2023 Annual Report
Stock Code: 688007 Stock Short Name: Appotronics
Appotronics Corporation Limited
Annual Report 2023
April 2024
本报告为深圳光峰科技股份有限公司自愿披露的《2023 年年度报告（英文
版）》，对本报告的中英文版本理解上发生歧义时，以中文版本为准。
This is 2023 Annual Report (English version) voluntarily disclosed by Appotronics
Corporation Limited. In the event of any discrepancy between the English and Chinese
versions of this report, the Chinese version shall prevail.
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2023 Annual Report
Forge Ahead with Determination
Dear all shareholders of Appotronics:
I am glad to talk with you at this time each year. The year 2023 witnessed the successful
transformation of Appotronics. Despite the various challenges we experienced in this year
full of uncertainty in the external environment, we not only withstood the pressure but also
achieved a successful transformation to stand on a bigger stage. I am especially grateful for
your long-lasting trust and partnership during this process.
With the firm belief in the power of persistence when facing various internal and
external challenges, we persisted in the development strategy of “core technologies + core
devices + application scenarios” in the path of transformation. The “fundamental businesses”,
including the cinema and dedicated display, and the “growth businesses”, including the
automotive business, are highly complementary to each other in building a combination of
“aggressive and defensive” fort for the Company, which created a very stable business
structure for Appotronics. Despite the objective huge growth potential of the automotive
business, there will be a stage of intense competition prior to the maturity of the automotive
business. Under such circumstance, the cinema and dedicated display businesses stood out
by the value they created. More importantly, without reducing our efforts for existing
businesses, we have been developing new growth poles for mature businesses to greatly
improve the speed and strength of making breakthroughs in growth businesses.
In 2023, we achieved a substantive breakthrough in the automotive business. “AITO
M9”, as Huawei’s smart flagship SUV and the first nominated automobile model for us, has
been officially implemented. Besides AITO M9, there are another 5 nominated automobile
models not released, which will also contribute to the performance of the Company in the
future. The breakthrough in the automotive optics business is of far-reaching significance.
As the automotive industry is experiencing historical and structural changes, we are both a
participant and a beneficiary as a link in the automotive industry chain. This will have active
and profound effects on the development of the fundamentals of the Company and the future
growth of performance.
In 2023, we achieved high-quality development of the cinema projector business to
build it into a cornerstone of business growth. As of December 31, 2023, the installations of
the APLD laser projection solution exceeded 29,500 sets in China. The new generation of
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active projection technology - VLED LED Cinema projection solution - released by
CINEAPPO, a subsidiary of Appotronics, has been successfully implemented in cinemas in
multiple provinces and cities, which will develop into a new point of profit growth for the
cinema business in the future.
We follow the strategy of developing fundamental businesses and growth businesses
side by side with a focus on improving operating quality. Meanwhile, we strive to seize the
opportunity of transforming a small racetrack into a big market to continuously expand our
strategic advantages and achievements in the field of automotive optics. Thanks to the
historical opportunity of the emerging and rapidly rising new racetrack for new energy
vehicles in China, we take active measures to acquire the blue ocean market of automotive
optics and smart cockpits, and work with domestic and overseas leading automobile
manufacturers to create completely new driving and riding experience for consumers by the
“Shenzhen acceleration” in the racetrack of automotive optics.
In the coming years, we will strive to build a smart supply chain, transforming a “small
workshop” into novel “smart manufacturing”. We will move to a new production base, which
means a brand new start to solidify the foundations including research and development,
supply chain, and platform capabilities.
In addition, we will continuously promote the integration of laser display technologies
with new technologies to expand to artificial intelligence (AI), augmented reality (AR), and
robot fields. Given the rapid development and enhancement of each other, these three types
of technologies are gradually becoming a new direction for application development in the
laser display industry.
To achieve this objective, we will continuously strengthen our capabilities of
engineering and smart manufacturing, improve the quality system, strive for an in-depth
combination of R&D and the supply chain, and create a smart manufacturing system in the
optics field with concrete efforts. We will insist on the adjustment and innovation of the R&D
organization to make it more resilient and profound, to accelerate product development, and
to deepen the patent moat while building a more extensive and inclusive ecology.
I believe in the confidence and power of Appotronics as a technology enterprise to seize
the opportunity and create more growth space in the trend of the era. Meanwhile, we are also
aware that enterprise operation is a process of wavy development, in which we will meet
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obstacles instead of moving straight ahead. We are firmly confident that we can forge ahead
with strategic persistence and strategic patience.
Last but not least, I would like to thank all shareholders and friends who have been
caring for Appotronics!
Time tells everything!
LI Yi
April 2024
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Important Note
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior officers 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 liability for this Annual
Report.
II. The Company did not make profits at the time of getting listed, and has not made profits by
now
□ Yes √ No
III. Alert of significant risks
The Company has described in detail the risks that may exist in the production and operation of the
Company. Refer to “Section III Discussion and Analysis of Business Situations - IV. Risk factors” for
the relevant risks.
IV. All directors of the Company attended the meeting of the Board of Directors.
V. Pan-China Certified Public Accountants (Special General Partnership) issued a standard
unqualified auditor’s report to the Company.
VI. LI Yi, Principal of the Company, WANG Yingxia, Person in Charge of the Accounting Work,
and WANG Yingxia, Person in Charge of the Accounting Body (Chief Accountant), hereby
represent that the financial statements contained in this Annual Report are true, accurate and
complete.
VII.Profit distribution proposal or proposal for capitalization of capital reserve approved by the
Board of Directors during the reporting period
As audited by Pan-China Certified Public Accountants (Special General Partnership), in 2023,
Appotronics realized the net profit attributable to shareholders of the listed company of RMB
103,186,743.57, the parent company realized the net profit of RMB 93,535,832.55, and the distributable
profit of the parent company as of the end of the year was RMB 639,288,806.42. The Company proposed
to distribute to all shareholders a cash dividend of RMB 0.7 (tax inclusive) for every 10 shares. As of the
disclosure date of this report, the Company has a total of 462,605,378 shares. With the 4,259,750 shares
in the special securities account for repurchase excluded, the cash dividend calculated to be distributed
was RMB 32,084,193.96 (tax inclusive), accounting for 31.09% of the net profit attributable to
shareholders of the listed company in 2023. The Company would neither capitalize its capital reserve nor
grant bonus shares this year. This proposal has been deliberated and passed at the 32nd meeting of the
second Board of Directors and the 24th meeting of the second Board of Supervisors, and is subject to the
deliberation at the general meeting of shareholders of the Company.
VIII. Is there any material event concerning any special arrangement of corporate governance?
□ Applicable √ N/A
IX. Risk statement regarding forward-looking statements
√ Applicable □ N/A
The forward-looking statements contained herein regarding the future plans, development strategies
or other matters of the Company do not constitute any substantive covenant made by the Company to the
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investors. Investors and relevant personnel should sufficiently know about the risks in this aspect, and
understand the differences among plans, predictions, and promises. Investors should be aware of the risk
of investment.
X. Is there any non-operating occupation of funds by the controlling shareholder or its affiliates?
No
XI. Is there any external guarantee provided in contravention of the stipulated decision-making
procedure?
No
XII.Are the majority of the directors unable to guarantee the truthfulness, accuracy and
completeness of the Annual Report disclosed by the Company?
No
XIII. Others
□ Applicable √ N/A
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Table of Contents
Section I. Definitions ........................................................................................................................... 8
Section II. Company Profile and Financial Highlights ....................................................................... 10
Section III. Discussion and Analysis of the Management .................................................................... 16
Section IV. Corporate Governance....................................................................................................... 56
Section V. Environment, Social Responsibility, and Other Corporate Governance ........................... 82
Section VI. Significant Matters ............................................................................................................ 95
Section VII. Changes in Shares and Shareholders ............................................................................... 128
Section VIII. Preferred Shares .............................................................................................................. 138
Section IX. Bonds .............................................................................................................................. 139
Section X. Financial Report .............................................................................................................. 140
Financial Statements with seals and signatures of the Principal of the Company,
the Person in Charge of the Accounting Work, and the Person in Charge of the
Accounting Body (Chief Accountant)
List of Documents
Available for Original Auditor’s Report with seals of the accounting firm and seals and
Inspection
signatures of the certified public accountants
All original documents and announcements publicly disclosed during the
reporting period
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Section I. Definitions
I. Definitions
For purpose of this report, unless the context otherwise requires, the following terms shall have the
meanings indicated below:
Terms
Company or
means Appotronics Corporation Limited
Appotronics
Appotronics Ltd. means Appotronics Corporation Ltd., the former name of the Company
CINEAPPO means CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd.
Formovie, Chongqing
means Formovie (Chongqing) Innovative Technology Co., Ltd.
Formovie
Appotronics HK means Appotronics Hong Kong Limited
Appotronics Daye means Shenzhen Appotronics Daye Investment Partnership (LP)
Appotronics Deye means Shenzhen Appotronics Deye Consulting Partnership (LP)
Appotronics Hongye means Shenzhen Appotronics Hongye Consulting Partnership (LP)
Appotronics Chengye means Shenzhen Appotronics Chengye Consulting Partnership (LP)
Jinleijing means Shenzhen Jinleijing Investment Limited Partnership (LP)
Blackpine means Blackpine Investment Corp. Ltd.
CINIONIC means Cinionic Limited (previously known as Barco Cineappo Limited)
WeCast means WeCast Technology Corp.
GDC BVI means GDC Technology Limited (British Virgin Islands)
GDC Cayman means GDC Technology Limited (Cayman Islands)
SSE means Shanghai Stock Exchange
Delta Electronics, Delta means Delta Electronics, Inc.
AI means Artificial Intelligence
AR means Augmented Reality
DCI means Digital Cinema Initiatives of the United States
Société Générale de Surveillance, a globally leading inspection,
SGS means
verification, testing, and certification institution
DLP means Digital Light Processing
CES means International Consumer Electronics Show
Liquid Crystal on Silicon, a new reflective display technology that
LCOS means
organically combines LCD and CMOS integrated circuits
LCD means Liquid Crystal Display
RGB means Three primary colors of light, R: red, G: green, B: blue
LED means Light Emitting Diode, a common light emitting device
On-Screen Display, an adjustment method by using a menu displayed on
OSD means
the screen
Chat Generative Pre-trained Transformer, a natural language processing
ChatGPT means
tool driving by artificial intelligence technologies
Kimi means An AI smart assistant product
Sora means AI video generation software
Genie means Interactive video generation model
AIGC means Artificial Intelligence Generated Content
AGI means Artificial General Intelligence
High Dynamic Range Imaging, a processing technology to improve the
HDR means
image brightness and contrast ratio
HFR means High Frame Rate, an image quality optimization technology
WCG means Wide Color Gamut
CVIA means China Video Industry Association
A screen resolution of digital products, representing the screen resolution
4K means
of 4096×2160, which is an ultra-high-definition resolution
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nit means The unit of brightness
IATF means International Automotive Task Force
ADB means Adaptive Driving Beam
PCT means Patent Cooperation Treaty
AVC Revo means All View Cloud Revo
means Netflix Inc. of the United States, a subscription video on-demand over-
Netflix
the-top streaming service
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Section II. Company Profile and Financial Highlights
I. Company profile
Chinese name 深圳光峰科技股份有限公司
Short name in Chinese 光峰科技
English name Appotronics Corporation Limited
Short name in English Appotronics
Legal representative LI Yi
20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai
Registered address
Street, Nanshan District, Shenzhen
1. October 24, 2006, Room 10, 14/F, Fangda Building, Keji South
12th Road, South Area, High-tech Industrial Zone, Nanshan District,
Shenzhen
2. September 6, 2007, Room 03, 17/F, Overseas Chinese High-tech
Venture Building, South Area, High-tech Industrial Zone, Nanshan
District, Shenzhen
3. June 7, 2011, Area A, 1/F, Building 13, Xili Wenguang Industrial
Historical changes of the
Zone, Nanshan District, Shenzhen
Company’s registered address
4. October 24, 2012, 401 Shenzhen IC Design and Application
Industrial Park, South to Chaguang Road, Xili Township, Nanshan
District, Shenzhen
5. December 14, 2017, 21-22/F, Hi-tech Zone Union Tower, No. 63
Xuefu Road, Yuehai Street, Nanshan District, Shenzhen
6. August 1, 2018, 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu
Road, Yuehai Street, Nanshan District, Shenzhen
20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai
Office address
Street, Nanshan District, Shenzhen
Postal code of office address 518052
Website http://www.appotronics.com
Email ir@appotronics.cn
II. Contact person and contact information
Board Secretary (Domestic Securities affairs representative
representative for information
disclosure)
Name CHEN Yasha WANG Weiqi
20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai Street,
Address
Nanshan District, Shenzhen
Telephone 0755-32950536
Facsimile 0755-86186299
Email ir@appotronics.cn
III. Media for information disclosure and place for keeping the annual reports
China Securities Journal (https://www.cs.com.cn)
Name and website of the media on which the Shanghai Securities News (https://www.cnstock.com)
Company discloses its annual report Securities Times (http://www.stcn.com)
Securities Daily (http://www.zqrb.cn)
Website of the securities exchange on which Shanghai Stock Exchange website
the Company discloses its annual report (http://www.sse.com.cn)
Place for keeping the annual reports Office of the Board of Directors
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IV. Stock and depository receipts of the Company
(I) Stock of the Company
√ Applicable □ N/A
Stock of the Company
Type of Stock exchange and Stock short name Stock code Former stock
stock board short name
A-shares Shanghai Stock Appotronics 688007 N/A
Exchange, STAR Market
(II) Depository receipts of the Company
□ Applicable √ N/A
V. Other related information
Name Pan-China Certified Public Accountants
(Special General Partnership)
Domestic accounting firm Office address 6/F, No. 128 Xixi Road, Xihu District,
appointed by the Company Hangzhou, Zhejiang
Accountants signing Mr. WEI Biaowen, Mr. NIU Chunjun
the report
VI. Main accounting data and financial highlights in the past three years
(I) Main accounting data
In RMB
% Change
Main accounting data 2023 2022 2021
(2023 v 2022)
Operating income 2,213,356,977.95 2,541,144,635.15 -12.90 2,498,228,401.78
Net profit attributable to
shareholders of the listed 103,186,743.57 119,440,773.77 -13.61 233,364,344.09
company
Net profit attributable to
shareholders of the listed
41,664,497.37 66,321,454.45 -37.18 125,396,283.97
company after deduction of
non-recurring profit or loss
Net cash flow from operating
364,082,055.08 177,350,715.69 105.29 58,337,226.84
activities
% Change
End of 2023 End of 2022 End of 2021
(2023 v 2022)
Net assets attributable to
shareholders of the listed 2,818,869,452.99 2,647,663,487.59 6.47 2,438,064,581.44
company
Total assets 4,220,570,891.16 4,333,350,260.15 -2.60 4,097,230,955.90
(II) Financial highlights
% Change (2023 v
Financial highlights 2023 2022 2021
2022)
Basic earnings per share (RMB/share) 0.23 0.26 -11.54 0.52
Diluted earnings per share (RMB/share) 0.22 0.26 -15.38 0.51
Basic earnings per share after deduction of
non-recurring profit or loss 0.09 0.15 -40.00 0.28
(RMB/share)
-0.92 percentage
Weighted average return on net assets (%) 3.81 4.73 10.26
points
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Weighted average return on net assets after
-1.09 percentage
deduction of non-recurring profit or loss 1.54 2.63 5.51
points
(%)
Proportion of R&D investments to +2.38 percentage
12.69 10.31 9.47
operating income (%) points
Explanation about the main accounting data and financial highlights in the past three years
√ Applicable □ N/A
1. During the reporting period, the net profit attributable to shareholders of the listed company and the net
profit attributable to shareholders of the listed company after deduction of non-recurring profit or loss
decreased by 13.61% and 37.18% respectively year on year; the basic earnings per share, diluted earnings
per share, and basic earnings per share after deduction of non-recurring profit or loss decreased by 11.54%,
15.38%, and 40.00%, respectively year on year, primarily due to the following: (1) during the reporting
period, under the impact of the fluctuation in the consumer electronics market, the Company’s revenue
from the business of household core devices and consumer products decreased; (2) the Company
continuously increased investment in the R&D of automotive optics and other businesses, leading to the
year-on-year increase in the R&D investments for the current period; (3) the loss of decline in value of
inventories provided by the Company increased year on year in consideration of the rapid iteration of
consumer electronics products; moreover, during the reporting period, the loss of GDC BVI, a
participating company with overseas investment of the Company, further increased, which led to the year-
on-year increase in investment losses and the impairment loss of long-term equity investment.
2. During the reporting period, the net cash flow from operating activities increased by 105.29% year on
year, which was mainly due to the optimized supply chain management, decreased payment for
procurement, and increased VAT refunds during the reporting period.
3. With respect to the non-recurring profit or loss calculated according to the definition of the Information
Disclosure and Presentation Rules for Companies Making Public Offering of Securities No. 1 - Non-
recurring Profit or Loss (Revision 2023) promulgated by the CSRC, under the same standard, the net
profit attributable to shareholders of the listed company after deduction of non-recurring profit or loss, the
basic earnings per share after deduction of non-recurring profit or loss, and the weighted average return
on net assets after deduction of non-recurring profit or loss of the comparable accounting periods have
been adjusted. Refer to the description in Section II.IX for details about the effects of non-recurring profit
or loss.
VII. Differences in accounting data under Chinese accounting standards and overseas accounting
standards
(I) Differences in net profit and net assets attributable to shareholders of the listed company
disclosed on the financial statements according to the international accounting standards and
the Chinese accounting standards
□ Applicable √ N/A
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(II) Differences in net profit and net assets attributable to shareholders of the listed company
disclosed on the financial statements according to the overseas accounting standards and the
Chinese accounting standards
□ Applicable √ N/A
(III)Explanation about the difference between overseas and Chinese accounting standards
□ Applicable √ N/A
VIII. Financial highlights in 2023 by quarter
In RMB
1st quarter 2nd quarter 3rd quarter 4th quarter
(Jan. - Mar.) (Apr. - Jun.) (Jul. - Sep.) (Oct. - Dec.)
Operating income 459,012,885.14 614,236,152.61 577,380,260.71 562,727,679.49
Net profit attributable to
shareholders of the listed 13,654,664.95 61,259,976.00 53,644,544.29 -25,372,441.67
company
Net profit attributable to
shareholders of the listed
-11,377,457.90 45,606,297.52 42,267,983.59 -34,832,325.84
company after deduction of
non-recurring profit or loss
Net cash flow from operating
-36,331,090.68 151,069,922.81 94,193,735.51 155,149,487.44
activities
Explanation about the difference between quarterly data and the data disclosed on regular reports
□ Applicable √ N/A
IX. Items and amounts of non-recurring profit or loss
√ Applicable □ N/A
In RMB
Note
Item of non-recurring profit or loss 2023 (if 2022 2021
applicable)
Gain or loss on disposal of non-
current assets, including write-off -2,047,603.22 -5,668,573.43 1,437,535.03
of provision for asset impairment
Government grants recognized in
profit or loss for the current period
(excluding government grants that
are closely related to the business
of the Company and are provided Section
37,324,883.93 38,211,496.91 86,941,748.45
in accordance with established X.XI
standards with continuous effects
on the profit or loss of the
Company according to the
provisions of national policies)
Profit or loss on changes in the fair
value of financial assets and
financial liabilities held by non- Section
197,000.00 -3,120,000.00 40,127,764.00
financial enterprises and profit or X.VII.70
loss on the disposal of financial
assets and financial liabilities,
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other than those used in the
effective hedging activities related
to normal operating business of the
Company
Profit or loss on entrusted Section
12,504,132.08 12,637,561.73 9,776,977.44
investments or assets management X.VII.68
Reversal of impairment loss on
receivables tested for impairment 701,851.05 837,824.59
individually
Net profit or loss of subsidiaries
from the beginning of the period
up to the business combination
28,971,469.98 27,765,106.19 14,561,407.47
date recognized as a result of
business combination involving
entities under common control
Profit or loss on debt restructuring -912,618.35
Other non-operating income and
-4,752,629.59 -679,415.19 865,330.69
expenses
Other profits or losses meeting the
definition of non-recurring profit -2,080.00 -10,400,000.00
or loss
Less: Effect of income taxes 5,157,172.94 4,337,471.38 7,122,055.13
Effects attributable to
6,219,685.09 11,612,511.75 28,220,647.83
minority interests (net of tax)
Total 61,522,246.20 53,119,319.32 107,968,060.12
Note: Non-recurring profit or loss is calculated according to the definition of the Information Disclosure
and Presentation Rules for Companies Making Public Offering of Securities No. 1 - Non-recurring Profit
or Loss (Revision 2023) promulgated by the CSRC. According to the principle above, the effects on the
non-recurring profit or loss of the comparable accounting periods is as follows: the net non-recurring profit
or loss of the Company attributable to shareholders of the listed company for 2022 under the same standard
was RMB 53.1193 million, decreased by RMB 1.5083 million compared with the amount prior to the
adjustment; the net non-recurring profit or loss attributable to shareholders of the listed company for 2021
was RMB 107.9681 million, decreased by RMB 1.1165 million compared with the amount prior to the
adjustment.
It is required to specify the reason for defining items not illustrated in the Information Disclosure and
Presentation Rules for Companies Making Public Offering of Securities No. 1 - Non-recurring Profit or
Loss as non-recurring profit or loss items of significant amounts, and reasons for defining non-recurring
profit or loss items illustrated in the Information Disclosure and Presentation Rules for Companies
Making Public Offering of Securities No. 1 - Non-recurring Profit or Loss as recurring profit or loss items.
□ Applicable √ N/A
X. Items at fair value
√ Applicable □ N/A
In RMB
Opening Effect on profit for
Item Closing balance Change
balance the current period
Held-for-trading 352,880,000.00 514,010,000.00 161,130,000.00 12,701,132.08
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financial assets
Receivables
4,279,041.00 11,387,400.00 7,108,359.00 0
financing
Investment in other
7,075,419.38 7,075,419.38 0 0
equity instruments
Total 364,234,460.38 532,472,819.38 168,238,359.00 12,701,132.08
XI. Explanation about performance indicators not under the Accounting Standards for Business
Enterprises
□ Applicable √ N/A
XII. Information disclosure postponed or exempted due to national secrets, trade secrets, etc.
√ Applicable □ N/A
Since the relevant information about the Company’s suppliers, customers, and key technical staff is
commercially sensitive information, the disclosure of which may result in unfair competition to the
detriment of the Company and shareholders, the Company anonymized the names of suppliers and
customers, and exempted the disclosure of the specific remuneration of the key technical staff.
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Section III. Discussion and Analysis of the Management
I. Discussion and Analysis of Business Situations
In 2023, we maintained the persistence in the development strategy of “core technologies + core
devices + application scenarios”, and continuously increased R&D investments to build the hard
technology strength as a high-growth technology enterprise. During the reporting period, the operating
income of the Company was RMB 2.213 billion, the net profit attributable to shareholders of the parent
company was RMB 103 million, and the gross profit margin of the Company was 36.22%.
During the reporting period, we received several high-quality OEM nominations in the automotive
optics business, and achieved the official implementation of AITO M9 in December 2023, which now is
in the mass production and delivery stage. The active film market in China effectively promoted the high-
quality development of the business of cinema core devices. The dedicated display business focused on
laser high-brightness products to keep leading in the industry development. At the consumer end, we took
the initiative to optimize and adjust the business and personnel structure, and integrated internal resources
from multiple perspectives with the business of household core devices to build energy for new
development of the projection industry.
1. Core device business
1.1 Accelerated development of the business of automotive core components to enter the mass
production and delivery stage for the first nominated automobile model AITO M9
Entered the mass production and delivery stage for the first nominated automobile model AITO
M9, and redefined the automotive smart space
With the intelligentization and upgrade of vehicles leading to a further explosion of vehicle
intelligentization demands, our automotive optics business has entered into the accelerated development
stage. By now, we have received 6 high-quality OEM nominations for the automotive business, and
achieved the implementation of the first nominated automobile model AITO M9 in December 2023, which
has entered the mass production and delivery stage. This not only will produce positive effects on the
future operating performance of the Company, but also establish a solid foundation for the Company to
continuously improve automotive products and solutions for penetration into domestic and overseas
outstanding automobile manufacturers.
In December 2023, AITO M9 was officially released, which was equipped with the world’s first
automobile-grade giant screen projection solution provided by Appotronics; it was also the first solution
for in-vehicle shared experience achieved through multiple interconnections in the industry. The
automobile-grade projection giant screen adopted in AITO M9 has passed the anti-halation certification
by SGS from Switzerland and the TV golden eye protection and comfort certification, so as to provide
drivers and passengers with unprecedented comfortable visual and audio experiences. Meanwhile, the
innovative X-shaped connection structure and the unique motor lock achieved the extreme anti-seismic
effects for automotive projection, so as to keep the image effects stable during high-speed driving. In
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addition, the core light generator of such projection giant screen solution has the features of long service
life, small volume, and high brightness to provide vivid and fine image effects, support high-definition
video play and 3D stereo image play to meet the demands of users for multiple in-vehicle application
scenarios.
First automobile-grade projection giant screen in the industry
32-inch 100% P3 color gamut | One-tap film watching mode | Support Huawei Lingxi
pointing remote control
TV eye protection Switzerland SGS
Comfort certification Golden anti-halation
certification
Figure 1: Automobile-grade projection giant screen in AITO M9
The automotive giant screen projection solution we provided for AITO M9 was successfully
equipped in the vehicle to meet the demands of in-vehicle film playing, gaming, entertainment, and work,
so as to achieve a more outstanding and comfortable way of entertainment during driving, which redefined
the automotive smart space. As the automotive display screen becomes the core device for the “human-
machine interaction” function of smart vehicles, the application of smart large screens will be verified by
the market and gradually complete market education for consumers. At present, we have entered the mass
production and delivery stage for AITO M9, which is expected to have positive effects on the operating
performance of the Company during the life cycle of such project.
Released the innovation achievements in automotive optics to showcase the new concept of
industry development
Enterprise innovation and development are impossible without continuous R&D investments and
high-value patent layouts. After entering the automotive optics field, we resolutely increase R&D
investments to continuously improve the capabilities of independent innovation. During the reporting
period, we had 105 new patents granted and filed for automotive optics technologies, increased by 29.63%
year on year. As of December 31, 2023, we had a total of 209 patents for automotive technologies granted
and filed, an increase by 41.22% year on year, which supported the high-quality development of the
business of automotive core components.
Thanks to the profound technology advantages and forward-looking layout for automotive optics, we
have created an innovative concept for automotive optics and have presented our innovative achievements
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in automotive optics at various major exhibitions of the industry. In January 2023, at the International
Consumer Electronics Show (CES 2023) of automobile brands, BMW released Dee - the world’s first
concept car equipped with the integrated display technology at four windows, which technology was
supplied by Appotronics. An ultra-small-sized and high-brightness ALPD DLP light generator is used to
achieve the functions of projection inside and display outside, and projection inside and display inside at
the side windows, so that the driver and passengers can interact with the display image either inside or
outside of the car.
At the 20th Shanghai International Automobile Industry Exhibition held in April 2023, we made our
debut with an exhibition car equipped with the automotive immersive laser display and lighting technical
scenario, and released the world’s first automobile-grade colorful laser headlight, and the immersive in-
car digital interaction solution containing window display, in-vehicle transparent display, in-vehicle
entertainment large screen, and smart surface. The laser headlight with both lighting and colorful display
functions can achieve better drive assistance and better safety. Meanwhile, the colors make the content
displayed more vivid, which helps improve the effects of interaction with users to make the driving process
more interesting.
As the automotive business has entered the phase of rapid development, we will actively match with
the planning of automobile manufacturers to achieve efficient and high-quality delivery of the other 5
nominated projects, so as to release the nominated automobile models through joint efforts. Meanwhile,
we will continue to focus on the logic of cooperation with major customers to make full use of the
technology competitiveness and nomination experience in automotive optics, actively expand the
nomination cooperation with Chinese and foreign leading automobile manufacturers, and improve both
the quality and quantity of nominations for the Company, hence becoming an outstanding core supplier of
automotive optics components.
1.2 The business of cinema core devices took the opportunity to create new growth points given the
obvious recovery of the cinema market
Continuous increase in the installations of the ALPD laser light source projection solution
The year 2023 witnessed the obvious recovery trend of the film market, featuring diversified themes,
high-quality films, and enthusiastic audience, which effectively improved the operation and development
indicators of upstream and downstream enterprises in the industry chain. During the reporting period, our
operating income from the business of cinema projection services was RMB 369 million, increased by
37.24% year on year. Thanks to the technology advantages in leading laser light sources and profound
industry expertise, we continuously improved the installations of the ALPD laser light source projection
solutions. As of December 31, 2023, the installations of the ALPD laser light source projection solutions
exceeded 29,500 sets in China.
Released the VLED LED Cinema projection solution to enrich the product portfolios
In recent years, in addition to more demanding requirements on the content quality of films, the
audience are pursuing better film-watching experiences - expecting to enjoy comfortable seats,
outstanding sound effects, and high-quality cinema services. With the insight into the demands for high-
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quality film-watching experiences, we released the VLED LED Cinema projection solution - a new
generation of active projection technology. Based on the self-luminous imaging principle, the VLED LED
Cinema film screen performs better in the depth of field, expression in multiple levels, and immersive
experience, which can greatly improve the film-watching experiences of the audience. In terms of
performance, the VLED LED Cinema projection solution has a service life that is 3 times of conventional
projectors, and consumes only 40% of the electricity at the equivalent brightness compared with other
LED film screens at the same level, which achieved the integration of the low-carbon and environmental
protection idea with the industry development. Meanwhile, based on our abundant experience in cinema
projects, we have built a set of complete, professional, and systematic installation processes for VLED
LED Cinema film screens, so as to assist cinemas in completing cinema upgrade and transformation
effectively.
While assisting cinemas in expanding high-end operation scenarios, the VLED LED Cinema
projection solution changed the conventional film-watching mode to explore diversified cinema
application scenarios. For example, during off seasons of films, cinemas can use VLED LED Cinema for
meetings, theater performances of children, talk shows, etc., so as to improve the utilization of cinema
halls to create additional incomes. By now, we have successfully installed 8 sets of the VLED LED
Cinema projection solution in cinemas in China, which has created a new profit growth point in the cinema
market for the Company.
1.3 Housed productization of ALPD 5.0 to provide consumers with a high-quality product
experience
In 2023, in the field of household core devices, focusing on the ALPD semiconductor laser light
source technology, we were continuously developing light generator products for laser mini projectors.
While maintaining the stable output and smooth iteration of existing products, we enhanced efforts to
advocate the application of ALPD 5.0 super panchromatic laser technology in the household field, and
have worked out specific products to meet the diversified product demands of customers.
During the reporting period, we took the lead in achieving productization of the ALPD 5.0 super
panchromatic laser technology by providing customers with a super panchromatic laser projector light
generator. Thanks to the ALPD 5.0 super panchromatic laser technology, this light generator can present
high-brightness, clear, and speckle-free images, hence creating a more eye-friendly use experience for
consumers.
Given the AI platform advantages of the ALPD 5.0 super panchromatic laser technology in terms
of modular hardware designing and programmable software, consumers can switch light sources at will
according to their own needs to change from “high-brightness light source” to “smart light source”, so as
to meet the requirements for use in multiple application scenarios and provide users with a better product
experience.
2. Brand business
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2.1 Abundant product portfolios in the dedicated display business kept leading in the industry
development
During the reporting period, we held a summit meeting of core partners, organized multiple brand
events including flare and case presentation, and discussed with customers on new opportunities and new
technology trends. Based on the advantages of the ALPD semiconductor laser light source technologies,
we focused on laser high-brightness products to improve the product competitiveness and keep the leading
position in the industry. In 2023, we achieved the operating income of RMB 428 million from the
dedicated display business.
Thanks to the high-brightness large venue light generators, we built multiple benchmark projects in
the industry, including the lighting show program of the indirect cooling tower of Mengtai Dongsheng
Phase II. By now, we have built over 40 benchmark cases throughout China, covering application
scenarios of night cultural tourism, art performance, and city building landscape, to present visual effects
full of colors and imagination. According to the Market Survey Report on the Laser Project Market of
Chinese Mainland in 2023 released by AVC Revo, we continuously ranked No. 1 in the industry in terms
of sales volume on the large venue laser projection market, and ranked No. 2 in terms of sales amounts.
Our products of over 10,000 lumens achieved higher contributions than other domestic brands.
In addition, according to the data of AVC Revo, in 2023, the market shares of over 10,000 lumens
large venue light generators increased year on year. This indicated that high-end products are drawing
more attention on the market, and all mainstream manufacturers are developing high-end product lines, so
as to build the high-brightness product portfolio into the core competitiveness of mainstream brands.
2.2 Formovie implemented management and business optimization to build a solid foundation for
improvement in business operation
In 2023, to achieve efficient and stable development of the consumer business, Formovie took the
initiative to optimize and adjust the business and personnel structure, and fully integrated internal
resources with the business of household core devices to improve the utilization rate of internal resources,
and to improve the capabilities and speed of innovation and iteration for consumer products, and controlled
and optimized period expenses to build a solid foundation for achieving performance and reducing losses.
During the reporting period, Formovie focused on own-brand products with more competitive advantages
- Xiaoming projection, and released the first 4K projector under this brand to promote the development of
the industry.
3. Enhanced efforts of building the supply chain to create a smart supply chain system
As an important stage of building the cost advantages and delivery advantages for our products, we
resolutely insisted on enhancing efforts of digitalization, automation, and intelligentization of the supply
chain in an attempt to build an efficient and agile smart manufacturing supply chain system, which
effectively supported our objectives of “quality first” and “efficient delivery” and built a solid foundation
for the long-term development of the Company. During the reporting period, we implemented automation
upgrade and transformation for assembly equipment at the manufacturing end to build capabilities of
automatic tests and automatic assembly. Meanwhile, with in-depth interconnection with the MES10
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manufacturing execution system, we achieved automatic collection and analysis of production data and
statement display using different templates, so as to create whole-process visible manufacturing based on
information communication and integration for automatic device operation state monitoring and process
control for product production. In addition, to further optimize resource allocation, we enhanced the
dynamic link among the R&D, procurement, quality, and other platform departments with the supply chain,
so as to make use of the system synergy effects, achieve resource sharing and complementary advantages,
and improve the overall operation efficiency and market competitiveness.
II. Main business, business model, status of industry and R&D activities during the reporting
period
(I) Main business and main products or services
1. Main business
The Company, as a global leading enterprise in the field of laser display technology, adheres to the
market and customer demand-oriented business philosophy, and continues to focus on the original
semiconductor laser light source technology and architecture as the lead, research and development,
production and sales of laser display core devices and complete machines. We apply the semiconductor
laser light source technology to household display, cinema projection, large venue, business education,
and other conventional scenarios, and successfully expand to new fields such as automotive display, AR,
robots, etc., to provide customers with a full range of solutions.
2. Main products and services
Our products may be mainly classified into core laser display devices and complete laser display
equipment. The core devices can be further classified into core devices for automotive optics, laser light
sources (cinema light sources and large venue light sources), laser TVs and smart mini projection light
generators, high-gain high-contrast ratio projection screens, etc., and complete laser display equipment
can be classified into smart mini projectors, laser TVs, laser digital cinema projectors, large venue laser
projectors, laser education projectors and others. The services that the Company performs include laser
cinema projection services, VLED LED Cinema projection solutions, large venue projection automatic
3D Mapping, and corresponding system solutions.
(II) Main business model
Based on industry policies, industry characteristics, upstream and downstream development, and
customer demands, with reference to the Company’s development strategy, competitive advantages,
service experience, and other factors, we have built mature business models with an independent and
complete R&D, procurement, production, and sales system.
1. R&D mode
We insist on the driving force of innovation to continuously improve the R&D system featuring
independent R&D, and separate technology R&D from product R&D in terms of organizational structure,
development process, etc. In terms of technology development, the Company focuses on the continuous
innovation and mastery of core technologies and key technologies, pays attention to user needs, and
introduces product development after the technology is mature, so as to maintain the Company’s core
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competitiveness in technology and leading position in the industry; in terms of product development,
according to the differentiated needs of different market segments, the Company sets up product lines and
teams for product planning, and divides it into feasibility \EVT\DVT\PVT\MP and other stages to achieve
rapid response to market demand.
2. Procurement mode
The Company maintains long-term and in-depth cooperation with many suppliers, constantly
strengthens supply chain management and quality management, and always adopts diversified
procurement. The procurement mode consists of front-end procurement services such as supplier selection,
determination of purchase price, cooperative business system, and establishment of supplier platform, as
well as back-end business such as purchase order execution and delivery.
3. Production mode
The Company implements the model of “independent production as the mainstay, supplemented by
outsourced production” with an independent production system. The Company’s external sales and
projection services of light sources, optical core devices and core processes in the production process are
completed by the Company independently; To C intelligent mini projector, laser mini projector, laser TV
complete machine, etc. are mainly outsourced, and other complete products are produced by itself.
4. Sales mode
(1) Product sales mode
The Company’s marketing service network is laid out well, matching various application market
segments. It adopts the product sales model combining “direct sales, distribution and agent sales”, and
achieves mutual penetration and coordinated development both online and offline to respond to customer
needs in a timely and rapid manner.
(2) Mode of cinema projection services
The Company provides laser cinema projection services for downstream cinema customers, and
charges service fees according to the length of use of light source by the cinemas (the fees are charged by
the hour or a certain period of time), while the cinemas do not need to purchase light source equipment,
thereby effectively easing their capital pressure and reducing their labor and maintenance costs.
(3) Business cooperation mode for automotive optics
According to the needs of car companies and the design of their own production lines, the Company
designs and develops automotive optical products, and accepts the audit and certification of car companies
at all stages until it receives mass production confirmation. The Company’s specific supply process is as
follows:
Before the mass production of the project, the Company obtains the project nomination and signs
relevant sales contracts with the car company, stipulating the rights and obligations of both parties.
The nomination contract usually uses the project usage within the procurement period as a reference
to determine the purchased products, model specifications, supply terms, etc., and the nomination supplier
supplies and provides services according to the contract provisions, and settles and pays regularly.
Regarding the Company’s products, the mode of synchronous research and development with car
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companies is adopted, so the project progress after signing the nomination contract is closely related to
the development progress of customer models.
After the mass production of the project, the car company requires the Company to conduct mass
production, and puts forward specific delivery arrangements, and after the car company confirms the
receipt, it will pay the Company according to the price agreed by both parties.
(III) Industry in which the Company operates
1. Development stage, basic characteristics and main technical barriers of the industry
(1) Development stage of the industry
As an emerging industry, laser display is at a stage of rapid growth, and its growth drivers mainly
come from: 1. technological progress has spawned emerging application fields, and semiconductor laser
light source technology has been applied to the automotive optics, AR, and other fields, and the market
has great potential for explosion; 2. the laser display industry in which the Company operates is one of the
strategic emerging industries receiving the major support from the State for accelerated development. With
the support of national and industry policies, more and more domestic enterprises and scientific research
institutions enter the upstream and downstream fields of the laser display industry chain, strengthen the
industrial chain, and actively develop and iterate technology, thus further increasing the localization rate
of core components.
(2) Basic characteristics of the industry
In 2007, the ALPD semiconductor laser light source technology invented by our R&D team created
a wholly new semiconductor laser light source, which made a breakthrough in the application of core
devices and imaging solutions of laser display, hence becoming the mainstream technical route for the
laser display industry and being widely used in vehicle, cinema, household, large venue, business
education and other fields.
In terms of technology, the ALPD semiconductor laser light source technology is compatible with
various chip and technology routes, and is suitable for the DLP, LCOS, and LCD technologies. In terms
of market, in addition to traditional applications such as cinema, large venue, and business education,
emerging industries such as smart cockpit, intelligent networking, AR, and AI are booming, and gradually
become a new application development focus of the laser display industry, and the overall scale of the
industry continues to expand, which is expected to help to broaden the application scenarios of the ALPD
semiconductor laser light source technology.
(3) Main technical barriers
A. Core technologies
The ALPD is our original semiconductor laser light source technology of great significance in the
display industry.
1) Original creation: In the past lighting and display, the rare earth phosphor is used only in LED
light sources, while we made the original creation of using rare earth phosphor in laser light sources.
2) Uniqueness: To improve the stability of the rare earth phosphor after being excited by laser, we
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explored a unique impulse mode and created a unique impulse architecture, which is under strict patent
protection.
3) Flexibility: Since the ALPD semiconductor laser light source technology combines two
materials/devices, there are many methods of adjustment between the two portions in this architecture,
including ① adjustable blue light distribution to output light that is adjustable in space; ② various
phosphor powders to achieve flexible color segments; and ③ adjustable ratio and strength among color
segments after the blue light is excited. Therefore, the output light is adjustable in terms of strength
distribution, brightness distribution, color temperature, and color to meet the requirements for different
scenarios.
4) Significance of the industry: Despite the long history of using a laser light source in the display
industry, subject to the high cost of red and green lasers, it was hard to make breakthroughs in the
industrialization of laser light sources. However, our ALPD semiconductor laser light source technology
greatly promoted the process of commercialization and industrialization of laser in the display industry.
5) Significance in materials: The ALPD semiconductor laser light source technology relies on the
blue laser and rare earth phosphor more than the RGB technology. The blue laser and blue LED share the
gallium nitride material system; given the developed LED industry in China, there is a favorable basis for
the gallium nitride system industry. In terms of the rare earth phosphor, since China has the most abundant
rare earth resources in the world, and rare earth phosphor is one of the important applications of the rare
earth element, China has the advantage of resource reserves in the world in terms of rare earth phosphor.
We have created a perfect combination point between the two material systems for which China has the
industry advantages, which provided the basic conditions for the long-lasting development of this
technology architecture.
B. Laser products
Laser display products involve several fields, including optics, electronics, materials, physics,
mechanical designing, precision manufacturing, etc. Specifically, in the designing of mechanical structures,
simulation and designing of heat and stress, designing of optical lens and other components, electronic
software and hardware (especially for image processing), analysis of ultra-high-definition signals,
precision manufacturing, etc., the Company has profound technologies and manufacturing processes
barriers in all the foregoing fields.
2. Analysis of the position of the Company in the industry and changes therein
As the display technology of a new generation, thanks to the advantages of high brightness, small
size, long service life, wide color gamut, and environment friendliness, the ALPD semiconductor laser
light source technology has a broad space for market application. Besides the conventional display field,
it has expanded to the vehicle, AR, and many other innovative fields.
As a leader in laser display technology, Appotronics has created a strong patent moat around the
underlying technical architecture of the ALPD semiconductor laser light source technology, which is hard
to be bypassed by projection brands in the industry entering the route of laser phosphor technologies. We
are committed to the breakthroughs, innovations, expansion of application scenarios, and industrialized
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promotion of semiconductor laser light source technology, thus creating technology reserves and patent
portfolios covering the whole technology chain of laser display technology from key system architectures,
and core devices to key algorithms. Thanks to the core competitive advantages consisting of “patent moat
+ technical barriers”, the Company holds a key position at the upstream core device stage.
3. Development of new technologies, new industries, new types of operation and new modes
during the reporting period and future trend
(1) Further accelerated localization of the laser display industry
Given that the 14th Five-Year Plan includes laser display as one of the key projects under the “new
display and strategic electronic materials” listed by the Ministry of Science and Technology, the laser
display industry has become one of the strategic emerging industries that will be supported by the State
for accelerated cultivation and development. Secondly, laser display is one of the important links in the
“carbon neutrality” development of China. Thanks to the obvious advantages of laser display in terms of
comfortable visual effects, low energy consumption, and more energy conservation for bigger screens, the
expansion and application of laser display technologies have become one of the significant measures to
promote green and low-carbon development.
With the support of national and industry policies, more and more domestic enterprises and scientific
research institutions enter the upstream and downstream fields of the laser display industry chain to engage
in the R&D and iteration of technologies, strengthen the industrial chain, actively develop and iterate
technology, and achieve breakthroughs in key elements such as lasers, display chips, projection lens, etc.,
which further improves the ratio of localized production of core components and obviously improves the
independence of laser display in China. According to the White Paper on the Global Laser Display
Industry Chain Development and National Regional Competitiveness, from the perspective of the laser
display industry chain as a whole, the localization rate of China’s laser display in 2021 was 45%-55%,
which is expected to increase from 45%-55% to 75%-80% in the next 3-5 years.
(2) Continuous upgrade of automotive intelligentization to transform the smart cockpit to the “third
living space”
At present, smart vehicles have entered the stage of rapid development with the market scale
expanding year by year. As predicted by IPS Consulting, the global market size of smart vehicles in 2025
will reach USD 1.7 trillion. With the in-depth development of AI and human-machine interaction
technologies, the vehicle’s smart cockpit and other smart devices are optimized constantly - the function
and safety of smart cockpits will be further enhanced, and the human-machine interaction will achieve a
big leap forward. As the interface for interaction among the human, vehicle, and environment, automotive
display fully reflects the intelligentization process of the cockpit, while the development of smart cockpits
continuously promotes the market expansion and technology upgrade of automotive display products,
which may develop into a key field of market competition. Moreover, given the continuous improvement
in the demands of consumers, vehicle cockpits are equipped with various innovative and smart functions,
and can be customized for customers. As a result, vehicle cockpits have gradually transformed from a
transport means to the “third living space” to meet the user demands for an immersive experience.
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Given the new tide of vehicle intelligentization development, we made use of our evident technology
advantages in the automotive optics field and experience of nominated cooperation to build product
portfolios for smart cockpits, hence providing consumers with new visual experiences and improving the
value of smart interaction in vehicles.
(3) LED film screen development driven by consumer demands for high visual quality and the trend
of high-end cinemas
At present, China’s film market is at a critical stage of transforming from steady recovery to high-
quality development. The efforts for the exploration and development of film technologies have never
stopped, and more LED projection products have been released to the market. Meanwhile, the audience
are having higher requirements for visual effects, which promotes filmmaking toward the direction of
higher resolution and higher refresh rate. In addition, in order to cope with the competition with online
video and audio streaming services, cinemas will transform into high-end operations, and therefore make
continuous investments in film experiences and other aspects. Based on the factors above, the LED film
screen is expected to become a new direction for cinema development.
In addition to playing films, LED cinema halls can be used for film press releases, electronic game
competitions, game broadcasting, corporate activities, theater performances, etc., so as to transform the
cinema into a complex commercial body to create diversified incomes.
We take the opportunity of consumer demands for high visual quality and high-end cinemas to release
the VLED LED Cinema projection solution - a new generation of active projection technology, to provide
the audience with outstanding film-watching experiences, and assist cinemas in achieving differentiated
operations to explore cinema halls with their own characteristics.
(4) The era of laser for brand projection
The consumption demands for high-quality and highly cost-effective projection have driven the
development of the projection industry towards high cost-effectiveness and quality improvement, and
attracted many projection manufacturers to increase their R&D investments in light source technologies.
As a result, the laser projection technology is fully marketed to bring brand projection to the era of full
laser projection. According to the data of RUNTO, in 2023, the market shipment of household laser
projectors (including laser TVs) in China was 0.593 million sets, increased by 35.5% year on year.
Meanwhile, RUNTO predicts that in 2024, the shipment of household laser projectors on the global market
will reach 1.25 million sets, increased by over 35% compared with 2023, and the shipment on overseas
markets is expected to reach 0.41 million sets, increased by nearly 24% compared with 2023. Laser display
will enter a year of large-scale, quality-oriented, and international-facing development for diversified
scenarios.
(5) AI empowered laser display to explore innovative application scenarios
In recent years, AI has become an important driving force for a new round of technology revolution
and industry transformation, and a key engine for promoting the high-quality economy development. At
present, AI is developing toward a new stage of multiple intelligence integration. The technology
breakthrough, like ChatGPT, has raised the curtain of general AI; and Kimi, Sora, Genie, and other multi-
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mode large models are released one after the other to achieve breakthrough progress in artificial
intelligence generated content (AIGC). The understanding and simulation of the physical world by such
models are getting close to the reality, which has become an important milestone for artificial general
intelligence (AGI).
The integration of AI with the physical economy will drive industry transformation and create new
industries, new models, and new types of operation. As a tool to serve the lives of human beings, AI can
be used to improve the life quality and meet the human requirements for consumption upgrades. As a
globally leading laser display enterprise, we can explore and strive for organic combination with cutting-
edge technologies in the fields of household, dedicated display, smart wearables, robots, and other fields.
Integration of projection products with AI to improve the interaction experience of products
Based on the profound accumulation of projection technologies and algorithm technologies, we
continuously promote the R&D and application of the three core algorithm technology modules -
perception, rendering, and AI, study the application of image and video generation AI models in projection
display, and explore content generation and real-time projection onto complex surfaces, so as to achieve
closed-loop interaction between the virtual content and the real world. This helps to stimulate both the
senses and emotions of customers to improve their participation and interaction, hence creating a
substantial leap forward in the experience of using projection products.
Accelerated innovation for AI-driven smart wearables
The explosive R&D efforts in AI large models both in China and abroad are transforming AI
technologies toward more diversified application scenarios. As the racetrack of AI technologies that is
closest to the consumer market, the smart wearable field is one of the scenarios for AI application, which
has the characteristics of diversified product categories, segment-specific application scenarios, etc., and
has created new products like projection wearable devices, smart rings, etc.
Thanks to the profound accumulation of optics display technologies and continuous exploration of
cutting-edge technologies, we have developed two high-performance, low-cost, and long-duration DLP
micro light generators. The DLP micro light generators used in the consumer field have a volume of less
than 2cc, which has great competitive advantages in the industry. By now, the two DLP micro light
generators can be shipped in small batches, and may be used for AR glasses for business and consumer
markets to achieve high-quality display effects on a lightweight and low-cost basis.
At present, projection wearable devices, as a new category of products, have drawn much attention
in the field of smart wearables. On the basis of AI technologies, the projection wearable devices combine
laser projection technologies with wearable devices to provide a dynamic solution of projecting data onto
any surface, so as to expand the scope of complex data visualization, multimedia experience, and
interactive user interfaces. This can achieve interaction between humans and smart devices in a more
natural, smarter, and more convenient manner. The gradual expansion of the projection wearable device
market may lead to great growth in the sales of consumer laser projectors, while laser projector
manufacturers with technology advantages may benefit from this industry trend.
Organic combination of AI with projection robots to enable a new experience of smart services
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Thanks to the iteration and upgrade of AI technologies, robots with access to large models have
started a new era of smart services. When being equipped with AI and natural language processing
technologies, the robot system can provide more abundant, smarter, and more human-oriented services
and experiences.
On the basis of the forward-looking layout in the projection and display industry, we provided the
projection solution for the first house service robot released by Midea Group in 2022, hence successfully
entering the robot field with growth potential. The projection light generator equipped with the ALPD
semiconductor laser light source technology has the advantages of higher efficiency, smaller volume, and
higher brightness to meet the necessary conditions of small-size and fully battery driving for robot
products. Meanwhile, given the compatibility of laser display technologies with the latest technologies
such as human-machine interaction, smart recognition, Internet of Things, cloud platform, big data, etc.,
and on the basis of the rapid iteration of AI technologies and the entry of more leading enterprises, the
robot market is developing fast, and we are looking to create a new racetrack for rapid development in the
field of smart service robots.
(IV) Core technologies and progress in R&D of technologies
1. Core technologies and their advancement, and changes during the reporting period
We are committed to the breakthroughs, innovations, expansion of application scenarios, and
industrialized promotion of semiconductor laser light source technology, thus creating technology reserves
and patent portfolios covering the whole technology chain of laser display technology from key system
architectures, and core devices to key algorithms. Meanwhile, the Company has devoted many R&D
resources to the preparation and processing for the miniaturization of laser display systems, light source
architectures, complete equipment structures, machine perception, and thin film materials to maintain the
leading position in the industry. As a Leader Level Member of the Laser Illuminated Projector Association
(LIPA), we have participated in the preparation of the international laser display standard.
With the support of the data, algorithms and design solutions accumulated by us over the years, we
can rapidly come up with products and solutions meeting the requirements of different application
scenarios, such as cinema projection, home entertainment, outdoor exhibition, ultra-large-sized display,
and immersive display. Meanwhile, we have continuously achieved breakthroughs in automobile-grade
laser light generators, AR optical modules, etc., and released products to the market.
National scientific and technology awards
□ Applicable √ N/A
Qualification of national “little giant” enterprises in specialized, refinement, differential, and innovation,
and “leading enterprise” in the manufacturing industry
□ Applicable √ N/A
2. R&D achievements during the reporting period
(1) Core technologies, core devices, and cutting-edge technologies
A. Core technologies
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Relying on the unique light combination technology and profound patent barriers, our latest and
independently developed ALPD 5.0 super panchromatic laser technology integrates three colors of laser
light sources with three colors of LED light sources to achieve the unprecedented integration of six light
sources. This technology perfectly overcomes the technical bottleneck of pure three-color laser light
sources or pure three-color LED light sources, so as to effectively solve the problems of speckle and
colorful edges and the problem of limited brightness of pure three-color LED, hence achieving the
advantages of higher brightness, no speckle, and more comfortable colors to produce extreme visual
experiences for users.
On the basis of the innovative light source architecture, the ALPD 5.0 super panchromatic laser
technology also has an outstanding dynamic modulation mechanism, so that the system employs an
algorithm to perform pre-analysis to identify the color gamut standard required for playing a video, and
feeds back such standard to the light source for modulation; this accurately restores the color gamut that
should be achieved for a corresponding image to present the truest colors and brightness.
In 2023, we took the lead in the productization of ALPD 5.0 super panchromatic laser technology
in the field of household core devices to provide consumers with better product use experiences. In the
future, we will enhance the integration of the ALPD 5.0 super panchromatic laser technology with more
application scenarios to continuously promote the productization of such technology.
B. Core devices
In the field of automotive core components, we released the world’s first automobile-grade colorful
laser headlight at the 20th Shanghai International Automobile Industry Exhibition. Meanwhile, we also
presented various immersive in-vehicle digital interaction solutions, such as window display, in-vehicle
transparent display, in-vehicle entertainment large screen, smart surface, etc.
In December 2023, AITO M9 was officially released, which was equipped with the world’s first
automobile-grade giant screen projection solution provided by Appotronics; it was also the first solution
for in-vehicle shared experience achieved through multiple interconnections in the industry. The
automobile-grade projection giant screen adopted in AITO M9 has passed the anti-halation certification
by SGS from Switzerland and the TV eye protection and comfort certification, so as to provide drivers
and passengers with unprecedented comfortable visual and audio experiences. Meanwhile, the innovative
X-shaped connection structure and the unique motor lock achieved the extreme anti-seismic effects for
automotive projection, so as to keep the image effects stable during high-speed driving. In addition, the
core light generator of such projection giant screen solution has the features of long service life, small
volume, and high brightness to provide vivid and fine image effects, support high-definition video play
and 3D stereo image play to meet the demands of users for multiple in-vehicle application scenarios.
In the field of cinema core devices, we released the VLED LED Cinema projection solution - a new
generation of active projection technology. Based on the self-luminous imaging principle, the brightness
of the VLED LED film screen can be 230% of common cinemas, and achieve the extreme contrast ratio
of ∞:1 and the 160° ultra-wide viewing angle, so as to provide the audience with unprecedented visual
effects. Moreover, it supports HDR, HFR, WGG, and other cutting-edge technologies, hence providing
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the hardware foundation for the next generation of film content. In terms of power consumption, the VLED
LED Cinema projection solution has a service life that is 3 times of conventional projectors, and consumes
only 40% of the electricity at the equivalent brightness compared with other LED film screens at the same
level, which is in line with the development idea of low-carbon and environmental protection.
In the field of household core devices, we took the lead in the productization of ALPD 5.0 super
panchromatic laser technology. During the reporting period, we supplied super panchromatic laser
projector light generators for customers. The light generator adopts the ALPD semiconductor laser light
source technology to present high-brightness, clear, and speckle-free images, hence creating a more eye-
friendly use experience for consumers. Thanks to the high performance of laser light generators, this light
generator allows appearance designing with a smaller and more compact size of the overall device. Given
the AI platform advantages of the ALPD 5.0 super panchromatic laser technology in terms of modular
hardware designing and programmable software, consumers can switch light sources at will according to
their own needs to change from “high-brightness light source” to “smart light source”, so as to meet the
requirements for use in multiple application scenarios and provide users with a better product experience.
In addition, with the technology development and reserve for long, we have made breakthroughs in
all bottlenecks of micro-optics coating technologies. This technology is a breakthrough in optical micro-
structure designing, large-size high-precision optical master die micro-machining technology, large-size
continuous optical film production and duplication process, magnetron sputtering high-reflective film, and
other production process technologies. Optical films and micro-lenses developed based on this technology
have been applied in household anti-light screens and light generator modules. Such anti-light screens
achieved a substantial leap forward in high gain and resistance to ambient light interference, while the
optical modules have the advantages of smaller size, lower cost, and more convenient and efficient
generation process, etc. Meanwhile, we will expand to the field of innovation application in automotive
optics to strengthen our competitive barrier in the automotive business and enhance product capabilities.
C. Cutting-edge technologies
Micro/nano optics
In 2023, we achieved stage progress in wave guide designing tools and wave guide template processes.
Our independently developed wave guide design software supported the efficient single- and dual-layer
glasses wave guide simulation and optimization to develop large-area, high-modulation, high-production
efficiency, and low-cost micro/nano template processes, and we established complete wave guide front
end and back end processes matching with such independently developed templates. In addition, we
completed the feasibility check of independently developed non-destructive technology for high-
throughput light grating parameters, which can achieve the measurement precision of light grating
parameters required for template processes. The independently developed efficient design tool and rapid
template iteration capabilities can help to reduce the period required for light wave guide designing
iteration.
DLP micro light generator
During the reporting period, thanks to the profound accumulation of optics display technologies and
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continuous exploration of cutting-edge technologies, we developed two high-performance, low-cost, and
long-duration DLP micro light generators. The DLP micro light generators used in the consumer field have
a volume of less than 2cc, which has great competitive advantages in the industry. By now, the two DLP
micro light generators can be shipped in small batches, and may be used for AR glasses for business and
consumer markets to achieve high-quality display effects on a lightweight and low-cost basis, so as to
meet application demands for information prompt, music and film entertainment, interaction, special work,
etc.
Algorithm system
During the reporting period, we continuously promoted the R&D and application of the three core
algorithm technology modules - perception, rendering, and AI, so as to provide the algorithm support for
using our display products in more application scenarios.
In terms of perception, we promoted the research and development of 3D reconstruction technology
based on structured light, so as to reconstruct high-quality 3D models for scenarios of single or multiple
projectors. This can achieve accurate measurement of the real space to establish the foundation for real-
time correction and fusion of projectors. In terms of rendering, we upgraded the software for automatic
projection distortion correction and brightness fusion, which can achieve automatic projection adjustment
and rendering based on real scenarios and enhance the visual effect of objects. Moreover, we are also
studying the application of image generation AI modules in projection display to explore the content
generation and real-time projection onto complex surfaces. The algorithm systems above can be used in
the fields of outdoor cultural and tourism lighting to stimulate both the senses and emotions of customers
to improve their participation and interaction.
In terms of AI interaction applications, we explored applications for interaction based on target
detection AI to improve the tracking accuracy and efficiency, which supports specific product
requirements such as hand tracking projection, face anti-glare, etc. and can be applied in the automotive
business, smart projectors and other fields to enhance the experience depth of the human-machine
interaction.
At present, none of the cutting-edge technologies above has been put into mass production. The large-
scale application of such cutting-edge technologies in relevant fields, and the overall penetration speed
thereof, are subject to multiple factors. We will continuously improve the efforts to support such cutting-
edge technologies to achieve reliable mass production.
(2) Branded complete equipment
A. Household products
In the smart mini projection field, Formovie continued to expand its own-brand product portfolios by
releasing multiple new products, including Xiaoming Q3 Neo and Q3 Pro in the Q3 series, the V1 and V1
Ultra smart mini projectors, and Formovie laser projector X5. In March 2023, Formovie officially released
the X5 laser projector, which was the first projection product directly adopting the CVIA brightness
standard in the industry. Being equipped with the ALPD semiconductor laser light source technology, the
X5 laser projector can achieve speckle-free and eye-friendly 4K resolution and the brightness of up to
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4,500 CVIA lumens, which is brighter than TVs.
In the field of laser TVs, Formovie released the laser TV C3 in May 2023. Being equipped with the
ALPD semiconductor laser light source technology that is the same as high-end cinema laser halls, this
product can display outstanding, clear, and speckle-free images while improving the brightness
performance to 400nit.
B. Dedicated display complete equipment
During the reporting period, we released the T Pro, G Pro, D, D Pro, F Pro, and S4 series new large
venue products, which upgraded our products in terms of brightness, image quality, lens adaption, etc. The
T Pro series high-brightness large venue projector is a laser large venue projector with stable performance
and brightness of over 30,000lm; it is equipped with the ALPD dual-color laser light source technology
and the 3DLP imaging technology to produce outstanding colors. The core light source has a service life
of up to 20,000 hours and supports dual-channel signal backup. Being able to restore colors accurately
with outstanding stability, this product is suitable for large venues, outdoor lighting, stage performances,
and lease scenarios. In terms of software, we released the “new Appotronics OSD system (AOSD system)”
and “Appotronics professional console system (APCS system)” to improve the control of projectors during
installation, adjustment, and management, helping users to efficiently complete project management,
operation, and maintenance.
List of intellectual property rights acquired during the reporting period
Newly added in the current year Total
Applications Granted (pcs) Applications Granted (pcs)
(pcs) (pcs)
Patent for
115 115 1,726 1,081
invention
Patent for utility
188 193 886 781
model
Patent for design 18 27 238 229
Software
9 15 142 142
copyright
Others 60 75 1,170 1,055
Total 390 425 4,162 3,288
Note: 1. “Others” in the table above refer to trademarks of the Company; 2. During the reporting period,
the Company filed a total of 12 valid PCT international patent applications.
3. R&D investments
In RMB
Current year Last year Change (%)
R&D investments expensed 280,932,800.35 262,108,405.90 7.18
R&D investments capitalized 0 0 -
Total R&D investments 280,932,800.35 262,108,405.90 7.18
Proportion of R&D investments to +2.38 percentage
12.69 10.31
operating income (%) points
Proportion of R&D investments
0 0
capitalized (%)
Reasons for the material change in the total R&D investments compared with last year
□ Applicable √ N/A
Reasons of the great change in the proportion of R&D investments capitalized and explanation
about the rationality thereof
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□ Applicable √ N/A
4. R&D projects
√ Applicable □ N/A
In RMB 0’000
Investment Progress
Estimated
in the Aggregate or Technological Application
No. Item total Goals
current investment interim level scenario
investment
period results
Provide
customized
automotive
optical Automotive,
Innovative
products for AR, and
projection Mass Take the lead
1 27,403.00 9,303.56 13,204.54 vehicle other
and optical production in the industry.
manufacturer innovative
application
brands, and scenarios.
develop AR
optical
modules, etc.
Continuously
develop the
new
generation of
ALPD
semiconductor
Continuous
laser light
Core development
source
device of core
technology to
light technologies
Mass achieve light Take the lead
2 source and 12,667.00 2,848.92 8,353.58 and core
production sources and in the industry.
light devices for
light
generator use in
generators
project various
with wider
fields.
color gamut,
higher
brightness,
and higher
energy
efficiency.
Develop laser
TVs with
advantageous
Mass performances Take the lead Household
3 Laser TV 12,015.00 2,693.65 11,195.62
production such as high in the industry. laser TVs.
brightness and
eye-
friendliness.
Develop DCI-
compliant and Intended for
highly cost- the high-end
Laser
effective household
digital Mass Take the lead
4 13,552.00 3,440.88 11,548.20 household market and
cinema production in the industry.
cinema projection
projector
projectors; halls at
and DCI- cinemas.
compliant
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LED cinema
screens for
cinema
projection
halls.
The smart
mini projector
products with
high
performance
and high cost-
effectiveness
will be
researched
and
developed,
and different
House mini
Smart mini Mass series of Take the lead
5 20,951.00 6,640.70 15,764.20 projector
projector production products will in the industry.
market.
be laid out to
make
breakthroughs
in technology
innovation,
product
modality
innovation
and quality
upgrade, and
meet different
user needs.
Multiple laser
large venue
projectors
with high
brightness,
Dedicated education Large venue
display projectors, and projector,
products business business
Mass Take the lead
6 (large 10,500.00 3,165.58 7,595.89 projectors education
production in the industry.
venue + with high cost- projector
business effectiveness and other
education) will be fields.
researched
and developed
for meeting
different user
needs.
Total - 97,088.00 28,093.28 67,662.03 - - - -
5. R&D staff
In RMB 0’000
Basic information
Current period Previous period
Number of R&D staff (persons) 428 521
Proportion of R&D staff to total employees 30.16 31.83
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of the Company (%)
Total compensation of R&D staff 18,847.54 16,993.04
Average compensation of R&D staff 44.04 32.62
Note: During the reporting period, we optimized the staffing structure of R&D personnel in different
business areas. On one hand, due to the business adjustment of the subsidiary Formovie, the number of
R&D personnel was reduced in the second half of 2023; on the other hand, we added R&D personnel in
the automotive field based on the nomination requirements and business planning of the automotive
business.
Academic structure of the R&D staff
Academic category Person in the academic category
Master and above 126
Bachelor and below 302
Age structure of the R&D staff
Age category Person in the age category
Below 30 (exclusive) 150
30-40 (including 30, excluding 40) 188
40 and above 90
Reason for material changes in the composition of the R&D staff, and impact on the future development
of the Company
□ Applicable √ N/A
6. Other information
□ Applicable √ N/A
III. Analysis of core competitiveness during the reporting period
(I) Analysis of core competitiveness
√ Applicable □ N/A
1.High-quality R&D team to promote the innovation and development of the laser display
industry
The Company adheres to the strategy of innovation-driven development, and continues to increase
R&D investments in forward-looking technology arrangement and product technology development. As
a high-tech enterprise, the Company will continue to improve R&D capabilities as the main theme of the
Company’s core competitiveness, and continue to improve the R&D system. With Dr. LI Yi, Chairman
and General Manager, as the core personnel of R&D, the Company has developed and innovated the laser
display technology for many years, and established a leading and high-quality R&D team in optical
modules, mechanical designing, thermal simulation, software and hardware control and preparation of rare
earth phosphors, thus having accumulated profound R&D technical strength and got a deep understanding
and judgment of the industry’s cutting-edge technology and development trend.
The Company has set up a research institute and a research and development center to jointly
coordinate technology planning, development and accumulation. The institute carries out forward-looking
product technology research and product verification, develops it into a new product line, and ensures that
R&D resources are advanced; the R&D center, combining the R&D and scientific research achievements
of the research institute, coordinates the management of new product development until mass production
and launch. With leading R&D technical resources, the Company significantly improves the efficiency of
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R&D planning through the cooperation of the R&D center and research institute, and applies the latest
R&D achievements to projection display products.
2.Relying on the technical advantages of core devices, all-round forward-looking strategic
arrangement for application scenarios is made
Based on the technical advantages of core devices and market development trends, the Company has
been committed to the breakthroughs, innovations, expansion of application scenarios, and industrialized
promotion of semiconductor laser light source technology, thus creating technology reserves and patent
portfolios covering the whole technology chain of laser display technology from key system architectures,
and core devices to key algorithms, constantly optimized and improved the strategic arrangements of
automotive optics, aviation display, AR and other application fields, promoted the innovative application
of core devices in new fields and new racetracks, and continued to broaden the long-term growth space of
core device value.
3.Build a patent moat around the underlying technical architecture
The Company takes the underlying technical architecture patent of the original semiconductor laser
light source technology as the center, and builds a solid and interconnected intellectual property patent
system, and it is difficult for competitors to fully imitate or directly bypass the underlying patent layouts
of the Company’s laser fluorescence technology route. The Company actively responds to the national
“intellectual property power strategy” and increases the proportion of high-value patents. As of December
31, 2023, the Company had a total of 2,862 patents filed and granted throughout the world, including
2,091 patents granted throughout the world, in which 1,081 ones were patents for invention.
In terms of technology leadership, the Company’s original semiconductor laser light source
technology has become the mainstream technology in the current laser display field, and as the underlying
key architecture technology, it has been used more than 670 times by companies in the same industry,
such as Philips of the Netherlands, Osram of Germany, and Epson of Japan.
(II) Events occurring during the reporting period that have a material effect on the Company’s
core competitiveness, analysis of the effect and countermeasures
□ Applicable √ N/A
IV. Risk factors
(I) Risk of not making a profit
□ Applicable √ N/A
(II) Risk of significant decrease in operating performance or loss
□ Applicable √ N/A
(III) Risk related to core competitiveness
√ Applicable □ N/A
1. Risk of the technology innovation falling short of expectations
We need to accurately understand the development trend of technologies and applications in the
industry and continuously develop and optimize our technology competence to provide services and
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2023 Annual Report
products meeting market demands and customers’ standards. If we fail to effectively identify the direction
of technological innovation, or fail to continuously achieve technological innovation, or fail to make
effective R&D investments due to constraint of funds, or experience risks of technology leakage, we may
face the adverse effects of weakened competitiveness.
We will make continuous efforts to promptly and accurately explore the technology development
trend in the laser display industry, further enhance technology advantages and technology development,
and increase R&D investments, so as to solidify our position in the industry and improve our product
competitiveness while maintaining the existing technology advantages.
(IV) Operating risk
□ Applicable √ N/A
(V) Financial risk
√ Applicable □ N/A
1. Risk of impairment of accounts receivable
As of the end of the reporting period, the carrying amount of our accounts receivable was RMB
180.2900 million, accounting for 4.27% of our assets. Our products are generally delivered after receiving
the payment therefor. We give a certain credit period to some major and high-quality customers. In case
of any material adverse change in the business condition of our customers, we may be unable to recover
certain accounts receivable, which may have an adverse effect on our operating performance in the future.
We strengthen risk management and control, continuously track and control customer credit, urge
customers to settle and pay in a timely manner, strengthen the assessment of accounts receivable collection,
and establish an early warning system for overdue accounts receivable; for individual customers who
maliciously default and have a long period of arrears, payment will be recovered through arbitration,
litigation and other legal methods.
2. Risk of impairment of inventories
As of the end of the reporting period, the carrying amount of our inventories was RMB 656.3468
million, accounting for 15.55% of our assets. Our inventories mainly comprise raw materials and goods
on hand. In the event of any significant change in the competition pattern of the industry, and material
innovation in laser display technology and products, the recoverable amount of the inventories will be
lower than their book value. The impairment of inventories will have a negative effect on our earnings.
The Company will pay close attention to the changes in supply and demand of the industrial chain, and
promptly carry out production and marketing coordination according to the market and production
conditions to reduce product inventory risks.
3. Risks of impairment of fixed assets
As of the end of the reporting period, the carrying amount of our fixed assets was RMB 336.2768
million, accounting for 7.97% of our assets. Our fixed assets mainly consist of production equipment and
cinema projector light sources for lease, where the cinema projector light sources account for 69.91%. If
force majeure factors result in shutdown of cinemas, the cinema projector light sources may be idle,
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2023 Annual Report
causing risks of impairment of fixed assets and having adverse effects on the operation of the Company.
In order to cope with the above risks, the Company will pay close attention to the status of fixed assets,
strengthen communication with business departments, improve the efficiency of asset use, and reduce the
risk of impairment. In the meanwhile, for assets that show signs of impairment, the Company will measure
the recoverable amount and make an impairment provision for fixed assets based on the difference between
the recoverable amount and the carrying value.
4. Risks of currency movement
The Company’s procurement and sales involve a variety of foreign currencies, of which the US dollar
is the main foreign currency. If the exchange rate of the relevant currency fluctuates, it will have a certain
impact on the Company’s financial position. In this regard, in order to effectively avoid the risks of the
foreign exchange market, prevent large fluctuations in the exchange rate from adversely affecting the
Company’s business performance, improve the efficiency of the use of foreign exchange funds, and
reasonably reduce financial costs, the Company carries out foreign exchange derivatives and other
businesses in a timely manner to reduce the risk of exchange rate fluctuations.
(VI) Industrial risk
√ Applicable □ N/A
1. Risk of cyclical fluctuation in the consumer electronics industry
In 2023, the industry prosperity of the consumer electronics industry of our household projection
business was low due to cyclical changes in the macro economy, intensified competition, etc.; as a result,
our business sector related to household projection declined in terms of both revenue and profit
contribution.
Slow restoration of demands in the consumer electronics industry in 2024 may still have adverse effects
on the operating performance of our businesses related to household projection.
(VII) Risk of macro-environment
√ Applicable □ N/A
At present, given that the global economy is experiencing cyclical fluctuations, both domestic and
overseas economies are complex and prone to changes, and the economy pattern is restructuring at an
accelerated pace. If the economy remains low both in China and abroad, our operation may be subject to
adverse effects, which may affect the profitability of the Company.
We will continue to enhance the efforts for the study of macro-economic conditions, pay close
attention to changes in the politics, economy, international trade environment and custom duties in major
countries, rapidly assess risks, and actively adjust relevant businesses to reduce the adverse effects caused
by changes in the international trade environment.
(VIII) Risk related to depository receipts
□ Applicable √ N/A
(IX) Other significant risks
√ Applicable □ N/A
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2023 Annual Report
1. Risks in failing to implement investment projects as expected
Under the impact of changes in the internal and external environment, there are risks that the
Company cannot implement investment projects as expected. Despite the efforts of the Company in
enhancing the management over investment projects, accelerating the progress of investment projects, and
constantly monitoring the progress of such investment projects, in the actual implementation, this cannot
avoid situation like delayed construction compared with the plan, or adjustment to the implementation
plan or solution in response to industry and market development. Upon the occurrence of such
circumstances, the Company will make decisions in accordance with relevant provisions and promptly
fulfil its obligations for information disclosure.
2. Risks in the arbitration with relevant parties of the participating company GDC BVI
At present, the Company is in the process of arbitration and counter arbitration with relevant parties
of GDC concerning the rights and interests of the parties. Because GDC Cayman, GDC BVI, Mr. ZHANG
Wanneng and his management team violated the provisions of the Shareholders’ Agreement and
Settlement Agreement, including but not limited to the appointment of directors in violation of corporate
governance regulations, violation of protective provisions for the Company, and failure to purchase the
minimum quantity of C5 projectors and core device parts by the end of 2021.
Given that the case is under trial at present, the impact of such case on the profit or loss of the
Company cannot be determined at present; the eventual actual impact depends on the award of the
arbitration tribunal or the negotiation between the parties. The Company has engaged a professional
attorney team and taken relevant legal measures to safeguard the legitimate rights and interests of the
Company and all shareholders in accordance with law, and will promptly fulfill the information disclosure
obligations in accordance with relevant provisions.
V. Main business activities during the reporting period
In 2023, we maintained the persistence in the development strategy of “core technologies + core
devices + application scenarios”, and continuously increased R&D investments to build the hard
technology strength as a high-growth technology enterprise. During the reporting period, the operating
income was RMB 2.213 billion, the net profit attributable to shareholders of the listed company was RMB
103 million, and the net profit attributable to shareholders of the listed company after deduction of non-
recurring profit or loss was RMB 41.6645 million. At the end of the period, the total assets of the Company
were RMB 4.221 billion, and the net assets attributable to shareholders of the listed company were RMB
2.819 billion.
(I) Analysis of main business
1. Analysis of changes in statement of income and statement of cash flows lines
In RMB
Item Current period Prior period % Change
Operating income 2,213,356,977.95 2,541,144,635.15 -12.90
Operating costs 1,411,758,369.08 1,711,732,842.88 -17.52
Selling expenses 300,679,932.99 334,758,958.86 -10.18
Administrative expenses 157,092,724.49 193,554,776.41 -18.84
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2023 Annual Report
Financial expenses -19,449,983.65 -9,162,605.79 N/A
R&D expenses 280,932,800.35 262,108,405.90 7.18
Net cash flow from operating 364,082,055.08 177,350,715.69 105.29
activities
Net cash flow from investment -328,864,633.65 47,917,226.22 -786.32
activities
Net cash flow from financing 1,797,013.72 116,013,055.07 -98.45
activities
Description of reasons for changes in the financial expenses: The financial expenses decreased by RMB
10.2874 million year on year, primarily due to the year-on-year increase in the subsidy for interests on
loans and interest incomes received;
Description of reasons for changes in the net cash flows from operating activities: The net cash flow from
operating activities increased by 105.29% year on year, which was mainly due to the optimized supply
chain management, decreased payment for procurement, and increased VAT refunds during the reporting
period;
Description of reasons for changes in the net cash flows from investment activities: The net cash flow
from investment activities decreased by 786.32% year on year, primarily due to the increase in the
purchase of wealth management products;
Description of reasons for changes in the net cash flow from financing activities: The net cash flow from
financing activities decreased by 98.45% year on year, primarily due to the decrease in the new borrowings
compared with last year.
Detailed description of major changes in the business types, profit composition or profit sources of the
Company
□ Applicable √ N/A
2. Analysis of revenue and costs
√ Applicable □ N/A
During the reporting period, our operating income was RMB 2.213 billion, decreased by 12.90% year on
year.
(1). Main business by sector, product, region, and sales mode
In RMB 0’000
Main business by sector
% Change
% Change
Operating Operating Gross in % Change in
Sector in operating
income costs margin (%) operating gross margin
income
cost
+3.58
Laser display 221,335.70 141,175.84 36.22 -12.90 -17.52 percentage
points
Main business by product
% Change
% Change
Operating Operating Gross in % Change in
Product in operating
income costs margin (%) operating gross margin
income
cost
Core devices
+4.7 percentage
and complete 200,892.40 123,620.99 38.46 -12.99 -19.17
points
equipment
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2023 Annual Report
-7.37
Other products
20,443.30 17,554.85 14.13 -11.96 -3.70 percentage
and businesses
points
Main business by region
% Change
% Change
Operating Operating Gross in % Change in
Region in operating
income costs margin (%) operating gross margin
income
cost
+4.54
Domestic 186,321.49 120,878.78 35.12 -12.12 -17.87 percentage
points
-0.95
Overseas 35,014.21 20,297.06 42.03 -16.81 -15.43 percentage
points
Main business by sales mode
% Change
% Change
Operating Operating Gross in % Change in
Sales mode in operating
income costs margin (%) operating gross margin
income
cost
+6.85
Direct sales 156,281.99 95,992.80 38.58 -15.24 -23.75 percentage
points
-4.50
Distribution 65,032.93 45,169.12 30.54 -6.62 -0.16 percentage
points
-9.50
Commissioned
20.78 13.92 32.99 -73.34 -68.94 percentage
sales
points
Description of main business by sector, product, region, and sales mode
1. Description by product: Our main businesses are the core device business and projection complete
equipment. During the reporting period, the main businesses achieved the revenue of RMB 2.213 billion,
decreased by 12.90% year on year, where the revenue from the core device and complete equipment
business was RMB 2.009 billion, decreased by 12.99% year on year, which was mainly due to decrease
in the revenue from the To C business caused by the weak demands on consumer electronics market.
2. Description by region: During the reporting period, our revenue from overseas operations was RMB
350.1421 million, decreased by 16.81% year on year, which was mainly due to the reduction in the
overseas sales of light sources.
3. Description by sales mode: Our sales were achieved mainly through direct sales and distribution sales,
supplemented by commissioned sales, where the revenue from commissioned sales was RMB 0.2078
million, decreased by 73.34%, which was mainly due to the change in the sales strategy, i.e., changing
partial commissioned sales businesses to self-operated businesses.
(2). Analysis of output and sales volume
√ Applicable □ N/A
%
% %
Sales Change
Main products Unit Output Stock Change Change
volume in sales
in output in stock
volume
Optical engine
and complete Set 469,652 508,002 115,938 -25.32 -10.67 -24.86
equipment
Explanation about output and sales volume
We supplied part of laser light source produced under operating leases, used part of laser TV light
generators produced to manufacture laser TV products, and used part of laser mini projector light
generators for producing laser mini projectors, which were not included in the production and sales volume.
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The decrease in the output, sales, and stock during the reporting period was mainly due to the changes in
our product portfolios and market demands. The stock reduced mainly because the Company enhanced
inventory control to improve the accuracy of prediction, and optimized the supply chain management, so
as to reduce products on stock.
(3). Performance of significant procurement contracts and significant sales contracts
□ Applicable √ N/A
(4). Analysis of costs
In RMB 0’000
Costs by sector
Ratio in Ratio
total in total
Amount %
costs for Amount of costs
Components for the Change
Sector the the prior for the Remark
of cost current in
current period prior
period amount
period period
(%) (%)
Laser
display
- 141,175.84 100.00 171,173.28 100.00 -17.52
industry
Costs by product
Ratio in Ratio
total in total
Amount %
costs for Amount of costs
Components for the Change
Product the the prior for the Remark
of cost current in
current period prior
period amount
period period
(%) (%)
Direct 109,689.23 88.73 138,681.64 90.67 -20.91
Core materials
devices 3,744.90 3.03 4,824.71 3.15 -22.38
Direct labor
and
Indirect 10,186.86 8.24 9,438.04 6.18 7.93
complete
expenses
equipment 123,620.99 100.00 152,944.39 100.00 -19.17
Subtotal
Other products and
17,554.85 100.00 18,228.89 100.00 -3.70
businesses
Total 141,175.84 100.00 171,173.28 100.00 -17.52
Explanation about cost analysis
The costs of the core device and complete equipment business mainly comprise direct materials, direct
labor and indirect expenses, of which, the costs of direct materials account for 88.73%. Compared with
the prior period, the ratio of indirect expenses increased mainly due to the change in the ratio of different
product portfolios of the core device and complete equipment business.
(5). Change in the scope of consolidation due to changes in equity interests held in major
subsidiaries during the reporting period
□ Applicable √ N/A
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(6). Significant changes in or adjustments to the businesses, products, or services of the Company
during the reporting period
□ Applicable √ N/A
(7). Main customers and main suppliers
A. The Company’s major customers of the sales
√ Applicable □ N/A
The sales to top 5 customers were RMB 634.6545 million, representing 28.67% of the total annual sales,
of which the sales to related parties were RMB 199.2587 million, representing 9.00% of the total annual
sales.
Top 5 customers
√ Applicable □ N/A
In RMB 0’000
Related to the listed company
No. Customer Sales % of total annual sales
or not
1 Customer 1 19,925.87 9.00 Yes
2 Customer 2 13,840.39 6.25 No
3 Customer 3 12,217.53 5.52 No
4 Customer 4 9,374.88 4.24 No
5 Customer 5 8,106.78 3.66 No
Total - 63,465.45 28.67 -
Description of sales to a single customer accounting for over 50% of the total sales value, new
customer in the top 5 customers, or serious dependence on a small number of customers during
the reporting period
√ Applicable □ N/A
Customer 5 was newly counted in the top 5 customers.
B. Information on major suppliers of the Company
√ Applicable □ N/A
The amount of purchases from top 5 suppliers were RMB 422.8018 million, representing 27.50% of the
total annual purchase cost, of which the amount of purchases from related parties were RMB 48.0149
million, representing 3.12% of the total annual purchase cost.
Top 5 suppliers
√ Applicable □ N/A
In RMB 0’000
Purchase % of total annual purchase Related to the listed company or
No. Supplier
cost cost not
1 Supplier 1 15,263.53 9.93 No
2 Supplier 2 10,673.51 6.94 No
3 Supplier 3 6,634.20 4.32 No
4 Supplier 4 4,907.45 3.19 No
5 Supplier 5 4,801.49 3.12 Yes
Total - 42,280.18 27.50 -
Description of purchase from a single supplier accounting for over 50% of the total purchase
value, new supplier in the top 5 suppliers, or serious dependence on a small number of suppliers
during the reporting period
□ Applicable √ N/A
3. Expenses
√ Applicable □ N/A
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In RMB
Item Current period Prior period % Change
Selling expenses 300,679,932.99 334,758,958.86 -10.18
Administrative 157,092,724.49 193,554,776.41 -18.84
expenses
Financial expenses -19,449,983.65 -9,162,605.79 N/A
R&D expenses 280,932,800.35 262,108,405.90 7.18
(1) The selling expenses decreased by 10.18% year on year, mainly due to the decrease in the marketing
expenses compared with the last year;
(2) The administrative expenses decreased by 18.84% year on year, primarily due to the year-on-year
decrease in the share-based payment;
(3) The financial expenses decreased by RMB 10.2874 million year on year, primarily due to the year-
on-year increase in the subsidy for interests on loans and interest incomes received;
(4) The R&D expenses increased by 7.18% year on year, primarily due to the increase in the R&D
expenses in the business of automotive core devices.
4. Cash flow
√ Applicable □ N/A
In RMB
Item Current period Prior period % Change
Net cash flow from operating
364,082,055.08 177,350,715.69 105.29
activities
Net cash flow from investment
-328,864,633.65 47,917,226.22 -786.32
activities
Net cash flow from financing
1,797,013.72 116,013,055.07 -98.45
activities
(1) During the reporting period, the net cash flow from operating activities increased by 105.29% year
on year, which was mainly due to the optimized supply chain management, decreased payment for
procurement, and increased VAT refunds during the reporting period;
(2) The net cash flow from investment activities decreased by 786.32% year on year, primarily due to
the increase in the purchase of wealth management products;
(3) The net cash flow from financing activities decreased by 98.45% year on year, primarily due to the
decrease in the new borrowings compared with last year.
(II) Explanation about material change in profit due to non-main business
□ Applicable √ N/A
(III) Analysis of assets and liabilities
√ Applicable □ N/A
1. Status of assets and liabilities
In RMB
% of total % of total
%
Balance at the assets at the Balance at the assets at
Change
Item end of the end of the end of the the end of Remark
in
current period current prior period the prior
amount
period period
Primarily due to
Held-for- the increase in
trading the purchase of
514,010,000.00 12.18 352,880,000.00 8.14 45.66
financial structural bank
assets deposits in the
current period
Notes 8,951,308.71 0.21 2,234,687.77 0.05 300.56 Primarily due to
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receivable the increase in
commercial
acceptance bills
received in the
current period
Primarily due to
the increase in
Receivables bank’s
11,387,400.00 0.27 4,279,041.00 0.10 166.12
financing acceptance bills
received during
this period
Primarily due to
Contract the increase in
1,664,740.29 0.04 1,061,581.35 0.02 56.82
assets quality warranty
amounts
Primarily due to
the increase in
Non-current the long-term
assets due receivables due
41,997,218.73 1.00 13,431,554.82 0.31 212.68
within one within one year
year as of the end of
the reporting
period
Primarily due to
VAT credit
Other current
48,417,270.11 1.15 106,502,611.79 2.46 -54.54 refunds during
assets
the reporting
period
Primarily due to
the increase in
Long-term the business of
26,000,543.13 0.62 11,524,193.80 0.27 125.62
receivables installment
receipts in the
current period
Primarily due to
the expiration of
Right-of-use some lease
40,016,903.67 0.95 62,255,670.29 1.44 -35.72
assets contracts that
were not
renewed
Primarily due to
the increase in
Other non- prepayments for
29,348,748.27 0.70 12,569,088.37 0.29 133.50
current assets the procurement
of long-term
assets
Primarily due to
the repayment of
Short-term due short-term
80,036,500.00 1.90 129,589,634.03 2.99 -38.24
borrowings borrowings
during the
reporting period
Primarily due to
the payment of
Notes payable 76,001,079.07 1.80 201,299,388.57 4.65 -62.24
bank acceptance
bills that are
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payable at the
beginning and
paid during the
reporting period
Primarily due to
Non-current
the increase in
liabilities due
268,748,151.67 6.37 178,031,817.37 4.11 50.96 the long-term
within one
borrowings due
year
within one year
Primarily due to
the payment
made in the
Other current
18,441,685.83 0.44 28,383,608.37 0.66 -35.03 current period for
liabilities
rebates incurred
in the prior
period
Primarily due to
the expiration of
Lease some lease
15,548,985.71 0.37 34,319,284.23 0.79 -54.69
liabilities contracts that
were not
renewed
Primarily due to
the recognition
Deferred and conversion
4,627,972.56 0.11 8,651,422.26 0.20 -46.51
income of deferred
incomes to other
incomes
Other information
None
2. Overseas assets
√ Applicable □ N/A
(1) Size of assets
Where: The overseas assets were RMB 392.2661 million, representing 9.29% of the total assets.
(2) Explanation about the high proportion of overseas assets
□ Applicable √ N/A
3. Encumbrances on assets as of the end of the reporting period
√ Applicable □ N/A
In RMB
Item Amount Reason
Cash and bank Undue time deposits and interests, account security
88,979,653.31
balances deposits, and restricted payments
Intangible assets 270,014,499.78 Mortgage collateral
Total 358,994,153.09 -
4. Other information
□ Applicable √ N/A
(IV) Analysis of operation information of the industry
√ Applicable □ N/A
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For the analysis of operation information of the industry during the reporting period, refer to “Section
III Discussion and Analysis of Business Situations - II. Main business, business model, status of industry
and R&D activities during the reporting period”.
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(V) Analysis of investments
Overall analysis of external equity investments
√ Applicable □ N/A
In RMB
Investment amount in the reporting period (in Investment in the same period of the
Range of change
RMB) prior year (in RMB)
144,726,776.43 162,394,917.57 -10.88%
1. Material equity investments
□ Applicable √ N/A
2. Material non-equity investments
□ Applicable √ N/A
3. Financial assets at fair value
√ Applicable □ N/A
In RMB
Gain or loss Cumulative fair Impairment Purchase
Sale/redemption
Asset Opening on changes in value changes of the amount for Other Closing
for the current
category balance fair value for included in current the current changes balance
period
the period equity period period
Equities 12,880,000.00 12,880,000.00
Others 351,354,460.38 130,000.00 -4,900,000.00 168,108,359.00 519,592,819.38
Total 364,234,460.38 130,000.00 -4,900,000.00 168,108,359.00 532,472,819.38
Note: “Others” mainly include structured deposits and other equity instruments, described in detail in XIII of Section X.
Description of securities investments
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√ Applicable □ N/A
In RMB
Gain
or loss Sales
Cumulativ Purchas Gains
on amoun
e fair e or
Initial Sourc change t for Closing
Security Securit Short Opening value amount losses Accountin
investment e of s in the balance of
type y code name book value changes for the from g item
cost funds fair curren book value
included in current disposa
value t
equity period l
for the period
period
Domesti Held-for-
Self-
c and Gabriell 14,000,000.0 12,880,000.0 12,880,000.0 trading
835438 funded 0 0 0 0 0
overseas e 0 0 0 financial
capital
shares assets
14,000,000.0 12,880,000.0 12,880,000.0
Total - - - 0 0 0 0 0 -
0 0 0
Description of derivative investments
√ Applicable □ N/A
(1). Derivative investments for hedging purposes during the reporting period
√ Applicable □ N/A
In RMB
Gain or Purchase Sales Ratio of the
Cumulative
loss on amount amount Closing closing book
Initial Opening fair value
changes in during during balance value to the
Type of derivative investments investment book changes
fair value the the of book closing net assets
amount value included in
for the reporting reporting value of the Company
equity
period period period (%)
Foreign exchange hedging 0 0 67,000.00 0 0 67,000.00 0 0
Total - - 67,000.00 - - 67,000.00 - -
Description of the accounting policy and specific
accounting principle of the hedging business during
N/A
the reporting period, and whether there is a
material change compared with the prior period
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Description of the actual gains and losses during The Company recognized the gains and losses from derivative investments during the reporting period, and during
the reporting period the reporting period, recognized the investment gains of RMB 67,000
Description of hedging effects N/A
Source of funds for derivative investments Self-funded capital
I. The Company followed the principles of lawfulness, diligence, safety, and effectiveness in conducting foreign
exchange derivative transactions. It did not engage in foreign exchange derivative transactions merely in pursuit of
profit. All the foreign exchange derivative transaction businesses were based on normal production and operation
and supported by specific operating businesses to avoid and protect against exchange rate or interest rate risks;
however, foreign exchange derivative transaction operations still face certain risks:
1. Market risks: The big changes in the foreign exchange market may lead to changes in the prices of foreign
exchange derivatives due to fluctuation in the market prices such as the interest rate, exchange rate, etc. of the
target, hence leading to the market risks of suffering losses;
2. Operating risks: The high professionalism and complexity of the hedging business may lead to certain risks due
to the failure to promptly and fully understand the information about derivatives, or failure to operate in
accordance with specific procedures;
Description of the risk analysis and control 3. Default risks: For forward foreign exchange transactions, if a bank defaults within the period of a contract, the
measures for the derivatives held during the Company would not be able to exercise the foreign exchange contract according to the agreed price, which may
reporting period (including but not limited to lead to risks of failure to hedge the risk exposure.
market risks, liquidity risks, credit risks, II. Risk control measures taken by the Company
operating risks, legal risks, etc.) 1. The Company selected foreign exchange derivatives with a simple structure, high liquidity, and controllable
risks for foreign exchange derivative transactions, prohibited any risk speculation acts, and refrained from any
leveraged foreign exchange derivative investments.
2. The Company formulated the strict Management Regulations for Foreign Exchange Derivative Transaction
Businesses, which requires to strictly follow the business operation process and authorization management system,
and enhance communication and exchanges with relevant professional institutions including banks and experts, so
as to minimize the operating and transaction risks.
3. The Company engaged in the foreign exchange derivative transaction business only with financial institutions,
such as large banks, with lawful qualifications, diligently reviewed the contracts with such financial institutions,
and strictly followed the risk management system to avoid possible default risks.
4. The Company regularly performed supervision and check on the compliance of foreign exchange derivative
transactions and the effectiveness, decision-making, and execution of the internal control mechanism.
Changes in the market price or fair value of
The Company recognized the gains and losses from derivative investments during the reporting period, recognized
products of invested derivatives during the
the change in the fair value of derivatives according to the difference between the agreed exchange rate and the
reporting period, and the specific method in use
forward exchange rate as of the end of the reporting period, transferred to investment gains upon the expiration of
for the analysis of the fair value of such
a contract, and recognized the investment gains of RMB 67,000 during the reporting period.
derivatives, and the settings of relevant
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assumptions and parameters
Litigation involved (if applicable) N/A
Disclosure date of the announcement of the Board
of Directors approving the derivative investments October 29, 2022
(if any)
Disclosure date of the announcement of the
general meeting of shareholders approving the N/A
derivative investments (if any)
(2). Derivative investments for speculation purposes during the reporting period
□ Applicable √ N/A
Other information
None
4. Description of investments in private equity investment funds
□ Applicable √ N/A
Other information
None
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5. Specific progress of material assets restructuring and integration during the reporting period
□ Applicable √ N/A
(VI) Sale of material assets and equities
□ Applicable √ N/A
(VII) Analysis of major investees
√ Applicable □ N/A
In RMB 0’000
Company Main Registered Shareholding Total Net Operating Net
name business capital ratio assets assets income profit
Provision of
cinema
projection
CINEAPPO 10,000.00 67.80% 80,289.11 50,430.94 51,919.72 10,492.46
services and
sales of
projectors
R&D and sale
Chongqing of household - -
7,017.54 39.19% 51,522.68 76,572.27
Formovie display 26,657.78 18,803.16
products
R&D and sale
Appotronics
of laser light 30,116.15 100.00% 34,821.14 29,809.81 12,056.43 -7,089.12
HK
source
(VIII) Structured entities controlled by the Company
□ Applicable √ N/A
VI. Discussion and analysis of future development of the Company
(I) Structure and trend of the industry
√ Applicable □ N/A
Business of automotive core components: Create the long-lasting growth space for the
automotive market through smart and innovative applications. Given the trend of smart electrification,
the development of the automotive industry focuses on the innovation of integrating multiple technologies.
The human-machine interaction experience is being combined with the scenarios of autonomous driving,
entertainment lighting, etc., new functions are continuously emerging to achieve interaction in richer forms,
and the innovative application of smart cockpits will create the long-lasting growth space for the
automotive market.
Automotive display products, as an important part of smart cockpits, are also the core carrier of the
“human-machine interaction” function for smart vehicles. Besides the state display, they also have the
functions of driver assistance, manipulation, entertainment, etc., so as to achieve continuous technology
iteration to meet market demands. At present, automotive display solutions mainly include in-vehicle
extreme anti-seismic rising large screens to redefine the automotive smart space, in-vehicle curtains to
create a soft partition for privacy protection for the front and back rows, respectively, and canopy
projection to achieve transparent display on the sunroof, such as displaying the image of the starry sky or
underwater sea to enhance the immersive atmosphere in the vehicle.
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On the background of cockpit intelligentization, the rapid increase of the information volume in
vehicles makes the in-vehicle information display area into a core, and the multiple-screen interaction
becomes an important trend for automotive display. By now, we have received multiple high quality
nominations for our smart cockpit products, with the product competitiveness recognized by automobile
manufacturers. In the future, we will make use of our technology advantages and abundant industry
experience to continuously acquire more high quality nominations.
Business of cinema core devices: Given the obvious recovery of the film market, the high
visionary demands will drive new development of the industry. In 2023, the total box office of China
was RMB 54.915 billion, increased by 83.5% year on year; the total number of moviegoers reached 1.299
billion, increased by 82.56% compared with 2022, which indicated an obvious trend of recovery. Looking
ahead into the future, with the continuous release of outstanding films on the film market, the recovery of
film-watching demands will continue, and the supply of outstanding films will drive the continuous
recovery of the industry.
Meanwhile, the audience are having higher requirements for visual effects, which promotes
filmmaking toward the direction of higher resolution and higher refresh rate; as a result, it is probable that
LED screens may become a new opportunity for future growth of the cinema business. As more domestic
enterprises enter the LED film screen market and the continuous maturity of technologies developed, the
VLED LED Cinema projection solution we released not only meets the film-watching demands of the
audience, but also supports cinemas in various differentiated activities to arrange electronic gaming,
enterprise activities, concerts, theater performances, etc. during non-film-watching periods, helping
cinemas to expand the source of profits.
Dedicated display business: Given the continuous recovery of the overall market, new
technologies will lead to high-quality development of the industry. Looking ahead into 2024, given the
multiple favorable factors, including the continuous consumption demands for cultural tourism, driving
force from consumption and investment policies, and the transformation of cultural and tourism digital
technologies, the fundamental condition of “generally favorable with growth expected” remains
unchanged, which effectively promotes the film-watching demands for cultural and tourism lighting, night
tourism, cultural arts, and other markets. In addition, given many market opportunities in smart
commercial spaces, immersive digital classrooms, restaurants, etc., the expansion in the width of
applications will lead to the development in the commercial market, and will lead to the continuous
recovery trend of the overall dedicated display market. For the overseas market, relying on the core
advantages of the ALPD semiconductor laser light source technology, we will further improve the
influence of the ALPD brand, enhance the overseas layout, and expand the size of the overseas business.
Thanks to the development of digital display technologies, laser display technologies may be
employed to provide the large venue field and commercial market with image presentations that are more
innovative, and highly customized, with higher commercial values, so as to enhance the rendering effects
and atmosphere for cultural performances, tourism, entertainment, and other scenarios. For education
scenarios, laser display technologies can create image effects that are more eye-friendly, clearer, and more
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vivid to make teaching more interesting, hence improving the learning efficiency of students. In addition,
on the background of the rapid development of AI technologies, the effective combination of laser display
and AI technologies can provoke both the senses and emotions of users, improve the participation of and
interaction with users, and provide users with more authentic and shocking effects, so as to drive the high-
quality development of the dedicated display field.
(II) Development strategy of the Company
√ Applicable □ N/A
Facing the future, we are dedicated to becoming a pioneer in the display industry; under the mission
and vision of “New light, New Life”, the Company insists on the strategic direction of “core technologies
+ core devices + application scenarios” to continuously promote breakthrough innovation of laser display
technologies, accelerate the expansion of application scenarios, enhance the in-depth industrialization of
laser display technologies, and build a bigger and stronger laser display industry ecology.
(III) Business plan
√ Applicable □ N/A
1. Development directions of various business sectors
For automotive core components, to ensure high-quality delivery of nominated products, we are
dedicated to building an efficient and stable supply chain system, and actively match with the planning of
automobile manufacturers to promote the mass production and delivery of nominated products, so as to
release the nominated automobile model through joint efforts. Meanwhile, we will continue to focus on
the logic of cooperation with major customers to make full use of the technology advantages in automotive
optics, actively expand the nomination cooperation with Chinese and foreign leading automobile
manufacturers, and improve both the quality and quantity of nominations for the Company, hence
becoming an outstanding core supplier of automotive optics components.
For the business of cinema core devices, we will rely on the technology advantages in leading laser
light sources and profound industry expertise to continuously improve the installations of the ALPD laser
light source projection solutions. Meanwhile, we will develop the VLED LED Cinema projection solutions
from aspects of R&D, supply chain, product services, and brand marketing, so as to assist cinemas in high-
end and differentiated business operations.
For the business of dedicated display, we will rely on the ALPD semiconductor laser light source
technologies to continuously enhance the layout of laser high-brightness products. Meanwhile, we will
enhance the marketing efforts for large venue projectors equipped with the ALPD 5.0 super panchromatic
laser technologies. We will strengthen the layout in lighting, cultural tourism, and large venue performance
markets to solidify our position in the industry in China, and take active measures to expand into the
overseas dedicated display market, so as to further increase the coverage of the overseas market.
For smart projection products, our household core device business division will closely follow the
development trend of smart projection, and continuously strengthen our core competitiveness by
improving product R&D, and accelerating product function iteration, so as to make full efforts to market
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the ALPD 5.0 super panchromatic laser technologies in the household smart projection industry while
promoting the stable and continuous output of existing products. Meanwhile, Formovie will focus on its
own competitive brand products while taking overseas advantages of Google TV+Netflix dual
certification to continuously improve its inherent dynamics, so as to achieve continuous improvement in
operating quality.
2. Continuous efforts to build a smart supply chain
We will further enhance the efforts for building a smart supply chain to build a smart manufacturing
supply chain system leading in the industry, so as to fully safeguard the delivery with cost advantages for
the automotive optics, household, cinema, and other business sectors, hence meeting the growth
requirements of various business sectors. Firstly, we intend to build a brand-new smart production base
by adopting automatic equipment to improve the automation of production processes, apply the IoT
technologies to integrate data from equipment terminals to achieve interconnection and communication,
and gradually establish a smart lights-out factory through smart material allocation and scheduling.
Secondly, to build a smart manufacturing system and framework based on the automation platform,
information platform, and intelligentization platform, we will establish a smart production and
management scheduling center to integrate the smart management of the production module, so as to build
a decision-making and management system for intelligent business operation. Thirdly, based on 5G data
interconnection technologies combined with AI big data analysis technologies, we will achieve data
collection and sharing in real time, establish digital management models, build an enterprise resource
management platform, and manufacture a simulation platform, to support the operation trend analysis and
development strategy prediction for the Company.
(IV) Others
□ Applicable √ N/A
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Section IV. Corporate Governance
I. Corporate governance
√ Applicable □ N/A
During the reporting period, in accordance with the requirements of the Company Law, the Securities
Law, the Rules Governing the Listing of Stocks on the Science and Technology Innovation Board of
Shanghai Stock Exchange, the Guidelines on Self-regulatory Supervision of Listed Companies on the
Science and Technology Innovation Board of Shanghai Stock Exchange, other laws and regulations, and
the Articles of Association, with reference to the actual operation conditions of the Company, we
constantly improved the corporate governance structure and continuously improved the internal
governance and control measures to improve the level of standardized operation and governance level of
the Company. During the reporting period, the actual conditions of corporate governance were in
compliance with the requirements of normative documents on the governance of listed companies.
(I) About the Company and controlling shareholder
During the reporting period, the controlling shareholder and actual controller of the Company strictly
followed the Code of Corporate Governance for Listed Companies, the Rules Governing the Listing of
Stocks on the Science and Technology Innovation Board of Shanghai Stock Exchange, the Guidelines on
Self-regulatory Supervision of Listed Companies on the Science and Technology Innovation Board of
Shanghai Stock Exchange, and other regulations to standardize its acts, and to exercise the rights and fulfill
the obligations as a shareholder in accordance with law. Major decisions of the Company were subject to
the corresponding approval procedure specified in the Articles of Association, while the controlling
shareholder and actual controller did not bypass the general meeting of shareholders to directly or
indirectly interfere with the decision-making and operating activities of the Company. The Company
neither had funds occupied by the controlling shareholder nor provided guarantee for the controlling
shareholder, and had an independent and complete business system and capabilities of independent
operation.
(II) About shareholders and the general meeting of shareholders
The general meeting of shareholders is the highest authority of the Company. During the reporting
period, the Company held 2 general meetings of shareholders. The Company convened, held, voted, and
made information disclosure of the general meetings of shareholders in strict compliance with the
Company Law, the Articles of Association, the Rules of Procedure for the General Meeting of
Shareholders, and relevant laws and regulations, normative documents, and the Company’s rules and
regulations, at which lawful and valid resolutions were made under the witness of lawyers on site, who
also issued legal opinions. We treated all shareholders equally, and took lawful and effective measures for
on-site attendance, online attendance, etc., so that more shareholders could attend the general meetings of
shareholders to fully safeguard the equal rights of all shareholders, especially small- and medium-sized
shareholders, safeguarding the rights of information and participation for every shareholder, and
facilitating the exercise of the voting power by every shareholder.
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(III) About directors and the Board of Directors
The Board of Directors is the standing decision-making and management authority of the Company.
During the reporting period, the Company held 6 meetings of the Board of Directors. The Company acted
in strict compliance with the Articles of Association, the Rules of Procedure for the Board of Directors,
and other relevant laws and regulations, normative documents, and the Company’s rules and regulations
in convening and holding meetings of the Board of Directors. At present, the second Board of Directors
of the Company consists of 8 directors, including 3 independent directors and 1 employee representative
director. All the members of the Board of Directors are qualified in accordance with the requirements of
laws and regulations, and have the professional expertise, skills, and quality required for acting as a
director. All the directors conducted their work in accordance with regulations and requirements, attended
punctually the meetings of the Board of Directors and specific-purpose committees and the general
meetings of shareholders, and diligently fulfilled their duties and obligations to safeguard the interests of
the Company and shareholders as a whole. Moreover, they actively participated in relevant training to
familiarize themselves with relevant laws and regulations.
The Board of Directors has four specific-purpose committees, namely the Audit Committee, the
Strategy and ESG Committee, the Remuneration and Appraisal Committee, and the Nomination
Committee. The members of such specific-purpose committees and their qualifications are in compliance
with laws and regulations and the requirements of the Articles of Association, and they fulfilled their duties
diligently to fully safeguard the scientific decision-making of the Company.
To further improve the Company’s level of environment, society, and governance (ESG)
management, enhance the ESG management system, strengthen the ESG management capabilities, and
actively fulfill corporate social responsibilities, the Board of Directors updated the “Strategy Committee”
to the “Strategy and ESG Committee” and added the ESG duties to the original duties thereof.
(IV) About supervisors and the Board of Supervisors
The Board of Supervisors is the supervisory body of the Company. During the reporting period, the
Company held 5 meetings of the Board of Supervisors. The Company acted in strict compliance with the
Articles of Association, the Rules of Procedure for the Board of Supervisors, and other relevant laws and
regulations, normative documents, and the Company’s rules and regulations in convening and holding
meetings of the Board of Supervisors. The second Board of Supervisors of the Company consists of 3
supervisors, including 1 employee representative supervisor. The composition of the Board of Supervisors
and the qualifications of the members thereof are in compliance with the requirements of laws and
regulations to ensure professional expertise and practical experience. All the supervisors acted
independently and effectively to fulfill their duties of supervision, check, etc. over major events and
financial conditions of the Company and over directors and senior officers, so as to actively safeguard the
legitimate rights and interests of the Company and all shareholders.
(V) About information disclosure and investor relation management
During the reporting period, we further improved the efforts for information disclosure management
in compliance with the relevant laws and regulations and the Management Regulations of Information
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2023 Annual Report
Disclosure, the Management Regulations for Investor Relation, etc. We made information disclosure in a
truthful, accurate, complete, timely, and fair manner, and kept the disclosed content easy to understand to
fully disclose risks for view by all shareholders. The designated website for information disclosure of the
Company is the website of Shanghai Stock Exchange (www.sse.com.cn), the designated journals of
information disclosure are China Securities Journal, Shanghai Securities News, Securities Daily, and
Securities Times to ensure fair access to information about the Company by shareholders.
We attached importance to the investor relation management. Investors can query about the operation
of the Company through multiple channels, including on-site survey, investor telephone number (0755-
32950536), investor email (ir@appotronics.cn), online performance briefing, the “E Interaction Platform”
of Shanghai Stock Exchange, and the WeChat official account (Appotronics), so as to keep active
communication and exchanges with investors, safeguard the rights of information and participation of
investors, truly maintain the legitimate rights and interests of investors, especially medium and small
investors, and improve the channel for information exchanges between investors and the Company.
(VI) Registration and management of insiders
During the reporting period, we followed the relevant requirements of laws and regulations and the
Management Regulations of Insider Information on the management of insiders to register and file relevant
personnel involving insider information during major events of the Company, such as regular reports,
repurchase of the Company’s shares, etc. During the window period of transactions, insiders including the
directors, supervisors, senior officers, and key technical staff of the Company would be reminded.
Meanwhile, we constantly enhanced the education and study on laws and regulations concerning the
prevention and control of insider trading by the directors, supervisors, senior officers, and relevant
personnel of the Company, so as to enhance their awareness of confidentiality. No trading of the
Company’s shares by insiders making use of insider information was detected.
(VII) Amending and formulating relevant governance regulations of the Company
During the reporting period, to further promote the standardized operation of the Company, and
establish and improve an internal management mechanism, the Board of Directors of the Company
established or amended the Articles of Association and 9 relevant governance regulations through
systematic comparison for system optimization in accordance with the relevant provisions of relevant laws,
regulations, and normative documents, so as to improve the quality of internal control and governance of
the Company.
Is there any major deviation in the corporate governance from laws, administrative regulations, and the
regulations of CSRC on the governance of listed companies? If yes, specify the reasons
□ Applicable √ N/A
II. Give an explanation if the Company cannot guarantee its dependence and ability to operate
independently due to its relationship with the controlling shareholder in business, personnel,
assets, organization, finance and other affairs
□ Applicable √ N/A
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2023 Annual Report
Information about the business identical or similar to that of the Company operated by the controlling
shareholder, actual controller, and other units under their control, impact of horizontal competition or
major changes in horizontal competition on the Company, measures that have been taken, solution
progress, and subsequent solution plans
□ Applicable √ N/A
Information about horizontal competition operated by the controlling shareholder, actual controller, and
other units under their control having material adverse effects on the Company
□ Applicable √ N/A
III. General meetings of shareholders held
Reference to
resolutions
Date of disclosure
Session Date of meeting published on the Resolutions
of resolutions
designated
website
Annual general
meeting of May 19, 2023 www.sse.com.cn May 20, 2023
All proposals
shareholders in 2022
were reviewed
1st extraordinary
and passed
general meeting of December 25, 2023 www.sse.com.cn December 26, 2023
shareholders in 2023
Extraordinary general meetings of shareholders convened at the request of preferred shareholders with
resumed voting rights
□ Applicable √ N/A
Explanation about the general meetings of shareholders
√ Applicable □ N/A
During the reporting period, the Company held 1 annual general meeting of shareholders and 1
extraordinary general meeting of shareholders. After being certified by Beijing Zhong Lun (Shenzhen)
Law Firm engaged by the Company, the convening and holding procedures of general meetings of
shareholders, the qualifications of the persons attending the meeting and conveners, the voting procedures
and results complied with the relevant provisions of the Company Law, the Rules for General Meetings of
Shareholders and other laws, regulations and normative documents as well as the provisions of the Articles
of Association, and were legal and valid. All proposals submitted by the Board of Directors of the
Company to the general meeting of shareholders were reviewed and passed.
IV. Implementation of and changes in arrangements of differentiated voting rights during the
reporting period
□ Applicable √ N/A
V. Governance of red-chip structure companies
□ Applicable √ N/A
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2023 Annual Report
VI. Directors, supervisors, and senior officers
(I) Changes in shareholding and remunerations of current directors, supervisors, senior officers and key technical staff and the former directors,
supervisors, senior officers and key technical staff who left the Company during the reporting period
√ Applicable □ N/A
Unit: Share
Total
remuneration
Number (inclusive of Whether or
of Number tax) received not receive
Beginning shares of shares Cause from the any
Expiry date of Change in
Name Title Gender Age date of term held as held as at of Company remuneration
term of office shareholding
of office at December change during the from any
January 31, 2023 reporting affiliate of
1, 2023 period the Company
(in RMB
0’000)
Chairman July 18, 2018
General December 31, August 2, 2024
LI Yi Manager Male 53 2021 0 0 - - 305.71 No
Key technical
- -
staff
YU March 29,
Director Male 63 August 2, 2024 0 0 - - 18.00 No
Zhuoping 2022
NING December 25,
Director Male 65 August 2, 2024 0 0 - - - No
Cunzheng 2023
August 3,
Director August 2, 2024
2021
Deputy
ZHANG
General Male 48 0 0 - - 57.58 No
Wei December 31,
Manager August 31, 2023
2021
(Left the
Company)
Employee
WANG Share
representative Female 42 July 15, 2021 August 2, 2024 78,124 128,124 50,000 78.97 No
Yingxia incentive
director
60 / 290
2023 Annual Report
Financial August 3,
Director 2021
CHEN Independent August 3,
Male 47 August 2, 2024 0 0 - - 18.00 No
Youchun director 2021
CHEN Independent December 25,
Female 40 August 2, 2024 0 0 - - - No
Han director 2023
LIANG Independent December 25,
Male 42 August 2, 2024 0 0 - - - No
Huaquan director 2023
Chairperson
GAO of the Board
Female 43 July 18, 2018 August 2, 2024 0 0 - - 73.68 No
Lijing of
Supervisors
SUN August 3,
Supervisor Male 42 August 2, 2024 3,000 3,000 - - 73.37 No
Hongdeng 2021
Employee
WANG
representative Female 47 July 18, 2018 August 2, 2024 0 0 - - 43.76 No
Yanyun
supervisor
CHEN Board Share
Female 33 April 29, 2022 August 2, 2024 18,750 93,750 75,000 55.06 No
Yasha Secretary incentive
Key technical Share
HU Fei Male 43 - - 190,316 265,316 75,000 - No
staff incentive
Key technical Share
YU Xin Male 43 - - 103,752 290,752 187,000 - No
staff incentive
WANG Key technical Share
Male 42 - - 101,752 240,752 139,000 - No
Lin staff incentive
WANG Key technical August 23, Share
Male 46 - 90,752 229,752 139,000 - No
Zeqin staff 2021 incentive
GUO Key technical Share
Male 33 - - 76,052 215,052 139,000 - No
Zuqiang staff incentive
Independent
NING director December 25,
Male 58 July 18, 2018 0 0 - - 18.00 No
Xiangdong (Left the 2023
Company)
TANG Independent December 25,
Male 61 July 18, 2018 0 0 - - 18.00 No
Guliang director 2023
61 / 290
2023 Annual Report
(Left the
Company)
Total - - - - - 662,498 1,466,498 804,000 - 760.13 -
Note: (1) As of the end of the reporting period, LI Yi held shares in the Company indirectly through Appotronics Holdings, Yuanshi Laser, Appotronics Daye,
Appotronics Hongye, Jinleijing, and Appotronics Chengye. WANG Yingxia, GAO Lijing, WANG Yanyun, HU Fei, YU Xin, GUO Zuqiang, WANG Lin, et. al. held
shares in the Company indirectly through the shareholding platforms Appotronics Hongye and Appotronics Daye. YU Xin and GUO Zuqiang held shares in the
Company indirectly through the shareholding platform Appotronics Daye. WANG Lin held shares in the Company indirectly through the shareholding platform
Appotronics Hongye;
(2) The Company held the 24th meeting of the second Board of Directors of the Company and the first extraordinary general meeting of shareholders for 2023 on
December 8, 2023 and December 25, 2023, respectively, at which Mr. NING Cunzheng was elected as a director of the second Board of Directors of the Company,
and Ms. CHEN Han and Mr. LIANG Huaquan were elected as independent directors of the second Board of Directors of the Company;
(3) In accordance with the relevant provisions of the Measures for the Administration of Independent Directors of Listed Companies, and given that the period of
acting as an independent director of the Company would exceed 6 consecutive years, Mr. NING Xiangdong and Mr. TANG Guliang, former independent directors of
the Company, resigned from the post of independent directors of the second Board of Directors of the Company on December 25, 2023; their remuneration disclosed
above is their total pre-tax remuneration received from the Company from January to December 2023;
(4) Mr. ZHANG Wei, former Deputy General Manager of the Company, resigned from the post of Deputy General Manager of the Company on August 31, 2023 due
to personal reasons; after resigning from the post of Deputy General Manager, he still acted as a director of the second Board of Directors of the Company; the
remuneration disclosed above is the total pre-tax remuneration received by Mr. ZHANG Wei during his employment at the Company;
(5) The Company did not disclose the remuneration received by the key technical staff not acting as the director, supervisor, or senior officer of the Company due to
trade secret.
Name Main work experience
LI Yi, male, born in June 1970, Chinese, holds a bachelor’s degree from Tsinghua University, and a master’s degree and a doctor’s degree from the
University of Rochester. He founded the Company in October 2006. He has served as the Chairman and the General Manager of the Company since
December 2010. Meanwhile, he is a member of the Expert Advisory Committee for the Formulation of the Compendium of IP Powerhouse Strategy
LI Yi and the Expert Advisory Committee for Building IP Powerhouse. In 2020, he was honored as the Person of Innovation and Entrepreneurship and
Advanced Model Person for the 40th Anniversary of Shenzhen Special Economic Zone, and the “2020 Shenzhen Science and Technology Award
Mayor Award”. In 2021, he was awarded the title of “2021 Quality Development Leader”, and was engaged as a “Shenzhen Advisor for Investment
Promotion”.
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2023 Annual Report
YU Zhuoping, male, born in January 1960, Chinese, with no right of permanent residence abroad, obtained a bachelor’s degree and a master’s degree
in mechanical engineering from Tongji University, and a doctorate degree in automotive engineering from Tsinghua University. He is currently a
professor at Tongji University, director of the National Intelligent New Energy Vehicle Collaborative Innovation Center, vice chairman of the China
Society of Automotive Engineers, vice chairman and director of the Expert Committee of China Hydrogen Alliance, chairman of Tongji Automobile
YU Design and Research Institute Co., Ltd., chairman of Shanghai Intelligent New Energy Vehicle Science and Technology Innovation Function Platform
Zhuoping
Co., Ltd., director of Shanghai Motor Vehicle Inspection Certification & Tech Innovation Center Co., Ltd., director of Appotronics Corporation
Limited, non-executive director of Huazhong In-Vehicle Holdings Company Limited, independent director of Weichai Power Co., Ltd., independent
director of Huayu Automotive Systems Co., Ltd., independent director of Ningbo Shenglong Automotive Powertrain System Co., Ltd., and
independent director of Jiangling Motors Co., Ltd.
NING Cunzheng, male, born in October 1958, U.S. citizen with permanent residency in the People’s Republic of China, Ph.D. in Physics from the
University of Stuttgart, Germany. Mr. NING Cunzheng has been engaged in semiconductor optoelectronic device research for long and created many
world records and leading achievements. He is one of the leaders in the field of semiconductor nano-lasers and devices in China and abroad, and the
inventor of white light laser. At present, he is a Chair Professor of Shenzhen Technology University, Dean of the College of Integrated Circuits and
Optoelectronic Chips, doctoral advisor, part-time professor at Tsinghua University, and a Director of Appotronics Corporation Limited. Mr. NING
Cunzheng used to be a senior scientist at NASA’s AMES Research Center, where he founded and led the Nano-optics Research Team, and became
the head of the Nanotechnology Program later. In 2006, he was a visiting professor at ISSP, Institute of Solid State Physics, University of Tokyo,
NING Japan. Since 2006, he has acted as a tenured professor in the Department of Electrical Engineering at Arizona State University and a part-time
Cunzheng
professor in the Department of Physics Chemistry and Materials Science at the same university. In 2013, he was a visiting professor at the Technical
University of Berlin, Germany and Tsinghua University. He was elected as a national high-end talent in 2012, and has been a permanent professor
of the Department of Electronics at Tsinghua University since 2014, and founded the International Center for Nanophotonics Research at Tsinghua
University in 2018, serving as the first director. In 2016, he was honored as the Person of the Year by Scientific Chinese. In 2023, he was elected as
a Class A Talent of Shenzhen Pengcheng Peacock Program. Mr. NING Cunzheng is a fellow of the International Institute of Electrical and Electronics
Engineers, a fellow of the Optical Society of America, and a member of the International Academy of Electromagnetic Sciences and the National
Academy of Inventors.
ZHANG Wei, male, born in November 1975, Chinese, received a doctorate degree from Indiana University, and is a practicing lawyer in the State
of New York. He is currently the director of Appotronics Corporation Limited, and has served as the legal director of Legend Holdings Co., Ltd., the
ZHANG Wei
general manager of the legal department of China Vanke Co., Ltd., the vice president of Qifei International Development Co., Ltd., the vice president
of 360 Group, and the independent director and deputy general manager of Appotronics Corporation Limited.
WANG Yingxia, female, born in September 1982, Chinese, with no right of permanent residence abroad, got the bachelor degree. She is currently
WANG the director and financial director of Appotronics Corporation Limited, and has successively served as the financial director and financial manager
Yingxia
of YLX Incorporated, and the deputy director of the finance department of Appotronics Corporation Limited.
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2023 Annual Report
CHEN Youchun, male, born in April 1976, Chinese, with no right of permanent residence abroad, obtained a bachelor’s degree from Southwest
University of Political Science and Law and Northumbria University in the United Kingdom, a master’s degree from Wuhan University, and a
CHEN doctorate degree from Southwest University of Political Science and Law. He is currently a partner of Beijing JunZeJun (Shenzhen) Law Offices,
Youchun
and an independent director of Appotronics Corporation Limited, an independent director of Nuode New Materials Co., Ltd., an independent director
of ValueHD Corporation, and an independent director of Joy Wing Mau Fruit Technologies Corporation Limited.
CHEN Han, female, born in January 1983, Chinese, with no right of permanent residence abroad, doctor in management (accounting). She is currently
an associate professor and master advisor of Xiamen National Accounting Institute, the director of the Institute of Management Accounting and
Financial Management of Xiamen National Accounting Institute, and an independent director of Appotronics Corporation Limited, an independent
director of XTC New Energy Materials (Xiamen) Co., Ltd., an independent director of Hengerda New Materials (Fujian) Co., Ltd., an independent
CHEN Han director of Haian Rubber Group Co., Ltd. (not listed), an independent director of Zonergy Corporation (not listed), and an executive director of
Xiamen Cross-border Enterprise Accounting Institute. She used to be an independent director of Tianma Microelectronics Co., Ltd., an independent
director of Shanying International Holdings Co., Ltd., an independent director of Chempartner Pharmatech Co., Ltd., an independent director of YLZ
Information Technology Co., Ltd., an independent director of Xiamen Nalong Science and Technology Co., Ltd., a research assistant at Accounting
Development Center, Xiamen University, and a visiting scholar at Western Illinois University.
LIANG Huaquan, male, born in September 1981, Chinese, with no right of permanent residence abroad, master’s degree, professional qualification
in law, non-practicing member of certified public accountants, and certified tax accountant. He is currently a partner of Shanghai Infaith Group Co.,
Ltd. and the founder of ZEN Management Consulting (Shenzhen) Co., Ltd., and an independent director of Appotronics Corporation Limited, a
director of Guangdong Transtek Medical Electronics Co., Ltd., a director of Guangdong Weide Information Technology Co., Ltd., an independent
LIANG director of Genbyte Technology Inc., an independent director of Shenzhen Creality 3D Technology Co., Ltd. (not listed), an independent director of
Huaquan
Zhejiang Hengye Electronics Co., Ltd. (not listed), and an independent director of Shenzhen Coocaa Network Technology Co., Ltd. (not listed). He
used to be a financial specialist of AVIC Shenzhen Co., Ltd, a supervisor of Shenzhen Stock Exchange, an independent director of Shenzhen Seastar
Technology Co., Ltd., an independent director of Foshan NationStar Optoelectronics Co., Ltd., an independent director of YGSOFT Inc., and an
independent director of Zhuhai Winbase International Chemical Tank Terminal Co., Ltd.
GAO Lijing, female, born in June 1980, Chinese, with no right of permanent residence abroad, master’s degree student at Chinese University of
Hong Kong, obtained legal professional qualification certificate through the national judicial examination. She is currently the chairperson of the
GAO Lijing supervisory board and the deputy general manager of the intellectual property & standards center of Appotronics Corporation Limited, and has
worked in the South China Intellectual Property Office of Foxconn Technology Group Co., Ltd. and the Intellectual Property and Legal Affairs Center
of Netac Technology Co., Ltd.
WANG WANG Yanyun, female, born in April 1977, Chinese, with no right of permanent residence abroad, got the bachelor degree. She is currently a
Yanyun supervisor and deputy director of technology project department of Appotronics Corporation Limited, and joined the Company in July 2013.
SUN SUN Hongdeng, male, born in January 1981, Chinese, with no right of permanent residence abroad, a Master of Arts from Hong Kong Metropolitan
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2023 Annual Report
Hongdeng University. He is currently a supervisor and director of the audit department of Appotronics Corporation Limited, and once worked for Huawei
Technologies Co., Ltd.
CHEN Yasha, female, born in January 1990, Chinese, with no right of permanent residence abroad, obtained the master’s degree in finance, and the
qualification certificate of board secretary of the science and technology innovation board and the qualification certificate of board secretary of the
CHEN Yasha
new third board. She joined the Company’s board office in September 2018 and is currently the secretary of the Board of Directors of Appotronics
Corporation Limited.
HU Fei, male, born in March 1980, Chinese, with no right of permanent residence abroad, received bachelor’s, master’s and doctoral degrees from
Tsinghua University, and master’s degree from Rensselaer Polytechnic Institute. He is currently the key technical personnel and general manager of
HU Fei the product technology research and development center (II) of Appotronics Corporation Limited, and has successively served as a software engineer
of Optical Research Associates, the vice president of research and development of YLX Incorporated and Appotronics Corporation Ltd., and the
chief technology officer and deputy general manager of Appotronics Corporation Limited.
YU Xin, male, born in February 1980, Chinese, with no right of permanent residence abroad, received a doctorate from Tsinghua University. He is
currently the key technical personnel and vice president of Appotronics Corporation Limited, and has successively served as a senior software
YU Xin engineer at Schlumberger Technologies Co., Ltd., a senior researcher at Shenzhen Zhongguang Industrial Technology Research Institute, and a senior
researcher, the general manager of the Cinema Solutions Business Unit, and the general manager of the Innovation Center and Cinema Business
Division of Appotronics Corporation Limited.
WANG Lin, male, born in September 1981, Chinese, with no right of permanent residence abroad, obtained a bachelor’s degree from the University
of Science and Technology of China, a master’s degree from Tsinghua University, and a doctorate degree from the Polytechnic University of Madrid,
WANG Lin Spain. He is currently the key technical personnel of Appotronics Corporation Limited, the deputy general manager of the product technology research
and development center (II), and has successively served as a senior optical engineer of Shanghai Philips Lighting (China) Investment Co., Ltd., and
a senior optical researcher of Appotronics Corporation Limited.
WANG Zeqin, male, born in December 1977, Chinese, with no right of permanent residence abroad, obtained a bachelor’s degree from Jilin
University, majoring in optoelectronic technology. He is currently the key technical personnel and the person in charge of the product technology
WANG research and development center (Ⅰ) of Appotronics Corporation Limited, and has successively served as an R&D engineer and an R&D expert of O-
Zeqin
Net Information Technology (Shenzhen) Co., Ltd., a researcher of YLX Incorporated, the R&D director of R&D center, the person in charge of core
device R&D center and complete machine R&D center of Appotronics Corporation Limited.
GUO Zuqiang, male, born in April 1990, Chinese, with no right of permanent residence abroad, received a master’s degree from Tsinghua University.
GUO He is currently the key technical personnel and the R&D director of the product technology research and development center (I) of Appotronics
Zuqiang Corporation Limited, and has successively served as an optical engineer of YLX Incorporated and the R&D manager of Appotronics Corporation
Limited.
Other information
65 / 290
2023 Annual Report
□ Applicable √ N/A
(II) Posts held by current directors, supervisors and senior officers and the former directors, supervisors and senior officers who left the Company during
the reporting period
1. Posts held at corporate shareholders of the Company
√ Applicable □ N/A
Posts held at corporate Beginning date of Expiry date of
Name Corporate shareholder
shareholder term of office term of office
Shenzhen Appotronics Holdings Limited Executive Director January 2014 -
Representative of Managing
Shenzhen Appotronics Daye Investment Partnership (LP) October 2016 -
Partner
Representative of Managing
Shenzhen Appotronics Hongye Investment Partnership (LP) December 2015 -
Partner
Representative of Managing
LI Yi Shenzhen Jinleijing Investment Limited Partnership (LP) October 2016 -
Partner
Shenzhen Yuanshi Laser Industrial Investment Consulting Representative of Managing
June 2016 -
Partnership (LP) Partner
Representative of Managing
Shenzhen Appotronics Chengye Consulting Partnership (LP) July 2017 -
Partner
Blackpine Investment Corp. Limited Director September 2018 -
Explanation
about the posts
held at
None
corporate
shareholders of
the Company
2. Posts held at other entities
√ Applicable □ N/A
Beginning date Expiry date of
Name Other entity Posts held at other entity
of term of office term of office
YLX Incorporated Chairman January 2007 -
Shenzhen Qingda Yifeng Investment Consulting
LI Yi Managing Partner October 2016 -
Partnership (LP)
Shenzhen Appotronics Deye Consulting Partnership Representative of Managing Partner May 2018 -
66 / 290
2023 Annual Report
(LP)
Shenzhen Appotronics Optoelectronic Technology Executive Director, General Manager, and Legal
October 2017 -
Development Co., Ltd. Representative
YLX (Hong Kong) Limited Director June 2008 -
APEX Fund Managed Limited Director November 2013 -
Long Pine Investment, INC. Director June 2020 -
Atria Light Ltd. Director April 2018 -
Atria Light Hong Kong Limited Director April 2018 -
Longpines Financial Investment, INC. Director April 2019 -
Tongji University Professor 1985 -
National Intelligent New Energy Vehicle
Director 2012 -
Collaborative Innovation Center
Tongji Automobile Design and Research Institute
Chairman December 2017 -
Co., Ltd.
Shanghai Intelligent New Energy Vehicle Science
and Technology Innovation Function Platform Co., Chairman March 2018 -
Ltd.
YU Zhuoping Shanghai Motor Vehicle Inspection Certification &
Director April 2021 -
Tech Innovation Center Co., Ltd.
Huazhong In-Vehicle Holdings Company Limited
Non-executive Director August 2019 -
(6830.HK)
Weichai Power Co., Ltd. (000338.SZ) Independent director July 2020 -
Huayu Automotive Systems Co., Ltd. (600741.SH) Independent director July 2021 -
Ningbo Shenglong Automotive Powertrain System
Independent director October 2020 -
Co., Ltd. (603178.SH)
Jiangling Motors Co., Ltd. (000550.SZ) Independent director October 2021 -
Chair Professor, Dean of the College of Integrated
NING Shenzhen Technology University Circuits and Optoelectronic Chips, doctoral April 2022 -
Cunzheng advisor
Tsinghua University Part-time professor January 2023 -
WANG
Shenzhen Tiwu Technology Co., Ltd. Supervisor January 2018 -
Yingxia
Hengqin Vanke Cloudland Commercial Services Co.,
Director & General Manager May 2017 -
ZHANG Wei Ltd.
Lijiang Banyan Tree Property Services Co., Ltd. Director May 2018 -
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2023 Annual Report
Yangshuo Banyan Tree Hotel Co., Ltd. Director September 2018 -
Zhenro Services Group Limited Director June 2020 -
Beijing JunZeJun (Shenzhen) Law Offices Partner July 2004 -
Nuode New Materials Co., Ltd. (600110.SH) Independent director February 2018 -
CHEN
ValueHD Corporation (301318.SZ) Independent director July 2020 -
Youchun
Joy Wing Mau Fruit Technologies Corporation -
Independent director October 2019
Limited (not listed)
Associate professor, master advisor, director of -
Xiamen National Accounting Institute the Institute of Management Accounting and November 2014
Financial Management
XTC New Energy Materials (Xiamen) Co., Ltd. April 2020 -
Independent director
(688778.SH)
CHEN Han
Hengerda New Materials (Fujian) Co., Ltd. October 2021 -
Independent director
(300946.SZ)
Haian Rubber Group Co., Ltd. (not listed) Independent director December 2022 -
Zonergy Corporation (not listed) Independent director December 2022 -
Xiamen Cross-border Enterprise Accounting Institute Standing director January 2018 -
Shanghai Infaith Group Co., Ltd. Partner August 2023 -
ZEN Management Consulting (Shenzhen) Co., Ltd. Founder July 2021 -
Guangdong Transtek Medical Electronics Co., Ltd. April 2022 -
Director
(300562.SZ)
Guangdong Weide Information Technology Co., Ltd. November 2022 -
Director
LIANG (688171.SH)
Huaquan Genbyte Technology Inc. (003028.SZ) Independent director January 2023 -
Zhejiang Hengye Electronics Co., Ltd. (not listed) Independent director January 2023 -
Shenzhen Coocaa Network Technology Co., Ltd. (not October 2020 -
Independent director
listed)
Shenzhen Creality 3D Technology Co., Ltd. (not December 2023 -
Independent director
listed)
GAO Lijing GDC Technology Limited Director March 2024 -
Explanation
about the posts
None
held at other
entities
68 / 290
2023 Annual Report
(III) Remunerations of directors, supervisors, senior officers and key technical staff
√ Applicable □ N/A
In RMB 0’000
Under the relevant provisions of the Articles of Association and the Company’s regulations, the
remuneration of the Company’s directors shall be reviewed by the Remuneration and Appraisal Committee
Decision-making procedure regarding the of the Board of Directors, and then be submitted by the Board of Directors directly to the general meeting
remunerations of directors, supervisors and senior of shareholders for deliberation; the remuneration of supervisors shall be submitted by the Board of
officers Supervisors directly to the general meeting of shareholders for deliberation; and the remuneration of senior
officers shall be reviewed by the Remuneration and Appraisal Committee, and then be submitted to the
Board of Directors for deliberation.
Whether the director withdraws from the
discussion of the Board of Directors on the Yes
remuneration of such director
Specific information about the suggestions made by The Company held the 2024 second meeting of the Remuneration and Appraisal Committee under the
the Remuneration and Appraisal Committee or a second Board of Directors on April 25, 2024, to deliberate the Proposal on the Remuneration for 2023
special meeting of independent directors on the and Remuneration Plan for 2024 of Directors of the Company, the Proposal on the Remuneration for 2023
remuneration of directors, supervisors, and senior and Remuneration Plan for 2024 of Supervisors of the Company, and the Proposal on the Remuneration
officers for 2023 and Remuneration Plan for 2024 of Senior Officers of the Company.
For directors, supervisors and senior officers who receive remuneration from the Company, their
remuneration is determined in accordance with the relevant provisions of the Articles of Association and
other relevant provisions in consideration of the market, industry level and personal ability, and the degree
of contribution to the Company; non-independent directors who do not receive remuneration from the
Basis for determining the remunerations of Company receive directors’ allowances in accordance with the remuneration plan approved by the general
directors, supervisors and senior officers meeting of shareholders; independent directors receive independent directors’ allowances in accordance
with the remuneration plan approved by the general meeting of shareholders.
The Board of Directors of the Company has a Remuneration and Appraisal Committee to conduct
performance appraisal on the directors and senior officers of the Company, and to formulate and review
the remuneration policies and solutions, etc.
Remunerations actually paid to directors, During the reporting period, the remunerations actually paid to directors, supervisors and senior officers
supervisors and senior officers are consistent with the relevant information disclosed by the Company.
Total remunerations paid to directors, supervisors
and senior officers as of the end of the reporting 760.13
period
Total remunerations paid to key technical staff as of
923.62
the end of the reporting period
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2023 Annual Report
Note: Since Mr. LI Yi, Chairman and General Manager of the Company, is also a key technician of the Company, the remunerations paid to key technical staff as
stated above included his remuneration.
(IV) Changes in directors, supervisors, senior officers and key technical staff
√ Applicable □ N/A
Name Position Change Cause of change
NING
Director Elect
Cunzheng As deliberated and passed at the 24th meeting of the second Board of Directors of the Company and the
Independent first extraordinary general meeting of shareholders for 2023, Mr. NING Cunzheng was elected as a
CHEN Han Elect
director director of the second Board of Directors of the Company; Ms. CHEN Han and Mr. LIANG Huaquan
LIANG Independent were elected as independent directors of the second Board of Directors of the Company.
Elect
Huaquan director
NING Independent In accordance with the relevant provisions of the Measures for the Administration of Independent
Left the Company
Xiangdong director Directors of Listed Companies, and given that the period of acting as an independent director of the
Company will exceed 6 consecutive years, Mr. NING Xiangdong and Mr. TANG Guliang, former
Independent
TANG Guliang Left the Company independent directors of the Company, resigned from the post of independent directors of the second
director
Board of Directors of the Company.
Deputy General
ZHANG Wei Left the Company Resigned from the post of Deputy General Manager due to personal reasons.
Manager
(V) Penalties imposed by the securities regulatory authorities in the past three years
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
VII. Board meetings held during the reporting period
Session Date of meeting Resolutions
19th meeting of the second The meeting reviewed and passed 22 proposals, including the Full Text and Summary of the Annual
April 26, 2023
Board of Directors Report 2022 and the Report on the Work of the Board of Directors for 2022.
The meeting reviewed and passed 4 proposals, including the Proposal on Adjustment to the Grant Price
20th meeting of the second
June 25, 2023 of the Restricted Share Incentive Plan and the Proposal on Discarding Certain Restricted Shares
Board of Directors
Granted but Not Vested.
21st meeting of the second August 16, 2023 The meeting reviewed and passed 3 proposals, including the Full Text and Summary of the Semiannual
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2023 Annual Report
Board of Directors Report for 2023 and the 2023 Semiannual Special Report on the Deposit and Use of Offering Proceeds.
22nd meeting of the second The meeting reviewed and passed 4 proposals, including the Third Quarter Report in 2023 and the
October 25, 2023
Board of Directors Proposal on Discarding Certain 2021 Second Restricted Shares Granted but Not Vested.
23rd meeting of the second The meeting reviewed and passed the Proposal on External Investment to Establish a Wholly-owned
November 16, 2023
Board of Directors Subsidiary and Sub-subsidiary.
The meeting reviewed and passed 9 proposals, including the Proposal on Adding Non-independent
24th meeting of the second
December 8, 2023 Directors for the Second Board of Directors of the Company and the Proposal on Adding Independent
Board of Directors
Directors for the Second Board of Directors of the Company.
VIII. Performance of duties by the directors
(I) Attendance by the directors of the meetings of the Board of Directors and shareholders
Attendance of the
Attendance of the meetings of the Board of Directors general meetings of
shareholders
Whether or
Whether the
not an Meetings Meetings
Director director has
independent the director Meetings attended Meetings Absence General meetings of
been absent
director should have attended in through attended by times shareholders
from two
attended in person communication proxy attended
consecutive
2023 equipment
meetings
LI Yi No 6 6 4 0 0 No 2
YU Zhuoping No 6 6 4 0 0 No 2
NING Cunzheng No - - - - - No -
ZHANG Wei No 6 6 4 0 0 No 2
WANG Yingxia No 6 6 4 0 0 No 2
CHEN Youchun Yes 6 6 4 0 0 No 2
CHEN Han Yes - - - - - No -
LIANG Huaquan Yes - - - - - No -
NING Xiangdong
(Resigned Yes 6 6 6 0 0 No 2
independent director)
TANG Guliang
(Resigned Yes 6 6 4 0 0 No 2
independent director)
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2023 Annual Report
Explanation about absence from two consecutive meetings of the Board of Directors
□ Applicable √ N/A
Meetings of the Board of Directors held in the current 6
year
Where: Face-to-face meetings 0
Meeting held through communication equipment 4
Meetings held both in the form of face-to-face 2
meeting and through communication equipment
(II) Objections raised by directors to matters of the Company
□ Applicable √ N/A
(III) Others
□ Applicable √ N/A
IX. Specific-purpose committees under the Board of Directors
√ Applicable □ N/A
(I) Members of specific-purpose committees under the Board of Directors
Category of specific-purpose committee Member
Strategy and ESG Committee LI Yi (Chairperson), YU Zhuoping, NING Cunzheng
Audit Committee CHEN Han (Chairperson), CHEN Youchun, LIANG Huaquan
Nomination Committee CHEN Youchun (Chairperson), LIANG Huaquan, LI Yi
Remuneration and Appraisal Committee LIANG Huaquan (Chairperson), CHEN Han, NING Cunzheng
(II) The Strategy and ESG Committee held 3 meetings during the reporting period
Major opinions Performance of
Date of meeting Content of meeting
and suggestions other duties
The meeting reviewed and passed the Proposal on Requesting the General Meeting of Shareholders of the
April 26, 2023 Company to Authorize the Board of Directors to Issue Shares to Specific Targets Through a Simplified
Procedure.
All proposals are
The meeting reviewed and passed the Proposal on External Investment to Establish a Wholly-owned
November 15, 2023 reviewed and None
Subsidiary and Sub-subsidiary.
passed
The meeting reviewed and passed 2 proposals, including the Proposal on Upgrading the Strategy
December 8, 2023 Committee under the Board of Directors to the Strategy and ESG Committee under the Board of Directors
of the Company.
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2023 Annual Report
(III) The Audit Committee held 5 meetings during the reporting period
Major opinions Performance of
Date of meeting Content of meeting
and suggestions other duties
April 3, 2023 Reported affairs during the audit on the financial statements for 2022.
Reported affairs at the end of the audit on the financial statements for 2022; the meeting reviewed and
April 26, 2023
passed 12 proposals, including the Final Account Report for 2022. All proposals are
The meeting reviewed and passed 4 proposals, including the Full Text and Summary of the Semiannual reviewed and None
August 16, 2023
Report for 2023. passed
October 25, 2023 The meeting reviewed and passed 2 proposals, including the Third Quarter Report in 2023.
December 25, 2023 Reported affairs at the planning stage of the audit on the financial statements for 2023.
(IV) The Nomination Committee held 2 meetings during the reporting period
Major opinions Performance of
Date of meeting Content of meeting
and suggestions other duties
The meeting reviewed and passed the Proposal on Engaging the Securities Affairs Representative of the
October 25, 2023 All proposals are
Company.
reviewed and None
The meeting reviewed and passed 3 proposals, including the Proposal on Adding Non-independent
December 8, 2023 passed
Directors for the Second Board of Directors of the Company.
(V) The Remuneration and Appraisal Committee held 3 meetings during the reporting period
Major opinions Performance of
Date of meeting Content of meeting
and suggestions other duties
The meeting reviewed and passed 2 proposals, including the Proposal on the Remuneration for 2022 and
April 26, 2023
Remuneration Plan for 2023 of Directors of the Company.
All proposals are
The meeting reviewed and passed 2 proposals, including the Proposal on Discarding Certain Restricted
June 25, 2023 reviewed and None
Shares Granted but Not Vested.
passed
The meeting reviewed and passed 2 proposals, including the Proposal on Discarding Certain 2021
October 25, 2023
Second Restricted Shares Granted but Not Vested.
(VI) Specific description of objections
□ Applicable √ N/A
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2023 Annual Report
X. Risks of the Company identified by the Board of Supervisors
□ Applicable √ N/A
The Board of Supervisors raised no objections with respect to matters under supervision during the
reporting period.
XI. Employees of the parent company and major subsidiaries as of the end of the reporting period
(I) Employees
Number of active employees of the parent company 960
Number of active employees of major subsidiaries 459
Total number of active employees 1,419
Number of retired employees for whom the parent
company and major subsidiaries need to pay certain 0
expenses
Profession
Category Number of employees
Production staff 601
Sales staff 212
Technology staff 428
Financial staff 36
Management staff and administrative staff 142
Total 1,419
Education
Level of education Number
Master and above 189
Undergraduate 626
College or below 604
Total 1,419
(II) Compensation policy
√ Applicable □ N/A
During the reporting period, we continuously followed the principle of “efforts-based distribution,
priority of efficiency, equity, and sustainable development” in remuneration management, and constantly
improved the remuneration and performance management system in consideration of the development
strategy, annual operating objectives, and economic benefits of the Company with reference to market and
industry conditions. The remuneration of employees of the Company is linked with the economic benefits
of the Company and achievement of objectives for individual posts, and adopts the remuneration structure
of “post-based salary, competence-based grade, and performance-based bonus”, consisting of the basic
salary, welfare subsidies, performance bonuses, etc.; moreover, the appraisal incentive programs are
formulated according to the category of posts for employees at different posts, so as to motivate employees
at all posts.
For directors, supervisors and senior officers who receive remuneration from the Company, their
remuneration is determined in accordance with the relevant provisions of the Articles of Association and
other relevant provisions in consideration of the market, industry level and personal ability, and the degree
of contribution to the Company; for employees at other posts, the Company determined their basic
74 / 290
2023 Annual Report
remuneration following international and local laws and regulations with reference to market and industry
conditions and post-specific duties, competence, work experience, etc., and determined their performance-
based remuneration according to actual appraisal results.
(III) Training programs
√ Applicable □ N/A
To support the long-term strategic development of the Company, maintain the head start advantages
in technologies, and effectively safeguard the continuous development and empowerment of technical
personnel, the Company continuously improved the talent development system and talent training program
designing to support the strategy with talent training efforts, to empower both the organization and
individuals, to continuously improve the organizational capabilities, and to eventually achieve the
dynamic balance between the supply and demand of talents for the Company.
During the reporting period, we designed training programs and developed the content of learning
intended for problem solution around the core objectives of “improving the organization performance and
achieving business results”. Thanks to the designing and implementation of a multi-level training system,
we enhanced the efforts of building a learning organization, created the atmosphere of active participation
in training and sharing, and established a training and education system intended for the growth and
continuous competence improvement for employees. In 2023, the key training programs conducted by the
Company include “Appotronics Lecture Hall”, “Meta-capability Classroom”, “Leadership Program”,
“MorningLight Plan”, “Starlight Plan”, and “Learning Roadmap and Improvement of Post-specific
Expertise and Skills”, etc. to continuously improve the talent education system, enhance training
management, assist employees in improving business capabilities in line with the development of the
Company in multiple levels from multiple perspectives, so as to match with the requirements for strategic
and business development.
In 2024, we will closely follow the requirements for strategic and business development and begin
with the end in mind to drive the joint development of both employees and the Company.
(IV) Outsourced workers
√ Applicable □ N/A
Total man-hours of outsourced workers 11,855 hours
Total remunerations paid to outsourced RMB 288,187.68
workers
XII. Proposals for profit distribution or capitalization of the capital reserve
(I) Establishment, implementation or adjustment of the cash dividend policy
√ Applicable □ N/A
1. Formulation of policies for cash dividend:
In April 2022, the Board of Directors of the Company formulated the Plan of Returns to Shareholders
for the Next Three Years in accordance with relevant laws and regulations and the Articles of Association,
which established a clear profit distribution mechanism on the basis of actively providing returns to
shareholders and achieving sustainable development of the Company.
2. Implementation of the policies for cash dividend:
75 / 290
2023 Annual Report
The Company held the 19th meeting of the second Board of Directors on April 26, 2023 and the 2022
annual general meeting of shareholders on May 19, 2023, at which the Announcement on the Profit
Distribution Proposal for 2022 was reviewed and passed. The specific plan is as follows: on the basis of
the total shares on the record date of interest distribution, deducted by shares in the special securities
account for repurchase by the Company, the Company proposed to distribute to all shareholders a cash
dividend of RMB 0.54 (tax inclusive) for every 10 shares, leading to a total of RMB 24,635,207.05 (tax
inclusive) for cash dividend distribution. The Company would neither capitalize its capital reserve nor
grant bonus shares in this profit distribution.
Meanwhile, in accordance with the relevant provisions of the Guidelines of Shanghai Stock Exchange
on Self-regulatory Supervision of Listed Companies No. 7 - Repurchase of Shares, the amount of RMB
19,371,239.41 (excluding the stamp tax, transaction commissions, and other transaction expenses) in the
repurchase conducted by the Company in 2022 shall be considered as cash dividend; the repurchase
amount accounted for 16.22% of the net profit attributable to shareholders of the listed company for 2022.
We disclosed the Announcement on Implementing Interest Distribution for 2022 on June 14, 2023,
in which the record date for the profit distribution is June 19, 2023, and the ex-dividend date is June 20,
2023. The Company’s plan of interest distribution for 2022 has been implemented.
(II) Special explanation about the cash dividend policy
√ Applicable □ N/A
Whether the policy is in compliance with the provisions of the Articles of
Association or the requirements of resolutions passed at the general meeting of √ Yes □ No
shareholders
Are the distribution standards and ratios specific and clear √ Yes □ No
Are the relevant decision-making procedure and mechanism complete √ Yes □ No
Whether independent directors perform their duties and roles √ Yes □ No
Whether small- and medium-sized shareholders have sufficient opportunities to
express their opinions and requests, and are their legitimate rights and interests √ Yes □ No
under sufficient protection
(III) If the Company made a profit in the reporting period and there’s profit distributable by the
parent company to the shareholders, but the Company does not propose to distribute profits in
cash, the Company shall explain the reason in detail and use of the undistributed profit.
□ Applicable √ N/A
(IV) Proposals for profit distribution and capitalization of capital reserve in the current period
√ Applicable □ N/A
In RMB
Number of bonus shares distributed per 10 shares -
Cash dividends distributed per 10 shares (inclusive of tax) 0.7
Number of shares distributed out of the capital reserve per 10 shares -
Amount of cash dividend (tax inclusive) 32,084,193.96
Net profit attributable to the shareholders of ordinary shares of the listed
103,186,743.57
company reported in the consolidated financial statements for the year
% of the net profit attributable to the shareholders of ordinary shares of the
31.09
listed company reported in the consolidated financial statements
The amount of repurchase of shares by cash included in cash dividends -
76 / 290
2023 Annual Report
Total dividend amount (tax inclusive) 32,084,193.96
Ratio of the total distribution amount to the net profit attributable to the
shareholders of ordinary shares of the listed company reported in the 31.09
consolidated financial statements (%)
As audited by Pan-China Certified Public Accountants (Special General Partnership), in 2023,
Appotronics realized the net profit attributable to shareholders of the listed company of RMB
103,186,743.57, the parent company realized the net profit of RMB 93,535,832.55, and the distributable
profit of the parent company as of the end of the year is RMB 639,288,806.42.
The Company proposed to distribute to all shareholders a cash dividend of RMB 0.7 (tax inclusive)
for every 10 shares. As of the disclosure date of this announcement, the Company has a total of
462,605,378 shares. With the 4,259,750 shares in the special securities account for repurchase excluded,
the cash dividend calculated to be distributed is RMB 32,084,193.96 (tax inclusive), accounting for 31.09%
of the net profit attributable to shareholders of the listed company in 2023. The Company would neither
capitalize its capital reserve nor grant bonus shares this year.
XIII.Share incentive plan, employee stock ownership plan or other employee incentive measures of
the Company and their effect
(I) Overview of share incentives
√ Applicable □ N/A
1.Share incentive plan during the reporting period
In RMB
Price of
Number of Proportion of
Name of Type of Number of Proportion of target
target target shares
plan incentive grantees grantees (%) shares
shares (%)
granted
2021
Restricted Type II 17.286,
Share restricted 18,500,000 4.05 242 17.05 18.286,
Incentive shares 20.786
Plan
2021
Second
Type II
Restricted 19.841,
restricted 10,500,000 2.30 64 4.51
Share 22.841
shares
Incentive
Plan
2022
Restricted Type II
Share restricted 10,500,000 2.30 107 7.54 15.341
Incentive shares
Plan
Note: (1) The proportion of grantees is the ratio of grantees to the number of employees of the Company
at the end of the reporting period;
(2) The price at which the target shares are granted under the share incentive plan above has been adjusted
according to the implementation of past profit distributions.
2.Implementation progress of the share incentive during the reporting period
√ Applicable □ N/A
Unit: Share
Number Number Number of Number of Grant Number Number
of equity of equity restricted restricted price/ex of of
Name of
incentives incentive shares that shares that ercise equity restricted
plan
granted s newly could be were price incentiv shares
at the granted vested/exerci vested/exercise (RMB) es vested/exe
77 / 290
2023 Annual Report
beginning in the sed/unlocked d/unlocked in granted rcised/unl
of the reporting in the the reporting at the ocked at
year period reporting period end of the end of
period the the period
period
2021
Restricte
4,084,87
d Share 8,529,528 - - - - -
8
Incentive
Plan
2021
Second
Restricte 10,500,00 19.841, 5,712,00
- 1,926,400 1,804,800 1,804,800
d Share 0 22.841 0
Incentive
Plan
2022
Restricte
4,255,58
d Share 8,648,080 - 3,399,000 3,299,000 15.341 3,299,000
0
Incentive
Plan
3.Completion of appraisal indicators for equity incentive and the share-based payment expenses
recognized during the reporting period
√ Applicable □ N/A
In RMB
Share-based payment
Completion of company-
expenses recognized
Name of plan level appraisal indicators
during the reporting
during the reporting period
period
2021 Restricted Share Incentive Plan Not achieved -18,247,493.11
2021 Second Restricted Share
Achieved 4,881,665.07
Incentive Plan
2022 Restricted Share Incentive Plan Achieved 6,697,653.24
Total - -6,668,174.80
(II) Incentives already disclosed in the interim announcements about which no new information is
available
√ Applicable □ N/A
Summary Reference
The Company held the 20th meeting of the second Board of
Refer to the relevant announcements
Directors and the 19th meeting of the second Board of
disclosed by the Company at the
Supervisors on June 25, 2023, deliberating and approving the
website of the Shanghai Stock
Proposal on Adjustment to the Grant Price of the Restricted
Exchange (www.sse.com.cn) on June
Share Incentive Plan, and the Proposal on Discarding Certain
27, 2023 for details.
Restricted Shares Granted but Not Vested, etc.
The Company held the 22nd meeting of the second Board of
Directors and the 21th meeting of the second Board of Refer to the relevant announcements
Supervisors on October 25, 2023, at which the Proposal on disclosed by the Company at the
Discarding Certain 2021 Second Restricted Shares Granted website of the Shanghai Stock
but Not Vested and the Proposal on Vesting Criteria for the Exchange (www.sse.com.cn) on
First Vesting Period in the Initial Grant under 2021 Second October 27, 2023 for details.
Restricted Share Incentive Plan were reviewed and passed.
Other information
□ Applicable √ N/A
78 / 290
2023 Annual Report
Employee stock ownership plan
□ Applicable √ N/A
Other incentives
□ Applicable √ N/A
(III) Share incentives granted to directors, senior officers and key technical staff during the
reporting period
1.Share options
□ Applicable √ N/A
2.Type I restricted shares
□ Applicable √ N/A
3.Type II restricted shares
√ Applicable □ N/A
Unit: Share
Numbe Marke
Number
Number of Number r of t price
Number of
restricted of restrict as of
of restricted
shares restricted ed the
restricte Grant shares
already shares shares end of
d shares price of already
granted as that actuall the
Name Title granted restricted granted
at the could be y reporti
during shares as of the
beginning vested in vested ng
the (RMB) end of
of the the in the period
reportin the
reporting reporting reporti (RMB
g period reporting
period period ng per
period
period share)
Chairman &
LI Yi 3,500,000 - - 0 0 3,500,000 25.88
General Manager
WAN
G Director, Financial
470,560 - - 114,000 50,000 470,560 25.88
Yingxi Director
a
CHEN
Board Secretary 432,750 - - 132,600 75,000 432,750 25.88
Yasha
HU Fei Key technical staff 540,000 - - 75,000 75,000 540,000 25.88
YU
Key technical staff 1,070,000 - - 196,000 196,000 1,070,000 25.88
Xin
WAN
Key technical staff 630,000 - - 139,000 139,000 630,000 25.88
G Lin
WAN
G Key technical staff 632,000 - - 139,000 139,000 632,000 25.88
Zeqin
GUO
Zuqian Key technical staff 626,000 - - 139,000 139,000 626,000 25.88
g
Total - 7,901,310 - - 934,600 813,000 7,901,310 -
(IV) Performance assessment mechanism for senior officers and the establishment and
implementation of incentive mechanism for senior officers during the reporting period
√ Applicable □ N/A
The Board of Directors of the Company has a Remuneration and Appraisal Committee to conduct
performance appraisal on the directors and senior officers of the Company, and to formulate and review
the remuneration policies and solutions, etc. The Company has established and continuously improved the
79 / 290
2023 Annual Report
employee performance appraisal system and remuneration system, under which the employee appraisal
and incentive programs specific to different posts, levels, and duties were formulated according to the
category of posts, so as to motivate the employees at different posts. During the reporting period, all the
senior officers of the Company performed their duties diligently in accordance with relevant provisions.
The remuneration of senior officers consisted of the basic salary and incentive bonuses, which are subject
to the review and approval of the Board of Directors.
In addition, to further improve the Company’s long-lasting incentive mechanism, focus on key
personnel that can play an important role in the new growth curve of the Company in the future, and fully
motivate grantees, the Company has released several restricted share incentive plans to safeguard the
achievement of the Company’s development strategy and operating objectives.
XIV. Measures and implementation for building internal control regulations during the
reporting period
√ Applicable □ N/A
(1) Efforts of internal control
During the reporting period, the Company identified risks in the existing business processes and led
responsible business units to work on a timely closed loop for rectifying risks contained in the processes
based on the in-depth understanding of the business logic, the objectives of business process designing,
and the verification of actual business data from multiple perspectives with reference to the end-to-end
business process audit performed according to the priority of the Company’s operating businesses in
accordance with the Basic Standard for Internal Controls of Enterprises and the relevant guidelines
thereof, and regulatory requirements on internal control. The recycling audit and assessment activities
helped to continuously improve the awareness of business personnel for internal control and to encourage
business units to voluntarily identify risks in and make improvement for processes, so as to improve the
level of internal control and governance of the Company as a whole. On the other hand, we enhanced the
exercise of the right of supervision under the leadership of the Audit Committee of the Board of Directors,
so as to expand the scope and strength of supervision of internal audit on the risk assessment for internal
control of the Company, to identify the root causes of risks, and promote to achieve a substantially closed
loop for risk issues in internal control.
(2) Supervision and assessment in internal control
During the reporting period, we organized the assessment on internal control for 2023 based on the
Company’s internal control system and the regulations on the method of assessment of internal control.
Based on the identification of major defects in the internal control of the Company, the Company had no
material and important defects in internal control for financial reporting and non-financial reporting. The
Board of Directors of the Company considered that the Company had implemented the requirements of the
corporate internal control system and relevant regulations, and the internal control for financial reporting
and non-financial reporting was effective in all material aspects. For the specific content, refer to the Report
on the Assessment of Internal Control for 2023 released on the website of Shanghai Stock Exchange
(www.sse.com.cn) on April 27, 2024.
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2023 Annual Report
Explanation about material defects in internal controls during the reporting period
□ Applicable √ N/A
XV. Management and control over subsidiaries during the reporting period
√ Applicable □ N/A
The Company conducted internal management of the stable operation of subsidiaries in accordance
with the laws and regulations, the Articles of Association, the Internal Control Management Regulations,
and other provisions, for which the internal audit has covered the supervision and risk assessment of the
truthfulness and integrity in aspects of compliance, assets safety, financial reporting, and relevant
information thereof; moreover, the Company conducted ongoing participation to optimize and adapt
business processes with reference to actual business scenarios, so as to promote the standardized and
efficient business operation. During the reporting period, all subsidiaries of the Company operated as
normal without concealing matters to be disclosed or material defects or omissions that affect the operation
and development of the Company, which were under effective control.
XVI. Explanation about the auditor’s report on internal controls
√ Applicable □ N/A
For the specific content, refer to the Auditor’s Report on Internal Controls for 2023 released on the
website of Shanghai Stock Exchange (www.sse.com.cn) on April 27, 2024.
Whether an auditor’s report on internal controls has been disclosed: Yes
Opinions in the auditor’s report on internal controls: Standard unqualified opinion
XVII. Rectification of issues detected during the self-inspection of governance of the listed
company
None
XVIII. Others
□ Applicable √ N/A
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2023 Annual Report
Section V. Environment, Social Responsibility, and Other
Corporate Governance
Statement of the Board of Directors on ESG
Since its listing in July 2019, the Company has voluntarily released independent ESG reports (social
responsibility reports) for five consecutive years to continuously improve the transparency in ESG
information disclosure. During the reporting period, the Company won many honorary titles, including
the Wind ESG A rating, Top 100 Listed Companies of China in ESG granted by Securities Times, Award
of Innovative Practice and Case in ESG for 2023 granted in the Annual Golden List of Snowball.
In order to promote the effective implementation of the Company’s ESG work, the Company has
established and continuously improved the linked ESG management communication and coordination
mechanism. As the first responsible person for ESG, the Chairman upgraded the Strategy Committee to
the Strategy and ESG Committee during the reporting period to study and submit proposals on the long-
term strategy, environment, society, and governance development and major investment decision-making
for the Company. The Company has established a Sustainable Development Department to conduct
training on sustainable development inside the Company, and to provide services for and coordinate with
relevant departments in the field of sustainable development. The business departments, functional
departments, and subsidiaries recommend a dedicated contact person to form an ESG working group,
which is responsible for implementing ESG efforts within the respective departments and keeping
communication with internal and external stakeholders. The Board of Directors regularly reviews the ESG
work report of the Company on a yearly basis.
During the reporting period, the Company’s ESG efforts include the following:
1. Focusing on R&D and innovation
As the world’s leading laser display technology enterprise, we always keep scientific and technology
innovation at the center for overall development. We maintained high R&D investments, paid attention to
the conversion of R&D results, strengthened protection of intellectual property rights, and improved the
level of industrialization to fully play our role in influencing the industry with our scientific and technology
capacities.
During the reporting period, our R&D investments amounted to RMB 281 million, accounting for
12.69% of the operating revenue and leading to the implementation of two major R&D results: the first is
AITO M9, a panoramic smart flagship SUV, which is equipped with the first automobile-grade giant screen
projection solution in the industry provided by us and has been announced for mass production and highly
welcomed by the market; the second is the global debut of the household smart projection product
equipped with our ALPD 5.0 super panchromatic laser technology for technology export overseas.
In terms of intellectual property rights, as of the end of the reporting period, we had a total of 2,862
patents filed and granted throughout the world, including 2,091 patents granted throughout the world, in
which 1,081 ones were patents for invention. Moreover, we have won many honorary titles including the
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National Intellectual Property Demonstration Enterprise, 24th China Patent Excellence Award, and one of
the first enterprises participating in the action of trademark and brand value improvement under “Thousand
Enterprises in a Hundred Cities”.
2. Strengthening corporate governance
We continuously improve the operation mechanism of the Board of Directors, solidify the foundation
of corporate governance, and constantly improve the level of corporate governance, so as to drive the
stable and long-lasting business development. During the reporting period, in consideration of the
development strategy and business requirements of the Company, we added three professionals as non-
independent directors and independent directors for the second Board of Directors to raise suggestions for
the operation and development of the Company. By now, the second Board of Directors of the Company
consists of 8 directors, including 3 independent directors and 1 employee representative director. The
members of the Board of Directors have worked diligently to fulfill the duties of the Board of Directors
and make decisions in a scientific manner.
The second Board of Supervisors of the Company consists of 3 supervisors, including 1 employee
representative supervisor. The composition of the Board of Supervisors and the qualifications of the
members thereof are in compliance with the requirements of laws and regulations to ensure professional
expertise and practical experience.
During the reporting period, the Company held 2 general meetings of shareholders, 6 meetings of the
Board of Directors, 5 meetings of the Board of Supervisors, and 13 meetings of professional committees
to deliberate on equity incentive, profit distribution, regular report, additional directors, amendment to the
Articles of Association, and relevant governance regulations, so as to continuously standardize the efficient
operation of the general meeting of shareholders, the Board of Directors, and the Board of Supervisors,
and improve the level of internal governance.
3. Adhering to green development
To assess the data on internal emission of green-house gases, we engaged a professional institution
to perform independent third-party review on the examination report on green-house gases. For detailed
data, refer to the table in the section “Green-house gas emission” below. In the future, we will regularly
review our carbon dioxide emission, and continuously reduce our energy consumption and carbon dioxide
emission by innovation of green technologies, optimization of production processes, strengthening energy
management, reducing pollutant emission, etc. Meanwhile, to achieve efficient energy management, we
made continuous efforts to establish and improve the energy management system, and passed the
ISO50001 certification in 2023. We insisted on incorporating energy management into daily production
management, so as to achieve the objectives of energy conservation and reduction in energy consumption
in a planned and orderly manner.
4. Assuming social responsibility
We actively advocate the value concept of “people-oriented”, and are dedicated to creating an equal,
open, and fair working and development environment for employees. During the reporting period, the
Company has a total of 1,419 employees, including 524 female employees, accounting for 36.9%. We
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continuously improve the system of remuneration and benefits to grant honors for outstanding
performance, and improve the sense of belonging of employees through abundant holiday benefits and
club activities. In terms of employee development, we provided rich training sessions to promote employee
development. During the reporting period, the total training hours of employees at the parent company
amounted to 10,600 hours, indicating an average of about 14.4 hours for each employee.
The enterprise is not only the seeker of commercial value, but also a performer of social responsibility
to transmit value and warmth to society. We made full use of our advantages to make contributions to
society in three major aspects including rural revitalization, popular science education, and social welfare.
For example, we made efforts for rural revitalization by farmer assistance and providing support in the
form of procurement; we made use of the corporate exhibition room as the base of popular science
education to actively combine laser display technologies with digital art, allowing the public to experience
the charm of immersive technologies.
For more details on our ESG efforts, refer to the 2023 Environmental, Social and Governance (ESG)
Report disclosed on the website of Shanghai Stock Exchange (www.sse.com.cn) .
Environment
Whether mechanisms related to environmental Yes
protection have been established
Investment in environmental protection funds 29.41
during the reporting period (unit: RMB 0’000)
(I) Whether the Company is a major polluter identified by the environmental protection authority
□ Yes √ No
During the reporting period, the Company has no production or operating entity included in the list of
major polluters identified by the environmental protection authority.
(II) Administrative penalties imposed due to environmental issues during the reporting period
During the reporting period, the Company experienced no administrative penalty imposed due to
environmental issues.
(III) Information of resource and energy consumption and emissions
√ Applicable □ N/A
As a leading laser display technology enterprise in the world, the Company mainly engages in the
research, development, production and sales of laser display core devices and complete equipment and
application of laser display technologies to different scenarios based on the ALPD semiconductor laser
light source technologies and architecture. Given the evident characteristics of high light effect for laser
light sources, the Company is a low energy consumption enterprise in terms of production.
In daily production and operation activities, the resources we consume mainly include electricity and
water, and our emissions mainly include waste gas, waste water, and solid waste. During the reporting
period, we have engaged a qualified third-party environment inspection institution to conduct inspection,
which indicated that our emission of waste water and waste gas was in compliance with the requirements
of national and local laws and regulations.
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1. Green-house gas emission
√ Applicable □ N/A
We are actively dedicated to the examination and control of green-house gas emission in an attempt
to save energy resources through green management inside the Company, hence contributing to the
sustainable development of the global ecological environment.
To assess the data on internal emission of green-house gases, during the reporting period, we engaged
a professional institution to perform an independent third-party review on the examination report on green-
house gases in accordance with ISO14064-1:2018 and ISO14064-3:2019. This was the Company’s first
examination of green-house gases to quantify the scope 1 and scope 2. With the Company’s Fuyong
factory as the organizational boundary, the data of examining the emission sources and emission volumes
within the organizational boundary is as follows:
Measurement
Category 2023 Proportion
unit
Green-house gas emission in scope 1
Ton 264.43 8.25%
(carbon dioxide equivalent)
Green-house gas emission in scope 2
Ton 2,939.37 91.75%
(carbon dioxide equivalent)
Total green-house gas emission (carbon
Ton 3,203.81 100%
dioxide equivalent)
2. Energy and resource consumption
√ Applicable □ N/A
We strictly abide by national and local environmental protection laws and regulations. Under the
principle of green production, we constantly optimize the production process and adopt advanced energy-
saving technologies to minimize the impact on the environment during the production process, so as to
promote sustainable development and environmental protection in contribution to the bright future of
human society.
In addition, it is worth noting that to achieve efficient energy management, we made continuous
efforts to establish and improve the energy management system, and passed the ISO50001 certification in
2023. We insisted on the idea of energy conservation, emission reduction, and energy efficiency
improvement by incorporating energy management into daily production management, so as to achieve
the objectives of energy conservation and reduction in energy consumption in a planned and orderly
manner.
3. Emission of wastes and pollutants
√ Applicable □ N/A
1. Waste water treatment
The domestic waste water from the office of the Company was treated uniformly by the office
building and the property management company of the industrial park, which was discharged into
municipal sewage pipeline only after reaching the relevant standard through pre-treatment. During the
reporting period, a third-party inspection institution inspected the waste water from the Company’s
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production activities in accordance with the Discharge Limits of Water Pollutants, a local standard of
Guangdong Province, which indicated that the inspection results were in compliance with the discharge
standard.
2. Waste gas treatment
Our production and operation activities generated few waste gases, mainly including tin-containing
waste gas and non-methane hydrocarbons. The waste gases were treated by UV photolysis, activated
carbon adsorption devices, air purification equipment, etc. The emission concentration of the treated waste
gases was in compliance with the environmental protection standard at the place where the production and
operation entity is located, i.e. the Emission Limits of Air Pollutants (DB44/27-2001 standard for level 2).
Moreover, the inspection conducted by a third-party inspection institution engaged also indicated that the
emission was in compliance with the standard.
3. Disposal of solid wastes
Our solid wastes were mainly classified into three categories: recyclable, non-recyclable, and
hazardous wastes, which were collected separately and transferred to the renewable resources company
for treatment in accordance with standards. We check the business qualifications of the renewable resource
company every year, and enter into the relevant recycling contract with such company. In addition, we
paid relevant management fees to the property management company every month to ensure that the
wastes generated by the Company will not affect the environment.
4. Noise treatment
Our production and operation activities generated few noises. According to the inspection conducted
in March 2023 by a third-party inspection institution in accordance with the Emission Standard for
Industrial Enterprises Noise at Boundary (GB12348-2008), the inspection results were in compliance with
the emission standard.
Management regulations of the Company for environment protection
√ Applicable □ N/A
We have formulated the Control Procedure of Hazardous Chemicals as a guidance for employees in
the management of chemicals, and established a dedicated region for the storage of chemicals. Moreover,
we have formulated the Emergency Plan Form and Control Procedure for Emergency Preparation and
Response in response to chemical, fire, and other emergency accidents, designated safety specialists for
daily safety inspection, conducted training on fire-fighting knowledge for employees, and formulated
emergency plans in handling fire accidents. The on-site inspection indicated that our management was in
compliance with requirements.
In addition, we have formulated and continuously improved the Control Procedure of Energy
Resource Consumption and set relevant environment objectives, so as to guide and supervise employees
of the Company to control resource consumption; moreover, we collected statistics on the monthly use of
water, electricity, and office paper, and encouraged employees to save water and electricity and avoid
waste.
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(IV)Measures taken to reduce carbon emissions during the reporting period and their effect
Whether carbon reduction measures
Yes
are in place
Reduction of CO2 equivalent
123,742 (current period)/489,242 (total)
emissions (in tons)
Types of carbon reduction measures
As of the end of the reporting period, we have installed over
(e.g., using clean energy to generate
29,500 sets of our ALPD laser projection solution
electricity, using carbon reduction
throughout China, achieving the total light source operation
technologies in the production
of about 316 million hours. This saved electricity by about
process, developing and producing
568 million kWh and reduced carbon dioxide emissions by
new products that contribute to
over 0.4892 million tons.
carbon reduction, etc.)
Specific description
√ Applicable □ N/A
Based on the statistics on multiple tests, compared with conventional xenon lamp light sources, the
ALPD laser projection light source can save electricity by 1.8 kWh per hour, while 1 kWh of electricity
will lead to 0.86 kg carbon dioxide. As of the end of the reporting period, the total light source operation
duration of our ALPD laser projection solution is about 316 million hours. This saved electricity by about
568 million kWh and reduced carbon dioxide emissions by over 0.4892 million tons.
(V) New technologies, new products, and new services for carbon emission reduction
√ Applicable □ N/A
At present, laser is the brightest and purest artificial light source in the world. Moreover, laser has
many advantages over conventional display technologies, including health for eye protection, outstanding
color performance, large screen, energy conservation and environmental protection, etc. We made full use
of the light source advantages and technology advantages in R&D and designing processes to integrate
the ideas of environmental protection, energy conservation, and low carbon, so as to continuously improve
the energy efficiency of our products and reduce energy consumption.
(VI)Relevant information conducive to protecting ecology, preventing pollution and fulfilling
environmental responsibilities
√ Applicable □ N/A
We achieve information transmission and communication through comprehensive efforts for
information system building, online process approval, electronic vouchers and invoices, and other
digitalization tools to reduce the use of office supplies such as paper, ink, printers, etc., so as to reduce the
consumption of natural resources and wastes generated, and reduce carbon dioxide emission and
environment pollution, hence implementing our operating idea of sustainable development and
environmental protection.
During daily operation, we paid attention to improving the awareness of employees for environmental
protection, and encouraged everyone to use environment-friendly products and services during work and
life. Moreover, we carried out multiple measures for green office, including waste segregation in public
areas, posting energy conservation signs, and continuously implementing measures for water conservation,
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electricity conservation, paper conservation, video conferences, electronic office, reduction of office and
domestic wastes, and waste recycling.
Performance of social responsibilities
(VII) Social contributions of the main business and industry key indicators
Our innovative invention, ALPD semiconductor laser light source technology, created a wholly new
semiconductor laser light source, which made a breakthrough in the application of core devices and
imaging solutions of laser display, hence becoming the mainstream technical route for the laser projection
industry and widely used in vehicle, cinema, dedicated display, household fields. Specifically, thanks to
the rapid breakthrough in automotive optics, we have entered into cooperation with multiple
internationally renowned automobile manufacturers. As one of the first enterprises listed on the STAR
Market, we always keep scientific and technology innovation at the center for overall development. We
maintained high R&D investments, paid attention to the conversion of R&D results, strengthened
protection of intellectual property rights, and improved the level of industrialization to fully play our role
in influencing the industry with our scientific and technology capacities.
Focusing on the needs of strategic development of the nation, we played our role as a leader in major
national scientific research projects to promote the further implementation and development of efforts of
national scientific and technological innovation for the 14th Five-year Plan period, actively participate in
exhibitions of scientific and technological innovation achievements and professional forums held by
domestic and foreign authorities, take the initiative to undertake national projects and formulate domestic
and foreign standards, and participate in the application of international awards to continuously promote
the development of the semiconductor laser light source industry.
During the reporting period, we participated in the study and R&D of a key special project of “study
of technical standards and applications of ultra-high definition and large-color gamut laser display
measurement and valuation” under the “national quality infrastructure system”. Meanwhile, we
participated in drafting the White Paper of Laser Display Technology Development and Intellectual
Property Rights and the 2023 White Paper of High-quality Development of the Laser Display Industry to
provide a reference for players in the laser display industry of China, hence jointly promoting the
sustainable and healthy development of the laser display ecology.
(VIII) Types of and contributions for public charity activities
Type Amount Remark
Rural revitalization
We purchased agricultural products from Nandan
County, Guangxi Zhuang Autonomous Region, and
purchased jelly oranges from Meishan City, Sichuan
Where: Funds (RMB 0’000) 7.8
Province for 3 consecutive years as holiday benefits
of employees, so as to assist farmers in the form of
procurement.
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1. Specific information about public charity activities
√ Applicable □ N/A
To allow the public to experience the convenience created by scientific and technology innovation,
we made use of the corporate exhibition room as the base of popular science education to actively combine
laser display technologies with digital art, allowing the public to experience the charm of immersive
technologies. During the reporting period, we passed the annual assessment of science popularization base
for Nanshan District, Shenzhen, got listed in the Cultivation Resource Bank of Industrial Tourism in
Guangdong, and established close cooperation with the Nanshan District Science Popularization Union,
Tsinghua University, Shenzhen Higher Secondary School, Nantou Primary School, Nanshan Qihang
Experience Trip, Macao Education and Youth Development Bureau, and Taoyuan Community of Nanshan
District, etc. to carry out a number of audience-specific theme activities of science popularization for
groups such as teenagers, children, students from Guangdong, Hong Kong and Macao Greater Bay Area,
and new forms of employment.
During the reporting period, our exhibition hall welcomed 10,458 person-times of social public in
347 times free of charge; and welcomed 611 person-times of children, students, and teenagers in a total of
23 times.
2. Information on consolidation and expansion of the results of poverty alleviation, rural revitalization and
other specific work
√ Applicable □ N/A
Project of poverty
alleviation and rural Number/content Remark
revitalization
Total investment
7.8 -
(RMB 0’000)
Where: Funds
7.8 Same as above
(RMB 0’000)
According to the statistics collected by the Rural
Revitalization Bureau of Nandan County, Guangxi
Number of persons Zhuang Autonomous Region, the agricultural products
21
benefited (persons) we purchased will benefit 21 local families with
financial difficulties, increasing their incomes by over
RMB 1,300 per person.
Specific description
□ Applicable √ N/A
(IX)Protection of the rights and interests of shareholders and creditors
We continuously improve the operation mechanism of the Board of Directors, solidify the foundation
of corporate governance, and constantly improve the level of corporate governance, so as to drive the
stable and long-lasting business development. We carry out our work in accordance with the provisions
and requirements of the Company Law, the Securities Law, the Code of Corporate Governance for Listed
Companies, and the relevant laws, regulations, and normative documents of China Securities Regulatory
Commission and Shanghai Stock Exchange. The Board of Directors, as the standing decision-making and
management body of the Company, has four specialized committees, namely, the Audit Committee, the
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Strategy and ESG Committee, the Remuneration and Appraisal Committee, and the Nomination
Committee. Meanwhile, we have built a legal person governance structure featuring clear division of
duties and responsibilities, specific tasks, effective checks, scientific decision-making, and coordinated
operation among the general meeting of shareholders, Board of Directors, Board of Supervisors, and
management, and optimized the operation mechanism consisting of “the general meeting of shareholders,
the Board of Directors, the Board of Supervisors, and the management” to continuously optimize the
efficiency of corporate governance.
(X) Protection of the rights and interests of employees
We actively advocate the value concept of “people-oriented”, respect and protect the rights and
interests of employees, and are dedicated to creating an equal, open, and fair working and development
environment for employees. Since the establishment of the trade union and the employee representative
meeting at the Company, all the policies and regulations involving the benefits, labor rights and interests,
and personal safety of the employees have been subject to the democratic decision-making of the employee
representative meeting to safeguard the rights and interests of employees. On the principle of equal
employment, we worked with universities to establish academy-enterprise talent cooperation base, worked
with district governments in Shenzhen to jointly establish talent practice bases, and supported the
combination of scientific research and practical implementation as a postdoctoral workstation to expand
the talent recruitment channel and improve our image as an employer. We continuously improve the
system of remuneration and benefits, and followed the distribution principles of “efforts-based distribution,
priority of efficiency, equity, and sustainable development” to properly safeguard benefits while awarding
those making outstanding contributions. In terms of employee development, we provided abundant
learning resources and a sound training system to facilitate the constant study and growth of employees.
Employee share ownership
Number of employees owning shares (persons) 174
Ratio of employees owning shares to the total
12.26
number of employees (%)
Number of shares owned by employees (0’000
2,891.58
shares)
Ratio of shares owned by employees to the total
6.25
share capital (%)
(XI)Protection of the rights and interests of suppliers, customers and consumers
With great importance attached to cooperation with suppliers and strategic partners, we actively
implemented clean and responsible procurement, concluded the Partner Integrity Agreement with
suppliers, elected to purchase environment-friendly raw materials, and actively deployed core areas and
links of the industrial chain as an important component of the Company’s production and operation. By
improving the management regulations, adopting the new supplier management system, and staffing of
professionals for various automotive modules, we have won the recognition of multiple domestic and
foreign customers of automotive business for our supply chain management system and started shipment.
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Meanwhile, we encourage, assist, and support suppliers to continuously improve their performance
of social and environment responsibilities, including improving the energy efficiency, reducing carbon
emission, reducing waste generation, adopting sustainable procurement, safeguarding labor rights and
interests, etc., so as to drive the improvement in the transparency of the supply chain. We worked with
suppliers to jointly formulate, implement, and supervise over improvement plans to ensure the actual
results of improvement.
In terms of customer services, we have built an after-sales service system covering mainstream e-
commerce platforms, integrating online with offline efforts and pre-sales with after-sales services, so as
to improve the timeliness of services and customer satisfaction through informatization, expert-oriented,
and localized efforts.
(XII) Safeguarding product safety
We always implement quality management under the objectives of high standards, high quality, and
high efficiency. We passed the ISO 9001 quality management system certification on the same year when
the Company was established, and adopted the IATF 16949 quality management system in 2021;
internally, we formulated a series of normative documents to enhance quality management efforts,
advocate the idea of quality culture, system and process building, laboratory system, and quality
supervision system to implement whole-process quality management.
We are committed to building a quality culture of “zero defect” by implementing production
monitoring, smart aging control, and 5S visualization throughout the process, integrating quality
monitoring into every stage of production management. Thanks to the strengthened quality management,
our products can meet the requirements of multiple display solutions for high-end core devices, house
laser smart projection, laser cinema projection devices, laser large venue devices, laser business education
products, laser TVs, etc., and are highly recognized by leading users in the industry including Xiaomi,
Barco, and CFGC. We value training on product quality, with the product quality training covering 100%
employees.
For example, in the automotive business, our high-quality automotive products passed the steady
state damp heat, temperature life, thermal fatigue compound vibration, mechanical shock, dust, solar
radiation, salt spray, VOC, odor, and other tests, for which the IATF16949 system and customers’
requirements are implemented strictly in process management, hence winning the wide recognition of
customers.
During the reporting period, in order to improve the quality of shipment, we established the
mechanism of regular efforts for top issues in pursuit of continuous improvement, and made policies and
improvement for the quality of new products by early preventive measures and early measures in response
to risks, which steadily improved the qualified rate of our products.
(XIII) Other information about the performance of social responsibilities
√ Applicable □ N/A
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We are committed to the combination of technology and culture, and have assisted the dissemination
of traditional culture and telling Chinese stories with light through efforts of large-scale cultural tourism
events, cultural performances, landscape lighting, night lighting, etc.
For example, we made use of multi-series large venue projectors to assist the project of “Picture of
the Mountain and the Sea @ Jiangjun Mountain, Pingtan, China”, in which the mountain and sea in
Jiangjun Mountain and stones in surrounding villages were used to create a performance of real mountain,
sea, and stones, providing immersive experience for audience to experience the Pingtan culture. In the
Mural Art Museum at Fahai Temple in Beijing, we made use of digital media presentation means such as
projection to present the content of mural arts and the background story to audience in a richer and more
vivid manner, so that the audience can experience the beauty of the mural art and culture.
We attached importance to improving the positive influence of our products on society and meeting
consumer demands by humanistic designing to improve the convenience and comfort in use. In addition
to the R&D of laser products, we also took active measures to popularize science and technology
knowledge so that the public can experience the charm of our products.
Other corporate governance
(I) Investor relation and protection
Type Times Remark
Convene performance briefings 3
Release the latest information and other
significant events of the Company on the capital
Conduct investor relation market to investors through the “Appotronics”
management activities through new 21 WeChat service account and the “Appotronics”
media video account, so as to improve the experience of
investors in obtaining information in the form of
images with text and short videos.
For details, refer to the investor relation page on
Column of investor relation on the √ Yes
our official website:
official website □ No
https://www.appotronics.com/investor_team.html
Specific information about investor relation management and investor protection
√ Applicable □ N/A
We continuously enhance communication and interaction with investors, return to investors by
creating more value, so as to build a favorable image on the capital market. During the reporting period,
we carried out a total of over 270 roadshows, including reverse roadshows, online and offline strategy
meetings, and open day for investors, accessing over 600 buyer-side investors. Meanwhile, the Company
was successfully included as a sample in SSE STAR 100 Index, which recognized the high innovation,
growth, and liquidity of the Company. During the reporting period, we held a total of 3 performance
presentation meetings, answered over 900 IR hotline calls, disclosed 7 record forms of survey information,
and regularly answered over 160 queries raised by investors on the public communication platform.
Explanation about communication with investors by other means
√ Applicable □ N/A
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In April 2023, we participated in the 20th Shanghai International Automobile Industry Exhibition for
the first time. For this top pubic exhibition in the automotive industry, the investor relation management
team visited the site in person to receive medium and small investors and presented professional speeches,
leading investors to intuitively experience our new products and new businesses.
(II) Transparency of information disclosure
√ Applicable □ N/A
We further improved the efforts for information disclosure management in compliance with the
relevant laws and regulations and the Management Regulations of Information Disclosure. We made
information disclosure in a truthful, accurate, complete, timely, and fair manner, actively made voluntary
information disclosure multiple times, released the ESG report and letter to shareholders, so as to
encourage investors to pay attention to the corporate social responsibilities and the long-term development
strategy of the Company. We disclosed the nomination of domestic and overseas famous automobile
manufacturer to promptly review the progress of our automotive business, assisting investors in decision-
making. We disclosed the English version of regular reports to inform overseas investors of our
development.
(III) Protection of intellectual property rights and information security
√ Applicable □ N/A
Under the culture and idea for intellectual property rights of “respecting knowledge, advocating
innovation, being honest and law-binding, and fair competition”, we continuously optimized and improved
the existing system for protection of intellectual property rights, and amended internal regulations
including the Patent Management Regulations and Trademark Management Regulations. We advocated
respecting the intellectual property rights of others, and implemented the alarm mechanism for risks in
intellectual property rights. As of the end of the reporting period, we had a total of 2,862 patents filed and
granted throughout the world, including 2,091 patents granted throughout the world, in which 1,081 ones
were patents for invention.
In terms of information security, we have formulated and continuously improved the Information
Security Regulations and the procedures, operation guidelines, control measures thereof, so as to provide
the rules to follow in information security efforts, safeguard the information confidentiality, integrity, and
availability of the Company and provide employees with specific and clear instructions and regulations.
In addition, we made active efforts in technology exploration and implementation during routine execution
and monitoring work in pursuit of information security.
(IV)Information about participation of institutional investors in corporate governance
√ Applicable □ N/A
Institutional investors of the Company actively participated in voting at the general meetings of
shareholders of the Company, and fully exercised the right of information, voting right, and other
shareholder’s right, so as to enhance the supervision over and suggestions for corporate governance of the
Company. With full awareness of the Company about the continuity and importance of institutional
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investors in promoting the governance capability of the Company, the Company keeps active
communication with institutional investors to present information about the Company and receive
suggestions about the development of the Company from institutional investors, assisting the management
in making judgments and decisions in a faster and more accurate manner and continuously improving
corporate governance.
(V) Other corporate governance
□ Applicable √ N/A
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Section VI. Significant Matters
I. Fulfillment of covenants
(I) Covenants made by the actual controller, shareholders, affiliates and acquirer of the Company, the Company itself and other related parties during the
reporting period or the outstanding covenants made by them in the prior periods
√ Applicable □ N/A
Whether Whether
Reason for
there’s a the Action plan
failure to
Date of time limit covenant if failing to
Background Type of Content of Period of fulfill the
Covenantor covenant for the has been fulfill the
of covenant covenant covenant covenant covenant
fulfillment strictly covenant
on time (if
of the fulfilled on time
applicable)
covenant on time
Covenant by the
Refer to the
controlling shareholder
Prospectus for the 36 months after
regarding restriction on
Restriction on Initial Public completion of
the sale of shares held by March
the sale of Offering of Shares Yes the IPO and the Yes N/A N/A
him, voluntary lock-up of 22, 2019
shares and Listing on the extended period
such shares, intention to
STAR Market of the stated below
hold and dispose of shares
Company
and other issues
36 months after
Covenant
completion of
related to IPO Covenant by the actual
Refer to the the IPO and the
controller regarding
Prospectus for the extended period
restriction on the sale of
Restriction on Initial Public stated below,
shares held by him, March
the sale of Offering of Shares Yes and 6 months Yes N/A N/A
voluntary lock-up of such 22, 2019
shares and Listing on the after
shares, intention to hold
STAR Market of the termination of
and dispose of shares and
Company employment
other issues
with the
Company
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Covenant by the persons
acting in concert with the Refer to the
actual controller regarding Prospectus for the 36 months after
Restriction on restriction on the sale of Initial Public completion of
March
the sale of shares held by him, Offering of Shares Yes the IPO and the Yes N/A N/A
22, 2019
shares voluntary lock-up of such and Listing on the extended period
shares, intention to hold STAR Market of the stated below
and dispose of shares and Company
other issues
12 months after
completion of
Covenant by HU Fei, as a
Refer to the the IPO and the
member of key technical
Prospectus for the extended period
staff, regarding restriction
Restriction on Initial Public stated below,
on the sale of shares held March
the sale of Offering of Shares Yes and 6 months Yes N/A N/A
by him, voluntary lock-up 22, 2019
shares and Listing on the after
of such shares, intention to
STAR Market of the termination of
hold and dispose of shares
Company employment
and other issues
with the
Company
Covenant by the key
Refer to the
technical staff YU Xin and 12 months after
Prospectus for the
others regarding completion of
Restriction on Initial Public
restriction on the sale of March the IPO, and 4
the sale of Offering of Shares Yes Yes N/A N/A
shares held by them, 22, 2019 years from the
shares and Listing on the
intention to hold and expiry of the
STAR Market of the
dispose of shares and other lockup period
Company
issues
Refer to the
Prospectus for the
Issuer’s covenant Initial Public
March
Others regarding measures Offering of Shares No Permanent Yes N/A N/A
22, 2019
against fraud in IPO and Listing on the
STAR Market of the
Company
96 / 290
2023 Annual Report
Refer to the
Controlling shareholder, Prospectus for the
actual controller and their Initial Public
March
concert parties’ covenant Offering of Shares No Permanent Yes N/A N/A
22, 2019
regarding measures and Listing on the
against fraud in IPO STAR Market of the
Company
Refer to the
Prospectus for the
Directors, supervisors and
Initial Public
senior officers’ covenant March
Offering of Shares No Permanent Yes N/A N/A
regarding measures 22, 2019
and Listing on the
against fraud in IPO
STAR Market of the
Company
Refer to the
Issuer’s covenant Prospectus for the
regarding remedial Initial Public
March
measures for diluted Offering of Shares No Permanent Yes N/A N/A
22, 2019
earnings in the current and Listing on the
period STAR Market of the
Company
Controlling shareholder, Refer to the
actual controller and their Prospectus for the
concert parties’ covenant Initial Public
March
regarding remedial Offering of Shares No Permanent Yes N/A N/A
22, 2019
measures for diluted and Listing on the
earnings in the current STAR Market of the
period Company
Refer to the
Directors and senior
Prospectus for the
officers’ covenant
Initial Public
regarding remedial March
Offering of Shares No Permanent Yes N/A N/A
measures for diluted 22, 2019
and Listing on the
earnings in the current
STAR Market of the
period
Company
97 / 290
2023 Annual Report
Refer to the
Prospectus for the
Issuer’s covenant Initial Public
March
regarding profit Offering of Shares No Permanent Yes N/A N/A
22, 2019
distribution policy and Listing on the
STAR Market of the
Company
Refer to the
Issuer’s covenant
Prospectus for the
regarding restraint
Initial Public
measures and liability for March
Offering of Shares No Permanent Yes N/A N/A
compensation in the event 22, 2019
and Listing on the
of failure to fulfill its
STAR Market of the
covenants
Company
Controlling shareholder,
Refer to the
actual controller and their
Prospectus for the
concert parties’ covenant
Initial Public
regarding restraint March
Offering of Shares No Permanent Yes N/A N/A
measures and liability for 22, 2019
and Listing on the
compensation in the event
STAR Market of the
of failure to fulfill their
Company
covenants
Directors, supervisors and Refer to the
senior officers’ covenant Prospectus for the
regarding restraint Initial Public
March
measures and liability for Offering of Shares No Term of office Yes N/A N/A
22, 2019
compensation in the event and Listing on the
of failure to fulfill their STAR Market of the
covenants Company
Refer to the
Controlling shareholder’s
Resolve Prospectus for the
covenant on avoiding
horizontal Initial Public
horizontal competition March
competition Offering of Shares No Permanent Yes N/A N/A
and regulating and 22, 2019
issues and Listing on the
reducing related-party
STAR Market of the
transactions
Company
98 / 290
2023 Annual Report
Refer to the
Actual controller’s
Prospectus for the
covenant on avoiding
Initial Public
horizontal competition March
Offering of Shares No Permanent Yes N/A N/A
and regulating and 22, 2019
and Listing on the
reducing related-party
STAR Market of the
transactions
Company
Refer to the 2021
Execution
Restricted Share
April 12, period of the
Incentive Plan Yes Yes N/A N/A
2021 equity incentive
(Draft) of the
plan
Company
Covenant by the grantee of Refer to the 2021
Execution
share incentives regarding Second Restricted
October period of the
information disclosure Share Incentive Yes Yes N/A N/A
25, 2021 equity incentive
documents Plan (Draft) of the
plan
Company
Refer to the 2022
Execution
Restricted Share
May 25, period of the
Incentive Plan Yes Yes N/A N/A
Covenant 2022 equity incentive
(Draft) of the
related to plan
Others Company
share
Refer to the 2021
incentives Execution
Restricted Share
April 12, period of the
Incentive Plan Yes Yes N/A N/A
2021 equity incentive
(Draft) of the
plan
Company
Company’s covenant on Refer to the 2021
Execution
refraining from providing Second Restricted
October period of the
financial assistance Share Incentive Yes Yes N/A N/A
25, 2021 equity incentive
Plan (Draft) of the
plan
Company
Execution
Refer to the 2022
May 25, period of the
Restricted Share Yes Yes N/A N/A
2022 equity incentive
Incentive Plan
plan
99 / 290
2023 Annual Report
(Draft) of the
Company
100 / 290
2023 Annual Report
(II) If the Company has made any profit forecast on its assets or projects and the reporting period
falls within the period of such profit forecast, explanation about whether the goal has been
achieved and the relevant reasons
□ Reached□ Not reached√ N/A
(III) Fulfillment of performance covenant and the relevant effect on goodwill impairment test
□ Applicable √ N/A
II. Non-operating occupation of funds by the controlling shareholder or its affiliates during the
reporting period
□ Applicable √ N/A
III. Guarantees in violation of regulations
□ Applicable √ N/A
IV. Explanation of the Board of Directors about the “modified audit opinion” issued by the
accounting firm
□ Applicable √ N/A
V. Explanation about the reasons and effect of changes in accounting policies and accounting
estimates or correction of material accounting errors
(I) Explanation about the reasons and effect of changes in accounting policies and accounting
estimates
√ Applicable □ N/A
For details, refer to “Section X. Financial Report - V.40 Changes in significant accounting policies and
accounting estimates” herein.
(II) Explanation about the reasons and effect of correction of material accounting errors
□ Applicable √ N/A
(III) Communication with the former accounting firm
□ Applicable √ N/A
101 / 290
2023 Annual Report
(IV) Approval procedure and other description
□ Applicable √ N/A
VI. Appointment and termination of appointment of accounting firm
In RMB 0’000
Current accounting firm
Name of domestic accounting firm Pan-China Certified Public Accountants (Special General Partnership)
Fee payable to domestic accounting
140
firm
Audit period of domestic
8
accounting firm
Name of registered accountants
Mr. WEI Biaowen, Mr. NIU Chunjun
from the domestic accounting firm
Total years of audit services of
Mr. WEI Biaowen has 3 years of audit services, and Mr. NIU Chunjun
registered accountants from the
has 4 years of audit services
domestic accounting firm
Name Fee
Accounting firm for internal Pan-China Certified Public Accountants 15
control audit (Special General Partnership)
Sponsor Huatai United Securities Co., Ltd. -
Explanation about the appointment and termination of appointment of accounting firm
√ Applicable □ N/A
The Company engaged Pan-China Certified Public Accountants (Special General Partnership) as the
institution for the audit of the 2023 annual financial statements and the internal control audit for financial
report with the annual fee of RMB 1.40 million (tax inclusive).
Explanation about re-appointment of accounting firm during the audit period
□ Applicable √ N/A
Explanation about the decrease in the audit fees compared with the previous year by over 20%
(including 20%)
□ Applicable √ N/A
VII. Delisting risks
(I) Reasons causing the delisting risk warning
□ Applicable √ N/A
(II) Response measures to be taken by the Company
□ Applicable √ N/A
(III) Risk of delisting and the reason
□ Applicable √ N/A
102 / 290
2023 Annual Report
VIII. Matters related to bankruptcy and reorganization
□ Applicable √ N/A
103 / 290
2023 Annual Report
IX. Material litigations and arbitrations
√ The Company was involved in material litigations or arbitrations during the current year □ The Company was not involved in material litigations or arbitrations
during the current year
(I) Litigations and arbitrations already disclosed in interim announcements about which no new information is available
√ Applicable □ N/A
Summary and type of case Reference
I. (2021) Yue 73 Zhi Min Chu No. 1860 In December 2021, Delta maliciously initiated an
Refer to the Announcement on Malicious Litigation Initiated by
intellectual property litigation against the Company. Since such act infringed the rights and
Delta Electronics (No. 2021-097) disclosed by the Company at the
interests of the Company, the Company sued Delta to Guangzhou Intellectual Property Court
website of the Shanghai Stock Exchange (www.sse.com.cn) on
on December 17, 2021 on the ground of such malicious act, involving the amount of RMB
December 21, 2021 for details.
10.00 million.
II. 01-22-0001-2735 In March 2022, GDC Cayman and GDC BVI initiated the arbitration
against the Company and its wholly-owned subsidiary Appotronics HK in respect of the
dispute over the implementation of the Settlement Agreement, involving the total amount of Refer to the Announcement on Arbitration with GDC Cayman and
USD 38.00 million. Later, the Company raised counter-claims against GDC Cayman, GDC GDC BVI (No. 2022-028) disclosed by the Company at the website
BVI, Mr. ZHANG Wanneng and his management team on the ground that GDC Cayman, of the Shanghai Stock Exchange (www.sse.com.cn) on April 2, 2022
GDC BVI, Mr. ZHANG Wanneng and his management team violated the provisions of the for details.
Shareholders’ Agreement and Settlement Agreement, involving the total amount of no less
than USD 40.00 million.
(II) Litigations and arbitrations that have not been disclosed in interim announcements or about which there’s new information available
√ Applicable □ N/A
In RMB 0’000
During the reporting period
Party Whether Result
Type of Amount Enforcement of
Plaintiff/claimant Defendant/respondent jointly and Background any Status and
litigation/arbitration claimed judgment/award
severally provision effect
104 / 290
2023 Annual Report
liable is
recognized
and the
amount
Case of dispute over
infringement on
patents for invention
(2021) Chuan 01
Zhi Min Chu No.
Chengdu The
685, the Plaintiff
Jinxi court
alleges that the
Delta Electronics, Appotronics Guangxian Infringement on Case approved
Defendant infringed 1,601.00 No -
Inc. Corporation Limited Information patent for invention closed to
such patent for
Technology withdraw
invention No.
Co., Ltd. the case
ZL201610387831.8
of the Plaintiff and
caused economic
losses to the
Plaintiff.
Case of dispute over
infringement on
patents for invention
(2021) Chuan 01
Zhi Min Chu No.
Chengdu The
686, the Plaintiff
Jinxi court
alleges that the
Delta Electronics, Appotronics Guangxian Infringement on Case approved
Defendant infringed 1,601.00 No -
Inc. Corporation Limited Information patent for invention closed to
such patent for
Technology withdraw
invention No.
Co., Ltd. the case
ZL201110041436.1
of the Plaintiff and
caused economic
losses to the
Plaintiff.
Delta Electronics, Appotronics Shanghai Infringement on Case of dispute over Case The
1,601.00 No -
Inc. Corporation Limited Haichi patent for invention infringement on closed court
105 / 290
2023 Annual Report
Digital patents for invention approved
Technology (2023) Hu 73 Zhi to
Co., Ltd. Min Chu No. 15 withdraw
(former case No.: the case
(2021) Hu 73 Zhi
Min Chu No. 1070),
the Plaintiff alleges
that the Defendant
infringed such
patent for invention
No.
ZL201110041436.1
of the Plaintiff and
caused economic
losses to the
Plaintiff.
Case of dispute over
infringement on
patents for invention
(2019) Jing 73 Min
Chu No. 1275, the
Plaintiff alleges that
The
it is the owner of the
Fengmi court
patent for invention
Delta Electronics, Appotronics (Beijing) Infringement on Case issued a
No. 1,601.00 No -
Inc. Corporation Limited Technology patent for invention closed ruling to
ZL201610387831.8
Co., Ltd. dismiss
and the Defendant
the case
infringed such
patent for invention
of the Plaintiff and
caused economic
losses to the
Plaintiff.
Appotronics Delta Cases of dispute The
Delta Electronics Infringement on Case
Corporation Video over infringement 3,825.00 No court -
(Shanghai) Co., Ltd. patent for invention closed
Limited Display on patents for approved
106 / 290
2023 Annual Report
System invention (2020) to
(Wujiang) Yue 73 Zhi Min Chu withdraw
Limited, No. 1335-1338, the case
WANG 1340, 1341, 1361,
Yuhai, the Plaintiff alleges
Hunan that the Defendants,
Dehao Delta Electronics
Cultural (Shanghai) Co.,
and Ltd., Delta Video
Creative Display System
Co., Ltd., (Wujiang) Limited,
Digital and other entities,
Protection infringed the patent
(Beijing) for invention No.
Electronics ZL200880107739.5
Technology of the Plaintiff and
Co., Ltd., caused economic
Guangdong losses to the
Jianye Plaintiff.
Display
Information
Technology
Co., Ltd.,
and
Guangzhou
Jianye
Network
Technology
Co., Ltd.
Delta Cases of dispute
The
Video over infringement
court
Appotronics Display on patents for
Delta Electronics Infringement on Case approved
Corporation System invention (2020) 4,175.00 No -
(Shanghai) Co., Ltd. patent for invention closed to
Limited (Wujiang) Yue 73 Zhi Min Chu
withdraw
Limited, No. 1339, 1353,
the case
WANG 1355, 1357-1360,
107 / 290
2023 Annual Report
Yuhai, the Plaintiff alleges
Hunan that the Defendants,
Dehao Delta Electronics
Cultural (Shanghai) Co.,
and Ltd., Delta Video
Creative Display System
Co., Ltd., (Wujiang) Limited,
Digital and other entities,
Protection infringed the patent
(Beijing) for invention No.
Electronics ZL200810065225.X
Technology of the Plaintiff and
Co., Ltd., caused economic
Guangdong losses to the
Jianye Plaintiff.
Display
Information
Technology
Co., Ltd.,
and
Guangzhou
Jianye
Network
Technology
Co., Ltd.
Delta Cases of dispute
Video over infringement The
Display on patents for court
System invention (2019) issued a
Appotronics (Wujiang) Yue 03 Min Chu judgment
Delta Electronics Infringement on Case
Corporation Limited, No. 2943, 2944, 2,800 No to -
(Shanghai) Co., Ltd. patent for invention closed
Limited Shenzhen 2946, 2948, and dismiss
Super 2951, the Plaintiff the
Network initiated the litigation
Technology infringement claims
Co., Ltd. lawsuit, alleging
108 / 290
2023 Annual Report
that the Defendant
infringed the patent
for invention No.
200810065225.X of
the Company and
caused economic
losses to the
Plaintiff.
(III) Other information
√ Applicable □ N/A
1. As of the end of the reporting period, 16 petitions for invalidation were submitted for our patent for invention No. ZL200880107739.5, and 11 petitions for
invalidation were submitted for our patent for invention No. ZL200810065225.X, of which 26 invalidation cases with the Company as the patentee have been decided
by China National Intellectual Property Administration, with the patents sustained, or withdrawn by the petitioner, and only 1 case is under trial at China National
Intellectual Property Administration.
2. As of the end of the reporting period, the Company has initiated a total of 3 invalidation petitions against the patents held by Delta Electronics, Inc., and China
National Intellectual Property Administration has declared all the patents under the invalidation petitions above invalid.
3. As of the end of the reporting period, 1 petition for invalidation was submitted against a patent of which the Company is the patentee, involving the patent “A
light source system and projection device” (patent No.: ZL201610129958.X). The case is under trial at China National Intellectual Property Administration.
109 / 290
2023 Annual Report
X. Penalties imposed on the listed company and its directors, supervisors, senior officers,
controlling shareholder, actual controller for suspected violation of laws and regulations and
rectification of the relevant violations
□ Applicable √ N/A
XI. Credit standing of the Company and its controlling shareholder and actual controller during
the reporting period
□ Applicable √ N/A
XII. Material related-party transactions
(I) Related-party transactions in connection with day-to-day operation
1. Matters already disclosed in the interim announcements about which no new information is
available
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new information
available
√ Applicable □ N/A
In RMB 0’000
Actually Reason for the great
Category Expected
incurred difference between
of related- amount for
Related party amount in the expected amount
party the current
the current and the actual
transaction period
period amount
Change in the business
Xiaomi Communications Co.,
30,000.00 19,925.87 structure and decline in
Ltd. and its affiliates
demands
China Film Equipment Co., Change in market
6,000.00 2,698.25
Ltd. and its affiliates demands
Provide a
It is no longer a related
related
CINIONIC and its affiliates 3,000.00 2,998.37 party from May 1,
party with
2023
products,
Beijing Donview Education Change in the business
goods,
Technology Co., Ltd. and its 2,000.00 4.00 structure and decline in
leases, and
affiliates demands
services
GDC and its affiliates 200.00 44.13 N/A
Change in the business
YLX Incorporated 1,500.00 412.35 structure and decline in
demands
Subtotal 42,700.00 26,082.97 -
Change in the business
Xiaomi Communications Co.,
Purchase 10,000.00 4,798.93 structure and decline in
Ltd. and its affiliates
goods, raw demands
materials, China Film Equipment Co.,
500.00 231.25 N/A
etc. from a Ltd. and its affiliates
related GDC and its affiliates 300.00 134.92 N/A
party YLX Incorporated 500.00 337.15 N/A
Subtotal 11,300.00 5,502.25 -
Receive Xiaomi Communications Co.,
100.00 2.56 N/A
labor Ltd. and its affiliates
110 / 290
2023 Annual Report
services China Film Equipment Co., Change in market
3,000.00 2,275.70
from a Ltd. and its affiliates demands
related YLX Incorporated 0.00 33.51 N/A
party Shenzhen Lighting Institute 0.00 37.74 N/A
Beijing Donview Education
Technology Co., Ltd. and its 0.00 0.42 N/A
affiliates
Subtotal 3,100.00 2,349.93 -
China Film Equipment Co.,
Property 250.00 147.81 N/A
Ltd. and its affiliates
lease
Subtotal 250.00 147.81 -
Total 57,350.00 34,082.96
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(II) Related-party transactions involving acquisition or sale of assets or equities
1. Matters already disclosed in the interim announcements about which no new information is
available
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable √ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
4. Fulfillment of performance covenants (if any) during the reporting period
□ Applicable √ N/A
(III) Significant related-party transactions involving joint external investments
1. Matters already disclosed in the interim announcements about which no new information is
available
√ Applicable □ N/A
Summary Reference
On April 26, 2023, the Company held the 19th Refer to the Announcement on Stopping
meeting of the second Board of Directors and the Subscribing to 51% Equity Interests in WeCast
18th meeting of the second Board of Supervisors, Technology Corp. by the Subsidiary Formovie
at which the Proposal on Stopping Acquiring 51% (No. 2023-014) disclosed by the Company at the
Equity Interests in WeCast Technology Corp. by website of the Shanghai Stock Exchange
the Subsidiary Formovie was reviewed and (www.sse.com.cn) on April 28, 2023 for details.
approved, under which it was approved that
Formovie (Chongqing) Innovative Technology
Co., Ltd., a subsidiary of the Company, shall stop
acquiring the 51% equity interests in WeCast.
111 / 290
2023 Annual Report
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable √ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(IV) Accounts receivable from and payable to related parties
1. Matters already disclosed in the interim announcements about which no new information is
available
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable √ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(V) Financial business between the Company and its affiliated financial companies, the Company’s
controlled financial companies or affiliates
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
XIII. Material contracts and performance thereof
(I) Trusteeship, contracting and lease
1. Trusteeship
□ Applicable √ N/A
2. Contracting
□ Applicable √ N/A
3. Lease
√ Applicable □ N/A
In RMB 0’000
Basis
Impact of Related- Relate
Amount for
Lease lease party d-
Name of Name of Leased of Start End determ
incom income transact party
lessor lessee assets leased date date ining
e on the ion or relatio
assets lease
Company not n
income
Appotroni Office,
Shenzhen
cs R&D,
Meisheng 2022. 2024.
Corporati factory, 1,469.40 - - - No
Industry 12.01 11.30
on employee
Co., Ltd.
Limited dormitory
Description of lease
None
112 / 290
2023 Annual Report
(II) Guarantees
√ Applicable □ N/A
In RMB 0’000
Guarantees provided by the Company or its subsidiaries for the subsidiaries of the Company
Whet
her
Relations Relations the Whet
Commence
hip hip Whether obliga Amount her
ment date
between between Type the tion of the there’
Guarante of Inception
Guaranto the the Expiry date of of obligation guara overdue sa
Obligor ed guarantee date of
r guarantor obligor guarantee guara guarantee nteed obligation count
amount (signing guarantee
and the and the ntee d has been has guarantee er
date of
listed listed discharged becom d guara
agreement)
company company e ntee
overd
ue
CINEAPP
Joint
O Laser
Appotroni and
Cinema
cs Headquart Controlled severa
Technolog 23,000.00 2021/1/26 2021/1/26 2026/2/7 No No No
Corporatio ers subsidiary l
y
n Limited liabilit
(Beijing)
y
Co., Ltd.
CINEAPP Three years from
Joint
O Laser the expiry of the
Appotroni and
Cinema performance period
cs Headquart Controlled severa
Technolog 4,000.00 2023/10/26 2023/8/25 of the debtor as No No No
Corporatio ers subsidiary l
y provided in the
n Limited liabilit
(Beijing) specific financing
y
Co., Ltd. contract
Appotroni CINEAPP The guarantee
Joint
cs Headquarte O Laser Controlled period is three years
5,000.00 2023/10/16 2023/10/16 and No No No
Corporatio rs Cinema subsidiary from the date of
several
n Limited Technolog termination of
113 / 290
2023 Annual Report
y claims liabilit
(Beijing) determination y
Co., Ltd. period
The period of
guarantee by the
guarantor is three
CINEAPP years from the
O Laser expiry of the debt Joint
Appotroni
Cinema performance period and
cs Headquart Controlled
Technolog 10,000.00 2023/11/3 2023/11/3 specified in the several No No No
Corporatio ers subsidiary
y master contract, liabilit
n Limited
(Beijing) where the period of y
Co., Ltd. guarantee under
each master contract
shall be calculated
separately.
Formovie
Joint
Appotroni (Chongqin
and
cs Headquart g) Controlled
20,000.00 2021/9/10 2021/9/10 2028/4/25 several No No No
Corporatio ers Innovative subsidiary
liabilit
n Limited Technolog
y
y Co., Ltd.
Formovie
Joint
Appotroni (Chongqin
and
cs Headquart g) Controlled
9,000.00 2021/12/6 2021/12/6 2026/12/30 several No No No
Corporatio ers Innovative subsidiary
liabilit
n Limited Technolog
y
y Co., Ltd.
Formovie
Joint
Appotroni (Chongqin Three years after the
and
cs Headquart g) Controlled due date for the
30,000.00 2022/9/16 2022/9/16 several No No No
Corporatio ers Innovative subsidiary obligations under
liabilit
n Limited Technolog the master contract.
y
y Co., Ltd.
Appotroni Headquart Formovie Controlled Three years after the Joint
12,000.00 2022/12/22 2022/12/22 No No No
cs ers (Chongqin subsidiary due date (without and
114 / 290
2023 Annual Report
Corporatio g) accelerated several
n Limited Innovative maturity) of the liabilit
Technolog latest financing due y
y Co., Ltd. and payable among
all the financings
drawn and used
during the period of
occurrence of
guaranteed debts
under the master
agreement or/and
inter-bank
borrowing
Total amount of guarantees provided for the subsidiaries during the reporting
30,071.36
period
Balance of guarantees provided for the subsidiaries as of the end of the reporting
42,831.99
period (B)
Total amount of guarantees provided by the Company (including those provided for the subsidiaries)
Total amount guaranteed (A+B) 42,831.99
Proportion of total amount guaranteed to the net assets of the Company (%) 15.19
Where:
Total amount of guarantees provided for the shareholders, actual controller and 0
their affiliates (C)
Total amount of debt guarantees directly or indirectly provided for the obligors
36,624.99
whose equity-debt ratio exceeds 70% (D)
Total amount guaranteed in excess of 50% of the net assets of the Company (E) 0
Total amount guaranteed (C+D+E) 36,624.99
Explanation about outstanding guarantees for which the Company may assume
N/A
joint and several liability
Explanation about guarantees N/A
115 / 290
2023 Annual Report
(III) Entrusted cash asset management
1. Entrusted wealth management
(1) Overall situation of entrusted wealth management
√ Applicable □ N/A
In RMB 0’000
Type Source of funds Total amount Outstanding amount Overdue amount
Bank wealth management
Idle offering proceeds 26,500.00 15,100.00 -
products
Bank wealth management
Self-funded capital 32,953.00 26,000.00 -
products
Wealth management
products of securities Self-funded capital 7,000.00 6,000.00 -
companies
Other information
□ Applicable √ N/A
(2) Single entrusted wealth management
√ Applicable □ N/A
In RMB 0’000
Start End With Amou
Amou Remu
date date Passe future nt of
Type of nt of nerati Expec
of of Annu Outst d entrus provis
entrust entrus Sourc on ted Actual Overd
entrus entrus Use of Restri alized andin statut ted ion
ed ted e of deter incom profit ue
Trustee ted ted funds cted rate of g ory wealth for
wealth wealth funds minati e or loss amou
wealth wealth or not yield amou proce mana impai
manage mana on (if nt
mana mana nt dure gemen rment
ment gemen metho any)
gemen gemen or not t plan (if
t d
t t or not any)
Bank of Bank
Hangzhou wealth Offeri Contra
Shenzhen manage 2,900. 2023/1 2024/3 ng ctual 2,900.
- No 2.70% 19.31 - - Yes Yes
Shenzhen ment 00 2/28 /27 procee provisi 00
Bay Sub- product ds ons
branch s
116 / 290
2023 Annual Report
Bank of Bank Offeri
Hangzhou wealth ng Contra
Shenzhen manage 5,000. 2023/1 2024/3 procee ctual 5,000.
- No 2.70% 33.29 - - Yes Yes
Shenzhen ment 00 2/28 /27 ds provisi 00
Bay Sub- product (exces ons
branch s s)
China
Bank
CITIC
wealth Offeri Contra
Bank
manage 7,200. 2023/1 2024/3 ng ctual 7,200.
Shenzhen - No 2.60% 45.65 - - Yes Yes
ment 00 2/29 /27 procee provisi 00
Longhua
product ds ons
Sub-
s
branch
Bank of Bank
Hangzhou wealth Contra
Self-
Shenzhen manage 3,000. 2023/1 2024/4 ctual 3,000.
funded - No 2.80% 42.12 - - Yes Yes
Shenzhen ment 00 0/25 /25 provisi 00
capital
Bay Sub- product ons
branch s
Bank
wealth Contra
Self-
Bank of manage 5,000. 2023/1 2024/1 ctual 5,000.
funded - No 3.57% 172.14 - - Yes Yes
China ment 00 1/29 1/15 provisi 00
capital
product ons
s
Bank
wealth Contra
Self-
Bank of manage 5,000. 2023/1 2024/3 ctual 5,000.
funded - No 2.90% 35.75 - - Yes Yes
Ningbo ment 00 2/6 /5 provisi 00
capital
product ons
s
Bank Contra
Self-
Bank of wealth 5,000. 2023/1 2024/3 ctual 5,000.
funded - No 2.90% 34.96 - - Yes Yes
Ningbo manage 00 2/29 /26 provisi 00
capital
ment ons
117 / 290
2023 Annual Report
product
s
Bank of Bank
Hangzhou wealth Contra
Self-
Shenzhen manage 3,000. 2023/1 2024/6 ctual 3,000.
funded - No 2.75% 41.14 - - Yes Yes
Shenzhen ment 00 2/29 /28 provisi 00
capital
Bay Sub- product ons
branch s
Bank
wealth Contra
Self-
Ping An manage 5,000. 2023/1 2024/4 ctual 5,000.
funded - No 3.00% 39.04 - - Yes Yes
Bank ment 00 2/29 /2 provisi 00
capital
product ons
s
Wealth
manage
ment
Contra
product Self-
CITIC 4,000. 2023/3 2024/3 ctual 4,000.
s of funded - No 4.60% 183.60 - Yes Yes
Securities 00 /24 /22 provisi 00
securitie capital
ons
s
compan
ies
Wealth
manage
ment
Contra
product Self-
CITIC 2,000. 2023/1 2024/1 ctual 2,000.
s of funded - No 4.00% 13.59 - Yes Yes
Securities 00 1/28 /29 provisi 00
securitie capital
ons
s
compan
ies
Other information
□ Applicable √ N/A
118 / 290
2023 Annual Report
(3) Provision for impairment of entrusted wealth management products
□ Applicable √ N/A
2. Entrusted loans
(1) Overall situation of entrusted loans
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(2) Single entrusted loans
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3) Provision for impairment of entrusted loans
□ Applicable √ N/A
3. Other information
□ Applicable √ N/A
(IV) Other material contracts
□ Applicable √ N/A
119 / 290
2023 Annual Report
XIV. Use of offering proceeds
√ Applicable □ N/A
(I) Overall use of funds raised
√ Applicable □ N/A
In RMB 0’000
Cumulative
Cumulative
Total total Ratio of
Net offering investment Total
Where: offering offering the
Source Date of proceeds Total progress as Amount offering
Total Amount proceeds proceeds amount
of receiving after offering of the end invested proceeds
offering of excess committed used as of invested
offering offering deduction of proceeds of the in this with the
proceeds offering after the end of in this
proceeds proceeds offering committed reporting year (4) purpose
funds adjustment the year (%)
expenses period (%) changed
(1) reporting (5)=(4)/(1)
(3)=(2)/(1)
period (2)
Initial
July 16,
public 119,000.00 6,247.08 106,247.08 106,247.08 106,247.08 89,816.12 84.54 14,363.75 13.52 None
2019
offering
120 / 290
2023 Annual Report
(II) Breakdown of investment projects
√ Applicable □ N/A
In RMB 0’000
Date
Whe Whether
Cumula for the
Cumula ther there are
tive projec
Am tive investm the any
Whet t to Bene
Total Total oun total ent inve material
her reach fits
Source investmen investmen t offering progress stme Benefits changes
chan the Specific reason reali
of t from the t from the inv proceed as of the nt or R&D in the
ge of worki Compl for failing to zed
Natu offerin offering offering este s used prog results project Bala
Project inves end of ng eted or achieve the plan in
re g proceeds proceeds d as of the the ress achieve feasibility nce
tmen conditi not of investment the
procee committe after in end of reportin meet d by the , and if
t is on for progress curre
ds d for the adjustme this the s the project any,
invol g period its nt
project nt (1) yea reportin prog describe
ved (%) intend year
r g period ress the
(3)＝ ed use
(2) plan specific
(2)/(1) [Note
ned reasons
1]
R&D and
Prod
industrializa
uctio Initial 28,78
tion of new Decem 79,286.8
n and public 27,931.1 0.04 [Note
generation No 31,300.00 31,300.00 - 89.24 ber Yes Yes N/A 3 [Note No
const offerin 1 [Note 3]
of laser 2022 2]
ructio g 2]
display
n
products
The construction
of the head office
building was
R&D center
Initial slowed down due
at the head 13,
public 22,218.3 March to the complex
office of R&D No 28,400.00 28,400.00 581 78.23 No No N/A N/A No N/A
offerin 0 2025 geological
Appotronics .31
g conditions on the
[Note 4]
site. This project
may be fully
implemented
121 / 290
2023 Annual Report
only after the
construction of
the head office
building is
completed. As a
result, the project
implementation
is postponed.
Since the main
body of the head
office building of
Oper the Company is
Information Initial
ation still under
system public 782 March
mana No 7,000.00 7,000.00 4,189.48 59.85 No No construction, the N/A N/A No N/A
upgrade and offerin .44 2025
geme prerequisites for
building g
nt implementing
this project have
not been
satisfied.
Suppl
emen
ting
the
Supplement worki Initial
ary working ng public 0.0 33,539.5
No 33,300.00 33,300.00 100.72 N/A Yes Yes N/A N/A N/A No N/A
capital capit offerin 0 0
[Note 5] al g
and
repay
ing
loans
Initial
Share Septem
Other public 0.0
repurchase No 2,000.00 2,000.00 1,937.73 96.89 ber Yes Yes N/A N/A N/A No N/A
s offerin 0
[Note 6] 2022
g
122 / 290
2023 Annual Report
Other Initial
excess Other public 0.0
No 4,247.08 4,247.08 - - N/A No Yes N/A N/A N/A No N/A
offering s offerin 0
proceeds g
[Note 1] On March 18, 2022, the Company held the 9th meeting of the second Board of Directors and the 8 th meeting of the second Board of Supervisors, approving the
Proposal on Postponing Some Investment Projects through deliberation, and agreeing the Company to adjust the time for some investment projects to reach the working
condition for its intended use. On December 8, 2023, the Company held the 24 th meeting of the second Board of Directors and the 22th meeting of the second Board of
Supervisors, approving the Proposal on Postponing Some Investment Projects through deliberation, and approving the Company to postpone the time for some investment
projects to reach the working condition for its intended use. The time of reaching the working condition for its intended use of the investment projects “R&D center at the
head office of Appotronics” and “information system upgrade and building” was adjusted to March 2025;
[Note 2] For this project, the incremental sales revenue after the investment is taken as the benefit indicator achieved this year, and the incremental sales revenue is taken as
the benefit indicator of the project achieved;
[Note 3] On April 26, 2023, the Company held the 19 th meeting of the second Board of Directors and the 18th meeting of the second Board of Supervisors respectively, which
deliberated and approved the Proposal on the Completion of Part of the Company’s Fundraising Projects and Permanent Replenishment of Liquidity with the Surplus Raised
Funds, and agreed that the Company would close the fundraising project “R&D and industrialization of new generation of laser display products”, and a total of RMB 51.6167
million saved (as of December 31, 2022) shall be used for permanent replenishment of the working capital. As of the date of remittance, the actual balance in the special
account was RMB 52.0022 million (including the interest income and wealth management income, net of handling fees). This special account (Hua Xia Bank Co., Ltd.
Shenzhen Houhai Sub-branch, account No.: 10869000000305964) has been deregistered on May 17, 2023, and the funds have been transferred to the general account of the
Company.
[Note 4] The Company held the 19 th meeting of the second Board of Directors and the 18th meeting of the second Board of Supervisors on April 26, 2023 and the annual
general meeting of shareholders for 2022 on May 19, 2023, respectively, approving the Proposal on Adjusting Internal Investment Structure of Some Investment Projects
through deliberation, and agreeing the Company to adjust the internal investment structure of the investment project “R&D center at the head office of Appotronics”, and to
decrease the “equipment purchase expenses” by RMB 65.0000 million and increase the “R&D expenditures” by RMB 65.0000 million;
[Note 5] During the project, the total wealth management returns of RMB 2.3950 million were realized from the special account of supplementary working capital, which
have been put into use in the project (supplementary working capital). As of the date of approval for issue of this Report, the special account (Huaxia Bank Co., Ltd. Shenzhen
Houhai Sub-branch, account number: 10869000000251463) has been deregistered. The interest of RMB 1,418.11 incurred after the project has been paid to the basic account
of the Company to be used as supplementary working capital;
[Note 6] The Company held the 9th meeting of the second Board of Directors and the 1st extraordinary general meeting of shareholders in 2022 respectively on March 18, 2022
and March 29, 2022, approving the Proposal on Repurchase of Shares of the Company through Call Auction through deliberation, and agreeing the Company to use the excess
offering funds to repurchase some RMB-denominated ordinary shares (A shares) issued by it through call auction;
[Note 7] Subject to the restriction of relevant management measures and banks’ requirements in operation, the Company paid expenses including salaries, social insurance
premiums, and contributions for housing funds for investment projects with non-offering proceeds, and then repaid such expenses by transferring funds of the corresponding
amount from the special account of offering proceeds to the general account of the Company;
123 / 290
2023 Annual Report
[Note 8] Some sum values do not correspond to the aggregate of breakdown values in the table above due to rounding.
(III) Change in or termination of investment projects during the reporting period
□ Applicable √ N/A
124 / 290
2023 Annual Report
(IV) Other information about the use of offering proceeds during the reporting period
1. Early investment and replacement of projects for which the offering proceeds are used
□ Applicable √ N/A
2. Supplement the working capital with idle offering proceeds
□ Applicable √ N/A
3. Cash management of idle offering proceeds, and investment in relevant products
√ Applicable □ N/A
In RMB 0’000
Whether
the
Effective
greatest
amount Balance of
Date of balance
deliberated cash
deliberation by exceeds
for cash Start date End date management
the Board of the
management at the end of
Directors authorized
of offering the period
amount
proceeds
during the
period
June 29, 2022 46,900.00 June 29, 2022 June 29, 2023 No
15,100.00
June 25, 2023 24,900.00 June 25, 2023 June 25, 2024 No
Other information
The Proposal on Cash Management of Temporarily Idle Offering Proceeds was approved through
deliberation at the 14th meeting of the second Board of Directors and the 13th meeting of the second Board
of Supervisors held by the Company on June 29, 2022. It was approved that, without affecting the normal
implementation of the investment plan for offering proceeds, a maximum of RMB 469 million temporarily
idle offering proceeds may be put under cash management to purchase investment products featuring high
security, good liquidity, and guarantee of the principal (including but not limited to structural deposits,
agreement deposits, notice deposits, term deposits, large-amount deposit note, and return notes), where
the total amount for purchasing return notes shall be no more than RMB 100 million for no more than 12
months, which shall be effective within 12 months from the review and approval by the Board of Directors
and Board of Supervisors.
The Proposal on Cash Management of Temporarily Idle Offering Proceeds was approved through
deliberation at the 20th meeting of the second Board of Directors and the 19th meeting of the second Board
of Supervisors held by the Company on June 25, 2023. It was approved that, without affecting the normal
implementation of the investment plan for offering proceeds, a maximum of RMB 249.00 million
temporarily idle offering proceeds may be put under cash management to purchase investment products
featuring high security, good liquidity, and guarantee of the principal (including but not limited to
structural deposits, time deposits, notice deposits, term deposits, large-amount deposit note, and return
notes), where the total amount for purchasing return notes shall be no more than RMB 100 million, which
shall be effective within 12 months from the review and approval.
125 / 290
2023 Annual Report
4. Supplement working capital permanently or repay bank loans with excess offering proceeds
□ Applicable √ N/A
5. Others
√ Applicable □ N/A
1. On March 18, 2022, the Company held the 9th meeting of the second Board of Directors and the 8th
meeting of the second Board of Supervisors, approving the Proposal on Postponing Some Investment
Projects through deliberation, and agreeing the Company to adjust the time for some investment projects
to reach the working condition for its intended use. Refer to the Announcement on Postponing Some
Investment Projects (No. 2022-019) disclosed by the Company at the website of the Shanghai Stock
Exchange (www.sse.com.cn) on March 21, 2022.
2. The Company held the 9th meeting of the second Board of Directors and the 1st extraordinary general
meeting of shareholders in 2022 respectively on March 18, 2022 and March 29, 2022, approving the
Proposal on Repurchase of Shares of the Company through Call Auction through deliberation, and
agreeing the Company to use the excess offering funds to repurchase some RMB-denominated ordinary
shares (A shares) issued by it through call auction via the trading system of the Shanghai Stock Exchange,
with the repurchase funds totaling not less than RMB 10 million (inclusive) but not more than RMB 20
million (inclusive), the repurchase price not exceeding RMB 26.89 per share (inclusive, namely the price
after adjustments to equity distribution in 2021) and the repurchase period being six months from the date
on which this repurchase plan is approved by the general meeting of shareholders.
As of December 31, 2022, the Company repurchased 900,000 shares in the aggregate through call auction,
representing 0.1969% of the Company’s total share capital, and paid RMB 19,377,297.59 (including
stamp duty, commissions and other transaction fees). The repurchase of shares has been completed.
3. The Company held the 14th meeting of the second Board of Directors and the 13th meeting of the second
Board of Supervisors on June 29, 2022, approving the Proposal on Adjusting Internal Investment Structure
of Some Investment Projects through deliberation, and agreeing the Company to adjust the internal
investment structure of the investment project “R&D and industrialization of new generation of laser
display products”, and to decrease the “equipment purchase expenses” by RMB 53.8020 million and
increase the “R&D expenditures” by RMB 53.8020 million.
4. The Company held the 19th meeting of the second Board of Directors and the 18th meeting of the second
Board of Supervisors and the annual general meeting of shareholders for 2022 on April 26, 2023 and May
19, 2023, respectively, approving the Proposal on Adjusting Internal Investment Structure of Some
Investment Projects through deliberation, and agreeing the Company to adjust the internal investment
structure of the investment project “R&D center at the head office of Appotronics”, and to decrease the
“equipment purchase expenses” by RMB 65.0000 million and increase the “R&D expenditures” by RMB
65.0000 million.
5. On December 8, 2023, the Company held the 24th meeting of the second Board of Directors and the 22th
meeting of the second Board of Supervisors, approving the Proposal on Postponing Some Investment
Projects through deliberation, and approving the Company to postpone the time for some investment
126 / 290
2023 Annual Report
projects to reach the working condition for its intended use. The time of reaching the working condition
for its intended use of the investment projects “R&D center at the head office of Appotronics” and
“information system upgrade and building” was adjusted to March 2025.
XV. Explanation about other significant matters having significant influence on the value
judgement and investment decision-making of investors
□ Applicable √ N/A
127 / 290
2023 Annual Report
Section VII. Changes in Shares and Shareholders
I. Changes in share capital
(I) Statement of changes in shares
1. Statement of changes in shares
Unit: Share
Before the change +/- After the change
Capitalization
Percentage New Bonus Percentage
Number of capital Others Subtotal Number
(%) shares shares (%)
reserve
I. Non-tradable shares 0 0 0 0 0 0 0 0 0
1. Shares held by the State 0 0 0 0 0 0 0 0 0
2. Shares held by State-owned
0 0 0 0 0 0 0 0 0
corporations
3. Shares held by other domestic
0 0 0 0 0 0 0 0 0
investors
Where: Shares held by domestic
0 0 0 0 0 0 0 0 0
non-state owned corporations
Shares held by domestic
0 0 0 0 0 0 0 0 0
natural persons
4. Shares held by foreign
0 0 0 0 0 0 0 0 0
investors
Where: Shares held by foreign
0 0 0 0 0 0 0 0 0
corporations
Shares held by foreign
0 0 0 0 0 0 0 0 0
natural persons
II. Tradable shares 457,107,538 100 0 0 0 5,103,800 5,103,800 462,211,338 100
1. RMB-denominated ordinary
457,107,538 100 0 0 0 5,103,800 5,103,800 462,211,338 100
shares
2. Foreign currency-
denominated shares listed 0 0 0 0 0 0 0 0 0
domestically
128 / 290
2023 Annual Report
3. Foreign currency-
denominated shares listed 0 0 0 0 0 0 0 0 0
overseas
4. Others 0 0 0 0 0 0 0 0 0
III. Total shares 457,107,538 100 0 0 0 5,103,800 5,103,800 462,211,338 100
2. Explanation about changes in shares
√ Applicable □ N/A
(1) On July 7, 2023, the Company registered a total of 3,299,000 new shares for the first vesting period in the initial grant of the 2022 Restricted Share Incentive Plan,
which increased the Company’s total shares from 457,107,538 shares to 460,406,538 shares;
(2) On November 13, 2023, the Company registered a total of 1,804,800 new shares for the first vesting period in the initial grant of the 2021 Second Restricted Share
Incentive Plan, which increased the Company’s total shares from 460,406,538 shares to 462,211,338 shares.
3. Effect of the changes in shares on the earnings per share, net assets per share and other financial indicators of the most recent year and the most recent
reporting period (if any)
√ Applicable □ N/A
For details about the effect of the changes in shares on the basic earnings per share, diluted earnings per share, net assets per share attributable to ordinary
shareholders of the Company, and other financial indicators of the most recent year and the most recent reporting period, refer to “Section II. Company Profile and
Financial Highlights - VI. Main accounting data and financial highlights in the past three years - (II) financial highlights”.
4. Other information disclosed as the Company deems necessary or required by the securities regulatory authority
□ Applicable √ N/A
(II) Changes in non-tradable shares
□ Applicable √ N/A
129 / 290
2023 Annual Report
II. Issuance and listing of securities
(I) Securities issued during the reporting period
□ Applicable √ N/A
Explanation about the securities issued during the reporting period (in case of any outstanding bonds
with different interest rates, please explain separately)
□ Applicable √ N/A
(II) Changes in total number of shares, shareholding structure, and structure of assets and
liabilities of the Company
√ Applicable □ N/A
1. On July 7, 2023, the Company registered a total of 3,299,000 new shares for the first vesting period
in the initial grant of the 2022 Restricted Share Incentive Plan, which increased the Company’s total shares
from 457,107,538 shares to 460,406,538 shares. In consideration of the changes in the total shares and
registered capital of the Company, some provisions of the Articles of Association should be revised with
reference to actual conditions of the Company under relevant rules. In October 2023, the Company
completed the registration formalities with the administration for market regulation for the change in the
registered capital and the amendment to the Articles of Association.
2. On November 13, 2023, the Company registered a total of 1,804,800 new shares for the first vesting
period in the initial grant of the 2021 Second Restricted Share Incentive Plan, which increased the
Company’s total shares from 460,406,538 shares to 462,211,338 shares. In consideration of the changes
in the total shares and registered capital of the Company, some provisions of the Articles of Association
should be revised with reference to actual conditions of the Company under relevant rules. In February
2024, the Company completed the registration formalities with the administration for market regulation
for the change in the registered capital and the amendment to the Articles of Association.
III. Shareholders and actual controller
(I) Total number of shareholders
Total number of shareholders of ordinary shares as of the end of the
15,667
reporting period (accounts)
Total number of shareholders of ordinary shares as of the end of the month
15,699
immediately prior to the issue date of this annual report (accounts)
Total number of shareholders of preferred shares whose voting right has
N/A
been restituted as of the end of the reporting period (accounts)
Total number of shareholders of preferred shares whose voting right has
been restituted as of the end of the month immediately prior to the issue date N/A
of this annual report (accounts)
Total number of shareholders holding shares with special voting rights as of
N/A
the end of the reporting period (accounts)
Total number of shareholders holding shares with special voting rights as of
N/A
the end of the month prior to the issue date of this annual report (accounts)
Number of holders of depository receipts
□ Applicable √ N/A
130 / 290
2023 Annual Report
(II) Shares held by top 10 shareholders and top 10 holders of tradable shares as of the end of the reporting period
Unit: Share
Shares held by top 10 shareholders (excluding shares lent out under the refinancing arrangement)
Shares pledged,
Balance of Number
Change marked, or
shares held as of non-
Shareholder during the Percentage frozen Nature of
of the end of tradable
(Full name) reporting (%) Nu shareholder
the reporting shares Status of
period mbe
period held shares
r
Domestic non-
Shenzhen Appotronics Holdings Limited 0 79,762,679 17.26 0 None - state owned
corporation
Domestic non-
Shenzhen Yuanshi Laser Industrial Investment
0 24,139,500 5.22 0 None - state owned
Consulting Partnership (LP)
corporation
Domestic non-
Nantong Strait Appotronics Investment Partnership (LP) -4,399,121 18,381,208 3.98 0 None - state owned
corporation
Domestic non-
Shenzhen Appotronics Daye Investment Partnership
-3,374,083 17,056,167 3.69 0 None - state owned
(LP)
corporation
Domestic non-
Shenzhen Appotronics Hongye Investment Partnership
-2,061,030 13,601,344 2.94 0 None - state owned
(LP)
corporation
Domestic non-
Shenzhen Appotronics Chengye Consulting Partnership
0 10,394,846 2.25 0 None - state owned
(LP)
corporation
Bank of China Co., Ltd. - Stable Income Bond Securities
104,691 10,038,092 2.17 0 None - Others
Investment Fund of E Fund
131 / 290
2023 Annual Report
Domestic non-
Shenzhen Jinleijing Investment Limited Partnership (LP) -2,460,400 9,892,706 2.14 0 None - state owned
corporation
Shanghai Pudong Development Bank Co., Ltd. - Invesco
Great Wall New Energy Industry Stock Securities 6,807,726 6,807,726 1.47 0 None - Others
Investment Fund
Domestic natural
LUO Xiaobin -632,996 6,004,004 1.30 0 None -
person
Shares held by top 10 holders of tradable shares
Number of tradable Type and number of shares
Shareholder
shares held Category Number
RMB-
Shenzhen Appotronics Holdings Limited 79,762,679 denominated 79,762,679
ordinary share
RMB-
Shenzhen Yuanshi Laser Industrial Investment Consulting Partnership (LP) 24,139,500 denominated 24,139,500
ordinary share
RMB-
Nantong Strait Appotronics Investment Partnership (LP) 18,381,208 denominated 18,381,208
ordinary share
RMB-
Shenzhen Appotronics Daye Investment Partnership (LP) 17,056,167 denominated 17,056,167
ordinary share
RMB-
Shenzhen Appotronics Hongye Investment Partnership (LP) 13,601,344 denominated 13,601,344
ordinary share
RMB-
Shenzhen Appotronics Chengye Consulting Partnership (LP) 10,394,846 denominated 10,394,846
ordinary share
RMB-
Bank of China Co., Ltd. - Stable Income Bond Securities Investment Fund of E Fund 10,038,092 denominated 10,038,092
ordinary share
RMB-
Shenzhen Jinleijing Investment Limited Partnership (LP) 9,892,706 denominated 9,892,706
ordinary share
132 / 290
2023 Annual Report
RMB-
Shanghai Pudong Development Bank Co., Ltd. - Invesco Great Wall New Energy Industry
6,807,726 denominated 6,807,726
Stock Securities Investment Fund
ordinary share
RMB-
LUO Xiaobin 6,004,004 denominated 6,004,004
ordinary share
Explanation about the special purchase account in top 10 shareholders N/A
Explanation about entrusted voting rights, proxy voting rights, waiver of voting rights
N/A
by the shareholders above
1. As of December 31, 2023, the following entities in top 10
shareholders of the Company constituted persons acting in concert:
Shenzhen Appotronics Holdings Limited, Shenzhen Yuanshi Laser
Industrial Investment Consulting Partnership (LP), Shenzhen
Appotronics Daye Investment Partnership (LP), Shenzhen
Appotronics Hongye Investment Partnership (LP), Shenzhen
Affiliates or concert parties among the shareholders stated above
Jinleijing Investment Limited Partnership (LP), and Shenzhen
Appotronics Chengye Consulting Partnership (LP).
2. Except for the above, we are not aware of whether there are
affiliates or concert parties as defined in the Administrative
Measures for the Acquisition of the Listed Companies among other
shareholders.
Holders of preferred shares whose voting right has been restituted and the number of
N/A
shares held by them
Participation in the lending of shares in refinancing businesses by top 10 shareholders
□ Applicable √ N/A
Change in top 10 shareholders compared with the prior period
√ Applicable □ N/A
Unit: Share
Change in top 10 shareholders compared with the prior period
Added/rem Number of shares under shareholder ordinary
Number of shares lent but not repaid in
oved accounts, credit accounts, and lent but not repaid in
refinancing businesses as of the end of the
Shareholder (Full name) during the refinancing businesses as of the end of the reporting
reporting period
reporting period
period Total shares Percentage (%) Total shares Percentage (%)
133 / 290
2023 Annual Report
Shanghai Pudong Development
Bank Co., Ltd. - Invesco Great Newly
- - 6,807,726 1.47
Wall New Energy Industry Stock added
Securities Investment Fund
Newly
LUO Xiaobin - - 6,004,004 1.30
added
Shenzhen Guochuang Chenggu
Capital Management Co., Ltd. -
Removed - - 3,822,639 0.83
Shenzhen Chengguhui Equity
Investment Partnership (LP)
Industrial Bank Co., Ltd. - Tianhong
Yongli Bond Securities Investment Removed - - - -
Fund
Top 10 holders of non-tradable shares and lock-up period
□ Applicable √ N/A
Statement of top 10 holders of domestic depository receipts as of the end of the reporting period
□ Applicable √ N/A
Participation in the lending of depository receipts in refinancing businesses by top 10 holders of depository receipts
□ Applicable √ N/A
Change in top 10 holders of depository receipts compared with the prior period
□ Applicable √ N/A
Number of non-tradable depository receipts held by top 10 holders and lock-up period
□ Applicable √ N/A
(III) Statement of top 10 shareholders by number of votes held as of the end of the reporting period
□ Applicable √ N/A
(IV) Strategic investors or general corporations that become top 10 shareholders as a result of allotment of new shares/depository receipts
□ Applicable √ N/A
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(V) Strategic allotment in IPO
1. Participation by any special asset management plan established by senior officers and key employees in the strategic allotment in IPO
□ Applicable √ N/A
2. Participation by any subsidiary of the sponsor in the strategic allotment in IPO
□ Applicable √ N/A
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IV. Controlling shareholder and actual controller
(I) Controlling shareholder
1 Legal person
√ Applicable □ N/A
Shenzhen Appotronics Holdings
Name
Limited
Principal or legal representative LI Yi
Date of establishment January 17, 2014
Main business Investment holding
Shares held in other domestic or foreign listed companies
None
during the reporting period
Other information N/A
2 Natural person
□ Applicable √ N/A
3 Special explanation if the Company does not have a controlling shareholder
□ Applicable √ N/A
4 Explanation about the change in the controlling shareholder during the reporting period
□ Applicable √ N/A
5 Block diagram of the controlling shareholder’s ownership of and control over the Company
√ Applicable □ N/A
Shenzhen Appotronics Holdings Limited
Appotronics Corporation Limited
(II) Actual controller
1 Legal person
□ Applicable √ N/A
2 Natural person
√ Applicable □ N/A
Name LI Yi
Nationality China
Whether or not have right of residence in any
Yes
other country or region
Main occupation and title President and General Manager of the Company
Whether or not control any domestic or foreign None
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2023 Annual Report
listed company in the past 10 years
3 Special explanation if the Company does not have an actual controller
□ Applicable √ N/A
4 Explanation about the change of control of the Company during the reporting period
□ Applicable √ N/A
5 Block diagram of the actual controller’s ownership of and control over the Company
√ Applicable □ N/A
LI Yi
Shenzhen Shenzhen Shenzhen Shenzhen Shenzhen Shenzhen
Appotronics Yuanshi Laser Appotronics Appotronics Jinleijing Appotronics
Holdings Industrial Daye Hongye Investment Chengye
Limited Investment Investment Investment Limited Consulting
Consulting Partnership Partnership Partnership Partnership
Partnership (LP) (LP) (LP) (LP)
(LP)
A total control of 33.50%
Appotronics Corporation Limited
6 The actual controller controls the Company by means of trust or other assets management
□ Applicable √ N/A
(III) Other information about the controlling shareholder and the actual controller
□ Applicable √ N/A
V. The total shares pledged by the controlling shareholder or largest shareholder and parties
acting in concert therewith account for over 80% of the shares held by such shareholder in the
Company
□ Applicable √ N/A
VI. Other corporate shareholders holding more than 10% shares
□ Applicable √ N/A
VII. Restrictions on the disposal of shares/depository receipts
□ Applicable √ N/A
VIII.Specific implementation of share repurchase during the reporting period
□ Applicable √ N/A
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Section VIII. Preferred Shares
□ Applicable √ N/A
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Section IX. Bonds
I. Enterprise bonds, corporate bonds, and non-financial enterprise debt financing instruments
□ Applicable √ N/A
II. Convertible corporate bonds
□ Applicable √ N/A
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2023 Annual Report
Section X. Financial Report
I. Auditor’s report
√ Applicable □ N/A
Auditor’s report
Tian Jian Shen (2024) No. 7-675
To all shareholders of Appotronics Corporation Limited:
I. Opinion
We have audited the financial statements of Appotronics Corporation Limited (“Appotronics”),
which comprise the consolidated and the parent company’s balance sheets as at December 31, 2023, and
the consolidated and the parent company’s income statements, the consolidated and the parent company’s
statements of cash flow and the consolidated and the parent company’s statements of changes in owners’
equity for the year then ended, and the notes to the relevant financial statements.
In our opinion, the accompanying financial statements of Appotronics are prepared and present fairly,
in all material respects, the consolidated and the parent company’s financial position as of December 31,
2023, and the consolidated and the parent company’s results of operations and cash flows for the year then
ended in accordance with the Accounting Standards for Business Enterprises.
II. Basis for opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accounts of
China. Our responsibilities under those standards are further described in the Certified Public Accountants’
Responsibilities for Audit of Financial Statements section of our report. We are independent of
Appotronics in accordance with the Code of Ethics for Chinese Certified Public Accountants, and we have
fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key audit items
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
(I) Revenue
1. Description
Details of relevant information are disclosed in V.34, V.37, and VII.61 of Section X.
Appotronics is mainly engaged in research, development, production, sales and leasing of laser
display core devices and complete equipment. In 2023, the operating income of Appotronics amounted to
RMB 2,213,356,977.95, of which sales and other incomes were RMB 1,844,190,487.75, representing
83.32% of the total operating income, and lease incomes were RMB 369,166,490.20, representing 16.68%
of the total operating income.
As the operating income is one of Appotronics’s KPIs, there may be an inherent risk that the
management of Appotronics (hereinafter referred to as “management”) may recognize the revenue
inappropriately to achieve specific objectives or expectations. Therefore, we identified revenue
recognition as a key audit matter.
2. Description of how the key audit matter was addressed in the audit
For revenue recognition, our audit procedures include, inter alia:
(1) Understand the key internal controls related to revenue recognition, evaluate the design of those
controls, determine whether they are implemented, and test the operational effectiveness of the relevant
internal controls;
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(2) Examine major sales contracts and lease contracts, understand the major provisions or conditions
thereof, and evaluate whether revenue recognition methods are appropriate;
(3) Implement analysis procedures for operating income and gross margin by month, product,
customer, etc., to identify whether there are significant or unusual fluctuations and to find out the causes
of such fluctuations;
(4) For sales income, sample supporting documents related to revenue recognition including, among
other things, sales contracts or orders, sales invoices, warehouse receipts, delivery notes, transport
information, and customer signature forms; for lease income, sample supporting documents including,
among other things, lease contracts, orders, installation orders, unit lease price per hour, and number of
hours consumed; for sales income, sample supporting documents including, among other things, sales
contracts, customs declaration forms, and bills of lading;
(5) In conjunction with accounts receivable confirmation procedures, send confirmation to major
customers to recognize the current incomes on a sample basis;
(6) Conduct the cut-off test on the operating incomes recognized on or after the balance sheet date to
evaluate whether the operating incomes are recognized during the appropriate period;
(7) Obtain a record of sales returns after the balance sheet date to check if there is any instance that
conditions for revenue recognition were not met at the balance sheet date;
(8) Check whether information relative to operating income is properly presented in the financial
statements.
(II) Net realizable value of inventories
1. Description
Details of relevant information are disclosed in V.16 and VII.10 of Section X.
As of December 31, 2023, the carrying amount of inventories of Appotronics amounted to RMB
750,307,578.52, and provisions for decline in value of inventories amounted to RMB 93,960,778.85,
hence the book value of inventories amounted to RMB 656,346,799.67.
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the net
realizable value is below the cost of inventories, a provision for decline in value of inventories is made. In
view of the purpose of holding inventories, the management determines the estimated selling price of
inventories based on historical or actual selling prices, and the net realizable value of inventories in
accordance with the balance of the estimated selling price less the sum of the estimated costs of completion
and the estimated costs necessary to make the sale and relevant taxes. The amount of inventories is material
and the determination of the net realizable value of inventories involves significant management judgment,
therefore, we identified the determination of the net realizable value of inventories as a key audit matter.
2. Description of how the key audit matter was addressed in the audit
For the net realizable value of inventories, our audit procedures include, inter alia:
(1) Understand the key internal controls related to the net realizable value of inventories, evaluate the
design of those controls, determine whether they are implemented, and test the operational effectiveness
of the relevant internal controls;
(2) Review the management’s forecast of the estimated selling price of inventories on a sample basis,
and compare the estimated selling price with historical data and subsequent situations, etc.;
(3) Evaluate the appropriateness of the management’s estimates on the estimated costs of completion
of inventories and the estimated costs necessary to make the sale and relevant taxes;
(4) Test the accuracy of the management’s calculation on the net realizable value of inventories;
(5) Evaluate the reasonableness of the management’s estimates on the net realizable value of
inventories by checking inventories recognized at the end of the period in terms of long age, obsolescence,
changes in technology or market demand in conjunction with inventory monitoring;
(6) Check whether information relative to the net realizable value of inventories is properly presented
in the financial statements.
IV. Other information
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2023 Annual Report
The management is responsible for 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 thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion 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, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the management and those charged with governance with respect to the
financial statements
The management is responsible for the preparation and fair presentation of the financial statements
in accordance with the Accounting Standards for Business Enterprises, and designing, implementing and
maintaining internal control that is necessary to ensure that the financial statements are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing Appotronics’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the management either intends to liquidate Appotronics or
to cease operations, or has no realistic alternative but to do so.
Those charged with governance of Appotronics (hereinafter referred to as “those charged with
governance”) are responsible for overseeing Appotronics’s financial reporting process.
VI. Certified public accountants’ responsibilities for audit of 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 solely to you. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Auditing Standards of China 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 Auditing Standards of China, 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 that 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. Meanwhile, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on Appotronics’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required by the Auditing Standards of
China to draw users’ attention in our auditor’s report to the related disclosures in the financial statements.
If such disclosures are inadequate, we are supposed to express an unqualified 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 Appotronics to cease to continue as a going concern.
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2023 Annual Report
(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.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the
entities or business activities within Appotronics to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain 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 significant 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 key 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 (Special General Partnership)
Chinese Certified Public Accountant: WEI Biaowen
(Partner in Charge)
Hangzhou City, China Chinese Certified Public Accountant: NIU Chunjun
April 25, 2024
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2023 Annual Report
II. Financial statements
Consolidated Balance Sheet
December 31, 2023
Prepared by: Appotronics Corporation Limited
In RMB
Item Note December 31, 2023 December 31, 2022
Current Assets:
Cash and bank balances VII. 1 1,386,828,549.06 1,355,882,208.63
Balances with clearing agencies
Placements with banks and other
financial institutions
Held-for-trading financial assets VII. 2 514,010,000.00 352,880,000.00
Derivative financial assets
Notes receivable VII. 4 8,951,308.71 2,234,687.77
Accounts receivable VII. 5 180,290,007.90 208,260,235.79
Receivables financing VII. 7 11,387,400.00 4,279,041.00
Prepayments VII. 8 35,112,661.82 48,445,976.86
Premiums receivable
Amounts receivable under reinsurance
contracts
Reinsurer’s share of insurance
contract reserves
Other receivables VII. 9 30,698,687.55 26,331,721.55
Where: Interests receivable
Dividends receivable 14,023,746.00 13,789,908.00
Financial assets purchased under
resale agreements
Inventories VII. 10 656,346,799.67 865,639,961.79
Contract assets VII. 6 1,664,740.29 1,061,581.35
Held-for-sale assets
Non-current assets due within one
VII. 12 41,997,218.73 13,431,554.82
year
Other current assets VII. 13 48,417,270.11 106,502,611.79
Total current assets 2,915,704,643.84 2,984,949,581.35
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term receivables VII. 16 26,000,543.13 11,524,193.80
Long-term equity investment VII. 17 144,726,776.43 162,394,917.57
Investment in other equity instruments VII. 18 7,075,419.38 7,075,419.38
Other non-current financial assets
Investment properties
Fixed assets VII. 21 336,276,793.84 427,539,718.53
Construction in progress VII. 22 347,777,138.86 278,978,057.73
Productive biological assets
Oil and gas assets
Right-of-use assets VII. 25 40,016,903.67 62,255,670.29
Intangible assets VII. 26 281,961,046.22 290,341,693.08
Development expenditure
Goodwill
Long-term prepaid expenses VII. 28 6,318,145.33 5,990,984.03
Deferred tax assets VII. 29 85,364,732.19 89,730,936.02
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2023 Annual Report
Other non-current assets VII. 30 29,348,748.27 12,569,088.37
Total non-current assets 1,304,866,247.32 1,348,400,678.80
Total assets 4,220,570,891.16 4,333,350,260.15
Current Liabilities:
Short-term borrowings VII. 32 80,036,500.00 129,589,634.03
Loans from the central bank
Taking from banks and other financial
institutions
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable VII. 35 76,001,079.07 201,299,388.57
Accounts payable VII. 36 247,318,466.10 276,845,321.28
Advance from customers VII. 37 110,573,711.24 113,834,728.10
Contract liabilities VII. 38 45,416,445.99 37,285,920.43
Financial assets sold under repurchase
agreements
Customer deposits and deposits from
banks and other financial institutions
Funds from securities trading agency
Funds from underwriting securities
agency
Employee benefits payable VII. 39 66,874,234.47 58,470,960.55
Taxes payable VII. 40 6,142,704.23 8,272,768.90
Other payables VII. 41 54,142,509.17 56,662,357.08
Where: Interest payable
Dividend payable
Fees and commissions payable
Amounts payable under reinsurance
contracts
Held-for-sale liabilities
Non-current liabilities due within one
VII. 43 268,748,151.67 178,031,817.37
year
Other current liabilities VII. 44 18,441,685.83 28,383,608.37
Total current liabilities 973,695,487.77 1,088,676,504.68
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings VII. 45 370,649,631.22 403,720,542.45
Bonds payable
Where: Preferred shares
Perpetual bonds
Lease liabilities VII. 47 15,548,985.71 34,319,284.23
Long-term payables
Long-term employee benefits payable
Provisions VII. 50 58,180,985.08 56,463,882.87
Deferred income VII. 51 4,627,972.56 8,651,422.26
Deferred tax liabilities VII. 29 1,229,654.81
Other non-current liabilities
Total non-current liabilities 450,237,229.38 503,155,131.81
Total liabilities 1,423,932,717.15 1,591,831,636.49
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share capital) VII. 53 462,211,338.00 457,107,538.00
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve VII. 55 1,616,489,567.43 1,530,752,116.04
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2023 Annual Report
Less: Treasury shares VII. 56 19,377,297.59 19,377,297.59
Other comprehensive income VII. 57 7,550,073.78 5,736,897.41
Special reserve
Surplus reserve VII. 59 84,873,365.32 75,519,782.06
General risk reserve
Undistributed profit VII. 60 667,122,406.05 597,924,451.67
Total owners’ (or shareholders’)
equity attributable to owners of the 2,818,869,452.99 2,647,663,487.59
parent company
Minority interests -22,231,278.98 93,855,136.07
Total owners’ (or shareholders’)
2,796,638,174.01 2,741,518,623.66
equity
Total liabilities and owners’ (or
4,220,570,891.16 4,333,350,260.15
shareholders’) equity
Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person in
Charge of the Accounting Body: WANG Yingxia
Balance Sheet of the Parent Company
December 31, 2023
Prepared by: Appotronics Corporation Limited
In RMB
Item Note December 31, 2023 December 31, 2022
Current Assets:
Cash and bank balances 885,876,318.51 675,429,827.76
Held-for-trading financial assets 514,010,000.00 352,880,000.00
Derivative financial assets
Notes receivable 8,951,308.71 2,234,687.77
Accounts receivable XIX. 1 462,480,236.37 688,004,828.29
Receivables financing 5,996,000.00 2,399,041.00
Prepayments 6,081,606.52 11,009,592.85
Other receivables XIX. 2 14,978,163.24 7,556,623.71
Where: Interests receivable
Dividends receivable
Inventories 360,986,333.90 390,906,125.18
Contract assets 1,664,740.29 1,061,581.35
Held-for-sale assets
Non-current assets due within one year 1,334,808.66
Other current assets 26,620,443.94 27,531,860.98
Total current assets 2,287,645,151.48 2,160,348,977.55
Non-current Assets:
Debt investments
Other debt investments
Long-term receivables 944,108.40
Long-term equity investment XIX. 3 469,318,028.03 450,239,347.45
Investment in other equity instruments 7,075,419.38 7,075,419.38
Other non-current financial assets
Investment properties
Fixed assets 65,177,438.43 66,271,459.60
Construction in progress 344,481,907.55 270,837,599.21
Productive biological assets
Oil and gas assets
Right-of-use assets 30,017,024.96 52,738,418.54
Intangible assets 283,883,645.37 294,108,453.73
Development expenditure
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2023 Annual Report
Goodwill
Long-term prepaid expenses 1,450,084.92 487,991.29
Deferred tax assets 33,459,331.86 20,220,930.66
Other non-current assets 28,174,416.97 9,952,305.78
Total non-current assets 1,263,037,297.47 1,172,876,034.04
Total assets 3,550,682,448.95 3,333,225,011.59
Current Liabilities:
Short-term borrowings 50,010,833.33 60,043,166.67
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 31,461,205.72 58,301,159.76
Accounts payable 274,312,877.51 275,547,785.20
Advance from customers
Contract liabilities 18,743,336.81 19,945,270.00
Employee benefits payable 34,021,863.01 35,920,277.61
Taxes payable 3,596,744.97 5,339,271.71
Other payables 15,161,050.55 9,722,655.99
Where: Interest payable
Dividend payable
Held-for-sale liabilities
Non-current liabilities due within one 61,007,143.63 24,463,018.64
year
Other current liabilities 3,912,927.75 2,666,327.90
Total current liabilities 492,227,983.28 491,948,933.48
Non-current Liabilities:
Long-term borrowings 233,506,228.03 148,087,667.43
Bonds payable
Where: Preferred shares
Perpetual bonds
Lease liabilities 10,326,879.29 29,114,281.86
Long-term payables
Long-term employee benefits payable
Provisions 20,925,309.05 24,939,050.33
Deferred income 2,718,881.63 5,630,959.06
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 267,477,298.00 207,771,958.68
Total liabilities 759,705,281.28 699,720,892.16
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share capital) 462,211,338.00 457,107,538.00
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1,625,258,496.25 1,541,789,874.63
Less: Treasury shares 19,377,297.59 19,377,297.59
Other comprehensive income
Special reserve
Surplus reserve 83,595,824.59 74,242,241.33
Undistributed profit 639,288,806.42 579,741,763.06
Total owners’ (or shareholders’) 2,790,977,167.67 2,633,504,119.43
equity
Total liabilities and owners’ (or
3,550,682,448.95 3,333,225,011.59
shareholders’) equity
Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person in
Charge of the Accounting Body: WANG Yingxia
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2023 Annual Report
Consolidated Income Statement
January to December 2023
In RMB
Item Note 2023 2022
I. Total operating income 2,213,356,977.95 2,541,144,635.15
Where: Operating income VII. 61 2,213,356,977.95 2,541,144,635.15
Interest income
Premiums earned
Fee and commission income
II. Total operating costs 2,138,781,888.21 2,504,104,232.01
Where: Operating costs VII. 61 1,411,758,369.08 1,711,732,842.88
Interest expenses
Fee and commission expenses
Surrenders
Claims and policyholder benefits (net
of amounts recoverable from reinsurers)
Net withdrawal of insurance contract
reserves
Insurance policyholder dividends
Expenses for reinsurance accepted
Taxes and surcharges VII. 62 7,768,044.95 11,111,853.75
Selling expenses VII. 63 300,679,932.99 334,758,958.86
Administrative expenses VII. 64 157,092,724.49 193,554,776.41
R&D expenses VII. 65 280,932,800.35 262,108,405.90
Financial expenses VII. 66 -19,449,983.65 -9,162,605.79
Where: Interest expense 18,635,749.36 24,819,665.70
Interest income 34,298,315.94 17,711,130.51
Add: Other income VII. 67 41,442,072.61 33,949,485.88
Investment income (loss is indicated
VII. 68 568,352.18 3,979,813.96
by “-”)
Where: Income from investments in
-12,002,779.90 -3,244,838.52
associates and joint ventures
Gains from derecognition of -912,618.35
financial assets measured at amortized cost
Foreign exchange gains (loss is
indicated by “-”)
Gains from net exposure hedges (loss
is indicated by “-”)
Gains from changes in fair values
VII. 70 130,000.00 -3,320,000.00
(loss is indicated by “-”)
Losses of credit impairment (loss is
VII. 71 -6,979,447.80 -10,257,975.50
indicated by “-”)
Impairment losses of assets (loss is
VII. 72 -74,260,854.74 -48,234,017.58
indicated by “-”)
Gains from disposal of assets (loss is
VII. 73 151,469.26 229,000.28
indicated by “-”)
III. Operating profit (loss is indicated by “-”) 35,626,681.25 13,386,710.18
Add: Non-operating income VII. 74 9,880,662.10 16,589,847.66
Less: Non-operating expenses VII. 75 7,832,364.17 2,466,545.66
IV. Total profits (total losses are indicated by
37,674,979.18 27,510,012.18
“-”)
Less: Income tax expenses VII. 76 20,058,698.03 -3,328,785.48
V. Net profits (net losses are indicated by “-”) 17,616,281.15 30,838,797.66
(I) Categorized by the continuity of operation
148 / 290
2023 Annual Report
1. Net profits from continuing operations
17,616,281.15 30,838,797.66
(net losses are indicated by “-”)
2. Net profits from discontinued
operations (net losses are indicated by “-”)
(II) Categorized by the ownership
1. Net profits attributable to shareholders
of the parent company (net losses are 103,186,743.57 119,440,773.77
indicated by “-”)
2. Profits or losses attributable to
minority shareholders (net losses are -85,570,462.42 -88,601,976.11
indicated by “-”)
VI. Other comprehensive income, net of tax 1,121,927.11 20,863,757.74
(I) Other comprehensive income that can
be attributable to owners of the parent 1,813,176.37 22,577,410.01
company, net of tax
1. Other comprehensive income that
cannot be reclassified subsequently to profit
or loss
(1) Changes from remeasurement of
defined benefit plans
(2) Other comprehensive income that
cannot be reclassified to profit or loss under
the equity method
(3) Changes in fair value of investments in
other equity instruments
(4) Changes in fair value of enterprises’
own credit risks
2. Other comprehensive income that will
1,813,176.37 22,577,410.01
be reclassified to profit or loss
(1) Other comprehensive income that will
be reclassified to profit or loss under the -3,126,210.45 -12,813,785.24
equity method
(2) Changes in fair value of other debt
investments
(3) Amount of financial assets reclassified
to other comprehensive income
(4) Provision for credit impairment of other
debt investments
(5) Reserve for cash flow hedges
(6) Exchange differences on translation of
financial statements denominated in foreign 4,939,386.82 35,391,195.25
currencies
(7) Others
(II) Other comprehensive income that can
be attributable to minority shareholders, net -691,249.26 -1,713,652.27
of tax
VII. Total comprehensive income 18,738,208.26 51,702,555.40
(I) Total comprehensive income that can be
104,999,919.94 142,018,183.78
attributable to owners of the parent company
(II) Total comprehensive income that can
-86,261,711.68 -90,315,628.38
be attributable to minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share (RMB/share) 0.23 0.26
(II) Diluted earnings per share
0.22 0.26
(RMB/share)
149 / 290
2023 Annual Report
In the event of business combinations involving entities under common control, the net profits realized
prior to the combination by the party being absorbed is: RMB 0, and the net profits realized in the last
period by the party being absorbed is: RMB 0.
Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person
in Charge of the Accounting Body: WANG Yingxia
Income Statement of the Parent Company
January to December 2023
In RMB
Item Note 2023 2022
I. Operating income XIX. 4 1,120,351,462.42 1,345,923,616.67
Less: Operating costs XIX. 4 781,792,429.91 910,770,517.27
Taxes and surcharges 6,174,264.79 7,604,069.03
Selling expenses 83,985,382.70 88,126,865.23
Administrative expenses 65,588,918.77 122,275,548.87
R&D expenses 161,343,424.73 151,041,023.34
Financial expenses -26,883,193.36 -27,358,557.34
Where: Interest expense 6,304,697.96 3,615,664.22
Interest income 29,873,828.03 20,440,797.02
Add: Other income 28,781,626.24 20,926,293.34
Investment income (loss is indicated by 19,652,860.44 103,034,950.62
XIX. 5
“-”)
Where: Income from investments in -163,837.89
associates and joint ventures
Gains from derecognition of
financial assets measured at amortized cost
Gains from net exposure hedges (loss is
indicated by “-”)
Gains from changes in fair values (loss is 130,000.00 -3,320,000.00
indicated by “-”)
Losses of credit impairment (loss is -5,325,094.56 -1,433,483.62
indicated by “-”)
Impairment losses of assets (loss is -11,148,568.14 -15,970,957.71
indicated by “-”)
Gains from disposal of assets (loss is 30,476.32 11,882.43
indicated by “-”)
II. Operating profit (loss is indicated by “-”) 80,471,535.18 196,712,835.33
Add: Non-operating income 542,346.47 113,375.83
Less: Non-operating expenses 240,165.57 2,033,425.93
III. Total profits (total losses are indicated by “-”) 80,773,716.08 194,792,785.23
Less: Income tax expenses -12,762,116.47 2,253,647.71
IV. Net profits (net losses are indicated by “-”) 93,535,832.55 192,539,137.52
(I) Net profits from continuing operations (net 93,535,832.55 192,539,137.52
losses are indicated by “-”)
(II) Net profits from discontinued operations
(net losses are indicated by “-”)
V. Other comprehensive income, net of tax
(I) Other comprehensive income that cannot
be reclassified subsequently to profit or loss
1. Changes from remeasurement of defined
benefit plans
2. Other comprehensive income that cannot
be reclassified to profit or loss under the equity
method
150 / 290
2023 Annual Report
3. Changes in fair value of investments in
other equity instruments
4. Changes in fair value of enterprises’ own
credit risks
(II) Other comprehensive income that will be
reclassified to profit or loss
1. Other comprehensive income that will be
reclassified to profit or loss under the equity
method
2. Changes in fair value of other debt
investments
3. Amount of financial assets reclassified to
other comprehensive income
4. Provision for credit impairment of other
debt investments
5. Reserve for cash flow hedges
6. Exchange differences on translation of
financial statements denominated in foreign
currencies
7. Others
VI. Total comprehensive income 93,535,832.55 192,539,137.52
VII. Earnings per share:
(I) Basic earnings per share (RMB/share)
(II) Diluted earnings per share (RMB/share)
Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person in
Charge of the Accounting Body: WANG Yingxia
Consolidated Cash Flow Statement
January to December 2023
In RMB
Item Note 2023 2022
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the
2,387,449,326.09 2,961,315,911.23
rendering of services
Net increase in customer deposits and deposits
from banks and other financial institutions
Net increase in loans from the central bank
Net increase in taking from banks and other
financial institutions
Cash receipts from premiums under direct
insurance contracts
Net cash receipts from reinsurance business
Net cash receipts from policyholders’ deposits
and investment contract liabilities
Cash receipts from interest, fees and commissions
Net increase in taking from banks
Net increase in financial assets sold under
repurchase arrangements
Net cash received from securities trading agencies
Receipts of tax refunds 51,043,896.71 9,075,667.22
Other cash receipts related to operating activities VII. 78 152,471,883.59 153,496,117.32
Subtotal of cash inflows from operating
2,590,965,106.39 3,123,887,695.77
activities
Cash payments for goods purchased and services
1,384,161,942.37 1,984,713,135.68
received
151 / 290
2023 Annual Report
Net increase in loans and advances to customers
Net increase in balance with the central bank and
due from banks and other financial institutions
Cash payments for claims and policyholders’
benefits under direct insurance contracts
Net increase in placements with banks and other
financial institutions
Cash payments for interest, fees and commissions
Cash payments for insurance policyholder
dividends
Cash payments to and on behalf of employees 445,173,399.88 443,190,106.16
Payments of various types of taxes 68,408,617.04 90,351,732.74
Other cash payments related to operating
VII. 78 329,139,092.02 428,282,005.50
activities
Subtotal of cash outflows from operating
2,226,883,051.31 2,946,536,980.08
activities
Net cash flow from operating activities 364,082,055.08 177,350,715.69
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery of
1,628,530,000.00 2,216,404,000.00
investments
Cash receipts from investment income 12,571,132.08 12,837,561.73
Net cash receipts from disposals of fixed assets,
536,758.74 6,713.15
intangible assets and other long-term assets
Net cash receipts from disposals of subsidiaries
and other business units
Other cash receipts related to investing activities VII. 78 8,004,240.00
Subtotal of cash inflows from investing
1,641,637,890.82 2,237,252,514.88
activities
Cash payments to acquire or construct fixed
115,247,559.31 167,335,288.66
assets, intangible assets and other long-term assets
Cash payments to acquire investments 1,835,530,000.00 2,022,000,000.00
Net increase in pledged loans receivables
Net cash payments for acquisitions of subsidiaries
19,724,965.16
and other business units
Other cash payments related to investing activities
Subtotal of cash outflows from investing
1,970,502,524.47 2,189,335,288.66
activities
Net cash flows from investment activities -328,864,633.65 47,917,226.22
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 87,810,995.80 76,598,336.46
Where: Cash receipts from capital contributions
from minority shareholders of subsidiaries
Cash receipts from borrowings 345,599,598.92 443,474,932.04
Other cash receipts related to financing activities
Subtotal of cash inflows from financing
433,410,594.72 520,073,268.50
activities
Cash repayments of borrowings 333,613,131.18 272,903,834.00
Cash payments for distribution of dividends or
63,555,733.03 81,512,905.15
profits or settlement of interest expenses
Where: Payments for distribution of dividends or
11,040,000.00 7,360,000.00
profits to minority shareholders of subsidiaries
Other cash payments related to financing
VII. 78 34,444,716.79 49,643,474.28
activities
Subtotal of cash outflows from financing
431,613,581.00 404,060,213.43
activities
152 / 290
2023 Annual Report
Net cash flows from financing activities 1,797,013.72 116,013,055.07
IV. Effect of Foreign Exchange Rate Changes on
6,252,057.48 22,106,239.41
Cash and Cash Equivalents
V. Net Increase in Cash and Cash Equivalents 43,266,492.63 363,387,236.39
Add: Opening balance of cash and cash
1,254,582,403.12 891,195,166.73
equivalents
VI. Closing Balance of Cash and Cash
1,297,848,895.75 1,254,582,403.12
Equivalents
Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person
in Charge of the Accounting Body: WANG Yingxia
Cash Flow Statement of the Parent Company
January to December 2023
In RMB
Item Note 2023 2022
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the 1,449,090,688.82 1,437,145,165.15
rendering of services
Receipts of tax refunds 2,864,310.29 2,037,215.25
Other cash receipts related to operating activities 45,454,875.70 60,542,250.60
Subtotal of cash inflows from operating 1,497,409,874.81 1,499,724,631.00
activities
Cash payments for goods purchased and services 819,973,474.81 1,054,147,368.37
received
Cash payments to and on behalf of employees 268,406,978.19 261,855,452.88
Payments of various types of taxes 22,487,347.11 48,340,610.72
Other cash payments related to operating 67,545,131.28 104,047,838.81
activities
Subtotal of cash outflows from operating 1,178,412,931.39 1,468,391,270.78
activities
Net cash flow from operating activities 318,996,943.42 31,333,360.22
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery of 1,628,530,000.00 1,993,000,000.00
investments
Cash receipts from investment income 19,816,698.33 103,034,950.62
Net cash receipts from disposals of fixed assets,
306,703.74 290,523.88
intangible assets and other long-term assets
Net cash receipts from disposals of subsidiaries
and other business units
Other cash receipts related to investing activities 13,463,816.00
Subtotal of cash inflows from investing 1,662,117,218.07 2,096,325,474.50
activities
Cash payments to acquire or construct fixed
101,218,671.62 154,297,761.42
assets, intangible assets and other long-term assets
Cash payments to acquire investments 1,849,343,800.00 1,932,000,000.00
Net cash payments for acquisitions of subsidiaries
and other business units
Other cash payments related to investing activities 6,615,975.54
Subtotal of cash outflows from investing 1,957,178,447.16 2,086,297,761.42
activities
Net cash flows from investment activities -295,061,229.09 10,027,713.08
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 87,810,995.80 76,598,336.46
Cash receipts from borrowings 215,599,598.92 203,474,932.04
Other cash receipts related to financing activities 21,408.88 29,000,000.00
153 / 290
2023 Annual Report
Subtotal of cash inflows from financing 303,432,003.60 309,073,268.50
activities
Cash repayments of borrowings 100,093,137.18 79,000,000.00
Cash payments for distribution of dividends or 34,742,560.84 53,675,287.81
profits or settlement of interest expenses
Other cash payments related to financing 26,087,400.44 71,573,255.83
activities
Subtotal of cash outflows from financing 160,923,098.46 204,248,543.64
activities
Net cash flows from financing activities 142,508,905.14 104,824,724.86
IV. Effect of Foreign Exchange Rate Changes on 3,601,784.10 5,563,361.83
Cash and Cash Equivalents
V. Net Increase in Cash and Cash Equivalents 170,046,403.57 151,749,159.99
Add: Opening balance of cash and cash 634,972,775.32 483,223,615.33
equivalents
VI. Closing Balance of Cash and Cash 805,019,178.89 634,972,775.32
Equivalents
Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person in
Charge of the Accounting Body: WANG Yingxia
154 / 290
2023 Annual Report
Consolidated Statement of Changes in Owners’ Equity
January to December 2023
In RMB
2023
Equity attributable to owners of the parent company
Item Other equity Gene Total
Paid-in Other Spec Minority
instruments Less: ral Undistrib owner’s
capital Capital comprehe ial Surplus Oth interests
Prefer Perpet Treasur risk uted Subtotal equity
(or share Oth reserve nsive rese reserve ers
red ual y shares reser profits
capital) ers income rve
shares bonds ve
I. Closing
457,107,5 1,530,752,1 19,377,2 5,736,897. 75,519,7 597,924,4 2,647,663,4 93,855,13 2,741,518,6
balance of
38.00 16.04 97.59 41 82.06 51.67 87.59 6.07 23.66
last year
Add:
Changes in
accounting
policies
Corre
ctions of
prior
period
errors
Other
s
II.
Opening
457,107,5 1,530,752,1 19,377,2 5,736,897. 75,519,7 597,924,4 2,647,663,4 93,855,13 2,741,518,6
balance of
38.00 16.04 97.59 41 82.06 51.67 87.59 6.07 23.66
the current
year
III.
Changes
-
for the 5,103,800. 85,737,451. 1,813,176. 9,353,58 69,197,95 171,205,96 55,119,550.
116,086,4
year 00 39 37 3.26 4.38 5.40 35
15.05
(decrease
is
155 / 290
2023 Annual Report
indicated
by “-”)
(I) Total
-
comprehen 1,813,176. 103,186,7 104,999,91 18,738,208.
86,261,71
sive 37 43.57 9.94 26
1.68
income
(II)
Owners’
-
contributio 5,103,800. 85,737,451. 90,841,251. 72,056,548.
18,784,70
ns and 00 39 39 02
3.37
reduction
in capital
1.
Ordinary
shares 5,103,800. 82,707,195. 87,810,995. 87,810,995.
contribute 00 80 80 80
d by
owners
2. Capital
contributio
n from
holders of
other
equity
instrument
s
3. Share-
based
payment 2,758,753.7 2,758,753.7 2,591,763 5,350,517.3
recognized 0 0 .68 8
in owners’
equity
4. Others 271,501.89 271,501.89 - -
21,376,46 21,104,965.
7.05 16
(III) Profit - - - -
9,353,58
distributio 33,988,78 24,635,205. 11,040,00 35,675,205.
3.26
n 9.19 93 0.00 93
1. Transfer -
9,353,58
to surplus 9,353,583
3.26
reserve .26
156 / 290
2023 Annual Report
2. Transfer
to general
risk
reserve
3.
Distributio
- - - -
ns to
24,635,20 24,635,205. 11,040,00 35,675,205.
owners (or
5.93 93 0.00 93
shareholde
rs)
4. Others
(IV)
Transfers
within
owners’
equity
1.
Capitalizat
ion of
capital
reserve
2.
Capitalizat
ion of
surplus
reserve
3. Loss
offset by
surplus
reserve
4.
Retained
earnings
carried
forward
from
changes in
defined
benefit
plans
5.
Retained
157 / 290
2023 Annual Report
earnings
carried
forward
from other
comprehen
sive
income
6. Others
(V)
Special
reserve
1. Transfer
to special
reserve in
the period
2. Amount
utilized in
the period
(VI)
Others
IV.
Closing -
462,211,3 1,616,489,5 19,377,2 7,550,073. 84,873,3 667,122,4 2,818,869,4 2,796,638,1
balance of 22,231,27
38.00 67.43 97.59 78 65.32 06.05 52.99 74.01
the current 8.98
year
2022
Equity attributable to owners of the parent company
Item Paid-in Other S G Minority Total owner’s
Less: Other O interests equity
capital equity Capital p Surplus e Undistribute
Treasury comprehen t Subtotal
(or share instrument reserve ec reserve n d profits h
shares sive income
capital) s ia er
158 / 290
2023 Annual Report
P P l al er
re er re ri s
fe p
se s
rr et
O r k
e u
th v re
d al
er
s b e se
s
h o r
a n v
re d
e
s s
I. Closing -
452,756,9 1,400,605,136. 56,265,868. 545,277,188. 185,172,097. 2,623,236,679.
balance of 16,840,512. 2,438,064,581.
01.00 65 31 08 94 38
last year 60 44
Add:
Changes
in
accountin
g policies
Corre
ctions of
prior
period
errors
Other
s
II.
Opening -
452,756,9 1,400,605,136. 56,265,868. 545,277,188. 2,438,064,581. 185,172,097. 2,623,236,679.
balance of 16,840,512.
01.00 65 31 08 44 94 38
the current 60
year
III.
Changes
for the
-
year 4,350,637. 19,377,297. 22,577,410. 19,253,913. 52,647,263.5
130,146,979.39 209,598,906.15 91,316,961.8 118,281,944.28
(decrease 00 59 01 75 9
7
is
indicated
by “-”)
(I) Total -
22,577,410. 119,440,773.
comprehe 142,018,183.78 90,315,628.3 51,702,555.40
01 77
8
159 / 290
2023 Annual Report
nsive
income
(II)
Owners’
contributi 4,350,637. 19,377,297.
130,146,979.39 115,120,318.80 6,358,666.51 121,478,985.31
ons and 00 59
reduction
in capital
1.
Ordinary
shares 4,350,637.
72,247,699.46 76,598,336.46 76,598,336.46
contribute 00
d by
owners
2. Capital
contributi
on from
holders of
other
equity
instrument
s
3. Share-
based
payment
recognize 57,899,279.93 57,899,279.93 6,358,666.51 64,257,946.44
d in
owners’
equity
4. Others 19,377,297. -19,377,297.59
-19,377,297.59
59
(III) Profit -
19,253,913.
distributio 66,793,510.1 -47,539,596.43 -7,360,000.00 -54,899,596.43
75
n 8
1.
-
Transfer 19,253,913.
19,253,913.7
to surplus 75
5
reserve
2.
Transfer
to general
160 / 290
2023 Annual Report
risk
reserve
3.
Distributi
-
ons to
47,539,596.4 -47,539,596.43 -7,360,000.00 -54,899,596.43
owners (or
3
sharehold
ers)
4. Others
(IV)
Transfers
within
owners’
equity
1.
Capitaliza
tion of
capital
reserve
2.
Capitaliza
tion of
surplus
reserve
3. Loss
offset by
surplus
reserve
4.
Retained
earnings
carried
forward
from
changes in
defined
benefit
plans
5.
Retained
earnings
carried
161 / 290
2023 Annual Report
forward
from other
comprehe
nsive
income
6. Others
(V)
Special
reserve
1.
Transfer
to special
reserve in
the period
2. Amount
utilized in
the period
(VI)
Others
IV.
Closing
457,107,5 1,530,752,116. 19,377,297. 5,736,897.4 75,519,782. 597,924,451. 2,647,663,487. 93,855,136.0 2,741,518,623.
balance of
38.00 04 59 1 06 67 59 7 66
the current
year
Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person in Charge of the Accounting Body: WANG Yingxia
Statement of Changes in Owners’ Equity of the Parent Company
January to December 2023
In RMB
2023
Paid-in Other equity instruments Other
Less: Undistrib Total
Item capital (or Capital comprehe Special Surplus
Preferred Perpetual Treasury uted owner’s
share Others reserve nsive reserve reserve
shares bonds shares profits equity
capital) income
457,107,53 1,541,789, 19,377,297 74,242,24 579,741,7 2,633,504,
I. Closing balance of last year
8.00 874.63 .59 1.33 63.06 119.43
Add: Changes in accounting
policies
Corrections of prior
period errors
Others
162 / 290
2023 Annual Report
II. Opening balance of the 457,107,53 1,541,789, 19,377,297 74,242,24 579,741,7 2,633,504,
current year 8.00 874.63 .59 1.33 63.06 119.43
III. Changes for the year 5,103,800.0 83,468,621 9,353,583. 59,547,04 157,473,04
(decrease is indicated by “-”) 0 .62 26 3.36 8.24
(I) Total comprehensive 93,535,83 93,535,832
income 2.55 .55
(II) Owners’ contributions and 5,103,800.0 83,468,621 88,572,421
reduction in capital 0 .62 .62
1. Ordinary shares contributed 5,103,800.0 82,707,195 87,810,995
by owners 0 .80 .8
2. Capital contribution from
holders of other equity
instruments
3. Share-based payment 761,425.82 761,425.82
recognized in owners’ equity
4. Others
9,353,583. - -
(III) Profit distribution 26 33,988,78 24,635,205
9.19 .93
9,353,583. -
1. Transfer to surplus reserve 26 9,353,583.
26
- -
2. Distributions to owners (or
24,635,20 24,635,205
shareholders)
5.93 .93
3. Others
(IV) Transfers within owners’
equity
1. Capitalization of capital
reserve
2. Capitalization of surplus
reserve
3. Loss offset by surplus
reserve
4. Retained earnings carried
forward from changes in
defined benefit plans
5. Retained earnings carried
forward from other
comprehensive income
6. Others
163 / 290
2023 Annual Report
(V) Special reserve
1. Transfer to special reserve in
the period
2. Amount utilized in the
period
(VI) Others
IV. Closing balance of the 462,211,33 1,625,258, 19,377,297 83,595,82 639,288,8 2,790,977,
current year 8.00 496.25 .59 4.59 06.42 167.67
2022
Paid-in Other equity instruments Other
Less: Undistrib Total
Item capital (or Capital comprehe Special Surplus
Preferred Perpetual Treasury uted owner’s
share Others reserve nsive reserve reserve
shares bonds shares profits equity
capital) income
I. Closing balance of last year 452,756,90 1,410,150, 54,988,32 453,996,1 2,371,891,
1.00 134.25 7.58 35.72 498.55
Add: Changes in accounting
policies
Corrections of prior
period errors
Others
II. Opening balance of the 452,756,90 1,410,150, 54,988,32 453,996,1 2,371,891,
current year 1.00 134.25 7.58 35.72 498.55
III. Changes for the year 4,350,637.0 131,639,74 19,377,297 19,253,91 125,745,6 261,612,62
(decrease is indicated by “-”) 0 0.38 .59 3.75 27.34 0.88
(I) Total comprehensive 192,539,1 192,539,13
income 37.52 7.52
(II) Owners’ contributions 4,350,637.0 131,639,74 19,377,297 116,613,07
and reduction in capital 0 0.38 .59 9.79
1. Ordinary shares 4,350,637.0 72,247,699 76,598,336
contributed by owners 0 .46 .46
2. Capital contribution from
holders of other equity
instruments
3. Share-based payment 59,392,040 59,392,040
recognized in owners’ equity .92 .92
4. Others 19,377,297 -
.59 19,377,297
.59
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(III) Profit distribution 19,253,91 - -
3.75 66,793,51 47,539,596
0.18 .43
1. Transfer to surplus reserve 19,253,91 -
3.75 19,253,91
3.75
2. Distributions to owners (or - -
shareholders) 47,539,59 47,539,596
6.43 .43
3. Others
(IV) Transfers within owners’
equity
1. Capitalization of capital
reserve
2. Capitalization of surplus
reserve
3. Loss offset by surplus
reserve
4. Retained earnings carried
forward from changes in
defined benefit plans
5. Retained earnings carried
forward from other
comprehensive income
6. Others
(V) Special reserve
1. Transfer to special reserve
in the period
2. Amount utilized in the
period
(VI) Others
IV. Closing balance of the 457,107,53 1,541,789, 19,377,297 74,242,24 579,741,7 2,633,504,
current year 8.00 874.63 .59 1.33 63.06 119.43
Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person in Charge of the Accounting Body: WANG Yingxia
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III. Company profile
1. Profile
√ Applicable □ N/A
Appotronics Corporation Limited (hereinafter referred to as “Company” or “the Company”),
formally named as Shenzhen Appotronics Optoelectronics Technology Inc. (hereinafter referred to as
“Appotronics Inc.”), was jointly invested and established by LI Yi and XU Yanzheng, registered in
Nanshan Branch of Market Supervision and Regulation Bureau of Shenzhen Municipality on October
24, 2006, and headquartered in Shenzhen City, Guangdong Province. The Company holds the business
license bearing the unified social credit code of 91440300795413991N. Its registered capital is RMB
462,211,338.00 divided into 462,211,338 shares (RMB 1.00 per share), including 462,211,338
unrestricted A shares. The Company’s shares were listed for trading on Shanghai Stock Exchange on
July 22, 2019.
The Company can be classified into the computer, communication and other electronic equipment
manufacturing industry. It mainly engages in research and development, production, sales and leasing of
laser display core devices and complete equipment, and can provide customers with technical research
and development services and customized products. Its products mainly include laser optical engines,
laser business education projectors, smart mini projectors, laser TVs, laser large venue projectors and
laser digital cinema projectors.
These financial statements have been approved by the 32nd meeting of the second Board of
Directors on April 25, 2024 for public disclosure.
IV. Basis of preparation of financial statements
1. Basis of preparation
The Company’s financial statements are prepared on a going-concern basis.
2. Going concern
√ Applicable □ N/A
The Company has detected no events or circumstances that may cast significant doubt upon its
ability to continue as a going concern within 12 months from the reporting period.
V. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates:
√ Applicable □ N/A
The Company establishes the specific accounting policies and makes the specific accounting estimates
with respect to inventories, depreciation of fixed assets, construction in progress, intangible assets,
recognition of revenues and other transactions and events according to the actual production and
operation characteristics of the Company.
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1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the Accounting
Standards for Business Enterprises and truly and completely reflect the Company’s financial position,
operating results, changes in shareholders’ equity, cash flows and other related information.
2. Accounting period
The accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
√ Applicable □ N/A
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 and domestic subsidiaries adopt RMB as their functional currency, while Appotronics
Hong Kong Limited and other overseas subsidiaries engaging in overseas operation adopt the currency in
their primary economic environments as their functional currencies.
5. Method and basis for determination of materiality
√ Applicable □ N/A
Item Materiality standard
The Company considers an individual dividend receivable in an
Significant dividends receivable
amount exceeding 0.3% of the total assets as a significant dividend
aged more than 1 year
receivable.
The Company considers the construction in progress which incurs
Significant construction in
the amount exceeding 0.3% of the total assets in the current period
progress
as a significant construction in progress.
The Company considers an individual cash flow from investing
Significant cash flow from
activities in an amount exceeding 5% of the total assets as a
investing activities
significant cash flow from investing activities.
The Company considers a subsidiary whose total assets/total
Significant subsidiaries and non-
revenue exceeds 15% of the group’s total assets/total revenue as a
wholly-owned subsidiaries
significant subsidiary or significant non-wholly-owned subsidiary.
The Company considers an associate whose total assets/total
Significant associates revenue exceeds 10% of the group’s total assets/total revenue as a
significant associate.
The Company considers an individual contingency in an amount
Significant contingencies
exceeding 0.3% of the total assets as a significant contingency.
The Company considers an event which is expected to have an
Significant events after the balance
impact on the total profit in an amount exceeding 5% of the group’s
sheet date
total profit as a significant event after the balance sheet date.
6. The accounting treatment of business combinations involving entities under common control
and not involving entities under common control
√ Applicable □ N/A
1. Accounting method for business combinations involving entities under common control
Assets and liabilities acquired from a business combination by the Company are measured at the
carrying amounts of the assets and liabilities of the combined party in the consolidated financial statements
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of the ultimate controller at the date of combination. The Company made adjustment to capital reserves
according to the differences between the shares in the owners’ equity of the combined party on the
consolidated financial statements of the ultimate controlling party and the book value of paid combination
considerations or the face value of issued shares. In case the capital reserve is not sufficient to absorb the
difference, the remaining balance is adjusted against the retained earnings.
2. Accounting method for business combinations not involving entities under common control
Where the cost of combination exceeds the Company’s interest in the fair value of the acquiree’s
identifiable net assets at the acquisition date, the difference is recognized as goodwill. Where the cost of
combination is less than the Company’s interest in the fair value of the acquiree’s identifiable net assets,
the Company firstly reassesses the fair values of the acquiree’s identifiable assets, liabilities and contingent
liabilities and the measurement of the cost of combination. If after that reassessment, the cost of
combination is still less than the Company’s interest in the fair value of the acquiree’s identifiable net
assets, the acquirer recognizes the remaining difference immediately in profit or loss for the current period.
7. Standard for determination of control and method of preparation of consolidated financial
statements
√ Applicable □ N/A
1. Determination of control
Control is the power of an investor over the investee to obtain variable returns by participating in
the relevant activities of the investee, and to affect the amount of the return by exercising the power over
the investee.
2. Method of preparation of the financial statements
The parent company includes all of its controlled subsidiaries in its consolidated financial
statements. The consolidated financial statements are prepared by the parent company in accordance
with the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements, on
the basis of the respective financial statements of the parent company and its subsidiaries, by reference
to other relevant data.
8. Classification of joint arrangements and accounting treatment of joint operations
√ Applicable □ N/A
1. Joint arrangements are classified into joint operations and joint ventures.
2. When the Company is a party to a joint operation, the Company recognizes the following items
related 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 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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9. Recognition of cash and cash equivalents
Cash presented on the cash flow statements refers to cash on hand and deposits that can be readily
withdrawn on demand. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
10. Translation of transactions and financial statements denominated in foreign currencies
√ Applicable □ N/A
1. Transactions denominated in foreign currencies
A foreign currency transaction is recorded in RMB, on initial recognition, by applying the spot
exchange rate on the date of the transaction. At the balance sheet date, foreign currency monetary items
are translated into RMB using the spot exchange rates at the balance sheet date. Exchange differences
arising from such translations are recognized in profit or loss for the current period, except for those
attributable to foreign currency borrowings that have been taken out specifically for the acquisition or
construction of qualifying assets and accrued interests. Non-monetary items denominated in foreign
currencies that are measured at historical cost are translated using the spot exchange rates ruling 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 spot exchange rates prevailing at the
dates when the fair value was determined, with exchange differences arising from such translations
recognized in profit or loss for the current period or other comprehensive income.
2. Translation of financial statements denominated in foreign currencies
Asset and liability items on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; owners’ equity items other than “undistributed profits” are translated at the spot
exchange rates at the dates on which such items arose; income and expense items in the income statement
are translated at the exchange rates that approximate the actual spot exchange rates on the dates of the
transactions. Exchange differences arising from such translations are recognized in other comprehensive
income.
11. Financial instruments
√ Applicable □ N/A
1. Classification of financial assets and financial liabilities
On initial recognition, the Company’s financial assets are classified into three categories, including
(1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive income;
and (3) financial assets at fair value through profit or loss for the current period.
Upon initial recognition, the Company’s financial liabilities are classified into four categories,
including (1) financial liabilities at fair value through profit or loss for the current period; (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; (3) financial guarantee contracts not falling
under Clauses (1) and (2), and loan commitments not falling under Clause (1) and below market interest
rate; and (4) financial liabilities at amortized cost.
2. Recognition, measurement and derecognition of financial assets and financial liabilities
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(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 related
to financial assets or liabilities at fair value through profit or loss are directly recognized in profit or loss
for the current period. Transaction costs related to other kinds of financial assets or liabilities are included
in their initially recognized amount. However, the accounts receivable, if do not contain any significant
financing component or are recognized by the Company without taking into consideration the financing
components under the contracts with a term of less than one year upon initial recognition, are initially
measured at transaction price defined in the Accounting Standards for Business Enterprises No. 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 arising from financial assets at amortized cost that do not belong to any
hedging relationship are recognized in profit or loss for the current period 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 for the current period, and 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 for the current period.
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 for the current period, and other gains or losses are recognized in other
comprehensive income. Upon derecognition, the accumulated gains or losses previously recognized in
other comprehensive income are transferred to retained earnings.
4) Financial assets at fair value through profit or loss for the current period
Financial assets at fair value through profit or loss for the current period are subsequently measured
at fair value, with gains or losses arising therefrom, including interest and dividend income, recognized in
profit or loss for the current period, except for the financial assets belonging to any hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss for the current period
Financial liabilities at fair value through profit or loss for the current period 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 for the current period. Such financial liabilities
are subsequently measured at fair value. Changes in the fair value of financial liabilities designated as at
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fair value through profit or loss for the period arising out of changes in the Company’s own 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 arising from such financial liabilities, including interest
expenses and changes in fair value not arising out of changes in the Company’s own credit risk, are
recognized in profit or loss for the current period, except for the financial liabilities belonging to any
hedging relationship. Upon derecognition, the accumulated 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 the Accounting Standards for Business
Enterprises No. 23 - Transfer of Financial Assets.
3) Financial guarantee contracts not falling under Clauses 1) and 2), and loan commitments not falling
under Clause 1) and below market interest rate
Such financial liabilities are subsequently measured at the higher of ① provision for impairment
losses determined according to the policy for impairment of financial instruments; and ② balance of the
initially recognized amount after deduction of the accumulated amortization determined in accordance
with the relevant provisions of the Accounting Standards for Business Enterprises No. 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 losses on financial liabilities at amortized cost that do not belong to any hedging
relationship are recognized in profit or loss for the current period 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 the Accounting Standards for Business Enterprises No. 23 - Transfer of
Financial Assets.
2) A financial liability (or part thereof) is derecognized when all or part of the outstanding
obligations thereon have been discharged.
3. Recognition 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 substantially all the risks and rewards incidental to the ownership of the
financial asset have been retained, the financial asset transferred continues to be recognized. If the
Company neither transferred nor retained a substantial portion of all risks and rewards incidental to the
ownership of the financial asset, then: (1) if the Company does not retain control over the financial asset,
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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); and (2) 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
(1) the carrying amount of the financial asset transferred at the date of derecognition; and (2) the sum of
the consideration received from the transfer and the portion of the accumulated 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 for the current period. If part of a
financial asset is transferred and the part transferred entirely meets the criteria for derecognition, the total
carrying amount 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 (1) the carrying amount of the part derecognized; and (2) the sum of the
consideration received from the transfer of the part derecognized and the portion of the accumulated
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 for the
current period.
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;
(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
obligation incurred in business combinations, and financial forecasts made using own data.
5. Impairment of financial instruments
The Company determines the impairment and assesses provision for impairment losses of financial
assets at amortized cost, investments in debt instruments at fair value through other comprehensive income,
contract assets, lease receivable, loan commitments other than financial liabilities designated at fair value
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2023 Annual Report
through profit or loss for the current period, and financial guarantee contracts other than financial liabilities
designated at fair value through profit or loss for the current period 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 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 shortage, wherein 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 a loss allowance equal to the accumulated amount of changes
in lifetime expected credit losses since initial recognition.
With respect to lease receivable, accounts receivable and contract assets that are formed from
transactions under the Accounting Standards for Business Enterprises No. 14 - Revenue, the Company
uses the simple measurement method and recognizes a loss allowance equal to the lifetime expected credit
loss.
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 a loss allowance equal to the lifetime expected credit loss 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 only has low credit
risk, the Company assumes that its credit risk has not increased significantly since initial recognition.
The Company assesses expected credit risks 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 loss allowance recognized in profit or loss for the current period as impairment
losses or gains. With respect to a financial asset at amortized cost, its carrying amount recorded in the
balance sheet is written off against the loss allowance. With respect to an investment in debt instruments
at fair value through other comprehensive income, the Company recognizes the loss allowance in other
comprehensive income, without reducing its carrying amount.
6. Offsetting of financial assets and financial liabilities
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Financial assets and financial liabilities are presented in the balance sheet separately, without
offsetting each other. However, the Company may represent the financial assets and financial liabilities
on a net basis in the balance sheet only if: (1) the Company has a legal right that is currently enforceable
to set off the recognized financial assets and financial liabilities, and (2) the Company intends either to
settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously.
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.
7. Recognition standard and provision method for expected credit loss of receivables and contract
assets
(1) Receivables and contract assets for which the provision of expected credit loss is made by
combination of credit risk characteristics
Basis for
Category of
determining Method for measuring expected credit losses
combination
a group
Bank acceptance bills
receivable
Type of notes
By reference to historical credit loss experience, and
Commercial acceptance
taking into account the current situations and prediction
bills receivable
of future economic conditions, calculate the expected
Receivables credit losses according to the default risk exposure and
Accounts receivable -
from related rate of lifetime expected credit loss.
group of receivables from
parties in the
related parties in the scope
scope of
of consolidation
consolidation
By reference to historical credit loss experience, and
taking into account the current situations and prediction
Accounts receivable - of future economic conditions, prepare a comparison
Aging
grouping by aging table of the aging of accounts receivable and rate of
expected credit loss, and calculate the expected credit
losses.
Receivables
from related By reference to historical credit loss experience, and
Contract assets - group of
taking into account the current situations and prediction
receivables from related parties in the of future economic conditions, calculate the expected
parties in the scope of
scope of credit losses according to the default risk exposure and
consolidation
rate of lifetime expected credit loss.
consolidation
By reference to historical credit loss experience, and
taking into account the current situations and prediction
Contract assets - group of
Aging of future economic conditions, prepare a comparison
aging table of the aging of contract assets 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
Other receivables -
Aging of future economic conditions, prepare a comparison
grouping by aging table of the aging of other receivables and rate of lifetime
expected credit loss, and calculate the expected credit
losses.
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2023 Annual Report
Basis for
Category of
determining Method for measuring expected credit losses
combination
a group
By reference to historical credit loss experience, and
taking into account the current situations and prediction
Long-term receivables -
Aging of future economic conditions, prepare a comparison
grouping by aging table of the aging of long-term receivables and rate of
lifetime expected credit loss, and calculate the expected
credit losses.
(2) Comparison table of the aging and rate of expected credit loss
Rate of
Rate of expected Rate of expected
expected credit Rate of expected
credit loss for credit loss for long-
Aging loss for credit loss for other
contract assets term receivables
accounts receivables (%)
(%) (%)
receivable (%)
Within 1 year
(including, the 5.00 5.00 5.00 5.00
same below)
1-2 years 25.00 25.00 25.00 25.00
2-3 years 50.00 50.00 50.00 50.00
Over 3 years 100.00 100.00 100.00 100.00
The aging of accounts receivable, contract assets, other receivables, and long-term receivables shall
be calculated from the date of occurrence of such amounts.
(3) Standard for identifying receivables and contract assets for which the provision of expected credit
losses is made individually
The Company makes provision of expected credit losses individually for receivables and contract assets
with obviously different credit risks and combinations of credit risks.
12. Notes receivable
√ Applicable □ N/A
Method for recognition of expected credit losses of notes receivable and relevant accounting
treatments
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Category of combination and determination basis for which the provision of bad debts is made by
combination of credit risk characteristics
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Aging calculation method for identifying combination of credit risk characteristics based on the
aging
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Determination standard for individually making provision for bad debts
√ Applicable □ N/A
Refer to V.11 of Section X for details.
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13. Accounts receivable
√ Applicable □ N/A
Method for recognition of expected credit losses of accounts receivable and relevant accounting
treatments
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Category of combination and determination basis for which the provision of bad debts is made by
combination of credit risk characteristics
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Aging calculation method for identifying combination of credit risk characteristics based on the
aging
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Determination standard for individually making provision for bad debts
√ Applicable □ N/A
Refer to V.11 of Section X for details.
14. Receivables financing
√ Applicable □ N/A
Method for recognition of expected credit losses of receivables financing and relevant accounting
treatments
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Category of combination and determination basis for which the provision of bad debts is made by
combination of credit risk characteristics
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Aging calculation method for identifying combination of credit risk characteristics based on the
aging
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Determination standard for individually making provision for bad debts
√ Applicable □ N/A
Refer to V.11 of Section X for details.
15. Other receivables
√ Applicable □ N/A
Method for recognition of expected credit losses of other receivables and relevant accounting
treatments
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Category of combination and determination basis for which the provision of bad debts is made by
combination of credit risk characteristics
√ Applicable □ N/A
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Refer to V.11 of Section X for details.
Aging calculation method for identifying combination of credit risk characteristics based on the
aging
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Determination standard for individually making provision for bad debts
√ Applicable □ N/A
Refer to V.11 of Section X for details.
16. Inventories
√ Applicable □ N/A
Categories of inventories, costing method of inventories transferred out, inventory counting system,
and amortization method for low cost and short-lived consumable items and packaging materials
√ Applicable □ N/A
1. Categories of inventories
Inventories mainly include finished goods or commodities held for sale in the ordinary course of
businesses, work in progress in the process of production or materials and supplies consumed in the
process of production or rendering service.
2. Costing method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
3. Inventory counting system
The perpetual inventory system is maintained for stock system.
4. Amortization method for low cost and short-lived consumable items and packaging materials
(1) Low cost and short-lived consumable items
Low cost and short-lived consumable items are amortized using the immediate write-off method.
(2) Packaging materials
Packaging materials are amortized using the immediate write-off method.
Recognition standard and method for provision of impairment for inventory
√ Applicable □ N/A
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If
the net realizable value is below the cost, a provision for decline in value of inventories is made. For
inventories directly used for sale, the net realizable value is determined as the estimated selling price in
the ordinary course of business less the estimated costs necessary to make the sale and relevant taxes. For
inventories required for processing, the net realizable value is determined as the estimated selling price of
finished goods in the ordinary course of business less the estimated costs of completion, and the estimated
costs necessary to make the sale and relevant taxes. As at the balance sheet date, if in the same item of
inventories, some are agreed with contractual prices while the others are not, the net realizable value for
such inventories is determined separately, and compared with the costs of the two parts of inventories
distinctively, so as to determine the provisions or reversal of provisions for decline in value of inventories
separately.
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Category of combination and determination basis for provision for impairment of inventory by
combination, and basis for determining the net realizable value of different types of inventories
□ Applicable √ N/A
Calculation method and determination basis of the net realizable value of each aging combination
for which the net realizable value of inventories is determined by aging
□ Applicable √ N/A
17. Contract assets
√ Applicable □ N/A
Recognition method and criteria of contract assets
√ Applicable □ N/A
The Company presents contract assets or contract liabilities in the balance sheet according to the
relationship between the performance of contractual obligations and payment by customers. Contract
assets and contract liabilities under a same contract are presented at the net amount after offsetting each
other.
Rights owned by the Company for unconditionally collecting the consideration from customers (that
is, depending only on the time) are presented as receivables, and rights for collecting the consideration for
goods that have been transferred to customers (depending on other factors than the time) are presented as
contract assets.
The obligations of the Company for transferring goods to customers corresponding to
considerations that have been received or receivable are presented as contract liabilities.
Method for recognition of expected credit losses of contract assets and relevant accounting
treatments
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Category of combination and determination basis for which the provision of bad debts is made by
combination of credit risk characteristics
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Aging calculation method for identifying combination of credit risk characteristics based on the
aging
√ Applicable □ N/A
Refer to V.11 of Section X for details.
Determination standard for individually making provision for bad debts
√ Applicable □ N/A
Refer to V.11 of Section X for details.
18. Non-current assets or disposal groups classified as held for sale
□ Applicable √ N/A
Recognition standard and accounting method for non-current assets or disposal groups classified
as held for sale
□ Applicable √ N/A
Determination standard and presentation method for discontinued operation
□ Applicable √ N/A
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19. Long-term equity investments
√ Applicable □ N/A
1. Judgments on 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 of such arrangement 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 does not control or jointly control over those policies.
2. Determination of investment cost
(1) In case of 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 amount of the owners’ equity of the
acquiree in the consolidated financial statements of the ultimate controller at the date of combination. The
difference between: (i) the initial investment cost of the long-term equity investment; and (ii) the carrying
amount of the consideration paid for the combination or the total par value of the shares issued 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 adjusted against the retained earnings.
For a long-term equity investment acquired through business combination involving entities under
common control that is achieved through multiple transactions by steps, the Company shall judge whether
such transactions constitute a package deal. If such transactions constitute a package deal, the Company
accounts for such transactions as one transaction to acquire control. If such transactions do not constitute
a package deal, the initial investment cost is the Company’s share of the carrying amount of the net assets
of the acquiree in the consolidated financial statements of the ultimate controller at the date of combination.
The difference between: (i) the initial investment cost of the long-term equity investment at the date of
combination; and (ii) the sum of the carrying amount of long-term equity investment before the
combination and the carrying amount of the consideration paid for acquisition of the additional shares at
the date of combination is adjusted against the capital reserve. In case the capital reserve is not sufficient
to absorb the difference, the remaining balance is adjusted against the retained earnings.
(2) In case of an equity investment acquired through a business combination not involving entities
under common control, the initial investment cost is the fair value of the carrying amount of the
consideration paid for the combination at the date of acquisition.
For a long-term equity investment acquired through a business combination not involving entities
under common control and achieved through multiple transactions by steps, the accounting treatment
thereof in the separate financial statements is different from that in the consolidated financial statements
as stated below:
1) In the separate financial statements, the sum of the carrying amount 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.
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2) In the consolidated financial statements, it is required to judge whether such transactions constitute
a package deal. If such transactions constitute a package deal, the Company accounts for such transactions
as one transaction to acquire control. If such transactions do not constitute a package deal, the Company
re-measures the fair value of the equity held in the acquiree prior to the date of acquisition, and records
the difference between the fair value and the carrying amount as investment income for the current period;
if the equity held in the acquiree prior to the date of acquisition involves other comprehensive income
under equity method, such other comprehensive income is transferred to the income of the period in which
the date of acquisition falls, except for other comprehensive income arising from re-measurement of
changes in net liabilities or net assets of defined benefit plans.
(3) In the event of no 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 determined in accordance with the Accounting Standards for Business
Enterprises No. 12 - Debt Restructuring if it is acquired through debt restructuring, or determined in
accordance with the Accounting Standards for Business Enterprises No. 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 are measured using the cost method. Long-term equity
investments in associates and joint ventures are measured using the equity method.
20. Investment properties
None
21. Fixed assets
(1). Criteria for recognition
√ Applicable □ N/A
Fixed assets are tangible assets held for 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 related to it are very likely to flow to the Company and its cost can be reliably measured.
(2). Method of depreciation
√ Applicable □ N/A
Annual
Method of Depreciation Residual ratio
Category depreciation rate
depreciation period (years) (%)
(%)
Machinery and Straight line
5 5.00 19.00
equipment method
Transportation Straight line
5 5.00 19.00
equipment method
Electronic Straight line
equipment and method 3-5 5.00 19.00-31.67
others
Operating leased Straight line
3, 7 5.00 31.67, 13.57
equipment method
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22. Construction in progress
√ Applicable □ N/A
1. A construction in progress is recognized if the economic benefits related to it are very likely to
flow to the Company and its cost can be reliably measured. A construction in progress is measured at the
actual cost incurred before it is completed and ready for 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 final settlement, the estimated value is adjusted according to the actual cost, but the accrued
depreciation is not adjusted.
Standards and timing for construction in progress
Category
transferred to fixed assets
Machinery and equipment, and When reaching the standard required in the design or specified
operating leased equipment in the contract after installation and commissioning
Houses and buildings When reaching the working condition for its intended use
23. Borrowing costs
√ Applicable □ N/A
1. Recognition for capitalization of borrowing costs
Borrowing costs incurred by the Company that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other
borrowing costs are recognized as expenses and charged to the current profit and loss.
2. Capitalization period of borrowing costs
(1) Borrowing expenses are capitalized when all of the following conditions are met: 1) capital
expenditure has been incurred; 2) borrowing expenses have been incurred; and 3) activities related to the
acquisition, construction or production of the asset that are necessary to prepare the asset for its intended
use or sale have commenced.
(2) Where acquisition, construction or production of a qualified asset is interrupted abnormally and
the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be
suspended. The borrowing expenses incurred during these periods shall be recognized as expenses for the
current period until the acquisition, construction or production of a qualifying asset is resumed.
(3) Capitalization of borrowing expenses shall be ceased when acquisition, construction or production
of the qualifying asset has prepared for its intended use or sale.
3. Capitalization rate and capitalization amount of borrowing expenses
As for the specific borrowings for the acquisition, construction or production of assets qualifying for
capitalization, the to-be-capitalized amount of interests shall be determined in light of the actual cost
incurred on the current specific borrowings (including the amortization of discounts or premiums
determined using the effective interest method) minus the income of interests earned from the unused
borrowings by depositing it in the bank or investment income from such borrowing by making it as a
temporary investment; where a general borrowing is used for the acquisition, construction or production
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of assets qualifying for capitalization, the Company shall calculate and determine the to-be-capitalized
amount of interests on the general borrowing by multiplying the weighted average value of the
accumulative expenditures to asset minus the specific borrowing by the capitalization rate of the general
borrowing used.
24. Biological assets
□ Applicable √ N/A
25. Oil and gas assets
□ Applicable √ N/A
26. Intangible assets
(1). Service life and determination basis thereof, estimation, amortization method, or verification
process
√ Applicable □ N/A
1. Intangible assets include land use rights, patents, and software, and are measured at cost initially.
2. An intangible asset with a finite useful life is amortized over its useful life in a systematical and
rational expected realization of economic benefits relative to the intangible asset, or is amortized using the
straight-line method if it is impossible to determine expected realization reliably. The details are as follows:
Service life and determination basis Amortization
Item
thereof method
Land use rights 30 years/statutory rights Straight-line method
Patents 10 years/statutory rights Straight-line method
Software 3-5 years/statutory rights Straight-line method
(2). Collection scope of R&D expenditures and relevant accounting method
√ Applicable □ N/A
1. Collection scope of R&D expenditures
(1) Personnel and labor expenses
The personnel and labor expenses include the salaries, premiums for basic pension insurance,
premiums for basic medical insurances, premiums for unemployment insurances, premiums for work
injury insurances, premiums for maternity insurances, and housing funds of the Company’s R&D staff,
and the labor expenses of external R&D personnel.
Where an R&D person serves multiple R&D projects at the same time, the labor expenses are
recognized based on the records of working hours of the R&D personnel in respective R&D projects
provided by the management departments of the Company, and are allocated in proportion among the
R&D projects.
Where the R&D staff and external R&D personnel directly engaging in R&D activities also get
involved in non-R&D activities, the Company allocates the personnel and labor expenses actually incurred
for such personnel between the R&D expenses and the production and operation expenses in proportion
to the actual working hours or by using another reasonable method based on the records of working hours
of such R&D personnel at different posts.
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(2) Expenses of direct investments
The expenses of direct investments refer to the relevant expenditures actually incurred by the
Company for conducting R&D activities, including: 1) expenses of materials, fuels, and power directly
consumed; 2) expenses for developing and manufacturing molds and process equipment for intermediate
tests and product trials, expenses for the procurement of samples, sample devices, and general tests not
constituting fixed assets, and inspection expenses for trial products; and 3) the expenses for the
maintenance, adjustment, check, inspection, repair, etc. of the instrument and devices used in R&D
activities.
(3) Depreciation expenses and long-term prepaid expenses
Depreciation expenses refer to the depreciation costs of instrument, equipment, and buildings used
in R&D activities.
Where the instrument, equipment, and buildings used in R&D activities are also used for non-R&D
activities at the same time, necessary records are kept for the use of such instrument, equipment, and
buildings, and the depreciation expenses actually incurred are allocated between the R&D expenses and
the production and operation expenses by using a reasonable method based on the actual working hours
and areas in use.
Long-term prepaid expenses refer to the long-term prepaid expenses incurred during the
reconstruction, modification, decoration, and repair of R&D facilities, which shall be collected according
to the expenditures actually incurred, and be amortized on an average basis for the specified period.
(4) Amortization expenses of intangible assets
The amortization expenses of intangible assets refer to the amortization expenses of software,
intellectual property rights, and non-patented technologies (know-how, license, design, calculation
method, etc.) used in R&D activities.
(5) Development expenses for outsourced R&D
Development expenses for outsourced R&D refer to the expenses incurred in R&D activities
conducted by other domestic and overseas institutions or individuals engaged by the Company (the results
of such R&D activities being owned by the Company and being closely related to the main business of
the Company).
(6) Other expenses
Other expenses refer to other expenses directly related to R&D activities except for the expenses
above, including expenses for technical books and materials, material translation expenses, expert
consulting fees, insurance premiums for high-tech R&D projects, expenses for the search, demonstration,
evaluation, appraisal and acceptance of R&D results, expenses for the application, registration, and agency
of intellectual property rights, meeting expenses, travel expenses, communication expenses, etc.
2. Expenditures incurred during the research phase of internal research and development projects are
recognized as current expenses when they occur. Expenditures on an internal research and development
project at development phase are recognized as an intangible asset if all the following conditions are met:
(1) it is technically feasible to complete the intangible asset so that it will be available for use or sale; (2)
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it is intended to complete the intangible asset so that it will be available for use or sale; (3) 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; (4) there are sufficient technical, financial and other resources available to complete
the development activities and to use or sell the intangible asset; and (5) the expenditures attributable to
the development of the intangible asset can be reliably measured.
27. Impairment of long-term assets
√ Applicable □ N/A
For long-term equity investments, fixed assets, construction in progress, 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 amount, the difference is
measured as impairment loss of the asset and recognized in profit or loss for the current period.
28. Long-term prepaid expenses
√ Applicable □ N/A
Long-term prepaid expenses are expenses that have already been incurred but should be amortized
over a period of more than one year (excluding one year). Long-term prepaid expenses are stated as the
amount actually incurred and shall be amortized evenly by stages within the benefit period or specified
period. If an item of long-term prepaid expenses will not benefit the subsequent periods, the amortized
value of the item that has not yet been amortized is wholly transferred to profit or loss for the current
period.
29. Contract liabilities
√ Applicable □ N/A
Refer to V.17 of Section X for details.
30. Employee benefits
(1). Accounting treatment of short-term employee benefits
√ Applicable □ N/A
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 for the current period
or the cost of related assets.
(2). Accounting treatment of post-employment benefits
√ Applicable □ N/A
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
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(1) In the accounting period during which employee services are rendered, the amount in contribution
as calculated according to the defined contribution plan is recognized as liabilities and included in profit
or loss for the current period or the cost 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 the 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 defined 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 plan 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 reporting 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 re-measurement of the net liabilities or net assets of the defined benefit plan,
wherein 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 for the current period or the cost of related assets, and the changes arising
from re-measurement of the net liabilities or net assets of the defined benefit plan are included in other
comprehensive income, which will not be reserved to profit or loss in subsequent periods, but may be
transferred within the scope of equity.
(3). Accounting treatment of termination benefits
√ Applicable □ N/A
If termination benefits are provided to employees, the liabilities of employee benefits from the
termination benefits are recognized at the earlier of the following and are recognized in the profit or loss
for the current period: (1) when the Company cannot unilaterally withdraw the termination benefits
provided due to the write-off of the labor relationship or lay-off suggestions; and (2) when the Company
recognizes costs or expenses in connection with restructuring involving termination benefits.
(4). Accounting treatment of other long-term employee benefits
□ Applicable √ N/A
31. Provisions
√ Applicable □ N/A
1. An obligation arising from any external guarantee, litigation, product quality warranty, onerous
contract or other contingencies is recognized as a provision if it is a present obligation assumed by the
Company, 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. The amount recognized as a provision is the best estimate of the consideration required to settle
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the present obligation. The carrying amount of provisions is reviewed at the balance sheet date.
32. Share-based payments
√ Applicable □ N/A
1. Categories of share-based payments
Share-based payments include equity-settled share-based payments and cash-settled share-based
payments.
2. Accounting treatment for implementation, modification and termination of share-based payment
plan
(1) Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees that can be
executed immediately upon being granted, are measured at the fair value of the equity instruments at the
grant date, and recognized as related costs or expenses with a corresponding adjustment to capital reserve.
At each balance sheet date during the vesting period, equity-settled share-based payments in exchange for
services rendered by employees that cannot be executed until services in the vesting period are completed
or required performance conditions are satisfied, are measured at the fair value of the equity instruments
at the grant date based on the best estimate of exercisable numbers of equity instruments, and recognized
as related costs or expenses with a corresponding adjustment to capital reserve.
For equity-settled share-based payments in exchange for services rendered by other parties, if the fair
value of services from other parties can be measured reliably, they are measured at the fair value of services
from other parties at the date when such services are received. If the fair value of services from other
parties cannot be measured reliably but the fair value of the equity instruments can be measured reliably,
they are measured at the fair value of the equity instruments at the date when such services are received.
The fair value of the equity instruments are recognized as related costs or expenses, with a corresponding
increase in owners’ equity.
(2) Cash-settled share-based payments
Cash-settled share-based payments in exchange for services rendered by employees that can be
executed immediately upon being granted, are recognized as related costs or expenses based on the fair
value of liabilities assumed by the Company at the grant date, with a corresponding increase in liability.
At each balance sheet date during the vesting period, cash-settled share-based payments in exchange for
services rendered by employees that cannot be executed until services in the vesting period are completed
or required performance conditions are satisfied, are measured at the fair value of liabilities assumed by
the Company based on the best estimate of exercisable conditions, and recognized as related costs or
expenses and relevant liabilities.
(3) Modification and termination of share-based payment plan
In case the Company modifies a share-based payment plan, if the modification increases the fair value
of the equity instruments granted, the Company will include the incremental fair value of the equity
instruments granted in the measurement of the amount recognized for services received. If the
modification increases the number of the equity instruments granted, the Company will include the fair
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value of additional equity instruments granted in the measurement of the amount recognized for services
received. If the Company modifies the exercisable conditions of the share-based payment plan in a manner
beneficial to the employee, the Company will consider the modified exercisable conditions when dealing
with exercisable conditions.
If the modification decreases the fair value of the equity instruments granted, the Company will
continue to measure the amount recognized for services received at the fair value of the equity instruments
at the grant date without including the decremental fair value of the equity instruments. If the modification
decreases the number of the equity instruments granted, the Company will treat the decreased number as
the written off number of equity instruments granted. If the Company modifies the exercisable conditions
in a manner unbeneficial to the employee, the Company will not consider the modified exercisable
conditions when dealing with exercisable conditions.
If write-off or settlement of the equity instruments granted occurs (not due to unsatisfaction of
exercisable conditions) during the vesting period, the Company will account for the write-off or settlement
of the equity instruments granted as an acceleration of vesting, and recognize immediately the amount that
otherwise would have been recognized over the remainder of the vesting period.
33. Preferred shares, perpetual bonds and other financial instruments
□ Applicable √ N/A
34. Revenue
(1). Accounting policies adopted for revenue recognition and measurement by the type of business
√ Applicable □ N/A
1. Principles for revenue recognition
At the beginning date of a contract, the Company assesses the contract to identify individual
performance obligations contained in the contract and determine whether individual obligations are to be
performed during a period of time or at a specific time point.
An obligation meeting one of the following conditions is one to be performed within a period of time,
and the remaining are obligations to be performed at a specific time point: (1) the customer receives and
consumes the economic benefits from the performance of the Company when the Company performs its
obligations; (2) the customer can control the goods in progress during the performance of the Company;
or (3) the goods generated during the performance process of the Company have irreplaceable uses, and
the Company is entitled to payment for the portion completed during the entire contract term.
The Company recognizes the revenue according to the performance progress during the period of
time for obligations to be performed during a period of time. If the performance progress cannot be
determined reasonably, and the Company is expected to be paid based on the costs incurred, the Company
recognizes the revenue according to the amount of costs incurred until the performance progress can be
determined reasonably. For obligations to be performed at a specific time point, the Company recognizes
the revenue when the customer receives the control over the relevant goods or services. The following will
be considered when determining whether the customer has obtained the control over the goods: (1) the
Company has the present rights of receiving payments for such goods, that is, the customer has the present
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obligation of making payment for the goods; (2) the Company has transferred the legal title to the goods
to the customer, that is, the customer has acquired the legal title to the goods; (3) the Company has
transferred the physical goods to the customer, that is, the customer is in possession of the physical goods;
(4) the Company has transferred the major risks and rewards of the legal title to the goods to the customer,
that is, the customer has acquired the major risks and rewards of the legal title to the goods; (5) the
customer has accepted the goods; and (6) there are other signs indicating that the customer has acquired
the control over the goods.
2. Principles of revenue measurement
(1) The Company measures the revenue according to the transaction price allocated to individual
performance obligations. The transaction price refers to the amount of the consideration expected to be
received by the Company on the basis of transferring goods or providing services to the customer,
excluding amounts collected on behalf of a third party and amounts expected to be refunded to the
customer.
(2) If a contract contains a variable consideration, the Company determines the best estimate of the
variable consideration according to the expected value or the most likely amount; however, the transaction
price containing the variable consideration does not exceed the amount for which no material reversal of
recognized revenue is highly probable when relevant uncertainty is eliminated.
(3) If a contract contains a major financing portion, the Company determines the transaction price as
the amount payable in cash when the customer obtains the control over the goods or services. The
difference between the transaction price and contract consideration is amortized using the effective interest
method during the term of the contract. If the Company expects that the interval between the acquisition
of the goods or services by the customer and the payment of prices by the customer will not exceed one
year from the commencement date of the contract, no significant financing factor is considered.
(4) If a contract contains two or more performance obligations, at the beginning date of the contract,
the Company allocates the transaction price to individual performance obligations according to the relative
proportion of the individual sale prices of the goods promised under such individual performance
obligations.
(2). Different revenue recognition and measurement methods for businesses of the same type but
operated under different modes
√ Applicable □ N/A
(1) Revenue from sales of goods
Revenue from sales of goods denotes contractual obligations to be performed at a time point. Our
sales include sales to the domestic market and sales to foreign markets.
Goods sold to the domestic market: 1) Under the direct sale model and the distribution model, the
Company recognizes the revenue when the goods sent have been delivered to customers with customers’
receipt given to the Company. For goods sold attached with return conditions, the Company recognizes
the revenue according to the amount of consideration to which it expects to be entitled in exchange for
transferring goods to customers, and recognizes the liabilities according to the expected amount to be
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returned due to sales return against the revenue; for goods required for installment and inspection after
sales, the Company recognizes the revenue when such goods have been installed and inspected with
customers’ acceptance certificate given to the Company. Where the Company shares the profit from the
sales of products by downstream end customers, the revenue from such profit sharing is recognized at the
best estimate of the variable consideration determined according to an expected value, which variable
consideration is estimated reasonably at the time of revenue recognition. 2) Under the commissioned sales
mode, the Company recognizes the revenue when it receives the list of commissioned sales from the
customer.
Goods exported to overseas markets: The Company mainly adopts FCA for export of goods. Under
this mode, the Company recognizes the revenue when it delivers goods at the designated location with
export customs clearance procedures completed.
(2) E-commerce platform revenue
In the e-commerce platform model, the e-commerce platform is responsible for product promotion
and order management. Consumers place orders and pay directly to the e-commerce platform, and the e-
commerce platform arranges third-party logistics through the Company or ships directly to the consumer
by the e-commerce platform after receiving the consumer’s payment. The specific revenue recognition
time points are: for domestic e-commerce platforms, revenue is recognized according to the time of end
customers’ receipt; for foreign e-commerce platforms, revenue is recognized after the Company receives
and checks the confirmation list of the e-commerce platform according to the reconciliation time agreed
in the contract.
(3) Other incomes
Other incomes denote contractual obligations to be performed at a time point/during a specific period
of time. For installation services provided by the Company, the Company recognizes the revenue when it
has completed the services and received customers’ acceptance certificate; for repair and maintenance
services provided by the Company, the Company recognizes the revenue when it has completed the
services and received payments; for patrol inspection services provided by the Company, the Company
determines the service performance progress by using the output approach, and recognizes the revenue
according to the performance progress; for patent license services provided by the Company, the Company
recognizes the revenue when the patent license is delivered; for technology development services provided
by the Company, the Company recognizes the revenue when it has completed the services or when the
agreed time point of service acceptance is reached.
35. Contract costs
□ Applicable √ N/A
36. Government grants
√ Applicable □ N/A
1. Government grants are recognized if (1) the Company meets the conditions attached to the
government grants; and (2) 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
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form of non-monetary assets are measured at fair value, or if their fair value is unavailable, at 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.
In the absence of such express provision in the applicable government documents, government grants
related to assets are those with a primary condition that the Company should purchase, construct or
otherwise acquire long-term assets. Government grants related to assets are offset against the carrying
amount of the relevant assets or recognized as deferred income. Government grants related to assets
recognized as deferred income shall be 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 for the current period. In case of sale, transfer, retirement or damage of the
relevant assets before the end of intended 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 in which 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 for the current period or offset against the
relevant costs. Government grants related to income as compensation for costs, expenses or losses already
incurred are directly included in profit or loss for the current period or offset against the relevant costs.
4. Government grants related to daily 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 daily operations of the Company are recognized in non-operating income or expenses.
5. Accounting treatment of policy preferential loans and interest subsidies
(1) If the Ministry of Finance appropriates the interest subsidies to the lending bank, who then grants
the loan to the Company at the policy preferential rate, the loan is stated as the amount actually received,
and the borrowing cost is calculated according to the principal of the loan and the policy preferential rate.
(2) If the Ministry of Finance directly appropriates the interest subsidies to the Company, the interest
subsidies are offset against the borrowing cost.
37. Leases
√ Applicable □ N/A
Determination basis and accounting method for simplified accounting of short-term lease and low-
value assets lease as the lessee
√ Applicable □ N/A
On the lease inception date, the Company recognizes a lease with a lease term of not more than 12
190 / 290
2023 Annual Report
months and not containing an option as a short-term lease; and recognizes a low-value assets lease for a
lease in which individually leased assets have a low value when they are new. If the Company subleases
or expects to sublease the leased asset, the original lease is not recognized as a low-value assets lease.
For short-term leases and low-value assets leases, the Company recognizes lease payment in the costs
of relevant assets or the profit or loss for the current period by using the straight-line method in each period
during the lease term.
Except for short-term leases and low-value assets leases subject to simplified treatment above, on the
lease inception date, the Company recognizes right-of-use assets and lease liabilities for leases.
(1) Right-of-use assets
Right-of-use assets are initially measured at cost; the cost includes: 1) initial measurement amount of
lease liabilities; 2) lease payments made on or before the lease inception date, where relevant acquired
amount related to lease incentives is excluded if there are lease incentives; 3) initial direct expenses
incurred by the lessee; and 4) costs expected to be incurred by the lessee for dismantling and removing
the leased assets, restoring the place of the leased assets, or restoring the leased assets to the state provided
under lease provisions.
The Company depreciates right-of-use assets by using the straight-line method. If there is reasonable
certainty that the lessee will obtain ownership of the leased asset by the end of the lease term, the Company
depreciates the leased asset over its remaining useful life. If there is no reasonable certainty that the lessee
will obtain ownership of the leased asset by the end of the lease term, the Company depreciates the leased
asset over the shorter of the lease term and its remaining useful life.
(2) Lease liabilities
On the lease inception date, the Company recognizes the present value of lease payments not paid as
lease liabilities. The interest rate implicit in the lease is used as the discount rate for calculating the present
value of the lease payments; if the interest rate implicit in the lease cannot be determined, the incremental
borrowing interest rate of the Company is used as the discount rate. The difference between the lease
payments and the present value thereof is considered as unrecognized financing charges; in each period
during the lease term, interest expenses are recognized in the profit or loss for the current period according
to the discount rate of the present value of recognized lease payments. Variable lease payments not
included in measurement of lease liabilities are recognized in the profit or loss for the current period when
they actually arise.
Where, after the lease inception date, there are changes in the substantial fixed payment, the payables
expected on the basis of the residual value of the guarantee, the index or ratio used for determining the
lease payment, and the evaluation results or actual exercise of purchase option, renewal option or lease
termination option, the Company re-measures the lease liability as per the present value of the lease
payment after change, and adjusts the book value of the right-of-use assets accordingly. Where the book
value of the right-of-use assets has been reduced to zero, but the lease liability still needs to be further
reduced, the Company includes the residual amount in the current profit or loss.
Categorization standard and accounting method for leases as the lessor
√ Applicable □ N/A
191 / 290
2023 Annual Report
On the lease inception date, the Company classifies a lease in which almost all the risks and rewards
related to the ownership of the leased asset have been substantially transferred as a finance lease, and
recognizes all other leases as operating leases.
Operating lease
In each period during the lease term, the Company recognizes lease payments as rental incomes by
using the straight-line method; initial direct expenses incurred are capitalized, and amortized on the same
basis for recognizing lease incomes and recognized in the profit or loss for each period. The variable lease
payments acquired by the Company that are related to operating leases and not recognized in lease
payments are recognized in the profit or loss for the current period when they actually occur.
38. Deferred tax assets and deferred tax liabilities
√ Applicable □ N/A
1. The difference between the carrying amount of an asset or liability and its tax base (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 amount) 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 taxable income that will be
probably available in future periods against which deductible temporary differences are deductible. At the
balance sheet date, deferred tax assets not recognized in prior 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 amount of deferred tax assets is reviewed and reduced 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 probably available, the reduced amount is reversed.
4. The income taxes and deferred income taxes are included in profit or loss for the current period as
income tax expenses or gains, except for the income taxes arising from any: (1) business combination; or
(2) transaction or event directly recognized in owners’ equity.
5. The Company presents deferred tax assets and deferred tax liabilities as net amounts after
offsetting if: (1) the Company has the legal right to settle the current income tax assets and liabilities on
a net basis; and (2) the deferred tax assets and deferred tax liabilities are related to the income taxes
levied by the same taxation authority on the same taxation subject, or are not related to the same taxation
subject, but in every significant future period for reversing deferred tax assets and liabilities, the
involved taxation subjects intend to settle the current income tax assets and liabilities on a net basis or to
realize the assets and settle the liabilities simultaneously.
39. Other significant accounting policies and accounting estimates
□ Applicable √ N/A
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2023 Annual Report
40. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√ Applicable □ N/A
The Company has, since January 1, 2023, implemented the provision concerning “accounting for not
applying initial recognition exemption for deferred income taxes incurred by individual transactions and
related to assets and liabilities” in the Interpretation of the Accounting Standards for Business Enterprises
No. 16, and made adjustment in accordance with this provision to individual transactions that occurred in
the period from the beginning of the earliest period in the financial statements applying this provision for
the first time to the date of initial application. If a taxable temporary difference or deducible temporary
difference is generated for the lease liabilities and right-of-use assets recognized due to the application of
such provision for individual transactions that occurred from the beginning of the earliest period in the
financial statements applying this provision, and the relevant predicted liabilities and corresponding
relevant assets for the disposal obligations recognized, the Company shall follow such provision and the
provisions of the Accounting Standards for Business Enterprises No. 18 - Income Tax to adjust the
cumulative effect to the opening retained earnings of the earliest period in the financial statements and
other relevant items in the financial statements. The changes in the foregoing accounting policies have no
significant influences on the financial statements of the Company.
Other information
None
(2). Changes in significant accounting estimates
□ Applicable √ N/A
(3). The first implementation of new accounting standards or standard interpretations from 2023
onwards that involves adjusting the financial statements at the beginning of the year in which
they were first implemented
□ Applicable √ N/A
41. Others
□ Applicable √ N/A
VI. Taxes
1. Major categories of taxes and tax rates
Description of major categories of taxes and tax rates
√ Applicable □ N/A
Category of tax Basis of tax computation Tax rate
VAT payable is the difference of the output tax
calculated based on the incomes from selling goods
Value-added tax 3%, 6%, 8%, 9%, 10%,
and taxable services in accordance with the Tax
(VAT) 13%
Law, less the input tax allowed to be reduced in the
period
City maintenance
and construction Turnover tax payable 5%, 7%
tax
193 / 290
2023 Annual Report
6.50%, 8.25%, 8.70%,
Enterprise
Taxable income 8.84%, 15%, 16.5%, 20%,
income tax
21%, 25%
Education Turnover tax payable 3%
surcharges
Local education Turnover tax payable 2%
surcharges
Disclosure of taxpayers with different rates of enterprise income tax:
√ Applicable □ N/A
Rate of enterprise
Taxpayer
income tax (%)
The Company 15%
Formovie (Chongqing) Innovative Technology Co., Ltd. 15%
Fengmi (Beijing) Technology Co., Ltd. 15%
Appotronics Hong Kong Limited 8.25%, 16.5%
Beijing Orient Appotronics Technology Co., Ltd. 20%
JoveAI Innovation, Inc. 8.70%, 8.84%, 21%
Appotronics USA, Inc. 8.84%, 21%
FORMOVIE TECHNOLOGY INC 21%
JoveAI Limited Tax exemption
WEMAX LLC 21%
Shenzhen Appotronics Display Device Co., Ltd. 20%
Appotronics Technology (Changzhou) Co., Ltd. 20%
Qingda Appotronics (Xiamen) Technology Co., Ltd. 20%
Shenzhen Appotronics Home Line Technology Co., Ltd. 20%
Shenzhen Appotronics Laser Technology Co., Ltd. 20%
Shenzhen Appotronics Xiaoming Technology Co., Ltd. 20%
JoveAI Asia Company Limited 20%
Formovie Limited 16.5%
Chongqing Ewei Ecommerce Co., Ltd. 20%
Chongqing Guangbo Ecommerce Co., Ltd. 20%
Shenzhen Orange Juice Energy Technology Co., Ltd. 20%
Tianjin Bonian Film Partnership (LP) Tax exemption
CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. 15%
Hong Kong Orange Juice Energy Technology Co., Limited 16.5%
Wemax Inc 6.50%, 21%
Shenzhen Weiwoqi Trading Co., Ltd. 20%
Yaoyouguang (Chongqing) Technology Co., Ltd. 20%
Appotronics International Limited 16.5%
Appotronics Intelligent Manufacturing (Shenzhen) Co., Ltd. 20%
Shenzhen Qianhai Taishi Investment Partnership (LP) Tax exemption
Other taxpayers except above 25%
Note:
1. Appotronics Hong Kong Limited, as domiciled in Hong Kong, one of which can apply the two-
level income tax system, namely, applying the tax rate of 8.25% for the first HKD 2 million taxable income
and 16.50% for the remaining taxable income.
2. JoveAI Limited, as domiciled in the Cayman Islands, is exempt from enterprise income tax.
3. Appotronics USA, Inc., as domiciled in the United States, applies the federal enterprise income
tax rate of 21% and the California state enterprise income tax rate of 8.84%.
194 / 290
2023 Annual Report
4. JoveAI Innovation, Inc., as domiciled in the United States, applies the federal enterprise income
tax rate of 21%, the California state enterprise income tax rate of 8.84%, and the Delaware state enterprise
income tax rate of 8.70%.
5. Formovie Technology Inc., as domiciled in the United States, applies the federal enterprise income
tax rate of 21%.
6. JoveAI Asia Company Limited, as domiciled in Vietnam, applies the enterprise income tax rate of
20%.
7. Wemax LLC, as domiciled in the United States, applies the federal enterprise income tax rate of
21%.
8. Formovie Limited, as domiciled in Hong Kong, applies the income tax rate of 16.50%.
9. Hong Kong Orange Juice Energy Technology Co., Limited, as domiciled in Hong Kong, applies
the income tax rate of 16.50%.
10. Wemax Inc, as domiciled in the United States, applies the federal enterprise income tax rate of
21%, and the New York state enterprise income tax rate of 6.50%.
11. Appotronics International Limited, as domiciled in Hong Kong, applies the income tax rate of
16.50%.
2. Tax incentives
√ Applicable □ N/A
1. Enterprise income tax
(1) On December 19, 2022, the Company obtained the High-tech Enterprise Certificate (Certificate
No.: GR202244206480) jointly issued by Shenzhen Science and Technology Innovation Commission,
Shenzhen Finance Bureau and Shenzhen Tax Service of State Taxation Administration with a valid term
of three years. Therefore, the Company paid the enterprise income tax at a rate of 15% in 2023.
(2) On November 28, 2022, Formovie (Chongqing) Innovative Technology Co., Ltd. obtained the
High-tech Enterprise Certificate (Certificate No.: GR202251101763) jointly issued by Chongqing
Municipal Science and Technology Bureau, Chongqing Finance Bureau and Chongqing Tax Service of
State Taxation Administration with a valid term of three years. Therefore, it paid the enterprise income
tax at a rate of 15% in 2023.
(3) On December 17, 2021, Fengmi (Beijing) Technology Co., Ltd. obtained the High-tech Enterprise
Certificate (Certificate No.: GR202111004001) jointly issued by Beijing Municipal Science and
Technology Commission, Beijing Municipal Finance Bureau and Beijing Tax Service of State Taxation
Administration with a valid term of three years. Therefore, it paid the enterprise income tax at a rate of
15% in 2023.
(4) On October 18, 2022, CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. obtained the
High-tech Enterprise Certificate (Certificate No.: GR202211008942) jointly issued by Beijing Municipal
Science and Technology Commission, Beijing Municipal Finance Bureau and Beijing Tax Service of State
Taxation Administration with a valid term of three years. Therefore, it paid the enterprise income tax at a
rate of 15% in 2023.
195 / 290
2023 Annual Report
(4) In accordance with the Announcement of the Ministry of Finance and the State Taxation
Administration on Implementing Preferential Income Tax Policies for Micro and Small Enterprises and
Individually-owned Businesses (Cai Shui (2021) No. 12), from January 1, 2021 to December 31, 2022, the
annual taxable income of a small low-profit enterprise that is not more than RMB 1 million shall be levied
with the enterprise income tax rate at a discount of 12.5%, namely, for which the applicable enterprise
income tax rate is 20%. In accordance with the Announcement of the Ministry of Finance and the State
Taxation Administration on Implementing Preferential Income Tax Policies for Micro and Small
Enterprises and Individually-owned Businesses (Cai Shui (2023) No. 6), from January 1, 2023 to
December 31, 2024, the annual taxable income of a small low-profit enterprise that is not more than RMB
1 million shall be levied with the enterprise income tax rate at a discount of 25%, namely, for which the
applicable enterprise income tax rate is 20%. The following companies are qualified for enjoying such tax
incentives: Beijing Orient Appotronics Technology Co., Ltd., Shenzhen Appotronics Display Device Co.,
Ltd., Appotronics Technology (Changzhou) Co., Ltd., Qingda Appotronics (Xiamen) Technology Co.,
Ltd., Shenzhen Appotronics Home Line Technology Co., Ltd., Shenzhen Appotronics Laser Technology
Co., Ltd., Shenzhen Appotronics Xiaoming Technology Co., Ltd., Chongqing Ewei Ecommerce Co., Ltd.,
Chongqing Guangbo Ecommerce Co., Ltd., Shenzhen Orange Juice Energy Technology Co., Ltd.,
Shenzhen Weiwoqi Trading Co., Ltd., Yaoyouguang (Chongqing) Technology Co., Ltd., and Appotronics
Intelligent Manufacturing (Shenzhen) Co., Ltd.
2. Value-added tax (VAT)
(1) In accordance with the Notice of the Ministry of Finance and the State Taxation Administration
on Value-added Tax Policies for Software Products (Cai Shui [2011] No. 100), for self-developed and
produced software products sold by general VAT taxpayers, the tax-refund-upon-collection policy is
applicable to the part of their actual VAT burden in excess of 3% after the VAT has been collected at a
tax rate of 17%. The Company, Fengmi (Beijing) Technology Co., Ltd., and Shenzhen Appotronics
Software Technology Co., Ltd. are qualified for enjoying such tax incentives.
(2) In accordance with the Announcement of the State Taxation Administration on Policies for
Reducing and Exempting Value-added Tax of Small-scale Taxpayers (Announcement No. 1 of 2023 by
the State Taxation Administration), and the Announcement of the Ministry of Finance, the State Taxation
Administration and the General Administration of Customs on Relevant Policies for Deepening the Value-
added Tax Reform (Announcement No. 39 of 2019 by the Ministry of Finance, the State Taxation
Administration, and the General Administration of Customs), from January 1, 2023 to December 31, 2023,
production taxpayers are allowed to deduct an additional 5% of the deductible input tax amount from the
payable tax amount; CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. is qualified for this tax
incentive.
(3) In accordance with the Announcement of the Ministry of Finance and the State Taxation
Administration on Additional Deductions for Value-added Taxes of Advanced Manufacturing Enterprises
(Announcement No. 43 of 2023 by the Ministry of Finance and the State Taxation Administration),
advanced manufacturing enterprises are allowed to deduct an additional 5% of the deductible input tax
196 / 290
2023 Annual Report
amount from the payable VAT amount. The Company, and Formovie (Chongqing) Innovative Technology
Co., Ltd. are qualified for this tax incentive.
(4) The Vietnamese government issued the resolution No. 44/2023/ND-CP, under which the VAT
rate of goods and services at the tax rate of 10% is reduced by 2% (to 8%). JoveAI Asia Company Limited
is qualified for this tax incentive from July 1, 2023 to December 31, 2024.
3. Others
□ Applicable √ N/A
VII. Notes to items in the consolidated financial statements
1. Cash and bank balances
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Cash on hand 5,751.15 5,479.42
Bank deposits 1,371,185,024.55 1,283,079,345.51
Other monetary funds 15,637,773.36 72,797,383.70
Total 1,386,828,549.06 1,355,882,208.63
Where: Total overseas deposits 175,001,829.77 261,403,774.28
Other information
None
2. Held-for-trading financial assets
√ Applicable □ N/A
In RMB
Opening Determination
Item Closing balance
balance reason and basis
Financial assets at fair value -
514,010,000.00 352,880,000.00
through profit or loss
Where:
Investment in equity -
42,880,000.00 42,880,000.00
instrument
Structural deposits 471,130,000.00 310,000,000.00 -
Total 514,010,000.00 352,880,000.00 -
Other information:
□ Applicable √ N/A
3. Derivative financial assets
□ Applicable √ N/A
4. Notes receivable
(1). Categories of notes receivable
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Bank acceptances 1,478,064.00
Commercial acceptances 7,473,244.71 2,234,687.77
Total 8,951,308.71 2,234,687.77
197 / 290
2023 Annual Report
(2). Notes receivable pledged by the Company at the end of the period
□ Applicable √ N/A
(3). Notes receivable which are undue as at the balance sheet date but endorsed or discounted by the
Company at the end of the period
□ Applicable √ N/A
(4). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Carrying Provision for bad Provision for bad
Carrying amount
amount debts debts
Categ Perce
ory Percent Book ntage Book
Perce Perce
Amou age of value of value
ntage Amount Amount ntage Amount
nt provisi provi
(%) (%)
on (%) sion
(%)
Provis
ion for
bad
debts
made
indivi
dually
Where:
Provis
ion for
bad
9,344, 100.0 393,328. 8,951,3 2,352,302.9 100.0 117,615. 2,234,68
debts 4.21 5.00
637.39 0 68 08.71 2 0 15 7.77
made
by
group
Where:
Bank
accept 1,478, 1,478,0
15.82
ance 064.00 64.00
bills
Com
merci
al 7,866, 393,328. 7,473,2 2,352,302.9 100.0 117,615. 2,234,68
84.18 5.00 5.00
accept 573.39 68 44.71 2 0 15 7.77
ance
bills
9,344, 100.0 393,328. 8,951,3 2,352,302.9 100.0 117,615. 2,234,68
Total 4.21 5.00
637.39 0 68 08.71 2 0 15 7.77
Provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group:
In RMB
Closing balance
Name Provision for bad Percentage of
Notes receivable
debts provision (%)
198 / 290
2023 Annual Report
Group of bank
1,478,064.00
acceptance bills
Group of commercial
7,866,573.39 393,328.68 5.00
acceptance bills
Total 9,344,637.39 393,328.68 4.21
Description of provision for bad debts made by group
□ Applicable √ N/A
Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
Refer to V.11 of Section X for details.
Description of significant changes in the balance of accounts receivable with changed provisions for losses
in the current period:
□ Applicable √ N/A
(5). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Closing
Category Recovery or Write-off or Other
balance Provision balance
reversal cancellation changes
Provision for
bad debts
made
individually
Provision for
bad debts
117,615.15 275,713.53 393,328.68
made by
group
Total 117,615.15 275,713.53 393,328.68
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
None
(6). Notes receivable actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of notes receivable canceled are described as below
□ Applicable √ N/A
Description of cancellation of notes receivable:
□ Applicable √ N/A
Other information
□ Applicable √ N/A
5. Accounts receivable
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
Closing balance of carrying Opening balance of carrying
Aging
amount amount
199 / 290
2023 Annual Report
Within 1 year
Where: Subitems within 1 year
Within 1 year 174,956,389.44 210,010,536.64
Subtotal of items within 1 year 174,956,389.44 210,010,536.64
1 to 2 years 18,036,240.20 27,967,582.36
2 to 3 years 19,637,948.14 966,561.56
Over 3 years 204,186.09 486,453.15
Total 212,834,763.87 239,431,133.71
(2). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Carrying Provision for Provision for
Carrying amount
amount bad debts bad debts
Per
Cate cent Perce
Per age Book ntage Book
gory Percen
Amo cent of value Amo of value
Amount Amount tage
unt age pro unt provis
(%)
(%) visi ion
on (%)
(%)
Provi
sion
for
bad 17,56 16,49
17,568,2 100. 16,498,54
debts 8,210 8.25 6.89 8,540. 100.00
10.65 00 0.60
made .65 60
indivi
duall
y
Where:
Provi
sion
for
195,2 14,67 208,26
bad 91.7 14,976,5 180,290,0 222,932,5
66,55 7.67 93.11 2,357. 6.58 0,235.7
debts 5 45.32 07.90 93.11
3.22 32 9
made
by
group
Where:
By
195,2 14,67 208,26
group 91.7 14,976,5 180,290,0 222,932,5
66,55 7.67 93.11 2,357. 6.58 0,235.7
of 5 45.32 07.90 93.11
3.22 32 9
aging
212,8 31,17 208,26
100. 32,544,7 15.2 180,290,0 239,431,1
Total 34,76 100.00 0,897. 13.02 0,235.7
00 55.97 9 07.90 33.71
3.87 92 9
Provision for bad debts made individually:
200 / 290
2023 Annual Report
√ Applicable □ N/A
In RMB
Closing balance
Name Carrying Provision for Percentage of
Reason for provision
amount bad debts provision (%)
The amounts are expected
Company A 16,541,558.24 16,541,558.24 100.00
to be unrecoverable
The amounts are expected
Others 1,026,652.41 1,026,652.41 100.00
to be unrecoverable
Total 17,568,210.65 17,568,210.65 100.00 -
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: By group of aging
In RMB
Closing balance
Name Provision for bad Percentage of
Accounts receivable
debts provision (%)
Within 1 year 174,956,389.44 8,747,819.47 5.00
1-2 years 16,113,796.59 4,028,449.21 25.00
2-3 years 3,992,181.10 1,996,090.55 50.00
Over 3 years 204,186.09 204,186.09 100.00
Total 195,266,553.22 14,976,545.32 7.67
Description of provision for bad debts made by group:
□ Applicable √ N/A
Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
Refer to V.11 of Section X for details.
Description of significant changes in the balance of accounts receivable with changed provisions for losses
in the current period:
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Write-off Closing
Category Recovery or Other
balance Provision or balance
reversal changes
cancellation
Provision
for bad
16,498,540.60 161,848.95 632,000.00 275,821.10 17,568,210.65
debts made
individually
Provision
for bad
14,672,357.32 424,682.56 8,050.00 -112,444.56 14,976,545.32
debts made
by group
Total 31,170,897.92 586,531.51 632,000.00 8,050.00 163,376.54 32,544,755.97
Including significant amounts recovered or reversed from the current provision for bad debts:
201 / 290
2023 Annual Report
□ Applicable √ N/A
Other information: None
(4). Accounts receivable actually canceled in the current period
√ Applicable □ N/A
In RMB
Item Cancellation amount
Accounts receivable actually canceled 8,050.00
In which significant amounts of accounts receivable canceled are described as below
□ Applicable √ N/A
Description of cancellation of accounts receivable:
□ Applicable √ N/A
(5). Top five closing balances of accounts receivable and contract assets categorized by debtors
√ Applicable □ N/A
In RMB
Proportion to
the total
Closing
Closing Closing balance closing Closing
balance
balance of of accounts balance of balance of
Entity of
accounts receivable and accounts bad debt
contract
receivable contract assets receivable provision
assets
and contract
assets (%)
Top 1 64,902,941.11 - 64,902,941.11 30.23 3,245,147.06
Top 2 16,541,558.24 - 16,541,558.24 7.70 16,541,558.24
Top 3 16,182,137.57 - 16,182,137.57 7.54 809,970.51
Top 4 15,870,091.00 - 15,870,091.00 7.39 793,504.55
Top 5 13,206,792.79 - 13,206,792.79 6.15 2,550,960.01
Total 126,703,520.71 - 126,703,520.71 59.01 23,941,140.37
Other information
None
Other information:
□ Applicable √ N/A
6. Contract assets
(1). Description of contract assets
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Provision
Item Carrying Carrying Provision for
for bad Book value Book value
amount amount bad debts
debts
Warranty
security 1,867,058.07 214,817.78 1,652,240.29 1,031,362.02 153,332.67 878,029.35
receivable
Goods
25,000.00 12,500.00 12,500.00 1,202,847.32 1,019,295.32 183,552.00
payment
Total 1,892,058.07 227,317.78 1,664,740.29 2,234,209.34 1,172,627.99 1,061,581.35
202 / 290
2023 Annual Report
(2). Amount and reasons of major changes in the book value during the reporting period
□ Applicable √ N/A
(3). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Carrying Provision for bad Provision for bad
Carrying amount
Categor amount debts debts
y Perc Percent Book Perc Percent Book
enta Amoun age of value entag age of value
Amount Amount Amount
ge t provisio e provisio
(%) n (%) (%) n (%)
Provisio
n for
bad
debts
made
individu
ally
Where:
Provisio
n for
bad 1,892,05 100. 227,317 1,664,7 2,234,209. 100.0 1,172,627. 1,061,
12.01 52.49
debts 8.07 00 .78 40.29 34 0 99 581.35
made by
group
Where:
By
1,892,05 100. 227,317 1,664,7 2,234,209. 100.0 1,172,627. 1,061,
group of 12.01 52.49
8.07 00 .78 40.29 34 0 99 581.35
aging
1,892,05 100. 227,317 1,664,7 2,234,209. 100.0 1,172,627. 1,061,
Total 12.01 52.49
8.07 00 .78 40.29 34 0 99 581.35
Provision for bad debts made individually:
□ Applicable √ N/A
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: By group of aging
In RMB
Closing balance
Name Provision for bad Percentage of
Contract assets
debts provision (%)
Within 1 year 1,432,571.19 71,628.56 5.00
1-2 years 296,216.88 74,054.22 25.00
2-3 years 163,270.00 81,635.00 50.00
Total 1,892,058.07 227,317.78 12.01
Description of provision for bad debts made by group
□ Applicable √ N/A
Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
Refer to V.11 of Section X for details.
203 / 290
2023 Annual Report
Description of significant changes in the balance of contract assets with changed provisions for losses in
the current period:
□ Applicable √ N/A
(4). Description of provision for bad debts made on contract assets during the period
√ Applicable □ N/A
In RMB
Provision Recovery or reversal Write-
Item in the in the period off/cancellation Reason
period in the period
Mainly include the
provision for bad
Provision for bad debts debts reversed due to
945,310.21
made by group the collection of
long-aged due
amounts.
Total 945,310.21 -
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
None
(5). Contract assets actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of contract assets canceled are described as below
□ Applicable √ N/A
Description of cancellation of contract assets:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
7. Receivables financing
(1) Categories of receivables financing
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Bank acceptance bills 11,387,400.00 4,279,041.00
Total 11,387,400.00 4,279,041.00
(2) Receivables financing pledged by the Company at the end of the period
□ Applicable √ N/A
(3) Receivables financing which are undue as at the balance sheet date but endorsed or discounted
by the Company at the end of the period
√ Applicable □ N/A
In RMB
Amount derecognized at the Amount not derecognized at the
Item
end of the period end of the period
Bank acceptance bills 2,906,700.00
204 / 290
2023 Annual Report
Total 2,906,700.00
(4) Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Provision for Provision for
Carrying amount Carrying amount
bad debts bad debts
Categ A A
ory Percentag Book Percent Book
Percen m Percen m
e of value age of value
Amount tage o Amount tage o
provision provisio
(%) u (%) u
(%) n (%)
nt nt
Provis
ion for
bad
debts
made
indivi
dually
Where:
Provis
ion for
bad
11,387,400 11,387, 4,279,04
debts 100.00 4,279,041.00 100.00
.00 400.00 1.00
made
by
group
Where:
Bank
accept 11,387,400 11,387, 4,279,04
100.00 4,279,041.00 100.00
ance .00 400.00 1.00
bills
11,387,400 11,387, 4,279,04
Total 100.00 4,279,041.00 100.00
.00 400.00 1.00
Provision for bad debts made individually:
□ Applicable √ N/A
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: Bank acceptance bills
In RMB
Closing balance
Name Financing amount Provision for bad Percentage of
receivable debts provision (%)
Group of bank 11,387,400.00
acceptance bills
Total 11,387,400.00
Description of provision for bad debts made by group
□ Applicable √ N/A
Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
205 / 290
2023 Annual Report
N/A
Description of significant changes in the balance of receivables financing with changed provisions for
losses in the current period:
□ Applicable √ N/A
(5) Provision for bad debts
□ Applicable √ N/A
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
None
(6) Receivables financing actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of receivables financing canceled are described as below
□ Applicable √ N/A
Description of cancellation:
□ Applicable √ N/A
(7) Changes in amount and fair value of receivables financing:
□ Applicable √ N/A
(8) Other information:
√ Applicable □ N/A
The acceptors of bank acceptance bills in the receivables financing are commercial banks with high
credit. Because it is less probable that bank acceptance bills will not get paid at maturity, the Company
has derecognized endorsed or discounted bank acceptance bills. However, if such notes are unable to be
paid at maturity, the Company will still be jointly and severally liable to the note holders pursuant to the
Negotiable Instruments Law.
8. Prepayments
(1). Disclosure of prepayments by aging
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1
22,863,911.50 65.12 37,333,767.05 77.06
year
1 to 2 years 5,136,169.79 14.63 4,701,469.65 9.70
2 to 3 years 725,259.48 2.06 6,410,740.16 13.24
Over 3 years 6,387,321.05 18.19
Total 35,112,661.82 100.00 48,445,976.86 100.00
Reasons for overdue settlement of prepayments with significant amounts aged more than 1 year:
None
(2). Top five closing balances of prepayments categorized by receivers
√ Applicable □ N/A
206 / 290
2023 Annual Report
Proportion to the total closing balance of
Entity Closing balance
prepayments (%)
Top 1 6,374,430.00 18.15
Top 2 4,947,500.85 14.09
Top 3 3,500,000.00 9.97
Top 4 2,014,000.00 5.74
Top 5 1,767,121.46 5.03
Total 18,603,052.31 52.98
Other information
None
Other information
□ Applicable √ N/A
9. Other receivables
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Interests receivable - -
Dividends receivable 14,023,746.00 13,789,908.00
Other receivables 16,674,941.55 12,541,813.55
Total 30,698,687.55 26,331,721.55
Other information:
□ Applicable √ N/A
Interests receivable
(1). Categories of interests receivable
□ Applicable √ N/A
(2). Significant interests overdue
□ Applicable √ N/A
(3). Disclosure by categories of provision for bad debts
□ Applicable √ N/A
Provision for bad debts made individually:
□ Applicable √ N/A
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
□ Applicable √ N/A
(4). Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
N/A
Description of significant changes in the balance of interests receivable with changed provisions for losses
in the current period:
□ Applicable √ N/A
207 / 290
2023 Annual Report
(5). Provision for bad debts
□ Applicable √ N/A
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
None
(6). Interests receivable actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of interests receivable canceled are described as below
□ Applicable √ N/A
Description of cancellation:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Dividends receivable
(7). Dividends receivable
√ Applicable □ N/A
In RMB
Item (or investee) Closing balance Opening balance
Dividend distribution from GDC Technology 14,023,746.00 13,789,908.00
Limited (BVI)
Total 14,023,746.00 13,789,908.00
(8). Dividends receivable with significant amounts aged more than 1 year
√ Applicable □ N/A
In RMB
Whether impairment
Closing Reason for
Item (or investee) Aging has occurred and the
balance non-recovery
basis for its judgment
They have not
reached an
agreement
through It is less probable that the
Dividend distribution from
2-3 negotiation on counterparty has a credit
GDC Technology Limited 14,023,746.00
years certain matters, risk, and no impairment
(BVI)
and the has occurred
payment has
not yet been
made
Total 14,023,746.00 - - -
(9). Disclosure by categories of provision for bad debts
□ Applicable √ N/A
Provision for bad debts made individually:
□ Applicable √ N/A
Explanation about provision for bad debts made individually:
208 / 290
2023 Annual Report
□ Applicable √ N/A
Provision for bad debts made by group:
□ Applicable √ N/A
(10). Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
Refer to V.11 of Section X for details.
Description of significant changes in the balance of dividends receivable with changed provisions for
losses in the current period:
□ Applicable √ N/A
(11). Provision for bad debts
□ Applicable √ N/A
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
None
(12). Dividends receivable actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of dividends receivable canceled are described as below
□ Applicable √ N/A
Description of cancellation:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Other receivables
(13). Disclosure by aging
√ Applicable □ N/A
In RMB
Closing balance of carrying Opening balance of carrying
Aging
amount amount
Within 1 year
Where: Subitems within 1 year
Within 1 year 8,746,169.48 5,167,315.12
Subtotal of items within 1 year 8,746,169.48 5,167,315.12
1 to 2 years 2,540,156.84 1,917,518.11
2 to 3 years 333,955.74 1,064,581.40
Over 3 years 6,002,199.51 5,030,255.35
Total 17,622,481.57 13,179,669.98
(14). Categories by the nature of other receivables
√ Applicable □ N/A
In RMB
Closing balance of carrying Opening balance of carrying
Nature of other receivables
amount amount
Deposits/margins/petty cash 10,696,150.09 11,162,127.62
209 / 290
2023 Annual Report
Withholding 393,531.80 818,004.80
Temporary receivables 6,532,799.68 1,133,717.92
Compensation receivable 65,819.64
Total 17,622,481.57 13,179,669.98
(15). Provision for bad debts
√ Applicable □ N/A
In RMB
Stage I Stage II Stage III
12-month Lifetime ECL Lifetime ECL
Provision for bad debts Total
ECL in the (without credit (with credit
future impairment) impairment)
Balance as at January 1, 2023 613,139.94 24,716.49 637,856.43
Balance as at January 1, 2023
- - -
in the current period
--transferred to Stage II -21,523.12 21,523.12
--transferred to Stage III
--reversed to Stage II
--reversed to Stage I
Provision 248,307.62 61,375.97 309,683.59
Reversal
Write-off
Cancellation
Other changes
Balance as at December 31,
839,924.44 107,615.58 947,540.02
2023
Basis for determination of each stage and percentage of provision for bad debts
The group of receivable deposits, margins and petty cash and other receivables due within one year
in the group of aging indicate no obvious increase in the credit risk since initial recognition (stage I), 1-2
years in the group of aging indicate obvious increase in the credit risk since initial recognition but no
credit impairment (stage II), and over 2 years in the group of aging indicate credit impairment since
initial recognition (stage III).
Description of significant changes in the balance of other receivables with changed provisions for losses
in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period:
□ Applicable √ N/A
(16). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Recovery Write-off Closing
Category Other
balance Provision or or balance
changes
reversal cancellation
Provision for
bad debts
637,856.43 309,683.59 947,540.02
made by
group
Total 637,856.43 309,683.59 947,540.02
210 / 290
2023 Annual Report
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information
None
(17). Other receivables actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of other receivables canceled are described as below
□ Applicable √ N/A
Description of cancellation of other receivables:
□ Applicable √ N/A
(18). Top five closing balances of other receivables categorized by debtors
√ Applicable □ N/A
In RMB
Proportion to
Closing
the balance of
Closing Nature of other balance of
Entity other Aging
balance receivables bad debt
receivables
provision
(%)
Over
Deposits/margins/petty
Top 1 3,574,618.00 20.28 3 178,730.90
cash
years
Over
Deposits/margins/petty
Top 2 1,294,675.20 7.35 3 64,733.76
cash
years
Deposits/margins/petty
1-3
Top 3 505,491.60 2.87 cash; temporary 25,274.58
years
receivables
Deposits/margins/petty 1-2
Top 4 500,000.00 2.84 25,000.00
cash years
Over
Deposits/margins/petty
Top 5 500,000.00 2.84 3 25,000.00
cash
years
Total 6,374,784.80 36.18 - - 318,739.24
(19). Presentation in other receivables due to centralized fund management
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
10. Inventories
(1). Categories of inventories
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
211 / 290
2023 Annual Report
Provision for Provision for
decline in value of decline in value of
Carrying Book Carrying Book
inventories/impair inventories/impair
amount value amount value
ment of contract ment of contract
performance cost performance cost
Raw 443,084,635.
41,537,753.59
401,546,882. 511,371,448.
29,152,044.36
482,219,404.
materials 75 16 78 42
Work in 14,472,238.1 13,993,318.4 15,037,109.2 12,456,095.0
478,919.67 2,581,014.21
progress 0 3 6 5
Goods on 260,003,554.
46,351,531.91
213,652,022. 354,588,226.
24,770,894.74
329,817,332.
hand 90 99 87 13
Goods
19,510,688.2 15,964,072.7 31,157,150.4 29,256,042.3
upon 4
3,546,615.45
9 8
1,901,108.14
4
delivery
Contract
performan 4,121,745.02 1,554,079.22 2,567,665.80 2,740,313.16 2,740,313.16
ce cost
Materials 180,136.65 180,136.65
in transit
Materials
for 8,934,579.86 491,879.01 8,442,700.85 9,397,672.25 246,897.56 9,150,774.69
consigned
processing
Total 750,307,578. 656,346,799. 924,291,920. 865,639,961.
93,960,778.85 58,651,959.01
52 67 80 79
(2). Provision for decline in value of inventories and impairment of contract performance cost
√ Applicable □ N/A
In RMB
Increase Decrease
Opening Closing
Item Reversal or
balance Provision Others Others balance
write-off
Raw materials 29,152,044.36 15,192,648.09 1,514.38 2,808,453.24 41,537,753.59
Work in 2,581,014.21 474,772.94 2,576,867.48 478,919.67
progress
Goods on hand 24,770,894.74 38,444,890.07 50,372.36 16,914,625.26 46,351,531.91
Goods upon 1,901,108.14 2,439,626.45 3,932.56 798,051.70 3,546,615.45
delivery
Contract
performance 1,554,079.22 1,554,079.22
cost
Materials for
consigned 246,897.56 256,617.34 11,635.89 491,879.01
processing
Total 58,651,959.01 58,362,634.11 55,819.30 23,109,633.57 93,960,778.85
Reason for reversing or writing off the provisions for decline in value of inventories in the current period
√ Applicable □ N/A
212 / 290
2023 Annual Report
Reason for
Reason for writing
reversing the
off the provision
Specific basis for determining the net provision for
Item for decline in value
realizable value decline in value of
of inventory
inventory
The net realizable value of raw The Company has
For the inventories of
materials is determined as the historical consumed/sold the
which a provision for
average selling price or actual average inventories for
decline in value has
Raw selling price of finished goods in the which a provision
been made in prior
materials ordinary course of business less the for decline in value
period, their net
estimated costs of completion, and the of inventory has
realizable values
estimated costs necessary to make the been made during
have increased
sale and relevant taxes. the current period
The net realizable value of work in The Company has
Work in progress is determined as the historical consumed the
progress, average selling price or actual average inventories for
and selling price of finished goods in the which a provision
No reversal
materials for ordinary course of business less the for decline in value
consigned estimated costs of completion, and the of inventory has
processing estimated costs necessary to make the been made during
sale and relevant taxes. the current period
The Company has
For the inventories of
For inventories directly used for sale, used/sold the
which a provision for
the net realizable value is determined as inventories for
decline in value has
Goods on the historical average selling price or which a provision
been made in prior
hand actual average selling price less the for decline in value
period, their net
estimated costs necessary to make the of inventory has
realizable values
sale and relevant taxes. been made during
have increased
the current period
Goods upon For goods delivered, the net realizable The Company has
delivery value is determined as the selling price sold the inventories
or actual average selling price less the for which a
estimated costs necessary to make the provision for
No reversal
sale and relevant taxes. decline in value of
inventory has been
made during the
current period
Contract For the contract performance cost, the
performance net realizable value is determined as the
cost actual selling price of goods in the
ordinary course of business less the No reversal No write-off
estimated costs of completion, and the
estimated costs necessary to make the
sale and relevant taxes
Provision for decline in value of inventory made by group
□ Applicable √ N/A
Standard for making provision for decline in value of inventory by group
□ Applicable √ N/A
(3). Description of capitalized amount of borrowing costs included in the closing balance of
inventories, and the standard and basis for the calculation thereof
□ Applicable √ N/A
213 / 290
2023 Annual Report
(4). Description of amortization of contract performance cost during the period
√ Applicable □ N/A
Provision for
impairment
Opening Closing
Item Increase Amortization made in the
balance balance
current
period
Entrusted
1,280,518.10 11,099,498.13 8,330,810.13 1,554,079.22 2,495,126.88
development
Overseas
1,459,795.06 72,538.92 1,459,795.06 72,538.92
freight
Subtotal 2,740,313.16 11,172,037.05 9,790,605.19 1,554,079.22 2,567,665.80
Other information
□ Applicable √ N/A
11. Held-for-sale assets
□ Applicable √ N/A
12. Non-current assets due within one year
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Debt investments due within one
year
Other debt investments due within
one year
Long-term receivables due within
41,997,218.73 13,431,554.82
one year
Total 41,997,218.73 13,431,554.82
Debt investments due within one year
□ Applicable √ N/A
Other debt investments due within one year
□ Applicable √ N/A
Other description of non-current assets due within one year
None
13. Other current assets
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Contract acquisition cost
Cost of returned goods receivable 1,611,745.50 3,729,974.65
Input VAT to be deducted 46,217,482.57 96,670,912.86
Prepaid enterprise income tax 588,042.04 6,101,724.28
Total 48,417,270.11 106,502,611.79
Other information
None
214 / 290
2023 Annual Report
14. Debt investments
(1). Description of debt investments
□ Applicable √ N/A
Changes in the provision for impairment of debt investments in the current period
□ Applicable √ N/A
(2). Debt investments with significant amounts at the end of the period
□ Applicable √ N/A
(3). Description of provision for impairment
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for impairment:
N/A
Description of significant changes in the balance of debt investments with changed provisions for losses
in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period
□ Applicable √ N/A
(4). Debt investments actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of debt investments canceled are described as below
□ Applicable √ N/A
Description of cancellation of debt investments:
□ Applicable √ N/A
Other information
□ Applicable √ N/A
15. Other debt investments
(1). Description of other debt investments
□ Applicable √ N/A
Changes in the provision for impairment of other debt investments in the current period
□ Applicable √ N/A
(2). Other debt investments with significant amounts at the end of the period
□ Applicable √ N/A
(3). Description of provision for impairment
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for impairment:
N/A
Description of significant changes in the balance of other debt investments with changed provisions for
losses in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period
□ Applicable √ N/A
215 / 290
2023 Annual Report
(4). Other debt investments actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of other debt investments canceled are described as below
□ Applicable √ N/A
Description of write-off of other debt investments:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
16. Long-term receivables
(1). Description of long-term receivables
√ Applicable □ N/A
In RMB
Closing balance Opening balance Range
Provision Provision of
Item Carrying Carrying
for bad Book value for bad Book value discount
amount amount
debts debts rate
Installment 28,410,593.87 2,410,050.74 26,000,543.13 14,358,245.82 2,834,052.02 11,524,193.80
4.30%-
collection 4.65%
Where:
Financing -711,250.41 -711,250.41 -415,458.66 -415,458.66
income not
realized
Total 28,410,593.87 2,410,050.74 26,000,543.13 14,358,245.82 2,834,052.02 11,524,193.80
(2). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Carrying Provision for Provision for
Carrying amount
amount bad debts bad debts
Pe
rce
Per
nta
Cate cent
ge
gory Perc Book Perc age Book
of
Amou enta value enta of value
Amount pr Amount Amount
nt ge ge pro
ovi
(%) (%) visi
sio
on
n
(%)
(%
)
Provi
sion
for
bad
debts
made
indivi
duall
y
Where:
216 / 290
2023 Annual Report
Provi
sion
for
28,410
bad 100. 2,410,050 8.4 26,000,543 14,358,245 100. 2,834,052 19.7 11,524,193
,593.8
debts 00 .74 8 .13 .83 00 .02 4 .80
7
made
by
group
Where:
Grou 28,410
100. 2,410,050 8.4 26,000,543 14,358,245 100. 2,834,052 19.7 11,524,193
p of ,593.8
00 .74 8 .13 .83 00 .02 4 .80
aging 7
28,410
100. 2,410,050 8.4 26,000,543 14,358,245 100. 2,834,052 19.7 11,524,193
Total ,593.8
00 .74 8 .13 .83 00 .02 4 .80
7
Provision for bad debts made individually:
□ Applicable √ N/A
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: Group of aging
In RMB
Closing balance
Name Provision for bad Percentage of
Long-term receivables
debts provision (%)
Group of aging 28,410,593.87 2,410,050.74 8.48
Total 28,410,593.87 2,410,050.74 8.48
Description of provision for bad debts made by group
□ Applicable √ N/A
(3). Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
Refer to V.11 of Section X for details.
Description of significant changes in the balance of long-term receivables with changed provisions for
losses in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of financial
instruments has been increased significantly in the current period
□ Applicable √ N/A
(4). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Recovery Write-off Closing
Category Other
balance Provision or or balance
changes
reversal cancellation
217 / 290
2023 Annual Report
Provision
for bad
2,834,052.02 5,808,087.18 6,232,088.46 2,410,050.74
debts made
by group
Total 2,834,052.02 5,808,087.18 6,232,088.46 2,410,050.74
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
“Other changes” indicate the provision for impairment corresponding to the long-term receivables
reclassified to be due within one year.
(5). Long-term receivables actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of long-term receivables canceled are described as below
□ Applicable √ N/A
Description of cancellation of long-term receivables:
□ Applicable √ N/A
Other information
□ Applicable √ N/A
17. Long-term equity investments
(1). Description of long-term equity investments
√ Applicable □ N/A
In RMB
Changes for the current period
Adjust
Closing
Investm ment
balanc
Openin ent in Declare
Additio Decre Other Provisi e of
Investee g profit other d cash Closing
nal ased equity on for Others provisi
s balanc or loss compr dividen balance
invest invest chang impair [Note] on for
e under ehensi ds or
ment ment es ment impair
equity ve profits
ment
method incom
e
I. Joint venture
Subtotal
II. Associates
GDC 162,394
Technol ,917.57 - -
11,704, 2,937,1 138,890 11,704,
ogy 11,610, 3,126,
497.05 62.14 ,614.32 497.05
Limited 757.89 210.45
(BVI)
Shenzhe 6,000,0 -
n 00.00 163,837
Zhongjia .89
5,836,1
n
62.11
Technol
ogy Co.,
Ltd.
162,394 6,000,0 - -
11,704, 2,937,1 144,726 11,704,
Subtotal ,917.57 00.00 11,774, 3,126,
497.05 62.14 ,776.43 497.05
595.78 210.45
- -
162,394 6,000,0 11,704, 2,937,1 144,726 11,704,
Total 11,774, 3,126,
,917.57 00.00 497.05 62.14 ,776.43 497.05
595.78 210.45
Note: “Others” indicate the amount generated from foreign exchange translation.
(2). Impairment test of long-term equity investments
√ Applicable □ N/A
Other information
218 / 290
2023 Annual Report
The recoverable amount is determined according to the net value of subtracting disposal expenses
from the fair value
√ Applicable □ N/A
In RMB
Method of
determinin Basis for
Key
Recoverable Impairment g the fair determinin
Item Book value parameter
amount amount value and g key
s
disposal parameters
expenses
150,595,111.3 138,890,614.3 11,704,497.0 Value Financial Financial
7 2 5 Consulting data of statements
GDC Report comparabl of
Technolog e comparabl
y Limited companies e
(BVI) and companies
investees and
investees
Total 150,595,111.3 138,890,614.3 11,704,497.0 - - -
7 2 5
The recoverable amount is determined according to the present value of the estimated future cash
flows
□ Applicable √ N/A
Reason for the obvious difference between the information above and the information used in the
impairment test in previous years or external information
□ Applicable √ N/A
Reason for the obvious difference between the information used by the Company in the impairment
test in previous years and the actual conditions of the corresponding year
□ Applicable √ N/A
Other information
None
219 / 290
2023 Annual Report
18. Investment in other equity instruments
(1). Description of investment in other equity instruments
√ Applicable □ N/A
In RMB
Reasons for
Changes for the current period
Dividends designating as
Total gains Total losses
Gains Losses income financial
recognized in recognized in
Opening recognized in recognized in Closing recognized assets at fair
Item other other
balance Additional Decreased other other balance for the value through
Others comprehensive comprehensive
investment investment comprehensive comprehensive current other
income income
income in the income in the period comprehensive
current period current period income
Shen Zhen
Timewaying
7,075,419.38 7,075,419.38
Technology
Co., Ltd.
Shenzhen
Bevix
Technology
Co., Ltd.
Total 7,075,419.38 7,075,419.38 -
(2). Description of derecognition in the current period
□ Applicable √ N/A
Other information:
√ Applicable □ N/A
The Company’s equity investments in Shen Zhen Timewaying Technology Co., Ltd., and Shenzhen Bevix Technology Co., Ltd. are mainly for promoting future
business cooperation rather than making transactions, hence they are designated as investments in equity instruments at fair value through other comprehensive income.
The cost of Shenzhen Bevix Technology Co., Ltd. is RMB 4,900,000.00, and the fair value change is -RMB 4,900,000.00.
220 / 290
2023 Annual Report
19. Other non-current financial assets
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
20. Investment properties
Measurement mode of investment properties
N/A
(1). Impairment test of investment properties measured at costs
□ Applicable √ N/A
The recoverable amount is determined as the fair value net of disposal expenses
□ Applicable √ N/A
The recoverable amount is determined according to the present value of the estimated future cash
flows
□ Applicable √ N/A
Reason for the obvious difference between the information above and the information used in the
impairment test in previous years or external information
□ Applicable √ N/A
Reason for the obvious difference between the information used by the Company in the impairment
test in previous years and the actual conditions of the corresponding year
□ Applicable √ N/A
21. Fixed assets
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Fixed assets 336,276,793.84 427,539,718.53
Disposal of fixed assets
Total 336,276,793.84 427,539,718.53
Other information:
□ Applicable √ N/A
Fixed assets
(1). Description of fixed assets
√ Applicable □ N/A
In RMB
Machinery Transportati Electronic Operating
Item and on equipment leased Total
equipment equipment and others equipment
I. Cost:
1. Opening balance 159,638,878.71 1,171,400.05 58,558,067.60 682,654,171.75 902,022,518.11
2. Increase 21,359,208.32 1,207,345.37 6,936,037.25 24,885,832.76 54,388,423.70
(1) Purchase 21,276,438.68 1,207,345.37 6,906,834.25 29,390,618.30
(2) Transfer from
construction in 24,885,832.76 24,885,832.76
progress
(3) Increase from
business combination
(4) Currency
82,769.64 29,203.00 111,972.64
movement
3. Decrease 7,960,468.47 151,000.00 1,383,148.41 42,329,618.21 51,824,235.09
(1) Disposal or
7,927,350.95 151,000.00 997,553.76 9,075,904.71
retirement
221 / 290
2023 Annual Report
(2) Transfer to
11,501.63 385,594.65 42,329,618.21 42,726,714.49
inventories
(3) Transfer to
construction in 21,615.89 21,615.89
progress
4. Closing balance 173,037,618.56 2,227,745.42 64,110,956.44 665,210,386.30 904,586,706.72
II. Accumulated depreciation
1. Opening balance 77,432,539.28 758,120.79 30,586,219.43 364,608,760.63 473,385,640.13
2. Increase 25,359,455.50 157,615.11 8,554,535.73 88,047,732.24 122,119,338.58
(1) Provision 25,307,099.25 157,615.11 8,529,361.50 88,047,732.24 122,041,808.10
(2) Purchase
(3) Currency
52,356.25 25,174.23 77,530.48
movement
3. Decrease 5,632,097.61 59,770.75 900,960.59 26,683,179.98 33,276,008.93
(1) Disposal or
5,625,336.41 59,770.75 715,917.46 6,401,024.62
retirement
(2) Transfer to
6,761.20 185,043.13 26,683,179.98 26,874,984.31
inventories
4. Closing balance 97,159,897.17 855,965.15 38,239,794.57 425,973,312.89 562,228,969.78
III. Provision for impairment
1. Opening balance 1,097,159.45 1,097,159.45
2. Increase 1,935,931.82 3,300,602.27 5,236,534.09
(1) Provision 1,935,931.82 3,300,602.27 5,236,534.09
3. Decrease 252,750.44 252,750.44
(1) Disposal or
252,750.44 252,750.44
retirement
4. Closing balance 1,935,931.82 4,145,011.28 6,080,943.10
IV. Book value
1. Closing balance 73,941,789.57 1,371,780.27 25,871,161.87 235,092,062.13 336,276,793.84
2. Opening balance 82,206,339.43 413,279.26 27,971,848.17 316,948,251.67 427,539,718.53
(2). Temporarily idle fixed assets
√ Applicable □ N/A
In RMB
Accumulated Provision for
Item Cost Book value Remark
depreciation impairment
Operating
leased 27,282,134.47 18,723,126.04 3,292,627.27 5,266,381.16
equipment
Subtotal 27,282,134.47 18,723,126.04 3,292,627.27 5,266,381.16
(3). Fixed assets leased out under operating lease
√ Applicable □ N/A
In RMB
Item Closing balance of book value
Operating leased equipment 229,825,680.97
Subtotal 229,825,680.97
(4). Fixed assets of which certificates of title have not been obtained
□ Applicable √ N/A
(5). Impairment test of fixed assets
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Disposal of fixed assets
□ Applicable √ N/A
222 / 290
2023 Annual Report
22. Construction in progress
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Construction in progress 347,777,138.86 278,978,057.73
Materials for construction
Total 347,777,138.86 278,978,057.73
Other information:
□ Applicable √ N/A
Construction in progress
(1). Description of construction in progress
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Provision Provision
Item Carrying for Carrying for
Book value Book value
amount impairme amount impairme
nt nt
Headquart
344,481,907. 344,481,907. 270,837,599. 270,837,599.
er
55 55 21 21
buildings
Assets to
3,295,231.31 3,295,231.31 6,266,605.31 6,266,605.31
be leased
Decoratio
n
1,873,853.21 1,873,853.21
constructi
on
347,777,138. 347,777,138. 278,978,057. 278,978,057.
Total
86 86 73 73
(2). Changes in significant constructions in progress for the current period
√ Applicable □ N/A
In RMB
O
t
h Inter
Amou Amo S
e Where est
nt unt of o
Amoun r Engi : capit
injecte accu u
Budg Openin t d Clos neeri Capital alizat
d as a mulat rc
et g Increa transfe e ing ng ized ion
Item propor ed e
amou balanc se rred to c bala prog interes rate
tion of capit of
nt e fixed r nce ress t for for
budget alized fu
assets e (%) the the
amoun intere n
a period perio
t (%) st ds
s d (%)
e
s
223 / 290
2023 Annual Report
S
el
f-
Head fu
344,
quarte 534,6 10,57 n
270,837, 73,644, 481, 70.2 5,583,4
r 35,20 70.23 9,558. 3.68 de
599.21 308.34 907. 3 27.71
buildi 0.00 50 d
55
ngs ca
pi
ta
l
Asset
3,29
s to 6,266,60 21,914, 24,885,
5,23
be 5.31 458.76 832.76
1.31
leased
347,
534,6 10,57
277,104, 95,558, 24,885, 777, 5,583,4
Total 35,20 9,558. -
204.52 767.10 832.76 138. 27.71
0.00 50
86
(3). Provision for impairment losses for construction in progress in the current period
□ Applicable √ N/A
(4). Impairment test of construction in progress
□ Applicable √ N/A
Other information
□ Applicable √ N/A
Materials for construction
(5). Description of materials for construction
□ Applicable √ N/A
23. Productive biological assets
(1). Productive biological assets measured at cost
□ Applicable √ N/A
(2). Impairment test of productive biological assets measured at cost
□ Applicable √ N/A
The recoverable amount is determined as the fair value net of disposal expenses
□ Applicable √ N/A
The recoverable amount is determined according to the present value of the estimated future cash
flows
□ Applicable √ N/A
Reason for the obvious difference between the information above and the information used in the
impairment test in previous years or external information
□ Applicable √ N/A
Reason for the obvious difference between the information used by the Company in the impairment
test in previous years and the actual conditions of the corresponding year
□ Applicable √ N/A
(3). Productive biological assets measured at fair value
□ Applicable √ N/A
Other information
□ Applicable √ N/A
224 / 290
2023 Annual Report
24. Oil and gas assets
(1) Description of oil and gas assets
□ Applicable √ N/A
(2) Impairment test of oil and gas assets
□ Applicable √ N/A
Other information:
None
25. Right-of-use assets
(1) Description of right-of-use assets
√ Applicable □ N/A
In RMB
Item Houses and buildings Total
I. Cost
1. Opening balance 80,936,615.37 80,936,615.37
2. Increase 13,299,459.65 13,299,459.65
(1) Lease in 13,289,935.99 13,289,935.99
(2) Currency movement 9,523.66 9,523.66
3. Decrease 8,571,220.42 8,571,220.42
(1) Disposal 8,571,220.42 8,571,220.42
4. Closing balance 85,664,854.60 85,664,854.60
II. Accumulated depreciation
1. Opening balance 18,680,945.08 18,680,945.08
2. Increase 29,391,436.98 29,391,436.98
(1) Provision 29,384,153.50 29,384,153.50
(2) Currency movement 7,283.48 7,283.48
3. Decrease 2,424,431.13 2,424,431.13
(1) Disposal 2,424,431.13 2,424,431.13
4. Closing balance 45,647,950.93 45,647,950.93
III. Provision for impairment
1. Opening balance
2. Increase
(1) Provision
3. Decrease
(1) Disposal
4. Closing balance
IV. Book value
1. Closing balance 40,016,903.67 40,016,903.67
2. Opening balance 62,255,670.29 62,255,670.29
(2) Impairment test of right-of-use assets
□ Applicable √ N/A
Other information:
None
The recoverable amount is determined as the fair value net of disposal expenses
□ Applicable √ N/A
The recoverable amount is determined according to the present value of the estimated future cash
flows
□ Applicable √ N/A
225 / 290
2023 Annual Report
Reason for the obvious difference between the information above and the information used in the
impairment test in previous years or external information
□ Applicable √ N/A
Reason for the obvious difference between the information used by the Company in the impairment
test in previous years and the actual conditions of the corresponding year
□ Applicable √ N/A
Other information:
None
26. Intangible assets
(1). Description of intangible assets
√ Applicable □ N/A
In RMB
Item Land use rights Patents Software Total
I. Cost
1. Opening balance 330,630,000.00 20,059,950.00 20,151,437.21 370,841,387.21
2. Increase 7,040,997.83 7,040,997.83
(1) Purchase 7,030,327.88 7,030,327.88
(2) Internal R&D
(3) Increase from
business
combination
(4) Currency
10,669.95 10,669.95
movement
3. Decrease
(1) Disposal
4. Closing
330,630,000.00 20,059,950.00 27,192,435.04 377,882,385.04
balance
II. Accumulated amortization
1. Opening balance 49,594,500.18 16,390,600.14 10,845,243.95 76,830,344.27
2. Increase 11,021,000.04 4,400,644.65 15,421,644.69
(1) Provision 11,021,000.04 4,390,272.10 15,411,272.14
(2) Currency
10,372.55 10,372.55
movement
3. Decrease
(1) Disposal
4. Closing balance 60,615,500.22 16,390,600.14 15,245,888.60 92,251,988.96
III. Provision for impairment
1. Opening balance 3,669,349.86 3,669,349.86
2. Increase
(1) Provision
3. Decrease
(1) Disposal
4. Closing balance 3,669,349.86 3,669,349.86
IV. Book value
226 / 290
2023 Annual Report
1. Closing balance 270,014,499.78 11,946,546.44 281,961,046.22
2. Opening 281,035,499.82
9,306,193.26 290,341,693.08
balance
The proportion of intangible assets generated by the Company’s internal research and development to
the balance of intangible assets at the end of the period is 0.
(2). Land use rights of which certificates of title have not been obtained
□ Applicable √ N/A
(3) Impairment test of intangible assets
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
27. Goodwill
(1). Cost of goodwill
□ Applicable √ N/A
(2). Impairment provision of goodwill
□ Applicable √ N/A
(3). Relevant information of groups of assets or combinations of groups of assets where the goodwill
is recognized
□ Applicable √ N/A
Changes in groups of assets or combinations of groups of assets
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(4). Specific method for determining the recoverable amount
The recoverable amount is determined as the fair value net of disposal expenses
□ Applicable √ N/A
The recoverable amount is determined according to the present value of the estimated future cash flows
□ Applicable √ N/A
Reason for the obvious difference between the information above and the information used in the
impairment test in previous years or external information
□ Applicable √ N/A
Reason for the obvious difference between the information used by the Company in the impairment test
in previous years and the actual conditions of the corresponding year
□ Applicable √ N/A
(5). Performance covenant and impairment of the corresponding goodwill
There is a performance covenant and the reporting period or the prior period is within the period of
performance covenant when the goodwill is generated
□ Applicable √ N/A
Other information
□ Applicable √ N/A
28. Long-term prepaid expenses
√ Applicable □ N/A
In RMB
Item Opening Increase Amortization Other decreases Closing balance
balance
Decoration
5,935,938.09 4,811,259.54 4,457,656.35 -6,585.59 6,296,126.87
construction
RTO gas for the
55,045.94 33,027.48 22,018.46
screen project
Total 5,990,984.03 4,811,259.54 4,490,683.83 -6,585.59 6,318,145.33
Other information:
None
227 / 290
2023 Annual Report
29. Deferred tax assets and deferred tax liabilities
(1). Deferred tax assets that are not offset
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Item Deductible Deductible
Deferred tax Deferred tax
temporary temporary
assets assets
differences differences
Provision for impairment
74,115,172.24 11,117,383.83 54,480,645.82 8,172,204.87
of assets
Unrealized profits for
210,685,301.87 31,602,795.28 293,141,594.90 43,971,239.24
insider transactions
Deductible losses 239,029,918.69 35,854,487.80 145,752,332.17 21,862,849.83
Provisions 34,841,473.16 5,226,220.97 33,861,061.30 5,079,159.20
Other current liabilities 4,991,932.34 748,789.85
Share-based payment
61,226,650.97 9,183,997.65 78,336,744.64 11,756,236.09
expenses
Deferred income 2,718,881.63 407,832.24 5,651,422.25 847,713.34
Lease liabilities 34,994,645.59 5,283,800.22 54,028,804.51 8,149,471.10
Held-for-trading
990,000.00 148,500.00 1,120,000.00 168,000.00
financial assets
Total 663,593,976.49 99,573,807.84 666,372,605.59 100,006,873.67
(2). Deferred tax liabilities that are not offset
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Item Taxable Taxable
Deferred tax Deferred tax
temporary temporary
liabilities liabilities
differences differences
Long-term receivables 69,036,668.06 10,355,500.21 15,031,309.08 2,254,696.36
Right-of-use assets 33,667,244.64 5,083,230.25 53,180,332.57 8,021,241.29
Total 102,703,912.70 15,438,730.46 68,211,641.65 10,275,937.65
(3). Deferred tax assets and deferred tax liabilities that are presented at the net amount after offset
√ Applicable □ N/A
In RMB
Closing Opening
Closing set-off Opening set-off
balance of balance of
amounts of amounts of
deferred tax deferred tax
Item deferred tax deferred tax
assets or assets or
assets and assets and
liabilities after liabilities after
liabilities liabilities
set-off set-off
Deferred tax assets 14,209,075.65 85,364,732.19 10,275,937.65 89,730,936.02
Deferred tax liabilities 14,209,075.65 1,229,654.81 10,275,937.65
(4). Details of unrecognized deferred tax assets
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Deductible losses 628,624,774.28 322,268,687.11
228 / 290
2023 Annual Report
Provision for impairment of assets 72,217,063.30 47,406,755.88
Unrealized profits for insider
17,628,227.02 33,624,043.48
transactions
Provisions 23,992,739.66 18,872,846.92
Deferred income 1,909,090.93 3,000,000.01
Share-based payment expenses 5,716,287.31 3,180,261.29
Leases 776,044.91 1,557,490.63
Profit distribution from partnership
22,937.98 15,991.72
enterprises
Changes in fair value of investments
4,900,000.00 4,900,000.00
in other equity instruments
Total 755,787,165.39 434,826,077.04
(5). Deductible losses, for which no deferred tax assets are recognized, will expire in the following
years
√ Applicable □ N/A
In RMB
Year Closing balance Opening balance Remark
2023 4,629,271.35
2024 3,721,926.96 3,721,926.96
2025 4,647,581.11 4,647,581.11
2026 585,694.63 585,694.63
2027 7,264,969.19 14,169,584.98
2028 14,859,636.58
2031 86,704,079.12 97,492,216.72
2032 174,220,126.74 91,057,406.63
2033 168,693,830.07
No expiry date 167,926,929.88 105,965,004.73
Total 628,624,774.28 322,268,687.11 -
Other information:
□ Applicable √ N/A
30. Other non-current assets
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Provision Provision
Item Carrying for Carrying for
Book value Book value
amount impairmen amount impairmen
t t
Prepaymen
t for
29,348,748.2 29,348,748.2 12,569,088.3 12,569,088.3
purchase
7 7 7 7
of long-
term assets
29,348,748.2 29,348,748.2 12,569,088.3 12,569,088.3
Total
7 7 7 7
Other information:
None
31. Items of restricted assets
√ Applicable □ N/A
In RMB
Closing Opening
Item
Carrying Book value Type of Restriction Carrying Book value Type of Restriction
229 / 290
2023 Annual Report
amount restriction amount restriction
Time Undue time Time Undue time
deposits deposits deposits deposits
and and and and
interests, interests, interests, interests,
Cash and
security account security account
bank 88,979,653.31 88,979,653.31 101,299,805.51 101,299,805.51
deposits, security deposits, security
balances
and funds deposits, and funds deposits,
in and in and
restricted restricted restricted restricted
accounts payments accounts payments
Intangible Mortgage Mortgage
330,630,000.00 270,014,499.78 Mortgage 330,630,000.00 281,035,499.82 Mortgage
assets collateral collateral
Total 419,609,653.31 358,994,153.09 - - 431,929,805.51 382,335,305.33 - -
Other information:
None
32. Short-term borrowings
(1). Categories of short-term borrowings
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Pledge borrowings 50,000,000.00
Guaranteed loans 30,000,000.00 39,500,000.00
Credit loans 60,000,000.00
Notes discount within the group 30,000,000.00
Interest 36,500.00 89,634.03
Total 80,036,500.00 129,589,634.03
Description for categories of short-term borrowings:
None
(2). Short-term borrowings overdue but not yet repaid
□ Applicable √ N/A
In which the significant amounts of short-term borrowings overdue but not yet repaid are described as
below:
□ Applicable √ N/A
Other information
□ Applicable √ N/A
33. Held-for-trading financial liabilities
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
34. Derivative financial liabilities
□ Applicable √ N/A
35. Notes payable
(1). Presented by notes payable
√ Applicable □ N/A
In RMB
Category Closing balance Opening balance
Commercial acceptance
bills
Bank acceptance bills 76,001,079.07 201,299,388.57
Total 76,001,079.07 201,299,388.57
Total notes payable matured but not paid yet are RMB 0 at the end of the period.
230 / 290
2023 Annual Report
36. Accounts payable
(1). Presented by accounts payable
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Amounts payable for 247,318,466.10 276,845,321.28
purchase
Total 247,318,466.10 276,845,321.28
(2). Accounts payable with significant amounts aged more than 1 year or overdue
□ Applicable √ N/A
Other information
□ Applicable √ N/A
37. Advance from customers
(1). Presented by advance from customers
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Advance payments of recharge 110,573,711.24 113,834,728.10
fees
Total 110,573,711.24 113,834,728.10
(2). Advance from customers with significant amounts aged more than 1 year
□ Applicable √ N/A
(3). Amount and reasons of major changes in the book value during the reporting period
□ Applicable √ N/A
Other information
□ Applicable √ N/A
38. Contract liabilities
(1). Description of contract liabilities
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Goods payment 45,416,445.99 37,285,920.43
Total 45,416,445.99 37,285,920.43
(2). Contract liabilities with significant amounts aged more than 1 year
□ Applicable √ N/A
(3). Amount and reasons of major changes in the book value during the reporting period
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
39. Employee benefits payable
(1). Presented by employee benefits payable
√ Applicable □ N/A
In RMB
Opening
Item Increase Decrease Closing balance
balance
I. Short-term
57,760,642.14 416,708,292.55 413,524,519.25 60,944,415.44
employee benefits
231 / 290
2023 Annual Report
II. Post-employment
benefits-defined 170,231.90 17,456,556.84 17,391,033.79 235,754.95
contribution plan
III. Termination
540,086.51 17,609,524.86 12,455,547.29 5,694,064.08
benefits
IV. Other benefits
due within one year
Total 58,470,960.55 451,774,374.25 443,371,100.33 66,874,234.47
(2). Presented by short-term employee benefits
√ Applicable □ N/A
In RMB
Opening Closing
Item Increase Decrease
balance balance
I. Wages or salaries,
bonuses, allowances and 57,630,572.03 372,404,406.24 369,599,329.02 60,435,649.25
subsidies
II. Staff welfare 8,231,926.36 7,955,571.36 276,355.00
III. Social security
107,849.71 13,561,735.35 13,517,938.61 151,646.45
contributions
Where: Medical
102,565.34 12,715,801.49 12,674,400.04 143,966.79
insurance
Work injury
5,267.39 512,512.89 510,117.60 7,662.68
insurance
Maternity
16.98 333,420.97 333,420.97 16.98
insurance
IV. Housing funds 21,304,069.89 21,282,550.89 21,519.00
V. Union running costs
and employee education 22,220.40 1,206,154.71 1,169,129.37 59,245.74
costs
VI. Short-term paid
leaves
VII. Short-term profit
sharing plan
Total 57,760,642.14 416,708,292.55 413,524,519.25 60,944,415.44
(3). Presented by defined contribution plan
√ Applicable □ N/A
In RMB
Opening Closing
Item Increase Decrease
balance balance
1. Basic pensions
164,547.68 16,955,255.51 16,891,718.07 228,085.12
insurance
2. Unemployment
5,684.22 501,301.33 499,315.72 7,669.83
insurance
3. Enterprise annuity
contribution
Total 170,231.90 17,456,556.84 17,391,033.79 235,754.95
Other information:
□ Applicable √ N/A
40. Taxes payable
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Value-added tax (VAT) 359,180.74 283,831.65
Enterprise income tax 1,334,766.59 1,329,891.54
232 / 290
2023 Annual Report
Individual income tax 3,528,285.07 5,330,584.62
City maintenance and
293,453.55 461,779.38
construction tax
Education surcharges 129,503.34 200,014.57
Local education surcharges 83,464.21 133,343.03
Stamp duty 399,474.92 521,340.60
Annual franchise right tax 14,519.54 11,933.84
Land use tax 56.27 49.67
Total 6,142,704.23 8,272,768.90
Other information:
None
41. Other payables
(1).Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Interests payable
Dividends payable
Other payables 54,142,509.17 56,662,357.08
Total 54,142,509.17 56,662,357.08
Other information:
□ Applicable √ N/A
(2).Interests payable
Presented by categories
□ Applicable √ N/A
Overdue interests payable with significant amounts:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
(3).Dividends payable
Presented by categories
□ Applicable √ N/A
(4).Other payables
Other payables presented by nature
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Withholding 519,802.15 264,611.23
Deposits/margins 14,940,040.78 9,538,090.44
Withdrawals in advance 35,291,543.85 38,870,669.59
Temporary receipts payable 3,391,122.39 7,988,985.82
Total 54,142,509.17 56,662,357.08
Other payables with significant amounts aged more than 1 year or overdue
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
42. Held-for-sale liabilities
□ Applicable √ N/A
43. Non-current liabilities due within one year
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
233 / 290
2023 Annual Report
Long-term borrowings due 241,906,668.40 147,500,008.00
within one year
Bonds payable due within one
year
Long-term payables due
within one year
Lease liabilities due within 26,571,363.83 30,342,348.86
one year
Interest payable 270,119.44 189,460.51
Total 268,748,151.67 178,031,817.37
Other information:
None
44. Other current liabilities
Description of other current liabilities
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Amounts payable for goods 201,468.53
returned
Rebates payable 14,406,021.16 25,168,744.15
Taxes to be written off 4,035,664.67 3,013,395.69
Total 18,441,685.83 28,383,608.37
Changes in short-term bonds payable:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
45. Long-term borrowings
(1). Categories of long-term borrowings
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Guaranteed loans and loans
136,305,570.04 147,905,776.70
against collateral
Guaranteed loans 136,980,000.00 255,299,986.00
Credit loans 97,000,000.00
Interest payable 364,061.18 514,779.75
Total 370,649,631.22 403,720,542.45
Description for categories of long-term borrowings:
None
Other information
□ Applicable √ N/A
46. Bonds payable
(1). Bonds payable
□ Applicable √ N/A
(2). Specific information about bonds payable: (excluding other financial instruments such as
preferred shares, perpetual bonds and others classified as financial liabilities)
□ Applicable √ N/A
(3). Description of convertible corporate bonds
□ Applicable √ N/A
Accounting treatment and determination basis of conversion rights
□ Applicable √ N/A
234 / 290
2023 Annual Report
(4). Description of other financial instruments classified as financial liabilities
Basic information of other financial instruments including outstanding preferred shares and perpetual
bonds at the end of the period
□ Applicable √ N/A
Changes in financial instruments including outstanding preferred shares and perpetual bonds at the end
of the period
□ Applicable √ N/A
Basis for other financial instruments classified as financial liabilities:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
47. Lease liabilities
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Unpaid lease payments 16,514,060.82 37,874,912.40
Less: Unrecognized financing
965,075.11 3,555,628.17
charges
Total 15,548,985.71 34,319,284.23
Other information:
None
48. Long-term payables
Presented by items
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Long-term payables
(1). Long-term payables presented by nature
□ Applicable √ N/A
Special payables
(2). Special payables presented by nature
□ Applicable √ N/A
49. Long-term employee benefits payable
□ Applicable √ N/A
(1). Statement of long-term employee benefits payable
□ Applicable √ N/A
(2). Changes in defined benefit plan
Present value of the obligations under the defined benefit plan:
□ Applicable √ N/A
Assets under the plan:
□ Applicable √ N/A
Net liabilities (net assets) under the defined benefit plan
□ Applicable √ N/A
Description of the impact of the content of the defined benefit plan and associated risks on the future
cash flow, time, and uncertainty of the Company:
□ Applicable √ N/A
Description of major actuarial assumptions and sensitivity analysis result for the defined benefit plan
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
235 / 290
2023 Annual Report
50. Provisions
√ Applicable □ N/A
In RMB
Item Opening balance Closing balance Reason
Pending litigation 5,154,659.93
Product quality 49,871,884.36 50,530,730.18 Expenses for “three
warranty guarantees” services
Amounts payable for 6,591,998.51 2,495,594.97
goods returned
Total 56,463,882.87 58,180,985.08 -
Other description, including significant assumptions and estimates relative to material provisions:
None
51. Deferred income
Description of deferred income
√ Applicable □ N/A
In RMB
Opening Closing
Item Increase Decrease Reason
balance balance
Government The relevant
grants related 5,905,986.57 2,156,391.60 3,749,594.97 asset is within its
to assets service life
Used for
compensation of
Government relevant costs,
grants related 2,745,435.69 1,624,800.00 3,491,858.10 878,377.59 expenses, or
to income losses in
subsequent
periods
Total 8,651,422.26 1,624,800.00 5,648,249.70 4,627,972.56 -
Other information:
□ Applicable √ N/A
52. Other non-current liabilities
□ Applicable √ N/A
53. Share capital
√ Applicable □ N/A
In RMB
Changes (+, -)
Opening Bonu Closing
Capitalizatio
balance New shares s Other balance
n of capital Subtotal
share s
reserve
s
Total
457,107,538.0 5,103,800.0 5,103,800.0 462,211,338.0
share
0 0 0 0
s
Other information:
On June 26, 2023, the Company received the additional investment of RMB 50,609,959.00 in total
paid by 76 qualified grantees of share incentives under the 2022 Restricted Share Incentive Plan, including
RMB 3,299,000.00 recognized as share capital, RMB 47,310,959.00 recognized as capital premium (share
premium), and RMB 6,993,880.00 transferred from capital reserve - other capital reserve to capital
premium (share premium). Pan-China Certified Public Accountants (Special General Partnership) audited
this capital increase and issued a Capital Verification Report (Tian Jian Yan (2023) No. 7-74).
On October 31, 2023, the Company received the additional investment of RMB 37,201,036.80 in
total paid by 38 qualified grantees of share incentives under the 2021 Restricted Share Incentive Plan,
236 / 290
2023 Annual Report
including RMB 1,804,800.00 recognized as share capital, RMB 35,396,236.80 recognized as capital
premium (share premium), and RMB 14,595,424.00 transferred from capital reserve - other capital reserve
to capital premium (share premium). Pan-China Certified Public Accountants (Special General
Partnership) audited this capital increase and issued a Capital Verification Report (Tian Jian Yan (2023)
No. 7-104).
54. Other equity instruments
(1). Basic information of other financial instruments including outstanding preferred shares and
perpetual bonds at the end of the period
□ Applicable √ N/A
(2). Changes in financial instruments including outstanding preferred shares and perpetual bonds
at the end of the period
□ Applicable √ N/A
Changes of other equity instruments in the current period, reasons for such change and basis for related
accounting treatments:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
55. Capital reserve
√ Applicable □ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
Capital premium
1,363,879,803.31 104,568,001.69 1,468,447,805.00
(share premium)
Other capital
166,872,312.73 2,758,753.70 21,589,304.00 148,041,762.43
reserve
Total 1,530,752,116.04 107,326,755.39 21,589,304.00 1,616,489,567.43
Other description, including changes in the current period and reasons for changes:
1) Refer to VII.53 of Section X for the increase in the capital reserve - share premium in the current
period.
2) Refer to VII.53 of Section X for the decrease in the capital reserve - other capital reserve in the
current period.
3) On January 1, 2021, the Company granted restricted shares to senior manager of subsidiaries
through its shareholding platform. The total expense of equity-settled share-based payments amounted to
RMB 934,700.00, in which RMB 633,726.60 was recognized in the capital reserve (other capital reserve)
and RMB 300,973.40 was charged to the amount attributable to minority interests.
4) Under the 2021 Restricted Share Incentive Plan, the total expense of equity-settled share-based
payments amounted to RMB -18,247,493.11, in which RMB -17,211,433.10 was recognized in the capital
reserve (other capital reserve) and RMB -1,036,060.01 was charged to the amount attributable to minority
interests.
5) Under the 2021 Second Restricted Share Incentive Plan, the total expense of equity-settled share-
based payments amounted to RMB 4,881,665.07, in which RMB 4,763,800.13 was recognized in the
capital reserve (other capital reserve) and RMB 117,864.94 was charged to the amount attributable to
minority interests.
6) In 2022, Chongqing Formovie, a subsidiary of the Company, deliberated and adopted the
Resolution on Granting Equity Shares of Shenzhen Fengye Investment Consulting Limited Partnership
(Limited Partnership), under which shares of Chongqing Formovie are granted to employees. In the
current period, the total expense of equity-settled share-based payments amounted to RMB 3,069,306.75,
in which RMB 1,202,861.32 was recognized in the capital reserve (other capital reserve), and RMB
1,866,445.43 was charged to the amount attributable to minority interests.
7) Under the 2022 Restricted Share Incentive Plan, the total expense of equity-settled share-based
payments amounted to RMB 6,697,653.24, in which RMB 6,815,165.82 was recognized in the capital
reserve (other capital reserve) and RMB -117,512.57 was charged to the amount attributable to minority
interests.
237 / 290
2023 Annual Report
8) On July 22, 2022, the Company granted restricted shares to the actual controller through its
shareholding platform. The total expense of equity-settled share-based payments amounted to RMB
5,502,974.45, in which RMB 5,502,974.45 was recognized in the capital reserve (other capital reserve).
9) On May 15, 2023, the Company acquired minority interests by paying the consideration of RMB
19,734,000.00 for the shares, and acquired shares in the fair value of the identifiable net assets in the
amount of RMB 20,005,501.89, while the difference of RMB 271,501.89 was recognized as capital reserve
(share premium).
10) On December 31, 2023, because the closing fair value of equity-settled share-based payments is
lower than the closing fair value of the prior period, the deferred tax assets were increased by RMB
995,088.01, the capital reserve was increased by RMB 1,051,658.48, and the minority interests were
decreased by RMB 56,570.47.
56. Treasury shares
√ Applicable □ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
Treasury shares 19,377,297.59 19,377,297.59
Total 19,377,297.59 19,377,297.59
Other description, including changes in the current period and reasons for changes:
None
57. Other comprehensive income
√ Applicable □ N/A
In RMB
Amount for the current period
Less: Less:
Amoun Amount
t previou
previou sly
sly include
Attrib
include d in
utable
Amount d in other Less:
to the Closin
incurred other compre Inco Attributable
Opening paren g
Item for compre hensive me to minority
balance t balanc
current hensive income tax shareholders
comp e
period income and expe after tax
any
before tax and transfer nse
after
transfe red to
tax
rred to retaine
profit d
or loss earning
for the s for the
period period
I. Other
comprehe
nsive
income
that
-
cannot be -4,900,000.00 4,900,000
reclassifie .00
d
subseque
ntly to
profit or
loss
Where:
Changes
from
238 / 290
2023 Annual Report
remeasur
ement of
defined
benefit
plans
Other
comprehe
nsive
income
that
cannot be
reclassifie
d to profit
or loss
under the
equity
method
Change
s in fair
value of
investme -
nts in -4,900,000.00 4,900,000
other .00
equity
instrumen
ts
Change
s in fair
value of
enterprise
s’ own
credit
risks
II. Other
comprehe
nsive
income
1,813,176.37 1,813,17 12,450,07
that will 10,636,897.41
6.37
-691,249.26
3.78
be
reclassifie
d to profit
or loss
Where:
Other
comprehe
nsive
income
that will -
- 16,306,81
be -13,180,600.06 -3,126,210.45 3,126,21 0.51
reclassifie 0.45
d to profit
or loss
under the
equity
method
Change
s in fair
239 / 290
2023 Annual Report
value of
other debt
investme
nts
Amoun
t of
financial
assets
reclassifie
d to other
comprehe
nsive
income
Provisi
on for
credit
impairme
nt of
other debt
investme
nts
Reserve
for cash
flow
hedges
Exchange
difference
s on
translatio
n of
28,756,88
financial 23,817,497.47
4,939， 4,939， -691,249.26
4.29
statement 386.82 386.82
s
denomina
ted in
foreign
currencie
s
Total
other 1,813,176.37 1,813,17 7,550,073
comprehe 5,736,897.41
6.37
-691,249.26
.78
nsive
income
Other description, including adjustments on transferring effective portion of cash flow hedges to amount
upon initial recognition of the hedged item:
None
58. Special reserve
□ Applicable √ N/A
59. Surplus reserve
√ Applicable □ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
240 / 290
2023 Annual Report
Statutory surplus
75,519,782.06 9,353,583.26 84,873,365.32
reserve
Discretionary
surplus reserves
Reserve fund
Enterprise
development fund
Others
Total 75,519,782.06 9,353,583.26 84,873,365.32
Surplus reserve description, including changes in the current period and reasons for changes:
The Company made provisions for statutory surplus reserves at 10% of the net profits realized by the
parent company in the period.
60. Undistributed profits
√ Applicable □ N/A
In RMB
Item Current period Prior period
Retained profits at the end of prior
597,924,451.67 545,277,188.08
period before adjustment
Total adjusted undistributed profits at
the beginning of the period (Add: +;
Less: -)
Retained profits at the beginning of
597,924,451.67 545,277,188.08
the period after adjustment
Add: Net profit attributable to
owners of the parent company for the 103,186,743.57 119,440,773.77
period
Less: Appropriation to statutory
9,353,583.26 19,253,913.75
surplus reserve
Appropriation to discretionary
surplus reserve
Appropriation to general risk
reserve
Declaration of dividends on
24,635,205.93 47,539,596.43
ordinary shares
Conversion of ordinary shares’
dividends into share capital
Retained profits at the end of the
667,122,406.05 597,924,451.67
period
Details of adjustments to undistributed profits at the beginning of the period:
1. As a result of the retrospective adjustment of the Accounting Standards for Business Enterprises and
related new regulations, undistributed profits at the beginning of the period were affected by RMB 0.00.
2. Retained profits at the beginning of the period were affected by RMB 0.00 due to changes in accounting
policies.
3. Retained profits at the beginning of the period were affected by RMB 0.00 due to the correction of
significant accounting errors.
4. Retained profits at the beginning of the period were affected by RMB 0.00 due to changes in the scope
of consolidation resulting from business combination involving entities under common control.
5. Retained profits at the beginning of the period were affected by RMB 0.00 in total due to other
adjustments.
On May 20, 2023, at the 2022 annual general meeting of shareholders, the Proposal on Preliminary
Plan on Profit Distribution for 2022 was reviewed and passed, approving to make profit distribution on
the basis of the total shares on the record date of interest distribution - the Company proposed to distribute
to all shareholders a cash dividend of RMB 0.54 (tax inclusive) for every 10 shares. The total cash dividend
to be paid is RMB 24,635,205.93.
241 / 290
2023 Annual Report
61. Operating income and operating costs
(1). Description of operating income and operating costs
√ Applicable □ N/A
In RMB
Current period Prior period
Item
Revenue Cost Revenue Cost
Main
2,213,356,977.95 1,411,758,369.08 2,541,144,635.15 1,711,732,842.88
business
Other
business
Total 2,213,356,977.95 1,411,758,369.08 2,541,144,635.15 1,711,732,842.88
(2). Breakdown of operating income and operating costs
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3). Description of performance obligations
□ Applicable √ N/A
(4). Description of allocation to remaining performance obligations
□ Applicable √ N/A
(5). Material contract changes or material adjustment in transaction prices
□ Applicable √ N/A
Other information:
In RMB
1) Breakdown of revenue from contracts with customers by the type of goods or services
Current period Prior period
Item
Revenue Cost Revenue Cost
Laser optical
507,173,216.98 282,748,311.16 520,281,404.32 295,829,647.10
engine
Complete laser
1,132,584,285.59 807,190,425.12 1,519,665,232.93 1,096,198,242.48
projector
Others 204,432,985.18 175,548,515.31 232,214,129.93 182,288,882.58
Subtotal 1,844,190,487.75 1,265,487,251.60 2,272,160,767.18 1,574,316,772.16
2) Breakdown of revenue from contracts with customers by operating region
Current period Prior period
Item
Revenue Cost Revenue Cost
Domestic 1,494,048,400.22 1,062,516,661.33 1,851,285,848.51 1,334,322,648.71
Overseas 350,142,087.53 202,970,590.27 420,874,918.67 239,994,123.45
Subtotal 1,844,190,487.75 1,265,487,251.60 2,272,160,767.18 1,574,316,772.16
3) Breakdown of revenue from contracts with customers by the transfer time of goods or services
Item Current period Prior period
Revenue recognized at a 1,838,714,320.05
2,267,893,396.00
time point
Revenue recognized for a 5,476,167.70
4,267,371.18
period of time
Subtotal 1,844,190,487.75 2,272,160,767.18
62. Taxes and surcharges
√ Applicable □ N/A
242 / 290
2023 Annual Report
In RMB
Item Current period Prior period
City maintenance and
3,531,311.38 4,982,220.93
construction tax
Education surcharges 1,546,743.38 2,272,337.58
Stamp duty 1,499,223.49 2,282,867.63
Local education surcharges 1,031,162.25 1,512,827.33
Others 159,604.45 61,600.28
Total 7,768,044.95 11,111,853.75
Other information:
None
63. Selling expenses
√ Applicable □ N/A
In RMB
Item Current period Prior period
Marketing fees 114,076,961.42 155,052,797.28
Employee benefits 98,106,453.46 95,370,627.26
After-sales repair expenses 27,424,936.96 30,700,760.47
Service fees 21,964,113.14 20,184,607.48
Travel expenses 7,796,836.26 3,678,494.64
Advertising and business promotion
3,794,162.38 3,434,485.14
expenses
Business entertainment expenses 2,826,688.91 2,055,070.35
Other expenses 24,689,780.46 24,282,116.24
Total 300,679,932.99 334,758,958.86
Other information:
None
64. Administrative expenses
√ Applicable □ N/A
In RMB
Item Current period Prior period
Employee benefits 78,501,773.47 76,535,958.03
Service fees 46,978,206.88 22,895,043.04
Depreciation and amortization
14,718,193.05 12,347,668.44
expenses
Rent expenses 4,496,288.03 4,269,462.94
Share-based payment expenses 2,841,165.47 67,301,038.25
Travel expenses 2,073,030.53 1,028,151.56
Other expenses 7,484,067.06 9,177,454.15
Total 157,092,724.49 193,554,776.41
Other information:
None
65. R&D expenses
√ Applicable □ N/A
In RMB
Item Current period Prior period
Employee benefits 188,475,365.59 169,930,447.89
Material consumption expenses 32,923,076.62 32,490,686.41
Depreciation and amortization
15,889,023.25 16,252,595.10
expenses
Service fees 10,039,393.07 9,079,992.43
Testing expenses 9,801,946.30 9,111,031.05
Entrusted R&D expenses 8,610,618.71 12,203,894.80
243 / 290
2023 Annual Report
Other expenses 15,193,376.81 13,039,758.22
Total 280,932,800.35 262,108,405.90
Other information:
None
66. Financial expenses
√ Applicable □ N/A
In RMB
Item Current period Prior period
Interest expenses 18,635,749.36 24,819,665.70
Less: Interest income -34,298,315.94 -17,711,130.51
Exchange profit or loss -6,618,898.60 -18,635,082.11
Bank service charges 2,831,481.53 2,363,941.13
Total -19,449,983.65 -9,162,605.79
Other information:
None
67. Other income
√ Applicable □ N/A
In RMB
Classified by nature Current period Prior period
Government grants related to
2,156,391.60 2,018,478.03
assets
Government grants related to
29,972,867.16 29,450,697.47
income
Refund of transaction fees for
withholding individual income 476,126.36 364,144.36
taxes
Additional deduction of input
8,836,687.49 2,116,166.02
VAT
Total 41,442,072.61 33,949,485.88
Other information:
Government grants recognized in other income in the current period are disclosed in XI of Section X in
details.
68. Investment income
√ Applicable □ N/A
In RMB
Item Current period Prior period
Gains from long-term equity investment accounted
-12,002,779.90 -3,244,838.52
for using the equity method
Investment income from disposal of long-term -4,700,290.90
equity investments
Investment income from held-for-trading financial 200,000.00
assets during the holding period
Dividend income from investment in other equity
instruments during the holding period
Interest income from debt investments during the
holding period
Interest income from other debt investments during
the holding period
Investment income from disposal of held-for-trading
12,571,132.08 12,637,561.73
financial assets
Investment income from disposal of investment in
other equity instruments
Investment income from disposal of debt
investments
244 / 290
2023 Annual Report
Investment income from disposal of other debt
investments
Profits from debt restructuring
Losses from debt restructuring -912,618.35
Total 568,352.18 3,979,813.96
Other information:
None
69. Gains from net exposure hedges
□ Applicable √ N/A
70. Gains from changes in fair values
√ Applicable □ N/A
In RMB
Source of gains from changes in fair values Current period Prior period
Held-for-trading financial assets 130,000.00 -3,320,000.00
Where: Gains from changes in fair values generated
by derivative financial instruments
Held-for-trading financial liabilities
Investment properties measured at fair value
Total 130,000.00 -3,320,000.00
Other information:
None
71. Losses of credit impairment
√ Applicable □ N/A
In RMB
Item Current period Prior period
Impairment losses of notes receivable -275,713.53 -52,530.78
Impairment losses of accounts -586,531.51 -6,838,360.54
receivable
Impairment losses of other receivables -309,115.58 312,921.68
Impairment losses of debt investments
Impairment losses of other debt
investments
Impairment losses of long-term 424,001.28 -1,910,252.02
receivables
Impairment losses related to financial
guarantees
Impairment losses of non-current assets -6,232,088.46 -1,769,753.84
due within one year
Total -6,979,447.80 -10,257,975.50
Other information:
None
72. Impairment losses of assets
√ Applicable □ N/A
In RMB
Item Current period Prior period
I. Impairment losses of contract assets 945,310.21 558,558.71
II. Losses of decline in value of inventories and
-58,362,634.11 -47,982,178.29
impairment losses of contract performance cost
III. Impairment losses of long-term equity -11,606,996.75
investments
IV. Impairment losses of investment properties
V. Impairment losses of fixed assets -5,236,534.09 -810,398.00
245 / 290
2023 Annual Report
VI. Impairment losses of materials for
construction
VII. Impairment losses of construction in
progress
VIII. Impairment losses of productive
biological assets
IX. Impairment losses of oil and gas assets
X. Impairment losses of intangible assets
XI. Goodwill impairment losses
XII. Others
Total -74,260,854.74 -48,234,017.58
Other information:
None
73. Gains from disposal of assets
√ Applicable □ N/A
In RMB
Item Current period Prior period
Gains from disposal of assets 151,469.26 229,000.28
Total 151,469.26 229,000.28
Other information:
74. Non-operating income
Description of non-operating income
√ Applicable □ N/A
In RMB
Amount included in
Item Current period Prior period non-recurring profit
or loss for the period
Total gains from disposal of
non-current assets
Gains from exchange of non-
monetary assets
Donation receipts
Government grants 9,000,000.00 16,000,000.00 9,000,000.00
Amounts not required for 603,511.68 603,511.68
328,200.61
payment
Compensation 202,391.88 240,500.00 202,391.88
Others 74,758.54 21,147.05 74,758.54
Total 9,880,662.10 16,589,847.66 9,880,662.10
Other information:
□ Applicable √ N/A
75. Non-operating expenses
√ Applicable □ N/A
In RMB
Amount included in non-
Item Current period Prior period recurring profit or loss
for the period
Total losses from disposal of
2,210,784.87 1,197,282.81 2,210,784.87
non-current assets
Losses from exchange of
non-monetary assets
External donations 1,089,957.64
Penalties and overdue fines 655,330.77 155,485.93 655,330.77
246 / 290
2023 Annual Report
Settlement payments 4,922,202.89 4,922,202.89
Others 44,045.64 23,819.28 44,045.64
Total 7,832,364.17 2,466,545.66 7,832,364.17
Other information:
None
76. Income tax expense
(1). Statement of income tax expense
√ Applicable □ N/A
In RMB
Item Current period Prior period
Income tax expense in the current
13,491,208.18 8,699,918.08
period
Deferred income tax expenses 6,567,489.85 -12,028,703.56
Total 20,058,698.03 -3,328,785.48
(2). Reconciliation of income tax expenses to the accounting profit
√ Applicable □ N/A
In RMB
Item Current period
Total profit 37,674,979.18
Income tax expense calculated based on statutory/applicable tax rate 5,651,246.90
Effect of different tax rates of subsidiaries operating in other jurisdictions 2,510,145.78
Effect of income tax for the period before adjustment -1,167,335.11
Effect of non-taxable income -717,475.22
Effect of non-deductible cost, expense and loss 1,367,208.75
Effect of utilizing deductible loss not recognized for deferred tax assets for
-901,380.48
prior period
Effect of deductible temporary difference or deductible loss not recognized
41,364,854.21
for deferred tax assets for the current period
Effect of additional deduction of R&D expenses -26,015,045.25
Effect of additional deduction for disability placement
Effect of share-based payments -2,033,521.55
Income tax expenses 20,058,698.03
Other information:
□ Applicable √ N/A
77. Other comprehensive income
√ Applicable □ N/A
Other comprehensive income net of tax is disclosed in VII.57 of Section X in detail.
78. Items in cash flow statement
(1). Cash related to operating activities
Other cash receipts related to operating activities
√ Applicable □ N/A
In RMB
Item Current period Prior period
Interest income 31,705,192.68 16,993,587.49
Government grants 36,467,444.30 38,614,415.12
Recovery of security deposits 48,740,274.02 77,288,005.93
Other transaction accounts 35,558,972.59 20,600,108.78
Total 152,471,883.59 153,496,117.32
Description of other cash receipts related to operating activities:
None
Other cash payments related to operating activities
247 / 290
2023 Annual Report
√ Applicable □ N/A
In RMB
Item Current period Prior period
Administrative expenses, selling 287,815,476.42
expenses, and R&D expenses paid 307,076,015.18
in cash
Non-operating expenses 2,080,229.30 168,267.66
Payment of security deposits 25,953,721.92 115,495,390.45
Service charges 2,831,481.53 2,363,931.13
Other transaction accounts 10,458,182.85 3,178,401.08
Total 329,139,092.02 428,282,005.50
Description of other cash payments related to operating activities:
None
(2). Cash related to investing activities
Cash receipts related to significant investing activities
√ Applicable □ N/A
In RMB
Item Current period Prior period
Redemption of wealth management
1,588,530,000.00 2,083,000,000.00
products
Total 1,588,530,000.00 2,083,000,000.00
Cash receipts related to significant investing activities
None
Cash payments related to significant investing activities
√ Applicable □ N/A
In RMB
Item Current period Prior period
Investment and wealth management
1,749,530,000.00 2,022,000,000.00
products
Total 1,749,530,000.00 2,022,000,000.00
Cash payments related to significant investing activities
None
Other cash receipts related to investing activities
√ Applicable □ N/A
In RMB
Item Current period Prior period
Performance compensation from
8,004,240.00
associates
Total 8,004,240.00
Description of other cash receipts related to investing activities:
None
Other cash payments related to investing activities
□ Applicable √ N/A
(3). Cash related to financing activities
Other cash receipts related to financing activities
□ Applicable √ N/A
Other cash payments related to financing activities
√ Applicable □ N/A
In RMB
Item Current period Prior period
Actual lease payment 34,444,716.79 30,266,176.69
Repurchase of shares 19,377,297.59
Total 34,444,716.79 49,643,474.28
Description of other cash payments related to financing activities:
248 / 290
2023 Annual Report
Changes in various liabilities due to financing activities
□ Applicable √ N/A
(4). Description of cash flows stated on a net basis
□ Applicable √ N/A
(5). Significant activities that do not involve receipts and payments of cash in the current period,
but affect the financial position of the enterprise or may affect cash flows of the enterprise in
the future
□ Applicable √ N/A
79. Supplementary information to the cash flow statement
(1). Supplementary information to the cash flow statement
√ Applicable □ N/A
In RMB
Amount for the current Amount for the prior
Supplementary information
period period
1. Reconciliation of net profit to cash flows from operating activities
Net profit 17,616,281.15 30,838,797.66
Add: Provision for impairment of assets 74,260,854.74 48,234,017.58
Losses of credit impairment 6,979,447.80 10,257,975.50
Depreciation of fixed assets, depletion of oil
and gas assets, and depreciation of productive 122,041,808.10 123,188,901.13
biological assets
Amortization of right-of-use assets 29,384,153.50 27,109,595.46
Amortization of intangible assets 4,390,272.12 3,472,505.47
Amortization of long-term prepaid expenses 4,490,683.83 7,015,722.76
Losses on disposal of fixed assets, intangible
assets and other long-term assets (gains are -151,469.26 -229,000.28
indicated by “-”)
Losses on retirement of fixed assets (gains are 1,197,282.81
2,210,784.87
indicated by “-”)
Losses on changes in fair values (gains are 3,320,000.00
-130,000.00
indicated by “-”)
Financial expenses (income is indicated by “-”) 12,016,850.75 6,184,583.59
Investment losses (income is indicated by “-”) -568,352.18 -3,979,813.96
Decrease in deferred tax assets (increase is
5,497,914.83 -12,028,703.56
indicated by “-”)
Increase in deferred tax liabilities (decrease is
1,229,654.81
indicated by “-”)
Decrease in inventories (increase is indicated
126,120,551.89 -186,369,538.60
by “-”)
Decrease in receivables from operating 123,322,744.93
101,330,770.81
activities (increase is indicated by “-”)
Increase in payables from operating activities
-151,127,567.85 -82,663,652.87
(decrease is indicated by “-”)
Others 8,489,415.17 78,479,298.07
Net cash flow from operating activities 364,082,055.08 177,350,715.69
2. Significant investing and financing activities that do not involve cash receipts and payments:
Conversion of debt into capital
Convertible corporate bonds due within one
year
Fixed assets acquired under finance leases
3. Net changes in cash and cash equivalents:
Closing balance of cash 1,297,848,895.75 1,254,582,403.12
Less: Opening balance of cash 1,254,582,403.12 891,195,166.73
Add: Closing balance of cash equivalents
249 / 290
2023 Annual Report
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 43,266,492.63 363,387,236.39
(2). Net cash paid to acquire subsidiaries for the current period
□ Applicable √ N/A
(3). Net cash receipts from disposal of subsidiaries for the current period
□ Applicable √ N/A
(4). Composition of cash and cash equivalents
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
I. Cash 1,297,848,895.75 1,254,582,403.12
Where: Cash on hand 5,751.15 5,479.42
Bank deposits that can be paid at any time 1,289,231,268.27 1,241,921,379.19
Other monetary funds that can be paid at any time 8,611,876.33 12,655,544.51
Deposits in the central bank that can be used for
payments
Deposits made with other banks
Placements with banks
II. Cash equivalents
Where: Investments in debt securities due within three
months
III. Closing balance of cash and cash equivalents 1,297,848,895.75 1,254,582,403.12
Where: Restricted cash and cash equivalents of the parent
178,753,477.66 367,696,226.22
company or subsidiaries within the group
(5). Items subject to restriction in use but still presented as cash and cash equivalents
√ Applicable □ N/A
In RMB
Amount for the current Reason
Item
period
In dedicated accounts for
Offering proceeds 178,753,477.66
special purposes
Total 178,753,477.66 -
(6). Monetary funds not classified as cash and cash equivalents
√ Applicable □ N/A
In RMB
Amount for Amount for
Item the current the prior Reason
period period
Other monetary 7,025,897.03
60,141,839.19 Security deposit, subject to restriction in use
funds
Time deposits and interests, security deposit, and
Bank deposits 81,953,756.28 41,157,966.32 funds in restricted accounts, subject to restriction in
use
-
Total 88,979,653.31 101,299,805.51
Other information:
√ Applicable □ N/A
None
250 / 290
2023 Annual Report
80. Notes to items in the statement of changes in owners’ equity
Describe matters such as the names and the adjusted amounts of the items included in “others” in respect
of adjustments to the closing balances of the prior year:
□ Applicable √ N/A
81. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable □ N/A
In RMB
Closing balance
Closing balance of RMB
Item of foreign Exchange rate
equivalent
currency
Cash and bank balances 203,528,366.16
Where: USD 28,387,181.71 7.0827 201,057,891.90
EUR 169,837.59 7.8592 1,334,787.59
HKD 940,157.90 0.90622 851,989.89
AUD 8,681.90 4.8484 42,093.32
CAD 32,550.74 5.3673 174,709.59
GBP 2,109.77 9.0411 19,074.64
VND 163,205,565.00 0.000293 47,819.23
Accounts receivable 26,468,677.29
Where: USD 3,673,853.54 7.0827 26,020,802.47
EUR 56,987.33 7.8592 447,874.82
Accounts payable 33,866,568.36
Where: USD 4,770,243.94 7.0827 33,786,206.75
JPY 1,600,414.34 0.050213 80,361.61
Other information:
None
(2). Description of overseas operating entities, including significant overseas operating entities, of
which the major operation place, functional currency and basis for selection as well as the
reason for change of functional currency should be disclosed:
√ Applicable □ N/A
Major overseas Functional Basis for
Item
operation place currency selection
Common
Appotronics Hong Kong Limited Hong Kong USD
currency
Local
Appotronics USA, Inc. USA USD
currency
JoveAI Limited Common
Cayman Islands USD
currency
Local
JoveAI Innovation, Inc. USA USD
currency
Local
Formovie Technology Inc USA USD
currency
Common
Formovie Limited Hong Kong USD
currency
Local
JoveAI Asia Company Limited Vietnam VND
currency
Local
WEMAX LLC USA USD
currency
Hong Kong Orange Juice Energy Common
Hong Kong USD
Technology Co., Limited currency
Local
Wemax Inc USA USD
currency
251 / 290
2023 Annual Report
Common
Appotronics International Limited Hong Kong USD
currency
82. Leases
(1) As a lessee
√ Applicable □ N/A
Expense relating to variable lease payments not included in measurement of lease liabilities
√ Applicable □ N/A
Simplified handling of lease expenses for short-term leases and low-value asset leases
√ Applicable □ N/A
Item Current period Prior period
Expenses related to short-term leases 3,111,815.05 3,198,138.79
Total 3,111,815.05 3,198,138.79
Sale and leaseback transactions and determination basis
□ Applicable √ N/A
The total cash outflow related to lease is RMB 37,836,595.19.
(2) As a lessor
Operating lease as a lessor
√ Applicable □ N/A
In RMB
Where: Income related to variable lease payments not
Item Lease incomes
recognized as lease payments
Projection
369,166,490.20 362,149,377.16
services
Total 369,166,490.20 362,149,377.16
Finance lease as a lessor
□ Applicable √ N/A
Reconciliation of undiscounted lease receipts to net investment
□ Applicable √ N/A
Undiscounted lease receipts for the next five years
√ Applicable □ N/A
In RMB
Yearly undiscounted lease receipts
Item
Closing balance Opening balance
Year 1 5,939,650.00 2,607,042.80
Year 2
Year 3
Year 4
Year 5
Total undiscounted lease receipts for the
next five years
(3) Sales profit and loss from finance leases recognized as a manufacturer or distributor
□ Applicable √ N/A
Other information
83. Others
□ Applicable √ N/A
VIII. R&D expenditures
(1).Presentation by the nature of expenses
√ Applicable □ N/A
In RMB
252 / 290
2023 Annual Report
Item Current period Prior period
Employee benefits 188,475,365.59 169,930,447.89
Material consumption expenses 32,923,076.62 32,490,686.41
Depreciation and amortization expenses 15,874,520.43 16,252,595.10
Entrusted R&D expenses 8,610,618.71 12,203,894.80
Testing expenses 9,801,946.30 9,111,031.05
Service fees 10,053,895.89 9,079,992.43
Rent expenses 3,785,023.31 3,197,103.71
Other expenses 11,408,353.50 9,842,654.51
Total 280,932,800.35 262,108,405.90
Where: Expensed R&D expenditures 280,932,800.35 262,108,405.90
Capitalized R&D expenditures
Other information:
None
(2).R&D expenditures meeting the capitalization conditions
□ Applicable √ N/A
Significant capitalized R&D projects
□ Applicable √ N/A
Provision for impairment of development expenditures
□ Applicable √ N/A
Other information
None
(3).Significant outsourced ongoing R&D projects
□ Applicable √ N/A
IX. Changes in scope of consolidation
1. Business combination not involving entities under common control
√ Applicable □ N/A
(1). Business combination transactions not involving entities under common control in the current
period
√ Applicable □ N/A
In RMB
Net Cash
Income
profit flow of
s of the
Ratio of the the
acquire
Time of Basis acquire acquire
Metho e from
Name point Cost of acqui for e from e from
d of Acquisi the
of of equity red determi the the
obtain tion acquisit
acquire obtain acquisiti equity ning the acquisit acquisit
ing date ion
e ing on intere acquisiti ion ion
equity date to
equity sts on date date to date to
the end
(%) the end the end
of the
of the of the
period
period period
Shenzh - 382,337
en 3,326.4 .37
Qianhai 3
Taishi May
19,734,00 100.0 Transf May 15,
Investm 15,
0.00 0 er 2023
ent 2023
Partner
ship
(LP)
Other information:
253 / 290
2023 Annual Report
In 2023, the Company entered into a Share Transfer Agreement with the original partner of
Shenzhen Qianhai Taishi Investment Partnership (LP), under which the main price shall be paid and the
corresponding formalities for transfer of assets shall be conducted on May 15, 2023. Therefore, May 15,
2023 is the acquisition date of this acquisition. This acquisition is conducted to acquire the minority
interests held by the counterparty in CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd.
Combination costs and goodwill
√ Applicable □ N/A
In RMB
Combination costs Shenzhen Qianhai Taishi Investment
Partnership (LP)
-- Cash 19,734,000.00
-- Fair value of non-cash assets
-- Fair value of debts issued or undertaken
-- Fair value of equity securities issued
-- Fair value of contingent consideration
-- Fair value at the acquisition date of the equity
interests held prior to the acquisition date
-- Others
Total combination costs 19,734,000.00
Less: Acquired shares in the fair value of the 20,005,501.89
identifiable net assets
Differences between amounts of -271,501.89
goodwill/combination costs and the acquired
shares in the fair value of the identifiable net
assets
Method of determining fair values of cost of business combination:
□ Applicable √ N/A
Completion of performance covenants:
□ Applicable √ N/A
Main reasons of large-amount goodwill:
□ Applicable √ N/A
Other information:
None
(2). Identifiable assets and liabilities of the acquiree at the acquisition date
√ Applicable □ N/A
In RMB
Shenzhen Qianhai Taishi Investment Partnership (LP)
Fair value at the acquisition Carrying amount at the
date acquisition date
Assets: 20,005,501.89 4,759,034.84
Cash and bank balances 9,034.84 9,034.84
Long-term equity investment 19,996,467.05 4,750,000.00
Liabilities:
Net assets 20,005,501.89 4,759,034.84
Less: Minority interests
Acquired net assets 20,005,501.89 4,759,034.84
Method for determining the fair value of identifiable assets and liabilities:
The long-term equity investment of Shenzhen Qianhai Taishi Investment Partnership (LP) is the
4.6% equity investment in CINEAPPO, the fair value of which is measured according to the amount of
the carrying amount of net assets of CINEAPPO at the corresponding proportion on the acquisition date.
Contingent liabilities of the acquiree that are taken in the business combination:
None
Other information:
254 / 290
2023 Annual Report
None
(3). Gains or losses from the equity interests held prior to the acquisition date that are remeasured
at fair value
Whether there are transactions for the purpose of implementing business combination via multiple
transactions by steps and obtaining the control during the reporting period
□ Applicable √ N/A
(4). Description about the failure in reasonably determining the combination considerations or the
fair values of the identifiable assets and liabilities of the acquiree at the acquisition date or at
the end of the combination period
□ Applicable √ N/A
(5). Other information
□ Applicable √ N/A
2. Business combination involving entities under common control
□ Applicable √ N/A
3. Counter purchase
□ Applicable √ N/A
4. Disposal of subsidiaries
Transactions or events in which the Company loses the control over subsidiaries
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Whether there are step-by-step disposal of subsidiaries via multiple transactions and loss of control over
the subsidiaries during the period
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
5. Changes in scope of consolidation for other reasons
Description of changes in the scope of consolidation for other reasons (e.g., new subsidiary
establishment, subsidiary liquidation, etc.) and the relevant information:
√ Applicable □ N/A
Refer to X of Section X for the changes in scope of consolidation for other reasons.
6. Others
□ Applicable √ N/A
X. Equity in other entities
1. Equity in subsidiaries
(1). Composition of enterprise group
√ Applicable □ N/A
In RMB 0’000
Princip Proportion of
Regis
al shareholding Acquisit
Registered tratio Business
Subsidiaries operati (%) ion
capital n nature
on Indir method
place Direct
place ect
Business
combina
Shenzhen R&D and
tion
Appotronics Laser Shenzh Shen sales of laser
CNY 3,000.00 100.00 involvin
Display Technology en zhen display
g
Co., Ltd. products
entities
under
255 / 290
2023 Annual Report
common
control
Technical
research and
Appotronics development
Chan
Technology Changz of projection Establis
CNY 2,000.00 gzho 100.00
(Changzhou) Co., hou equipment, hment
u
Ltd. screen and
electronic
computer
Technical
development
Shenzhen
Shenzh Shen and sales of Establis
Appotronics Software CNY 1,000.00 100.00
en zhen computer hment
Technology Co., Ltd.
software and
hardware
Technical
development,
sales, and
technical
Shenzhen
Shenzh Shen services for Establis
Appotronics Display CNY 300.00 100.00
en zhen display hment
Device Co., Ltd.
products;
import and
export
business
Sales of laser 100.0 Establis
WEMAX LLC USA USD 30.00 USA
equipment 0 hment
Development,
Shenzhen consultation
Appotronics Shenzh Shen and transfer Establis
CNY 200.00 100.00
Xiaoming en zhen of laser hment
Technology Co., Ltd. display
technology
Software
development
Shenzhen
related to
Appotronics Home Shenzh Shen Establis
CNY 100.00 semiconducto 100.00
Line Technology Co., en zhen hment
r
Ltd.
optoelectroni
c products
Software
development
Shenzhen for
Shenzh Shen Establis
Appotronics Laser CNY 100.00 semiconducto 100.00
en zhen hment
Technology Co., Ltd. r
optoelectroni
c devices
Business
combina
tion not
No specific involvin
Tianjin Bonian Film Tianji
Tianjin CNY 824.70 business 99.00 1.00 g
Partnership (LP) n
conducted entities
under
common
control
256 / 290
2023 Annual Report
Technology
promotion;
Beijing Orient computer
Beiji Establis
Appotronics Beijing CNY 1,000.00 systems, 59.00
ng hment
Technology Co., Ltd. application
software
services
Information
Qingda Appotronics
Shenzh Xiam technology Establis
(Xiamen) Technology CNY 1,000.00 51.00
en en consulting hment
Co., Ltd.
services
Formovie
Technology
(Chongqing) Chongq Chon Establis
CNY 7,017.54 and software 39.19
Innovative ing gqing hment
development
Technology Co., Ltd.
Technology
Fengmi (Beijing) Beiji Establis
Beijing CNY 5,000.00 and software 39.19
Technology Co., Ltd. ng hment
development
No specific
Chongqing Guangbo Chongq Chon Establis
CNY 1.00 business 39.19
Ecommerce Co., Ltd. ing gqing hment
conducted
No specific
Chongqing Ewei Chongq Chon Establis
CNY 1.00 business 39.19
Ecommerce Co., Ltd. ing gqing hment
conducted
Shenzhen Orange Technology
Shenzh Shen Establis
Juice Energy CNY 500.00 and software 33.31
en zhen hment
Technology Co., Ltd. development
Hong Kong Orange
Import and
Juice Energy Hong Hong Establis
HKD 1.00 export 33.31
Technology Co., Kong Kong hment
business
Limited
Import and
Establis
Wemax Inc USA USD 2.00 USA export 33.31
hment
business
Business
combina
tion not
No specific involvin
Shenzhen Weiwoqi Chongq Shen
CNY 1.00 business 33.31 g
Trading Co., Ltd. ing zhen
conducted entities
under
common
control
Yaoyouguang No specific
Chongq Chon Establis
(Chongqing) CNY 1,000.00 business 39.19
ing gqing hment
Technology Co., Ltd. conducted
No specific
Hong Hong Establis
Formovie Limited HKD 1.00 business 39.19
Kong Kong hment
conducted
No specific
Formovie Establis
USA USD 2.00 USA business 39.19
Technology Inc hment
conducted
Research and Business
CINEAPPO Laser
Beiji development, combina
Cinema Technology Beijing CNY 10,000.00 24.84 42.96
ng production, tion
(Beijing) Co., Ltd.
technical involvin
257 / 290
2023 Annual Report
services, g
sales and entities
lease of laser under
cinema common
projection control
equipment
Production,
research, and
development
of
semiconducto
r
optoelectroni
Appotronics Hong Hong Hong Establis
USD 4,320.00 c products, 100.00
Kong Limited Kong Kong hment
sales and
consulting,
investment
and video
content
value-added
services
Business
R&D, combina
manufacturin tion
g and sales of involvin
Appotronics USA, 100.0
USA 0.00 USA semiconducto g
Inc. 0
r entities
optoelectroni under
c products common
control
Caym
Cayma No specific
an Establis
JoveAI Limited n USD 0.14 business 64.29
Islan hment
Islands conducted
ds
R&D of laser
JoveAI Innovation, display Establis
USA USD 0.0001 USA 64.29
Inc. software hment
system
Technical
research and
development
JoveAI Asia Vietna VND Vietn of projection Establis
64.29
Company Limited m 232,300.00 am equipment, hment
screen and
electronic
computer
No specific
Appotronics Hong Hong Establis
USD 1.00 business 100.00
International Limited Kong Kong hment
conducted
Appotronics
No specific
Intelligent Shenzh Shen Establis
CNY 5,000.00 business 100.00
Manufacturing en zhen hment
conducted
(Shenzhen) Co., Ltd.
Business
Shenzhen Qianhai No specific
Shenzh Shen combina
Taishi Investment CNY 1,000.00 business 70.00 30.00
en zhen tion not
Partnership (LP) conducted
involvin
258 / 290
2023 Annual Report
g
entities
under
common
control
Note: Except for the main subsidiaries above, the Company also has 9 subsidiaries without actual
operation as of the end of 2023.
Description of the difference between the proportion of shareholding and the proportion of voting rights
in a subsidiary:
None
Basis for holding half of the voting rights or below but still controlling the investee, and holding over half
of voting rights but having no control over the investee:
Fengmi (Beijing) Technology Co., Ltd., Formovie Technology Inc., Formovie Limited, Chongqing
Ewei Ecommerce Co., Ltd., Chongqing Guangbo Ecommerce Co., Ltd., and Yaoyouguang (Chongqing)
Technology Co., Ltd. are wholly-owned subsidiaries of Formovie (Chongqing) Innovative Technology
Co., Ltd.; Hong Kong Orange Juice Energy Technology Co., Limited, Wemax Inc, and Shenzhen Weiwoqi
Trading Co., Ltd. are wholly-owned subsidiaries of Shenzhen Orange Juice Energy Technology Co., Ltd.;
Shenzhen Orange Juice Energy Technology Co., Ltd. is a controlled subsidiary of Formovie (Chongqing)
Innovative Technology Co., Ltd.
The Company and Shenzhen Fengye Investment Consulting Limited Partnership (Limited
Partnership), a party acting in concert with the Company, hold a total of 53.6250% voting rights in
Formovie (Chongqing) Innovative Technology Co., Ltd., for which the voting rights are exercised
according to the opinions of the Company. Since the voting rights are sufficient to exercise significant
influences on the resolution of the general meeting of shareholders of Formovie (Chongqing) Innovative
Technology Co., Ltd., the Company becomes the controlling shareholder of Formovie (Chongqing)
Innovative Technology Co., Ltd.
Basis for controls over significant structured entities included in consolidation scope:
None
Basis for determining the company acts as the agent or the principal:
None
Other information:
None
(2). Significant non-wholly-owned subsidiaries
√ Applicable □ N/A
In RMB
Dividends
Profit or loss
declared for
Shareholding attributable to Closing balance
distribution to
Subsidiaries ratio by minority minority of minority
minority
shareholders shareholders for interests
shareholders in
the current period
the current period
Formovie
(Chongqing)
Innovative 60.81% -114,428,305.59 -165,677,426.87
Technology
Co., Ltd.
CINEAPPO
Laser Cinema
Technology 32.20% 35,409,549.79 11,040,000.00 162,387,627.80
(Beijing) Co.,
Ltd.
259 / 290
2023 Annual Report
Description of the difference between the proportion of shareholding by minority shareholders and their
proportion of voting rights in a subsidiary:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
(3). Significant financial information of significant non-wholly-owned subsidiaries
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Subsi Cur Non- Curre Non- Curre Non-
Total Curre Non- Total
diarie rent curre Total nt current Total nt current
liabili nt current liabilit
s asse nt assets liabili liabiliti assets liabili liabiliti
ties assets assets ies
ts assets ties es ties es
Form
ovie
(Cho
ngqin
457
g) 57,8
,40 515,2 616,0 165,7 781,8 870,8 71,21 942,0 784,2 237,0 1,021,
Innov 26,1
0,6 26,80 30,71 73,93 04,65 80,71 8,934. 99,64 82,17 89,01 371,18
ative 30.9
71. 2.90 3.80 8.04 1.84 1.77 56 6.33 6.85 0.02 6.87
Tech 1
99
nolog
y
Co.,
Ltd.
CINE
APP
O
Laser
Cine 344
458,
ma ,63 802,8 284,6 13,91 298,5 232,4 618,7 851,2 365,8 56,59 422,46
251,
Tech 9,9 91,08 64,83 6,849. 81,68 75,41 25,73 01,14 67,12 8,158. 5,287.
114.
nolog 69. 3.54 1.13 30 0.43 5.87 3.60 9.47 8.59 55 14
50
y 04
(Beiji
ng)
Co.,
Ltd.
Current period Prior period
Opera Total Cash Total Cash flow
Subsidiarie
ting Net compreh flow from Operating Net comprehen from
s
incom profit ensive operating income profit sive operating
e income activities income activities
Formovie
(Chongqing 765,72 - - - - -
1,159,333,1
) Innovative 2,661. 188,031,6 187,562,2 140,000,3 142,170,4 142,961,86 23,462,596.37
69.54
Technology 50 39.32 89.20 76.01 72.45 1.45
Co., Ltd.
CINEAPPO
519,19
Laser 104,924,5 104,924,5 264,749,5 336,829,07 11,534,56 11,534,561.
7,223. 74,757,387.05
Cinema 92.06 92.06 23.66 5.51 1.75 75
10
Technology
260 / 290
2023 Annual Report
(Beijing)
Co., Ltd.
Other information:
(4). Significant limitations on use of the group assets and pay off the group debts
□ Applicable √ N/A
(5). Financial or other support provided to structured entities included in consolidated financial
statements:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
2. Changes of shares of owners’ equity in subsidiaries but continue to remain control over
transactions of subsidiaries
□ Applicable √ N/A
(1). Description of changes in the share in the owner’s equity of subsidiaries
√ Applicable □ N/A
Subsidiaries Date of change Shareholding ratio Shareholding ratio
prior to change after change
CINEAPPO Laser
Cinema Technology May 15, 2023 63.20% 67.80%
(Beijing) Co., Ltd.
(2). Impact of the transaction on minority interests and owners’ interests attributable to owners of
the parent company
√ Applicable □ N/A
In RMB
CINEAPPO Laser Cinema Technology
(Beijing) Co., Ltd.
Acquisition cost/disposal consideration 19,734,000.00
-- Cash 19,734,000.00
-- Fair value of non-cash assets
Total acquisition cost/disposal consideration 19,734,000.00
Less: Share in net assets of subsidiaries calculated based on 20,005,501.89
the acquired/disposed shareholding ratio
Difference -271,501.89
Where: Adjustment to capital reserves -271,501.89
Adjustment to surplus reserves
Adjustment to undistributed profits
Other information
□ Applicable √ N/A
3. Equity in joint ventures or associates
√ Applicable □ N/A
(1). Significant joint ventures or associates
√ Applicable □ N/A
Proportion of Accounting
Joint shareholding treatment
Principal
ventures Registration (%) method for
operation Business nature
or place investments in
place
associates Direct Indirect joint ventures
or associates
261 / 290
2023 Annual Report
R&D, production,
GDC and sales of digital
Asia and British Accounting for
Technology cinema servers and
North Virgin 44.00 under equity
Limited cinema
America Islands method
(BVI) management
system
Description of the difference between the proportion of shareholding and the proportion of voting rights
in joint ventures or associates
N/A
Basis that the company owns less than 20% voting rights but may exercise major impacts, or that the
company owns 20% or over voting rights but does not has major impacts:
N/A
(2). Major financial information of significant joint ventures
□ Applicable √ N/A
(3). Major financial information of significant associates
√ Applicable □ N/A
In RMB
Opening
Closing balance/Amount
balance/Amount for the
for the current period
prior period
GDC Technology GDC Technology
Limited (BVI) Limited (BVI)
Current assets 469,030,680.80 552,730,874.23
Non-current assets 39,933,434.58 52,568,431.68
Total assets 508,964,115.38 605,299,305.91
Current liabilities 252,688,656.25 240,966,036.37
Non-current liabilities 95,696,939.36 172,710,379.48
Total liabilities 348,385,595.61 413,676,415.85
Minority interests
Interests attributable to shareholders of the
160,578,519.77 191,622,890.06
parent company
Share of net assets calculated by
70,654,548.70 84,314,071.63
ownership percentage
Adjustment
--Goodwill 77,772,341.43 77,772,341.43
--Impairment of goodwill -11,704,497.05
--Unrealized profits for insider
-275,368.66 -797,530.34
transactions
-- Others
Carrying amount of investment in
138,890,614.32 162,394,917.57
associates
Fair values of equity investments in
associates having publicly quoted prices
Operating income 273,417,813.12 273,268,222.10
Net profit -26,903,058.91 -14,340,503.11
Net profit of discontinued operations
Other comprehensive income -7,105,023.56 -30,900,188.42
Total comprehensive income -34,008,082.47 -45,240,691.53
Dividends received from associates in the
current year
Other information
None
262 / 290
2023 Annual Report
(4). Summary financial information of insignificant joint ventures and associates
□ Applicable √ N/A
(5). Descriptions of significant limitations over the ability of joint ventures or associates to transfer
funds to the Company
□ Applicable √ N/A
(6). Excessive loss of joint venture or associates
□ Applicable √ N/A
(7). Unrecognized commitment related to investments in joint ventures
□ Applicable √ N/A
(8). Contingent liabilities related to investments in joint ventures or associates
□ Applicable √ N/A
4. Significant joint operations
□ Applicable √ N/A
5. Interests in structured entities that are not included in consolidated financial statements
Description of structured entities that are not included in consolidated financial statements:
□ Applicable √ N/A
6. Others
□ Applicable √ N/A
XI. Government grants
1. Government grants recognized at the amount receivable at the end of the period
□ Applicable √ N/A
Reason of failing to receive the government grants in the expected amount at the expected time point
□ Applicable √ N/A
2. Liability items related to government grants
□ Applicable √ N/A
3. Government grants included in profit or loss for the period
√ Applicable □ N/A
In RMB
Type Current period Prior period
Amount of government grants recognized as 32,129,258.76
31,469,175.50
other incomes
Amount of government grants recognized as 9,000,000.00
16,000,000.00
non-operating incomes
Effect of interest subsidies on the total profit 6,084,300.00 70,200.00
Total 47,213,558.76 47,539,375.50
Other information:
(I) New government grants in the current period
Increased government grants for the
Item
current period
Government grants related to income 38,115,427.53
Where: Recognized as deferred incomes 1,624,800.00
Recognized as other incomes 27,490,627.53
Recognized as non-operating incomes 9,000,000.00
Interest subsidies 6,084,300.00
Where: Offset against financial expenses 6,084,300.00
Total 44,199,727.53
(II) Government grants returned in the current period
263 / 290
2023 Annual Report
Amount
Item Return reason
returned
Return the subsidy because the period of
Subsidy for daily management
16,667.00 doctor stay at the station is less than 2
expenditures of post-doctor stations
years
Trichromatic Laser Display Complete
Return expenditures not related to the
Equipment Production Demonstration 992,951.47
project
Line
Total 1,009,618.47
XII. Risks associated with financial instruments
1. Risks associated with financial instruments
√ Applicable □ N/A
The Company’s risk management objectives are to achieve a proper balance between risks and
yields, minimize the adverse impacts of risks on the Company’s operation performance, and maximize
the benefits of the shareholders and other stakeholders. Based on these risk management objectives, the
Company’s basic risk management strategy is to identify and analyze its exposure to various risks,
establish an appropriate minimum tolerance to risk, implement risk management, and monitor regularly
and effectively these exposures to ensure the risks are monitored at a certain level.
The Company is exposed to various risks associated with financial instruments in its daily routines,
primarily including credit risk, liquidity risk and market risk. The management has reviewed and
approved policies to manage these risks, summarized as below.
(I) Credit risk
Credit risk refers to the risk that a party of the financial instrument will default on its obligations
resulting in financial loss to the counterparty.
1. Management of credit risk
(1) Evaluation of credit risk
The Company assesses at each balance sheet date whether the credit risk of the underlying financial
instruments has increased significantly since initial recognition. In determining whether the credit risk
has increased significantly since initial recognition, the Company considers reasonable and supportable
information that is available without undue cost or effort, including qualitative and quantitative analysis
based on historical data, ranking of external credit risks and forward-looking information. The Company
compares the risk of a default occurring on a financial instrument as at the balance sheet date with the
risk of a default occurring on the financial instrument as at the date of initial recognition based on
individual financial instrument or a group of financial instruments with similar credit risk characteristics,
to determine the change of the risk of a default occurring on a financial instrument over the expected
life.
The Company considers the credit risk of financial instruments has increased significantly when
one or more of the following quantitative and qualitative criteria are met:
1) The quantitative criterion primarily refers to a certain percentage of increase in the probability of
default over the remaining life of the financial instruments as of the balance sheet date when comparing
with that at initial recognition of the financial instruments;
2) The qualitative criterion includes, inter alia, adverse material changes in business or financial
conditions that are expected to cause a significant decrease in the debtor’s ability to meet its debt
obligations, and an actual or expected significant adverse change in the technological, market, economic,
or legal environment of the debtor that results in a significant decrease in the debtor’s ability to meet its
debt obligations.
(2) Definition of defaulted or credit-impaired assets
264 / 290
2023 Annual Report
A financial asset is defined as defaulted when the financial instrument meets one or more conditions
stated as below, and the criterion of defining defaulted asset is consistent with that of defining credit-
impaired asset:
1) significant financial difficulty of the debtor;
2) a breach of contract terms with binding force by the debtor;
3) it is becoming probable that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons related to the debtor’s financial
difficulty, has granted to the debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of ECL
Key parameters to measure ECL include the probability of default, loss given default and the
exposure at default. The Company established models of the probability of default, loss given default and
the exposure at default on the basis of qualitative analysis on historical statistical data (such as counterparty
ranking, guarantee methods, collateral category, and repayment way) and forward-looking information.
3. Refer to VII.4, VII.5, VII.6, VII.7, VII.9, and VII.16 of Section X for details of reconciliation of
the opening balance and the closing balance of provision for impairment of financial instruments.
4. Credit risk exposure and credit risk concentration
The Company’s credit risk is primarily from cash and bank balances and receivables. In order to
control the risks associated with aforementioned items, the Company has taken the following measures.
(1) Cash and bank balances
The credit risk of the Company is limited because the Company has deposited bank deposits and
other monetary funds in banks with high credit ratings.
(2) Receivables and contract assets
The Company regularly evaluates the creditworthiness of its customers with deals on credit, and
selects to deal with approved and creditworthy customers subject to the results of the credit assessment
with monitoring the balance of its receivables, so as to ensure that the Company is not exposed to
significant risk of bad debt.
No collaterals are required since the Company only deals with third parties that are approved and
creditworthy. The concentrated credit risks are managed by customers. As of December 31, 2023, the
Company is exposed to certain concentration of credit risks, as the Company’s accounts receivable and
contract assets from top 5 customers have accounted for 59.01% of the total balance of accounts receivable
and contract assets (December 31, 2022: 56.87%). The Company held no collateral or other credit ranking
measures for the balance of accounts receivable and contract assets.
The maximum exposure to the Company is the carrying amount of each financial asset in the balance
sheet.
(II) Liquidity risk
Liquidity risk refers to the risk that the Company is in shortage of funds in performing obligations
that are settled by delivering cash or another financial asset. Liquidity risk may arise from an inability to
sell a financial asset at fair value as soon as possible, a counterparty’s inability to pay its contractual
liabilities, the accelerated maturity of liabilities, or an inability to generate expected cash flows.
Closing balance
Item Undiscounted
Book value Within 1 year 1-3 years Over 3 years
contract amount
Bank
692,862,919.06 735,334,807.65 343,828,440.51 309,926,656.55 81,579,710.59
borrowings
Notes
76,001,079.07 76,001,079.07 76,001,079.07
payable
Accounts 247,318,466.10 247,318,466.10 247,318,466.10
payable
265 / 290
2023 Annual Report
Other
54,142,509.17 54,142,509.17 54,142,509.17
payables
Lease
42,120,349.54 44,407,139.93 27,921,961.12 15,610,193.95 874,984.86
liabilities
Subtotal 1,112,445,322.94 1,157,204,001.92 749,212,455.97 325,536,850.50 82,454,695.45
In order to control this risk, the Company balances the continuity and flexibility of financing by using
various financing measures such as notes settlement and bank loans comprehensively and adopting both
long-term and short-term financing methods to optimize the financing structure. The Company has
received credit facilities from a number of commercial banks to satisfy its working capital requirements
and capital expenditures.
Financial liabilities classified by remaining maturity dates
(Continued to above table)
Closing of last year
Item Undiscounted
Book value Within 1 year 1-3 years Over 3 years
contract amount
Bank
680,999,644.99 741,583,550.58 294,187,405.68 302,318,773.93 145,077,370.97
borrowings
Notes
201,299,388.57 201,299,388.57 201,299,388.57
payable
Accounts
276,845,321.28 276,845,321.28 276,845,321.28
payable
Other
56,662,357.08 56,662,357.08 56,662,357.08
payables
Lease
64,661,633.09 68,598,988.87 30,342,348.86 38,256,640.01
liabilities
Subtotal 1,280,468,345.01 1,344,989,606.38 859,336,821.47 340,575,413.94 145,077,370.97
(III) Market risk
Market risk refers to the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. Market risk mainly includes interest rate risk and currency
risk.
1. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company is exposed to the risk of fair value
interest rate due to financial instruments with a fixed interest rate and to the risk of cash value interest
rate due to financial instruments with a floating interest rate. The Company determines the proportion
between the fixed-rate financial instruments and the floating-rate financial instruments based on market
conditions, and maintains appropriate portfolios of financial instruments through regular review and
monitoring. The cash flow interest rate risk exposed to the Company relates primarily to the Company’s
floating-rate interest-bearing bank borrowings.
As at December 31, 2023, the principal of the Company’s floating-rate interest-bearing bank
borrowings amounted to RMB 464,442,238.44 (December 31, 2022: RMB 650,205,770.70). On the
basis of the assumption that the interest rate has changed 50 basis points, where all other variables are
held constant, it will bring no material impacts on the Company’s total profits and shareholders’ equity.
2. Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. The Company’s exposure to the currency risk is
primarily associated with the Company’s monetary assets and liabilities dominated in foreign currencies.
If the monetary assets and liabilities dominated in foreign currencies are imbalanced in a short time, the
Company will purchase and sell foreign currencies at the market exchange rate to keep the net risk
exposure acceptable.
266 / 290
2023 Annual Report
The closing balance of the Company’s monetary assets and liabilities dominated in foreign
currencies is disclosed in VII.81 of Section X in details.
2. Hedge
(1) The Company conducted hedging businesses for risk management
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(2) The Company conducted qualified hedging businesses and adopted hedging accounting
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3) The Company conducted hedging businesses for risk management which are expected to
achieve the objectives of hedging management but did not adopt hedging accounting
□ Applicable √ N/A
Other information
□ Applicable √ N/A
3. Transfer of financial assets
(1) Types of transfer
□ Applicable √ N/A
(2) Financial assets derecognized due to transfer
□ Applicable √ N/A
(3) Transferred financial assets with continuous participation
□ Applicable √ N/A
Other information
□ Applicable √ N/A
XIII. Disclosure of fair value
1. The closing balance of the fair value of assets and liabilities measured at fair value
√ Applicable □ N/A
In RMB
Closing balance of fair value
Item
Level 1 Level 2 Level 3 Total
I. Continuous fair value
measurement
(I) Held-for-trading financial
484,010,000.00 30,000,000.00 514,010,000.00
assets
1. Financial assets at fair value
484,010,000.00 30,000,000.00 514,010,000.00
through profit or loss
(1) Investment in debt
instrument
(2) Investment in equity
12,880,000.00 30,000,000.00 42,880,000.00
instrument
(3) Derivative financial assets
(4) Structural deposits 471,130,000.00 471,130,000.00
2. Designated as financial
assets at fair value through
profit or loss
(1) Investment in debt
instrument
(2) Investment in equity
instrument
(II) Other debt investments
267 / 290
2023 Annual Report
(III) Investment in other equity
7,075,419.38 7,075,419.38
instruments
(IV) Investment properties
1. Land use right for leasing
purpose
2. Buildings leased
3. Land use right held for the
purpose of transfer after value
appreciation
(V) Biological assets
1. Consumable biological
assets
2. Productive biological assets
(VI) Receivables financing 11,387,400.00 11,387,400.00
Total assets continuously
484,010,000.00 48,462,819.38 532,472,819.38
measured at fair value
(VI) Held-for-trading financial
liabilities
1. Financial liabilities at fair
value through profit or loss
Where: Held-for-trading bonds
issued
Derivative financial
liabilities
Others
2. Designated as financial
liabilities at fair value through
profit or loss
Total liabilities continuously
measured at fair value
II. Non-continuous fair value
measurement
(I) Held-for-sale assets
Total assets that are not
continuously measured at
fair value
Total liabilities that are not
continuously measured at
fair value
2. Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
□ Applicable √ N/A
3. Valuation techniques and qualitative and quantitative information of key parameters adopted
for continuous and non-continuous level 2 fair value measurement items
√ Applicable □ N/A
The equity instrument investment presented stocks subscribed on the New Third Board: considering the
factors including the level of activity for trading of stocks on the New Third Board, the Company
classified stocks on the New Third Board as level 2 for the measurement of fair value, where the fair
value is determined according to the average closing price of the previous 20 trading days.
Structured deposits are valued using observable returns, with the sum of expected returns and principal
determined as fair value when the expected yield is observable, and the principal amount as fair value in
other cases.
268 / 290
2023 Annual Report
4. Valuation techniques and qualitative and quantitative information of key parameters adopted
for continuous and non-continuous level 3 fair value measurement items
√ Applicable □ N/A
The Company uses specific valuation techniques to determine fair value, and important parameters
used include the net assets of the investee and the costs of commercial bills at the end of the period.
5. Reconciliation between opening and closing carrying amounts and sensitivity analysis of
unobservable parameters for continuous level 3 fair value measurement items
□ Applicable √ N/A
6. Where transfers among levels occurred in the period, transfer reasons and policies for
determining transfer time point for continuous fair value measurement items
□ Applicable √ N/A
7. Changes in valuation techniques in the period and reasons for changes
□ Applicable √ N/A
8. Fair value of financial assets and financial liabilities not measured at fair value
□ Applicable √ N/A
9. Others
□ Applicable √ N/A
XIV. Related-party relationships and transactions
1. Parent company of the Company
√ Applicable □ N/A
In RMB 0’000
Proportion of Proportion of
the Company’s the Company’s
Parent Registration Business Registered
shares held by voting right held
company place nature capital
the parent by the parent
company (%) company (%)
Shenzhen R&D and
Appotronics sales of RMB 10
Shenzhen 17.26 17.26
Holdings semiconductor million
Limited products
Description of the parent company of the Company
None
The ultimate controlling party of the Company is LI Yi.
Other information:
None
2. Subsidiaries of the Company
√ Applicable □ N/A
Please refer to the description in X of Section X for details about the subsidiaries of the Company.
3. Joint ventures and associates of the Company
√ Applicable □ N/A
Please refer to the description in X of Section X for the details about the major joint ventures or
associates of the Company. Details of other joint ventures or associates having related-party transactions
in the period or balances with the Company in prior periods:
Joint ventures or associates Relationship with the Company
GDC Technology Limited (BVI) Associate
Shenzhen Zhongjian Technology Co., Ltd. Associate
Other information
□ Applicable √ N/A
269 / 290
2023 Annual Report
4. Other related parties of the Company
√ Applicable □ N/A
Other related party Relationship between other related party and the
Company
Beijing Donview Education Technology Co., Ltd. Minority shareholders holding more than 10% shares in the
and its affiliates subsidiary and their affiliates
YLX Incorporated Controlled by the same de facto controller
Minority shareholders holding more than 10% shares in the
Xiaomi Communications Co., Ltd. and its affiliates
subsidiary and their affiliates
Minority shareholders holding more than 10% shares in the
China Film Equipment Co., Ltd. and its affiliates
subsidiary and their affiliates
Shenzhen Lighting Institute Controlled by the same de facto controller
Enterprise in which the actual controller holds the post of
WeCast and its affiliates
director (resigned in November 2022)
CINIONIC and its affiliates Participating company during the comparable period
Other information
None
5. Related-party transactions
(1). Sales and purchase of goods, rendering and receipt of services
Purchase of goods/receipt of services
√ Applicable □ N/A
In RMB
Whether
Transaction the
Subject Current amounts transaction
Related party Prior period
matter period approved (if amounts are
applicable) exceeded (if
applicable)
GDC Technology Electronic
Limited (BVI) and components
1,349,232.72 - - 424,778.76
its affiliates and
services
Beijing Donview
Education
Service 4,198.11 - - 3,539.62
Technology Co.,
Ltd. and its affiliates
YLX Incorporated Electronic
components
3,706,664.02 - - 2,720,265.30
and
services
Xiaomi Electronic
Communications components
48,014,870.12 - - 146,622,541.76
Co., Ltd. and its and
affiliates services
China Film Power
Equipment Co., Ltd. supply,
and its affiliates water 26,547,617.35 - - 20,715,146.16
cooling and
services
WeCast and its Electronic
affiliates equipment
- - - 188,016.24
and
services
Shenzhen Lighting
Service 377,358.50 - - 23,584.90
Institute
270 / 290
2023 Annual Report
Subtotal 79,999,940.82 - - 170,697,872.74
Sales of goods/rendering of services
√ Applicable □ N/A
In RMB
Current
Related party Subject matter Prior period
period
GDC Technology Limited (BVI) and its Cinema projector, 441,254.26 11,155,919.47
affiliates spare parts, and
software
WeCast and its affiliates Laser TV, smart mini -5,780,412.26
projector
Beijing Donview Education Technology Laser business 40,002.03 1,940,644.07
Co., Ltd. and its affiliates education projector
Xiaomi Communications Co., Ltd. and Laser TV, smart mini 199,258,722.33 393,149,841.49
its affiliates projector
China Film Equipment Co., Ltd. and its Laser digital cinema 26,982,529.63 29,790,770.70
affiliates projector, laser light
source, lease services
CINIONIC and its affiliates Laser light source 29,983,701.86 94,280,931.42
YLX Incorporated Parts 4,123,489.91 3,338,508.67
Shenzhen Zhongjian Technology Co., 41,903.98
Service
Ltd.
Subtotal 260,871,604.00 527,876,203.56
Description of sales and purchase of goods, rendering and receipt of services
□ Applicable √ N/A
(2). Details of trust with related parties/subcontracting and trust management/contract-issuing
Details of trust/contracting where a group entity is the trustor/main contractor:
□ Applicable √ N/A
Description of trust/subcontracting with related parties
□ Applicable √ N/A
Details of trust/contracting where a group entity is the trustor/main contractor
□ Applicable √ N/A
Description of management/contract-issuing with related parties
□ Applicable √ N/A
(3). Leases with related parties
The Company as the lessor
□ Applicable √ N/A
271 / 290
2023 Annual Report
The Company as the lessee
√ Applicable □ N/A
In RMB
Variable lease
Simplified handling
payments not
of rental costs for Assumed interest
included in the Added right-of-use
Type of short-term leases and Paid rent expenses of lease
Name of measurement of assets
leased low-value asset leases liabilities
lessor lease liabilities (if
assets (if applicable)
applicable)
Current Prior Current Prior Current Prior Current Prior Current Prior
period period period period period period period period period period
China
Film
Equipment Property
227,735.01 1,175,936.24 274,688.57 92,401.05 42,657.63 3,614,426.76
Co., Ltd. lease
and its
affiliates
Description of leases with related parties
□ Applicable √ N/A
272 / 290
2023 Annual Report
(4). Guarantees with related parties
The Company as a guarantor:
□ Applicable √ N/A
The Company as a guaranteed party:
□ Applicable √ N/A
Description of guarantees with related parties
□ Applicable √ N/A
(5). Borrowings/loans with related parties
□ Applicable √ N/A
(6). Assets transfer/debt restructuring with related parties
□ Applicable √ N/A
(7). Compensation for key management personnel
√ Applicable □ N/A
In RMB 0’000
Item Current period Prior period
Compensation for key 760.13 1,019.85
management personnel
(8). Other related-party transactions
□ Applicable √ N/A
6. Unsettled items receivable from or payable to related parties
(1). Amounts due from related parties
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Item Related party Carrying Provision for Carrying Provision for
amount bad debts amount bad debts
Accounts CINIONIC and
29,768,395.79 1,488,419.79
receivable its affiliates
GDC
Accounts Technology
801,394.38 196,250.40 1,739,949.64 86,997.48
receivable Limited (BVI)
and its affiliates
Accounts WeCast and its
16,541,558.24 16,541,558.24 16,265,737.14 16,265,737.14
receivable affiliates
Xiaomi
Accounts Communications
64,902,941.11 3,245,147.06 22,671,178.87 1,133,558.94
receivable Co., Ltd. and its
affiliates
China Film
Accounts Equipment Co.,
3,299,580.10 164,979.01 2,098,625.51 110,758.50
receivable Ltd. and its
affiliates
Subtotal 85,545,473.83 20,147,934.71 72,543,886.95 19,085,471.85
China Film
Equipment Co.,
Prepayments 1,736,886.89 5,451,984.90
Ltd. and its
affiliates
GDC
Technology
Prepayments 43,716.82
Limited (BVI)
and its affiliates
Subtotal 1,780,603.71 5,451,984.90
273 / 290
2023 Annual Report
China Film
Other Equipment Co.,
171,450.20 8,572.51 273,354.20 13,667.71
receivables Ltd. and its
affiliates
GDC
Other Technology
14,023,746.00 13,789,908.00
receivables Limited (BVI)
and its affiliates
Xiaomi
Other Communications
200,000.00 10,000.00 200,000.00 10,000.00
receivables Co., Ltd. and its
affiliates
Subtotal 14,395,196.20 18,572.51 14,263,262.20 23,667.71
(2). Amounts due to related parties
√ Applicable □ N/A
In RMB
Item Related party Closing balance of Opening balance of
carrying amount carrying amount
Accounts YLX Incorporated 390,043.13 110,054.78
payable
Accounts Xiaomi Communications Co., 1,286,376.61 12,521,840.23
payable Ltd. and its affiliates
Accounts China Film Equipment Co., 9,319,770.17 4,356,968.33
payable Ltd. and its affiliates
Subtotal 10,996,189.91 16,988,863.34
China Film Equipment Co.,
Notes payable 22,554,693.11
Ltd. and its affiliates
Subtotal 22,554,693.11
Advance from China Film Equipment Co.,
8,056,313.86 9,342,716.60
customers Ltd. and its affiliates
Advance from GDC Technology Limited
4,800.00
customers (BVI) and its affiliates
Subtotal 8,056,313.86 9,347,516.60
Contract GDC Technology Limited 23,677.17
liabilities (BVI) and its affiliates
Contract China Film Equipment Co.,
1,259,149.95 2,738,876.11
liabilities Ltd. and its affiliates
Contract Shenzhen Zhongjian
763,039.15
liabilities Technology Co., Ltd.
Subtotal 2,022,189.10 2,762,553.28
Beijing Donview Education
Other payables Technology Co., Ltd. and its 50,000.00 50,000.00
affiliates
Other payables CINIONIC and its affiliates 507,874.72
GDC Technology Limited
Other payables 221,249.75 20,620.00
(BVI) and its affiliates
China Film Equipment Co.,
Other payables 7,200.00 18,025.76
Ltd. and its affiliates
Subtotal 278,449.75 596,520.48
Other current Xiaomi Communications Co.,
115,422.47 201,468.53
liabilities Ltd. and its affiliates
Other current China Film Equipment Co.,
323,036.17 3,179,145.48
liabilities Ltd. and its affiliates
274 / 290
2023 Annual Report
Other current Shenzhen Zhongjian
99,195.09
liabilities Technology Co., Ltd.
Subtotal 537,653.73 3,380,614.01
(3). Other items
□ Applicable √ N/A
7. Related party commitments
□ Applicable √ N/A
8. Others
□ Applicable √ N/A
XV. Share-based payments
1. Various equity instruments
√ Applicable □ N/A
Quantity unit: share Amount unit: RMB
Granted in the Exercised in the current Unlocked in the Expired in the current
Category of
current period period current period period
payee
Number Amount Number Amount Number Amount Number Amount
Management
5,103,800 87,810,995.80 8,117,150 149,855,398.40
members
Management 1,961,418 4,464,375.10
members
(Chongqing
Formovie)
Total 5,103,800 87,810,995.80 10,078,568 154,319,773.50
Outstanding share options or other equity instruments at the end of the period
√ Applicable □ N/A
Outstanding share options at the end Outstanding other equity
of the period instruments at the end of the period
Category of payee Exercise price Remaining Exercise price Remaining
range contractual range contractual
period period
RMB 4.3-
Management members 3-19 months
22.841/share
Management members RMB 1-
30 months
(Chongqing Formovie) 3.42/share
Other information
None
2. Equity-settled share-based payments
√ Applicable □ N/A
In RMB
The method of determining the fair value of equity
Option pricing model
instruments at the grant date
Significant parameters of the fair value of equity
instruments at the grant date
The basis of determining the number of equity
Actual grant amount
instruments expected to be exercised
Reasons for the significant difference between the
estimate in the current period and that in the prior None
period
Amounts of equity-settled share-based payments
138,498,124.61
accumulated in capital reserve
275 / 290
2023 Annual Report
Other information
Chongqing Formovie
The method of determining the fair value of equity Evaluation of all shareholder’s equity
instruments at the grant date interests
Significant parameters of the fair value of equity
instruments at the grant date
The basis of determining the number of equity Actual grant amount
instruments expected to be exercised
Reasons for the significant difference between the None
estimate in the current period and that in the prior period
Amounts of equity-settled share-based payments 18,835,146.43
accumulated in capital reserve
3. Cash-settled share-based payments
□ Applicable √ N/A
4. Share-based payment expenses in the current period
√ Applicable □ N/A
In RMB
Category of payee Expenses of equity-settled Expenses of cash-settled
share-based payments share-based payments
Management members 2,841,165.47
Total 2,841,165.47
Other information
None
5. Modification to and termination of share-based payments
□ Applicable √ N/A
6. Others
□ Applicable √ N/A
XVI. Commitments and contingencies
1. Significant commitments
□ Applicable √ N/A
2. Contingencies
(1). Significant contingencies as of the balance sheet date
√ Applicable □ N/A
1. Contingent Liabilities arising from pending litigation or arbitration and their financial effect
(1) Civil litigation and arbitration where the Company acted as the plaintiff
As of December 31, 2023, the important information about civil litigation and arbitration in which
the Company acted as a plaintiff is specifically as follows:
Patents
Case Cause of Plaintiff/Appella Defendant/Appel Progres
involve Amount
No. action nt ee s
d
GDC Technology
Arbitration
Limited (Cayman
and Appotronics
Islands)
arbitration Hong Kong
01- GDC Technology Compensatio
counterclaim Limited
22- Limited (British n of no less
of dispute Accepte
0001 Virgin Islands) N/A than USD
over the Appotronics d
- De facto 40.00
implementati Corporation
2735 controller million
on of the Limited
ZHANG
Settlement
Wanneng and his
Agreement
management team
276 / 290
2023 Annual Report
(2) Civil litigation and arbitration where the Company acted as the defendant
As of December 31, 2023, the important information about civil litigation and arbitration in which
the Company acted as a defendant is specifically as follows:
Case Cause of Patents Amount
Plaintiff Defendant Progress
No. action involved involved
Arbitration and GDC
arbitration Technology
Appotronics Hong
counterclaim Limited
01- Kong Limited
of dispute over (Cayman USD
22-
the Islands) N/A 38.00 Accepted
0001- Appotronics
implementation GDC million
2735 Corporation Limited
of the Technology
Settlement Limited (British
Agreement Virgin Islands)
(2). Description shall also be provided even if the Company has no significant contingencies to be
disclosed:
□ Applicable √ N/A
3. Others
□ Applicable √ N/A
XVII. Events after the balance sheet date
1. Material non-adjusting event
□ Applicable √ N/A
2. Profit distribution
√ Applicable □ N/A
In RMB
Proposed distributions of profits or Distribute to all shareholders a cash dividend of RMB 0.7
dividends (tax inclusive) for every 10 shares
Profits or dividends declared for 32,084,193.96
distribution upon discussion and
approval
3. Sales return
□ Applicable √ N/A
4. Description of other events after the balance sheet date
√ Applicable □ N/A
Information about transfer of partial equity interests in subsidiaries and related-party transactions
The Company held the 30th meeting of the second Board of Directors on April 12, 2024, and
deliberated and passed the Proposal on Transferring Partial Equity Interests in Subsidiary and Related-
party Transaction. The Company intended to transfer 51% equity interests in its wholly-owned subsidiary
Appotronics HK to Long Pine Investment, Inc. After this transaction is completed, the equity interests
held by the Company in Appotronics HK will be changed from 100% to 49%, and Appotronics HK will
no longer be included in the scope of the Company’s consolidated statements.
XVIII. Other significant events
1. Corrections of prior period errors
(1). Retrospective application
□ Applicable √ N/A
(2). Prospective application
□ Applicable √ N/A
2. Significant debt restructuring
□ Applicable √ N/A
277 / 290
2023 Annual Report
3. Asset swap
(1). Exchange of non-monetary assets
□ Applicable √ N/A
(2). Other asset swap
□ Applicable √ N/A
4. Annuity plan
□ Applicable √ N/A
5. Discontinued operations
□ Applicable √ N/A
6. Segment reporting
(1). Determination basis and accounting policies of reporting segments
□ Applicable √ N/A
(2). Financial information of reporting segments
□ Applicable √ N/A
(3). If the Company has no reporting segments, or cannot disclose the total assets and liabilities of
reporting segments, specify the reasons
√ Applicable □ N/A
The Company has no reporting segments due to absence of diversified operations. Refer to VII.61 of
Section X for the breakdown of the Company’s revenue.
(4). Other information
□ Applicable √ N/A
7. Other significant transactions and matters having an impact on the decisions of investors
□ Applicable √ N/A
8. Others
□ Applicable √ N/A
XIX. Notes to key items in the parent company’s financial statements
1. Accounts receivable
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
Closing balance of carrying Opening balance of carrying
Aging
amount amount
Within 1 year
Where: Subitems within 1 year
Within 1 year 248,513,107.85 440,724,111.48
Subtotal of items within 1 year 248,513,107.85 440,724,111.48
1 to 2 years 168,649,179.18 237,687,773.27
2 to 3 years 40,720,444.20 12,522,109.16
Over 3 years 13,741,038.86 3,678,400.00
Total 471,623,770.09 694,612,393.91
(2). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Catego
Carrying Provision for bad Book Carrying Provision for Book
ry
amount debts value amount bad debts value
278 / 290
2023 Annual Report
Perce
Per
Percen Per ntage
cen
tage of cent of
Amount tag Amount Amount Amount
provisi age provis
e
on (%) (%) ion
(%)
(%)
Provisi
on for
bad
863,700.0 863,700.
debts 0.18 100.00
0 00
made
individ
ually
Where:
Provisi
on for
bad 462,48
470,760,0 99.8 8,279,83 694,612,3 100. 6,607,56 688,004,8
debts 1.76 0,236. 0.95
70.09 2 3.72 93.91 00 5.62 28.29
made 37
by
group
Where:
462,48
471,623,7 100. 9,143,53 694,612,3 100. 6,607,56 688,004,8
Total 1.94 0,236. 0.95
70.09 00 3.72 93.91 00 5.62 28.29
37
Provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group:
In RMB
Closing balance
Name Accounts Provision for bad Percentage of
receivable debts provision (%)
Group of aging 77,912,006.36 8,279,833.72 10.63
Group of receivables from 392,848,063.73
related parties in the scope
of consolidation
Total 470,760,070.09 8,279,833.72 1.76
Description of provision for bad debts made by group:
□ Applicable √ N/A
Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
Refer to V.11 of Section X for details.
Description of significant changes in the balance of accounts receivable with changed provisions for losses
in the current period:
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Recovery Write-off Closing
Category Other
balance Provision or or balance
changes
reversal cancellation
279 / 290
2023 Annual Report
Provision for
bad debts
863,700.00 863,700.00
made
individually
Provision for
bad debts 6,607,565.62 1,674,318.10 2,050.00 8,279,833.72
made by group
Total 6,607,565.62 2,538,018.10 2,050.00 9,143,533.72
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information
None
(4). Accounts receivable actually canceled in the current period
√ Applicable □ N/A
In RMB
Item Cancellation amount
Accounts receivable actually canceled 2,050.00
In which significant amounts of accounts receivable canceled are described as below
□ Applicable √ N/A
(5). Top five closing balances of accounts receivable and contract assets categorized by debtors
√ Applicable □ N/A
In RMB
Proportion to
the total
Closing
Closing balance closing Closing
Closing balance balance
of accounts balance of balance of
Entity of accounts of
receivable and accounts bad debt
receivable contract
contract assets receivable and provision
assets
contract assets
(%)
Top 1 274,860,478.42 - 274,860,478.42 58.05 -
Top 2 30,581,008.57 - 30,581,008.57 6.46 -
Top 3 29,350,303.07 - 29,350,303.07 6.20 -
Top 4 26,115,537.28 - 26,115,537.28 5.52 -
Top 5 22,226,303.13 - 22,226,303.13 4.69 -
Total 383,133,630.47 - 383,133,630.47 80.92 -
Other information
None
Other information:
□ Applicable √ N/A
2. Other receivables
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Interests receivable
Dividends receivable
Other receivables 14,978,163.24 7,556,623.71
Total 14,978,163.24 7,556,623.71
Other information:
□ Applicable √ N/A
280 / 290
2023 Annual Report
Interests receivable
(1). Categories of interests receivable
□ Applicable √ N/A
(2). Significant interests overdue
□ Applicable √ N/A
(3). Disclosure by categories of provision for bad debts
□ Applicable √ N/A
Provision for bad debts made individually:
□ Applicable √ N/A
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
□ Applicable √ N/A
Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
N/A
Description of significant changes in the balance of dividends receivable with changed provisions for
losses in the current period:
□ Applicable √ N/A
(3). Provision for bad debts
□ Applicable √ N/A
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information
None
(4). Interests receivable actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of interests receivable canceled are described as below
□ Applicable √ N/A
Description of cancellation:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
(1). Dividends receivable
Dividends receivable
(5). Dividends receivable
(2). Dividends receivable with significant amounts aged more than 1 year
□ Applicable √ N/A
(4). Disclosure by categories of provision for bad debts
□ Applicable √ N/A
Provision for bad debts made individually:
□ Applicable √ N/A
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
□ Applicable √ N/A
Provision for bad debts made in accordance with the general model of ECL
□ Applicable √ N/A
Basis for determination of each stage and percentage of provision for bad debts
N/A
Description of significant changes in the balance of dividends receivable with changed provisions for
losses in the current period:
281 / 290
2023 Annual Report
□ Applicable √ N/A
(5). Provision for bad debts
□ Applicable √ N/A
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
None
(6). Dividends receivable actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of dividends receivable canceled are described as below
□ Applicable √ N/A
Description of cancellation:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Other receivables
(6). Disclosure by aging
√ Applicable □ N/A
In RMB
Closing balance of carrying Opening balance of carrying
Aging
amount amount
Within 1 year
Where: Subitems within 1 year
Within 1 year 8,993,196.10 2,266,730.32
Subtotal of items within 1 year 8,993,196.10 2,266,730.32
1 to 2 years 835,410.95 105,528.66
2 to 3 years 82,446.00 841,125.46
Over 3 years 5,471,349.86 4,680,224.40
Total 15,382,402.91 7,893,608.84
(7). Categories by the nature of other receivables
√ Applicable □ N/A
In RMB
Nature of other receivables Closing balance of carrying Opening balance of carrying
amount amount
Deposits/margins/petty cash 7,278,349.93 6,539,089.13
Amounts with related parties in the
7,347,685.40 1,153,906.23
scope of consolidation
Temporary receivables 756,367.58 134,793.84
Compensation receivable 65,819.64
Total 15,382,402.91 7,893,608.84
(8). Provision for bad debts
√ Applicable □ N/A
In RMB
Stage I Stage II Stage III
Provision for bad 12-month Lifetime ECL Lifetime ECL Total
debts ECL in the (without credit (with credit
future impairment) impairment)
Balance as at January 1, 336,985.13 336,985.13
2023
Balance as at January 1,
2023 in the current - - -
period
282 / 290
2023 Annual Report
--transferred to Stage II -625.95 625.95
--transferred to Stage III
--reversed to Stage II
--reversed to Stage I
Provision 64,750.75 2,503.79 67,254.54
Reversal
Write-off
Cancellation
Other changes
Balance as at December
401,109.93 3,129.74 404,239.67
31, 2023
Basis for determination of each stage and percentage of provision for bad debts
The group of receivable deposits, margins and petty cash, group of amounts from transaction with
related parties in the scope of consolidation, and other receivables due within one year in the group of
aging indicate no obvious increase in the credit risk since initial recognition (stage I), 1-2 years in the
group of aging indicate obvious increase in the credit risk since initial recognition but no credit impairment
(stage II), and over 2 years in the group of aging indicate credit impairment since initial recognition (stage
III).
Description of significant changes in the balance of other receivables with changed provisions for losses
in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of financial
instruments has been increased significantly in the current period:
□ Applicable √ N/A
(1). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Recovery Write-off Closing
Category Other
balance Provision or or balance
changes
reversal cancellation
Provision for 336,985.13 67,254.54 404,239.67
bad debts
made by
group
Total 336,985.13 67,254.54 404,239.67
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information
None
(9). Other receivables actually canceled in the current period
□ Applicable √ N/A
In which significant amounts of other receivables canceled are described as below
□ Applicable √ N/A
Description of cancellation of other receivables:
□ Applicable √ N/A
(10). Top five closing balances of other receivables categorized by debtors
√ Applicable □ N/A
In RMB
Proportion to Closing
Closing the balance of Nature of other balance of
Entity Aging
balance other receivables receivables bad debt
(%) provision
283 / 290
2023 Annual Report
Receivables from -
Within 1
Top 1 5,444,385.16 35.39 related parties in the
year
scope of consolidation
Deposits/margins/petty Over 3
Top 2 3,574,618.00 23.24 178,730.90
cash years
Deposits/margins/petty Over 3
Top 3 1,257,075.20 8.17 62,853.76
cash years
Receivables from
Within 1
Top 4 1,000,936.77 6.51 related parties in the -
year
scope of consolidation
Receivables from
Within 1
Top 5 810,400.88 5.27 related parties in the -
year
scope of consolidation
Total 12,087,416.01 78.58 - - 241,584.66
(11). Presentation in other receivables due to centralized fund management
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
3. Long-term equity investments
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Item Carrying Provision for Carrying Provision for
Book value Book value
amount impairment amount impairment
Investments
in 476,309,658.71 12,827,792.79 463,481,865.92 463,067,140.24 12,827,792.79 450,239,347.45
subsidiaries
Investments
in
associates 5,836,162.11 5,836,162.11
and joint
ventures
Total 482,145,820.82 12,827,792.79 469,318,028.03 463,067,140.24 12,827,792.79 450,239,347.45
(1). Investments in subsidiaries
√ Applicable □ N/A
In RMB
Closing
Provision
Opening Closing balance of
Investees Increase Decrease for
balance balance provision for
impairment
impairment
CINEAPPO
Laser Cinema
Technology 46,661,211.65 509,163.93 47,170,375.58
(Beijing) Co.,
Ltd.
Shenzhen
Appotronics
Software 1,457,799.42 -71,631.06 1,386,168.36
Technology
Co., Ltd.
Beijing Orient
5,900,000.00 5,900,000.00
Appotronics
284 / 290
2023 Annual Report
Technology
Co., Ltd.
Shenzhen
Appotronics
12,000,000.0
Xiaoming 12,000,000.00 12,000,000.00
0
Technology
Co., Ltd.
Fengmi
(Beijing)
3,469,000.91 -143,262.09 3,325,738.82
Technology
Co., Ltd.
Qingda
Appotronics
(Xiamen) 5,100,000.00 5,100,000.00 827,792.79
Technology
Co., Ltd.
Shenzhen
Appotronics
Laser Display 18,966,857.26 18,966,857.26
Technology
Co., Ltd.
Appotronics
Hong Kong 305,476,042.87 468,625.98 305,944,668.85
Limited
JOVE AI
800,010.03 -0.01 800,010.02
Innovation
Appotronics
Technology
2,000,000.00 2,000,000.00
(Changzhou)
Co., Ltd.
Shenzhen
Appotronics
Display 3,000,000.00 3,000,000.00
Device Co.,
Ltd.
Appotronics
USA, Inc.
Tianjin
Bonian Film
26,954,120.20 26,954,120.20
Partnership
(LP)
Formovie
(Chongqing)
Innovative 31,277,785.13 -1,329,865.5 29,947,919.62
Technology
Co., Ltd.
Shenzhen
Orange Juice
Energy 4,312.77 -4,312.77
Technology
Co., Ltd.
Shenzhen
Qianhai
13,813,800.00 13,813,800.00
Taishi
Investment
285 / 290
2023 Annual Report
Partnership
(LP)
Total 463,067,140.24 13,242,518.47 476,309,658.71 12,827,792.79
(2). Investments in associates and joint ventures
√ Applicable □ N/A
In RMB
Changes for the current period
Closi
Adju
Invest ng
stme
ment Decla bala
nt in
Decr profit Othe red Provi nce
Open Addit othe Closi
Invest ease or r cash sion of
ing ional r ng
ee d loss equit divide for Othe provi
balan inves com balan
inve under y nds impai rs sion
ce tmen preh ce
stme equit chan or rmen for
t ensiv
nt y ges profit t impa
e
meth s irme
inco
od nt
me
I. Joint venture
Subtot
al
II. Associates
Shenz 6,000 - 5,836,
hen ,000. 163,8 162.1
Zhong 00 37.89 1
jian
Techn
ology
Co.,
Ltd.
6,000 - 5,836,
Subto
,000. 163,8 162.1
tal
00 37.89 1
6,000 - 5,836,
Total ,000. 163,8 162.1
00 37.89 1
(3). Impairment test of long-term equity investments
□ Applicable √ N/A
Other information:
None
The recoverable amount is determined as the fair value net of disposal expenses
□ Applicable √ N/A
The recoverable amount is determined according to the present value of the estimated future cash
flows
□ Applicable √ N/A
Reason for the obvious difference between the information above and the information used in the
impairment test in previous years or external information
□ Applicable √ N/A
Reason for the obvious difference between the information used by the Company in the impairment
test in previous years and the actual conditions of the corresponding year
□ Applicable √ N/A
286 / 290
2023 Annual Report
Other information:
None
4. Operating income and operating costs
(1). Description of operating income and operating costs
√ Applicable □ N/A
In RMB
Current period Prior period
Item
Revenue Cost Revenue Cost
Main business 1,120,351,462.42 781,792,429.91 1,345,923,616.67 910,770,517.27
Other business
Total 1,120,351,462.42 781,792,429.91 1,345,923,616.67 910,770,517.27
(2). Breakdown of operating income and operating costs
√ Applicable □ N/A
In RMB
Total
Category of contract
Operating income Operating costs
By the type of goods
Laser optical engine 505,638,401.86 361,036,393.60
Complete laser
464,885,063.12 286,912,380.33
projector
Others 149,827,997.44 133,843,655.98
By operating region
Domestic 926,419,420.85 667,534,423.45
Overseas 193,932,041.57 114,258,006.46
By the transfer time of goods
Revenue recognized at
1,120,351,462.42 781,792,429.91
a time point
Total 1,120,351,462.42 781,792,429.91
Other information
√ Applicable □ N/A
The revenue that was included in contract liability balance at the beginning of period is RMB
9,037,218.97.
(3). Description of performance obligations
□ Applicable √ N/A
(4). Description of allocation to remaining performance obligations
□ Applicable √ N/A
(5). Material contract changes or material adjustment in transaction prices
□ Applicable √ N/A
Other information:
None
5. Investment income
√ Applicable □ N/A
In RMB
Item Current period Prior period
Gains from long-term equity investment accounted 7,452,000.00 90,512,000.00
for using the cost method
Gains from long-term equity investment accounted -163,837.89
for using the equity method
Investment income from disposal of long-term
equity investments
287 / 290
2023 Annual Report
Investment income from held-for-trading financial 200,000.00
assets during the holding period
Dividend income from investment in other equity
instruments during the holding period
Interest income from debt investments during the
holding period
Interest income from other debt investments during
the holding period
Investment income from disposal of held-for-trading 12,364,698.33 12,322,950.62
financial assets
Investment income from disposal of investment in
other equity instruments
Investment income from disposal of debt
investments
Investment income from disposal of other debt
investments
Profits from debt restructuring
Total 19,652,860.44 103,034,950.62
Other information:
None
6. Others
□ Applicable √ N/A
XX. Supplementary information
1. Breakdown of non-recurring profit or loss for the current period
√ Applicable □ N/A
In RMB
Item Amount Description
Gain or loss on disposal of non-current assets, including write-off of
-2,047,603.22
provision for asset impairment
Government grants recognized in profit or loss for the current period
(excluding government grants that are closely related to the business
of the Company and are provided in accordance with established 37,324,883.93 Section X.XI
standards with continuous effects on the profit or loss of the Company
according to the provisions of national policies)
Profit or loss on changes in the fair value of financial assets and
financial liabilities held by non-financial enterprises and profit or loss
on the disposal of financial assets and financial liabilities, other than 197,000.00 Section X.VII.70
those used in the effective hedging activities related to normal
operating business of the Company
Income earned from lending funds to non-financial institutions and
recognized in profit or loss
Profit or loss on entrusted investments or assets management 12,504,132.08 Section X.VII.68
Profit or loss on entrusted loans
Losses on assets due to force majeure events, e.g. natural disasters
Reversal of impairment loss on receivables tested for impairment
701,851.05
individually
The excess of attributable fair value of identifiable net assets over the
consideration paid for the acquisition of subsidiaries, associates and
joint ventures
Net profit or loss of subsidiaries from the beginning of the period up
to the business combination date recognized as a result of business 28,971,469.98
combination involving entities under common control
Profit or loss on exchange of non-monetary assets
288 / 290
2023 Annual Report
Profit or loss on debt restructuring
One-off expenses incurred by the enterprise for discontinued
operating activities, such as expenditures for employee placement, etc.
One-off effect on the profit or loss for the current period due to an
adjustment in taxation, accounting, and other laws and regulations
Share-based payment expenses recognized on a one-off basis for
canceling or modifying an equity incentive plan
For cash-settled share-based payments, profit or loss from the change
in fair value of employee benefits payable after the exercise date
Profit or loss on changes in the fair value of investment properties that
are subsequently measured using the fair value model
Profit or loss attributable to the evidently unfair transaction price
Profit or loss arising from contingencies other than those related to
normal operating business
Custodian fees earned from entrusted operation
Other non-operating income and expenses -4,752,629.59
Other profits or losses meeting the definition of non-recurring profit
or loss
Less: Effect of income taxes 5,157,172.94
Effects attributable to minority interests (net of tax) 6,219,685.09
Total 61,522,246.20
It is required to specify the reason for defining items not illustrated in the Information Disclosure and
Presentation Rules for Companies Making Public Offering of Securities No. 1 - Non-recurring Profit or
Loss as non-recurring profit or loss items of significant amounts, and reasons for defining non-recurring
profit or loss items illustrated in the Information Disclosure and Presentation Rules for Companies
Making Public Offering of Securities No. 1 - Non-recurring Profit or Loss as recurring profit or loss
items.
□ Applicable √ N/A
Other information
√ Applicable □ N/A
Item Amount Reason
involved
Net non-recurring profit or loss attributable to owners of the 54,627,639.75
parent company for 2022
Net non-recurring profit or loss attributable to owners of the
parent company that is calculated in 2022 in accordance with the
provision of the Information Disclosure and Presentation Rules 53,119,319.32
for Companies Making Public Offering of Securities No. 1 -
Non-recurring Profit or Loss (Revision 2023)
Variance 1,508,320.43
2. Return on net assets and earnings per share
√ Applicable □ N/A
Weighted Earnings per share
average return Diluted
Profit for the reporting period Basic earnings
on net assets earnings per
(%) per share
share
Net profit attributable to ordinary
3.81 0.23 0.22
shareholders of the Company
Net profit after deduction of non-recurring
profits or losses attributable to ordinary 1.54 0.09 0.09
shareholders of the Company
289 / 290
2023 Annual Report
3. Differences in accounting data under Chinese accounting standards and overseas accounting
standards
□ Applicable √ N/A
4. Others
□ Applicable √ N/A
Chairman: LI Yi
Approval for submission by the Board of Directors: April 25, 2024
Revision information
□ Applicable √ N/A
290 / 290
