意见反馈 手机随时随地看行情
  • 公司公告

公司公告

熵基科技:熵基科技股份有限公司2023年第三季度报告(英文版)2023-11-01  

                                                                                                                        ZKTeco 2023 Q3 Report


Stock Code: 301330             Abbreviation of Securities: ZKTECO                  Announcement No.: 2023-075




                                          ZKTECO CO., LTD.
                                       2023 3 rd Quarter Report

      The Company and all members of the Board of Directors guarantee that

the information disclosed is true, accurate, and complete, without any false

records, misleading statements or material omissions.


Important content tips:
     1. The Board of Directors, the Board of Supervisors, directors, supervisors, and senior management guarantee
that the information presented in this report is true, accurate and complete without any false records, misleading
statements or material omissions, and will undertake individual and joint legal liabilities.

     2. The Company's legal representative, the person in charge of the accounting work, and the person in charge
of accounting institution (accounting supervisor) hereby declare that the financial information in this report is true,
accuracy, and complete.

     3. Whether the 3rd quarter report has been audited

    □ Yes No




                                                                                                                      1
                                                                                                                               ZKTeco 2023 Q3 Report


     I. Key Financial Data

     (I) Main Accounting Data and Financial Indicators

     Whether the Company performed a retroactive adjustment or restatement of the previous accounting data
     Yes □ No
     Reasons for retroactive adjustment or restatement of the previous accounting data
     Accounting policy change

                                                                                                                                                  Increase/dec
                                                                             YoY                                                                  rease in this
                                                                            change                                                                  reporting
                                                                                         From the
                                                                            during                                                                    period
                                     The same period last year                          beginning of           The same period last year
                    Current                                                   the                                                                 compared to
                                                                                        2023 to the
                   reporting                                               reportin                                                                 the same
                                                                                         end of the
                     period                                                g period                                                                period last
                                                                                         reporting
                                                                                                                                                       year
                                                                                           period
                                                                            After
                                       Before             After                                                Before              After             After
                                                                           adjustm
                                     adjustment        adjustment                                            adjustment         adjustment        adjustment
                                                                             ent
Operating
revenue           502,800,942.03     478,423,074.51    478,423,074.51          5.10%   1,439,983,612.03     1,403,538,024.67   1,403,538,024.67             2.60%
(RM B)
Net profit
attributable to
shareholders
                   49,889,198.20      63,927,831.56     64,035,685.03        -22.09%     138,643,533.82      134,193,053.52      134,267,346.46             3.26%
of listed
companies
(RM B)
Net profit
attributable to
shareholders
of listed
companies
                   50,126,505.67      60,059,763.70     60,167,617.17        -16.69%     144,602,982.17      134,062,594.86      134,136,887.80             7.80%
after
deducting
non-recurring
profits and
losses (RM B)
Net cash
flows from
operating               -                 -                  -                 -         183,302,835.87        -1,672,945.85      -1,672,945.85      11,056.89%
activities
(RM B)
Basic earnings
per share                   0.2100            0.5166             0.3805      -44.81%            0.7182               1.1619             0.8390          -14.40%
(RM B/share)
Diluted
earnings per
                            0.2097            0.5166             0.3805      -44.89%            0.7141               1.1619             0.8390          -14.89%
share
(RM B/share)
Weighted
average return              1.58%             3.22%              3.23%        -1.65%             4.44%                8.30%              8.30%           -3.86%
on net assets
                   At the end of this reporting                                                                                 Increase or decrease at the
                                                                          At the end of the previous year
                             period                                                                                             end of this reporting period

                                                                                                                                                        2
                                                                                                                          ZKTeco 2023 Q3 Report


                                                                                                                            compared to the end of the
                                                                                                                                 previous year
                                                         Before adjustment                   After adjustment                    After adjustment
Total assets
                                   3,800,739,623.17              3,655,960,456.30                      3,662,519,973.00                                 3.77%
(RM B)
Owner's
equity
attributable to
shareholders                       3,187,091,264.83              3,057,467,189.68                      3,057,720,783.95                                 4.23%
of the listed
company
(RM B)
     Reasons for changes in accounting policies and situations of correction of accounting errors

     On November 30, 2022, the M inistry of Finance issued and implemented the "Interpretation No. 16 of the Accounting Standards for
     Business Enterprises", which stipulates that "deferred income tax related to asset s and liabilities arising from individual transactions
     shall not be subject to the accounting treatment of initial recognition exemption". The Company shall implement it from January 1,
     2023. For the lease liabilities and right-of-use assets recognized due to the application of this regulation in the earliest period of financial
     statement presentation for the first time, as well as the estimated liabilities and corresponding assets related to the disposal obligation
     recognized, which generate taxable temporary differences and deductible temporary differences, the Company shall adjust the
     cumulative impact to present the initial retained earnings and other related financial statement items for the earliest period in the
     financial statements in accordance with this regulation and the provisions of "Accounting Standards for Enterprises No. 18 - Income
     Tax".


     (II) Items and Amounts of Non-recurring Gains and Losses

     Applicable □ Not applicable
                                                                                                                                        Unit: RM B
                                                                                    Amount from the beginning
                                            Amount during this reporting
                      Item                                                           of 2023 to the end of the                  Remarks
                                                     period
                                                                                         reporting period
        Losses and gains from
        disposal of non-current assets
        (including the offsetting                               -197,525.38                         -631,161.14
        portion of the provision for
        asset impairment)
        Government subsidies
        included in current profits and
        losses (except those closely
        related to the normal business
        of the Company, which are in                          1,594,646.45                        4,607,003.37
        line with national policies and
        regulations and continue to be
        enjoyed in accordance with
        certain standards or quotas)
        Capital occupancy fees
        charged to non-financial
                                                                  12,920.94                           39,527.94
        enterprises included in current
        profits and losses
        In addition to the effective                                                                                M ainly due to investment
        hedging business related to                                                                                 gains and losses and changes
                                                              1,139,553.13                        -6,670,356.22
        the normal business of the                                                                                  in fair value generated by
        Company, the profits and                                                                                    partial forward exchange


                                                                                                                                                    3
                                                                                                              ZKTeco 2023 Q3 Report


   losses from fair value changes                                                                        settlement to hedge against
   arising from the holding of                                                                           exchange rate fluctuations
   trading financial assets and                                                                          risk
   trading financial liabilities as
   well as investment income
   from the disposal of trading
   financial assets, trading
   financial liabilities and
   available-for-sale financial
   assets
   Other non-operating income
   and expenses other than the                        -2,517,579.47                      -2,647,690.57
   above items
   Less: income tax impact                               268,332.89                         725,943.44
         M inority interest impact
                                                              990.25                        -69,171.71
   (after tax)
   Total                                                -237,307.47                      -5,959,448.35                 -

Details of other profit and loss items that meet the definition of non-recurring profits and losses:
□ Applicable Not applicable

The Company does not have other specific conditions of profit and loss items that meet the definition of non-recurring profit and loss.
Explanations on classifying any non-recurring gain/loss item mentioned in the "Explanatory Announcement for Information Disclosure
by Companies that Issue Securities to the Public No. 1 - Non-recurring Gains and Losses" as recurring Gain/loss item.

□ Applicable Not applicable
The Company does not classify any non-recurring gain/loss item mentioned in the "Explanatory Announcement for Information
Disclosure by Companies that Issue Securities to the Public No. 1 - Non-recurring Gains and Losses" as recurring gain/loss item.


(III) Changes and Reasons for Changes in Key Accounting Data and Financial Indicators

     Applicable □ Not applicable
     During the reporting period, the operating revenue and gross profit increased by RM B 24.3779 million and RM B 34.0113 million
respectively compared to the same period last year, an increase of 5.10% and 16.16%, respectively. However, the net profit attributable
to shareholders of the listed company decreased by RM B 14.1465 million or 22.09% compared to the same period last year, mainly
due to the following reasons:
     (1) The recognized share-based payment amount generated by equity incentives during this reporting period is RM B 10.7791
million, which was not included in the same period last year;
     (2) During this reporting period, the Company further increased its R&D investment, with R&D expenses (excluding share-based
payment) increasing by 13.40% compared to the same period last year;
     (3) During this reporting period, the sales department's advertising and promotional expenses, exhibition expenses, and personnel
compensation expenses for expanding the market increased significantly, with sales expenses (excluding share-based payment)
increasing by 8.26% compared to the same period last year;
     (4) The USD to RM B exchange rate increased significantly during the same period last year, resulting in significant exchange
gains. However, during this reporting period, the fluctuation of USD to RM B exchange rate was relatively small, and there were certain
exchange losses.
Balance Sheet Items        September 30, 2023          January 1, 2023          Change ratio                     Reasons
                                                                                                M ainly due to the redemption of
Trading financial asset       81,448,599.23            204,318,406.05             -60.14%       structured wealth management products
                                                                                                upon maturity
Construction in              121,456,375.48             57,041,298.90             112.93%       M ainly due to the Company's


                                                                                                                                       4
                                                                                                                 ZKTeco 2023 Q3 Report


    progress                                                                                     construction of a multimodal biometrics
                                                                                                 digitalization industrial base project,
                                                                                                 resulting in an increase in investment in
                                                                                                 this period
                                                                                                 M ainly due to a small number of
                                                                                                 payable bills issued at the end of 2022
    Notes payable             141,733,753.49            68,293,818.22             107.54%
                                                                                                 and an increase in procurement volume
                                                                                                 in 2023
    Income Statement       January - September
                                                   January - September 2022     Change ratio                     Reasons
    Items                         2023
                                                                                                 M ainly due to the increase in interest
    Financial expenses        -44,978,271.11            -34,685,171.83            -29.68%        income from current fund deposits
                                                                                                 M ainly due to the lack of relevant
    Other income               8,430,892.85             12,226,993.76             -31.05%        subsidies for the subsidy projects for the
                                                                                                 same period last year in this period
                                                                                                 M ainly due to losses generated by
    Income from changes                                                                          partial forward exchange settlement to
                              -1,955,731.23               -722,849.81             170.56%
    in fair value                                                                                hedge against exchange rate fluctuations
                                                                                                 risk
                                                                                                 M ainly due to an increase in accounts
    Losses from credit
                              -4,162,381.02              -2,775,855.38             49.95%        receivable leading to an increase in bad
    impairment                                                                                   debt reserves
    Cash Flow Statement    January - September
                                                   January - September 2022     Change ratio                     Reasons
    Items                         2023
                                                                                                 M ainly due to an increase in cash
                                                                                                 received from selling goods and
    Net cash flows from
                              183,302,835.87             -1,672,945.85           11056.89%       providing services in the current period
    operating activities
                                                                                                 and a decrease in cash paid for
                                                                                                 purchasing goods and receiving services
                                                                                                 M ainly due to the increase in cash paid
                                                                                                 for purchasing wealth management
    Net cash flows from
                             -182,299,863.94            -12,040,820.80           -1414.02%       products, investment in ongoing
    operating activities
                                                                                                 projects, and external investment
                                                                                                 payments in this period
                                                                                                 M ainly due to the receipt of funds raised
    Net cash flows from
                              -86,869,563.26           1,433,962,592.96           -106.06%       from the listing during the same period
    financing activities
                                                                                                 last year
                                                                                                 M ainly due to a decrease in net cash
    Net increase in cash
                              -83,173,247.43           1,453,069,177.47           -105.72%       flow from investing activities and
    and cash equivalents
                                                                                                 financing activities in the current period




    II. Shareholder Information

    (I) Table of the Total Number of Common Shareholders and the Number of Preferred Shareholders with
    Resumed Voting Rights and Information about Top Ten Shareholders

                                                                                                                                Unit: share
                                                                   Total number of preferred shareholders whose voting
Total number of common shareholders at the
                                                         18,034    rights have been recovered at the end of the reporting                 0
end of the reporting period
                                                                   period (if any)

                                               Particulars about the top 10 shareholders

                                                                                            Number of         Pledged, marked or frozen
                                Nature of         Shareholding      Total shares held       shares with
   Name of shareholder
                               shareholder         percentage       at the period-end         trading
                                                                                                              Share status       Amount
                                                                                            restrictions
                             Domestic non
Shenzhen ZKTeco Times
                             state-owned                30.30%             58,500,000        58,500,000
Investment Co., Ltd.
                             legal persons

                                                                                                                                          5
                                                                                                                ZKTeco 2023 Q3 Report


                              Domestic
Che Quanhong                                             17.62%            34,022,300        34,022,300
                              individual
Shenzhen JYSJ Investment      Domestic non
Enterprise (Limited           state-owned                 7.31%            14,107,600        10,580,700
Partnership)                  legal persons
Shenzhen JYHY Investment      Domestic non
Enterprise (Limited           state-owned                 7.21%            13,921,050        10,440,787
Partnership)                  legal persons
Dongguan LX Investment        Domestic non
Partnership (Limited          state-owned                 5.12%              9,880,000         9,880,000
Partnership)                  legal persons
Shenzhen JYLX Consulting      Domestic non
Enterprise (Limited           state-owned                 2.46%              4,748,380         3,561,285
Partnership)                  legal persons
Huaxin Yuanchuang
(Qingdao) Capital
M anagement Co., Ltd. -
Qingdao Walden                Other                       1.76%              3,396,302                 0
Zhongxiang Investment
Centre (Limited
Partnership)
Shenzhen Fuhai Juanyong I     Domestic non
Venture Investment Fund       state-owned                 1.35%              2,612,540                 0
(Limited Partnership)         legal persons
Shenzhen JYQL Investment      Domestic non
and Consulting Enterprise     state-owned                 0.91%              1,762,800         1,322,100
(Limited Partnership)         legal persons
Huaxin Yuanchuang
(Qingdao) Capital
M anagement Co., Ltd. -
                              Other                       0.66%              1,267,067                 0
Yiwu Walden Yuanjing
Venture Capital Centre
(Limited Partnership)

      Particulars about shares held by the Top 10 common shareholders holding shares that are not subject to trading restriction(s)

                                                                                                                   Types of shares
            Name of shareholder                       Number of shares without trading restrictions
                                                                                                                 Type            Number
                                                                                                            RM B
Shenzhen JYSJ Investment Enterprise (Limited
                                                                                               3,526,900    denominated         3,526,900
Partnership)
                                                                                                            ordinary shares
                                                                                                            RM B
Shenzhen JYHY Investment Enterprise
                                                                                               3,480,263    denominated         3,480,263
(Limited Partnership)
                                                                                                            ordinary shares
Huaxin Yuanchuang (Qingdao) Capital
                                                                                                            RM B
M anagement Co., Ltd. - Qingdao Walden
                                                                                               3,396,302    denominated         3,396,302
Zhongxiang Investment Centre (Limited
                                                                                                            ordinary shares
Partnership)
                                                                                                            RM B
Shenzhen Fuhai Juanyong I Venture Investment
                                                                                               2,612,540    denominated         2,612,540
Fund (Limited Partnership)
                                                                                                            ordinary shares
Huaxin Yuanchuang (Qingdao) Capital                                                                         RM B
M anagement Co., Ltd. - Yiwu Walden Yuanjing                                                   1,267,067    denominated         1,267,067
Venture Capital Centre (Limited Partnership)                                                                ordinary shares
                                                                                                            RM B
Shenzhen JYLX Consulting Enterprise
                                                                                               1,187,095    denominated         1,187,095
(Limited Partnership)
                                                                                                            ordinary shares
Changjiang Wealth Asset M anagement - Bank                                                     1,098,092    RM B                1,098,092


                                                                                                                                       6
                                                                                                              ZKTeco 2023 Q3 Report


of Nanjing - Changjiang Wealth - ZKTeco                                                                  denominated
Employee Strategic Placement No.1 Collective                                                             ordinary shares
Asset M anagement Plan
                                                                                                           RM B
Shenzhen Gohedge Fund M anagement Co.,
                                                                                               799,630     denominated         799,630
Ltd. - Gohedge Pearl No.1 Private Equity Fund
                                                                                                           ordinary shares
                                                                                                           RM B
Zhu Yongjian                                                                                     779,713 denominated           779,713
                                                                                                           ordinary shares
                                                                                                           RM B
Liang Qiming                                                                                     700,000 denominated           700,000
                                                                                                           ordinary shares
                                                                    Shareholder Che Quanhong is elder brother of shareholder Che
                                                                    Quanzhong from Shenzhen ZKTeco Times Investment Co., Ltd., and
                                                                    son of Che Jun, partner of Dongguan LX Investment Partnership
                                                                    (Limited Partnership).
                                                                    The shareholder Che Quanhong holds 76.02% of the equity of
                                                                    Shenzhen ZKTeco Times Investment Co., Ltd., being the controlling
                                                                    shareholder of Shenzhen ZKTeco Times Investment Co., Ltd.
                                                                    M eanwhile, Che Quanhong holds 1.18% of the property share of
                                                                    shareholder Dongguan LX Investment Partnership (Limited
                                                                    Partnership).
Explanation on associated relationship and concerted actions
                                                                    Che Quanzhong, the younger brother of shareholder Che Quanhong,
among above shareholders
                                                                    holds a 23.98% stake in Shenzhen ZKTeco Times Investment Co., Ltd.
                                                                    Che Jun, the father of shareholder Che Quanhong, holds 98.68% of
                                                                    the property share of Dongguan LX Investment Partnership (Limited
                                                                    Partnership).
                                                                    The fund managers of shareholders Qingdao Walden Zhongxiang
                                                                    Equity Investment Center (Limited Partnership) and Yiwu Walden
                                                                    Yuanjing Venture Capital Center (Limited Partnership) are both
                                                                    Huaxin Yuanchuang (Qingdao) Capital M anagement Co., Ltd.
                                                                    In addition, there is no affiliated relationship between the other
                                                                    shareholders of the Company.
                                                                    The shareholder Shenzhen Gohedge Fund M anagement Co., Ltd. -
                                                                    Gohedge Pearl No.1 Private Equity Fund holds 674,570 shares of the
Information on Top 10 shareholders of participating in margin
                                                                    Company through ordinary securities account, and 125,060 shares of
trading and short selling business (if any)
                                                                    the Company through a margin account of CITIC Securities Co.,
                                                                    Ltd., totaling 799,630 shares of the Company.


    (II) Total Number of Preferred Shareholders and information about Top 10 Preferred Shareholders

    □ Applicable Not applicable


    (III) Changes in Restricted Shares

    Applicable □ Not applicable


                                                                                                                           Unit: share
                                 Number of          Number of                       Number of
                                                                    Increase in                                           Date of
                                  restricted     shares released                     restricted
                                                                     restricted                      Reason for       releasing from
      Name of shareholder       shares at the      from trading                    shares at the
                                                                     shares in                       restrictions         trading
                                beginning of      restrictions in                   end of the
                                                                    this period                                         restrictions
                                 the period         this period                        period
     Shenzhen ZKTeco                                                                               Restricted        February 17,
                                  45,000,000                    0    13,500,000      58,500,000
     Times Investment                                                                              shares before     2026

                                                                                                                                       7
                                                                                     ZKTeco 2023 Q3 Report


Co., Ltd.                                                                 IPO
                                                                          Restricted
                                                                                           February 17,
Che Quanhong            26,171,000          0    7,851,300   34,022,300   shares before
                                                                                           2026
                                                                          IPO
                                                                                           One quarter of
                                                                                           the shares will
                                                                                           be unlocked
Shenzhen JYSJ                                                             Restricted       from August
Investment Enterprise   10,852,000   3,526,900   3,255,600   10,580,700   shares before    17, 2023, until
(Limited Partnership)                                                     IPO              all shares are
                                                                                           unlocked on
                                                                                           August 17,
                                                                                           2026
                                                                                           One quarter of
                                                                                           the shares will
                                                                                           be unlocked
Shenzhen JYHY                                                             Restricted       from August
Investment Enterprise   10,708,500   3,480,263   3,212,550   10,440,787   shares before    17, 2023, until
(Limited Partnership)                                                     IPO              all shares are
                                                                                           unlocked on
                                                                                           August 17,
                                                                                           2026
Dongguan LX
                                                                          Restricted
Investment                                                                                 August 17,
                         7,600,000          0    2,280,000    9,880,000   shares before
Partnership (Limited                                                                       2025
                                                                          IPO
Partnership)
                                                                                           One quarter of
                                                                                           the shares will
                                                                                           be unlocked
Shenzhen JYLX                                                             Restricted       from August
Consulting Enterprise    3,652,600   1,187,095   1,095,780    3,561,285   shares before    17, 2023, until
(Limited Partnership)                                                     IPO              all shares are
                                                                                           unlocked on
                                                                                           August 17,
                                                                                           2026
Shenzhen Fuhai
                                                                          Restricted
Juanyong I Venture                                                                         August 22,
                         2,009,646   2,612,540    602,894            0    shares before
Investment Fund                                                                            2023
                                                                          IPO
(Limited Partnership)
Huaxin Yuanchuang
(Qingdao) Capital
M anagement Co.,                                                          Restricted
                                                                                           August 22,
Ltd. - Yiwu Walden       1,406,752   1,828,777    422,025            0    shares before
                                                                                           2023
Yuanjing Venture                                                          IPO
Capital Centre
(Limited Partnership)
Huaxin Yuanchuang
(Qingdao) Capital
M anagement Co.,                                                          Restricted
                                                                                           August 22,
Ltd. - Qingdao           2,612,540   3,396,302    783,762            0    shares before
                                                                                           2023
Walden Zhongxiang                                                         IPO
Investment Centre
(Limited Partnership)
Shenzhen JYQL                                                                              One quarter of
                                                                          Restricted
Investment and                                                                             the shares will
                         1,356,000    440,700     406,800     1,322,100   shares before
Consulting Enterprise                                                                      be unlocked
                                                                          IPO
(Limited Partnership)                                                                      from August


                                                                                                             8
                                                                                                                 ZKTeco 2023 Q3 Report


                                                                                                                         17, 2023, until
                                                                                                                         all shares are
                                                                                                                         unlocked on
                                                                                                                         August 17,
                                                                                                                         2026
 Changjiang Wealth
 Asset M anagement -
 Bank of Nanjing -
 Changjiang Wealth -                                                                                 Restricted          August 22,
                                    1,733,148        2,253,092          519,944                  0
 ZKTeco Employee                                                                                     shares after IPO    2023
 Strategic Placement
 No.1 Collective Asset
 M anagement Plan
 Changjiang Wealth
 Asset M anagement -
 Bank of Nanjing -
 Changjiang Wealth -                                                                                 Restricted          August 22,
                                     272,022           353,629           81,607                  0
 ZKTeco Employee                                                                                     shares after IPO    2023
 Strategic Placement
 No.2 Collective Asset
 M anagement Plan
 Offline issuance                                                                                    Restricted          February 17,
                                    1,865,168        1,865,168                 0                 0
 restricted shares                                                                                   shares after IPO    2023
 Total                        115,239,376           20,944,466      34,012,262       128,307,172             -                   -


III. Other Important Events

Applicable □ Not applicable

     1.   Listing and circulation of some shares already issued before the initial public offering and strategic placement shares in the
          initial public offering
     Some of the shares already issued before the Company's initial public offering and the strategic placement shares in the init ial
public offering were lifted from restrictions and listed for circulation on August 22, 2023. The specific situation is as follows: there are
a total of 9 shareholders for which the restrictions were lifted, and the number of restricted shares listed for circulation is 19,079,298,
accounting for 9.8836% of the Company's total share capital. Among them, there are 7 shareholders for which the restrictions have
been lifted on shares issued before the initial public offering, and the number of shares is 16,472,577, accounting for 8.5333% of the
Company's total share capital. There 2 shareholders for which the restrictions on the initial public offering of strategic placement shares
have been lifted, and the number of shares is 2,606,721, accounting for 1.3504% of the Company's total share capital.

     2.   Bank Credit

     On September 19, 2023, Dongguan Tangxia Sub-branch of Agricultural Bank of China Ltd. issued a "Credit Statement", granting
the Company a credit line of RM B 280 million, with a validity period from September 19, 2023 to September 18, 2024. Among them,
RM B 60 million is other exclusive credit lines, occupied by bank accept ance and guarantee deposits; RM B 40 million is a low risk
credit line, and 100% deposit is required for low risk businesses; RM B 180 million is a general credit line, RM B 5 million is used for
handling capital business on behalf of customers in branches, and the remaining RM B 175 million is used for handling bank acceptance
bills, short-term working capital loans and trade financing business. Among them, RM B 80 million is used for credit, and the guarantee
way of the other RM B 100 million is pending. The sp ecific use of credit shall be implemented in accordance with the management
measures for individual business, and the loan interest rate shall be implemented in accordance with the relevant regulations of
Agricultural Bank of China. The proportion of deposit for handling bank acceptance bills and letter of guarantee business shall not be
less than 30%, with the bank acceptance bill handling fee within three months being 0.025% of the total invoicing amount.




                                                                                                                                           9
                                                                                ZKTeco 2023 Q3 Report


IV. Quarterly Financial Statements

(I) Financial Statements

1. Consolidated Balance Sheet

Prepared by: ZKTECO CO., LTD.
                                             September 30, 2023
                                                                                              Unit: RM B
                   Item                      September 30, 2023             January 1, 2023
 Current assets:
    M onetary funds                                      2,005,821,024.37             1,912,945,031.97
    Deposit reservation for balance
    Lendings to banks and other financial
 institutions
    Trading financial asset                                81,448,599.23                204,318,406.05
    Derivative financial assets
    Notes receivable
    Accounts receivable                                   456,433,009.21                403,497,924.27
    Receivable financing
    Prepayment                                             42,184,932.00                 30,954,685.58
    Premiums receivable
    Reinsurance accounts receivable
    Reserves for reinsurance contract
 receivable
    Other receivables                                      38,499,739.75                 34,207,287.53
       Including: interest receivable
               Dividends receivable
    Buying back the sale of financial
 assets
    Inventories                                           338,300,015.56                348,280,641.59
    Contract assets                                           301,199.94                    306,799.94
    Held-for-sale assets
    Non-current assets due within one year                                               10,025,638.89
    Other current assets                                    15,077,688.43                17,861,354.81
 Total current assets                                    2,978,066,208.49             2,962,397,770.63
 Non-current assets:
    Loans and advances to customers
    Debt investment                                        41,892,027.22                 12,331,160.29
    Other debt investment
    Long-term receivables
    Long-term equity investment                             7,050,362.49                  7,151,332.70
    Other equity instrument investments
    Other non-current financial assets                     24,000,000.00
    Investment real estate                                 23,555,781.87
    Fixed assets                                          433,815,082.69                446,857,509.06
    Construction in progress                              121,456,375.48                 57,041,298.90
    Productive biological assets
    Oil and gas assets
    Right-of-use asset                                     40,432,996.08                 50,640,675.59
    Intangible assets                                      66,003,240.17                 68,110,512.79
    Development expenditures
    Goodwill                                                  511,724.31                    496,386.40
    Long-term deferred expenses                             2,235,140.03                  3,056,310.34
    Deferred income tax assets                             59,853,160.31                 53,309,238.98


                                                                                                     10
                                                               ZKTeco 2023 Q3 Report


   Other non-current assets                     1,867,524.03            1,127,777.32
Total non-current assets                      822,673,414.68          700,122,202.37
Total assets                                3,800,739,623.17        3,662,519,973.00
Current liabilities:
   Short-term loan                             9,855,000.00             9,855,000.00
   Borrowings from the Central Bank
   Borrowings from banks and other
financial institutions
   Trading financial liabilities               2,099,555.02
   Derivative financial liabilities
   Notes payable                             141,733,753.49           68,293,818.22
   Accounts payable                          186,666,309.76          226,000,476.96
   Advances from customer
   Contract liabilities                       57,507,108.82           58,838,840.39
   Financial assets sold for repurchase
   Deposit from customers and interbank
   Acting trading securities
   Acting underwriting securities
   Payroll payable                            39,601,916.38           58,940,852.80
   Taxes and dues payable                     32,058,524.43           22,621,805.04
   Other payables                             39,112,651.09           31,429,478.43
     Including: interest payable                   8,315.00
               Dividends payable
   Handling charges and commissions
payable
   Reinsurance accounts receivable
   Liabilities held for sale
   Non-current liabilities due within one
                                              22,194,903.29           23,718,225.39
year
   Other current liabilities                  14,216,429.01           21,173,620.79
Total current liabilities                    545,046,151.29          520,872,118.02
Non-current liabilities:
   Reserves for insurance contracts
   Long-term loan                              8,406,776.30              141,757.54
   Bonds payable
     Including: preferred stock
               Perpetual bonds
   Lease liabilities                          19,131,141.53           28,256,717.44
   Long-term payables
   Long-term payroll payable
   Estimated liabilities                         600,000.00               600,000.00
   Deferred income                             1,900,087.84             2,039,702.49
   Deferred tax liability                      8,873,615.06             9,833,050.63
   Other non-current liabilities                 210,000.00
Total non-current liabilities                 39,121,620.73           40,871,228.10
Total liabilities                            584,167,772.02          561,743,346.12
Owner's equity:
   Share capital                             193,039,666.00          148,492,051.00
   Other equity instruments
     Including: preferred stock
               Perpetual bonds
   Capital reserve                          2,047,020,545.38        2,061,172,912.28
   Less: treasury stock
   Other comprehensive income                 17,558,092.62             5,254,175.81
   Special reserve
   Surplus reserves                           53,975,085.77           53,975,085.77
   General risk reserves

                                                                                   11
                                                                                                       ZKTeco 2023 Q3 Report


   Undistributed profits                                              875,497,875.06                            788,826,559.09
 Total owner's equity attributable to the
                                                                    3,187,091,264.83                          3,057,720,783.95
 parent company
   M inority interests                                                 29,480,586.32                             43,055,842.93
 Total owner's equity                                               3,216,571,851.15                          3,100,776,626.88
 Total liabilities and owner's equity                               3,800,739,623.17                          3,662,519,973.00
Legal Representative: Jin Hairong Person in charge of accounting work: Wang Youwu Person in charge of accounting institution:
Fang Li


2. Consolidated income statement

                                                                                                                    Unit: RM B
                     Item                                  2023 Q3                                    2022 Q3
 I.        Total operating revenue                               1,439,983,612.03                           1,403,538,024.67
   Including: operating revenue                                  1,439,983,612.03                           1,403,538,024.67
           Interest income
           Premium earned
           Revenue from handling
 charges and commissions
 II. Total operating cost                                         1,262,912,308.23                           1,251,733,742.80
      Including: operating cost                                     747,237,863.64                             797,056,661.33
             Interest expense
           Expenses from handling
 charges and commissions
             Surrender value
             Net payments for insurance
 claims
           Net provisions for reserves in
 insurance liability contracts
             Policy dividend expenses
             Reinsurance expenses
             Taxes and surcharges                                    14,487,429.74                              12,086,514.72
             Selling expense                                        296,766,809.25                             257,199,618.38
             Administrative expense                                  93,319,512.60                              82,753,203.33
             R&D expenses                                           156,078,964.11                             137,322,916.87
             Financial expenses                                      -44,978,271.11                            -34,685,171.83
               Including: interest expenses                            2,461,347.10                              2,310,259.45
                       Interest income                               45,417,933.63                              12,765,104.45
      Plus: other income                                               8,430,892.85                             12,226,993.76
        Investment income (loss
                                                                      -1,725,758.54                             -2,851,452.46
 expressed with "-")
        Including: income from
 investment in associates and joint                                    1,812,820.04                              1,887,556.49
 ventures
                     Gains from
 derecognition of financial assets
 measured at amortized cost
         Gains from foreign exchange
 (loss expressed with "-")



                                                                                                                             12
                                                                 ZKTeco 2023 Q3 Report


        Gains from net exposure hedging
(loss expressed with "-")
        Gains from changes in fair value
                                                 -1,955,731.23            -722,849.81
(loss expressed with "-")
         Losses from credit impairment
                                                 -4,162,381.02           -2,775,855.38
(loss expressed with "-")
         Losses from impairment of assets
                                                 -3,428,778.18           -5,030,757.26
(loss expressed with "-")
         Gains from disposal of assets
                                                   -234,164.39              14,745.57
(loss expressed with "-")
III. Operating profit (loss expressed with
                                                173,995,383.29         152,665,106.29
"-")
   Plus: non-operating revenue                      780,799.31             748,112.04
   Less: non-operating expenditure                3,823,995.51           1,877,488.95
IV Total profit (loss expressed with "-")       170,952,187.09         151,535,729.38
   Less: income tax expenses                     16,266,701.41           5,533,749.41
V Net profit (loss expressed with "-")          154,685,485.68         146,001,979.97
   (I) Classification by business
continuity
      1. Net profit from continuing
                                                154,685,485.68         146,001,979.97
operations (net loss expressed with "-")
      2. Net profit from discontinued
operations (net loss expressed with "-")
   (II) Classification by ownership
      1. Net profit attributable to
shareholders of the parent company (net         138,643,533.82         134,267,346.46
loss expressed with "-")
      2. M inority shareholders' profit and
                                                 16,041,951.86          11,734,633.51
loss (net loss expressed with "-")
VI. Other comprehensive income - after
                                                  1,168,896.86          32,538,347.92
tax
   Net of tax of other comprehensive
income attributable to the owner of the          12,303,916.81          31,704,946.32
parent company
        (I) Other comprehensive income
that cannot be transferred to profit or loss
         1. Changes in re-measurement of
the defined benefit plan
         2. Other comprehensive income
that cannot be transferred to profit or loss
under the equity method
         3. Changes in fair value of other
equity instrument investments
         4. Changes in the fair value of the
Company's own credit risk
         5. Other
      (II) Other comprehensive income
                                                 12,303,916.81          31,704,946.32
that will be reclassified into profit or loss
         1. Other comprehensive income
that can be transferred to profit or loss
under the equity method
         2. Change in fair value of other
debt investments
         3. Amount of financial assets
reclassified into other comprehensive
income


                                                                                     13
                                                                                                             ZKTeco 2023 Q3 Report


           4. Provision for credit impairment
  of other debt investments
           5. Cash flow hedging reserve
           6. Translation difference of
                                                                           12,303,916.81                                 31,704,946.32
  foreign currency financial statements
           7. Others
     After-tax net amount of other
  comprehensive income attributable to the                                -11,135,019.95                                    833,401.60
  minority shareholders
  VII. Total comprehensive income                                         155,854,382.54                                178,540,327.89
     (I) Total comprehensive income
  attributable to owners of the parent                                    150,947,450.63                                165,972,292.78
  company
     (II) Total comprehensive income
                                                                            4,906,931.91                                 12,568,035.11
  attributable to minority shareholders
  VIII. Earnings per share:
     (I) Basic earnings per share                                                 0.7182                                        0.8390
     (II) Diluted earnings per share                                              0.7141                                        0.8390
In the event of a merger of enterprise under the same control in the current period, the net profit realized by the combined party
before the merger is RM B 0.00, and the net profit realized by the combined party in the previous period is RM B 0.00.
Legal Representative: Jin Hairong Person in charge of accounting work: Wang Youwu Person in charge of accounting institution:
Fang Li


3. Consolidated Cash Flow Statement

                                                                                                                           Unit: RM B
                    Item                                       2023 Q3                                      2022 Q3
 I. Cash flows from operating activities:
    Cash received from sale of goods and
                                                                       1,487,266,012.39                             1,429,208,395.73
 rendering of services
   Net increase in deposits from
 customers and deposits in banks and
 other financial institutions
   Net increase in borrowings from the
 Central Bank
   Net increase in borrowings from banks
 and other financial institutions
    Cash received from receiving
 insurance premiums of original insurance
 contracts
   Net cash received from reinsurance
 business
    Net increase in deposits and
 investments from policyholders
    Cash received from interest, handling
 fees and commissions
    Net increase in borrowings from banks
 and other financial institutions
    Net capital increase in repurchase
 business
    Net cash received from vicariously
 traded securities
    Refund of taxes and surcharges                                        48,522,171.18                                40,371,738.83


                                                                                                                                    14
                                                                 ZKTeco 2023 Q3 Report


   Cash received from other operating
                                                34,026,186.26           59,468,312.19
activities
Subtotal of cash inflows from operating
                                              1,569,814,369.83        1,529,048,446.75
activities
   Cash paid for purchase of goods and
                                               729,304,911.13          905,799,976.85
rendering of services
  Net increase in loans and advances to
customers
   Net increase in deposits in Central
Bank and other banks and financial
institutions
  Cash paid for original insurance
contract claims
  Net increase in lendings to banks and
other financial institutions
  Cash paid for interest, handling fees
and commissions
  Cash paid for policy dividends
   Cash paid to and for employees              412,108,352.14          376,666,397.24
   Payments of all types of taxes               54,586,811.26           62,007,657.83
   Other cash payments relating to
                                               190,511,459.43          186,247,360.68
operating activities
Subtotal of cash outflows from operating
                                              1,386,511,533.96        1,530,721,392.60
activities
Net cash flows from operating activities       183,302,835.87            -1,672,945.85
II. Cash flows from investing activities:
   Cash received from disinvestment            549,376,181.66           84,671,435.32
   Cash received from investment
                                                 2,499,098.17             1,333,253.66
income
   Net cash received from disposal of
fixed assets, intangible assets and other          343,862.87              381,494.14
long-term assets
   Net cash received from disposal of
                                                          0.00
subsidiaries and other business units
   Cash received from other investing
                                                          0.00
activities
Subtotal of cash inflows from investing
                                               552,219,142.70           86,386,183.12
activities
   Cash paid to acquire and construct
fixed assets, intangible assets and other      108,652,539.76           60,109,142.96
long-term assets
  Cash paid for investments                    619,025,771.88           31,829,460.96
  Net increase in pledge loans
   Net cash paid to acquire subsidiaries
and other business units
   Cash paid for other investing activities      6,840,695.00             6,488,400.00
Subtotal of cash outflows from investing
                                               734,519,006.64           98,427,003.92
activities
Net cash flows from operating activities      -182,299,863.94           -12,040,820.80
III. Cash flows from financing activities:
   Cash received from investors                  2,445,378.21         1,486,667,165.16
      Including: cash received by
subsidiaries from the absorption of              2,445,378.21
minority shareholders' investments
   Cash received from borrowings                 8,500,000.00

                                                                                     15
                                                                                                  ZKTeco 2023 Q3 Report


    Cash received from other financing
                                                                               0.00
 activities
 Subtotal of cash inflows from financing
                                                                     10,945,378.21                     1,486,667,165.16
 activities
    Cash paid for debt repayments                                       224,246.01                           152,016.85
    Cash paid for distribution of dividends
                                                                     73,168,224.18                         6,423,466.51
 and profits or payment of interest
      Including: dividends and profits
 paid to minority shareholders by                                    21,116,705.95                         6,403,557.60
 subsidiaries
    Cash paid for other financing activities                         24,422,471.28                        46,129,088.84
 Subtotal of cash outflows from financing
                                                                     97,814,941.47                        52,704,572.20
 activities
 Net cash flows from financing activities                            -86,869,563.26                    1,433,962,592.96
 IV Effect of exchange rate changes on
                                                                      2,693,343.90                        32,820,351.16
 cash and cash equivalents
 V Net increase in cash and cash
                                                                     -83,173,247.43                    1,453,069,177.47
 equivalents
    Plus: beginning balance of cash and
                                                                   1,077,608,258.10                      516,288,425.76
 cash equivalents
 VI. Closing balance of cash and cash
                                                                    994,435,010.67                     1,969,357,603.23
 equivalents


(II) Implementation of new accounting standards adjustment for the first time starting from
2023. Relevant project information on financial statements at the beginning of the year

Applicable □ Not applicable
Adjustment description


According to the relevant provisions of the "Interpretation No. 16 of the Accounting Standards for Business Enterprises",
the Company has made the following adjustments to the beginning balance of 2023 for certain accounts in the
consolidated balance sheet:


Adjustment of some accounts involved in the consolidated balance sheet


                                                                                                              Unit: RMB


                Item                           December 31, 2022         January 1, 2023             Adjustments
Deferred income tax assets                       46,749,722.28            53,309,238.98             6,559,516.70
Deferred tax liability                           3,557,844.83              9,833,050.63             6,275,205.80
Other comprehensive income                       5,255,222.65              5,254,175.81               -1,046.84
Undistributed profits                           788,571,917.98           788,826,559.09              254,641.11
M inority interests                              43,025,126.30            43,055,842.93               30,716.63




(III) Audit Report

Whether the 3rd Quarter Report has been audited
□ Yes No
The Company's Q3 Report has not been audited.

                                                                                                                      16
ZKTeco 2023 Q3 Report


   ZKTECO CO., LTD.
     Board of Directors
      October 27, 2023




                    17