due to business 123,630,406.59 92,148,597.19 207,803,629.23 423,582,633.01
combinations
(4) Differences
in translation of
foreign currency 453,336.36 453,336.36
financial
statements
(5) Transferred
from
50,779,000.00 35,555,301.80 14,150,943.41 100,485,245.21
construction in
progress
3. Decrease 1,301,960.15 1,301,960.15
(1) Disposed 1,301,960.15 1,301,960.15
4. Closing
629,094,585.89 362,386,608.26 154,718,885.76 6,733,029.45 207,803,629.23 1,360,736,738.59
balance
II. Accumulated
amortization
1. Opening
67,599,772.86 166,692,664.59 85,208,441.65 6,733,029.45 326,233,908.55
balance
2. Increase 32,487,007.66 105,051,027.03 14,447,161.94 19,048,666.01 171,033,862.64
(1) Recognized 8,102,283.40 45,413,925.79 12,226,881.94 19,048,666.01 84,791,757.14
(2) Increased
due to business 24,384,724.26 59,184,865.67 83,569,589.93
combinations
(3) Differences
in translation of
foreign currency 452,235.57 2,220,280.00 2,672,515.57
financial
statements
3. Decrease 223,454.34 223,454.34
129
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(1) Disposed 223,454.34 223,454.34
4. Closing
100,086,780.52 271,520,237.28 99,655,603.59 6,733,029.45 19,048,666.01 497,044,316.85
balance
III. Allowance
for impairment
loss
1. Opening
balance
2. Increase
(1) Recognized
3. Decrease
(1) Disposed
4. Closing
balance
IV. Carrying
value
1. Closing
529,007,805.37 90,866,370.98 55,063,282.17 188,754,963.22 863,692,421.74
balance
2. Opening
181,403,535.57 65,826,683.65 55,359,500.70 302,589,719.92
balance
27. Goodwill
(1) Original value of goodwill
In RMB
Increase Decrease
Investee or event giving rise to goodwill Opening balance Arising from Closing balance
Disposed
business combination
MFLEX 1,770,752,915.84 1,770,752,915.84
Multek 179,329,062.90 179,329,062.90
Mutto Optronics 153,957,647.78 153,957,647.78
RF Top Electronic 135,001,580.53 135,001,580.53
Aranda asset group 50,502,380.96 50,502,380.96
Total 2,239,041,207.05 50,502,380.96 2,289,543,588.01
(2) Allowance for impairment of goodwill
In RMB
Opening Increase Decrease
Investee or event giving rise to goodwill Closing balance
balance Recognized Disposed
Mutto Optronics 38,233,132.28 29,242,600.72 67,475,733.00
Aranda asset group 4,000,219.86 4,000,219.86
RF Top Electronic 8,868,134.17 8,868,134.17
Total 47,101,266.45 33,242,820.58 80,344,087.03
(3) Information of asset group or combination of asset groups to which the goodwill belongs
Composition of asset group or combination of asset group and Business segment and basis for Whether or not the
Name
basis for grouping classification same as prior years
MFLEX All of its assets and liabilities when acquired by the Company PCB, manufacturing circuit boards Yes
Multek All of its assets and liabilities when acquired by the Company PCB, manufacturing circuit boards Yes
Touch panel and LCM, manufacturing
Mutto Optronics All of its assets and liabilities Yes
touch panels
Precision components, manufacturing
RF Top Electronic All of its assets and liabilities Yes
ceramic filters
(4) Method of determination of recoverable amounts
Recoverable amount determined based on fair value net of disposal cost:
□ Applicable N/A
130
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Recoverable amount determined based on the present value of estimated future cash flows:
Applicable □ N/A
In RMB
Basis for
Key parameters
Recoverable Forecast Key parameters for determining the
Item Carrying value Impairment loss for the forecast
amount period the stable period key parameters for
period
the stable period
Pre-tax discount
Revenue growth Revenue growth rate of 11.68%,
rate: 0.08%; rate: 0%; margin determined based
MFLEX 11,065,825,804.14 18,740,000,000.00 5 years
margin growth growth rate: on the weighted
rate: 16.65% 16.19% average capital
cost as adjusted
Pre-tax discount
Revenue growth Revenue growth rate of 10.99%,
rate: 2.37%; rate: 0%; margin determined based
Multek 2,384,815,341.96 2,690,000,000.00 5 years
margin growth growth rate: on the weighted
rate: 16.86% 16.74% average capital
cost as adjusted
Pre-tax discount
Revenue growth rate of 10.84%,
Revenue growth
Mutto rate: 2.61%; determined based
449,242,600.72 420,000,000.00 29,242,600.72 5 years rate: 0%; margin
Optronics margin growth on the weighted
growth rate: 7.12%
rate: 6.86% average capital
cost as adjusted
Pre-tax discount
Revenue growth Revenue growth rate of 12.46%,
RF Top rate: 10.00%; rate: 0%; margin determined based
363,486,919.03 386,000,000.00 5 years
Electronic margin growth growth rate: on the weighted
rate: 20.68% 24.69% average capital
cost as adjusted
Total 14,263,370,665.85 22,236,000,000.00 29,242,600.72
Note: The increase in the allowance for impairment of goodwill was primarily due to a goodwill impairment recognized as a result
of the reversal of deferred tax liabilities arising from an increase in the appraised value of Aranda acquired by the Company, and
the effect of goodwill impairment assessment.
1) According to the Valuation Report (Canwin Valuation Report [2024] No. 2-12) issued by Canwin Appraisal Co., Ltd., the
recoverable amount of the asset group or combination of asset groups including the goodwill for MFLEX was
RMB18,740,000,000.00, which was higher than its carrying value of RMB7,674,174,195.86, so the goodwill was not impaired.
2) According to the Valuation Report (Canwin Valuation Report [2024] No. 2-13) issued by Canwin Appraisal Co., Ltd., the
recoverable amount of the asset group or combination of asset groups including the goodwill for Multek was
RMB2,690,000,000.00, which was higher than its carrying value of RMB305,184,658.04, so the goodwill was not impaired.
3) According to the Valuation Report (Canwin Valuation Report [2024] No. 2-13) issued by Canwin Appraisal Co., Ltd., the
recoverable amount of the asset group or combination of asset groups including the goodwill for Mutto Optronics was
RMB420,000,000.00, while its carrying value was RMB449,242,600.72, so a goodwill impairment of RMB29,242,600.72 was
recognized.
4) According to the Valuation Report (Zhongsheng Valuation Report [2024] No. 0067) issued by Zhongsheng Appraisal &
Consulting Co., Ltd., the recoverable amount of the asset group or combination of asset groups including the goodwill for RF Top
Electronic was RMB386,000,000.00, which was higher than its carrying value of RMB22,513,080.97, so the goodwill was not
impaired.
(5) The completion of performance commitments and corresponding goodwill impairment
Goodwill was recognized based on performance commitments made during the reporting period or the preceding period of
performance commitments.
Applicable N/A
131
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
28. Long-term deferred expenses
In RMB
Item Opening balance Increase Amortization Other decreases Closing balance
Decoration costs of fixed
501,517,044.33 619,495,951.41 254,140,804.53 866,872,191.21
assets and others
Total 501,517,044.33 619,495,951.41 254,140,804.53 866,872,191.21
29. Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets not offset
In RMB
Closing balance Opening balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Allowance for
800,118,130.88 128,429,874.02 1,152,275,069.45 181,401,380.14
impairment of assets
Deductible losses 2,579,402,663.68 389,544,407.25 1,466,877,523.35 222,911,742.77
Fixed assets 55,181,543.30 13,469,931.13 200,864,027.50 30,334,952.34
Accrued expenses 132,769,288.28 26,353,080.15 200,467,698.35 40,863,348.65
Lease liabilities 1,872,497,186.10 342,955,848.83 1,671,260,217.63 271,245,622.44
Unrealized inter-
255,979,699.52 59,652,829.61
company transactions
Provisions 57,512,864.31 10,480,061.52 69,202,183.16 12,324,185.63
Deferred income 660,215,044.53 107,254,395.87 747,587,634.12 121,151,814.13
Total 6,413,676,420.60 1,078,140,428.38 5,508,534,353.56 880,233,046.10
(2) Deferred tax liabilities not offset
In RMB
Closing balance Opening balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
One-off deduction of
depreciation of fixed 1,588,082,312.80 318,338,339.27 1,803,750,324.83 380,449,918.63
assets
Accrued interest
86,995,017.26 18,917,600.59 69,638,588.72 14,859,117.31
income and others
Right-of-use assets 1,252,668,050.83 266,830,422.09 1,298,935,545.47 252,034,574.31
Income tax payable
due to increase in 384,245,651.82 87,206,749.88
appraised value
Total 3,311,991,032.71 691,293,111.83 3,172,324,459.02 647,343,610.25
(3) Deferred tax assets and deferred tax liabilities presented on a netting basis
In RMB
Closing offset amount Closing balance of Opening offset amount Opening balance of
Item of deferred tax assets deferred tax assets or of deferred tax assets deferred tax assets or
and liabilities liabilities after offset and liabilities liabilities after offset
Deferred tax assets 1,078,140,428.38 787,330,085.52
Deferred tax liabilities 691,678,802.70 554,440,649.67
132
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(4) Unrecognized deferred tax assets
In RMB
Item Closing balance Opening balance
Deductible temporary differences 1,045,519,017.80 917,684,269.16
Deductible losses 470,774,420.57 460,552,464.56
Total 1,516,293,438.37 1,378,236,733.72
(5) Deductible losses on unrecognized deferred tax assets that will expire in the following years
In RMB
Year Closing balance Opening balance Remark
2023 13,996,117.83
2024 40,403,329.83 40,403,329.83
2025 100,804,003.97 100,804,003.97
2026 39,377,012.01 39,377,012.01
2027 265,972,000.92 265,972,000.92
2028 24,218,073.84
Total 470,774,420.57 460,552,464.56
30. Other non-current assets
In RMB
Closing balance Opening balance
Item Allowance for Allowance for
Book balance Carrying value Book balance Carrying value
impairment loss impairment loss
Deferred
income –
unrealized gain 26,662,462.41 26,662,462.41 33,780,926.88 33,780,926.88
or loss on sale
and leaseback
Prepayment for
projects and 906,360,511.93 906,360,511.93 838,731,849.70 838,731,849.70
equipment
Total 933,022,974.34 933,022,974.34 872,512,776.58 872,512,776.58
31. Assets subject to restrictions on ownership or right of use
In RMB
Closing balance Opening balance
Item Type of Reason of Type of Reason of
Book balance Carrying value Book balance Carrying value
restriction restriction restriction restriction
Cash and Security Security
bank 1,315,351,783.39 1,315,351,783.39 Pledge deposit for 1,674,175,995.02 1,674,175,995.02 Pledge deposit for
bills, etc. bills, etc.
balances
Discounted
Notes but yet not
130,000,000.00 130,000,000.00 Pledge
receivable matured
bills
Security for Security for
loans, sales loans, sale
Fixed assets 784,051,228.85 418,641,701.59 Mortgage 751,006,098.07 459,521,491.55 Mortgage
and and
leaseback leaseback
Accounts
Pledge of Pledge of
receivable 172,685,965.02 172,685,965.02 Pledge
bills
441,621,937.83 441,621,937.83 Pledge
bills
financing
Right-of- Finance Finance
1,535,413,001.39 1,252,668,050.83 Mortgage 1,166,314,314.92 951,068,254.01 Mortgage
lease lease
133
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
use assets
Accounts
96,168,092.66 96,168,092.66 Pledge Factoring
receivable
Total 4,033,670,071.31 3,385,515,593.49 4,033,118,345.84 3,526,387,678.41
32. Short-term borrowings
(1) Short-term borrowings by category
In RMB
Item Closing balance Opening balance
Pledge loans 747,939,478.37
Credit loans 4,376,608,244.06 5,734,146,965.18
Discounting and factoring of notes, letters
779,491,972.95 1,312,323,501.13
of credit and accounts receivable
Total 5,156,100,217.01 7,794,409,944.68
33. Financial liabilities held for trading
In RMB
Item Closing balance Opening balance
Financial liabilities held for trading 104,174,076.23 91,517,116.89
Incl.:
Derivative financial liabilities 104,174,076.23 91,517,116.89
Incl.:
Total 104,174,076.23 91,517,116.89
34. Derivative financial liabilities
35. Notes payable
In RMB
Category Closing balance Opening balance
Commercial acceptance bills 52,292,024.62 280,442,316.20
Banker’s acceptance bills 856,879,191.31 1,727,963,543.99
Total 909,171,215.93 2,008,405,860.19
36. Accounts payable
In RMB
Item Closing balance Opening balance
Payment for materials 6,672,185,481.42 5,156,025,655.74
Payment for projects and equipment 1,055,789,013.23 563,403,370.98
Others 311,132,681.87 266,857,563.60
Total 8,039,107,176.52 5,986,286,590.32
37. Other payables
In RMB
Item Closing balance Opening balance
Other payables 80,188,628.54 54,324,601.72
Total 80,188,628.54 54,324,601.72
1) Other payables by nature
In RMB
134
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Item Closing balance Opening balance
Temporary receipts payable 60,966,287.79 30,358,476.53
Others 19,222,340.75 23,966,125.19
Total 80,188,628.54 54,324,601.72
38. Advances from clients
39. Contract liabilities
In RMB
Item Closing balance Opening balance
Trade payables 28,982,676.07 26,193,456.12
Total 28,982,676.07 26,193,456.12
40. Employee benefits payable
(1) Employee benefits payable
In RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term benefits 490,065,662.97 4,120,276,390.76 4,070,078,098.37 540,263,955.36
II. Post-employment
benefits - defined 10,059,652.33 292,066,802.24 289,211,429.25 12,915,025.32
contribution plans
III. Termination
4,181,685.07 4,181,685.07
benefits
Total 500,125,315.30 4,416,524,878.07 4,363,471,212.69 553,178,980.68
(2) Short-term employee benefits
In RMB
Item Opening balance Increase Decrease Closing balance
1. Wages, bonuses, allowances
477,783,158.98 3,582,146,645.16 3,529,704,788.53 530,225,015.61
and subsidies
2. Staff welfare 8,347,077.03 233,793,571.45 242,140,648.48
3. Social insurance contributions 3,307,563.55 150,428,864.50 148,108,817.90 5,627,610.15
Workers’ compensation
290,015.13 8,735,380.68 8,591,031.45 434,364.36
insurance
Medical and maternity
3,017,548.42 141,693,483.82 139,517,786.45 5,193,245.79
insurance
4. Housing provident fund 565,575.35 139,484,492.85 137,395,679.32 2,654,388.88
5. Trade union fund and
62,288.06 14,422,816.80 12,728,164.14 1,756,940.72
employee education fund
Total 490,065,662.97 4,120,276,390.76 4,070,078,098.37 540,263,955.36
(3) Defined contribution plans
In RMB
Item Opening balance Increase Decrease Closing balance
1. Basic pension insurance 9,558,389.21 281,944,662.57 279,185,813.20 12,317,238.58
2. Unemployment insurance 501,263.12 10,122,139.67 10,025,616.05 597,786.74
Total 10,059,652.33 292,066,802.24 289,211,429.25 12,915,025.32
41. Taxes payable
In RMB
Item Closing balance Opening balance
Value-added tax 15,906,070.71 51,132,065.23
135
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Enterprise income tax 425,307,243.33 339,281,179.49
Individual income tax 7,474,547.48 6,334,094.56
Urban maintenance and construction tax 6,227,121.91 3,920,049.58
Property tax 8,141,101.87 3,841,808.72
Stamp duty 6,471,998.78 4,553,692.87
Education surcharge 2,672,083.16 1,765,890.80
Land use tax 735,915.46 267,878.11
Local education surcharge 1,781,388.79 1,061,118.33
Other taxes 858,735.34 132,003.25
Total 475,576,206.83 412,289,780.94
42. Liabilities held for trading
43. Non-current liabilities due within one year
In RMB
Item Closing balance Opening balance
Long-term borrowings due within one year 2,467,018,914.05 1,165,803,694.70
Lease liabilities due within one year 29,697,992.30 23,941,171.43
Total 2,496,716,906.35 1,189,744,866.13
44. Other current liabilities
In RMB
Item Closing balance Opening balance
Output tax to be recognized 6,556,017.38 4,476,657.36
Total 6,556,017.38 4,476,657.36
45. Long-term borrowings
(1) Long-term borrowings by category
In RMB
Item Closing balance Opening balance
Pledge loans 764,600,000.00
Credit loans 3,741,405,477.65 2,583,821,643.49
Guaranteed and pledge loans 100,000,000.00
Mortgage and guaranteed loans 200,274,861.11 514,000,000.00
Total 4,706,280,338.76 3,197,821,643.49
46. Bonds payable
47. Lease liabilities
In RMB
Item Closing balance Opening balance
Lease obligations payable 2,098,735,814.79 1,985,857,535.57
Less: Unrecognized financing costs -255,936,620.99 -338,538,489.37
Total 1,842,799,193.80 1,647,319,046.20
48. Long-term payables
In RMB
Item Closing balance Opening balance
Long-term payables 296,995,789.48
Total 296,995,789.48
(1) Long-term payables by nature
In RMB
Item Closing balance Opening balance
Share purchase price 296,995,789.48
49. Long-term employee benefits payable
50. Provisions
In RMB
Item Closing balance Opening balance Reason
136
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Product warranty 30,235,945.92 42,352,230.73
Provision for sales return 30,549,264.52 26,849,952.43
Total 60,785,210.44 69,202,183.16
51. Deferred income
In RMB
Item Opening balance Increase Decrease Closing balance Reason
Government grants 747,587,634.12 131,751,774.19 145,882,723.14 733,456,685.17 Government grants
Total 747,587,634.12 131,751,774.19 145,882,723.14 733,456,685.17 --
52. Other non-current liabilities
53. Share capital
In RMB
+/-
Opening balance Capitalization Closing balance
New
Bonus shares of capital Others Subtotal
issue
reserve
Total shares 1,709,867,327.00 1,709,867,327.00
54. Other equity instruments
55. Capital reserve
In RMB
Item Opening balance Increase Decrease Closing balance
Capital premium (share premium) 7,896,510,906.74 7,896,510,906.74
Other capital reserve 158,383,174.03 8,874,328.96 167,257,502.99
Total 8,054,894,080.77 8,874,328.96 8,063,768,409.73
Other information: The change in capital reserve was due to share-based payments recognized under ESOPs in the current period.
56. Treasury shares
In RMB
Item Opening balance Increase Decrease Closing balance
Treasury shares 125,906,811.33 125,906,811.33
Total 125,906,811.33 125,906,811.33
57. Other comprehensive income
In RMB
2023
Less: Other Amount Balance on
Balance on Less: Other
Item comprehensive Amount attributable December 31,
January 1, 2023 Amount before comprehensive Less: Income
income attributable to the to minor 2023
tax income reclassified tax expenses
reclassified to parent after tax interest
to retained earnings
profit or loss after tax
I. Other
comprehensive
income that
-350,000,000.00 -350,000,000.00
cannot be
reclassified to
profit or loss
Change in fair
value of
investments in -350,000,000.00 -350,000,000.00
other equity
instruments
II. Other
comprehensive
income that
-342,976,005.21 -84,114,998.93 -72,938,763.54 10,512,338.04 -21,688,573.43 -364,664,578.64
will be
reclassified to
profit or loss
Reserves for
cash flow -57,469,963.42 -22,510,955.72 -72,938,763.54 10,512,338.04 39,915,469.78 -17,554,493.64
hedge
Differences in
translation of
foreign
-285,506,041.79 -61,604,043.21 -61,604,043.21 -347,110,085.00
currency
financial
statements
Total other
comprehensive -692,976,005.21 -84,114,998.93 -72,938,763.54 10,512,338.04 -21,688,573.43 -714,664,578.64
income
137
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
58. Special reserve
59. Surplus reserve
In RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 135,347,835.10 49,519,034.63 184,866,869.73
Total 135,347,835.10 49,519,034.63 184,866,869.73
60. Retained profits
In RMB
Item 2023 2022
Balance of retained profits at the end of the previous
7,297,404,445.02 5,275,515,670.63
period before adjustment
Total adjustment to the opening balance of retained
18,372,951.79
profits after adjustment (decrease expressed with “-”)
Opening balance of retained profits after adjustment 7,297,404,445.02 5,293,888,622.42
Add: Net profit attributable to owners of the parent 1,964,525,269.65 2,368,347,970.02
Less: Appropriation to statutory surplus reserve 49,519,034.63 23,649,519.95
Dividends payable to the ordinary shareholders 187,315,150.99 341,182,627.47
Closing balance of retained profits 9,025,095,529.05 7,297,404,445.02
Particulars of adjustment to the retained profits at the beginning of the current period:
1) Effect of retrospective adjustment pursuant to the CASBEs and related new provisions thereunder on the opening balance of
retained profits: Nil.
2) Effect of changes in accounting policies on the opening balance of retained profits: RMB18,372,951.79.
3) Effect of correction of material accounting errors on the opening balance of retained profits: Nil.
4) Effect of changes in the scope of consolidation resulting from business combinations involving entities under common control
on the opening balance of retained profits: Nil.
5) Cumulative effect of other adjustments on the opening balance of retained profits: Nil.
61. Operating revenue and operating costs
In RMB
2023 2022
Item
Revenue Cost Revenue Cost
Primary business 33,475,973,831.47 28,425,160,342.65 31,450,821,150.93 25,961,338,699.87
Other business 175,231,637.33 116,480,700.09 129,325,581.65 59,340,633.37
Total 33,651,205,468.80 28,541,641,042.74 31,580,146,732.58 26,020,679,333.24
Whether the lower of the net profit before and after the deduction of non-recurring gain or loss is negative?
□ Yes No
62. Taxes and surcharges
In RMB
Item 2023 2022
Urban maintenance and construction tax 42,047,978.00 42,173,074.00
Education surcharge 18,986,817.25 18,333,969.54
Property tax 24,366,953.46 16,738,300.91
Land use tax 1,981,401.11 1,587,701.79
Vehicle and vessel tax 53,430.27 9,563.33
Stamp duty 21,991,019.79 14,176,516.91
Environmental protection tax 807,946.43 404,606.40
Local education surcharge 12,733,547.98 12,228,157.62
Total 122,969,094.29 105,651,890.50
63. Administrative expenses
In RMB
Item 2023 2022
Employee benefits 467,679,720.20 445,921,834.05
Depreciation and amortization 156,374,496.81 124,492,061.14
138
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Consulting service fees 82,075,606.89 58,050,066.27
Office expenses 51,393,464.05 44,182,104.24
Entertainment expenses 72,376,322.16 44,097,815.99
Travel expenses 21,691,454.80 15,460,221.90
Rents 3,992,796.13 10,211,075.07
Repair costs 30,527,647.62 19,422,207.36
Taxes 999,118.09 1,409,194.20
Others 70,213,292.11 52,415,906.67
Total 957,323,918.86 815,662,486.89
64. Selling expenses
In RMB
Item 2023 2022
Employee benefits 203,487,546.56 178,775,039.38
Sales service fees 63,214,240.46 35,375,649.64
Export charges 17,420,576.66 24,666,048.57
Travel expenses 11,187,985.21 26,656,711.23
Entertainment expenses 24,420,099.35 18,403,395.91
Others 42,363,653.52 69,116,608.77
Total 362,094,101.76 352,993,453.50
65. R&D expenses
In RMB
Item 2023 2022
Direct costs 476,990,832.66 448,026,811.32
Labor costs 499,166,662.04 367,119,066.09
Depreciation and amortization 86,545,177.50 76,160,187.19
Others 98,487,602.28 48,779,387.38
Total 1,161,190,274.48 940,085,451.98
66. Financial expenses
In RMB
Item 2023 2022
Interest expenses 370,433,774.62 302,704,601.47
Interest on leases and financing fees 93,255,168.88 80,950,330.25
Less: Interest income -225,593,949.55 -42,128,725.22
Add: Exchange loss -93,398,783.31 -204,336,793.36
Bank charges and others 44,435,526.05 62,443,691.35
Total 189,131,736.69 199,633,104.49
67. Other income
In RMB
Sources of other income 2023 2022
Government grants related to assets 145,882,723.14 142,868,540.16
Government grants related to income 102,195,944.89 174,748,593.64
Refund of individual income tax
1,803,288.48 956,961.84
withholding service fees
68. Net exposure hedging income
69. Gain on changes in fair value
In RMB
Source of gain on changes in fair value 2023 2022
Financial assets held for trading -9,740,779.67 -66,613,459.50
Total -9,740,779.67 -66,613,459.50
70. Investment income
In RMB
Item 2023 2022
Income from long-term equity
-10,820,910.91 -3,353,804.37
investments under the equity method
139
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Investment income from financial assets
held for trading during the holding 6,960,501.71 6,348,937.52
period
Investment income from the disposal of
17,064,250.96 7,015,976.12
financial assets held for trading
Discount loss on accounts receivable
-9,045,317.41 -10,933,498.09
financing
Total 4,158,524.35 -922,388.82
71. Credit loss
In RMB
Item 2023 2022
Loss from doubtful accounts -39,436,689.63 -76,228,643.25
Total -39,436,689.63 -76,228,643.25
72. Impairment loss on assets
In RMB
Item 2023 2022
I. Impairment of inventories and contract
-397,214,961.29 -441,556,620.37
fulfilling costs
II. Impairment of long-term equity
-9,319,087.50
investments
IV. Impairment of fixed assets -11,049,705.17
X. Impairment of goodwill -33,242,820.58 -19,782,833.44
XII. Others 1,100,106.59 4,184,595.15
Total -438,676,762.78 -468,204,563.83
73. Gain on disposal of assets
In RMB
Source of gain on disposal of assets 2023 2022
Gain on disposal of fixed assets -18,240,640.06 -5,513,221.27
74. Non-operating revenue
In RMB
Amount recognized in non-
Item 2023 2022
recurring gain or loss
Penalties 3,153,492.52 7,926,374.74 3,153,492.52
Amounts that cannot be paid 2,085,714.60 3,996,486.25 2,085,714.60
Others 1,426,664.84 289,484.75 1,426,664.84
Investment income 134,812,863.84 134,812,863.84
Total 141,478,735.80 12,212,345.74
75. Non-operating expenses
In RMB
Amount recognized in non-
Item 2023 2022
recurring gain or loss
Donations 3,522,368.13 6,916,600.00 3,522,368.13
Loss on destruction and
retirement of non-current 8,127,234.15 8,707,696.75 8,127,234.15
assets
Penalties, overdue fines and
605,672.00 1,440,637.80 605,672.00
liquidated damages
Others 2,936,415.30 781,275.49 2,936,415.30
Total 15,191,689.58 17,846,210.04
76. Income tax expenses
(1) Statement of income tax expenses
In RMB
Item 2023 2022
Income tax expense 566,656,749.91 447,982,671.47
Deferred income tax expenses -340,618,962.41 24,853,791.34
Total 226,037,787.50 472,836,462.81
140
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
(2) Reconciliation of income tax expenses to accounting profit
In RMB
Item 2023
Total profit 2,191,087,954.92
Income tax expenses calculated based on statutory/applicable
328,663,193.24
tax rate
Effect of different tax rates applicable to subsidiaries 21,407,363.25
Effect of adjustment of income taxes for prior years -80,205,723.18
Effect of non-deductible costs, expenses and losses 4,796,799.62
Effect of deductible temporary differences or deductible losses
19,985,704.42
not recognized for deferred tax assets for the current period
Effect of super deduction of R&D expenses -68,609,549.85
Income tax expenses 226,037,787.50
77. Other comprehensive income
See Notes to the Financial Statements.
78. Items of the cash flow statement
(1) Cash flows related to operating activities
Other cash receipts related to operating activities:
In RMB
Item 2023 2022
Security deposit for acceptance bills 619,568,010.65 406,241,523.96
Government grants 200,684,445.55 379,880,087.27
Interest income 210,139,325.51 42,128,725.22
Temporary receipts payable and others 34,254,072.08 27,886,394.91
Total 1,064,645,853.79 856,136,731.36
Other cash payments related to operating activities
In RMB
Item 2023 2022
Security deposit for acceptance bills 447,811,795.42 767,949,563.14
Payment of period expenses in cash 589,898,141.45 470,246,313.16
Bank charges 44,435,526.05 62,443,691.35
Temporary payments receivable and
1,748,926.64 36,575,288.51
others
Total 1,083,894,389.56 1,337,214,856.16
(2) Cash flows related to investing activities
Other cash receipts related to investing activities
In RMB
Item 2023 2022
Recovery of term deposits 439,820,656.38 228,424,521.00
Recovery of performance compensation 7,000,000.00
Total 439,820,656.38 235,424,521.00
Other cash payments related to investing activities
In RMB
Item 2023 2022
Term deposits 682,400,228.05 455,064,192.71
Security deposit for the acquisition 226,168,789.48
Total 908,569,017.53 455,064,192.71
(3) Cash flows related to financing activities
Other cash receipts related to financing activities
In RMB
Item 2023 2022
141
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Security deposits 599,543,791.66 826,870,220.72
Proceeds from discounts on acceptance
729,491,972.95 1,312,323,501.13
bills and letters of credit
Total 1,329,035,764.61 2,139,193,721.85
Other cash payments related to financing activities
In RMB
Item 2023 2022
Security deposits 261,577,385.74 453,162,239.17
Payment of rents 183,001,957.26 253,811,187.11
Payments under bill financing 1,297,119,441.20 1,337,897,642.56
Repurchase of shares 49,990,856.17
Acquisition of minority interests in RF
97,834,888.06
Top Electronic
Total 1,741,698,784.20 2,192,696,813.07
Changes in liabilities arising from financing activities
□ Applicable N/A
79. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
In RMB
Supplementary information 2023 2022
1. Reconciliation of net profit to cash
flows from operating activities:
Net profit 1,965,050,167.42 2,368,062,503.84
Add: Allowance for impairment of assets 478,113,452.41 544,433,207.08
Depreciation of fixed assets, oil and gas
1,828,511,050.11 1,697,771,894.84
assets, and productive biological assets
Depreciation of right-of-use assets 76,014,470.01 100,106,051.84
Amortization of intangible assets 84,791,757.14 57,776,055.04
Amortization of long-term deferred
254,140,804.53 157,201,034.52
expenses
Loss on disposal of fixed assets,
intangible assets and other long-term 18,240,640.06 5,513,221.27
assets (gain expressed with “-”)
Loss on retirement of fixed assets (gain
8,127,234.15 8,707,696.75
expressed with “-”)
Loss on changes in fair value (gain
9,740,779.67 66,613,459.50
expressed with “-”)
Financial expenses (income expressed
356,010,007.62 179,318,138.36
with “-”)
Investment loss (income expressed with
-13,203,841.76 -10,011,109.27
“-”)
Decrease in deferred tax assets (increase
-197,907,382.28 -279,275,317.07
expressed with “-”)
Increase in deferred tax liabilities
-7,551,164.41 304,128,458.41
(decrease expressed with “-”)
Decrease in inventories (increase
-528,190,428.16 -160,903,575.10
expressed with “-”)
Decrease in trade receivables (increase
268,250,724.76 625,999,220.48
expressed with “-”)
Increase in trade payables (decrease
698,298,848.99 -1,052,291,844.61
expressed with “-”)
Others -126,017,650.06 16,734,915.50
Net cash flows from operating activities 5,172,419,470.20 4,629,884,011.38
2. Significant investing and financing
activities not involving cash receipts and
payments
Debt-to-capital swap
Convertible corporate bonds due within
one year
Fixed assets acquired under finance
142
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
leases
3. Net changes in cash and cash
equivalents:
Closing balance of cash 5,644,487,018.31 5,457,026,822.70
Less: Opening balance of cash 5,457,026,822.70 3,939,301,126.79
Add: Closing balance of cash equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash equivalents 187,460,195.61 1,517,725,695.91
(2) Net cash paid for the acquisition of subsidiaries in the current period
(3) Net cash received from the disposal of subsidiaries in the current period
(4) Components of cash and cash equivalents
In RMB
Item Closing balance Opening balance
I. Cash 5,644,487,018.31 5,457,026,822.70
Incl.: Cash on hand 559,941.39 340,651.93
Bank deposits immediately
5,643,927,076.92 5,456,686,170.77
available for withdrawal
III. Closing balance of cash and cash
5,644,487,018.31 5,457,026,822.70
equivalents
(5) Amounts subject to restriction on use but still presented as cash and cash equivalents
In RMB
Reason for presentation as cash and
Item 2023 2022
cash equivalents
Immediately available for withdrawal
Offering proceeds 30,654,962.53 104,031,255.89
despite of restriction on use
Total 30,654,962.53 104,031,255.89
(6) Cash and bank balances not classified as cash and cash equivalents
In RMB
Reason for not classified as cash and
Item 2023 2022
cash equivalents
May be unavailable for withdrawal
Term deposits and interest 690,180,814.95 455,064,192.71
due to pledge, freeze or otherwise
May be unavailable for withdrawal
Security deposit for bills 497,103,353.58 889,734,249.82
due to pledge, freeze or otherwise
Security deposit for the May be unavailable for withdrawal
230,197,429.36
acquisition due to pledge, freeze or otherwise
Security deposit for letters of May be unavailable for withdrawal
73,225,915.43 59,093,243.44
credit due to pledge, freeze or otherwise
Security deposit for letters of May be unavailable for withdrawal
54,841,699.43 87,288,309.05
guarantee due to pledge, freeze or otherwise
May be unavailable for withdrawal
Security deposit for loans 174,646,000.00
due to pledge, freeze or otherwise
Security deposit for foreign May be unavailable for withdrawal
8,350,000.00
exchange transactions due to pledge, freeze or otherwise
Total 1,545,549,212.75 1,674,175,995.02
80. Notes to items of the statement of changes in owners’ equity
Titles of items under “others” whose balance at the end of the previous year was adjusted and amount of adjustment:
81. Monetary items denominated in foreign currencies
(1) Monetary items denominated in foreign currencies
In RMB
Item Closing balance in foreign Exchange rate Closing balance in RMB
143
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
currency
Cash and bank balances
Incl.: USD 558,879,977.22 7.0827 3,958,379,214.66
EUR 571,300.04 7.8592 4,489,961.27
HKD 1,332,881.14 0.9062 1,207,856.89
KRW 11,568,030.00 0.0055 63,624.17
SGD 4,411,846.57 5.3772 23,723,381.38
NTD 261,627.00 0.2314 60,540.49
JPY 200,982.36 0.0502 10,089.31
SEK 9,674.71 0.7110 6,878.72
MXN 7,963,587.98 0.4181 3,329,576.13
THB 43,843,261.44 0.2074 9,093,092.42
Accounts receivable
Incl.: USD 868,151,602.60 7.0827 6,148,857,355.74
EUR 74,192.00 7.8592 583,089.77
HKD
JPY 2,582,351.20 0.0502 129,634.03
MXN 733,568.66 0.4181 306,705.06
Long-term borrowings
Incl.: USD 6,216,932.28 7.0827 44,032,666.26
EUR
HKD
Other receivables 5,582,005.98
Incl.: USD 612,024.52 7.0827 4,334,786.07
NTD 13,000.00 0.2314 3,008.20
MXN 2,975,871.10 0.4181 1,244,211.71
Short-term borrowings 317,746,358.48
Incl.: USD 40,645,713.99 7.0827 287,881,398.48
EUR 3,800,000.00 7.8592 29,864,960.00
Accounts payable 3,080,098,899.87
Incl.: USD 432,437,416.05 7.0827 3,062,824,486.66
EUR 439,112.92 7.8592 3,451,076.26
JPY 275,327,745.00 0.0502 13,821,452.80
SEK 2,650.00 0.7110 1,884.15
Employee benefits payable 106,710,962.50
Incl.: USD 15,005,314.31 7.0827 106,278,139.66
MXN 1,035,213.69 0.4181 432,822.84
Taxes payable 129,467,727.16
Incl.: USD 18,182,287.29 7.0827 128,779,686.19
MXN 1,645,637.34 0.4181 688,040.97
Other payables 19,978,118.28
Incl.: USD 2,609,716.00 7.0827 18,483,835.51
JPY 2,747,701.00 0.0502 137,934.59
MXN 3,244,076.01 0.4181 1,356,348.18
Non-current liabilities due
1,863,699.39
within one year
Incl.: USD 263,134.03 7.0827 1,863,699.39
(2) Information about overseas operating entities, including main places of business and functional currencies of major
overseas operating entities, basis for the choice of functional currencies, and reasons for changes in functional currencies:
□ Applicable N/A
82. Leases
(1) The Company as the lessee
Applicable □N/A
Variable lease payments not included in lease liabilities:
□Applicable N/A
144
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Lease expenses under short-term leases and leases of low-value assets using the simplified approach:
□Applicable N/A
Sale and leaseback transactions:
(2) The Company as the lessor
The Company as lessor under operating leases
Applicable □N/A
In RMB
Incl.: Income related to variable lease
Item Rental income
payments not included in lease receipts
Rental income 2,074,264.15
Total 2,074,264.15
The Company as lessor under finance leases
□Applicable N/A
Annual undiscounted lease receipts in the following five years:
□Applicable N/A
Reconciliation of undiscounted lease receipts to net investment in leases:
(3) Gain or loss on sales under finance leases as producer or distributor
□Applicable N/A
VIII. Research and Development Expenses
In RMB
Item 2023 2022
Direct costs 476,990,832.66 448,026,811.32
Labor costs 499,166,662.04 367,119,066.09
Depreciation 86,545,177.50 76,160,187.19
Others 98,487,602.28 48,779,387.38
Total 1,161,190,274.48 940,085,451.98
Incl.: Expensed research and development
1,161,190,274.48 940,085,451.98
expenses
IX. Changes in the Scope of Consolidation
1. Business combination involving entities not under common control
(1) Business combination involving entities not under common control effected in the current period
In RMB
Net profit of the Cash flows of
Basis for Revenues of the
acquiree from the acquiree
Time of Percentage determining acquiree from the
Method of Acquisition the acquisition from the
Acquiree acquisition Acquisition cost of shares the acquisition date till
acquisition date date till the end acquisition date
of shares acquired acquisition the end of the
of the current till the end of the
date current period
period current period
When the
Suzhou February 1, February 1, control is
1,382,684,003.83 100.00% Acquisition 2,514,129,505.84 128,984,222.52 -248,837,791.83
JDI 2023 2023 actually
gained
When the
February 1, February 1, control is
Aranda 360,773,589.22 100.00% Acquisition 367,294,065.03 -12,895,662.95 30,193,527.70
2023 2023 actually
gained
(2) Acquisition cost and goodwill
In RMB
Acquisition cost Suzhou JDI Aranda
--Cash 1,382,684,003.83 289,946,589.22
--Fair value of non-cash assets
--Fair value of liabilities issued or assumed
--Fair value of equity securities issued
--Fair value of contingent consideration 70,827,000.00
--Fair value of shares at the acquisition date held prior to the acquisition date
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
--Others
Total acquisition cost 1,382,684,003.83 360,773,589.22
Less: Share of fair value of identifiable net assets acquired 1,517,496,867.67 310,271,208.26
Excess of the share of fair value of identifiable net assets acquired over
-134,812,863.84 50,502,380.96
goodwill/acquisition cost
Method for determining the fair value of acquisition cost: The acquisition cost of Suzhou JDI is the amount of cash paid by the
acquirer for gaining control over the acquiree at the acquisition date.
Contingent consideration and changes therein: The acquisition cost of Aranda is the sum of cash and fair value of contingent
consideration paid or payable by the acquirer for gaining control over the acquiree at the acquisition date; where the contingent
consideration depends on the future results of operation of Aranda, and is up to USD10 million. The fair value of contingent
consideration is determined by applying the exchange rate prevailing at the acquisition date to USD1000, the maximum amount
payable in the future.
(3) Identifiable assets and liabilities of the acquirees at the acquisition date
In RMB
Suzhou JDI Aranda
Fair value at the Carrying value at the Fair value at the Carrying value at the
acquisition date acquisition date acquisition date acquisition date
Assets: 1,817,532,018.97 1,614,138,284.07 544,168,939.62 336,365,310.40
Cash and bank balances 503,174,580.68 503,174,580.68 8,681,780.00 8,681,780.00
Accounts receivable 404,450,501.88 404,450,501.88 61,622,190.43 61,622,190.43
Inventories 338,247,580.15 336,044,706.24 23,865,137.30 23,865,137.30
Fixed assets 350,430,429.36 255,511,571.22 73,667,928.80 73,667,928.80
Intangible assets 139,415,048.00 33,143,045.15 207,803,629.22
Deferred tax assets 346,501.93 346,501.93
Liabilities: 248,455,370.13 251,064,299.20 233,897,731.36 190,258,969.22
Borrowings
Accounts payable 190,671,256.87 190,671,256.87 36,554,844.60 36,554,844.60
Deferred tax liabilities 51,926,283.10 425,617.11 43,638,762.14
Deferred income 869,643.03 3,478,572.10
Net assets 1,517,496,867.67 1,362,994,869.69 310,271,208.26 146,106,341.18
Less: Minority interests
Net assets acquired 1,517,496,867.67 1,362,994,869.69 310,271,208.26 146,106,341.18
(4) Gain or loss on remeasurement of fair value of shares held prior to the acquisition date
Whether the control over any acquiree was gained during the current period as a result of business combination effected through
multiple transactions by steps?
□ Yes No
2. Business combination involving entities under common control
3. Reverse acquisition
4. Disposal of subsidiaries
Whether the control over any subsidiary was lost as a result of disposal of investment in such subsidiary through a single
transaction?
□ Yes No
Whether the control over any subsidiary was lost during the current period as a result of the disposal of investment in such
subsidiary through multiple transactions by steps?
□ Yes No
5. Changes in the scope of consolidation due to other reasons
1. Subsidiaries newly included in the scope of consolidation
Method of Date of Percentage of
Company name acquisition of acquisition of Registered capital capital
shares shares contribution
Suzhou Dongdi Holding Limited Established February 13, 2023 RMB100,000,000 100.00%
Hong Kong Dongdi Holding Limited Established July 28, 2023 HKD10,000 100.00%
Multek Zhuhai Enterprise Management Co., Established April 27, 2023 RMB1,000,000 100.00%
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LTD
Multi-Fineline Electronics (Thailand) Co., Ltd. Established June 30, 2023 USD50,000,000 100.00%
2. Subsidiaries removed from the scope of consolidation
Net profit from
Method of
Date of disposal of Net assets at the January 1, 2023
Company name disposal of
shares date of disposal to the date of
shares
disposal (RMB)
Zhuhai Dii Information Technology Consulting
Deregistration September 7, 2023
Co., Ltd.
Hainan Chengjia Technology Consulting Co.,
Deregistration November 1, 2023 -206,048.28 12,320,966.42
Ltd.
Suzhou Yuanshi Electronic Technology Co.,
Deregistration August 4, 2023 -12,592,979.40 -468,295.88
Ltd.
DSBJ Norway AS Deregistration December 27, 2023 345,205.52 18,211,422.23
X. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of the enterprise group
Registered Principal place Place of Shareholding percentage
Subsidiary Nature of business Method of acquisition
capital of business incorporation Direct Indirect
Suzhou Yongchuang Metal Business combinations
Science and Technology Suzhou Suzhou Manufacturing 100.00% involving entities under
Co., Ltd. common control
Suzhou Dongkui Lighting
Suzhou Suzhou Manufacturing 100.00% Established
Co., Ltd.
Suzhou Chengjia Suzhou Suzhou Manufacturing 100.00% Established
Dongguan Dongshan
Precision Manufacturing Dongguan Dongguan Manufacturing 95.00% 5.00% Established
Co., Ltd.
Suzhou Dongjiyuan Metal
Suzhou Suzhou Manufacturing 100.00% Established
Technology Co., Ltd.
Yancheng Dongshan Yancheng Yancheng Manufacturing 95.00% 5.00% Established
Suzhou Jebson Intelligent
Suzhou Suzhou Manufacturing 51.00% Established
Technology Co., Ltd.
Suzhou Dongdai
Electronic Technology Suzhou Suzhou Manufacturing 51.00% Established
Co., Ltd.
Suzhou Dongyan
Electronic Technology Suzhou Suzhou Manufacturing 51.00% Established
Co., Ltd.
Yancheng Dongshan
Business Management Yancheng Yancheng Property management 95.00% 5.00% Established
Co., Ltd.
Yancheng Dongshan
Communication Yancheng Yancheng Manufacturing 100.00% Established
Technology Co., Ltd.
Shanghai Chengjia
Consulting Management Shanghai Shanghai Business & investment 100.00% Established
Co., Ltd.
Yancheng Mutto Optronics
Yancheng Yancheng Manufacturing 100.00% Established
Technology Co., Ltd.
Dowell Smart Suzhou Co.,
Suzhou Suzhou Manufacturing 100.00% Established
Ltd.
MFLEX Yancheng Co.,
Yancheng Yancheng Manufacturing 100.00% Established
Ltd.
Business combinations
MFLEX Suzhou Suzhou Suzhou Manufacturing 100.00% involving entities not under
common control
Business combinations
MFLEX Chengdu Co.,
Chengdu Chengdu Manufacturing 100.00% involving entities not under
Ltd.
common control
Business combinations
RF Top Electronic Suzhou Suzhou Manufacturing 93.51% involving entities not under
common control
Business combinations
Mutto Optronics Suzhou Suzhou Manufacturing 100.00% involving entities not under
common control
Business combinations
Multek Technology
Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
(Zhuhai) Co., Ltd.
common control
Business combinations
Multek Industries Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
common control
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Business combinations
Multek Electronics Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
common control
Business combinations
Multek Zhuhai Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
common control
Business combinations
Multek China Zhuhai Zhuhai Manufacturing 100.00% involving entities not under
common control
Multek Zhuhai Enterprise
Zhuhai Zhuhai Business & investment 100.00% Established
Management Co., LTD
Suzhou Dongbo Precision
Suzhou Suzhou Manufacturing 51.00% Established
Manufacturing Co., Ltd.
MFLEX Shanghai Co.,
Shanghai Shanghai Wholesale 100.00% Established
Ltd.
Shenzhen Qindao
Dongchuang Investment Shenzhen Shenzhen Business & investment 76.92% Established
Partnership (L.P.)
Suzhou Dongke Real
Suzhou Suzhou Real estate 100.00% Established
Estate Co., Ltd.
Yancheng Dongchuang
Precision Manufacturing Yancheng Yancheng Manufacturing 100.00% Established
Co., Ltd.
Suzhou Dongchen
Intelligent Equipment Suzhou Suzhou Manufacturing 100.00% Established
Manufacturing Co., Ltd.
Shanghai Dongxin New
Energy Technology Co., Shanghai Shanghai Manufacturing 95.00% 5.00% Established
Ltd.
Shanghai Donglan New
Energy Technology Co., Shanghai Shanghai Manufacturing 100.00% Established
Ltd.
Suzhou Dongyue New
Energy Technology Co., Kunshan Kunshan Manufacturing 90.00% 10.00% Established
Ltd.
Suzhou Dongshan
Industrial Investment Co., Suzhou Suzhou Business & investment 100.00% Established
Ltd.
Suzhou Dongdi Holding
Suzhou Suzhou Business & investment 100.00% Established
Limited
Suzhou JDI Suzhou Suzhou Manufacturing 100.00%
Chaowei Microelectronics
Yancheng Yancheng Manufacturing 100.00% Established
(Yancheng) Co., Ltd.
Hong Kong Dongshan Hong Kong Hong Kong Business & investment 100.00% Established
Business combinations
Mutto Optronics Group
BVI Business & investment 100.00% involving entities not under
Limited
common control
DSBJ holdings Inc. USA Business & investment 100.00% Established
DSBJ International Inc. USA Business & investment 100.00% Established
DSBJ Solutions INC USA Business & investment 100.00% Established
Dragon Electronix
USA Business & investment 100.00% Established
Holdings INC.
Business combinations
Multi-Fineline Electronix,
USA Business & investment 100.00% involving entities not under
Inc.
common control
Business combinations
MFLEX Delaware, Inc. Delaware Business & investment 100.00% involving entities not under
common control
Business combinations
Multi-Fineline Electronix
Singapore Business & investment 100.00% involving entities not under
Singapore Pte. Ltd.
common control
Business combinations
MFLEX B.V. Netherlands Business & investment 100.00% involving entities not under
common control
Hong Kong Dongshan
Hong Kong Business & investment 100.00% Established
Holding Limited
DSBJ PTE. LTD. Singapore Business & investment 100.00% Established
Multek Group (Hong
Hong Kong Business & investment 100.00% Established
Kong) Limited
Multek Technology, Inc. USA Business & investment 100.00% Established
Business combinations
Multek Technologies
Mauritius Business & investment 100.00% involving entities not under
Limited
common control
Business combinations
The Dii Group (BVI) Co.
BVI Business & investment 100.00% involving entities not under
Limited
common control
148
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Business combinations
The Dii Group Asia
Hong Kong Business & investment 100.00% involving entities not under
Limited
common control
Business combinations
Multek Hong Kong
Hong Kong Business & investment 100.00% involving entities not under
Limited
common control
Business combinations
Astron Group Limited Hong Kong Business & investment 100.00% involving entities not under
common control
Business combinations
Vastbright PCB (Holding)
Hong Kong Business & investment 100.00% involving entities not under
Limited
common control
Business combinations
Multek Technology
Germany Business & investment 100.00% involving entities not under
Germany GmbH
common control
Multek Technology
Sweden Business & investment 100.00% Established
Sweden AB
Multek Technology
Malaysia Business & investment 100.00% Established
Malaysia SDN.BHD
Korea branch office of
Korea Business & investment 100.00% Established
DSBJ Pte. Ltd.
Business combinations
Autotech Producti on de
Mexico Manufacturing 100.00% involving entities not under
Mexico S. de R. L. de C.V.
common control
Business combinations
Aranda Tooling, Inc. USA Manufacturing 100.00% involving entities not under
common control
Business combinations
AutoTech Production
USA Manufacturing 100.00% involving entities not under
Services, Inc.
common control
DSBJ
MEXICO,S.DER.L.DEC. Mexico Manufacturing 100.00% Established
V.
Multi-Fineline Electronics
Thailand Manufacturing 100.00% Established
(Thailand) Co., Ltd.
Hong Kong Dongdi
Hong Kong Business & investment 100.00% Established
Holding Limited
XI. Government Grants
1. Government grants recognized at the amount receivable at the end of the reporting period
Applicable □N/A
Closing balance of government receivable: RMB37,648,885.00.
Reason for failure to receive expected government grants at the expected time:
□ Applicable N/A
2. Liabilities related to government grants
Applicable □N/A
In RMB
Amount of non-
Amount
operating
New grants transferred to Other changes
revenue Related to
Item Opening balance received in the other income in in the current Closing balance
recognized in assets/income
current period the current period
the current
period
period
Deferred
747,587,634.12 131,751,774.19 145,882,723.14 733,456,685.17 Related to assets
income
Subtotal 747,587,634.12 131,751,774.19 145,882,723.14 733,456,685.17
3. Government grants recognized in profit or loss
Applicable □N/A
In RMB
Item 2023 2022
Government grants recognized in other income 248,078,668.03 317,617,133.80
Effect of financial interest subsidy on total profit 1,174,471.47 309,000.00
Total 249,253,139.50 317,926,133.80
XII. Risks associated with financial instruments
1. Risks arising from financial instruments
The Company’s objectives of risk management are to maintain a balance between risk and income, minimize the negative effect of
149
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risks on the operating results of the Company and maximize the interests of the shareholders and other equity investors. On the
basis of such objectives of risk management, the Company’s basic risk management policy is designed to identify and analyze all
kinds of risks facing the Company, set appropriate risk thresholds in risk management, and monitor risks and adherence to limits in
a timely and reliable manner.
The Company faces a variety of risks associated with financial instruments in its daily activities, mainly including credit risk,
liquidity risk and market risk. Below is a summary of the policies for managing such risks considered and approved by the
management.
(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an
obligation.
1. Credit risk management practice
(1) Assessment of credit risk
At each balance sheet date, the Company assesses whether the credit risk of a financial instrument has increased significantly since
initial recognition. In assessing whether the credit risk has increased significantly since initial recognition, the Company takes into
account reasonable and supportable information, which is available without undue cost or effort, including qualitative and
quantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Company
determines the changes in default risk of financial instruments during their estimated lifetime through a comparison of the default
risk at the balance sheet date and the initial recognition date, on an individual or collective basis.
The Company determines that the credit risk of a financial instrument has increased significantly when one or more of the
following qualitative and quantitative standards are met:
1) Quantitative standard, mainly relates to the scenario in which, at the balance sheet date, the probability of default in the
remaining lifetime has risen by more than a certain percentage compared with the initial recognition; and/or
2) Qualitative standard, mainly relates to significant adverse changes in the debtor’s business situation or financial position, and
present or expected changes in technology, market, economy or legal environment that will have a material adverse effect on the
debtor’s ability to repay.
(2) Definition of default and credit-impaired assets
A financial instrument is in default or credit impaired when one or more of the following conditions are met:
1) significant financial difficulty of the debtor;
2) any breach by the debtor of contract terms binding on it;
3) it becomes probable that the debtor will enter bankruptcy or other financial reorganization;
4) the creditors of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to the
debtor a concession that the creditors would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit losses include the probability of default, loss given default, and exposure to
default risk. The Company has developed a model of the probability of default, loss given default and exposure to default risk on
the basis of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, payment
method, etc.) and forward-looking information.
3. See Notes V(I)3, V(I)4, V(I)7 and V(I)10 for the conciliation table of opening balances and closing balances of allowance for
impairment loss on financial instruments.
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4. Credit risk exposure and credit risk concentration
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, the
Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other monetary capital in financial institutions with relatively high credit ratings, so
its credit risk is relatively low.
(2) Accounts receivable
The Company performs credit assessments on customers using credit settlement on an ongoing basis. The Company selects
approved and creditworthy customers based on the result of credit assessment, and monitors the balance of accounts receivable
from them on an ongoing basis, to avoid significant risk of doubtful accounts.
As the Company only deals with approved and creditworthy third parties, no collateral is required. As of December 31, 2023, the
Company faced certain credit concentration risks. In particular, 60.39% (December 31, 2022: 52.73%) of the Company’s accounts
receivable came from the top 5 customers, without any collateral or other credit enhancement.
The Company’s maximum exposure to credit risk is the carrying value of each financial asset in the balance sheet.
(II) Liquidity risk
Liquidity risk is the risk that the Company may not have enough cash to satisfy its obligation to deliver cash or other financial
assets, due to the inability to liquidate financial assets at fair value in a timely manner, or failure of counterparties to discharge
their contract liabilities, acceleration of debts, failure to generate expected cash flows, or otherwise.
In order to control such risk, the Company utilizes a variety of financing tools such as settlement by means of notes, bank loans,
etc., combines long-term and short-term financing to optimize financing structure, and maintains a balance between financing
sustainability and flexibility. The Company has obtained lines of credit from many commercial banks to satisfy its working capital
requirements and capital expenditures.
Financial liabilities classified by remaining maturity
In RMB
December 31, 2023
Item Undiscounted
Carrying value Within 1 year 1-3 years Over 3 years
contract amount
Bank loans 12,329,399,469.82 12,883,478,634.71 7,981,675,775.53 3,054,956,512.84 1,846,846,346.34
Financial liabilities held for trading 104,174,076.23 104,174,076.23 104,174,076.23
Notes payable 909,171,215.93 909,171,215.93 909,171,215.93
Accounts payable 8,039,107,176.52 8,039,107,176.52 8,039,107,176.52
Other payables 80,188,628.54 80,188,628.54 80,188,628.54
Lease liabilities (including non-current
1,872,497,186.10 2,130,134,243.16 77,293,792.42 1,609,372,610.71 443,467,840.03
liabilities due within one year)
Long-term payables (including non-
296,995,789.48 296,995,789.48 296,995,789.48
current liabilities due within one year)
Subtotal 23,631,533,542.62 24,443,249,764.57 17,191,610,665.17 4,961,324,913.03 2,290,314,186.37
(Continued)
December 31, 2022
Item Undiscounted
Carrying value Within 1 year 1-3 years Over 3 years
contract amount
Bank loans (including non-current
12,158,035,282.87 12,622,983,732.45 9,154,149,516.56 2,953,900,674.22 514,933,541.67
liabilities due within one year)
Financial liabilities held for trading 91,517,116.89 91,517,116.89 91,517,116.89
Notes payable 2,008,405,860.19 2,008,405,860.19 2,008,405,860.19
Accounts payable 5,986,286,590.32 5,986,286,590.32 5,986,286,590.32
Other payables 54,324,601.72 54,324,601.72 54,324,601.72
Lease liabilities (including non-current
1,671,260,217.63 2,187,054,071.55 24,396,526.02 303,388,335.26 1,859,269,210.27
liabilities due within one year)
Subtotal 21,969,829,669.62 22,950,571,973.12 17,319,080,211.70 3,257,289,009.48 2,374,202,751.94
(III) Market Risk
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Market risk is the risk of fluctuation in the fair value or future cash flows of financial instruments due to changes in market prices.
Market risk mainly includes interest risk and foreign exchange risk.
1. Interest risk
Interest risk is the risk of fluctuation in the fair value or future cash flows of financial instruments due to changes in market
interest rates. Interest-bearing financial instruments with fixed interest rates expose the Company to fair value interest rate risk,
while interest-bearing financial instruments with floating interest rates expose the Company to cash flow interest rate risk. The
Company determines the proportion of fixed-rate financial instruments and floating-rate financial instruments based on the market
environment, and reviews and monitors the appropriateness of its portfolio of financial instruments on a regular basis. The cash
flow interest rate risk that the Company faces is primarily associated with the floating-rate bank loans owed by the Company,
which amounted to RMB1,406,781,793.94 as of December 31, 2023 (December 31, 2022: RMB735900000.00). Supposing the
interest rate changes by 50 basic points while other variables remain unchanged, the Company’s total profit and shareholders’
interest will not be materially affected.
2. Foreign exchange risk
Foreign exchange risk is the risk of fluctuation in the fair value or future cash flows of financial instruments due to changes in
exchange rates. The Company’s foreign exchange risk relates mainly to foreign currency denominated monetary assets and
liabilities. When a short-term imbalance occurs on foreign currency denominated assets and liabilities, the Company may trade
foreign currencies at market exchange rates when necessary, in order to maintain the net risk exposure at an acceptable level.
See notes to the Financial Statements for details of foreign currency denominated monetary assets and liabilities on December 31,
2023.
XIII. Fair Value Disclosures
1. Closing balance of the fair value of assets and liabilities measured at fair value
In RMB
Closing balance of fair value
Item Level 1 fair value Level 2 fair value Level 3 fair value
Total
measurement measurement measurement
I. Recurring fair value
-- -- -- --
measurement
1. Financial assets at fair value
146,141,371.77 146,141,371.77
through profit or loss
(2) Investment in equity
71,779,147.66 71,779,147.66
instruments
(4) Derivatives 26,920,185.50 26,920,185.50
(5) Bank wealth management
47,442,038.61 47,442,038.61
products
(II) Other debt investments 290,477,095.22 290,477,095.22
(III) Investment in other equity
278,157,110.00 278,157,110.00
instruments
Total assets measured at fair
714,775,576.99 714,775,576.99
value on a recurring basis
(VI) Financial liabilities held for
104,174,076.23 104,174,076.23
trading
Total liabilities measured at fair
104,174,076.23 104,174,076.23
value on a recurring basis
II. Fair value measurement on a
-- -- -- --
non-recurring basis
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
2. Basis for determining the market prices of items subject to recurring and non-recurring fair value
measurements within Level 1
3. Valuation techniques and qualitative and quantitative information of important inputs for items
subject to recurring and non-recurring fair value measurements within Level 2
4. Valuation techniques and qualitative and quantitative information of important inputs for items
subject to recurring and non-recurring fair value measurements within Level 3
1. The closing balance of the fair value of bank wealth management products is determined mainly based on their principal and
expected income.
2. The fair value of forward exchange settlement and sale transactions already authorized but not yet settled is determined based
on the forward exchange rates as confirmed with the transaction bank at the end of the reporting period.
3. The fair value of an investment in other equity instruments is determined based on the initial investment amount.
4. The fair value of a note receivable is determined based on its face amount.
5. The fair value of an investment in equity instruments is determined based on the initial investment amount.
XIV. Related Parties and Related-party Transactions
1. Parent of the Company
The Company’s actual controllers are YUAN Yonggang, YUAN Yongfeng and YUAN Fugen, who hold 11.83%, 13.01% and
3.44% of the total shares and votes of the Company respectively, and 28.27% of the total shares and votes of the Company in
aggregate.
2. Subsidiaries of the Company
The particulars of the subsidiaries of the Company are set forth in “Interests in Other Entities”.
3. Joint ventures and associates of the Company
The particulars of the joint ventures and associates of the Company are set forth in “Interests in Other Entities”.
Other joint ventures or associates that have carried out related-party transactions with the Company in the current period or the
previous periods with balances recorded in the current period:
Name of joint venture or associate Relationship with the Company
Suzhou Toprun Electric Equipment Co., Ltd. Associate
Suzhou Dongcan Optoelectronics Technology Co., Ltd. Associate
4. Other related parties
Name of other related party Relationship with the Company
Hai Dixin Semiconductor (Nantong) Co., Ltd. Associate
Anhui Landun Photoelectron Co., Ltd. A company controlled by the actual controllers of the Company
Shanghai Corkuna New Material Technologies Co., Ltd. A company controlled by the actual controllers of the Company
Suzhou Corkuna New Material Technologies Co., Ltd. A company controlled by the actual controllers of the Company
5. Related-party transactions
(1) Related-party commodity and service transactions
Purchase of goods and receipt of services from related parties
In RMB
Transaction Whether or not
Related party Subject matter 2023 quota exceed the 2022
approved transaction quota?
Suzhou Toprun Electric Equipment
Purchase of goods 3,097.35
Co., Ltd.
Suzhou Dongcan Optoelectronics
Purchase of goods 1,153,371.50 204,576.69
Technology Co., Ltd.
Shanghai Corkuna New Material Purchase of goods 11,426,652.85
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Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Technologies Co., Ltd.
Sale of goods and rendering of services to related parties
In RMB
Related party Subject matter 2023 2022
Suzhou Toprun Electric Equipment Co., Ltd. Sale of goods 131,783.22
Suzhou Toprun Electric Equipment Co., Ltd Purchase of equipment 154,390.07
Suzhou Dongcan Optoelectronics Technology Co., Ltd. Sale of goods 18,297.73
Suzhou Dongcan Optoelectronics Technology Co., Ltd. Rendering of services 150,462.54 97,261.61
Anhui Landun Photoelectron Co., Ltd. Rendering of services 269,820.00 485,700.00
Suzhou Corkuna New Material Technologies Co., Ltd. Sale of equipment 964,438.95
(2) Related-party entrusted management/contracts
(3) Related-party leases
(4) Related-party guarantees
The Company as guarantor:
In RMB
Whether the obligation
Amount Effective date of Expiry date of
Obligor guaranteed has been
guaranteed guarantee guarantee
discharged
Suzhou Toprun Electric
5,000,000.00 April 30, 2023 April 30, 2024 No
Equipment Co., Ltd.
Suzhou Toprun Electric
3,000,000.00 May 11, 2023 May 11, 2024 No
Equipment Co., Ltd.
Suzhou Toprun Electric
5,400,000.00 August 24, 2023 August 23, 2024 No
Equipment Co., Ltd.
Suzhou Toprun Electric
6,600,000.00 September 5, 2023 September 4, 2024 No
Equipment Co., Ltd.
Suzhou Toprun Electric
5,000,000.00 January 12, 2023 January 12, 2024 No
Equipment Co., Ltd.
Shanghai Fu Shan Precision
30,000,000.00 October 12, 2023 October 11, 2024 No
Manufacturing Co., Ltd.
The Company as obligor:
In RMB
Whether the obligation
Effective date of Expiry date of
Guarantor Amount guaranteed guaranteed has been
guarantee guarantee
discharged
YUAN Yonggang and
500,000,000.00 March 22, 2018 August 28, 2024 No
YUAN Yongfeng
(5) Related-party loans
(6) Related-party asset transfer and debt restructuring
(7) Remunerations of key officers
In RMB
Item 2023 2022
Remunerations of key officers 21,963,000.00 23,629,500.00
6. Amounts receivable from/payable to related parties
(1) Amounts receivable from related parties
In RMB
Closing balance Opening balance
Item Related party Allowance for Allowance for
Book balance Book balance
doubtful accounts doubtful accounts
154
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Accounts Suzhou Dongcan Optoelectronics
257,026.80 22,356.61 95,094.62 1,972.32
receivable Technology Co., Ltd.
Accounts Suzhou Toprun Electric
129,457.70 1,150.29 1,032,857.12 181,059.83
receivable Equipment Co., Ltd.
Accounts Hai Dixin Semiconductor
1,607,132.92 1,607,132.92 1,607,132.92 1,607,132.92
receivable (Nantong) Co., Ltd.
Other Suzhou Corkuna New Material
339,816.02 1,699.08
receivables Technologies Co., Ltd.
Other Hai Dixin Semiconductor
1,790,748.55 1,790,748.55 1,790,748.55 1,790,748.55
receivables (Nantong) Co., Ltd.
(2) Amounts payable to related parties
In RMB
Item Related party Closing balance Opening balance
Suzhou Dongcan Optoelectronics
Accounts payable 310,347.77 45,359.67
Technology Co., Ltd.
Shanghai Corkuna New Material
Accounts payable 7,338,661.31
Technologies Co., Ltd.
XV. Share-based Payments
1. Summary of share-based payments
Applicable □ N/A
In RMB
Granted in the current Exercised in the current Expired in the current
Vested in the current period
Type of period period period
grantees Number Number of Number of Number
Amount Amount Amount Amount
of shares shares shares of shares
Administrative
555,885.50 10,895,355.80 559,888.50 10,973,814.60 4,003.00 109,041.72
personnel
R&D
57,157.00 1,120,277.20 58,370.00 1,144,052.00 1,213.00 33,042.12
personnel
Sales
64,799.00 1,270,060.40 64,799.00 1,270,060.40
personnel
Total 677,841.50 13,285,693.40 683,057.50 13,387,927.00 5,216.00 142,083.84
Outstanding share options or other equity instruments at the end of the current period:
□ Applicable N/A
2. Equity-settled share-based payments
Applicable □ N/A
In RMB
Closing price of the Company’s stock at the date the relevant
Important parameters for determining the fair value of equity
employee stock ownership plan was approved by the general
instruments at the grant date
meeting of shareholders
The number approved by the Board of Directors and the
Basis for determining the number of exercisable equity
general meeting of shareholders of the Company, taking into
instruments
account the performance indicators
Reason of significant differences between the current estimates
N/A
and previous estimates
Aggregate amount of equity-settled share-based payments
25,609,244.46
recorded in capital reserve
Total amount of equity-settled share-based payments
8,882,690.60
recognized in expenses in the current period
3. Cash-settled share-based payments
□ Applicable N/A
4. Share-based payments in the current period
Applicable □ N/A
In RMB
Type of grantees Equity-settled share-based payments Cash-settled share-based payments
Administrative personnel 7,190,365.68
R&D personnel 802,000.00
155
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Sales personnel 890,324.92
Total 8,882,690.60
XVI. Commitments and Contingencies
1. Significant commitments
As of the balance sheet date, the Company did not have any significant commitment needing to be disclosed.
2. Contingencies
(1) Significant contingencies as of the balance sheet date
As of the balance sheet date, the Company did not have any contingency needing to be disclosed.
(2) Whether the Company does not have any significant contingency needing to be disclosed?
The Company does not have any significant contingency needing to be disclosed.
XVII. Subsequent Events
1. Significant non-adjusting events
2. Profit distribution
Dividends to be distributed per 10 shares (RMB) 2.5
Number of bonus shares to be distributed per 10 shares (shares) 0
Number of shares to be distributed per 10 shares through
0
capitalization of capital reserve (shares)
Dividends to be distributed per 10 shares approved and declared
0
(RMB)
Number of bonus shares to be distributed per 10 shares approved
0
and declared (shares)
Number of shares to be distributed per 10 shares through
0
capitalization of capital reserve approved and declared (shares)
Pursuant to the Regulatory Guidance for Listed Companies
No. 3 – Distribution of Cash Dividends by the Listed
Companies, the AOA and other relevant provisions, taking
into account the actual business situation and development
plans of the Company, as well as the requirements of normal
operation and sustainable development of the Company, the
Company proposed to distribute a cash dividend of RMB 2.5
(inclusive of tax) per 10 shares, or RMB425,319,052.25 in
Profit distribution proposal
total, to all shareholders on the basis of 1,701,276,209 shares
(excluding the treasury shares) for the year 2023, without
distributing any bonus shares or transferring any capital
reserve to the share capital. (Note: As of the date of this
Report, the Company had a total share capital of
1,709,867,327 shares, of which, 8,591,118 shares held in the
dedicated securities account for repurchase would not
participate in the profit distribution.)
3. Sales return
4. Other subsequent events
Pursuant to the resolution adopted at the 2nd extraordinary general meeting of shareholders of the Company in 2024 held on March
29, 2024, the Company decided to issue shares in a total amount of up to RMB1,500,000,000 to YUAN Yonggang and YUAN
Yongfeng, the actual controllers of the Company, the offering proceeds received from which, after deduction of the offering costs,
would be wholly used to replenish the Company’s working capital.
XVIII. Other Significant Information
XIX. Notes to Key Items of the Standalone Financial Statements
1. Accounts receivable
(1) Accounts receivable by age
In RMB
Age Closing book balance Opening book balance
Within 1 year (inclusive) 1,278,554,642.91 1,687,314,119.76
Within 6 months 1,195,439,845.81 1,391,027,273.41
7-12 months 83,114,797.10 296,286,846.35
156
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
1-2 years 689,194,247.06 42,046,884.05
2-3 years 4,893,435.36 46,005,127.05
Over 3 years 227,083,256.45 265,061,558.90
3-4 years 195,473,911.72 230,459,611.43
4-5 years 9,831,416.31 15,304,313.92
Over 5 years 21,777,928.42 19,297,633.55
Total 2,199,725,581.78 2,040,427,689.76
(2) Accounts receivable by method of recognition of allowance for doubtful accounts
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Item Book balance Book balance
accounts Carrying accounts Carrying
value value
Amount % Amount % Amount % Amount %
Allowance
12,127,413. 12,127,413. 11,014,431. 11,014,431.
recognized 0.55% 100.00% 0.54% 100.00%
92 92 64 64
individually
Incl.:
Allowance
2,187,598,1 102,894,892 2,084,703,2 2,029,413,2 88,306,919. 1,941,106,3
recognized 99.45% 4.70% 99.46% 4.35%
67.86 .64 75.22 58.12 25 38.87
collectively
Incl.:
2,199,725,5 115,022,306 2,084,703,2 2,040,427,6 99,321,350. 1,941,106,3
Total 100.00% 5.23% 100.00% 4.87%
81.78 .56 75.22 89.76 89 38.87
Allowance for doubtful accounts recognized collectively:
In RMB
Closing balance
Item Allowance for doubtful
Book balance %
accounts
Group of related parties within the
1,214,252,593.14
scope of consolidation
Aging group 973,345,574.72 102,894,892.64 10.57%
Total 2,187,598,167.86 102,894,892.64
Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
□ Applicable N/A
(3) Allowance for doubtful accounts recognized, recovered or reversed in the current period
Allowance for doubtful accounts recognized in the current period:
In RMB
Changes in the current period
Opening
Item Recovered or Closing balance
balance Recognized Written off Others
reversed
Allowance
recognized 11,014,431.64 1,149,544.84 -36,562.56 12,127,413.92
individually
Allowance
recognized 88,306,919.25 51,693,067.04 37,105,093.65 102,894,892.64
collectively
Total 99,321,350.89 52,842,611.88 37,105,093.65 -36,562.56 115,022,306.56
(4) Accounts receivable actually written off in the current period
(5) Top 5 debtors in terms of closing balance of accounts receivable
In RMB
Closing balance of
Total closing % of total closing allowance for
Closing balance of Closing balance of balance of accounts balance of accounts doubtful accounts
Company name
accounts receivable contract assets receivable and receivable and receivable and
contract assets contract assets impairment of
contract assets
Debtor 1 384,489,368.13 384,489,368.13 17.48%
Debtor 2 248,011,073.93 248,011,073.93 11.27%
Debtor 3 231,272,368.40 231,272,368.40 10.51%
Debtor 4 164,038,130.02 164,038,130.02 7.46% 820,190.65
Debtor 5 108,970,984.24 108,970,984.24 4.95%
157
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Total 1,136,781,924.72 1,136,781,924.72 51.67% 820,190.65
2. Other receivables
In RMB
Item Closing balance Opening balance
Dividends receivable 2,203,111,413.70 1,210,095,256.90
Other receivables 3,049,524,125.86 2,035,435,690.22
Total 5,252,635,539.56 3,245,530,947.12
(1) Dividends receivable by category
In RMB
Item (or investee) Closing balance Opening balance
Hong Kong Dongshan Holding 1,817,111,413.70 944,095,256.90
Yancheng Dongshan 266,000,000.00 266,000,000.00
Suzhou JDI 120,000,000.00
Total 2,203,111,413.70 1,210,095,256.90
(2) Significant dividends receivable aged over one year
In RMB
Whether or not
Item (or investee) Closing balance Age Reason for failure to collect impaired and the basis
for determination
To support the development
Hong Kong Dongshan Holding 344,095,256.90 2-3 years
of the subsidiary
To support the development
Yancheng Dongshan 266,000,000.00 2-3 years
of the subsidiary
Total 610,095,256.90
(3) Other receivables
1) Other receivables by nature
In RMB
Nature of account Closing balance Opening balance
Current accounts 3,043,264,560.13 2,021,455,028.32
Security deposit 2,042,208.17 8,626,398.25
Loans and reserve fund 2,562,780.89 7,191,382.15
Temporary payment receivable 4,250,557.91
Total 3,052,120,107.10 2,037,272,808.72
2) Other receivables by age
In RMB
Age Closing book balance Opening book balance
Within 1 year (inclusive) 2,918,638,154.04 1,811,580,254.07
1-2 years 123,650,779.00 209,574,243.72
2-3 years 1,451,851.51 8,539,126.50
Over 3 years 8,379,322.55 7,579,184.43
3-4 years 8,199,590.38 39,000.00
4-5 years 39,000.00 189,660.00
Over 5 years 140,732.17 7,350,524.43
Total 3,052,120,107.10 2,037,272,808.72
3) Other receivables by the method of recognition of allowance for doubtful accounts
Applicable □ N/A
In RMB
Closing balance Opening balance
Allowance for doubtful Allowance for doubtful
Item Book balance Book balance
accounts Carrying value accounts Carrying
value
Amount % Amount % Amount % Amount %
Allowance
3,052,120,107 3,049,524,125. 2,037,272,808 2,035,435,690
recognized 100.00% 2,595,981.24 0.09% 100.00% 1,837,118.50 0.09%
.10 86 .72 .22
collectively
Incl.:
3,052,120,107 3,049,524,125. 2,037,272,808 2,035,435,690
Total 100.00% 2,595,981.24 0.09% 100.00% 1,837,118.50 0.09%
.10 86 .72 .22
158
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Allowance for doubtful accounts recognized collectively: Aging group
In RMB
Closing balance
Item Allowance for doubtful
Book balance %
accounts
Group of related parties within
3,043,264,560.13
the scope of consolidation
Aging group 8,855,546.97 2,595,981.24 29.31%
Incl.: Within 1 year 3,640,461.98 182,023.10 5.00%
1-2 years 2,305,779.00 230,577.90 10.00%
2-3 years 1,451,851.51 725,925.76 50.00%
Over 3 years 1,457,454.48 1,457,454.48 100.00%
Total 3,052,120,107.10 2,595,981.24
Basis for grouping:
Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
In RMB
Stage 1 Stage 2 Stage 3
Allowance for doubtful Lifetime expected Lifetime expected
12-month expected Total
accounts credit loss (not credit credit loss (credit
credit loss
impaired) impaired)
Balance on January 1,
597,356.91 202,472.37 1,037,289.22 1,837,118.50
2023
In the current period:
- Transferred to stage 2 -115,288.95 115,288.95
- Transferred to stage 3 -145,185.15 145,185.15
Recognized -300,044.86 -87,183.42 1,146,091.02 758,862.74
Balance on December
182,023.10 230,577.90 2,183,380.24 2,595,981.24
31, 2023
Basis for classification of stages and percentage of allowance for doubtful accounts recognized:
Significant changes in the book balance of allowance for doubtful accounts in the current period:
□ Applicable N/A
4) Allowance for doubtful accounts recognized, recovered or reversed in the current period
5) Other receivables actually written off in the current period
6) Top 5 debtors in terms of closing balance of other receivables
In RMB
% of total closing Closing balance of
Company name Nature of account Closing balance Age balance of other allowance for
receivables doubtful accounts
Yancheng Dongshan Current accounts 897,244,867.35 Within 1 year 29.40%
Mutto Optronics Current accounts 509,763,515.78 Within 1 year 16.70%
Hong Kong Dongshan
Current accounts 521,768,759.08 Within 1 year 21.07%
Holding Limited
Hong Kong Dongshan
Current accounts 121,345,000.00 1-2 years
Holding
Suzhou Dongkui
Current accounts 308,786,242.13 Within 1 year 10.12%
Lighting Co., Ltd.
Yancheng Dongchuang
Precision Current accounts 265,473,073.23 Within 1 year 8.70%
Manufacturing Co., Ltd.
Total 2,624,381,457.57 85.99%
3. Long-term equity investments
In RMB
Closing balance Opening balance
Item Allowance for Allowance for
Book balance Carrying value Book balance Carrying value
impairment loss impairment loss
Investments in
9,515,272,968.95 133,690,000.00 9,381,582,968.95 7,635,046,830.50 133,690,000.00 7,501,356,830.50
subsidiaries
159
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Investments in
associates and 102,227,354.08 17,507,056.47 84,720,297.61 96,697,663.15 17,507,056.47 79,190,606.68
joint ventures
Total 9,617,500,323.03 151,197,056.47 9,466,303,266.56 7,731,744,493.65 151,197,056.47 7,580,547,437.18
(1) Investments in subsidiaries
In RMB
Opening Changes in the current period
Closing balance
Opening balance balance of Allowance for Closing balance
Investee Additional Reduced of allowance for
(carrying value) allowance for impairment Others (carrying value)
investment investment impairment loss
impairment loss loss
Dongguan
Dongshan
Precision 342,000,000.00 342,000,000.00
Manufacturing
Co., Ltd.
Hainan Chengjia
Technology
4,090,724.00 5,017,941.22 927,217.22
Consulting Co.,
Ltd.
MFLEX
Shanghai Co., 2,023,777.30 2,023,777.30
Ltd.
Shenzhen Qindao
Dongchuang
100,000,000.00 100,000,000.00
Investment
Partnership (L.P.)
RF Top
372,735,017.46 128,922.38 372,863,939.84
Electronic
Suzhou Chengjia
Precision
80,068,355.10 36,456.12 80,104,811.22
Manufacturing
Co., Ltd.
Suzhou Dongbo
Precision
5,100,000.00 5,100,000.00
Manufacturing
Co., Ltd.
Suzhou Dongdai
Electronic Tech 1,530,000.00 1,530,000.00
Co Ltd.
Suzhou
Dongjiyuan Metal
52,600,000.00 52,600,000.00
Technology Co.,
Ltd.
Suzhou Dongke
Real Estate Co., 152,389,096.00 152,389,096.00
Ltd.
Suzhou Dongkui
12,100,000.00 12,100,000.00
Lighting Co., Ltd.
Suzhou Dongyan
Electronic
1,530,000.00 1,530,000.00
Technology Co.,
Ltd.
Suzhou Jebson
Intelligent
255,000.00 255,000.00
Technology Co.,
Ltd.
Yongchuang Tech 451,528,857.01 47,869.88 451,576,726.89
Suzhou Yuanshi
Electronic
5,000,000.00 7,600,000.00 12,600,000.00
Technology Co.,
Ltd.
Hong Kong
3,744,565,150.00 133,690,000.00 3,744,565,150.00 133,690,000.00
Dongshan
Hong Kong
Dongshan 452,677,880.00 452,677,880.00
Holding Limited
Yancheng
1,093,199,757.00 373,203.50 1,093,572,960.50
Dongshan
Yancheng
Dongshan
Business 3,042,042.00 22,422.40 3,064,464.40
Management Co.,
Ltd.
Yancheng
Dongshan
Communication 280,242,702.43 141,067.86 280,383,770.29
Technology Co.,
Ltd.
Suzhou JDI 1,382,684,003.83 1,382,684,003.83
Suzhou Dongshan
Industrial
20,010,000.00 20,010,000.00
Investment Co.,
Ltd.
Shanghai
Dongxin New
Energy 20,000,000.00 60,000,000.00 80,000,000.00
Technology Co.,
Ltd.
160
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
Yancheng
Dongchuang
Precision 150,000,000.00 120,000,000.00 270,000,000.00
Manufacturing
Co., Ltd.
Suzhou Dongyue
New Energy
165,000,000.00 300,000,000.00 465,000,000.00
Technology Co.,
Ltd.
Multek China 44,577.80 23,774.86 68,352.66
Mutto Optronics 571,953.00 295,135.50 867,088.50
MFLEX Suzhou 4,501,718.20 2,393,008.44 6,894,726.64
Yancheng Mutto
Optronics
29,718.50 15,849.90 45,568.40
Technology Co.,
Ltd.
MFLEX
2,806,806.40 1,492,033.48 4,298,839.88
Yancheng
Multek Industries 1,536,469.20 819,450.24 2,355,919.44
Multek Zhuhai 187,229.10 99,855.62 287,084.72
Dowell Smart
12,639.46 12,639.46
Suzhou Co., Ltd.
Multek Zhuhai
Enterprise
721,168.98 721,168.98
Management Co.,
LTD
Total 7,501,356,830.50 133,690,000.00 1,890,294,003.83 17,617,941.22 7,550,075.84 9,381,582,968.95 133,690,000.00
(2) Investments in associates and joint ventures
In RMB
Changes in the current period
Opening Declared Closing
Opening Investment Closing
balance of Adjustment to Other cash Allowance balance of
balance Reduced income or balance
Investee allowance for Additional other change dividends for Other allowance for
(carrying investmen loss under (carrying
impairment investment comprehensiv s in or profit impairmen s impairment
value) t equity value)
loss e income equity distributio t loss loss
method
n
I. Joint ventures
II. Associates
Suzhou Toprun
-
Electric 16,547,578.4 11,641,777.5
4,905,800.8
Equipment 1 5
6
Co., Ltd.
Shenzhen
Nanfang Blog
17,507,056.4 17,507,056.4
Technology
7 7
Development
Co., Ltd.
Shanghai Fu
Shan Precision
Manufacturing
Co., Ltd.
Suzhou
LEGATE
12,039,124.2 12,352,316.9
Intelligent 313,192.68
8 6
Equipment
Co., Ltd.
Suzhou
Dongcan
Optoelectronic 3,750,632.95 46,625.40 3,797,258.35
s Technology
Co., Ltd.
Jiangsu
Nangao
Intelligent
Equipment 4,133,295.48 126,074.14 4,259,369.62
Innovation
Center Co.,
Ltd.
Jiaozuo
Songyang -
28,198,390.7 26,753,781.0
Optoelectric 1,444,609.6
6 7
Technology 9
Co., Ltd.
Suzhou
Yongxin
Jingshang -
14,521,584.8 15,000,000.0 25,915,794.0
Venture 3,605,790.7
0 0 6
Capital 4
Partnership
(L.P.)
-
79,190,606.6 17,507,056.4 15,000,000.0 84,720,297.6 17,507,056.4
Subtotal 9,470,309.0
8 7 0 1 7
7
-
79,190,606.6 17,507,056.4 15,000,000.0 84,720,297.6 17,507,056.4
Total 9,470,309.0
8 7 0 1 7
7
Recoverable amount determined based on fair value net of disposal cost:
□ Applicable N/A
Recoverable amount determined based on the present value of estimated future cash flows:
□ Applicable N/A
161
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
4. Operating revenue and operating costs
In RMB
2023 2022
Item
Income Cost Income Cost
Primary business 3,432,663,877.17 3,217,738,606.44 3,614,088,084.88 3,328,227,008.90
Other business 304,866,996.33 163,638,849.01 263,824,966.79 150,341,977.65
Total 3,737,530,873.50 3,381,377,455.45 3,877,913,051.67 3,478,568,986.55
5. Investment income
In RMB
Item 2023 2022
Income from long-term equity investments under
1,120,631,673.83 600,121,362.64
cost method
Income from long-term equity investments under
-9,470,309.07 -2,530,300.44
the equity method
Investment income from the disposal of long-
-12,592,979.40
term equity investments
Discount loss on accounts receivable financing -1,212,944.45 -7,880,660.00
Income from bank wealth management products 169,744.17
Total 1,097,355,440.91 589,880,146.37
XX. Supplementary Information
1. Statement of non-recurring gain or loss for the current period
Applicable □ N/A
In RMB
Item Amount Remark
Gain or loss from disposal of non-current assets -26,367,874.21
Government grants recognized in profit or loss (excluding the government grants
that are closely related to the business of the Company, conform to the applicable
249,253,139.50
policies of the country, are provided in accordance with the established
standards, and continuously affect the Company’s profit or loss)
Gain or loss on changes in fair value of financial assets and financial liabilities
held by non-financial entities, and gain or loss on disposal of financial assets and
14,283,973.00
financial liabilities, except for effective hedges held in the ordinary course of
business
Reversal of allowance for impairment loss on accounts receivable assessed
1,250,000.00
individually
Other non-operating revenues and expenses -398,583.47
Investment income
arising from business
Other gain or loss within the meaning of non-recurring gain or loss 134,812,863.84 combinations involving
entities not under
common control
Less: Effect on income tax 22,244,723.86
Effect on minority interests (exclusive of tax) 597,751.37
Total 349,991,043.43 --
Other items of gain or loss within the meaning of non-recurring gain or loss:
□ Applicable N/A
Classification of any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on Information
Disclosure for Companies Publicly Offering Securities - Non-recurring gain or Loss as recurring profit or loss:
□ Applicable N/A
2. Return on equity and earnings per share
Weighted average Earnings per share
Profit for the reporting period return on net Basic earnings per share Diluted earnings per share
assets (RMB/share) (RMB/share)
Net profit attributable to ordinary
11.38% 1.15 1.15
shareholders of the Company
Net profit attributable to ordinary
9.35% 0.95 0.95
shareholders of the Company after
162
Suzhou Dongshan Precision Manufacturing Co., Ltd. Annual Report 2023
deduction of non-recurring gain or loss
3. Differences in accounting data under the CASBEs and overseas accounting standards
(1) Differences in net profit and net assets disclosed in the financial report prepared under the CASBEs and the IFRS
□ Applicable N/A
(2) Differences in net profit and net assets disclosed in the financial report prepared under the CASBEs and overseas
accounting standards
□ Applicable N/A
Suzhou Dongshan Precision Manufacturing Co., Ltd.
Legal representative: YUAN Yonggang
April 18, 2024
163
