Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Zhejiang Sanhua Intelligent Controls Co. Ltd.2024 Semi-Annual Report

August 2024

1Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section I Important Notes Contents and Definitions

The Board of Directors Board of Supervisors Directors Supervisors and Senior Management

of Zhejiang Sanhua Intelligent Controls Co. Ltd. (hereinafter referred to as the “Company”) hereby

guarantee that the information presented in this report shall be authentic accurate complete and free

from material misstatement whether due to false record misleading statement or significant omission

and they will bear both individual and joint legal liabilities.Zhang Yabo the Company's legal representative Yu Yingkui the person in charge of the

accounting work and Li Zhimi the person in charge of accounting department (Accounting Officer)

hereby declare and warrant that the financial statements in this report are authentic accurate and

complete.All directors attended the board meeting to review this report.The forward-looking descriptions of future plans development strategies and other forward-

looking statements contained in this report do not constitute substantial commitments by the

Company to investors and investors are advised to be aware of the investment risks.The Company describes in detail concerning the possible risks and countermeasures in Section

X "Risks and Countermeasures of the Company" under Section III "Management’s Discussion and

Analysis of Operations". Please pay particular attention to relevant contents.The profit distribution proposal of the Company considered and approved by the Board of

Directors is as follows: on the basis of 3731414614 the cash dividend of RMB1.00 (tax inclusive)

will be distributed to all shareholders for every 10 shares 0 bonus shares will be given out (tax

inclusive) and there will be no transfer of capital to share capital from the provident fund.Note: the Company’s share capital is 3732615535 shares the number of shares repurchased is

1200921 shares. In accordance with “the Company Law” shares of the Company held by the listed

company through special account for share buyback shall not be entitled to participate in the

distribution of profits and capitalisation of capital reserve.If the total share capital of the Company changes due to conversion of convertible bonds share

repurchase exercise of share incentives listing of additional shares for refinancing etc. prior to the

implementation of the distribution plan the total amount of distribution will be adjusted accordingly

on the basis of the principle of unchanged distribution ratio.

2Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

CONTENTS

Section I Important Notes Contents and Definitions... 2

Section II Corporate Profile and Key Financial Ind... 6

Section III Management’s Discussion and Analysis o.. 10

Section IV Corporate Governance .................... 30

Section V Environmental and Social Responsibility .. 34

Section VI Significant Events ...................... 40

Section VII Changes in Shares and Information abou.. 66

Section VIII Information of Preferred Shares ....... 77

Section IX Bonds ................................... 78

Section X Financial Report ......................... 79

3Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

List of Documents Available for Inspection

1. The 2024 Semi-Annual Report signed by the chairman of the board

2. The financial report signed and sealed by the Company's legal representative chief finance officer and

person in charge of accounting department

3. The Company’s articles of association

4. Original copy of all the Company's documents and announcements published on the newspapers designated

by CSRC within the reporting period

5. Other documents available for inspection

4Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Definitions

Items Refers to Definition

The Company Company Refers to Zhejiang Sanhua Intelligent Controls Co. Ltd.The Articles of Association Refers to Articles of Association for Zhejiang Sanhua Intelligent Controls Co. Ltd.The CSRC Refers to China Securities Regulatory Commission

SZSE Refers to Shenzhen Stock Exchange

Zhejiang Securities Regulatory Zhejiang Securities Regulatory Bureau of China Securities Regulatory

Refers to

Bureau Commission

General Meeting Refers to General Meeting of Zhejiang Sanhua Intelligent Controls Co. Ltd.The Board of Directors Refers to The Board of Directors of Zhejiang Sanhua Intelligent Controls Co. Ltd.The Board of Supervisors Refers to The Board of Supervisors of Zhejiang Sanhua Intelligent Controls Co. Ltd.Yuan Refers to RMB

5Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section II Corporate Profile and Key Financial Indicators

I. Corporate Information

Stock abbreviation Sanhua Intelligent Controls Stock code 002050

Former stock abbreviation (if

Sanhua Co.any)

Stock Exchange where the

shares of the Company are Shenzhen Stock Exchange

listed

Name of the Company in浙江三花智能控制股份有限公司

Chinese

Abbr. of the Company name三花智控

in Chinese (if any)

Name of the Company in

ZHEJIANG SANHUA INTELLIGENT CONTROLS CO. LTD.English (if any)

Abbr. of the Company name

SANHUA

in English (if any)

Legal representative Zhang Yabo

II. Contacts and Contact Information

Board Secretary Securities Affairs Representative

Name Hu Kaicheng Wang Yutong

Office building in Sanhua Industrial Park No. Office Building in Sanhua Industrial Park No.Address 289 12th Baiyang Street Qiantang New 219 Woxi Avenue Chengtan Street

District Hangzhou Zhejiang Xinchang Shaoxing Zhejiang

Tel. 0571-28020008 0575-86255360

Fax 0571-28876605 0575-86563888-8288

E-mail shc@zjshc.com shc@zjshc.com

III. Other Relevant Information

1. Company’s contact information

Whether there is any change in the Company’s registered address office address zip code website or email

address during the reporting period.□Applicable √Not applicable

During the reporting period there were no changes in the Company's registered address the address of the

Company's office and its postal code the Company's website or e-mail address. Please refer to the 2023 Annual

6Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Report for details.

2. Information disclosure and place of the report

Whether there is any change in information disclosure and place of the report during the reporting period.□Applicable √Not applicable

During the reporting period there were no changes in the stock exchange website media and website for disclosing

the semi-annual report as well as the location of the Company's semi-annual report. Please refer to the 2023 Annual

Report for details.

3. Other relevant information

Whether other relevant information has changed during the reporting period

□Applicable √Not applicable

IV. Key Accounting Information and Financial Indicators

Whether the Company performed a retrospective adjustment or restatement of previous accounting data

□Yes √No

Corresponding Period of Last

Current Reporting Period YoY Change (%)

Year

Total Revenue (RMB) 13676072161.08 12528920625.59 9.16%

Net Profit Attributable to

Shareholders of the Listed 1514515444.75 1394760848.85 8.59%

Company (RMB)

Net Profit Attributable to

Shareholders of the Listed

Company after Deducting 1526827093.52 1467390266.69 4.05%

Non-recurring Gains and

Losses (RMB)

Net Cash Flow Generated

from Operational Activities 1161629876.17 1718673593.61 -32.41%

(RMB)

Basic Earnings per Share

0.400.392.56%

(RMB/Share)

Diluted Earnings per Share

0.400.392.56%

(RMB/Share)

Weighted Average ROE 8.32% 10.17% -1.85%

At the End of the Current

At the End of Last Year YoY Change (%)

Reporting Period

Total Assets (RMB) 33100790488.42 31890584773.41 3.79%

Net Assets Attributable to

Shareholders of the Listed 18042163085.12 17894403984.79 0.83%

Company (RMB)

7Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

V. Differences in Accounting Data between Domestic and Overseas Accounting Standards

1. Difference in net profits and net assets of this financial report between International Financial Reporting

Standards and China Accounting Standards

□ Applicable √ Not applicable

There is no difference in net profits and net assets of this financial report between International Financial

Reporting Standards (IFRS) and China Accounting Standards in the reporting period.

2. Difference in net profits and net assets of this financial report between Overseas Accounting Standards

and China Accounting Standards

□ Applicable √ Not applicable

There is no difference in net profits and net assets of this financial report between Overseas Accounting Standards

and China Accounting Standards in the reporting period.VI. Items and Amounts of Non-recurring Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Items Amount Note

Gains or Losses from Disposal of Non-

current Assets (Including the Write-off -6146341.57

for the Accrued Impairment of Assets)

Government grants recognised in the

current period's profit or loss (except for

government grants that are closely

related to the Company's normal business

51359679.62

operations in line with national policies

and in accordance with defined criteria

and have a continuing impact on the

Company's profit or loss)

In order to avoid raw material price risk

and prevent exchange rate risk the

Company and its subsidiaries carried out

derivatives business including futures

contracts and foreign exchange forward

contracts etc. From January to June

2024 futures gained RMB 13.1419

Gains and losses from changes in fair

value of financial assets and liabilities million and forward loss was RMB

held by non-financial corporations and 76.0077 million and from January to

gains and losses from the disposal of June 2023 futures gained RMB 4.3452

-62865867.03

financial assets and liabilities except for million and forward loss was RMB

effective hedging operations related to 137.708 million. Therefore the amount

the Company's normal business

of non-recurring profit and loss items in

operations

the first half of the two years generated

large fluctuations. Meanwhile the

exchange gain from January to June

2024 was RMB42.0242 million and the

exchange gain from January to June

2023 was RMB194.1929 million.

According to "Interpretative

8Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Announcement No. 1 on Information

Disclosure of Companies Issuing Public

Securities - Non-recurring Gains and

Losses" exchange gains and losses are

recurring profit and loss items and

futures forward gains and losses are

non-recurring profit and loss items.Non-operating Revenue and

1932406.50

Expenditures Other Than the Above

Other Gains and Losses Items that Fit in

the Definition of Non-recurring Gains 1520214.66

and Losses

Less: Impact of Income Tax -3260821.02

Impact of Minority Equity (after

1372561.97

tax)

Total -12311648.77

Details of other gains and losses items that meet the definition of non-recurring gains and losses:

□Applicable √ Not applicable

The Company has no circumstances of other gains and losses items that meet the definition of non-recurring gains

and losses.The reasons for the non-recurring gains and losses items defined or listed in the Explanatory Announcement No. 1

of Information Disclosure of Listed Companies – Non-recurring Gains and Losses are defined as recurring gains

and losses items.□Applicable √ Not applicable

In the reporting period the Company did not define any non-recurring gains and losses items defined and listed in

the Explanatory Announcement No. 1 of Information Disclosure of Listed Companies – Non-recurring Gains and

Losses as recurring gains and losses items.

9Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section III Management’s Discussion and Analysis of Operations

I. The Principal Business of the Company during the Reporting Period

1. Main business operations

The Company adheres to the "Dedication and Leadership Innovation and Surpassing" business path take the

research and application of heat pump technology and thermal management system products as the core focuses on

the development of environmental thermal management solutions for heat and cold conversion and intelligent

temperature control commits to specialized operations in the fields of building HVAC electrical equipment and

thermal management of NEVs. According to the different stages and characteristics of strategic and mature business

development the Company's business is mainly divided into refrigeration and air conditioning electrical

components business and automotive components business. Refrigeration and air conditioning electrical

components business is committed to building HVAC electrical equipment specialized operation the main products

include Four-way Reversing Valve Electronic Expansion Valve Solenoid Valve Microchannel Heat Exchanger

Omega Pumps etc. which widely used in air conditioning refrigerators cold chain logistics dishwashers and other

fields; Automotive components business focuses on in depth research in the field of automotive thermal

management the main products include Thermal Expansion Valve Electronic Expansion Valve Electronic Water

Pump New Energy Vehicle Thermal Management Integrated Modules etc. widely used in both NEVs and ICVs.There were no changes in the Company's principal business and business model during the reporting period.

2. Industry development

(1) Refrigeration and air conditioning electrical components industry

With the global trend of environmental protection and carbon reduction the proposal of China's "dual carbon"

goals and the improvement of intelligent refrigeration and air conditioning equipment and energy efficiency

standards there is a new demand for the refrigeration and air conditioning electrical components industry around

the world bringing new market space and value increment. As the leader in refrigeration and air conditioning control

components the Company with years of manufacturing experience leading technology and extensive and deep

cooperation with customers will adapt to market changes seize opportunities and develop steadily.

(2) Automotive components industry

In recent years the development of NEVs worldwide has continued to grow rapidly becoming an unstoppable

trend. NEVs from different technical approaches have put forward new requirements for automotive thermal

management products which are becoming more technology intensive and capital intensive. The Company has

been in the field

of automotive thermal management since its early years with profound technical accumulation and widespread

customer recognition. It has entered subsystems and components from automotive thermal management components

and has now become an important partner for customers such as BYD Volvo Geely Valeo Mahler Volkswagen

Mercedes Benz BMW Toyota General Motors Li Auto NIO etc.

3. Industry status

The Company is the world's largest manufacturer of refrigeration control components and the world's leading

10Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

manufacturer of automotive thermal management system control components. "Sanhua" refrigeration intelligent

control components have become a world-famous brand and a strategic partner of many automobile enterprises and

air-conditioning refrigeration appliance manufacturers in the world. The Company takes improving energy

efficiency level of various end products as its responsibility leading the global transformation of energy-saving and

environmental protection products. After more than 30 years of development the Company has established a leading

position in the global market of refrigeration and automotive thermal management. The market share of the

Company's Electronic Expansion Valve Four-way Reversing Valve Solenoid Valve Microchannel Heat

Exchanger Automotive Electric Expansion Valve Thermal Management Integrated Module for new energy vehicle

Omega Pump ranks first globally. The market share of the Company's Service Valve Automotive Thermal

Expansion Valve and Receiver Drier is in the leading position in the world.II. Core Competitiveness Analysis

1. Clear strategic layout

The Company adheres to the "Dedication and Leadership Innovation and Surpassing" business path takes the

research and application of heat pump technology and thermal management system products as the core firmly

grasps the development theme of energy conservation environmental protection and intelligent control upgrades

from "mechanical parts development" to "system control technology solution development of electronic control

integration". The Company’s products series are expanded from household A/C and refrigerator components to the

field of commercial A/C and commercial refrigeration and extending to the direction of inverter control technology

and system integration and upgrading. Meanwhile after the injection of automotive components business it gives

full play to the synergy effect with the original business continues to deepen the research and development of new

energy vehicle thermal management system components and actively explores the deeper application of thermal

management components and subsystems in the automotive field so as to provide global customers with

competitive environmental intelligent control solutions.

2. Technology leading customer oriented

As a national high-tech enterprise the Company has always adhered to the technological route of independent

development and innovation. For decades it has focused on the field of intelligent control and vigorously cultivated

core technologies with independent intellectual property rights. It has been authorized with 3966 patents both

domestic and abroad including 1975 invention patents. The Company has established a comprehensive multi-

disciplinary R&D team for product development and technical research and established a matrix R&D

organizational structure. Utilizing the model of product development driven by technological research we can

promote innovation. Meanwhile a technical expert committee has been established to guide and manage

technological development. All products services and quality of the Company take meeting the needs of customers

as the first priority.

3. Quality assurance scale economy effect

The Company's products cover refrigeration A/C electrical components and automotive components industry. The

market share of the Company's Electronic Expansion Valve Four-way Reversing Valve Solenoid Valve

Microchannel Heat Exchanger Automotive Electric Expansion Valve Thermal Management Integrated Module for

new energy vehicle Omega Pump ranks first globally. The market share of Service Valve Automotive Thermal

Expansion Valve and Receiver Drier is in the leading position in the world. The Company has established a complete

and strict quality assurance system achieved ISO9001 IATF16949 QC080000 quality system certification. The

11Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Company won the National Quality Award Zhejiang Quality Award National Technological Innovation

Demonstration Enterprise and won the high comments from JCI Daikin Carrier Midea Gree Haier Toyota Benz

Volkswagen Valeo and other well-known enterprises at home and abroad.

4. Advantages of global marketing network and production base

Since the 1990s the Company has focused on expanding the international market and has established overseas

subsidiaries in Japan South Korea Singapore the United States Mexico Germany and other places to build a

global marketing network. At the same time it has established overseas production bases in the United States

Poland Mexico Vietnam Thanland India and other places. And in practice we have trained a number of

management talents who can meet the needs of business development in different countries and regions.III. Main Business Analysis

Overview

In the first half of 2024 the world faced challenges such as high interest rates and geopolitical conflicts but

economic growth stabilised growth indicators in major economies such as the U.S. and Europe are picking up;

China's economy operated steadily domestic demand continued to recover and economic fundamentals were

positive in the long term. At the company level refrigeration and air conditioning electrical components business

benefited from the consumer goods trade-in policy and global warming and other favourable support the global

market share has been further consolidated and enhancedand there is a steady growth in performance; Automotive

components business benefited from the trade-in subsidies auto finance policy relaxation etc. with the

development of the NEVs the orders continue to release empowering the performance of faster growth.During the reporting period the company achieved revenue of 13.676 billion yuan up 9.16% year-on-year; net

profit attributable to shareholders of listed company 1.515 billion yuan up 8.59% year-on-year. According to

products the revenue of refrigeration and air conditioning electrical components business was RMB 8.279 billion

up 7.43% year-on-year; the revenue of automotive components business was 5.397 billion yuan up 11.91% year-

on-year.

1. Continuously update and expand the business layout with a view to improving the quality of the business

(1) Refrigeration and air conditioning electrical components business

In the first half of 2024 in addition to maintaining the market share of the leading products the Company is

committed to increasing the market share of high technical requirements iterative product the new-generation

products and promoting the industrialisation of new products to create incremental business. In terms of customer

expansion the company consolidates the orders of core customers while expanding the layout of new regional

customers. In terms of technology development the company grows together with the market to improve the quality

and strengthen the cost control and increase R&D in less copper copper-free products. In terms of patent

construction the company focuses on key product patents and takes patent protection as the backing of product

innovation. In terms of operation management the company promotes the self-research of key manufacturing

equipment lean production digital transformation and other activities to reduce costs and increase efficiency. In

addition the company continues to increase the globalisation of manufacturing R&D layout and talent team

building in Vietnam Mexico and Thailand factories to strengthen the company's global competitiveness.

(2) Automotive components business

The competition in the NEVs market has been intensifying the company consolidates the market position through

new customer expansion technology development and refined operation to achieve the leadership of technology

12Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

and cost. In terms of customer development the Company has increased the development of new projects and

business opportunities based on the demonstration effect of benchmark customers. In terms of technology

development the company established the product power model to continuously improve product power especially

in the promotion of intelligent standardised and modular design of integrated components. In terms of operation

management further promoted information technology established the global cockpit for automotive components

business's operations and conducted data management with visual reports. In terms of global layout the Company

has continued to build plants in Mexico and Poland and plants in Zhongshan Shenyang Tianjin and Shaoxing

Binhai China as well as new production capacity to implement the global supply map.

(3) Strategic Emerging Business

The development of artificial intelligence is rising and the biomimetic robot industry is changing rapidly which is

expected to become a revolutionary industry after computers smartphones and NEVs with greater development

potential and wider application prospects. In the field of biomimetic robots the company focuses on

electromechanical actuators and cooperates with customers to carry out the full range of product research and

development trial production and iteration and delivery of samples and has been highly evaluated by customers.In terms of energy storage the company closely tracked the development trend of energy storage system technology

focusing on the main models recognizing by the head customers; focusing on the medium and long-term

development potential of the energy storage industry and the matching of the company's core technology laying the

foundations for the subsequent development of technically superior products.

2. Sound corporate governance and incentivising core staff

The Company has implemented the 2024 Restricted Share Incentive Plan and the 2024 Stock Appreciation Right

Incentive Plan to encourage core talents to continuously improve their performance level and output and empower

the Company's performance growth. At the same time the Company continued to strengthen and improve the

construction of internal control system standardise the operation of the three meetings and communicate with

investors through the Interactive Ease platform investor call answering on-site reception and other diversified ways.

3. Help Carbon Neutral Establish Clean and Low Carbon Energy System

In terms of optimising energy structure the company has accelerated the application of photovoltaic and energy

storage in the industrial park to reduce carbon emissions. In terms of low-carbon product design and development

the company measures and evaluates the environmental impact of products at all stages of their life cycle and

promotes the design of environmentally friendly products.

4. Proposed issuance of Global Depositary Receipts (GDRs) and listing on the Swiss Stock Exchange

In order to further promote the globalization strategy the Company continue to promote the GDR project. The

raised funds are intended to expand the Company's global business map strengthen the ability of the production

and manufacturing of refrigeration control components new energy thermal management and robot

electromechanical actuator businesses improve the Company's R&D investment and technological innovation and

enhance the Company's intelligent manufacturing digitization and informatization level.Changes in key financial data over the corresponding period of last year

Unit: RMB

Current Reporting Corresponding Period

YoY Change (%) Note of Change

Period of Last Year

13Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Mainly due to the

increase of the market

share of the

refrigeration and air-

conditioning control

components the

Total Revenue 13676072161.08 12528920625.59 9.16%

development of

automotive

components industry

to promote the solidly

development of the

company's sales.Mainly due to the sales

Cost of sales 9920390318.93 9308660916.27 6.57% growth drives cost

increases

Selling Expenses 297002465.74 264131730.27 12.44%

Mainly due to the

increase in staff salary

Administrative

887999303.50 619856574.65 43.26% and intermediary

Expenses

service fees during the

period.Mainly due to lower

Financial Expenses -51781709.55 -151660370.01 65.86% foreign exchange gains

during the period

Mainly due to higher

income tax expense as

Income Tax Expenses 332296145.99 263470197.45 26.12%

a result of higher

profits

R&D Investments 632611907.96 580269632.04 9.02%

Mainly due to the

Net Cash Flows from increase in staff salary

1161629876.171718673593.61-32.41%

Operating Activities and cash paid for taxes

during the period.Mainly due to the

receipt of 546 million

Net Cash Flows from yuan in compensation

-1427543077.19-990771136.32-44.08%

Investment Activities for the land storage in

Xialiquan in the same

period last year.Mainly due to the

increase in cash paid

Net Cash Flows from

-738938657.56 -877206246.29 15.76% for dividend

Financing Activities

distribution during the

period

Net Increase in Cash

-1049395331.86271578.55

and Cash Equivalents

Whether there is significant change in Company’s profit structure or profit source during the reporting

period

□ Applicable √ Not applicable

There is no such case during the reporting period

14Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Revenue structure

Unit: RMB

Current Reporting Period Corresponding Period of Last Year

YoY Change (%)

Proportion to total Proportion to total

Amount Amount

revenue revenue

Total Revenue 13676072161.08 100% 12528920625.59 100% 9.16%

Classified by Industry

General

Equipment

13676072161.08100.00%12528920625.59100.00%9.16%

Manufacturing

Industry

Classified by Product

Refrigeration A/C

Electrical 8278700304.27 60.53% 7706021104.32 61.51% 7.43%

Components

Automotive

5397371856.8139.47%4822899521.2738.49%11.91%

Components

Classified by Region

Domestic Sales 7826338533.84 57.23% 6776150179.62 54.08% 15.50%

Overseas Sales 5849733627.24 42.77% 5752770445.97 45.92% 1.69%

Industries products or regions accounting for more than 10% of the Company’s operating revenue or

operating profit

√ Applicable □ Not applicable

Unit: RMB

YoY Change

YoY Change YoY Change

Gross (%) of

Revenue Cost of sales (%) of Cost of (%) of gross

margin operating

sales margin

revenue

Classified by industry

General

Equipment

13676072161.089920390318.9327.46%9.16%6.57%1.76%

Manufacturing

Industry

Classified by product

Refrigeration

A/C Electrical 8278700304.27 5997251947.03 27.56% 7.43% 4.76% 1.85%

Components

Automotive

5397371856.813923138371.9027.31%11.91%9.47%1.62%

Components

15Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Classified by region

Domestic Sales 7826338533.84 5750715247.13 26.52% 15.50% 12.84% 1.73%

Overseas Sales 5849733627.24 4169675071.80 28.72% 1.69% -1.02% 1.95%

In the case that the Company's main business data statistics are adjusted during the reporting period the

Company's main business data of the latest reporting period were adjusted according to the statistics at the

end of the last reporting period

□ Applicable √ Not applicable

IV. Non-Main Business Analysis

√Applicable □Not applicable

Unit: RMB

Amount Proportion to net profit Note of Change Sustainability

Floating gains/losses

on futures derivatives

floating gains/losses on

Investment Income -11680068.63 -0.63% exchange rate No

derivatives gains on

bank financial

products etc.Floating gains/losses

on exchange rate

derivatives floating

Gains and Losses from

-43077568.28 -2.32% gains/losses on futures No

Change of Fair Value

derivatives floating

gains/losses on bank

financial products etc.No requirement

payment profit on

Non-operating compensation and

4559030.63 0.25% No

Revenue liquidated damages

profit on retirement of

fixed assets etc.Fixed asset retirement

losses compensation

Non-operating

8527704.42 0.46% and liquidated No

Expenditures

damages donations

etc.Credit Impairment

-76800982.89 -4.14% Bad debt losses No

Loss

Loss on provision for

Assets Impairment inventory decline

-44434103.33 -2.40% No

Loss impairment loss on

goodwill etc.Gains on Disposal of Gain on disposal of

-245261.28 -0.01% No

Properties fixed assets

Government subsidies "Employment of

VAT refund for persons with

"placement of disabled disabilities" VAT

Other Gains 128552012.14 6.93%

persons in refund VAT refund for

employment" VAT software products in

refund for software excess of the tax

16Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

products in excess of burden and VAT credit

the tax burden VAT are sustainable but the

credits etc. rest are not sustainable

V. Analysis of Assets and Liabilities

1. Material changes of assets

Unit: RMB

At the End of Current Reporting

At the End of Last Year

Period Note of YoY Change

significant

Percentage of Percentage of (%)

Amount Amount change

total assets total assets

Cash and bank 5222883432. 6584684683.

15.78%20.65%-4.87%

balance 16 93

Accounts 7152843602. 5773991481.

21.61%18.11%3.50%

receivable 65 22

4509575295.4600729378.

Inventories 13.62% 14.43% -0.81%

7319

Real estate held

7588431.930.02%8165805.310.03%-0.01%

for investment

Long-term

equity 37094293.30 0.11% 37924431.29 0.12% -0.01%

investment

8018985493.7730363778.

Fixed assets 24.23% 24.24% -0.01%

6782

Construction in 2746629632. 2036326757.

8.30%6.39%1.91%

progress 47 72

Assets with

273457356.510.83%313254745.530.98%-0.15%

right of use

Short-term 1398200202. 1212150378.

4.22%3.80%0.42%

borrowings 82 85

Contractual

62714790.240.19%51788802.030.16%0.03%

liabilities

Long-term 2220000000. 1030801111.1

6.71%3.23%3.48%

borrowings 00 3

Lease liabilities 198342644.46 0.60% 221295481.86 0.69% -0.09%

Notes 2675326003. 2476839413.

8.08%7.77%0.31%

receivable 36 89

3520145951.3416711594.

Notes payable 10.63% 10.71% -0.08%

3464

Accounts 5033866555. 4449940359.

15.21%13.95%1.26%

payable 98 81

Non-current

1440093253.

liabilities due 292569239.45 0.88% 4.52% -3.64%

93

within one year

17Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

2. Main overseas assets

√Applicable □ Not applicable

Proportion

Whether

Control of overseas

Assets there is

Content of Operation measures to Income assets in

Formation Scale Location significant

Assets Mode ensure (RMB) net assets

(RMB) impairment

asset safety of the

risk

Company

R&D

Sanhua Financial

manufactur

International monitoring

Equity ing sales

Inc. (the 31790215 commissio 10477357

investmen The U.S. and No

U.S.) 85.48 ning of 3.44

t investment

(consolidate external

manageme

d) audits

nt

Sanhua Financial

Manufactur

International monitoring

Equity ing sales -

Singapore 48538704 commissio

investmen Singapore investment 82001316. No

Pte Ltd 93.24 ning of

t manageme 76

(consolidate external

nt

d) audits

3. Assets and liabilities measured at fair value

√ Applicable □ Not applicable

Unit: RMB

Profit and

Cumulative

loss of fair Impairment

changes in Current Current

Opening value accrued in Other Closing

Items fair value purchase sale

balance change in the current changes balance

included in amount amount

the current period

equity

period

Financial Assets

1. Held-

for-trading

financial

assets 62500000 52500000 10000000

(Excluding 0.00 0.00 0.00

Derivative

Financial

Assets)

2.Derivativ -

22636112.5050000.010931764.

e Financial 16754348.

68044

Assets 24

Financial -

22636112.62500000525000005050000.011093176

Assets 16754348.

680.000.0004.44

Subtotal 24

-

22636112.62500000525000005050000.011093176

Total 16754348.

680.000.0004.44

24

-

Financial 14219110. 26184260. 36903370.

3500000.0

Liabilities 02 29 31

0

Other changes

1. Other changes in financial assets represent the purchase of options and the recognition of option expense of

5.05 million yuan.

2. Other changes in financial liabilities relate to the fulfillment of performance commitments by minority

18Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

shareholders of subsidiaries amounting to 3.5 million yuan.Whether there were any material changes on the measurement attributes of major assets of the Company

during the reporting period:

□ Yes √ No

4. Limitation of asset rights as of the end of reporting period

Items Book balance Book value Reason for restriction

Currency funds 50256461.32 50256461.32 Margin deposits

Notes receivable 1866025559.72 1862419818.56 Pledge financing

Electronic debt instruments that

have been transferred for

Accounts Receivable 62493748.40 59369060.98

payment or factored for financing

but not yet matured

Total 1978775769.44 1972045340.86

VI. Analysis of Investments

1. Overview

√Applicable □ Not applicable

Investment during the Reporting Period Investment over the Corresponding

Fluctuation Rate (%)

(RMB) Period of Last Year (RMB)

267922553.15145114207.2584.63%

2. Significant equity investment during the reporting period

□Applicable √Not applicable

3. Significant non-equity investment during the reporting period

□Applicable √ Not applicable

4. Financial asset investment

（1）Securities Investments

□ Applicable √ Not applicable

No securities investments during this reporting period.

19Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（2）Derivatives Investments

√Applicable □ Not applicable

1）Derivative investments for hedging purposes during the reporting period

√Applicable □ Not applicable

Unit: RMB in 10 thousand

Ratio of

closing

Gains and

Accumulated Purchase amount to

losses from Sales amount

Type of fair value amount the

Opening changes in during the Closing

derivatives changes during the company's

amount fair value in reporting amount

investment recognized in reporting net assets at

the current period

equity period the end of the

period

reporting

period

Futures

contracts

foreign

exchange

contracts

Total

Accounting

policies and

specific

accounting

principles for

hedging

business

during the

reporting

period as

well as No

explanations

on whether

there have

been

significant

changes

compared to

the previous

reporting

period

Explanation

of actual

gains and

losses during

the reporting

period

Explanation

of hedging

effectiveness

Capital

Own funds

source of

20Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

derivatives

investment

Risk analysis

and control

measures

(including

but not

limited to

market risk

In order to prevent raw material price risks and exchange rate risks the Company and its subsidiaries conducted

liquidity risk

derivative instruments business including futures instruments and foreign exchange instruments. The Company

credit risk

and its subsidiaries have strictly implemented the relevant provisions of the Measures for the Operation and

operational

Management of Futures Hedging Business and the Management System for Foreign Exchange Hedging Business.risk legal

risk etc.) of

holding

derivatives

during the

reporting

period

Change of

market price

or fair value

of invested

derivatives

during the

reporting

period;

specific

methods

related

assumptions

and

parameter

setting of the

derivatives’

fair value

analysis

should be

disclosed

Litigation (if

N/A

applicable)

2) Derivatives investments for speculative purposes during the reporting period

□ Applicable √ Not applicable

No derivative investments for speculative purposes during this reporting period.

21Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

5. Use of raised funds

√ Applicable □ Not applicable

（1） Overall use of raised funds

√ Applicable □ Not applicable

Unit: RMB in 10 thousand

Proporti

on of

Total accumul

Total amount Accumul ated

Raised

amount Accumul of raised ated amount Total

funds

Total Net of raised ated funds amount of raised amount Raised

has not

amount amount funds amount with use of raised funds of funds has

Year Method been

of raised of raised invested of raised alteratio funds with use unused not been

used for

funds funds in the funds n during with use alteratio raised used

two

report invested the alteratio n to the funds

years

period reporting n total

period amount

of raised

funds

Deposited

in the

Public 298753. 11542.5 230218. special

202130000073970.8

offering 1 8 31 account

for fund-

raising

298753.11542.5230218.

Total -- 300000 73970.8 --

1831

Description of Overall Usage of Raised Funds

(1) Actual amount of funds raised and time of fund arrival

Pursuant to the approval of the China Securities Regulatory Commission by way of Securities Regulatory Permit [2021] No. 168

the Company made a public offering of 30 million convertible corporate bonds (the "Sanhua Convertible Bonds") with the nominal

value of RMB100 each and the total issuance amount of 3 billion yuan raising the total of 3 billion yuan and the net proceeds of

RMB2987531008.41 after deduction of the issuance costs of RMB12468991.59 in 2021 June. The aforesaid arrival of the

proceeds has been verified by Tianjian Accounting Firm which has issued the Verification Report (Tianjian Verification [2021] No.

277).

As one of the subjects for the implementation of the investment project is Zhejiang Sanhua Commercial Refrigeration

Co.(hereinafter referred to as Sanhua Commercial) the Company has allocated RMB1487 million of the proceeds to Sanhua

Commercial by way of capital increase.

(2) Use and balance of issue proceeds

22Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Amount (Unit: RMB in 10

Items Index

thousand)

Net amount of funds raised in the current period A 298753.10

Project investment B1 218675.73

Accumulated amount as of the

beginning of the period

Net income from raised funds B2 5123.08

Project investment C1 11542.58

Amount incurred in this

reporting period

Net income from raised funds C2 312.92

Project investment D1=B1+C1 230218.31

Accumulated amount by the

end of the period

Net income from raised funds D2=B2+C2 5436.00

Calculated balance of raised funds E=A-D1+D2 73970.80

Actual balance of raised funds F 73970.80

Difference G=E-F 0.00

（2） Promised fund-raising projects

√ Applicable □ Not applicable

Unit: RMB in 10 thousand

Committ

Investme

ed

Accumul nt Whether

investme Total

Whether ative progress Whether feasibilit

nt committ Total Date of Benefits

project Investme investme at the expected y of

projects ed investme asset achieved

has been nt in the nt at the end of benefits project

and investme nt after ready for in the

(or current end of the have has

allocatio nt of alteratio intended current

partially) year the period been changed

n of raised n (1) use year

altered period (%) achieved significa

over- funds

(2) (3)=(2)/( ntly

raised

1)

funds

Committed investment projects

Construc

tion

project

of

commer

cial

refrigera

tion and

air

116664. May 31

conditio No 148700 148700 7336.78 78.46% N/A No

932025

ning

intellige

nt

control

compone

nts with

an

annual

output of

23Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

65

million

sets

Technica

l

transfor

mation

project

of high-

efficienc

y and

energy-

saving

refrigera

tion and 32279.9 May 31

Yes 69800 69800 4205.8 46.25% N/A No

air 8 2025

conditio

ning

control

compone

nts with

an

annual

output of

50.5

million

sets

Supplem

entary of

No 81500 81500 81273.4 99.72% N/A No

working

capital

Subtotal

of

committ

11542.5230218.

ed -- 300000 300000 -- -- -- --

831

investme

nt

projects

Ultra-purchase funds invested

No

11542.5230218.

Total -- 300000 300000 -- -- -- --

831

（1）The "Annual Production Capacity of 50.5 Million Sets of Energy-Efficient Refrigeration and Air Conditioning

Circumst Control Components Technology Reform Project" is a technology reform and upgrading project which is directly

ances implemented by the Company and included in the integrated management and unified accounting. The actual benefits

and of the investment project are not expected to be separately accounted for. According to the feasibility study report of the

reasons project the project is expected to achieve sales revenue (including tax) of RMB1980 million in a normal year after the

project reaches production which will better enhance the operating results of the "energy-efficient refrigeration control

for not

components business".reaching "Supplementary working capital" does not directly generate economic benefits and cannot be the subject of independent

the economic analyses the estimated benefits have not been measured and the actual benefits cannot be separately

planned accounted.progress

or (2)As approved by the Board of Directors of the Company on August 28 2024 the date on which the "50.5 million sets

of high-efficiency energy-saving refrigeration and air-conditioning control components technical transformation

expected

project" will reach its intended state of use will be postponed from August 2024 to May 2025. Other elements of the

income project remaining unchanged. The specific reasons for the extension of the project are as follows: At present the new

by production capacity of "50.5 million sets of high-efficiency energy-saving refrigeration and air-conditioning control

specific components technical transformation project" has been gradually released during the construction period and the project

project construction work in progress has been gradually solidified. The Company combined with the existing product structure

and market trends the fund-raising funds were adopt to prudent use of reasonable investment strategy. The Company

24Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

in some of the gold processing equipment some parts of the equipment purchase commissioning and other aspects of

the process has been delayed to a certain extent so do not have the conditions for the completion of the project.Considering the actual construction progress of the current project and the subsequent need to carry out equipment

debugging commissioning and equipment acceptance work. For the principle of prudent investment the Company will

extend the fund-raising project to reach the intended state of use date to May 2025.Significa

nt

changes

in the No

feasibilit

y of

projects

Amount

usage

and use

progress N/A

of over-

raised

Funds

Change

in

impleme

ntation

location

of

N/A

investme

nt

projects

of

Raised

Funds

Adjustm

ent to

impleme

ntation

method

of

N/A

investme

nt

projects

of

Raised

Funds

Advance

investme

nt and

substitut

ion of

In 2021 the Company substituted the initial investment amount of 179.3857 million yuan with raised funds

projects

invested

with

raised

funds

Tempora

ry N/A

supplem

25Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

ent of

working

capital

with idle

raised

funds

The

amount

and

reasons

of the

balance

N/A

of raised

funds in

the

project

impleme

ntation

Applicat

ions of

unused Deposited in the special account for raised funds and the subscription of large amount certificates of deposit.raised

funds

Problem

s or

other

situation

s in the

N/A

use and

disclosur

e of

raised

funds

（3） Changes of raised funds

□ Applicable √ Not applicable

There was no change of raised funds in the reporting period.VII. Disposal of Significant Assets and Equity

1. Disposal of significant assets

□ Applicable √ Not applicable

During the reporting period there was no disposal of significant assets

2. Sale of significant equity

□ Applicable √ Not applicable

VIII. Analysis of Major Subsidiaries and Investees

√ Applicable □ Not applicable

26Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Information about major subsidiaries and investees that contribute above 10% of the Company’s net profit

Unit：RMB

Company Company Principal Registered Operating Operating

Total assets Net assets Net profit

name type business capital revenue profit

Manufactur

Zhejiang

ing and

Sanhua

sales of

Commercia

refrigeratio

l 1655.29 30875159 23142343 11522767 24937041 21659362

Subsidiary n and air

Refrigerati million 10.27 43.52 90.53 6.90 6.05

conditionin

on Co. Ltd

g electrical

(Consolidat

component

ed)

s

Sanhua Manufactur

(Hangzhou ing and

) Micro sales of

Channel refrigeratio

2438707413484190112677971089192394949178.

Heat Subsidiary n and air 360 million

79.0002.6050.396.4708

Exchanger conditionin

Co.Ltd. g electrical

(Consolidat component

ed) s

Sales of

refrigeratio

Zhejiang

n and air - -

Sanhua 49993585 13419397 33776786

Subsidiary conditionin 50 million 50683366. 38120072.Trading 13.39 2.48 76.80

g electrical 71 64

Co. Ltd.component

s

Zhejiang

Sanhua Manufactur

Automotiv

ing and

e 2160 12425984 69090058 53973718 83203939 67267042

Subsidiary sales of

Component million 003.84 75.31 56.81 1.74 7.81

s Co. Ltd automotive

(Consolidat parts

ed)

Manufactur

ing and

sales of

Sanhua refrigeratio

Internation

n and air 37.55

al Inc. 31790215 12631543 27288086 12517706 10477357

Subsidiary conditionin million

(USA) 85.48 23.73 73.34 2.09 3.44

(Consolidat g electrical USD

ed) component

investment

manageme

nt

Manufactur

ing and

Sanhua

Internation sales of

al refrigeratio 175.151245 - -

485387041187394537353707

Singapore Subsidiary n and air 4 million 75125814. 82001316.Pte. Ltd. 93.24 91.49 85.72 conditionin USD 01 76

(Consolidat g electrical

ed)

component

investment

27Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

manageme

nt

Information about obtaining and disposal of subsidiaries during the reporting period

√ Applicable □ Not applicable

Methods of acquiring and disposing Impact on overall production operation

Company name

subsidiaries during the reporting period and performance

Zhejiang Sanhua Intelligent Drive Co. New investment No significant impact

Zhejiang Shengtai Paper Co. New investment No significant impact

SANHUATROY PROPERTY

New investment No significant impact

MANAGEMENTLLC

American Tubing International Leverage

Liquidation and cancellation No significant impact

Lender LLC

IX. Structural Entities Controlled by the Company

□ Applicable √ Not applicable

X. Risks and Countermeasures of the Company

(1) Risk of price fluctuation of raw materials

The raw materials needed by the Company are copper and aluminum which account for a large proportion of the

cost composition of the products. Therefore the fluctuation of the market price of raw materials will bring large

cost pressure to the Company. The Company will reduce the adverse impact of raw material price fluctuations

through the establishment of linkage pricing mechanism hedging operation of commodity futures timely

negotiation with customers and developing less copper and copper-free products to reduce the dependence on raw

materials with high price volatility.

(2) The risk of rising labor cost

The labor costs are rising year by year which reduces the profit margin of the Company to a certain extent. In the

future the Company will continue to improve the level of intelligent manufacturing by continuously promoting lean

production process improvement and technical transformation.

(3) Exchange rate fluctuation risks

The Company's export volume is large involving North America Europe Japan Korea and Southeast Asia and

other regions. Due to the changes in regional trade policies the Company's daily operation will be affected. The

Company deals with interregional trade risks through transferring production capacity to foreign countries. In

addition the fluctuation of exchange rate will also have a certain impact on the profit. According to the actual

situation the Company deals with and reduces this risk by means of forward foreign exchange settlement and

establishing overseas production bases in the United States Poland Mexico Vietnam Thailand India and other

places.

28Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

XI. Implementation and enforcement of the "Double Enhancement for Quality and Returns"

action programme

The Company disclosed the announcement of the action programme of "Double Enhancement for Quality and

Returns".□ Applicable √ Not applicable

29Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section IV Corporate Governance

I. Annual General Meeting and Extraordinary General Meetings Convened During the

Reporting Period

1. Annual General Meeting convened during the current reporting period

Proportion of

Meeting Nature participating Convened Date Disclosure Date Disclosure Index

investors

The announcement

of the resolution of

the first

extraordinary

general meeting of

First Extraordinary

Extraordinary shareholders in

General Meeting 17.37% May 6 2024 May 7 2024

General Meeting 2024 No. 2024-

in 2024

028 was published

in China Securities

Journal Securities

Times and

CNINFO.The announcement

of resolutions of

the 2023 annual

general meeting of

2023Annual Annual General shareholders

General Meeting Meeting of 60.96% May 20 2024 May 21 2024 (2024-038) was

of Shareholders Shareholders published in the

Securities Times

Shanghai

Securities Journal

and CNINFO.The announcement

on the resolution

of the second

extraordinary

Second general meeting of

Extraordinary Extraordinary shareholders in

62.34% June 202024 June 21 2024

General Meeting General Meeting 2024 (2024-055)

in 2024 was published in

China Securities

Journal Securities

Times and

CNINFO.

2. Extraordinary general meetings convened at the request of preferred shareholders with resumed voting

rights

□ Applicable √ Not applicable

30Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

II. Changes of directors supervisors and senior management personnel

□ Applicable √ Not applicable

There were no changes in the Company's directors supervisors and senior management during the reporting

period. Please refer to the 2023 Annual Report for details

III. Profit distribution and conversion of capital reserve to share capital during the

reporting period

√Applicable □Not applicable

Bonus share issued per 10 shares (share) 0

Cash dividend per 10 shares (RMB) (tax inclusive) 1.00

Total capital share basis for the distribution proposal (share) 3731414614

Total cash dividend (RMB) (tax inclusive) 373141461.40

Cash dividend amount in other ways (such as share repurchase)

0.00

(RMB)

Total cash dividends (including other ways) (RMB) 373141461.40

Distributable profits (RMB) 1856838772.64

Percentage of cash dividends in the total distributed profit (%) 100%

Cash dividends

Other

Detailed description of profit distribution or capital reserves conversion plan

Based on provisional 3731414614 shares of capital stock[note] cash dividend of RMB 1.00 (tax inclusive) will be distributed to

all shareholders for every 10 shares. The Company will not distribute bonus shares or convert capital reserves to share capital. A

total of RMB 373141461.40 will be distributed and the Company's remaining undistributed profits are carried forward to the

next year.Note: The share capital of the Company is 3732615535 shares of which the number of repurchased shares is 1200921.According to the provisions of the Company Law the shares held by the listed company through the repurchase account do not

enjoy the right to participate in profit distribution or the conversion of capital reserve into share capital

If the total share capital of the Company changes due to the conversion of convertible bonds share repurchase exercise of equity

incentive scheme refinancing and listing of new shares before the implementation of the distribution plan the total distribution

amount shall be adjusted accordingly based on the principle of unchanged distribution proportion.

31Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

IV. The Implementation of an Equity Incentive Plan Employee Stock Incentive Plan or

Other Incentive Plans

√Applicable □Not applicable

1. Equity incentive plan

1. In 2022 the Company launched the 2022 restricted stock incentive plan and share appreciation rights incentive

plan granting 17.58 million shares of restricted stock to 1366 incentive objects and 485000 shares of share

appreciation rights were granted to 41 incentive objects. The granting date of this equity incentive plan is May 31

2022 and the granting price is 10 yuan/share. The listing date of this restricted stock is June 30 2022.

* On June 3 2024 the Company held the twenty-third extraordinary meeting of the seventh session of the Board

of directors and the twentieth extraordinary meeting of the seventh session of the Board of Supervisors respectively

to consider and approve the ''Proposal on the Adjustment of the Repurchase Price of the Restricted Share Incentive

Plan for the Year 2022'' ''Proposal on the Achievement of the Conditions for the Release of the Restricted Shares

during the Second Release of Restricted Shares Period under the Restricted Share Incentive Plan for the Year 2022''''Proposal on the Cancellation of Particular Restricted Shares” “The Resolution on the Adjustment of the ExercisePrice under the 2022 Stock Appreciation Right Incentive Plan” “The Resolution on the Accomplishment of theExercise Conditions for the Second Exercise Period under the 2022 Stock Appreciation Right Incentive Plan” and

“The Resolution on the Cancellation of Certain Stock Appreciation Rights”. The date of listing and circulation of

the shares released from restricted sale was July 1 2024 1313 shareholders were released from restricted sale

5.133 million shares could be released from restricted sale accounting for 0.1375% of the Company's total share

capital at present; the Company plans to repurchase all or part of restricted shares held by 33 ineligibility incentive

recipients of the 2022 Restricted Stock Incentive Plan with the total of 226000 shares the repurchase price of 9.40

yuan / share. The total number of incentive recipients eligible for the exercise of stock appreciation rights was 37

and the number of feasible options was 135000 shares; the Company cancelled all or part of the stock appreciation

rights held by 2 incentive recipients who were ineligible under the 2022 Stock Appreciation Rights Incentive Plan

totalling 8500 shares.* On June 20 2024 the Company held the Second Extraordinary General Meeting of 2024 to consider and approve

the “Proposal on Cancellation of Certain Restricted Shares”. The Company plans to repurchase and cancel all or

part of the restricted shares held by 33 ineligible incentive recipients under the 2022 Restricted stock incentive plan

totalling 226000 shares with the repurchase price of 9.40 yuan/share.

2. In 2024 the Company launched the 2024 restricted stock incentive plan and stock appreciation right incentive

plan granting 24.91 million restricted shares to 1933 incentive objects and 560000 stock appreciation rights to 47

incentive objects. The granting dates of the share incentive plan are May 13 2024 and June 3 2024 and the granting

price is 11.75 yuan/share. The listing date of the restricted shares is June 20 2024.

2. Employee stock ownership plan

□ Applicable √ Not applicable

32Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

3. Other employee incentive schemes

□ Applicable √ Not applicable

33Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section V Environmental and Social Responsibility

I. Significant environmental issues

Whether the Company or the Company’s subsidiaries are critical pollutant enterprises disclosed by National

Environmental Protection Department

√Yes □No

Environmental protection related policies and industry standards

During the reporting period the Company strictly adhered to national environmental protection related laws and

regulations in its daily production and operation such as the Environmental Protection Law the Air Pollution

Prevention and Control Law the Water Pollution Prevention and Control Law the Solid Waste Pollution

Environmental Prevention and Control Law the Environmental Noise Pollution Prevention and Control Law the

Soil Pollution Prevention and Control Law the Environmental Impact Assessment Law etc. The Company strictly

implements national environmental protection related industry standards such as the Electroplating Pollutant

Discharge Standard (GB2190-2008) Comprehensive Air Pollutant Discharge Standard (GB16297-1996)

Comprehensive Wastewater Discharge Standard (GB8978-1996) Emission Standard for Air Pollutants from Boilers

(GB13271-2014) Emission Standard for Pollutants in the Synthetic Resin Industry (GB31572-2015) Unorganized

Emission Control Standard for volatile organic compounds (GB37822-2019) the Electroplating Water Pollutant

Discharge Standard (DB33/2260-2020) in Zhejiang Province and Indirect Emission Limits of Nitrogen and

Phosphorus Pollutants in Industrial Enterprise Wastewater (DB33/887-2013) and Emission Standard for

Environmental Noise at the Boundary of Industrial Enterprises (GB 12348-2008).Administrative permits for environmental protection

Since 2010 the Company has invested in the construction of Meizhu Sanhua Industrial Estate in Xinchang County

and has obtained 25 EIA permits. All the projects have passed. In October 2023 the Company has completed the

re-issuance of the national emission permit.Industry emission standards and specific situations of pollutant emissions involved in production and business

activities

Main Name of

pollutant main

Name of

s and pollutant Distribut Emissio Emissio

Compan Number Total Approve Over

types of s and Emissio ion of n n

y or of emission d total standard

character character n mode emission concentr standard

subsidiar outlets s emission emission

istic istic outlets ation s

y

pollutant pollutant

s s

The

Zhejiang limitatio

Sanhua n of Not

Intellige Waste Sewer * 500mg COD in 62.386 T exceedin

COD 1 North 23.14T

nt water system /L GB8978 /year g the

Controls -1996 standard

Co. Ltd. Integrate

d

34Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Wastewa

ter

Emissio

n

Standard

is

500mg /

L

The

limitatio

n listed

in

DB33/8

Indirect

Zhejiang Emissio

Sanhua n Limits

Not

Intellige Ammoni of

Waste Sewer * 35mg/ 6.262 T exceedin

nt a 1 North Nitrogen 2.31T

water system L /year g the

Controls Nitrogen and

standard

Co. Ltd Phospho

rus

Pollutan

ts from

Industri

al

Wastewa

ter is

35mg / L

The

limitatio

n listed

in

GB1327

Zhejiang 1-2014

Sanhua Emissio Not

Intellige Waste Direct * 50mg/ n 2.15 T exceedin

SO2 1 North 0.11T

nt gas emission m3 Standard /year g the

Controls of Air standard

Co. Ltd Pollutant

s for

Boilers

is

50mg/m

3

Accordi

ng to the

low

Zhejiang Nitrogen

Sanhua emission Not

Intellige Waste Nitrogen Direct * 50mg/ requirem 10.06 T exceedin

1 North 0.46T

nt gas Oxide emission m3 ents of /year g the

Controls local standard

Co. Ltd governm

ent the

limitatio

n of gas-

35Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

fired

boiler is

50mg /

m3

Treatment of pollutants

Adhering to the advanced management concept the Company takes "developing energy-saving and low-carbon

economy creating a green quality environment" as its own responsibility constantly surpasses and becomes an

important creator and contributor of human green quality living environment with limited resources and unlimited

wisdom.

1. Waste water treatment: The Company responded to the construction of "five water treatment" "eliminating

inferior V-type water" and "zero direct discharge of sewage" in the whole province. The Company renovated

the rainwater and sewage outlets in the factory area implemented the separation of rainwater and sewage and

installed cut-off valves and video monitoring equipment at the Company's rainwater discharge outlets and

collected and treated the early rainwater. There are two wastewater treatment stations in the factory. The sewage

treatment stations have been equipped with standardized sewage outlets and set up discharge outlet signs.Online monitoring device solenoid valve flowmeter and card swiping sewage system are installed at the

discharge outlet which has been connected with the environmental protection department. The monitoring

indicators include pH COD total copper total zinc total chromium total nickel and flow. Wastewater treatment:

The Company has entrusted a third-party professional treatment unit for treatment. The discharge indicators of

the Company's internal control wastewater are stricter than the environmental discharge standard. The final

treated wastewater is discharged into the sewage collection pipe network of the industrial zone and sent to

Shengxin sewage treatment plant for retreatment.

2. Waste gas treatment: The Company has acid pickling electroplating waste gas welding dust and other waste

gas. All kinds of waste gas discharge cylinders are equipped with corresponding waste gas treatment devices.The acid pickling and electroplating waste gas absorption and treatment tower is installed with automatic dosing

system and the waste gas is discharged to air after treatment. At the same time in order to win the blue-sky

defense activity the Company carried out low Nitrogen emission transformation of the Company's gas boilers

in accordance with the requirements of relevant official departments in 2019. In 2021 the transformation and

upgrading of VOCs treatment facilities in industrial enterprises have been implemented. At the same time the

process has been improved and the water cleaning is used to replace the organic solvent cleaning so as to

reduce the generation of VOCs. In 2022 the Company carried out an upgrade and transformation of diesel

powered mobile source emissions upgrading from the original National II emission standard to National IV

greatly reducing particulate matter emissions. In 2023 the Company passed the B-level acceptance of air

pollution prevention and control performance of key industry enterprises in Zhejiang Province.

3. Solid waste and soil treatment(surface water): All kinds of hazardous waste of the Company are entrusted to

the third qualified party for disposal the general solid waste with utilization value is recycled the domestic

waste is cleared and transported by the environmental sanitation station and the construction waste is cleaned

and transported by the construction unit. In July 2020 the Company became one of the first "waste free

factories" in Shaoxing. The Company commissioned a third-party testing agency to conduct soil and

36Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

groundwater testing in 2022 and no contamination was found. In 2023 the Company was no longer on the list

of key soil pollution monitoring units.

4. Noise control: The Company's existing main noise is workshop production noise air compressor room waste

gas and waste water treatment equipment noise. Equipment layout is reasonable and trees are planted around

the workshop. Noise at factory meets the standard.

5. The "three wastes" pollution control facilities of the Company are in normal and stable operation. The pollutants

are discharged based on the standard and there is no environmental pollution event.Emergency Response Plan

Zhejiang Sanhua Intelligent Controls Co. Ltd. re-prepared the Emergency Response Plan in August 2023 and filed

with Xinchang Environmental Protection Bureau on August 30 2023 (Record No. 330624-2023-40-M).Investment in environmental governance and protection and payment of environmental protection taxes

During the reporting period the Company's environmental governance investment and payment of environmental

protection tax amounted to 18.033 million yuan.Environmental self-monitoring program

The Company formulated Self-monitoring Scheme of Zhejiang Sanhua Intelligent Control Co. Ltd. according to the

requirements of the superior environmental protection department combined with the actual production situation

and the actual needs of environmental management of the Company. The sewage station of the Company is equipped

with a laboratory and the detection is conducted by a specially assigned person. On line automatic monitoring

equipment such as pH COD TOC total copper total zinc total chromium total nickel flow rate etc. are installed

at the Company's total wastewater discharge outlet so as to achieve the combination of automatic monitoring and

manual testing. For the pollution factors such as suspended matters total Phosphorus Ammonia Nitrogen total Iron

and Petroleum the Company entrusts a third-party testing agency to carry out regular monitoring according to self-

monitoring requirements for national effluent licence. The monitoring results are published regularly on the

enterprise self-monitoring information disclosure platform of Zhejiang Province.Administrative penalties for environmental problems during the reporting period

Not applicable

Other environmental information that should be disclosed

Not applicable

Measures and effects in reducing carbon emissions during the reporting period

√ Applicable □ Not applicable

There are direct greenhouse gas emissions from the use of natural gas gasoline and diesel fuel as well as indirect

greenhouse gas emissions from purchased electricity in the Company's production and operations. In this regard

the Company is committed to energy saving and emission reduction practices as well as continues to innovate green

product technologies to ensure effective use of resources and improve operational efficiency. As of the end of the

reporting period the Company had prepared and issued the Energy Management Measures Gas and Liquid

37Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Management Measures Compressed Air Use Inspection and Reward & Penalty Management Regulations Trial

Management Measures for Compressed Air Cost Reduction and Water Conservation System and other management

systems relating to resource conservation. By regularly checking usage we aim to minimize the consumption of

water electricity fuel and other resources and actively assist society in energy conservation and emission reduction

while optimizing our own energy resource costs. At the same time the Company has always adhered to the business

philosophy of energy saving and environmental protection constantly innovating products and technologies and is

committed to promoting the green and low-carbon development of the industry.

1. Low-carbon design and R&D: The Company takes the initiative to incorporate the concept of ecological and

environmental protection into the process of product development design and production etc. Adhering to the

concept of sustainable development the Company starts from the various stages of the life cycle of the product and

measures and evaluates the impact of the product on the environment during the life cycle.

2. Optimize the energy structure: Large-scale use of distributed photovoltaics in the park to replace the original

purchased electricity and increase the purchase of green electricity. Achieving cleaner energy and using waste heat

recovery technology to achieve lower energy consumption and higher resource utilisation efficiency; On the other

hand the energy storage system in the production park can comprehensively take advantage of peak and valley

electricity which improves the efficiency of distributed photovoltaic utilization.

3. Accurate control of energy efficiency: The Company continues to promote the application of smart energy IOT

platform and effectively controls the use efficiency of all energy within the scope through real-time display of

digital information traceability technical transformation and energy conservation and consumption reduction

analysis.

4. Promote green technology: The Company reduces energy consumption and improves energy efficiency through

the improvement of manufacturing and technological process. Reduce energy consumption and carbon emission by

troubleshooting of air leakage point of compressed air pipeline of equipment upgrading and transformation of air

compressor emission reduction of triple supply and nitrogen recycling.

5. Enhancing green cooperation: through the conversion of purchased liquid oxygen and liquid nitrogen to in-house

production in-house oxygen and nitrogen could be used directly in production avoiding the liquefaction of oxygen

and nitrogen by suppliers for large-volume shipments and reducing the large amount of energy consumption for

liquefaction of gaseous state thus reducing the impact on the climate.

6. Complete green products: the Company develops a series of low-carbon key core components such as electronic

expansion valves inverter controllers micro-channel products significantly reducing carbon emissions from the

use of end-products to promote the industry's green and low-carbon development.

7. Green Packaging: The company is committed to reducing the environmental impact of packaging materials by

optimising the packaging process adopting green packaging materials and implementing recycling plans for

packaging products and planning transportation scientifically to less environmental impact and promote the saving

and recycling of packaging materials.

38Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

8. Production layout: Sanhua adheres to the concept of "wherever customers are Sanhua is there" By setting up

factories nearby we not only serve customers but also reduce carbon emissions in transportation. We have

established production bases in Mexico Poland Vietnam India Hangzhou Wuhu Zhongshan and other areas.At the same time as a leading global manufacturer of thermal management system control components for new

energy vehicles the Company fully grasps the business opportunities brought by the development of the global

new energy vehicle industry actively explores green and efficient refrigeration technology and continues to bring

professional and green product solutions to the industry.Other environmental information

Not applicable

II. Social responsibility

The Company is committed to actively fulfilling the social responsibility as well as promoting social harmony

and sustainable development through public welfare and charity programmes. The Company contributes to the

society by visiting the elderly in nursing homes pairing up to help the needy in the community doing donations

etc. The Company also provides assistance and condolences to the employees in difficulty through the "Sanhua One

Family" Fund which has set a good example for social responsibility. During the reporting period donations were

made to the Shangyu Charity Federation to help the disadvantaged groups.

39Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section VI Significant Events

I. Complete and Incomplete Commitments of the Company and Its Actual Controller

Shareholders Related parties Acquirers and Other Related Parties by the End of the

Reporting Period

√ Applicable □ Not applicable

Commitment Details of Date of Term of

Commitments Nature Performance

party commitments commitments commitments

When the

number of

shares sold

through listing

and trading in

Shenzhen Stock

Exchange

Zhang Yabo

Commitment reaches 1% of

controlling Until the

from Other the total number November 21st Strict

shareholder commitment is

reformation of commitment of shares of the 2005 performance

Sanhua Holding fulfilled

shareholding Company it

Group Co. Ltd.shall make an

announcement

within two

working days

from the date of

the occurrence

of the fact.Zhang Daocai

and Sanhua

holding group

the controlling

shareholder of

Commitment

the Company

Zhang Daocai on horizontal

promise that

controlling competition

there will not be January 5th Strict

shareholder related party Long term

any competition 2009 performance

Sanhua Holding transactions and

with Sanhua

Group Co. Ltd. capital

intelligent

occupation

Commitments controls in the

from assets business scope

reorganization being or already

carried out in

the future.Sanhua Holding

Commitment Group

Zhang Daocai on horizontal promises: after

controlling competition the completion

January 5th Strict

shareholder related party of this Long term

2009 performance

Sanhua Holding transactions and transaction

Group Co. Ltd. capital Sanhua Holding

occupation Group and

Sanhua

40Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

intelligent

controls will

sign an

agreement

according to

law perform

legal

procedures

fulfill the

obligation of

information

disclosure and

handle

significant

matters for

approval in

accordance

with relevant

laws

regulations and

articles of

association of

Sanhua

intelligent

controls. In the

process of

implementation

of related party

transactions we

will follow the

principle of

legality and

reasonableness

ensure the

fairness of

prices and

procedures and

make certain

that the

legitimate

interests of

Sanhua

intelligent

controls and

other

shareholders

will not be

damaged

through related

party

transactions.Zhang Daocai Commitment In order to

Zhang Yabo on horizontal avoid

horizontal

Zhang Shaobo competition Strict

competition July 24th 2015 Long term

controlling related party with Sanhua performance

shareholder transactions and intelligent

Sanhua Holding capital controls Zhang

41Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Group Co. occupation Daocai Zhang

Ltd. Zhejiang Yabo Zhang

Shaobo Sanhua

Sanhua Lvneng

Holding Group

Industrial the controlling

Group Co. Ltd. shareholder of

the Company

and Sanhua

Lvneng

Industry the

trading partner

made the

following

commitments:

1. I (or the

Company) will

not directly or

indirectly

engage in or

participate in

the business

that constitutes

potential direct

or indirect

competition

with Sanhua

Intelligent

Controls and its

subordinate

enterprises;

guarantee that

legal and

effective

measures shall

be taken to urge

other

enterprises

controlled by

me (or the

Company) not

to engage in or

participate in

any business

competing with

Sanhua

Intelligent

Controls and its

subordinate

enterprises.

2. If Sanhua

Intelligent

Controls further

expands its

business scope

I (or the

Company) and

other controlled

enterprises will

not compete

with Sanhua

Intelligent

Controls'

expanded

business; if it is

possible to

compete with

Sanhua

42Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Intelligent

Controls'

business after

expansion I (or

the Company)

and other

controlled

enterprises will

withdraw from

Sanhua

Intelligent

Controls in the

following ways

of competition:

A. Stop the

businesses that

compete or may

compete with

Sanhua

Intelligent

Controls; B.Inject the

competitive

business into

Sanhua

Intelligent

Controls; C.Transfer the

competitive

business to an

unrelated third

party.

3. If I (or the

Company) and

other

enterprises

controlled by

me (or the

Company) have

any business

opportunities to

engage in and

participate in

any activities

that may

compete with

Sanhua

Intelligent

Controls'

business

operation they

shall

immediately

inform Sanhua

Intelligent

Controls of the

above business

opportunities. If

Sanhua

Intelligent

Controls makes

an affirmative

reply to take

advantage of

the business

opportunity

within a

43Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

reasonable

period specified

in the notice it

shall do its best

to give the

business

opportunity to

Sanhua

Intelligent

Controls.

4. In case of

breach of the

above

commitment I

(or the

Company) is

willing to bear

all

responsibilities

arising

therefrom and

fully

compensate all

direct or

indirect losses

caused to

Sanhua

Intelligent

Controls.In order to

standardize the

related party

transactions

with Sanhua

Intelligent

Controls Zhang

Daocai Zhang

Yabo Zhang

Shaobo Sanhua

Holding Group

Zhang Daocai the controlling

shareholder of

Zhang Yabo

the Company

Zhang Shaobo Commitment

and Sanhua

controlling on horizontal Lvneng

shareholder competition Industrial the

Strict

Sanhua Holding related party trading partner July 24th 2015 Long term

performance

Group Co. transactions and made the

Ltd. Zhejiang capital following

commitments:

Sanhua Lvneng occupation

1. I (or the

Industrial Company) and

Group Co. Ltd. the controlled

enterprises will

reduce the

related party

transactions

with Sanhua

intelligent

controls as far

as possible and

will not use

their own status

as shareholders

44Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

of Sanhua

intelligent

controls to seek

for superior

rights in terms

of business

cooperation and

other aspects

compared with

other third

parties;

2. I (or the

Company) will

not take

advantage of

the right to enter

into a

transaction with

Sanhua

intellectual

controls using

the position as a

shareholder.

3. If there are

necessary and

unavoidable

related party

transactions I

(or the

Company) and

the controlled

enterprises will

sign agreements

with Sanhua

intelligent

controls in

accordance

with the

principles of

fairness follow

legal

procedures and

perform the

information

disclosure

obligations in

accordance

with the

requirements of

relevant laws

regulatory

documents and

the articles of

association. It

shall also

perform

relevant

internal

decision-

making and

approval

45Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

procedures to

ensure that it

will not conduct

transactions

with Sanhua

intelligent

controls on

terms that are

obviously

unfair

compared with

the market

price and will

not use such

transactions to

engage in any

behavior that

damages the

legitimate

rights and

interests of

Sanhua

intelligent

controls and

other

shareholders.Zhang Daocai

Zhang Yabo

Zhang Shaobo

and Sanhua

holding Group

the controlling

shareholder of

the Company

made the

following

commitments:

after the

Zhang Daocai completion of

Zhang Yabo the transaction

Zhang Shaobo Sanhua

Other Strict

controlling intelligent July 24th 2015 Long term

Commitment performance

shareholder controls will

Sanhua Holding continue to

Group Co. Ltd. improve the

corporate

governance

structure and

independent

operation of the

Company

management

system in

accordance

with the

requirements of

relevant laws

46Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

and regulations

and the articles

of Association

and continue to

maintain the

independence

of Sanhua

intelligent

controls in

business assets

finance

institutions

personnel etc.to protect the

interests of all

shareholders.

1. I (or the

Company) and

the controlled

enterprises will

reduce the

related party

transactions

with Sanhua

intelligent

controls as far

as possible and

will not use the

position as a

shareholder of

Sanhua

intellectual

controls to seek

the superior

Zhang Daocai rights for

Zhang Yabo business

Zhang Shaobo Commitment cooperation

controlling on horizontal with Sanhua

shareholder competition intelligent

controls September 18th Strict

Sanhua Holding related party Long term

compared with 2017 performance

Group Co. transactions and other third

Ltd. Zhejiang capital parties;

Sanhua Lvneng occupation 2. I (or the

Industrial Company) will

Group Co. Ltd. not use my

position as a

shareholder of

Sanhua

intellectual

controls to seek

for the priority

right to

cooperate with

Sanhua

intellectual

controls;

3. If there are

necessary and

unavoidable

related party

transactions I

(or the

47Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Company) and

the controlled

enterprises will

sign agreements

with Sanhua

intelligent

controls in

accordance

with the

principles of

fairness follow

legal

procedures and

perform the

information

disclosure

obligations in

accordance

with the

requirements of

relevant laws

regulatory

documents and

the articles of

association. It

shall also

perform

relevant

internal

decision-

making and

approval

procedures to

ensure that it

will not conduct

transactions

with Sanhua

intelligent

controls on

terms that are

obviously

unfair

compared with

the market

price and will

not use such

transactions to

engage in any

behavior that

damages the

legitimate

rights and

interests of

Sanhua

intelligent

controls and

other

48Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

shareholders.

1. I (or the

Company) will

not directly or

indirectly

engage in or

participate in

any business

that may

constitute

potential direct

or indirect

competition

with Sanhua

intelligent

controls and its

subordinate

enterprises;

guaranteed that

legal and

effective

measures will

be taken to urge

other

enterprises

controlled by

me (or the

Zhang Daocai Company) not

Zhang Yabo to engage in or

Zhang Shaobo Commitment participate in

controlling on horizontal any business

shareholder competition that is

competitive September 18th Strict

Sanhua Holding related party Long term

with Sanhua 2017 performance

Group Co. transactions and intelligent

Ltd. Zhejiang capital controls and its

Sanhua Lvneng occupation subordinate

Industrial enterprises

Group Co. Ltd. Business.

2. If Sanhua

intelligent

controls further

expands its

business scope

I (or the

Company) and

other

enterprises

controlled by

me (or the

Company) will

not compete

with Sanhua

intelligent

controls'

expanded

business; if it is

possible to

compete with

Sanhua

intelligent

controls'

business after

expansion I (or

the Company)

49Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

and other

enterprises

controlled by

me (or the

Company) will

withdraw from

Sanhua

intelligent

controls in the

following ways

of competition:

A. stop the

businesses that

compete or may

compete with

Sanhua

intelligent

controls; B.inject the

competitive

business into

Sanhua

intelligent

controls; C.transfer the

competitive

business to an

unrelated third

party.

3. If I (or the

Company) and

other

enterprises

controlled by

me (or the

Company) have

any business

opportunities to

engage in and

participate in

any activities

that may

compete with

Sanhua

intelligent

controls'

business

operation they

shall

immediately

inform Sanhua

intelligent

controls of the

above business

opportunities. If

Sanhua

intelligent

controls makes

an affirmative

reply to take

advantage of

the business

opportunity

within a

reasonable

period specified

in the notice it

50Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

shall do its best

to give the

business

opportunity to

Sanhua

intelligent

controls.

4. In case of

breach of the

above

commitment I

(or the

Company) is

willing to bear

all

responsibilities

arising

therefrom and

fully

compensate all

direct or

indirect losses

caused to

Sanhua

intelligent

controls.After the

completion of

the transaction

the listed

Company will

continue to

improve the

corporate

governance

structure and

independent

Zhang Daocai

operation of the

Zhang Yabo

Company

Zhang Shaobo

management

controlling

system in

shareholder

Other accordance September 18th Strict

Sanhua Holding Long term

commitment with the 2017 performance

Group Co.requirements of

Ltd. Zhejiang

relevant laws

Sanhua Lvneng

and regulations

Industrial

and the articles

Group Co. Ltd.of association

continue to

maintain the

independence

of the listed

Company in

business assets

finance

institutions

personnel and

other aspects

51Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

and effectively

protect the

interests of all

shareholders.The

commitment

made at the time

of IPO it shall

not engage in

the same

production

operation or

business as the

Company in the

future. In order

to avoid

business

competition

Commitment with the

Commitment Zhang Daocai on horizontal Company and

made during controlling competition clarify the non-

Strict

initial public shareholder related party competition June 7th 2005 Long term

performance

offering or Sanhua Holding transactions and obligations

Sanhua Holding

refinancing Group Co. Ltd. capital

Group on

occupation behalf of itself

and its

subsidiaries

with more than

50% equity

makes a

commitment to

Sanhua

intelligent

controls to

avoid possible

horizontal

competition.The controlling

shareholders of

Will not

the listed

actively reduce

Other Company

holdings of the

commitments Sanhua Holding

Company's

made to Group Co. Other August 18th Until February Strict

shares within

minority Ltd. Zhejiang commitment 2022 17 2024 performance

eighteen

shareholders of Sanhua Lvneng

months from

the Company Industrial

August 18

Group Co.

2022.

Ltd. and Mr.Zhang Yabo

Are the

commitments Yes

fulfilled on time

If the

commitment

has not been

fulfilled beyond N/A

the deadline it

should detail

the specific

52Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

reasons for not

completing the

fulfillment and

the next step of

the work plan.II. The Company’s funds used by the controlling shareholder or its related parties for non-

operating purposes.□ Applicable √ Not applicable

No such case during the reporting period.III. Illegal provision of guarantees for external parties

□ Applicable √ Not applicable

No such case during the reporting period.IV. Engagement and disengagement of the CPA firm

Whether this financial report was audited

□Yes √ No

This report was not audited.V. Explanation Given by the Board of Directors and Supervisory Committee Regarding

the “Non-standard Auditor’s Report” Issued by the CPA Firm for the Reporting Period

□ Applicable √ Not applicableVI. Explanation Given by the Board of Directors Regarding the “Non-standard Auditor’sReport” Issued by the CPA Firm for the Prior Year

□ Applicable √ Not applicable

VII. Bankruptcy and Restructuring

□ Applicable √ Not applicable

No such case during the reporting period.VIII. Material Litigation and Arbitration

Material Litigation and Arbitration

□ Applicable √ Not applicable

No such case during the reporting period.Other litigations

□ Applicable √ Not applicable

53Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

IX. Punishments and Rectifications

□ Applicable √ Not applicable

No such case during the reporting period.X. Integrity of the Company and Its Controlling Shareholders and Actual Controllers

□ Applicable √ Not applicable

XI. Significant Related-party Transaction

1. Significant related-party transactions arising from routine operation

□Applicable √Not applicable

No such case in the reporting period.

2. Related-party transactions regarding purchase and disposal of assets or equity

□Applicable √Not applicable

No such case in the reporting period.

3. Significant related-party transactions arising from joint investments on external parties

□Applicable √Not applicable

No such case in the reporting period.

4. Related credit and debt transactions

□ Applicable √Not applicable

No such case in the reporting period.

5. Transactions with related financial companies

□Applicable √Not applicable

No such case in the reporting period.

6. Transactions between financial companies controlled by the Company and related parties

□Applicable √Not applicable

No such case in the reporting period.

7. Other significant related party transactions

□Applicable √Not applicable

54Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

No such case in the reporting period.XII. Significant Contracts and Execution

1. Matters on trusteeship contracting and leasing

（1）Trusteeship

□ Applicable √ Not applicable

No such case in the reporting period.

（2）Contracting

□ Applicable √ Not applicable

No such case in the reporting period.

（3）Leasing

√Applicable □ Not applicable

Please refer to the notes of leasing instructions for details under Section X Financial Report.Projects with gains and losses exceeding 10% of the Company's total profit during the reporting period

□ Applicable √ Not applicable

No such case in the reporting period.

2. Significant guarantees

√Applicable □ Not applicable

Unit: RMB in 10 thousand

External Guarantees from the Company and its Subsidiaries (Excluding Guarantees to the Subsidiaries)

Disclosu

re date

Guarante

of Actual

Guarant Guarante Actual Type of Counter Term of e for

announc Guarante Collatera Due or

eed e Occurre Guarant guarante Guarante Related

ement of e l (if any) Not

Party Cap nce Date ee e (if any) e Parties

the Amount

or Not

guarante

e cap

Company's Guarantees to Subsidiaries

Disclosu

re date

Guarante

of Actual

Guarant Guarante Actual Type of Counter Term of e for

announc Guarante Collatera Due or

eed e Occurre Guarant guarante Guarante Related

ement of e l (if any) Not

Party Cap nce Date ee e (if any) e Parties

the Amount

or Not

guarante

e cap

55Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

SANHU

A

INTER

Joint 2023.3.2

NATIO

August March liability 4-

NAL 240000 5363.19 Yes Yes

13 2022 24 2023 guarante 2024.3.2

SINGAP

e 3

ORE

PTE.LTD.Guangd

ong

Sanhua

Joint

New Novemb Novemb 2023.11.liability

Energy er 7 500 er 29 500 29- Yes Yes

guarante

Automot 2023 2023 2024.4.2

e

ive

compon

ents Co.SANHU

A

INTER

Joint

NATIO 2023.5.4

April 29 May 4 liability

NAL 340000 3064.68 - Yes Yes

2023 2023 guarante

SINGAP 2024.5.3

e

ORE

PTE.LTD.SANHU

A

INTER

Joint

NATIO 2023.5.4

April 29 May 4 liability

NAL 340000 4597.02 - Yes Yes

2023 2023 guarante

SINGAP 2024.5.3

e

ORE

PTE.LTD.SANHU

A

INTER

Joint 2023.5.1

NATIO

April 29 May 11 liability 1-

NAL 340000 3830.85 Yes Yes

2023 2023 guarante 2024.5.1

SINGAP

e 0

ORE

PTE.LTD.SANHU

A

INTER

Joint 2023.5.2

NATIO

April 29 May 22 14557.2 liability 2-

NAL 340000 Yes Yes

2023 2023 3 guarante 2024.5.2

SINGAP

e 1

ORE

PTE.LTD.SANHU Joint 2023.5.3

April 29 May 31

A 340000 7661.7 liability 1- Yes Yes

20232023

INTER guarante 2024.5.3

56Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

NATIO e 0

NAL

SINGAP

ORE

PTE.LTD.SANHU

A Joint

2023.6.9

INTER April 29 June 9 liability

95000 10690.2 - Yes Yes

NATIO 2023 2023 guarante

2024.6.5

NALIN e

C.SANHU

A Joint

Septemb 2023.9.8

INTER April 29 liability

95000 er 8 2850.72 - No Yes

NATIO 2023 guarante

20232024.9.6

NALIN e

C.SANHU

A Joint 2023.9.1

Septemb

INTER April 29 liability -

95000 er 1 1425.36 No Yes

NATIO 2023 guarante 2024.9.3

2023

NALIN e 0

C.SANHU

A

INTER

Joint

NATIO 2023.5.1

April 29 May 11 liability

NAL 340000 2138.04 1- No Yes

2023 2023 guarante

SINGAP 2024.7.8

e

ORE

PTE.LTD.SANHU

A

INTER

Joint 2023.8.2

NATIO

April 29 August liability 1-

NAL 340000 14253.6 No Yes

2023 21 2023 guarante 2024.8.2

SINGAP

e 0

ORE

PTE.LTD.SANHU

A

INTER

Joint 2023.10.NATIO

April 29 October liability 20-

NAL 340000 5363.19 No Yes

2023 20 2023 guarante 2024.10.

SINGAP

e 19

ORE

PTE.LTD.SANHU

A Joint 2023.10.INTER April 29 October liability 25-

340000 4597.02 No Yes

NATIO 2023 25 2023 guarante 2024.10.NAL e 24

SINGAP

57Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

ORE

PTE.LTD.SANHU

A

INTER

Joint 2023.11.NATIO Novemb

April 29 liability 20-

NAL 340000 er 20 7661.7 No Yes

2023 guarante 2024.11.

SINGAP 2023

e 19

ORE

PTE.LTD.SANHU

A

INTER

Joint 2023.11.NATIO Novemb

April 29 liability 20-

NAL 340000 er 20 7126.8 No Yes

2023 guarante 2024.11.

SINGAP 2023

e 19

ORE

PTE.LTD.SANHU

A

INTER

Joint 2023.12.NATIO Decemb

April 29 liability 7-

NAL 340000 er 7 9960.21 No Yes

2023 guarante 2024.12.

SINGAP 2023

e 6

ORE

PTE.LTD.SANHU

A

INTER

Joint 2024.3.2

NATIO

April 29 March liability 4-

NAL 340000 5363.19 No Yes

2023 24 2024 guarante 2025.3.2

SINGAP

e 3

ORE

PTE.LTD.SANHU

A

INTER

Joint

NATIO 2024.5.3

April 30 May 3 liability

NAL 360000 3064.68 - No Yes

2024 2024 guarante

SINGAP 2025.5.2

e

ORE

PTE.LTD.SANHU

A

INTER

Joint

NATIO 2024.5.3

April 30 May 3 liability

NAL 360000 4597.02 - No Yes

2024 2024 guarante

SINGAP 2025.5.2

e

ORE

PTE.LTD.

58Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

SANHU

A

INTER

Joint

NATIO 2024.5.1

April 30 May 10 liability

NAL 360000 3830.85 0- No Yes

2024 2024 guarante

SINGAP 2025.5.9

e

ORE

PTE.LTD.SANHU

A

INTER

Joint 2024.5.2

NATIO

April 30 May 21 14557.2 liability 1-

NAL 360000 No Yes

2024 2024 3 guarante 2025.5.2

SINGAP

e 0

ORE

PTE.LTD.SANHU

A

INTER

Joint 2024.5.3

NATIO

April 30 May 30 liability 0-

NAL 360000 7661.7 No Yes

2024 2024 guarante 2025.5.2

SINGAP

e 9

ORE

PTE.LTD.SANHU

A Joint

2024.6.6

INTER April 30 June 6 liability

95000 10690.2 - No Yes

NATIO 2024 2024 guarante

2025.6.4

NALIN e

C.Zhejiang

Joint 2024.6.2

Sanhua

April 30 June 28 liability 8-

Heat 20000 5000 No Yes

2024 2024 guarante 2029.7.2

Exchang

e 0

er Co.Guangd

ong

Sanhua

Joint 2024.4.2

New Novemb

April 25 liability 5-

Energy er 7 500 1105.88 No Yes

2024 guarante 2024.11.

Automot 2023

e 30

ive

compon

ents Co.Guangd

ong

Sanhua

Joint 2024.4.2

New Novemb

April 25 liability 5-

Energy er 7 500 62.67 No Yes

2024 guarante 2024.11.

Automot 2023

e 30

ive

compon

ents Co.

59Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Guangd

ong

Sanhua

Joint 2024.4.2

New Novemb

April 25 liability 5-

Energy er 7 500 647.41 No Yes

2024 guarante 2024.11.

Automot 2023

e 30

ive

compon

ents Co.Guangd

ong

Sanhua

Joint 2024.4.2

New Novemb

April 25 liability 5-

Energy er 7 500 989.29 No Yes

2024 guarante 2024.12.

Automot 2023

e 30

ive

compon

ents Co.Guangd

ong

Sanhua

Joint 2024.4.2

New Novemb

April 25 liability 5-

Energy er 7 500 935.38 No Yes

2024 guarante 2024.12.

Automot 2023

e 30

ive

compon

ents Co.Subsidiaries' Guarantees to Subsidiaries

Disclosu

re date

Guarante

of Actual

Guarant Guarante Actual Type of Counter Term of e for

announc Guarante Collatera Due or

eed e Occurre Guarant guarante Guarante Related

ement of e l (if any) Not

Party Cap nce Date ee e (if any) e Parties

the Amount

or Not

guarante

e cap

Total Amount of

Total Balance of

Guarantees to

Guarantees Actually

Subsidiaries

810000 Paid to Subsidiaries 58505.5

Approved during the

during the Reporting

Reporting Period

Period (C2)

(C1)

Total Amount of

Total Balance of

Approved

Actual Guarantees to

Guarantees to

810000 Subsidiaries By the 113882.13

Subsidiaries by the

end of the Reporting

end of the Reporting

Period (C4)

Period (C3)

The total amount of the Company's guarantees (the total of the above three items)

Total Amount of Total Amount of

Guarantees Guarantees Actually

Approved during the 810000 Occurred during the 58505.5

Reporting Period Reporting Period

(A1+B1+C1) (A2+B2+C2)

Total Amount of Total Balance of

Guarantees Guarantees Actually

Approved by the 810000 Paid by the End of 113882.13

End of the Reporting the Reporting Period

Period (A3+B3+C3) (A4+B4+C4)

60Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Total Amount of Actual Guarantees

(A4+B4+C4) as a Percentage of the 6.31%

Company's Net Assets

Of which：

Balance of Debt Guarantees Directly or

Indirectly Offered to Guaranteed Objects

with Asset-liability Ratio Exceeding 70% (E)

Total Amount of the Above Three Guarantees

(D+E+F)

3. Entrusted wealth management

√Applicable □ Not applicable

Unit: RMB in 10 thousand

Accrued

Overdue impairment

Balance before

Specific types Capital source Amount uncollected amount of overdue

maturity

amount unrecovered

financial product

Security financial The Company’s

10100010000

products self-owned funds

Bank financial The Company’s

130000130000

products self-owned funds

Total 231000 140000

Specific situation of high-risk entrusted financial management with large single amount or low security and poor

liquidity

√Applicable □ Not applicable

61Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Unit: RMB in 10 thousand

Future

Actual

Amount entruste

Referen Actual recover Event

of Throug d

Determi ce profit y of overvie

Type Termina Capital Expecte provisio h legal financia

Name of Product Amoun Capital Start nation annualiz and loss profit w and

of tion investm d return n for procedu l

trustee type t source date of ed rate in the and loss relevant

trustee date ent (if any) impair res or manage

return of reportin in the index

ment (if not ment

return g period reportin (if any)

any) plan or

g period

not

Fixed

income

Citic National

Self- April with

Securities securit debt May 6 2.81

10000 owned 29 guarant 1.57% 3.01 Yes /

Company y reverse 2024 1

funds 2024 ee of

Limited repurchas

principa

e

l

Fixed

National income

Citic

debt Self- April with

Securities securit May 6 2.84

reverse 10000 owned 29 guarant 1.59% 3.05 Yes /

Company y 2024 8

repurchas funds 2024 ee of

Limited

e principa

l

Fixed

National income

Citic

debt Self- April April with

Securities securit 4.81

reverse 20000 owned 29 30 guarant 1.53% 5.01 Yes /

Company y 4

repurchas funds 2024 2024 ee of

Limited

e principa

l

Fixed

National income

Citic

debt Self- April with

Securities securit May 6 0.49

reverse 10000 owned 30 guarant 2.18% 0.6 Yes /

Company y 2024 7

repurchas funds 2024 ee of

Limited

e principa

l

Citic National Fixed

Self- April

Securities securit debt May 6 income 0.44

10000 owned 30 2.00% 0.55 Yes /

Company y reverse 2024 with 7

funds 2024

Limited repurchas guarant

62Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

e ee of

principa

l

Fixed

National income

Citic

debt Self- April with

Securities securit May 6 0.44

reverse 10000 owned 30 guarant 1.98% 0.54 Yes /

Company y 2024 1

repurchas funds 2024 ee of

Limited

e principa

l

Fixed

National income

Citic

debt Self- with

Securities securit May 6 May 13

reverse 50000 owned guarant 1.92% 18.41 15.911 Yes /

Company y 2024 2024

repurchas funds ee of

Limited

e principa

l

Fixed

National income

Citic

debt Self- with

Securities securit June 6 June 7 1.86

reverse 10000 owned guarant 1.79% 1.96 Yes /

Company y 2024 2024 2

repurchas funds ee of

Limited

e principa

l

Fixed

National income

Citic

debt Self- with

Securities securit June 6 June 7 1.86

reverse 10000 owned guarant 1.79% 1.96 Yes /

Company y 2024 2024 2

repurchas funds ee of

Limited

e principa

l

Fixed

National income

Citic

debt Self- with

Securities securit June 6 June 7 1.86

reverse 10000 owned guarant 1.79% 1.96 Yes /

Company y 2024 2024 2

repurchas funds ee of

Limited

e principa

l

Fixed

National

Citic income

debt Self-

Securities securit June 27 July 1 with 3.00

reverse 10000 owned 2.76% 3.03 Yes /

Company y 2024 2024 guarant 5

repurchas funds

Limited ee of

e

principa

63Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

l

Capital Fixed

Protected income

Citic

Income Self- with

Securities securit May 14 June 11

Certificate 40000 owned guarant 1.90% 60 60.000 Yes /

Company y 2024 2024

s "Rise funds ee of

Limited

and principa

Shine" l

2000

Total -- -- -- -- -- -- 100.09 -- -- -- --

00

Note: The Company's accumulated financial management of RMB3835.99 million during the reporting period and the above breakdown represents the Company's

significant financial management of a single item (the single item amounting to RMB100 million or more

64Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Entrusted financial management is expected to be unable to recover the principal or there are other situations that

may lead to impairment

□ Applicable √ Not applicable

4. Other significant contracts

□ Applicable √ Not applicable

No such case in the reporting period.XIII. Other significant events

□ Applicable √ Not applicable

No such case in the reporting period.XIV. Significant events of the Company’s subsidiaries

□ Applicable √ Not applicable

No such case in the reporting period.

65Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section VII Changes in Shares and Information about Shareholders

I. Changes in Shares

1. Changes in shares

Unit: Share

Before the change Changes in the period (+ -) After the change

Share

transferreNew

Bonus d

Shares Ratio Shares Others Sub-total Shares Ratio

share from

Issued

capital

reserve

1. Shares

subject to

condition 4252219 1964331 1964331 6216550

1.14%1.66%

al 1 1 1 2

restriction

(s)

1)

Shares

held by

the states

2)

Shares

held by

State-

owned

corporate

3)

Other 4246619 1966731 1966731 6213350

1.14%1.66%

domestic 1 1 1 2

shares

Of

which:

Shares

held by

domestic

legal

person

Shar

es held by

4246619196673119667316213350

domestic 1.14% 1.66%

1112

natural

person

4)

Shares

held by 56000 0.00% -24000 -24000 32000 0.00%

overseas

investors

66Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Of

which:

Shares

held by

overseas

legal

person

Shar

es held by

overseas 56000 0.00% -24000 -24000 32000 0.00%

natural

person

2. Shares - -

36900933670450

without 98.86% 1964331 1964331 98.33%

344033

restriction 1 1

1)

--

RMB 3690093 3670450

98.86%1964331196433198.33%

common 344 033

11

shares

2)

Domestic

ally listed

foreign

shares

3)

Foreign

shares

listed

overseas

4)

Others

37326153732615

3. Total 100.00% 0 0 100.00%

535535

Reason for the changes in share capital

√ Applicable □ Not applicable

1. At the beginning of each year the number of locked shares held by senior executives of the Company shall be

recalculated according to 75% of the total shares held by senior executives.

2. The Company's 2024 Restricted Stock Incentive Plan grants 24.91 million shares of restricted stock to 1933

incentive recipients which are sourced from the Company's repurchase account with outstanding stocks converted

to restricted stocks.

3. On June 29 2024 the second vesting period of the 2022 Restricted Stock Incentive Plan expired and 5.133

million Restricted stocks of 1313 incentive recipients who met the conditions were released from restricted sale.Approval for changes in share capital

√ Applicable □ Not applicable

I. The Company's 2024 Restricted Stock Incentive Plan grants totally 24.91 million shares of restricted stock to

67Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

1933 incentive recipients at a grant price of 11.75 per share with a grant date of June 19 2024 as approved

below:

1. On April 19 2024 the 20th interim meeting of the 7th session of the Board of Directors and the 17th interim

meeting of the 7th session of the Supervisory Committee of the Company considered and passed the "Motion on

the 2024 Restricted Share Incentive Plan (Draft) of Zhejiang SANHUA Intelligent Control Stock Co. Ltd. 2024

Equity Incentive Plan" and "Proposal to Request the General Meeting of Shareholders to Authorise the Board of

Directors to Handle Matters in Relation to the 2024 Equity Incentive Plan" the aforesaid proposals having first been

considered and approved by the Remuneration and Evaluation Committee of the Board of Directors.

2. On April 30 2024 the Company disclosed in its announcement the ''Public Announcement and Verification

Opinions of the Supervisory Committee on the List of Incentive Recipients under the 2024 Equity Incentive Plan''.

3. On May 6 2024 the First Extraordinary General Meeting of 2024 of the Company considered and passed the

"Motion on the 2024 Restricted Stock Incentive Plan (Draft) of Zhejiang SANHUA Intelligent Control Company

Limited and its Summary" the "Motion on the 2024 Equity Incentive Plan of Zhejiang SANHUA Intelligent Control

Company Limited and its Management Measures for the Implementation of the 2024 Equity Incentive Plan and the

"Motion on the Proposal for the General Meeting to Proposal on Requesting the Shareholders' General Meeting to

Authorise the Board of Directors to Handle Matters Relating to the 2024 Equity Incentive Plan.

4. On May 13 2024 the ''Proposal on the Granting of Restricted Shares to the Incentive Recipients under the 2024

Restricted Share Incentive Scheme of the Company'' was considered and approved at the Twenty-second

Extraordinary Meeting of the Seventh Session of the Board of Directors and the Nineteenth Extraordinary Meeting

of the Seventh Session of the Board of Supervisors of the Company and the aforesaid proposal had been considered

and approved by the Remuneration and Evaluation Committee of the Board of Directors first.

5. On June 3 2024 the Twenty-third Interim Meeting of the Seventh Session of the Board of Directors and the

Twentieth Interim Meeting of the Seventh Session of the Supervisory Committee of the Company considered and

passed the ''Proposal on the Granting of Restricted Shares to the Incentive Recipients of the Suspended Grants under

the Company's Restricted Share Incentive Plan for the Year 2024'' ''Proposal on the Adjustment to the List of

Incentive Recipients to be Awarded Under the Restricted Share Incentive Plan for the Year 2024 the Number of

Grants and the Grant Price the aforesaid motions have been first considered and approved by the Compensation

and Evaluation Committee of the Board of Directors.II. On June 3 2024 the Twenty-third Interim Meeting of the Seventh Session of the Board of Directors and the

Twentieth Interim Meeting of the Seventh Session of the Supervisory Committee of the Company considered and

passed the ''Proposal on the Achievement of the Conditions for Unlocking of the Restricted Shares during the Second

Unlocking Period of the Restricted Share Incentive Scheme in 2022'' and the ''Proposal on the Repurchase and

Cancellation of Part of Restricted Shares'' which had been firstly considered and approved by the Remuneration

and Evaluation Committee of the Board of Directors. A total of 1313 incentive recipients were eligible for the

release of restricted shares and the number of shares available for release of restricted shares was 5.133 million

shares.

68Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Transfer of shares

√Applicable □Not applicable

On May 13 2024 and June 3 2024 the Company granted totally 24.91 million shares of restricted stock to 1933

incentive recipients and on June 19 2024 the Company completed the transfer and registration of the restricted

stock.Information about the implementation of share repurchase

√ Applicable □ Not applicable

1. As at June 30 2024 the Company had repurchased a total of 13961794 shares of the Company accounting for

0.3740% of the total share capital of the Company at the highest trading price of RMB 29.09 per share and the

lowest trading price of RMB 19.81 per share for a total transaction amount of RMB 319919680.07 through the

special securities account for share repurchases by means of centralised bidding trading (transaction costs not

included). (excluding transaction fees).

2. As at June 30 2024 a total of 12415964 shares repurchased by the Company in 2021 had been fully used for

the Company's restricted share incentive scheme of which the number of repurchased shares used for the 2022

restricted share incentive scheme was 9783096 and that for the 2024 restricted share incentive scheme was

4614060 representing a total of 4614060 shares. The total amount accounted for 0.3326% of the current total

share capital of the Company.

3. As at June 30 2024 the total number of shares repurchased by the Company in 2022 was 7535067 shares which

have been fully utilised for the 2024 Restricted Share Incentive Scheme accounting for 0.2019% of the current total

share capital of the Company.The progress on reduction of re-purchase shares by means of centralized bidding

□Applicable √Not applicable

Effects of changes in share capital on the basic earnings per share ("EPS") diluted EPS net assets per share

attributable to common shareholders of the Company and other financial indexes over the last year and last

period

□ Applicable √ Not applicable

Please refer to the financial report for details.Other contents that the Company considers necessary or required by the securities regulatory authorities to

disclose

□ Applicable √ Not applicable

2. Changes in restricted shares

√ Applicable □ Not applicable

Unit: Share

Opening Closing balance Note for

Name of Vested in Increased in Date of

balance of of restricted restricted

shareholder current period current period unlocking

restricted shares shares

69Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

shares

According to According to

the relevant the relevant

provisions of provisions of

Zhang Yabo 29268150 0 0 29268150 shares shares

management management

for senior for senior

executives executives

According to According to

the relevant the relevant

provisions of provisions of

shares shares

Wang Dayong 189421 0 100000 289421 management management

for senior for senior

executives executives

+ equity + equity

incentive incentive

According to According to

the relevant the relevant

provisions of provisions of

shares shares

Ni Xiaoming 183796 0 80000 263796 management management

for senior for senior

executives executives

+ equity + equity

incentive incentive

According to According to

the relevant the relevant

provisions of provisions of

shares shares

Chen Yuzhong 252562 0 80000 332562 management management

for senior for senior

executives executives

+ equity + equity

incentive incentive

According to According to

the relevant the relevant

provisions of provisions of

shares shares

Hu Kaicheng 189421 0 80000 269421 management management

for senior for senior

executives executives

+ equity + equity

incentive incentive

According to According to

the relevant the relevant

provisions of provisions of

shares shares

Yu Yingkui 212901 0 80000 292901 management management

for senior for senior

executives executives

+ equity + equity

incentive incentive

According to According to

the relevant the relevant

provisions of provisions of

Mo Yang 10926 0 0 10926 shares shares

management management

for senior for senior

executives executives

According to According to

the relevant the relevant

Chen Xiaoming 8325 0 0 8325 provisions of provisions of

shares shares

management management

70Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

for senior for senior

executives executives

According to According to

the relevant the relevant

provisions of provisions of

Other incentive

11956000 5016000 24490000 31430000 shares shares

objects

management management

for equity for equity

incentive incentive

Total 42271502 5016000 24910000 62165502 -- --

II. Issuance and Listing of Securities

□ Applicable √ Not applicable

III. Total Number of Shareholders and Their Shareholdings

Unit: Share

Total Number of Preferred Shareholders

Total Number of Common

(If Any) (Refer to Note 8) Whose Voting

Shareholders at the End of 112836 0

the Reporting Period Rights Have Been Recovered at the End

of the Reporting Period

Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them

(excluding lending shares through the facility)

The

Total The

Increase/ number of Pledged or frozen

Share- shares held number of

Nature of decrease common

Name of holding at the end shares held

sharehold during the shares held

shareholder percentage of the without

er reporting with

(%) reporting trading Status Amount

period trading

period restrictions

restrictions

Domestic

Sanhua

non-state-

Holding 94848707 94848707

owned 25.41% 0 0 N/A 0

Group Co.corporatio 7 7

Ltd.n

Zhejiang

Domestic

Sanhua

non-state- 15000000

Lvneng 74274795 74274795

owned 19.90% 0 0 Pledged 0

Industrial

corporatio 4 4.00

Group Co. [Note]

n

Ltd.Hong Kong

Overseas -

Central 42930260 42930260

corporatio 11.50% 14984940 0 N/A 0

Clearing

n 9 9

Limited 6

Domestic

Zhang Yabo 1.05% 39024200 0 29268150 9756050 N/A 0

Individual

Industrial

and

Commercial

Bank of

Others 0.71% 26458197 9825200 0 26461697 N/A 0

China

Limited -

Huatai-Perry

CSI 300

71Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Traded

Open-End

Index Fund

Zhang Domestic

0.66% 24662822 24662822 0 24662822 N/A 0

Jianping Individual

Industrial

and

Commercial

Bank of

China

Limited -

ETF CSI

New Energy Others 0.65% 24383702 7758712 0 24383702 N/A 0

Vehicle

Industry

Index

Initiated

Securities

Investment

Fund (LOF)

China

Construction

Bank

Corporation

- E Fund

CSI 300

Others 0.49% 18317634 2376600 0 18317634 N/A 0

Traded

Open Index

Initiated

Securities

Investment

Fund

Industrial

and

Commercia

l Bank of

China

Limited - Others 0.47% 17552480 11646500 0 17561480 N/A 0

HuataiPerry

CSI 300

Traded

Open-End

Index Fund

China

Merchants

Bank

Corporation

- Quanguo

Xuyuan

Three Year Others 0.46% 17208754 -4210600 0 17208754 N/A 0

Holding

Period

Hybrid

Securities

Investment

Fund

72Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Information about

Strategic Investors’ or

General Legal Persons’

Becoming Top Ten No

Common Shareholders for

Placement of New Shares

(If Any) (Refer to Note 3)

Explanation on Among the above shareholders Sanhua Holding Group Co. Ltd. Zhejiang Sanhua Lvneng Industrial

Associated Relationship Group Co. Ltd. and Zhang Yabo are the persons acting in concert. The Company does not know

or Concerted Actions whether there is any related relationship between other shareholders or whether they belong to the

among the Above- persons acting in concert stipulated in the Administrative Measures for the Acquisition of Listed

Mentioned Shareholders Companies.Explanation of the above

shareholders involved in

proxy/trusted voting rights No

and waiver of voting

rights

Special note on the

existence of repurchase

special accounts among No

the top 10 shareholders

( if any)(Refer to Note 11)

Particulars about Shares Held by Top Ten Common Shareholders Holding Shares That Are Not Subject to Trading Restrictions

(Excluding lending shares through the transfer facility and executive lock-up shares)

Type of shares

Number of Common Shares Held without Restrictions at the End of

Name of Shareholder

the Reporting Period

Type Amount

RMB

Sanhua Holding Group 94848707

948487077 common

Co. Ltd.stock 7

RMB

Zhejiang Sanhua Lvneng 74274795

742747954 common

Industrial Group Co. Ltd

stock 4

RMB

Hong Kong Central 42930260

429302609 common

Clearing Limited

stock 9

Industrial and

Commercial Bank of RMB

China Limited - Huatai- 26458197 common 26458197

Perry CSI 300 Traded stock

Open-End Index Fund

RMB

Zhang Jianping 24662822 common 24662822

stock

China Life Insurance

Company Co. Ltd. - RMB

Traditional - General 24383702 common 24383702

Insurance Products -005L stock

- CT001 Shanghai

Industrial and

Commercial Bank of

China Limited - ETF CSI RMB

New Energy Vehicle 18317634 common 18317634

Industry Index Initiated stock

Securities Investment

Fund (LOF)

China Construction Bank

RMB

Corporation - E Fund CSI

17552480 common 17552480

300 Traded Open Index stock

Initiated Securities

73Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Investment Fund

China Merchants Bank

Corporation - Quanguo

RMB

Xuyuan Three Year

17208754 common 17208754

Holding Period Hybrid stock

Securities Investment

Fund

Industrial and

Commercial Bank of

China Limited - China RMB

Europe Times Vanguard 16827643 common 16827643

Equity Initiating stock

Securities Investment

Fund

Explanation of Associated

Relationship or Concerted

Actions among Top Ten

Common Shareholders Among the above shareholders Sanhua Holding Group Co. Ltd. Zhejiang Sanhua Lvneng Industrial

without Trading Group Co. Ltd. and Zhang Yabo are the persons acting in concert. The Company does not know

Restrictions and among whether there is any related relationship between other shareholders or whether they belong to the

Top Ten Common persons acting in concert stipulated in the Administrative Measures for the Acquisition of Listed

Shareholders without Companies.Trading Restrictions and

Top Ten Common

Shareholders

Explanation of Top Ten

Common Shareholders’

Participation in Securities N/A

Margin Trading (If Any)

(Refer to Note 4)

Note: Sanhua Lvneng pledged additional 70 million shares on August 8 2024. After this pledge the shares of the

Company held by Sanhua Lvneng have been pledged the aggregate of 220 million shares.Shareholders holding more than 5% of shares top 10 shareholders and top 10 shareholders with unlimited shares

in circulation participating in the lending of shares in the transfer and financing business

√ Applicable □ Not applicable

Unit: Share

Shareholders holding more than 5% of shares top 10 shareholders and top 10 shareholders with unlimited shares in circulation

participating in the lending of shares in the transfer and financing business

Shares in the common

Shares lent and not yet Shares in the common Shares lent and not yet

account and credit

returned at the period- account and credit account returned at the period-

account at the period-

Full name of begin at the period-end end begin

shareholder

As % of As % of As % of

Total Total Total As % of total Total

total share total share total share

shares shares shares share capital shares

capital capital capital

Industrial and

Commercial

Bank of China

Limited - 242113 2645819

0.65%35000.00%0.71%35000.00%

Huatai-Perry 97 7

CSI 300

Traded Open-

End Index

74Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Fund

China

Construction

Bank

Corporation -

E Fund CSI

1678101755248

300 Traded 0.45% 52100 0.00% 0.47% 9000 0.00%

800

Open Index

Initiated

Securities

Investment

Fund

Top 10 shareholders and top 10 shareholders with unlimited number of outstanding shares changed from the

previous period due to lending/returning of convertible bonds

□ Applicable √ Not applicable

Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted any

agreed buy-back in the reporting period

□ Applicable √ Not applicable

No such cases during the current reporting period.IV. Shareholding changes of directors supervisors senior management personnel

√ Applicable □ Not applicable

Number Number

Number Number

Number Number of of

of Number of

of shares of shares restricted restricted

additional of shares restricted

held at held at shares shares

Tenure shares reduced shares

Name Title the the granted granted

status held during the granted

period- period- at the at the

during the period during the

begin(sha end period- period-

period (shares) period

res) (shares) begin(sha end

(shares) (shares)

res) (shares)

Wang Direct or Incumben

252562100000035256256000100000132000

Dayong President t

Ni Incumben

Direct or 245062 80000 0 325062 49000 80000 108000

Xiaoming t

Direct or

Chen Incumben

chief 336750 80000 0 416750 56000 80000 112000

Yuzhong t

engine er

Vice

president

Hu Secretary Incumben

2525628000003325625600080000112000

Kaicheng of the t

board of

directors

Vice

Yu Incumben

president 283869 80000 0 363869 56000 80000 112000

Yingkui t

CFO

Total -- -- 1370805 420000 0 1790805 273000 420000 576000

75Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

V. Changes in Controlling Shareholders or Actual Controllers

Change of the controlling shareholder during the current reporting period

□ Applicable √ Not applicable

No such cases in the reporting period.Change of the actual controller during the reporting period

□ Applicable √ Not applicable

No such cases in the current reporting period.

76Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section VIII Information of Preferred Shares

□ Applicable √ Not applicable

No existed preferred shares for the Company during the current reporting period.

77Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section IX Bonds

□ Applicable √ Not applicable

78Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Section X Financial Report

I. Audit report

Whether the semi-annual report is audited

□ Yes √ No

The Company’s 2024 Semi-annual Financial Report has not been audited.II. Financial Statements

Units of financial reports in the notes: RMB

1. Consolidated balance sheet

Prepared by: Zhejiang Sanhua Intelligent Controls Co. Ltd.June 30 2024

Unit: RMB

Items June 30 2024 January 1 2024

Current asset：

Cash and Bank Balances 5222883432.16 6584684683.93

Settlement funds

Loans to other banks

Held-for-trading financial

100000000.00

assets

Derivative financial assets 10931764.44 22636112.68

Notes receivable 2675326003.36 2476839413.89

Accounts receivable 7152843602.65 5773991481.22

Receivable financing

Advances paid 151070635.58 133792623.54

Premium receivable

Reinsurance accounts

receivable

Reinsurance reserves

receivable

Other receivables 189681028.61 227792892.12

Including: Interest

receivable

Dividends

receivable

Repurchasing of financial

assets

Inventories 4509575295.73 4600729378.19

Including: Data

resources

Contract assets

Assets held for sales

Non-current assets due

within one year

Other current assets 191097848.27 251073584.56

79Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Total current assets 20203409610.80 20071540170.13

Non-current assets:

Loans and advances paid

Debt investments

Other debt investments

Long-term receivable 3805833.60

Long-term equity

37094293.3037924431.29

investments

Other equity instrument

investments

Other non-current financial

assets

Investment property 7588431.93 8165805.31

Fixed assets 8018985493.67 7730363778.82

Construction in progress 2746629632.47 2036326757.72

Productive biological assets

Oil & gas assets

Right-of-use assets 273457356.51 313254745.53

Intangible assets 1022779188.91 843866292.82

Including: Data

resources

Development expenditures

Including: Data

resources

Goodwill 6583577.40 6785228.04

Long-term prepayments 139905636.19 118096436.09

Deferred tax assets 102523517.15 156432157.23

Other non-current assets 541833750.09 564023136.83

Total non-current assets 12897380877.62 11819044603.28

Total assets 33100790488.42 31890584773.41

Current liabilities:

Short-term borrowings 1398200202.82 1212150378.85

Central bank loans

Loans from other banks

Held-for-trading financial

3500000.00

liabilities

Derivative financial liabilities 36903370.31 10719110.02

Notes payable 3520145951.34 3416711594.64

Accounts payable 5033866555.98 4449940359.81

Advances received

Contract liabilities 62714790.24 51788802.03

Selling of repurchased

financial assets

Absorbing deposit and

interbank deposit

Deposit for agency security

transaction

Deposit for agency security

underwriting

Employee benefits payable 494084219.25 598801246.34

Taxes and rates payable 272273758.52 382396791.19

Other payables 578350601.82 250642662.86

Including: Interest

Payable

Dividends

80Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Payable

Handling fee and

commission payable

Reinsurance accounts

payable

Liabilities classified as

held for sale

Non-current liabilities due

292569239.451440093253.93

within one year

Other current liabilities 2837216.89 2099986.27

Total current liabilities 11691945906.62 11818844185.94

Non-current liabilities:

Insurance policy reserve

Long-term borrowings 2220000000.00 1030801111.13

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities 198342644.46 221295481.86

Long-term payables 17497031.70 11290788.32

Long-term employee

37014460.5539840362.77

benefits payable

Provisions

Deferred income 411084710.03 379140042.48

Deferred tax liabilities 247868736.73 307511069.30

Other non-current liabilities 18154107.25 18154107.25

Total non-current liabilities 3149961690.72 2008032963.11

Total liabilities 14841907597.34 13826877149.05

Equity:

Share capital 3732615535.00 3732615535.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserve 3198382978.14 3455643565.98

Less: Treasury shares 435418676.78 423468591.57

Other comprehensive income -56162453.59 114757064.28

Special reserve

Surplus reserve 1011914243.67 1011914243.67

General risk reserve

Undistributed profit 10590831458.68 10002942167.43

Total equity attributable to the

18042163085.1217894403984.79

parent Company

Non-controlling interest 216719805.96 169303639.57

Total equity 18258882891.08 18063707624.36

Total liabilities & equity 33100790488.42 31890584773.41

Legal representative：Zhang Yabo Officer in charge of accounting：Yu Yingkui Head of accounting

department：Li Zhimi

2. Parent Company Balance Sheet

Unit: RMB

Items June 30 2024 January 1 2024

Current assets:

Cash and bank balances 1972313106.42 3755111885.56

81Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Held-for-trading financial

100000000.00

assets

Derivative financial assets 8355659.20 1463100.00

Notes receivable 391660072.05 1293651597.02

Accounts receivable 1533553307.90 703445875.41

Receivables financing

Advances paid 8883876.05 7501313.44

Other receivables 467355212.61 2269591236.02

Including: Interest

Receivable

Dividends

550000000.00

Receivable

Inventories 683943972.23 772429361.79

Including: Data

resources

Contract assets

Assets classified as held for

sale

Non-current assets due

within one year

Other current assets

Total current assets 5166065206.46 8803194369.24

Non-current assets:

Debt investments

Other debt investments

Long-term receivable 500000.00 500000.00

Long-term equity investments 9167742923.42 8880133268.57

Other equity instrument

investments

Other non-current financial

assets

Investment property

Fixed assets 1654521000.34 1623330889.08

Construction in progress 64544194.78 53871265.08

Productive biological assets

Oil & gas assets

Right-of-use assets 7341677.21 9370623.95

Intangible assets 142242171.23 142130830.79

Including: Data

resources

Development expenditures

Including: Data

resources

Goodwill

Long-term prepayments 16887644.98 15876569.88

Deferred tax assets 5587256.35

Other non-current assets 79453826.12 99458254.31

Total non-current assets 11133233438.08 10830258958.01

Total assets 16299298644.54 19633453327.25

Current liabilities:

Short-term borrowings 400368222.26 202384500.02

Held-for-trading financial

liabilities

Derivative financial liabilities

Notes payable 579704486.32 559657858.19

82Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Accounts payable 1769427802.35 1465144230.80

Advances received

Contract liabilities 1053654.28 121488.76

Employee benefits payable 95894342.21 127817926.77

Taxes and rates payable 34905187.74 112191203.17

Other payables 749086724.15 4315100068.76

Including: interest

payable

Dividends

Payable

Liabilities classified as held for

sale

Non-current liabilities due

236096564.611373267226.41

within one year

Other current liabilities

Total current liabilities 3866536983.92 8155684502.88

Non-current liabilities:

Long-term borrowings 2170000000.00 1030801111.13

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities 3451045.86 5571522.93

Long-term payables

Long-term employee benefits

payable

Provisions

Deferred income 48351515.00 47332045.49

Deferred tax liabilities 72722628.72 81604566.52

Other non-current

liabilities

Total non-current liabilities 2294525189.58 1165309246.07

Total liabilities 6161062173.50 9320993748.95

Equity:

Share capital 3732615535.00 3732615535.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserve 4100378768.83 4351276453.48

Less: treasury shares 435418676.78 423468591.57

Other comprehensive income

Special reserve

Surplus reserve 883822071.35 883822071.35

Undistributed profit 1856838772.64 1768214110.04

Total equity 10138236471.04 10312459578.30

Total liabilities & equity 16299298644.54 19633453327.25

83Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

3. Consolidated Income statement

Unit: RMB

Items 2024 Interim 2023 Interim

I. Total operating revenue 13676072161.08 12528920625.59

Including: Operating revenue 13676072161.08 12528920625.59

Interest income

Premium earned

Revenue from handling

charges and commission

II. Total operating cost 11770455716.86 10680635898.54

Including: Operating cost 9920390318.93 9308660916.27

Interest expenses

Handling charges and

commission expenditures

Surrender value

Net payment of insurance

claims

Net provision of insurance

policy reserve

Premium bonus

expenditures

Reinsurance expenses

Taxes and surcharges 84233430.28 59377415.32

Selling expenses 297002465.74 264131730.27

Administrative expenses 887999303.50 619856574.65

R&D expenses 632611907.96 580269632.04

Financial expenses -51781709.55 -151660370.01

Including: Interest expenses 71736060.65 126688323.68

Interest income 84853231.77 87661462.57

Add: Other income 128552012.14 62816875.53

Investment income (or less:

-11680068.63-46142073.31

losses)

Including: Investment

income from associates and joint 5419862.01 5296750.30

ventures

Gains from derecognition

of financial assets at amortized -8174613.92

cost

Gains on foreign

exchange (or less: losses)

Gains on net exposure to

hedging risk (or less: losses)

Gains on changes in fair

-43077568.28-88814525.03

value (or less: losses)

Credit impairment loss (or

-76800982.89-72153972.68

less: losses)

Assets impairment loss

-44434103.33-24923403.90

(or less: losses)

Gains on asset disposal (or

-245261.28-406527.50

less: losses)

III. Operating profit (or less:

1857930471.951678661100.16

losses)

Add: Non-operating revenue 4559030.63 4564351.93

84Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Less: Non-operating

8527704.425260738.91

expenditures

IV. Profit before tax (or less: total

1853961798.161677964713.18

loss)

Less: Income tax expense 332296145.99 263470197.45

V. Net profit (or less: net loss) 1521665652.17 1414494515.73

(I) Categorized by the continuity

of operations

1. Net profit from continuing

1521665652.171414494515.73

operations (or less: net loss)

2. Net profit from

discontinued operations (or

less: net loss)

(II) Categorized by the portion of

equity ownership

1. Net profit attributable to

owners of parent Company (or 1514515444.75 1394760848.85

less: net loss)

2. Net profit attributable to

non-controlling shareholders 7150207.42 19733666.88

(or less: net loss)

VI. Other comprehensive income

-170919517.8794145944.13

after tax

Items attributable to the

-170919517.8794145944.13

owners of the parent Company

(I) Not to be reclassified

subsequently to profit or loss

1.Changes in remeasurement

on the net defined benefit plan

2. Items under equity method

that will not be reclassified to

profit or loss

3. Changes in fair value of

other equity instrument

investments

4. Changes in fair value of

own credit risk

5. Others

(II) To be reclassified

-170919517.8794145944.13

subsequently to profit or loss

1. Items under equity method

that may be reclassified to

profit or loss

2. Changes in fair value of

other debt investments

3. Profit or loss from

reclassification of financial

assets into other

comprehensive income

4. Provision for credit

impairment of other debt

investments

5.Cash flow hedging reserve

6. Translation reserve -170919517.87 94145944.13

7. Others

85Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Items attributable to non-

controlling shareholders

VII. Total comprehensive income 1350746134.30 1508640459.86

Items attributable to the

1343595926.881488906792.98

owners of the parent Company

Items attributable to non-

7150207.4219733666.88

controlling shareholders

VIII. Earnings per share (EPS):

(I) Basic EPS (yuan per share) 0.40 0.39

(II) Diluted EPS (yuan per share) 0.40 0.39

Legal representative：Zhang Yabo Officer in charge of accounting：Yu Yingkui Head of accounting

department：Li Zhimi

4. Income statement of the Parent Company

Unit: RMB

Items 2024 Interim 2023 Interim

I. Operating revenue 3604910150.35 3376084891.56

Less: Operating cost 2699896113.74 2626431304.22

Taxes and surcharges 20108843.46 16723005.44

Selling expenses 16870927.89 15955241.78

Administrative expenses 176761913.69 134058887.06

R&D expenses 146298916.01 153802234.31

Financial expenses -2764047.88 44791262.57

Including: Interest expenses 41595966.73 106958559.19

Interest income 47883088.75 59962732.06

Add: Other income 13056130.43 18207329.04

Investment income (or less:

523114161.1364615265.38

losses)

Including: Investment

income from associates and 4819302.01 4605330.06

joint ventures

Gains from derecognition of

financial assets at amortized

cost

(or less: losses)

Gains on net exposure to

hedging (or less: losses)

Gains on changes in fair

1842559.20-2692778.64

value (or less: losses)

Credit impairment loss (or

4001428.97-3773476.35

less: losses)

Assets impairment loss (or

less: losses)

Gains on asset disposal (or

2972.81102873.11

less: losses)

II. Operating profit (or less:

1089754735.98460782168.72

losses)

Add: Non-operating revenue 1076815.23 522218.81

Less: Non-operating

1652847.65622679.50

expenditures

III. Profit before tax (or less:

1089178703.56460681708.03

total loss)

86Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Less: Income tax expense 73927887.46 53317816.09

IV. Net profit (or less: net loss) 1015250816.10 407363891.94

(I) Net profit from continuing

1015250816.10407363891.94

operations (or less: net loss)

(II) Net profit from discontinued

operations (or less: net loss)

V. Other comprehensive income

after tax

(I) Not to be reclassified

subsequently to profit or loss

1.Changes in remeasurement

on the net defined benefit

plan

2. Items under equity method

that will not be reclassified

to profit or loss

3. Changes in fair value of

other equity instrument

investments

4. Changes in fair value of

own credit risk

5. Others

(II) To be reclassified

subsequently to profit or loss

1. Items under equity method

that may be reclassified to

profit or loss

2. Changes in fair value of

other debt investments

3. Profit or loss from

reclassification of financial

assets into other

comprehensive income

4. Provision for credit

impairment of other debt

investments

5. Cash flow hedging reserve

(profit or loss on cash flow

hedging)

6. Translation reserve

7. Others

VI. Total comprehensive income 1015250816.10 407363891.94

VII. Earnings per share (EPS):

(I) Basic EPS

(II) Diluted EPS

5. Consolidated Cash Flow Statement

Unit: RMB

Items 2024 Interim 2023 Interim

I. Cash flows from operating

activities:

Cash receipts from sale of goods or

12835226773.2712310137775.42

rendering of services

Net increase of client deposit and

87Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

interbank deposit

Net increase of central bank loans

Net increase of loans from other

financial institutions

Cash receipts from original

insurance contract premium

Net cash receipts from reinsurance

Net increase of policy-holder

deposit and investment

Cash receipts from interest

handling charges and commission

Net increase of loans from others

Net increase of repurchase

Net cash receipts from agency

security transaction

Receipts of tax refund 418010676.37 230989224.84

Other cash receipts related to

238171867.92115095499.27

operating activities

Subtotal of cash inflows from

13491409317.5612656222499.53

operating activities

Cash payments for goods

9064591310.078435913051.14

purchased and services received

Net increase of loans and advances

to clients

Net increase of central bank

deposit and interbank deposit

Cash payments for insurance

indemnities of original insurance

contracts

Net increase of loans to others

Cash payments for interest

handling charges and commission

Cash payments for policy bonus

Cash paid to and on behalf of

2086751143.951745042767.20

employees

Cash payments for taxes and rates 691470586.47 370908197.71

Other cash payments related to

486966400.90385684889.87

operating activities

Subtotal of cash outflows from

12329779441.3910937548905.92

operating activities

Net cash flows from operating

1161629876.171718673593.61

activities

II. Cash flows from investing

activities:

Cash receipts from withdrawal of

investments

Cash receipts from investment

7417488.9011925092.64

income

Net cash receipts from the disposal

of fixed assets intangible assets and 358018.25 560463829.79

other long-term assets

Net cash receipts from the disposal

of subsidiaries & other business units

Other cash receipts related to

599458224.67454311380.20

investing activities

Subtotal of cash inflows from 607233731.82 1026700302.63

88Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

investing activities

Cash payments for the acquisition

of fixed assets intangible assets and 1595170957.86 1938773141.25

other long-term assets

Cash payments for investments 3500000.00

Net increase of pledged

borrowings

Net cash payments for the

acquisition of subsidiaries & other

business units

Other cash payments related to

439605851.1575198297.70

investing activities

Subtotal of cash outflows from

2034776809.012017471438.95

investing activities

Net cash flows from investing

-1427543077.19-990771136.32

activities

III. Cash flows from financing

activities:

Cash receipts from absorbing

337623562.507090938.20

investments

Including: Cash received by

subsidiaries from non-controlling 35010251.75 7090938.20

shareholders as investments

Cash receipts from borrowings 1390000000.00 918843500.00

Other cash receipts related to

29918063.0539626352.75

financing activities

Subtotal of cash inflows from

1757541625.55965560790.95

financing activities

Cash payments for the repayment

1140000000.00967560802.01

of borrowings

Cash payments for distribution of

dividends or profits and for interest 993916578.17 806707757.88

expenses

Including: Cash paid by

subsidiaries to non-controlling 1200000.00 19951954.67

shareholders as dividend or profit

Other cash payments related to

362563704.9468498477.35

financing activities

Subtotal of cash outflows from

2496480283.111842767037.24

financing activities

Net cash flows from financing

-738938657.56-877206246.29

activities

IV. Effect of foreign exchange rate

-44543473.28149575367.55

changes on cash & cash equivalents

V. Net increase in cash and cash

-1049395331.86271578.55

equivalents

Add: Opening balance of cash and

3624955498.842050328601.77

cash equivalents

VI. Closing balance of cash and cash

2575560166.982050600180.32

equivalents

6. Cash Flow Statement of the Parent Company

Unit: RMB

Items 2024 Interim 2023 Interim

89Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

I. Cash flows from operating activities:

Cash receipts from sale of goods and

3766750803.412915020263.22

rendering of services

Receipts of tax refund 55669134.77 59871119.99

Other cash receipts related to

104539629.5859140225.47

operating activities

Subtotal of cash inflows from

3926959567.763034031608.68

operating activities

Cash payments for goods purchased

1963487906.981801889579.35

and services received

Cash paid to and on behalf of

351014174.24310450399.64

employees

Cash payments for taxes and rates 94604476.46 81786514.53

Other cash payments related to

70526615.2551315280.70

operating activities

Subtotal of cash outflows from

2479633172.932245441774.22

operating activities

Net cash flows from operating

1447326394.83788589834.46

activities

II. Cash flows from investing

activities:

Cash receipts from withdrawal of

investments

Cash receipts from investment

1060191424.8761868191.54

income

Net cash receipts from the disposal

of fixed assets intangible assets and 7900.00 91582409.06

other long-term assets

Net cash receipts from the disposal

of subsidiaries & other business units

Other cash receipts related to

1116585714.74462874796.10

investing activities

Subtotal of cash inflows from investing

2176785039.61616325396.70

activities

Cash payments for the acquisition of

fixed assets intangible assets and other 103365117.04 82942530.86

long-term assets

Cash payments for investments 1230161306.01 145114207.25

Net cash payments for the

acquisition of subsidiaries & other

business units

Other cash payments related to

372443768.69979549544.59

investing activities

Subtotal of cash outflows from

1705970191.741207606282.70

investing activities

Net cash flows from investing

470814847.87-591280886.00

activities

III. Cash flows from financing

activities:

Cash receipts from absorbing

292692500.00

investments

Cash receipts from borrowings 1340000000.00

Other cash receipts related to

1022395689.59573060328.06

financing activities

Subtotal of cash inflows from

2655088189.59573060328.06

financing activities

90Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Cash payments for the repayment of

1140000000.00199092500.00

borrowings

Cash payments for distribution of

dividends or profits and for interest 968772142.42 768979698.33

expenses

Other cash payments related to

3754705275.571711728.00

financing activities

Subtotal of cash outflows from

5863477417.99969783926.33

financing activities

Net cash flows from financing

-3208389228.40-396723598.27

activities

IV. Effect of foreign exchange rate

changes on cash and cash equivalents

V. Net increase in cash and cash

-1290247985.70-199414649.81

equivalents

Add: Opening balance of cash and

1793207457.49996678169.38

cash equivalents

VI. Closing balance of cash and cash

502950315.92797263519.57

equivalents

7. Consolidated Statement of Changes in Owners' Equity

Amount of this period

91Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Unit: RMB

2024 Interim

Equity Attributable to parent Company

Other equity

Gen Non-

instruments Other Spe

Items Share Less: eral Undistrib controlli

Prefe Perp Capital compre cial Surplus Oth Total equity

Capita treasury risk uted Subtotal ng

rred etual Oth reserve hensive rese reserve ers

l shares reser profit interest

share bond ers income rve

ve

s s

I. Balance at 3732 101191 100029

3455644234681147571789440169303180637076

the end of 6155 4243.6 42167.4

3565.98591.57064.283984.79639.5724.36

prior year 35.00 7 3

Add:

Cumulative

changes of

accounting

policies

Error

correction of

prior period

Business

combination

under

common

control

Others

II. Balance at

3732101191100029

the beginning 345564 423468 114757 1789440 169303 180637076

61554243.642167.4

of current 3565.98 591.57 064.28 3984.79 639.57 24.36

35.0073

year

III. Current

period - -

1195005878891477591474161195175266.

increase (or 257260 170919

85.21291.2500.3366.3972

less: 587.84 517.87

decrease)

(I) Total - 151451 1343595 715020 135074613

comprehensiv 170919 5444.75 926.88 7.42 4.30

92Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

e income 517.87

(II) Capital

---

contributed or 119500 414659

2572602692106227744714.

withdrawn by 85.21 58.97

587.8473.0508

owners

1. Ordinary

-

shares 5776629 351030 612765955.

577662

contributed 00.00 55.78 78

900.00

by owners

2. Capital

contributed

by holders of

other equity

instruments

3. Amount of

share-based - -

340727289635

payment 2555625 255562534.

15.35250.00

included in 34.65 65

equity

---

299977636290

4. Others 291333 5913110 584948135.

735.213.19

303.1938.4021

----

(III) Profit

9266269266261120000927826153.

distribution

153.5053.500.0050

1.

Appropriation

of surplus

reserve

2.

Appropriation

of general

risk reserve

3.

----

Appropriation

9266269266261120000927826153.

of profit to

153.5053.500.0050

owners

4. Others

93Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

(IV) Internal

carry-over

within equity

1. Transfer of

capital

reserve to

capital

2. Transfer of

surplus

reserve to

capital

3. Surplus

reserve to

cover losses

4. Changes in

defined

benefit plan

carried over

to retained

earnings

5. Other

comprehensiv

e income

carried over

to retained

earnings

6. Others

(V) Special

reserve

1.

Appropriation

of current

period

2. Application

of current

period

(VI) Others

IV. Balance at 3732 319838 435418 - 101191 105908 1804216 216719 182588828

94Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

the end of 6155 2978.14 676.78 56162 4243.6 31458.6 3085.12 805.96 91.08

current period 35.00 453.59 7 8

Amount of Previous Period

Unit: RMB

2023 Interim

Equity Attributable to parent Company

Other equity

instruments Other Spec

Items Share Less: Gener Non-

Prefe Perpe Capital compreh ial Surplus al risk Undistribute Othe controlling Total equity

Capita treasury Subtotal interest

rred tual Oth reserve ensive reser reserve reserv d profit rs

l shares e

share bond ers income ve

s s

409

I. Balance at 3590 - 86352 129413

544282602330022813333177989131193001

the end of 8694 854304 3059.0 10409.4

970.695.98975.536242.88781.4090.82

prior year 65.00 8.33 1 2

41

Add:

Cumulative

changes of

accounting

policies

Error

correction of

prior period

Business

combination

under

common

control

Others

II. Balance at 409

3590-86352129413

the beginning 544 282602 330022 813333 177989 131193001

86948543043059.010409.4

of current 970. 695.98 975.53 6242.88 781.40 90.82

65.008.3312

year 41

III. Current 1371 - 872172 - 941459 677788 952088 687265 958961093.

95Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

period 403.0 447 28.12 960383 44.13 338.45 443.30 0.41 71

increase (or 0 283 60.00

less: decrease) 0.40

(I) Total

941459139476148890197336150864045

comprehensiv

44.130848.856792.9866.889.86

e income

(II) Capital -

1371-

contributed or 447 872172 180154 709093 187245098.

403.0960383

withdrawn by 283 28.12 160.72 8.20 92

060.00

owners 0.40

1. Ordinary

---

shares 709093

18041392361572767090938.20

contributed by 8.20

00.000.000.00

owners

2. Capital

-

contributed by 1551

44733834530913530913523.7

holders of 803.0 0.00

28351.1023.700

other equity 0

0.40

instruments

3. Amount of

share-based

39079839079839079881.1

payment 0.00

81.1781.177

included in

equity

-

156951110160110160755.

4. Others 944656 0.00

55.85755.8585

00.00

----

(III) Profit

716972716972199519736924465.

distribution

510.40510.4054.6707

1.

Appropriation

0.000.00

of surplus

reserve

2.

Appropriation

0.000.00

of general risk

reserve

96Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

3.

----

Appropriation

716972716972199519736924465.

of profit to

510.40510.4054.6707

owners

4. Others

(IV) Internal

carry-over

within equity

1. Transfer of

capital reserve

to capital

2. Transfer of

surplus

reserve to

capital

3. Surplus

reserve to

cover losses

4. Changes in

defined

benefit plan

carried over to

retained

earnings

5. Other

comprehensiv

e income

carried over to

retained

earnings

6. Others

(V) Special

reserve

1.

Appropriation

of current

period

2. Application

97Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

of current

period

(VI) Others

405

IV. Balance at 3592 86352 138933

072369819233984856028881112184862140782612

the end of 2408 3059.0 98852.7

140.924.10615.5395.804581.33431.8184.53

current period 68.00 1 2

01

8. Statement of Changes in Owners' Equity of the Parent Company

Amount of this period

Unit: RMB

2024 Interim

Other equity instruments Other Spec

Less:

Items Share Prefer Perpet Capital comprehe ial Surplus Undistribute Oth

treasury Total equity

Capital red ual Others reserve nsive reser reserve d profit ers

shares

shares bonds income ve

I. Balance at the 37326

43512764423468598838220717682141110312459

end of prior 15535.

53.481.571.350.04578.30

year 00

Add:

Cumulative

changes of

accounting

policies

Error correction

of prior period

Others

II. Balance at 37326

43512764423468598838220717682141110312459

the beginning 15535.

53.481.571.350.04578.30

of current year 00

III. Current

--

period increase 11950085. 88624662.6

250897684174223107

(or less: 21 0.65.26

decrease)

98Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

(I) Total

10152508110152508

comprehensive

6.1016.10

income

(II) Capital

--

contributed or 11950085.

250897684262847769

withdrawn by 21.65.86

owners

1. Ordinary

-

shares 577662900

57766290

contributed by .00

0.00

owners

2. Capital

contributed by

holders of other

equity

instruments

3. Amount of

share-based -

34072715.28963525

payment 255562534

350.00

included in .65

equity

--

29997773

4. Others 284970400 584948135

5.21.00.21

--

(III) Profit

926626153.926626153

distribution

50.50

1.

Appropriation

of surplus

reserve

2.

--

Appropriation

926626153.926626153

of profit to

50.50

owners

3. Others

(IV) Internal

carry-over

99Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

within equity

1.Transfer of

capital reserve

to capital

2.Transfer of

surplus reserve

to capital

3.Surplus

reserve to cover

losses

4. Changes in

defined benefit

plan carried

over to retained

earnings

5. Other

comprehensive

income carried

over to retained

earnings

6. Others

(V) Special

reserve

1.

Appropriation

of current

period

2. Application

of current

period

(VI) Others

IV. Balance at 37326

41003787435418678838220718568387710138236

the end of 15535.

68.836.781.352.64471.04

current period 00

Amount of Previous Period

Unit: RMB

2023 Interim

Items

Share Other equity instruments Capital Other Spec Surplus Othe Total equity

100Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Capital Prefer Perpet reserve Less: comprehen ial reserve rs

Undistribute

red ual Others treasury sive reser

d profit

shares bonds shares income ve

I. Balance at

3590864095449711808263330022977354308813356892692233798

the end of

9465.000.4155.135.536.6978.940.64

prior year

Add:

Cumulative

changes of

accounting

policies

Error

correction of

prior period

Others

II. Balance at

the beginning 359086 40954497 11808263 33002297 73543088 13356892 692233798

of current 9465.00 0.41 55.13 5.53 6.69 78.94 0.64

year

III. Current

period - - - -

13714079575409.

increase (or 4472830. 96038360 309608618 137096276.

3.0066

less: 40 .00 .46 20

decrease)

(I) Total

407363891407363891.

comprehensiv.9494

e income

(II) Capital

--

contributed or 137140 79575409. 172512342.

4472830.96038360

withdrawn by 3.00 66 26

40.00

owners

1. Ordinary

---

shares

180400.1392360.01572760.

contributed

00000

by owners

2. Capital -

15518033834551.30913523.7

contributed 4472830.

3.00100

by holders of 40

101Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

other equity

instruments

3. Amount of

share-based

39079881.39079881.1

payment

177

included in

equity

-

8053337.3102518937.

4. Others 94465600

939.00

--

(III) Profit

716972510716972510.

distribution.4040

1.

Appropriation

of surplus

reserve

2.

--

Appropriation

716972510716972510.

of profit to.4040

owners

3. Others

(IV) Internal

carry-over

within equity

1.Transfer of

capital

reserve to

capital

2.Transfer of

surplus

reserve to

capital

3.Surplus

reserve to

cover losses

4. Changes in

defined

102Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

benefit plan

carried over

to retained

earnings

5. Other

comprehensiv

e income

carried over

to retained

earnings

6. Others

(V) Special

reserve

1.

Appropriation

of current

period

2. Application

of current

period

(VI) Others

IV. Balance at

3592244050721412604017233984617354308810260806678524170

the end of

0868.000.0164.795.536.6960.484.44

current period

103Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

III. Company profile

The Company was established by the original Sanhua Fuji Koki Co. Ltd. The Company currently holds a

business license with a unified social credit code of 913300006096907427 registered and issued by Zhejiang

Administration of Industry and Commerce with headquarter in Shaoxing City Zhejiang Province. The registered

capital of 3732615535.00 yuan total share of 3732615535 shares (each with par value of one yuan). The

Company’s shares were listed at Shenzhen Stock Exchange.The Company operates in the machinery manufacturing industry. Business scope includes production and

marketing of Service Valve Electronic Expansion valve Drainage Pump Solenoid Valve One-way Valve

Compressor Parts Pressure Pipeline Components Electromechanical Hydraulic Control Pump and other

electromechanical hydraulic control components undertaking services of inspection test and analysis of

refrigeration accessories and engaging in import and export business. Main products include control components

and parts of household appliances and automobile A/C.The Company operates in the machinery manufacturing industry main business activities include research

and development production and sales of refrigeration and air-conditioning appliances and automotive

components.This financial statement has been approved for external disclosure by the 26th extraordinary board of

directors of the company on August 28 2024.

104Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

IV. Preparation basis of the financial statements

1. Preparation basis

The financial statements have been prepared on the basis of going concern.

2. Going concern

The Company has no events or conditions that may cast significant doubts upon the Company’s ability to

continue as a going concern within the 12 months after the balance sheet date.V. Significant accounting policies and estimates

Tips on specific accounting policies and accounting estimates:

The Company has set up accounting policies and estimates on transactions or events such as impairment of

financial instruments inventories depreciation of fixed assets construction in progress intangible assets revenue

recognition share-based paymentetc. based on the Company’s actual production and operation features.

1.Statement of compliance with China Accounting Standards for Business Enterprises

The financial statements have been prepared in accordance with the requirements of China Accounting

Standards for Business Enterprises (CASBEs) and present truly and completely the financial position results of

operations and cash flows of the Company.

2. Accounting period

The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.

3. Operating cycle

The Company has a relatively short operating cycle for its business an asset or a liability is classified as

current if it is expected to be realized or due within 12 months.

4. Functional currency

The functional currency of the Company and its domestic subsidiaries is Renminbi (RMB) Yuan while the

functional currency of subsidiaries engaged in overseas operations including SANHUA AWECO Appliance

Systems GmbH、Sanhua International Inc etc. is the currency of the primary economic environment in which

they operate.

105Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

5. Determination method and basis for selection of materiality

√ Applicable □Not Applicable

items Materiality criteria

Individual accruals accounting for more than 5% of

Significant accounts receivable with provision for bad the total bad debt provision for all types of accounts

debts made on an individual basis receivable and amounting to more than 30 million

yuan are considered significant.Individual accruals accounting for 5% or more of the

Significant other receivables with provision for bad total bad debt provision for each category of other

debts made on an individual basis receivables and amounting to more than 20 million

yuan are considered significant.The budget for a single project is more than 500

Significant construction in progress

million yuan.A single investing activity that accounts for more than

5% of the total cash inflows or outflows related to the

Significant cash flows from investing activities receipt or disbursement of cash related to investing

activities and is greater than 50 million yuan is

considered to be significant.Subsidiaries with total assets/total revenue/profit

before tax in excess of 15% of the group’s total

Significant subsidiaries not wholly-owned

assets/total revenue/profit before tax are identified as

subsidiaries

significant subsidiaries/significant not wholly-owned

subsidiaries.Significant joint ventures associates and joint Joint ventures or associates with total assets exceeding

operations 1 billion yuan are considered significant.Project matters in which the Company is involved in

Significant commitments

fundraising are considered significant.Distribution of profit after the balance sheet date

Significant events subsequent to the balance sheet date

significant financing etc.

6. Accounting treatments of business combination under and not under common control

1. Accounting treatment of business combination under common control

Assets and liabilities arising from business combination are measured at carrying amount of the combined

party included in the consolidated financial statements of the ultimate controlling party at the combination date.Difference between carrying amount of the equity of the combined party included in the consolidated financial

statements of the ultimate controlling party and that of the combination consideration or total par value of shares

issued is adjusted to capital reserve if the balance of capital reserve is insufficient to offset any excess is adjusted

to retained earnings.

2. Accounting treatment of business combination not under common control

When combination cost is in excess of the fair value share of identifiable net assets obtained from the

acquiree at the acquisition date the excess is recognized as goodwill; If the combination cost is less than the fair

value share of identifiable net assets obtained from the acquiree the fair value of the identifiable assets liabilities

and contingent liabilities obtained from the acquiree as well as the measurement of the combination cost need to

be reviewed at first. After review if the combination cost is still less than the fair value share of the identifiable

net assets obtained from the acquiree the difference is recognized in profit or loss.

106Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

7. Judgement criteria for control and compilation method of consolidated financial statements

1.Judgement of control

Having the power over the invested party enjoying variable returns through participating in related activities

of the invested party and having the ability to use the power over the invested party to influence its variable return

amount is recognized as control.

2. Compilation method of consolidated financial statements

The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidatedfinancial statements are compiled by the parent company according to “CASBE 33 – Consolidated FinancialStatements” based on relevant information and the financial statements of the parent company and its

subsidiaries.

8. Recognition criteria of cash and cash equivalents

Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash

equivalents refer to short-term highly liquid investments that can be readily converted to cash and that are subject

to an insignificant risk of changes in value.

9. Foreign currency transactions and foreign currency statement translation

1. Translation of transactions denominated in foreign currency

Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate or the

approximate exchange rate similar to the spot exchange rate at the transaction date at initial recognition. At the

balance sheet date monetary items denominated in foreign currency are translated at the spot exchange rate at the

balance sheet date with difference except for those arising from the principal and interest of exclusive borrowings

eligible for capitalization included in profit or loss; non-cash items carried at historical costs are translated at the

spot exchange rate at the transaction date with its RMB amount unchanged; non-cash items carried at fair value in

foreign currency are translated at the spot exchange rate at the date when the fair value was determined with

difference included in profit or loss or other comprehensive income.

2. Translation of financial statements measured in foreign currency

The assets and liabilities in the balance sheet are translated at the spot rate at the balance sheet date; the

equity items other than undistributed profit are translated at the spot rate at the transaction date; the revenues and

expenses in the income statement are translated at the approximate exchange rate similar to the systematically and

rationally determined spot exchange rate at the transaction date. The difference arising from foreign currency

translation is included in other comprehensive income.

10．Financial instruments

1. Classification of financial assets and financial liabilities

Financial assets are classified into the following three categories when initially recognized: (1) financial

assets at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets

107Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

at fair value through profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1) financial

liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset

does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee

contracts not fall within the above categories (1) and (2) and commitments to provide a loan at a below-market

interest rate which do not fall within the above category (1); (4) financial liabilities at amortized cost.

2. Recognition criteria measurement method and derecognition condition of financial assets and financial

liabilities

(1) Recognition criteria and measurement method of financial assets and financial liabilities

When the Company becomes a party to a financial instrument it is recognized as a financial asset or

financial liability. The financial assets and financial liabilities initially recognized by the Company are measured

at fair value; for the financial assets and liabilities at fair value through profit or loss the transaction expenses

thereof are directly included in profit or loss; for other categories of financial assets and financial liabilities the

transaction expenses thereof are included into the initially recognized amount. However at initial recognition for

accounts receivable that do not contain a significant financing component or in circumstances where the Company

does not consider the financing components in contracts within one year the Company measures the transaction

price in accordance with “CASBE 14 – Revenues”.

(2) Subsequent measurement of financial assets

1) Financial assets measured at amortized costs

The Company measures its financial assets at the amortized costs using effective interest method. Gains or

losses on financial assets that are measured at amortized cost and are not part of hedging relationships shall be

included into profit or loss when the financial assets are derecognized reclassified through the amortization

process or in order to recognize impairment gains or losses.

2) Debt instrument investments at fair value through other comprehensive income

The Company measures its debt instrument investments at fair value. Interests impairment losses or gains

and gains and losses on foreign exchange that calculated using effective interest method shall be included into

profit or loss while other gains or losses are included into other comprehensive income. Accumulated gains or

losses that initially recognized as other comprehensive income should be transferred out into profit or loss when

the financial assets are derecognized.

3) Equity instrument investments at fair value through other comprehensive income

The Company measures its equity instrument investments at fair value. Dividends obtained (other than those

as part of investment cost recovery) shall be included into profit or loss while other gains or losses are included

into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive

income should be transferred out into retained earnings when the financial assets are derecognized.

4) Financial assets at fair value through profit or loss

The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value

(including interests and dividends) shall be included into profit or loss except for financial assets that are part of

hedging relationships.

(3) Subsequent measurement of financial liabilities

1) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including

derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The

Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial

liabilities that are attributable to changes in the Company’s own credit risk shall be included into other

108Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

comprehensive income unless such treatment would create or enlarge accounting mismatches in profit or loss.Other gains or losses on those financial liabilities (including interests changes in fair value that are attributable to

reasons other than changes in the Company’s own credit risk) shall be included into profit or loss except for

financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized as

other comprehensive income should be transferred out into retained earnings when the financial liabilities are

derecognized.

2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or

when the continuing involvement approach appliesThe Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of FinancialAssets”.

3) Financial guarantee contracts not fall within the above categories 1) and 2) and commitments to provide a

loan at a below-market interest rate which do not fall within the above category 1)

The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in

accordance with impairment requirements of financial instruments; b. the amount initially recognized less the

amount of accumulated amortization recognized in accordance with “CASBE 14 – Revenues”.

4) Financial liabilities at amortized cost

The Company measures its financial liabilities at amortized cost using effective interest method. Gains or

losses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be

included into profit or loss when the financial liabilities are derecognized and amortized using effective interest

method.

(4) Derecognition of financial assets and financial liabilities

1) Financial assets are derecognized when:

a. the contractual rights to the cash flows from the financial assets expire;

b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with

“CASBE 23 – Transfer of Financial Assets”.

2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the

financial liability be derecognized accordingly.

3. Recognition criteria and measurement method of financial assets transfer

Where the Company has transferred substantially all of the risks and rewards related to the ownership of the

financial asset it derecognizes the financial asset and any right or liability arising from such transfer is

recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to

the ownership of the financial asset it continues recognizing the financial asset. Where the Company does not

transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset it is dealt

with according to the circumstances as follows respectively: (1) if the Company does not retain its control over the

financial asset it derecognizes the financial asset and any right or liability arising from such transfer is

recognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset

according to the extent of its continuing involvement in the transferred financial asset it recognizes the related

financial asset and recognizes the relevant liability accordingly.If the transfer of an entire financial asset satisfies the conditions for derecognition the difference between the

amounts of the following two items is included in profit or loss: (1) the carrying amount of the transferred

financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the

financial asset and the accumulative amount of the changes of the fair value originally included in other

comprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debt

instrument investments at fair value through other comprehensive income). If the transfer of financial asset

109Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

partially satisfies the conditions to derecognition the entire carrying amount of the transferred financial asset is

between the portion which is derecognized and the portion which is not apportioned according to their respective

relative fair value and the difference between the amounts of the following two items is included into profit or

loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portion

which is derecognized and the portion of the accumulative amount of the changes in the fair value originally

included in other comprehensive income which is corresponding to the portion which is derecognized (financial

assets transferred refer to debt instrument investments at fair value through other comprehensive income).

4. Fair value determination method of financial assets and liabilities

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient

data and information are available to measure fair value. The inputs to valuation techniques used to measure fair

value are arranged in the following hierarchy and used accordingly:

(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the

Company can access at the measurement date.

(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset

or liability either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in

active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other

than quoted prices that are observable for the asset or liability for example interest rates and yield curves

observable at commonly quoted intervals; market-corroborated inputs;

(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is

not observable and cannot be corroborated by observable market data at commonly quoted intervals historical

volatility future cash flows to be paid to fulfill the disposal obligation assumed in business combination financial

forecast developed using the Companys own data etc.

5. Impairment of financial instruments

The Company on the basis of expected credit loss recognizes loss allowances of financial assets at

amortized cost debt instrument investments at fair value through other comprehensive income contract assets

leases receivable loan commitments other than financial liabilities at fair value through profit or loss financial

guarantee contracts not belong to financial liabilities at fair value through profit or loss or financial liabilities that

arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement

approach applies.Expected credit losses refer to the weighted average of credit losses with the respective risks of a default

occurring as the weights. Credit loss refers to the difference between all contractual cash flows that are due to the

Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash

shortfalls) discounted at the original effective interest rate. Among which purchased or originated credit-impaired

financial assets are discounted at the credit-adjusted effective interest rate.At the balance sheet date the Company shall only recognize the cumulative changes in the lifetime expected

credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial

assets.For leases receivable and accounts receivable and contract assets resulting from transactions regulated in

“CASBE 14 – Revenues” the Company chooses simplified approach to measure the loss allowance at an amount

equal to lifetime expected credit losses.For financial assets other than the above on each balance sheet date the Company shall assess whether the

credit risk on the financial instrument has increased significantly since initial recognition. The Company shall

measure the loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses if

the credit risk on that financial instrument has increased significantly since initial recognition; otherwise the

110Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected

credit loss.Considering reasonable and supportable forward-looking information the Company compares the risk of a

default occurring on the 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 so as to assess whether the credit risk on the financial

instrument has increased significantly since initial recognition.The Company may assume that the credit risk on a financial instrument has not increased significantly since

initial recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet

date.The Company shall estimate expected credit risk and measure expected credit losses on an individual or a

collective basis. When the Company adopts the collective basis financial instruments are grouped with similar

credit risk features.The Company shall remeasure expected credit loss on each balance sheet date and increased or reversed

amounts of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For

a financial asset measured at amortized cost the loss allowance reduces the carrying amount of such financial

asset presented in the balance sheet; for a debt investment measured at fair value through other comprehensive

income the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying

amount of such financial asset.

6. Offsetting financial assets and financial liabilities

Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.However the Company offsets a financial asset and a financial liability and presents the net amount in the balance

sheet when and only when the Company: (1) currently has a legally enforceable right to set off the recognized

amounts; and (2) intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.For a transfer of a financial asset that does not qualify for derecognition the Company does not offset the

transferred asset and the associated liability.Recognition criteria and accrual method for expected credit losses of receivables and contract assets

1. Receivables and contract assets with expected credit losses measured on a collective basis using similar

credit risk features

Basis for

Categories determination of Method for measuring expected credit loss

portfolio

Notes receivable-Bank

Based on historical credit loss experience the current

acceptance receivable

situation and the forecast of future economic

Notes receivable -Trade

Type of notes conditions the Company calculates expected credit

acceptance receivable

loss through exposure at default and lifetime expected

Notes receivable -finance

credit loss rate.company

Based on historical credit loss experience the current

situation and the forecast of future economic

Accounts receivable –

Aging conditions the Company prepares the comparison

Portfolio grouped with aging

table of accounts receivable ages and lifetime expected

credit loss rate so as to calculate expected credit loss.Based on historical credit loss experience the current

situation and the forecast of future economic

Other receivable – Portfolio

Aging conditions the Company prepares the comparison

grouped with aging

table of other receivable ages and lifetime expected

credit loss rate so as to calculate expected credit loss.

2.Accounts receivable – comparison table of aging and lifetime expected credit loss rate of portfolio grouped

111Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

with aging.Aging Expected credit loss rate (%)

Within 1 year 5

1-2 years 10

2-3 years 30

Over 3 years 50

Aging of accounts receivable/other receivables/… are calculated from the month when such receivables are

accrued.

3.Recognition criteria for receivables and contract assets with expected credit losses measured on an

individual basis

For receivables and contract assets whose credit risk is significantly different from that of portfolios the

Company accrues expected credit losses on an individual basis.

11．Inventories

1. Classification of inventories

Inventories include finished goods or goods held for sale in the ordinary course of business work in process

in the process of production materials or supplies etc. to be consumed in the production process or in the

rendering of services.

2. Accounting method for dispatching inventories

Inventories dispatched from storage are accounted for with weighted average method or specific

identification method at the end of each month.

3. Basis for determining net realizable value

At the balance sheet date inventories are measured at the lower of cost or net realizable value; provisions for

inventory write-down are made on the excess of its cost over the net realizable value.

4. Inventory system

The perpetual inventory system is adopted.

5. Amortization method of low-value consumables and packages

Low-value consumables and packages are amortized with one-off method at the time of purchase or receipt.

12．Long-term equity investments

1. Judgment of joint control and significant influence

Joint control is the contractually agreed sharing of control of an arrangement which exists only when

decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant

influence is the power to participate in the financial and operating policy decisions of the investee but is not

control or joint control of these policies.

2. Determination of investment cost

(1) For business combination under common control if the consideration of the combining party is that it

makes payment in cash transfers non-cash assets assumes its liabilities or issues equity securities on the date of

combination it regards the share of the carrying amount of the equity of the combined party included the

consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The

difference between the initial cost of the long-term equity investments and the carrying amount of the combination

consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is

112Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

insufficient to offset any excess is adjusted to retained earnings.

(2) For business combination not under common control investment cost is initially recognized at the

acquisition-date fair value of considerations paid.

(3) Long-term equity investments obtained through ways other than business combination the initial cost of

a long-term equity investment obtained by making payment in cash is the purchase cost which is actually paid.

3. Subsequent measurement and recognition method of profit or loss

For long-term equity investments with control relationship it is accounted for with cost method; for long-

term equity investments of associated enterprises and cooperative enterprises it is accounted for with equity

method.

13. Investment property

Measurement model of investment property

Cost method measurement

Depreciation or amortization method

1. Investment property includes land use right of leased-out property and of property held for capital

appreciation and buildings that have been leased out.

2. The initial measurement of investment property is based on its cost and subsequent measurement is made

using the cost model the depreciation or amortization method is the same as that of fixed assets and intangible

assets.

14. Fixed assets

（1）Recognition principles of fixed assets

Fixed assets are tangible assets held for use in the production of goods or rendering of services for rental to

others or for administrative purposes and expected to be used during more than one accounting year. Fixed assets

are recognized if and only if it is probable that future economic benefits associated with the assets will flow to

the Company and the cost of the assets can be measured reliably.

（2）Depreciation method of different categories of fixed assets

Categories Depreciation Estimated residual Annual depreciation Useful life (years)

method value proportion (%) rate (%)

Buildings and Straight-line

20-300-53.17～5.00

structures method

Machinery and Straight-line

5-120-57.92～20.00

equipment method

Measurement Straight-line

5-100-59.50～19.00

analysis equipment method

Straight-line

Vehicle 5-8 0-5 11.88～20.00

method

Office equipment Straight-line

5-80-511.88～20.00

and others method

113Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

15．Construction in progress

1. Construction in progress is recognized if and only if it is probable that future economic benefits

associated with the item will flow to the Company and the cost of the item can be measured reliably. Construction

in progress is measured at the actual cost incurred to reach its designed usable conditions.

2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed

usable conditions. When the auditing of the construction in progress was not finished while reaching the designed

usable conditions it is transferred to fixed assets using estimated value first and then adjusted accordingly when

the actual cost is settled but the accumulated depreciation is not to be adjusted retrospectively.Categories Standards and time point of transferring construction in progress to fixed assets

Machinery After installation and commissioning it meets the standard of production

After installation and commissioning the construction is completed and accepted to

Houses and buildings

meet the commissioning standards

16．Borrowing costs

Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and

construction or production of assets eligible for capitalization it is capitalized and included in the costs of relevant

assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred and are

included in profit or loss.

17．Intangible assets

(1) Service life and its basis for determination estimate amortization method or review procedure

1.Intangible assets include land use right land ownership application software and intellectual property etc.

The initial measurement of intangible assets is based on its cost.

2. For intangible assets with finite useful lives their amortization amounts are amortized within their useful

lives systematically and reasonably if it is unable to determine the expected realization pattern reliably intangible

assets are amortized by the straight-line method with details .as follows:

Items Useful life and determination basis Amortization method

Land use rights fifty yearsContractual service life Straight-line method

Application software 1-4Useful life Straight-line method

Intellectual property 5-10Useful life Straight-line method

Intangible assets with indefinite useful life are not amortized but their useful life is reviewed annually. The

indefinite land ownership held by overseas subsidiaries abroad is not amortized due to uncertain service life.

3.R&D costs

The collection of R&D costs is directly related to the R&D activities of enterprises including R&D

personnel salaries R&D materials depreciation and amortization expenses technical cooperation fees evaluation

and testing fees etc. The costs incurred during the research phase of internal R&D projects are recognized in the

current period's profit and loss when incurred. Expenditures on the research phase of an internal project are

recognized as profit or loss when they are incurred. An intangible asset arising from the development phase of an

internal project is recognized if the Company can meet relevant conditions.

114Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

18．Impairment of part of long-term assets

For long-term assets such as long-term equity investments investment property at cost model fixed assets

construction in progress right-of-use assets intangible assets with finite useful lives etc. if at the balance sheet

date there is indication of impairment the recoverable amount is to be estimated. For goodwill recognized in

business combination and intangible assets with indefinite useful lives no matter whether there is indication of

impairment impairment test is performed annually. Impairment test on goodwill is performed on related asset

group or asset group portfolio.When the recoverable amount of such long-term assets is lower than their carrying amount the difference is

recognized as provision for assets impairment through profit or loss.

19．Long-term prepayments

Long-term prepayments are expenses that have been recognized but with amortization period over one year

(excluding one year). They are recorded with actual cost and evenly amortized within the beneficiary period or

stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods

residual values of such items are included in profit or loss.

20．Employee benefits

1. Short-term employee benefits

The Company recognizes in the accounting period in which an employee provides service short-term

employee benefits actually incurred as liabilities with a corresponding charge to profit or loss or the cost of a

relevant asset.

2. Post-employment benefits

Post-employment benefit plans are mainly classified as defined contribution plans. During the accounting

period employees provide services according the defined contribution plan the amount payable is recognized as

liabilities and included in the current profits and losses or relevant asset costs.

3. Termination benefits

Termination benefits provided to employees are recognized as an employee benefit liability with a

corresponding charge to profit or loss at the earlier of the following dates: (1) when the Company cannot

unilaterally withdraw the offer of termination benefits because of an employment termination plan or a

curtailment proposal; (2) when the Company recognizes cost or expenses related to a restructuring that involves

the payment of termination benefits.

4. Other long-term employee benefits

When other long-term employee benefits provided to the employees satisfied the conditions for classifying as

a defined contribution plan those benefits are accounted for in accordance with the requirements relating to

defined contribution plan while other benefits are accounted for in accordance with the requirements relating to

defined benefit plan. The Company recognizes the cost of employee benefits arising from other long-term

employee benefits as the followings: (1) service cost; (2) net interest on the net liability or net assets of other long-

term employee benefits; and (3) changes as a result of remeasurement of the net liability or net assets of other

long-term employee benefits. As a practical expedient the net total of the aforesaid amounts is recognized in

profit or loss or included in the cost of a relevant asset.

115Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

21．Provisions

1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as

providing guarantee for other parties litigation products quality guarantee onerous contract etc. may cause the

outflow of the economic benefit and such obligations can be reliably measured.

2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling

the present obligations and its carrying amount is reviewed at the balance sheet date.

22．Share-based payment

1. Types of share-based payment

Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.

2. Accounting treatment for settlements modifications and cancellations of share-based payment terms and

conditions

(1) Equity-settled share-based payment

For equity-settled share-based payment transaction with employees if the equity instruments granted vest

immediately the fair value of those equity instruments is measured at grant date and recognized as transaction

cost or expense with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest

until the counterparty completes a specified period of service at the balance sheet date within the vesting period

the fair value of those equity instruments measured at grant date based on the best estimate of the number of

equity instruments expected to vest is recognized as transaction cost or expense with a corresponding adjustment

in capital reserve.For equity-settled share-based payment transaction with parties other than employees if the fair value of the

services received can be measured reliably the fair value is measured at the date the Company receives the

service; if the fair value of the services received cannot be measured reliably but that of equity instruments can be

measured reliably the fair value of the equity instruments granted measured at the date the Company receives the

service is referred to and recognized as transaction cost or expense with a corresponding increase in equity.

(2) Cash-settled share-based payment

For cash-settled share-based payment transactions with employees if share appreciation rights vest

immediately the fair value of the liability incurred as the acquisition of goods or services is measured at grant date

and recognized as transaction cost or expense with a corresponding increase in liabilities; if share appreciation

rights do not vest until the employees have completed a specified period of service the liability is measured at

each balance sheet date until settled at the fair value of the share appreciation rights measured at grant date based

on the best estimate of the number of share appreciation right expected to vest.

(3) Modifications and cancellations of share-based payment terms and conditions

If the modification increases the fair value of the equity instruments granted measured immediately before

and after the modification the Company includes the incremental fair value granted in the measurement of the

amount recognized for services received as consideration for the equity instruments granted; similarly if the

modification increases the number of equity instruments granted the Company includes the fair value of the

additional equity instruments granted measured at the date of the modification in the measurement of the amount

recognized for services received as consideration for the equity instruments granted; if the Company modifies the

vesting conditions in a manner that is beneficial to the employee the Company takes the modified vesting

conditions into account.If the modification reduces the fair value of the equity instruments granted measured immediately before

116Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

and after the modification the Company does not take into account that decrease in fair value and continue to

measure the amount recognized for services received as consideration for the equity instruments based on the

grant date fair value of the equity instruments granted; if the modification reduces the number of equity

instruments granted to an employee that reduction is accounted for as a cancellation of that portion of the grant; if

the Company modifies the vesting conditions in a manner that is not beneficial to the employee the Company

does not take the modified vesting conditions into account.If the Company cancels or settles a grant of equity instruments during the vesting period (other than a grant

cancelled by forfeiture when the vesting conditions are not satisfied) the Company accounts for the cancellation

or settlement as an acceleration of vesting and therefore recognizes immediately the amount that otherwise would

have been recognized for services received over the remainder of the vesting period.

23．Revenue

Disclosure of accounting policies used for revenue recognition and measurement according to transaction type

1. Revenue recognition principles

At contract inception the Company shall assess the contracts and shall identify each performance obligation

in the contracts and determine whether the performance obligation should be satisfied over time or at a point in

time.The Company satisfies a performance obligation over time if one of the following criteria is met otherwise

the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes

the benefits provided by the Company’s performance as the Company performs; (2) the customer can control

goods or services as they are created by the Company’s performance; (3) the Company’s performance does not

create goods or services with an alternative uses and the Company has an enforceable right to payment for

performance completed to date.For each performance obligation satisfied over time the Company shall recognize revenue over time by

measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the

progress cannot be measured reasonably but the costs incurred in satisfying the performance obligation are

expected to be recovered the Company shall recognize revenue only to the extent of the costs incurred until it can

reasonably measure the progress. For each performance obligation satisfied at a point in time the Company shall

recognize revenue at the time point that the customer obtains control of relevant goods or services. To determine

whether the customer has obtained control of goods the Company shall consider the following indicators: (1) the

Company has a present right to payment for the goods i.e. the customer is presently obliged to pay for the goods;

(2) the Company has transferred the legal title of the goods to the customer i.e. the customer has legal title to the

goods; (3) the Company has transferred physical possession of the goods i.e. the customer has physically

possessed the goods; (4) the Company has transferred significant risks and rewards of ownership of the goods

i.e. the customer has obtained significant risks and rewards of ownership of the goods; (5) the customer has

accepted the goods; (6) other indicators showing the customer has obtained control over the goods.

2.Revenue measurement principle

(1) Revenue is measured at the amount of the transaction price that is allocated to each performance

obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in

exchange for transferring goods or services to a customer excluding amounts collected on behalf of third parties

and those expected to be refunded to the customer.

(2) If the consideration promised in a contract includes a variable amount the Company shall confirm the

best estimate of variable consideration at expected value or the most likely amount. However the transaction price

117Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

that includes the amount of variable consideration only to the extent that it is high probable that a significant

reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the

variable consideration is subsequently resolved.

(3) In the circumstance that the contract contains a significant financing component the Company shall

determine the transaction price based on the price that a customer would have paid for if the customer had paid

cash for obtaining control over those goods or services. The difference between the transaction price and the

amount of promised consideration is amortized under effective interest method over contractual period. The

effects of a significant financing component shall not be considered if the Company expects at the contract

inception that the period between when the customer obtains control over goods or services and when the

customer pays consideration will be one year or less.

(4) For contracts containing two or more performance obligations the Company shall determine the stand-

alone selling price at contract inception of the distinct good underlying each performance obligation and allocate

the transaction price to each performance obligation on a relative stand-alone selling price basis.

3. Revenue recognition method

The company's main business activities are the R&D production and sales of control components and parts

of household appliances and automobiles which belong to the performance obligations at a certain point in time.The revenue from domestic sales of products shall be recognized based on sales contracts settlement

vouchers (delivery or usage)and other documents upon completion of product delivery; and the revenue from

export of products shall be recognized according to the sales contract customs declaration form bill of lading

and other documents upon completion of customs declaration and export. The sales revenue of metal scrap is

recognized after weighing and picking up the goods and obtaining the receipt certificate.The situation where similar businesses adopt different business models involving different revenue

recognition and measurement methods.

24．Costs of obtaining a contract and costs to fulfill a contract

The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are

expected to be recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if

the amortization period of the asset is one year or less.If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories fixed

assets or intangible assets etc. the Company shall recognize the costs to fulfill a contract as an asset if all the

following criteria are satisfied:

1. The costs relate directly to a contract or to an anticipated contract including direct labor direct materials

manufacturing overhead cost (or similar cost) cost that are explicitly chargeable to the customer under the

contract and other costs that are only related to the contract;

2. The costs enhance resources of the Company that will be used in satisfying performance obligations in

the future;

3. The costs are expected to be recovered.

An asset related to contract costs shall be amortized on a systematic basis that is consistent with related

goods or services with amortization included into profit or loss.The Company shall make provision for impairment and recognize an impairment loss to the extent that the

carrying amount of an asset related to contract costs exceeds the remaining amount of consideration that the

Company expects to receive in exchange for the goods or services to which the asset relates less the costs

expected to be incurred. The Company shall recognize a reversal of an impairment loss previously recognized in

118Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

profit or loss when the impairment conditions no longer exist or have improved. The carrying amount of the asset

after the reversal shall not exceed the amount that would have been determined on the reversal date if no provision

for impairment had been made previously.

25．Contract assets contract liabilities

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship

between its performance obligations and customers’ payments. Contract assets and contract liabilities under the

same contract shall offset each other and be presented on a net basis.The Company presents an unconditional right to consideration (i.e. only the passage of time is required

before the consideration is due) as a receivable and presents a right to consideration in exchange for goods that it

has transferred to a customer (which is conditional on something other than the passage of time) as a contract

asset.The Company presents an obligation to transfer goods to a customer for which the Company has received

consideration (or the amount is due) from the customer as a contract liability.

26．Government grants

1. Government grants shall be recognized if and only if the following conditions are all met: (1) the

Company will comply with the conditions attaching to the grants; (2) the grants will be received. Monetary

government grants are measured at the amount received or receivable. Non-monetary government grants are

measured at fair value and can be measured at nominal amount in the circumstance that fair value can’t be

assessed.

2. Government grants related to assets

Government grants related to assets are government grants with which the Company construct or otherwise

acquire long-term assets under requirements of government. In the circumstances that there is no specific

government requirement the Company shall determine based on the primary condition to acquire the grants and

government grants related to assets are government grants whose primary condition is to construct or otherwise

acquire long-term assets. They offset carrying amount of relevant assets or recognized as deferred income. If

recognized as deferred income they are included in profit or loss on a systematic basis over the useful lives of the

relevant assets. Those measured at notional amount is directly included into profit or loss. For assets sold

transferred disposed or damaged within the useful lives balance of unamortized deferred income is transferred

into profit or loss of the year in which the disposal occurred.

3. Government grants related to income

Government grants related to income are government grants other than those related to assets. For

government grants that contain both parts related to assets and parts related to income in which those two parts

are blurred and thus collectively classified as government grants related to income. For government grants related

to income used for compensating the related future cost expenses or losses of the Company are recognized as

deferred income and are included in profit or loss or offset relevant cost during the period in which the relevant

cost expenses or losses are recognized; for government grants related to income used for compensating the

related cost expenses or losses incurred to the Company they are directly included in profit or loss or directly

offset relevant cost.

4. Government grants related to the ordinary course of business shall be included into other income or offset

119Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

relevant cost based on business nature while those not related to the ordinary course of business shall be included

into non-operating revenue or expenditures.

5. Policy interest subvention

(1) In the circumstance that government appropriates interest subvention to lending bank who provides

loans for the Company with a policy subsidised interest rate borrowings are carried at the amount received with

relevant borrowings cost computed based on the principal and the policy subsidised interest rate.

(2) In the circumstance that government directly appropriates interest subvention to the Company the

subsidised interest shall offset relevant borrowing cost.

27．Deferred tax assets/Deferred tax liabilities

1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference

between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and

tax base of items not recognized as assets and liabilities but with their tax base being able to be determined

according to tax laws) and in accordance with the tax rate applicable to the period during which the assets are

expected to be recovered or the liabilities are expected to be settled.

2. A deferred tax asset is recognized to the extent of the amount of the taxable income which it is most likely

to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date if there

is any exact evidence that it is probable that future taxable income will be available against which deductible

temporary differences can be utilized the deferred tax assets unrecognized in prior periods are recognized.

3. At the balance sheet date the carrying amount of deferred tax assets is reviewed. The carrying amount of a

deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be

available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to

the extent that it becomes probable that sufficient taxable income will be available.

4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit

or loss excluding those arising from the following circumstances: (1) business combination; and (2) the

transactions or items directly recognized in equity.

5.Deferred tax assets and deferred tax liabilities shall offset each other and be presented on a net basis when

the following conditions are all met: (1) the Company has the legal right to settle off current tax assets against

current tax liabilities; (2) Deferred income tax assets and deferred income tax liabilities are related to the income

tax levied by the same tax administration department on the same taxpayer or related to the same tax

administration department for different taxpayers. However in each period during which significant deferred

income tax assets and deferred income tax liabilities are reversed in the future the taxpayer involved intends to

settle the current income tax assets and liabilities on a net basis or simultaneously acquire assets and settle debts.

28. Leases

1. The Company as lessee

At the commencement date the Company recognizes a lease that has a lease term of 12 months or less as a

short-term lease which shall not contain a purchase option; the Company recognizes a lease as a lease of a low-

value asset if the underlying asset is of low value when it is new.For all short-term leases and leases of low-value assets lease payments are recognized as cost or profit or loss

120Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

with straight-line method over the lease term.Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach the

Company recognizes right-of-use assets and lease liabilities at the commencement date.

(1) Right-of-use assets

The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initial measurement

of the lease liabilities; 2) any lease payments made at or before the commencement date less any lease incentives

received; 3) any initial direct costs incurred by the lessee; and 4) an estimate of costs to be incurred by the lessee in

dismantling and removing the underlying asset restoring the site on which it is located or restoring the underlying

asset to the condition required by the terms and conditions of the lease.The Company depreciates the right-of-use asset using the straight-line method. If it is reasonable to be certain

that the ownership of the underlying asset can be acquired by the end of the lease term the Company depreciates

the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise

the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful

life of the right-of-use asset or the end of the lease term.

(2) Lease liabilities

At the commencement date the Company measures the lease liability at the present value of the lease payments

that are not paid at that date discounted using the interest rate implicit in the lease.Unrecognized financing expenses

calculated at the difference between the lease payment and its present value are recognized as interest expenses

over the lease term using the discount rate which has been used to determine the present value of lease payment and

included in profit or loss. Variable lease payments not included in the measurement of lease liabilities are included

in profit or loss in the periods in which they are incurred.

2.The Company as lessor

At the commencement date the Company classifies a lease as a finance lease if it transfers substantially all the

risks and rewards incidental to ownership of an underlying asset. Otherwise it is classified as an operating lease.For operating leaselease receipts are recognized as lease income with straight-line method over the lease

term. Initial direct costs incurred shall be capitalized amortized on the same basis as the recognition of lease

income and included into profit or loss by installments. Variable lease payments related to operating lease which

are not included in the lease payment are charged as profit or loss in the periods in which they are incurred.

29. Segment reporting

Operating segments are determined based on the structure of the Company’s internal organization

management requirements and internal reporting system. An operating segment is a component of the Company:

1. That engages in business activities from which it may earn revenues and incur expenses;

2. Whose financial performance is regularly reviewed by the Management to make decisions about resource

121Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

to be allocated to the segment and to assess its performance;

3. For which accounting information regarding financial position financial performance and cash flows is

available through analysis.

30. Share repurchase

When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its

employees. The amount actually paid shall be treated as treasury stock and registered for future reference at the

same time. If the purchased shares are to be retired the difference between the total book value of shares retired

and the cash distributed to existing shareholders for repurchase is to reduce capital reserve or retained earnings

when the capital reserve is not enough to reduce. If the Company repurchases vested equity instruments in equity-

settled share-based payment transactions with employees cost of treasury shares granted to employees and capital

reserve (other capital reserve) accumulated within the vesting period are to be written off on the payment made to

employees with a corresponding adjustment in capital reserve (share premium).

31. Changes in significant accounting policies and accounting estimates

(1) Implement the relevant regulations of Interpretation of China Accounting Standards for Business

Enterprises No. 17

On October 25 2023 the Ministry of Finance issued Interpretation No. 17 of the China Accounting

Standards for Business Enterprises (Finance and Accounting [2023] No. 21) (hereinafter referred to as

"Interpretation No. 17") which will come into effect on January 1 2024. Our company will implement the

provisions of Interpretation No. 17 from January 1 2024. The relevant provisions of Interpretation No. 17 have no

significant impact on the financial statements of our company during the reporting period.A:Classification of current liabilities and non current liabilities

Our company will implement this regulation from January 1 2024 and its implementation will not have a

significant impact on the company.B:Disclosure of Supplier Financing Arrangements

Our company will implement this regulation from January 1 2024 and its implementation will not have a

significant impact on the company.C:Accounting treatment of post-sale leaseback transactions

Our company will implement this regulation from January 1 2024 and its implementation will not have a

significant impact on the company.

(2) Reclassification of warranty fees for guarantee category

The finance department released the "Compilation of Application Guidelines for Enterprise Accounting

Standards 2024" in March 2024 which stipulates that warranty fees should be included in operating costs.Our company will implement this regulation from January 1 2024 and reclassify the warranty expenses that

were originally included in sales expenses for each reporting period into operating costs.This accounting policy change will affect the "operating costs" and "sales expenses" in the company's income

122Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

statement but will not affect the company's "operating revenue" and "operating profit" and will not have a

significant impact on the company's financial condition and operating results. The impact of this accounting

policy change on the financial statements for the first half of 2023 is as follows:

Income Statement for January June 2023

Report project

Amount before adjustment Correction of affected amount Amount after adjustment

consolidated Income Statement

Operating costs 9295615081.75 13045834.52 9308660916.27

selling expenses 277177564.79 -13045834.52 264131730.27

Income Statement of the Parent Company

Operating costs 2625734196.14 697108.08 2626431304.22

selling expenses 16652349.86 -697108.08 15955241.78

Ⅵ. Taxes

1. Major categories of taxes and tax rates

Tax Type Taxation basis Tax rate

Enterprise income tax Taxable income 15%，25%The output tax calculated based on the revenue from sales

of goods or rendering of services in accordance with the 13%，9%，Value-added tax (VAT)

tax law net of the input tax that is allowed to be deducted 6%

in the current period

For housing property levied on the basis of price housing

property tax is levied at the rate of 1.2% of the balance

Housing property tax after deducting 30% of the cost; for housing property 12%1.2%

levied on the basis of rent housing property tax is levied

at the rate of 12% of lease income

Urban maintenance and

Turnover tax actually paid 7%，5%construction tax

Education surcharge Turnover tax actually paid 3%

Local education surcharge Turnover tax actually paid 2%

Different enterprise income tax rates applicable to different taxpayers:

Taxpayers Income tax rate

Zhejiang Sanhua Intelligent Controls Co. Ltd 15%

Zhejiang Sanhua Commercial Refrigeration Co. Ltd 15%

Sanhua (hangzhou) Micro Channel Heat Exchanger Co. Ltd 15%

Zhejiang Sanhua Automotive Components Co. Ltd. 15%

Shaoxing Sanhua New Energy Automotive Components Co. 15%

Ltd

Wuhu Sanhua Auto-control Components Co. Ltd and other 15%

subsidiaries

Domestic taxpayers other than the above-mentioned 25%

123Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

2. Tax preferential policies

The company and several subsidiaries can enjoy tax incentives for high-tech enterprises and the final

settlement and payment shall prevail.Export goods enjoy the VAT exemption and refund policy; the exceeding portion over the 3% VAT payable of

the certified software products enjoy the immediate refund policy; several subsidiaries are welfare enterprises and

value-added tax enjoys the preferential policy of immediate collection and refund of the "employment quota for

disabled persons".

3. Others

The overseas subsidiary shall be subject to the tax regulations of its host country.

124Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Ⅶ. Notes to Items in the Consolidated Financial Statements

1. Cash and bank balances

Unit: RMB

Items Closing balance Opening balance

Cash on hand 611537.90 291216.13

Cash in bank 5171938336.92 6507907610.98

Other cash and bank balances 50333557.34 76485856.82

Total 5222883432.16 6584684683.93

Including: Deposited overseas 964008405.86 510550872.27

Other remarks:

As of June 30 2024 bank deposits containing large deposit certificates with fixed interest rates amounted to

2597.0668 million yuan.

2. Held-for-trading financial assets

Unit: RMB

Items Closing balance Opening balance

Financial assets at fair value through profit

100000000.00

or loss

Including:

Financial products 100000000.00

Including:

Total 100000000.00

3. Derivative Financial Assets

Unit: RMB

Items Closing balance Opening balance

Foreign exchange tool 7171639.44 20878992.10

Futures tools 3760125.00 1757120.58

Total 10931764.44 22636112.68

4. Notes receivable

（1）Categories of notes receivable

Unit: RMB

Items Closing balance Opening balance

Bank acceptance 2561934390.67 2332015457.09

Trade acceptance 5775043.04 7632781.39

Financial company acceptance 107616569.65 137191175.41

Total 2675326003.36 2476839413.89

125Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（2）Provision for bad debts

Unit: RMB

Closing balance Opening balance

Provision for Provision for

Book balance Book balance

bad debt bad debt

Categorie Amount Proport Amount ProPro

s Carrying ion visi Carrying visi

amount on amount

Amou Propo on

Amount pro

nt rtion pro

port

port

ion

ion

Including:

Notes

receivable

with

provision 26812

100.005967979.0.22267532624844577618345.0.31247683941

for bad 93983. 100.00%

%64%003.36759.7283%3.89

debt made 00

on a

collective

basis

Including:

Bank 25619

95.5525619342332015233201545

acceptanc 34390. 0.00 93.87%

%390.67457.097.09

e 67

Financial

company 113280 5664029. 5.00 10761656 14440779 7216620. 5.00 137191175.

4.22%5.81%

acceptanc 599.64 99 % 9.65 5.90 49 % 41

e

Trade

607895.005775043.8034506.5.00

acceptanc 0.23% 303949.65 0.32% 401725.34 7632781.39

92.69%0473%

e

26812

100.005967979.0.22267532624844577618345.0.31247683941

Total 93983. 100.00%

%64%003.36759.7283%3.89

00

Provision for bad debt made on a collective basis:

Unit: RMB

Closing balance

Items

Book balance Provision for bad debt Provision proportion (%)

Bank acceptance

2561934390.67

portfolio

Financial company

113280599.645664029.995.00%

acceptance

126Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Trade acceptance

6078992.69303949.655.00%

portfolio

Total 2681293983.00 5967979.64

If the provision for bad debt of notes receivable is in accordance with the general expected credit loss model:

√ Applicable □ Not Applicable

Unit: RMB

Phase I Phase II Phase III

Provision for bad Subtotal

debt 12* month expected credit Lifetime expected credit Lifetime expected

losses losses (credit not impaired) credit losses

(credit impaired)

Balance on January

120247618345.837618345.83

The balance as of

January 1 2024 is

in the current

period

Provision for this

period

-1650366.19-1650366.19

Balance on June 30

20245967979.645967979.64

（3）Provision for bad debt accrued recovered or reversed in current period

Provision for bad debt accrued in current period:

Unit: RMB

Changed amount of this period

Opening Closing

Categories Recovered or

balance Accrual Write off Others balance

reversed

Provision for

bad debt made

7618345.83-1650366.195967979.64

on a collective

basis

Total 7618345.83 -1650366.19 5967979.64

Including significant provision for bad debt recovered or reversed amount:

□ Applicable √ Not Applicable

（4）Pledged notes at the balance sheet date

Unit: RMB

Items Closing balance of pledged notes

Bank acceptance 1793910736.57

Financial company acceptance 72114823.15

Total 1866025559.72

127Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（5）Endorsed or discounted but undue notes at the balance sheet date

Unit: RMB

Closing balance not yet

Items Closing balance derecognized

derecognized

Bank acceptance 71858630.91

Total 71858630.91

5. Accounts receivable

（1）Disclosure of accounts receivable by aging

Unit: RMB

AR Aging Closing balance Opening balance

Within 1 year (including one year) 7475428437.53 6039601208.01

1 to 2 years 55145447.10 45652788.88

2 to 3 years 11138289.75 388260.85

Over 3 years 447720.11 265553.29

Total 7542159894.49 6085907811.03

（2）Disclosure of accounts receivable by categories

Unit: RMB

Closing balance Opening balance

Provision for Provision for

Book balance Book balance

Catego bad debt bad debt

ries Amount Propo Amoun Accru Carrying Amount Propo Amoun Accru Carrying

rtion t ed amount rtion t ed amount

propo propo

rtion rtion

Receiv

ables

with

provisi

on 8312148. 831214 100.00 5690817. 569081 100.00

0.11%0.09%

made 34 8.34 % 36 7.36 %

on an

individ

ual

basis

Includi

ng:

128Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Receiv

ables

with

provisi

on 7533847 99.89 381004 7152843 6080216 99.91 306225 5773991

5.06%5.04%

made 746.15 % 143.50 602.65 993.67 % 512.45 481.22

on a

collecti

ve

basis

Includi

ng:

7542159100.0038931671528436085907100.003119165773991

Total 5.16% 5.13%

894.49%291.84602.65811.03%329.81481.22

Provision made on an individual basis:

There are no provisions made on an individual basis need to be disclosed in this period.Unit: RMB

Closing balance

Items

Book balance Provision for bad debt Accrued proportion

Within 1 year 7472842540.14 373642127.09 5.00%

1 to 2 years 55145447.10 5514544.71 10.00%

2 to 3 years 5412038.80 1623611.64 30.00%

Over 3 years 447720.11 223860.06 50.00%

Total 7533847746.15 381004143.50

If the provision for bad debt of accounts receivable is in accordance with the general expected credit loss model:

√Applicable □ Not Applicable

Unit: RMB

Provision for bad debt Phase I Phase II Phase III

12* month expected Lifetime expected Lifetime expected Subtotal

credit losses credit losses (credit not credit losses (credit

impaired) impaired)

Balance on January 1 2024 301980060.40 3996197.15 5940072.26 311916329.81

The balance as of January 1

2024 is in the current period

Provision accrued in the

72270331.201518347.564731190.8778519869.63

current period

Provision reversed in current

period 608264.51 511643.09 1119907.60

Balance on June 30 2024

373642127.095514544.7110159620.04389316291.84

（3）Provision for bad debt accrued recovered or reversed in current period

Provision for bad debt accrued in current period:

Unit: RMB

129Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Changed amount of the current period

Opening Recovered Closing

Categories

balance Accrued or Write off Others balance

reversed

Receivables with

provision made on 5690817.36 3132974.07 511643.09 8312148.34

an individual basis

Receivables with

provision made on 306225512.45 75386895.56 608264.51 381004143.50

a collective basis

Total 311916329.81 78519869.63 1119907.60 389316291.84

（4）Details about accounts receivable actually written off in the current period

Unit: RMB

Item Amount

Actually written off amount 1119907.60

There were no significant write-offs of accounts receivable during the period

（5）Accounts receivable and contract assets of the top five ending balances

Closing balance of top 5 debtors totaled 3835.4284 million yuan accounting for 50.85% of the total closing

balance of accounts receivable. The corresponding provision for bad debts of accounts receivable is 191.8120

million yuan.

（6）Other remarks

Some of the company's accounts receivable are collected by digital and electronic debt vouchers. These debt

vouchers have certain credit liquidity and can be used for commercial factoring or transfer payment. As of June

30 2024 the company had 1905.2108 million yuan of digital and electronic debt vouchers in hand and 62.4937

million yuan of digital and electronic debt vouchers that had been transferred for payment but not expired.

6. Other receivables

Unit: RMB

Items Closing balance Opening balance

Other receivables 189681028.61 227792892.12

Total 189681028.61 227792892.12

（1）Other receivables

1）Other receivables categorized by nature

Unit: RMB

Items Closing balance Opening balance

Tax refund receivable 110811217.75 164712845.63

Guarantee deposits 27057636.23 45694632.70

Others 58138036.58 25466493.81

130Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Total 196006890.56 235873972.14

2）Disclosure by aging

Unit: RMB

Aging Closing balance Opening balance

Within 1 year (including one year) 185914210.46 209294612.66

1 to 2 years 4500822.46 7805876.63

2 to 3 years 2040040.72 6125806.34

Over 3 years 3551816.92 12647676.51

Total 196006890.56 235873972.14

3）Disclosure by categories

√ Applicable □Not Applicable

Unit: RMB

Closing balance Opening balance

Provision for Provision for

Book balance Book balance

Catego bad debt bad debt

ries Amount Propor Amoun Accru Carrying Amount Propor Amoun Accru Carrying

tion t ed amount tion t ed amount

propor propor

tion tion

Provisi

on

made

1161570116157017026821702682

on an 59.26% 72.19%

30.4330.4381.6881.68

individ

ual

basis

Includi

ng:

131Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Provisi

on

made 7984986 632586 7352399 6560569 808108 5752461

40.74%7.92%27.81%12.32%

on a 0.13 1.95 8.18 0.46 0.02 0.44

collect

ive

basis

Includi

ng:

1960068100.0063258618968102358739100.008081082277928

Total 3.23% 3.43%

90.56%1.9528.6172.14%0.0292.12

Provision made on a collective basis:

Unit: RMB

Closing balance

Items

Book balance Provision for bad debt Accrued proportion

Within 1 year 69757180.03 3487859.03 5.00%

1 to 2 years 4500822.46 450082.24 10.00%

2 to 3 years 2040040.72 612012.22 30.00%

Over 3 years 3551816.92 1775908.46 50.00%

Total 79849860.13 6325861.95

Provision for bad debt of other receivables in accordance with the general expected credit loss model:

Unit: RMB

Phase I Phase II Phase III

Provision for bad 12* month Lifetime expected Lifetime expected Subtotal

debt

expected credit credit losses (credit credit losses (credit

losses not impaired) impaired)

Balance on January

2301288.08780587.674999204.278081080.02

12024

The balance as of

January 1 2024 is

in the current

period

Provision for this

1186570.95-330505.43-924586.07-68520.55

period

Write off for this

1686697.521686697.52

period

Balance on June 30

3487859.03450082.242387920.686325861.95

2024

Loss provisions for significant changes in book balances in current period

□ Applicable √ Not Applicable

132Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

4）Provision for bad debt accrued recovered or reversed in current period

Provision for bad debt accrued in current period:

Unit: RMB

Changed amount of the current period

Opening Closing

Categories Recovered

balance Accrued Write off Others balance

or reversed

Provision for bad debt 8081080.02 -68520.55 1686697.52 6325861.95

Total 8081080.02 -68520.55 1686697.52 6325861.95

（5）Details about accounts receivable actually written off in the current period

Unit: RMB

Item Amount

Actually written off amount 1686697.52

There were no significant write-offs of accounts receivable during the period.

6）Details of the top 5 debtors with largest balances

Unit: RMB

Proportion to Provision for

Nature of the total balance bad debt at the

Items Closing balance Ages

receivables of other end of the

receivables period

Tax refund

Tax refund 110811217.75 Within 1 year 56.53%

receivables

Customs

US Customs 5345812.68 Within 1 year 2.73%

deposit

Hailiang

(Anhui) Copper Performance

4000000.00 Within 1 year 2.04% 200000.00

Industry Co. bond

Ltd

Shaoxing

Binhai New

City

Performance

Development 1311000.00 Within 1 year 0.67% 65550.00

bond

and

Construction

Co. Ltd

Hisense

Performance

Refrigerator 800000.00 0 to 2 years 0.41% 65000.00

bond

Co. Ltd

Total 122268030.43 62.38% 330550.00

133Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

7. Advances paid

（1）Advances paid by aging

Unit: RMB

Closing balance Opening balance

Aging

Amount Percentage Amount Percentage

Within 1 year 142420509.02 94.27% 128617877.12 96.13%

1 to 2 years 4641165.56 3.07% 2851372.48 2.13%

2 to 3 years 3601200.00 2.38% 1053936.12 0.79%

Over 3 years 407761.00 0.27% 1269437.82 0.95%

Total 151070635.58 133792623.54

（2）Top 5 debtors with the largest advances paid balances

Closing balance of top 5 debtors totaled 27328487.07 yuan accounting for 18.09% of the total closing

balance.

8. Inventories

Whether the Company needs to comply with the disclosure requirements of the real estate industry

□Yes √ No

（1）Categories of inventories

Unit: RMB

Closing balance Opening balance

Provision for Provision for

decline in decline in

value of value of

inventories inventories

Items or provision Carrying or provision Carrying

Book balance Book balance

for amount for amount

impairment impairment

of contract of contract

performance performance

costs costs

Raw

1120760900.4967612940.351053147960.14932169486.9061788757.16870380729.74

materials

Work-in-

706437334.088597976.58697839357.50596409922.791602512.78594807410.01

progress

Finished

2798119611.5354209754.072743909857.463179557350.4750888480.613128668869.86

goods

Others 14678120.63 14678120.63 6872368.58 6872368.58

Total 4639995966.73 130420671.00 4509575295.73 4715009128.74 114279750.55 4600729378.19

（2）Provision for decline in value of inventories and Provision for impairment of contract performance

costs

Unit: RMB

134Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Decrease in current

Increase in current period

Opening period

Items Closing balance

balance Reversal or

Accrued Others Others

write off

Raw materials 61788757.16 16531019.49 10706836.30 67612940.35

Work-in-

1602512.786922057.9073405.908597976.58

progress

Finished goods 50888480.61 29728741.33 54502.21 26461970.08 54209754.07

Total 114279750.55 53181818.72 127908.11 37168806.38 130420671.00

9. Other current assets

Unit: RMB

Items Closing balance Opening balance

Deductible input tax 166625073.66 186254431.54

Prepaid Enterprise income tax 13564061.42 61993000.46

Others 10908713.19 2826152.56

Total 191097848.27 251073584.56

10. Long-term receivable

（1）Long-term receivable

Unit: RMB

Closing balance Opening balance

Range of

Provision Provision

Items Book Carrying Book Carrying discount

for bad for bad

balance amount balance amount rate

debt debt

Employee

3805833.603805833.60

home loan

Guarantee of 35133388.2 35133388.2

quality 4 4

Unrecognised - -

financing 35133388.2 35133388.2

gain 4 4

Total 0.00 0.00 3805833.60 3805833.60

11. Long-term equity investments

Unit: RMB

Changes in current period

Opening Closing

Investm Cash

balance Adjustm balance

Opening ent dividend Closing

of Investm Investm ent in Provisio of

Investee balance income Changes / Profit balance

provisio ents ents other n for provisio

s (Book recogniz in other declared Others (Book

n for increase decrease compreh impairm n for

value) ed under equity for value)

impairm d d ensive ent impairm

equity distribut

ent income ent

method ion

135Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

1. Associates

2. Joint ventures

Chongqi

ng

-

Tainuo 1830417 2882088 1618626

5000000

Machine 6.79 .15 4.94.00

ry Co.Ltd.Qingdao

Sanhua

Jinlifeng 7207202 1524268 8731471

0.00

Machine .81 .57 .38

ry Co.Ltd.Guochu

ang

Energy

Internet

Innovati 4941151 118788.9 5059939

0.00

on .03 5 .98

Center

(Guangd

ong)

Co. Ltd

Ningbo

Jinlifeng -

2818824648292.42217116

Machine 1250000.390.79

ry Co. .00

Ltd.Xinchan

g

zhejiang

energy

18467621873693

sanhua 26931.08 0.00.69.77

compreh

ensive

energy

co. LTD

Zhongsh

an

Xuanyi

2806313219492.83025806

Pipe 0.00.586.44

Manufa

cturing

Co. Ltd

-

379244354198623709429

Subtotal 6250000

1.29.013.30.00

-

379244354198623709429

Total 6250000

1.29.013.30.00

The recoverable amount is determined based on the net amount after deducting disposal expenses from fair value

□ Applicable √ Not Applicable

The recoverable amount is determined based on the present value of expected future cash flows

136Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

□ Applicable √ Not Applicable

12. Investment property

（1）Investment property measured by cost method

√ Applicable □ Not Applicable

Unit: RMB

Land use right and

Items Buildings and structures Total

Overseas land ownership

* . Original Carrying

amount

1.Opening balance 12988799.79 3465907.20 16454706.99

2.Increase in current

450964.17-87097.50363866.67

period

（1）Acquisition 316459.62 316459.62

（2）Transferred in

from inventory\fixed

assets\ construction in

progress

（3）Increase in

business merger

（4）Converted

difference in Foreign 134504.55 -87097.50 47407.05

Currency Statements

3.Decrease in current

period

（1）Disposal

（2）Other transfer out

4.Closing balance 13439763.96 3378809.70 16818573.66

* . Accumulated

depreciation and

amortization

1.Opening balance 8288901.68 8288901.68

2. Increase in current

941240.05941240.05

period

（1）Accrual or

1130899.101130899.10

amortization

137Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（2）Converted

difference in Foreign -189659.05 -189659.05

Currency Statements

3.Decrease in current

period

（1）Disposal

（2）Other transfer out

4.Closing balance 9230141.73 9230141.73

* . Provision for

impairment

1.Opening balance

2. Increase in current

period

（1）Accrual

3.Decrease in current

period

（1）Disposal

（2）Other transfer out

4.Closing balance

* . Carrying amount

1.Closing balance 4209622.23 3378809.70 7588431.93

2.Opening balance 4699898.11 3465907.20 8165805.31

The recoverable amount is determined based on the net amount after deducting disposal expenses from fair value

□ Applicable √ Not Applicable

The recoverable amount is determined based on the present value of expected future cash flows

□ Applicable √ Not Applicable

（2）Investment properties measured using fair value measurement model

□ Applicable √ Not Applicable

13. Fixed assets

Unit: RMB

Items Closing balance Opening balance

Fixed assets 8018985493.67 7730363778.82

Total 8018985493.67 7730363778.82

138Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（1）Fixed assets

Unit: RMB

Machinery and Transportation Office and other

Items Buildings and structures Total

equipment vehicles equipment

* . Original

book

value:

1.Opening

4047371816.597015745758.8948012520.72288532729.2011399662825.40

balance

2. Increase

in current 168209500.72 369757804.33 2933853.21 56850274.09 597751432.35

period

（1）

6766236.5083549914.183046854.5341720838.45135083843.66

Acquisition

（2）

Transferred in

from 189294675.78 291617863.12 15907577.71 496820116.61

construction in

progress

（3）Increase

in business

merger

（4）

Converted

difference in

-27851411.56-5409972.97-113001.32-778142.07-34152527.92

Foreign

Currency

Statements

3. Decrease

in current 13884008.95 1549497.06 1139488.61 16173567.09 32746561.71

period

（1）

Disposal or 13884008.95 1549497.06 1139488.61 16173567.09 32746561.71

scrap

4.Closing

4201697308.367383954066.1649806885.32329209436.2011964667696.04

balance

*.Accumulated

depreciation

1.Opening

757805108.302712789940.7429589671.69144827742.273645012463.00

balance

2. Increase

in current 77379049.75 241976625.64 2135428.43 16097827.56 337588931.38

period

（1）Accrual 79877741.83 246201849.56 2199871.81 16394494.52 344673957.72

(2) Converted

difference in

Foreign -2498692.08 -4225223.92 -64443.38 -296666.96 -7085026.34

Currency

Statements

3. Decrease

in current 1872764.36 51365630.81 1531410.51 3079219.53 57849025.21

period

139Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（1）Disposal

1872764.3651365630.811531410.513079219.5357849025.21

or scrap

4.Closing

833311393.692903400935.5730193689.61157846350.303924752369.17

balance

* . Provision

for

impairment

1.Opening

23829156.84457426.7424286583.58

balance

2. Increase

in current

period

（1）Accrual

3. Decrease

in current 3327909.66 28840.72 3356750.38

period

（1）Disposal

3327909.6628840.723356750.38

or scrap

4.Closing

20501247.18428586.0220929833.20

balance

* . Carrying

amount

1.Closing

3368385914.674460051883.4119613195.71170934499.888018985493.67

balance

2.Opening

3289566708.294279126661.3118422849.03143247560.197730363778.82

balance

（2）Temporarily idle fixed assets

Unit: RMB

Original book Accumulated Impairment

Item Net book value Notes

value depreciation provision

Machinery and

39540859.1618110601.0020897208.34533049.82

equipment

Office equipment

402344.15369309.2932624.86410.00

and others

Subtotal 39943203.31 18479910.29 20929833.20 533459.82

（3）Fixed assets leased out through operating leases

Unit: RMB

Item Closing balance

Buildings and structures 33455808.98

（4）Fixed assets with certificate of titles being unsettled

Unit: RMB

Item Carrying amount Reasons for unsettlement

Sitong new factory1# production 36197351.79 New assets the certificate of title to

140Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

workshop and power workshop be processed uniformly after the

overall completion

Parts accessories and Class A New assets the certificate of title to

warehouse in the new factory of 23701068.10 be processed uniformly after the

Sitong overall completion

New assets the certificate of title to

Pump and auxiliary room in the new

7325165.81 be processed uniformly after the

factory of Sitong

overall completion

New assets the certificate of title to

Dormitory of Sitong 1#&2# 42178969.78 be processed uniformly after the

overall completion

New assets the certificate of title to

Factory 13-15# in Meichu North

159442014.54 be processed uniformly after the

District

overall completion

Finished product warehouse and New assets the certificate of title to

Class A warehouse in Meichu North 38098009.54 be processed uniformly after the

District overall completion

Power tooling experimental testing New assets the certificate of title to

and R&D testing workshop in 1-8 # 425779181.41 be processed uniformly after the

of Commercial overall completion

Commercial refrigeration product

New assets the certificate of title to

warehouse raw material warehouse

62151537.91 be processed uniformly after the

Class A warehouse and Class C

overall completion

warehouse

New assets the certificate of title to

Commercial dormitory 1-4# 148034040.06 be processed uniformly after the

overall completion

New assets the certificate of title to

Commercial canteens training

38537450.24 be processed uniformly after the

buildings etc

overall completion

New assets the certificate of title to

Wuhu Sanhua Automatic Control

72466558.09 be processed uniformly after the

dormitory

overall completion

New assets the certificate of title to

1 # Super workshop and power plant 187076296.94 be processed uniformly after the

overall completion

New assets the certificate of title to

Heat exchanger 9 # production

140866562.99 be processed uniformly after the

workshop

overall completion

Commercial refrigeration hydrogen

station 35KV substation three

New assets the certificate of title to

waste treatment station activity

18473783.39 be processed uniformly after the

management room administrative

overall completion

area security guard logistics area

security guard

14. Construction in progress

Unit: RMB

Items Closing balance Opening balance

Construction in progress 2746629632.47 2036326757.72

Total 2746629632.47 2036326757.72

141Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（1）Details of construction in progress

Unit: RMB

Closing balance Opening balance

Items Provision for Carrying Provision for Carrying

Book balance Book balance

impairment amount impairment amount

Annual

production of

12 million sets

of intelligent

thermal

management

159823657.32159823657.32259331934.09259331934.09

components of

new energy

vehicles

technical

renovation

project

Annual

production of

12.5 million

sets of

intelligent

thermal 275215675.22 275215675.22 208351289.28 208351289.28

management

module for new

energy vehicles

construction

project

Annual

production of 8

million sets of

intelligent

230046921.69230046921.69186106762.72186106762.72

thermal

management

component

project

Sanhua Minshi

Automotive

investment 21

million euros to

establish a new 104761923.55 104761923.55 138550445.99 138550445.99

automotive

parts

production line

project

Industrial Plant

Engineering in 212595522.92 212595522.92 128804884.71 128804884.71

Mexico

The new

energy vehicle

thermal

management 502038616.60 502038616.60 113445275.23 113445275.23

parts

production

project in

142Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Guangdong

Sanhua

Annual

production of

1.5 million sets

new energy

61338484.3461338484.3487649308.5087649308.50

thermal

management

component

project

Annual output

of 11 million

sets of high

efficiency heat

86172352.4286172352.4287188916.5587188916.55

exchange

component for

new energy

vehicles project

Dormitory of

107369474.19107369474.1977248786.3777248786.37

Automotive

150-3#-6#

Rental

119634066.95119634066.9573709950.0073709950.00

dormitory

buildings

Annual output

of 14 million

sets of new

energy cooling

76422286.6376422286.6366609673.6166609673.61

component

technology

renovation

project

Annual output

of 11 million

sets of

components 90954786.63 90954786.63 61306246.90 61306246.90

technical

renovation

projects

5 million sets

of technical

renovation 23568313.34 23568313.34 28032778.68 28032778.68

projects and

equipment

Vietnam

Industrial Plant 66584064.04 66584064.04 27351178.96 27351178.96

Engineering

Annual output

of 3 million

sets of thermal

management

components for

27831644.6827831644.6824537513.2024537513.20

new energy

vehicles

technical

renovation

project

143Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Annual output

of 4 million

sets of heat

pump

components for

9255697.819255697.8116303564.1016303564.10

new energy

vehicles

technical

renovation

project

Annual output

of 65 million

sets of

intelligent

control

components for 11685886.29 11685886.29 14882282.34 14882282.34

commercial

refrigeration

and air

conditioning

project

Sanhua new

energy vehicle

battery water

cooled plate 12697090.98 12697090.98 13525758.03 13525758.03

production line

construction

project

Annual output

of 3 million

sets of plate

heat exchange

units and

annual output

of 2 million 49621126.68 49621126.68 11493210.78 11493210.78

sets of EXV

electronic

expansion

valve

components

project

Others 519012040.19 519012040.19 411896997.68 411896997.68

Total 2746629632.47 2746629632.47 2036326757.72 2036326757.72

（2）Changes of significant construction in progress in current period

Unit: RMB

Transf Accu Includi

Other Accum Capitali

erred mulate ng:

amoun Comple ulated zation

Increas to d capitali

Openin ts tion amount rate for

ed in fixed Closing invest zed Fund

Items Budget g decrea percent of interest

current assets balance ment interest source

balance sed in age capitali in

period in to in

current (%) zed current

the budget current

period interest period

current (%) period

144Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

period

Annual

producti

on of 65

million

sets of

commer

cial

refrigera

tion and

17805

air 148822 404156 43612 1168588 Raised

50000.75.12%75.12%

conditio 82.34 38.32 034.37 6.29 funds

00

ning

intellige

nt

control

compon

ents

construc

tion

project

Annual

output

of 50.5

million

sets of

high

efficienc

y and

energy

7855700 464239 46423 Raised

saving 31.40% 31.40%

00.00 09.30 909.30 funds

refrigera

tion and

air

conditio

ning

control

compon

ents

project

Annual

producti

on of 1.5

million

sets of

new Self-

650500087649358520632162613384133.25

energy 99.98% raised

00.0008.505.35889.5184.34%

thermal funds

manage

ment

compon

ents

project

Annual

Self-

output 9400000 871889 126348 127365 861723

80.86% 80.86% raised

of 11 00.00 16.55 917.92 482.05 52.42

funds

million

145Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

sets of

new

energy

vehicles

high

efficienc

y heat

exchang

er

assembl

y project

Annual

output

of 12.5

million

sets

intellige

nt

thermal Self-

1372650208351668643275215

manage 20.05% 20.05% raised

000.00289.2885.94675.22

ment funds

module

for new

energy

vehicles

construc

tion

project

The new

energy

vehicle

thermal

manage

ment

Self-

parts 2050000 1134452 388605 11710. 502038

24.49% 24.49% raised

producti 000.00 75.23 051.99 62 616.60

funds

on

project

in

Guangd

ong

Sanhua

Annual

producti

on of 8

million

sets of

intellige Self-

＄1500010704213535712353230046

nt 28.85% 28.85% raised

000.00879.46621.95579.72921.69

thermal funds

manage

ment

compon

ents

project

618559809867261929116649

Total

951.36590.77605.577936.56

146Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（3）Impairment testing of construction in progress

□ Applicable √ Not Applicable

15. Right of use assets

（1）Details of right of use assets

Unit: RMB

Items Houses and buildings Vehicle Total

* . Original Carrying

amount

1.Opening balance 515115808.59 9520959.07 524636767.66

2.Increased in current

13964299.67-51329.7613912969.91

period

(1) Rent 16924450.63 177448.34 17101898.97

(2) Converted difference in

Foreign Currency -2960150.96 -228778.10 -3188929.06

Statements

3.Decreased in current

11321136.662187277.6113508414.27

period

(1) Disposal 11321136.66 2187277.61 13508414.27

4.Closing balance 517758971.60 7282351.70 525041323.30

* . Accumulated

amortization

1.Opening balance 208527758.51 2854263.62 211382022.13

2.Increased in current

47082269.03-38240.9147044028.12

period

(1) Accrual 47331258.02 33144.32 47364402.34

(2) Converted difference

in Foreign Currency -248988.99 -71385.23 -320374.22

Statements

3. Decreased in

6126072.92716010.546842083.46

current period

(1) Disposal 6126072.92 716010.54 6842083.46

4.Closing balance 249483954.62 2100012.17 251583966.79

* . Provision

for impairment

1.Opening balance

2. Increased in current

period

（1）Accrual

3. Decreased in

current period

（1）Disposal

4.Closing balance

* . Carrying amount

1.Closing balance 268275016.98 5182339.53 273457356.51

2.Opening balance 306588050.08 6666695.45 313254745.53

147Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（2）Impairment testing of right of use assets

□ Applicable √ Not Applicable

16. Intangible Assets

（1）Details of intangible assets

Unit: RMB

Overseas land Application Intellectual

Items Land use right Total

ownership software property

* . Original Carrying

amount

1.Opening balance

831065742.5487865763.7559242753.8052824940.361030999200.45

2.Increased in

current period

105661450.3582588023.928064368.17196313842.44

（1）

Acquisition 107940679.65 88110446.31 8786657.92 204837783.88

（2）Internal

research and

development

（3）Increased

in business merger

（4）Converted

difference in Foreign

Currency Statements

-2279229.30-5522422.39-722289.75-8523941.44

3.Decreased in

current period

（1）Disposal

148Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

4.Closing balance 936727192.89 170453787.67 67307121.97 52824940.36 1227313042.89

*.Accumulated

amortization

1.Opening balance 120494299.61 739235.92 35248356.61 30651015.49 187132907.63

2.Increased in

9306097.5471309.234932552.473090987.1117400946.35

current period

（1）Accrual 9680778.78 66706.42 5167388.11 3090987.11 18005860.42

（2) Converteddifference in Foreign -374681.24 4602.81 -234835.64 -604914.07

Currency Statements

3. Decreased in

current period

（1）Disposal

4.Closing balance 129800397.15 810545.15 40180909.08 33742002.60 204533853.98

* . Provision

for impairment

1.Opening balance

2. Increased in

current period

（1）Accrual

149Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（2) Converteddifference in Foreign

Currency Statements

3. Decreased in

current period

（1）Disposal

4.Closing balance

* . Carrying amount

1.Closing balance 806926795.74 169643242.52 27126212.89 19082937.76 1022779188.91

2.Opening balance 710571442.93 87126527.83 23994397.19 22173924.87 843866292.82

At the end of this period the proportion of intangible assets formed through internal research and development of

the company to the balance of intangible assets is 0.00%.

17. Goodwill

（1）Original Carrying amount of goodwill

Unit: RMB

Investee or Increased in current period Decreased in current period

events Opening Due to Closing

resulting in balance business Disposal balance

goodwill combination

R-Squared

31959091.6031959091.60

Puckett Inc.Goodwill of

Asset Group of

Zhejiang

Sanhua plate 5839387.56 5839387.56

Exchange

Technology

Co. Ltd

Goodwill of

Non-Asset

1752443.051752443.05

Group of

Zhejiang

150Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Sanhua plate

Exchange

Technology

Co. Ltd

Total 39550922.21 39550922.21

（2）Provision for goodwill impairment

Unit: RMB

Investee or Increased in current period Decreased in current period

events Opening Closing

Provision

resulting in balance Disposal balance

made

goodwill

R-Squared

31959091.6031959091.60

Puckett Inc.Goodwill of

Non-Asset

Group of

Zhejiang

806602.57201650.641008253.21

Sanhua plate

Exchange

Technology

Co. Ltd

Total 32765694.17 201650.64 32967344.81

（3）Other remarks

Goodwill of Non-Asset Group of Zhejiang Sanhua plate Exchange Technology Co. Ltd. refers to the

goodwill formed by recognizing deferred income tax liabilities for asset valuation appreciation the goodwill

generated when Zhejiang Sanhua Commercial Co. Ltd. acquired and merged Zhejiang Sanhua plate Exchange

Technology Co. Ltd. under non-common control the goodwill impairment loss is provisioned synchronously

with the reversal of deferred tax liabilities.

18. Long-term prepayments

Unit: RMB

Opening Increased in

Items Amortization Other decreases Closing balance

balance current period

Rental housing

construction

and 91089761.84 31555734.67 11365116.11 111280380.40

transformation

expenditure

Expenditures on

tooling and 27006674.25 7936545.53 6317963.99 28625255.79

molds

Total 118096436.09 39492280.20 17683080.10 139905636.19

151Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

19. Deferred tax assets / deferred tax liabilities

（1）Deferred tax assets before offset

Unit: RMB

Closing balance Opening balance

Items Deductible temporary Deferred tax Deductible temporary Deferred tax

difference assets difference assets

Provision for bad

339588141.8873560923.63261315206.5854641190.49

debt

Provision for

25678481.745596181.5342325391.268139006.84

inventory write-down

Unrealized profit

from internal 369869111.14 24940973.45 433833345.36 34546191.69

transactions

Deductible losses 92293578.38 23073394.61 76215945.95 18485636.55

Deferred income-

410380362.6872697603.83378102855.5368133180.61

government grants

Provision for fixed

20929833.203149723.2220614046.133102355.15

assets impairments

Lease liabilities 68592824.33 13108534.26 85136567.36 16775016.78

Share-based payment

149253576.0222853190.06115180902.7917742289.08

expenses

Floating loss of

derivative 263750.00 39562.50 1228538.00 184280.70

instruments

Total 1476849659.37 239020087.09 1413952798.96 221749147.89

（2）Deferred tax liabilities before offset

Unit: RMB

Closing balance Opening balance

Items Taxable temporary Deferred tax Taxable temporary Deferred tax

difference liabilities difference liabilities

Appreciation of

assets appraisal of the

business

7087522.281063128.349008004.601351200.69

combinations not

under common

control

Accelerated

depreciation of 2160986121.81 340381985.50 2047041074.93 324214511.19

equipment

Floating gain on

3901784.20585267.631463100.00219465.00

derivatives

Accrued interest of

181261422.7829226390.92191331258.6230267866.29

certificate of deposit

Right-of-use assets 68592824.33 13108534.28 85136567.36 16775016.78

Total 2421829675.40 384365306.67 2333980005.51 372828059.95

152Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

（3）Deferred tax assets or liabilities after offset shown on a net offsetting basis

Unit: RMB

Deferred tax assets Deferred tax assets

Closing balance of Opening balance of

and liabilities offset and liabilities offset

deferred tax assets deferred tax assets

Items amount at the end amount at the

or liabilities after or liabilities after

of the balance beginning of the

offset offset

amount balance amount

Deferred tax assets 136496569.94 102523517.15 65316990.66 156432157.23

Deferred tax

136496569.94247868736.7365316990.66307511069.30

liabilities

（4）Details of unrecognized deferred tax assets

Unit: RMB

Items Closing balance Opening balance

Provision for bad debt 62021991.55 66300549.08

Provision for inventory write-down 104742189.26 71954359.29

Deductible losses of subsidiaries 307426461.72 280085140.01

Deferred income-government grants 704347.35 1037186.95

Floating loss on derivatives 36639620.31 9490572.02

Investment losses recognized by the equity

19494293.3020324431.29

method

Total 531028903.49 449192238.64

（5）Deductible losses of unrecognized deferred tax assets will expire in the following years

Unit: RMB

Maturity years Closing balance Opening balance Remarks

Year 2025 1160674.55

Year 2026 521923.98

Year 2027 18085193.22 23055008.78

Year 2028 69411053.56 74714376.64

Year 2029 79612442.10 16716170.44

Year 2030 6447140.25 12549643.88

Year 2031 69321405.03 69321405.03

Year 2032 3108373.33 6336459.07

Year 2033 61440854.23 75709477.64

Total 307426461.72 280085140.01

20. Other non-current assets

Unit: RMB

Items Closing balance Opening balance

153Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Provision Provision

Book Carrying Carrying

for Book balance for

balance amount amount

impairment impairment

Advanced

payment for

non-current 537847282.09 537847282.09 564023136.83 564023136.83

assets

purchasing

Employee

3986468.003986468.00

housing loan

Total 541833750.09 541833750.09 564023136.83 564023136.83

21. Assets with title or use right restrictions

Unit: RMB

Closing Opening

Reasons Reasons

Type of Type of

Items Book Carrying for Book Carrying for

restriction restriction

balance amount restriction balance amount restriction

s s

s s

Cash and

50256461. 50256461. Guarante 76476700. 76476700. Guarante

bank Pledge Pledge

32 32 e deposit 95 95 e deposit

balances

Cash and

28157037 28157037 Pledge

bank Pledge

9.73 9.73 financing

balances

Notes

18660255 18624198 Pledge 22143638 22084468 Pledge

receivabl Pledge Pledge

59.72 18.56 financing 80.38 69.75 financing

e

Digital Digital

and and

electronic electronic

debt debt

vouchers vouchers

Accounts

62493748. 59369060. that have 66621446. 63290374. that have

receivabl Pledge Pledge

40 98 been 85 51 been

e

endorsed endorsed

or or

discounte discounte

d but are d but are

not due not due

19787757197204532639032426297843

Total

69.4440.8607.9124.94

22. Short-term borrowings

（1）Categories of short-term borrowings

Unit: RMB

Items Closing balance Opening balance

Credit borrowings 400000000.00 200000000.00

154Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Overseas loan under domestic

987273900.001002451361.04

guarantee

Financial asset discount financing 9700000.00 5748871.44

Accrued interest 1226302.82 3950146.37

Total 1398200202.82 1212150378.85

23. Trading financial liabilities

Unit: RMB

Items Closing balance Opening balance

Trading financial liabilities 3500000.00

Including:

Contingent consideration for

3500000.00

business merge

Including:

Total 3500000.00

24. Derivative financial liabilities

Unit: RMB

Items Closing balance Opening balance

Exchange rate derivative 36636918.40 10719110.02

Futures derivative 266451.91

Total 36903370.31 10719110.02

25. Notes payable

Unit: RMB

Categories Closing balance Opening balance

Bank acceptance 3520145951.34 3416711594.64

Total 3520145951.34 3416711594.64

26. Accounts payable

（1）Details of accounts payable

Unit: RMB

Items Closing balance Opening balance

Within 1 year 4882360110.46 4405227329.99

1 to 2 years 114033135.57 27522682.35

2 to 3 years 27678372.62 10155105.49

Over 3 years 9794937.33 7035241.98

Total 5033866555.98 4449940359.81

27. Other payables

Unit: RMB

Item Closing balance Opening balance

Other payables 578350601.82 250642662.86

155Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Total 578350601.82 250642662.86

（1）Other payables

1）Other payables listed by nature

Unit: RMB

Items Closing balance Opening balance

Restricted shares repo obligations 410702774.29 118010274.29

Demolition of loans 33604994.80

Compensation for product quality

7138336.7219370760.58

loss

Guarantee deposit 52167839.25 41716593.20

Rent and property fee 7962781.21 2401192.28

Collection of talent awards 2529968.59 4114516.00

Others 64243906.96 65029326.51

Total 578350601.82 250642662.86

28. Contract liabilities

Unit: RMB

Items Closing balance Opening balance

Customer contract advance

62714790.2451788802.03

payment

Total 62714790.24 51788802.03

29. Employee benefits payable

（1）Details of employee benefits payable

Unit: RMB

Opening Increased in Decreased in Closing

Items

balance current period current period balance

* . Short-term employee benefits 581554274.99 1875917342.94 1974595148.52 482876469.41

* . Post-employment benefits -

12017618.6666644195.7271378470.287283344.10

defined contribution plan

* . Termination benefits 5229352.69 1304946.95 3924405.74

Total 598801246.34 1942561538.66 2047278565.75 494084219.25

（2）Details of Short-term employee benefits

Unit: RMB

Increased in current Decreased in current

Items Opening balance Closing balance

period period

1. Wage bonus

allowances and 528759992.88 1416192432.70 1538847892.16 406104533.42

subsidy

2. Employee welfare

805549.1868972957.0769197652.44580853.81

fund

3. Social insurance 18721770.38 60674873.01 56385318.42 23011324.97

156Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

premium

Including:

5616918.9235782799.7136612331.424787387.21

Medicare premium

Occupational injuries 747127.97 2461898.71 2911553.77 297472.91

premium

121875.86112835.6380881.69153829.80

Maternity premium

Overseas social

12235847.6322317338.9616780551.5417772635.05

security contributions

4. Housing provident

19286.0037579813.2737569495.2729604.00

fund

5.Dispatching

23811068.55281568793.93263383478.9041996383.58

remuneration

6. Stock appreciation

7879890.00760620.008640510.00

option

7.Others 1556718.00 10167852.96 9211311.33 2513259.63

Total 581554274.99 1875917342.94 1974595148.52 482876469.41

（3）Details of defined contribution plan

Unit: RMB

Opening Increased in current Decreased in current Closing

Items

balance period period balance

1. Basic endowment insurance

11603727.0164425459.9168994165.937035020.99

premium

2. Unemployment insurance

413891.652218735.812384304.35248323.11

premium

Total 12017618.66 66644195.72 71378470.28 7283344.10

30. Taxes and rates payable

Unit: RMB

Items Closing balance Opening balance

Enterprise income tax 163522335.15 186575216.87

VAT 53318488.42 30168036.77

Housing property tax 14269671.01 23482515.63

Land use tax 7466399.06 12974469.60

Urban maintenance and

4868921.435330039.26

construction tax

Education surcharge 2463553.88 2459912.39

Local education surcharge 1643109.17 1639941.61

Overseas tax 8544900.23 99516370.91

Individual income tax 9625590.52 12843108.53

Others 6550789.65 7407179.62

Total 272273758.52 382396791.19

31. Non-current liabilities due within one year

Unit: RMB

Items Closing balance Opening balance

157Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Guaranteed borrowings 230000000.00 1370000000.00

Accrued interest 1904138.91 1195277.78

Lease liabilities 60665100.54 68897976.15

Total 292569239.45 1440093253.93

32. Other current liabilities

Unit: RMB

Items Closing balance Opening balance

Output tax to be written off 2837216.89 2099986.27

Total 2837216.89 2099986.27

33. Long-term borrowings

（1）Categories of long-term borrowings

Unit: RMB

Items Closing balance Opening balance

Guaranteed borrowings 2220000000.00 1030000000.00

Accrued interest 801111.13

Total 2220000000.00 1030801111.13

34. Leased liabilities

Unit: RMB

Items Closing balance Opening balance

Lease payables 259007745.00 290193458.01

Less：Leased liabilities due within 1

-60665100.54-68897976.15

year

Total 198342644.46 221295481.86

35. Long-term payables

Unit: RMB

Items Closing balance Opening balance

Long-term payables 17497031.70 11290788.32

Total 17497031.70 11290788.32

（1）Long-term payables listed by nature

Unit: RMB

Items Closing balance Opening balance

Stock appreciation rights deposit 9657551.70 3499818.32

Retention money 7839480.00 7790970.00

Total 17497031.70 11290788.32

158Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

36. Long-term employee benefits payable

（1）Table of long-term employee benefits payable

Unit: RMB

Items Closing balance Opening balance

Long-term employee rights protection funds 37014460.55 39840362.77

Total 37014460.55 39840362.77

37. Deferred income

Unit: RMB

Opening Increased in current Decreased in Closing Reasons for

Items

balance period current period balance balance

Government Related to

379140042.4866427000.0034482332.45411084710.03

grants assets

Total 379140042.48 66427000.00 34482332.45 411084710.03 --

38. Other non-current liabilities

Unit: RMB

Items Closing balance Opening balance

Engineering agent construction

18154107.2518154107.25

fund

Total 18154107.25 18154107.25

39. Share capital

Unit: RMB

Changed amount of current period（+/-）

Issue

Reserve

Opening balance of Bonus Closing balance

transferred Others Subtotal

new shares

to shares

shares

Total

3732615535.003732615535.00

shares

40. Capital reserve

Unit: RMB

Increased in current Decreased in

Items Opening balance Closing balance

period current period

Capital premium

（Share 3296004248.86 291333303.19 3004670945.67premium）

Other capital

159639317.1234072715.35193712032.47

reserve

Total 3455643565.98 34072715.35 291333303.19 3198382978.14

159Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

41. Treasury shares

Unit: RMB

Increased in current Decreased in

Items Opening balance Closing balance

period current period

Restricted shares 118009850.00 292692500.00 3057250.00 407645100.00

Repo shares 305458741.57 299977735.21 577662900.00 27773576.78

Total 423468591.57 592670235.21 580720150.00 435418676.78

42. Other comprehensive income (OCI)

Unit: RMB

Changed amount of the current period

Less:

Less: OCI Attributa

Current OCI Attributab

carried Less: ble to

period carried le to

Opening forward incom Non- Closing

Items cumulativ forward the parent

balance transferre e tax controllin balance

e before transferr Company

d to expen g

income ed to after

undistribu se interest

tax profit or tax

ted profit after tax

loss

Items to be

reclassified - - -

114757064

subsequentl 170919517 170919517 56162453.28

y to profit .87 .87 .59

or loss

---

Converted 114757064

17091951717091951756162453

difference .28.87.87.59

in Foreign

Other

---

comprehens 114757064

17091951717091951756162453

ive income .28.87.87.59

in total

43. Surplus reserve

Unit: RMB

Opening Increased in current Decreased in current Closing

Items

balance period period balance

Statutory surplus

985419187.09985419187.09

reserve

Discretionary surplus

8681137.208681137.20

reserve

Reserve fund 17813919.38 17813919.38

Total 1011914243.67 1011914243.67

44. Undistributed profit

Unit: RMB

Items Current period Previous period

Balance before adjustment at the end of the 10002942167.43 8133336242.88

160Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

previous period

Balance after adjustment at the end of the

10002942167.438133336242.88

previous period

Add: Net profit attributable to shareholders

1514515444.751394760848.85

of the parent Company for current year

Payable dividends on ordinary shares 926626153.50 716972510.40

Closing balance 10590831458.68 8811124581.33

45. Operating revenue and Operating cost

Unit: RMB

Current period cumulative Preceding period comparative

Items

Revenue Cost Revenue Cost

Main operations 13339516056.72 9600581039.21 12098477558.91 8896073559.94

Other operations 336556104.36 319809279.72 430443066.68 412587356.33

Total 13676072161.08 9920390318.93 12528920625.59 9308660916.27

46. Taxes and surcharges

Unit: RMB

Items Current period cumulative Preceding period comparative

Urban maintenance and construction tax 23537077.44 19076010.08

Education surcharge 11398760.51 9549962.48

Housing property tax 16482455.15 13259614.90

Land use tax 7044828.51 -2555201.21

Stamp duty 12321752.89 9273589.74

Local education surcharge 7620732.33 6366641.58

Local foundation for water works 705258.48 615607.60

Others 5122564.97 3791190.15

Total 84233430.28 59377415.32

47. Administrative expenses

Unit: RMB

Items Current period cumulative Preceding period comparative

Labor cost 563739428.50 375657341.88

Share-based payment remuneration 28245298.77 33770669.95

Depreciation and amortization expense 84573992.63 69142975.31

Office expense 113589529.35 76921701.21

Intermediary organ expense 41778051.43 28816004.69

Entertainment expense 12456327.05 10229586.21

Vehicle expense 12573736.97 6229475.81

Sporadic renovation expense in the park 9329354.50 4904430.90

Others 21713584.30 14184388.69

Total 887999303.50 619856574.65

48. Selling expenses

Unit: RMB

Current period cumulative Preceding period comparative

Items

Labor cost 174823710.59 144826488.29

161Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Entertainment expense 26263620.05 23340048.05

Warehousing freight and miscellaneous

53153942.6345966149.44

charges

Travel expense 19582339.16 15714428.65

Advertising expense 7867850.80 8873624.72

Others 15311002.51 25410991.12

Total 297002465.74 264131730.27

49. R&D expenses

Unit: RMB

Items Current period cumulative Preceding period comparative

Labor cost 387224362.76 336153051.01

Direct input expense 181888526.25 176171267.76

Depreciation and amortization expense 25381756.53 20543216.56

Mold manufacturing expense 12203836.61 29986237.50

Royalties 6041782.02 4486936.80

Outsourcing R&D expense 1130148.71 784296.40

Others 18741495.08 12144626.01

Total 632611907.96 580269632.04

50. Financial expenses

Unit: RMB

Items Current period cumulative Preceding period comparative

Interest expense 71736060.65 126688323.68

Including: Interest on bond payable 67598047.15

Interest on lease liabilities 3186027.96 795945.00

Interest income -84853231.77 -87661462.57

Exchange gains or losses -42024236.94 -194192937.27

Others 3359698.51 3505706.15

Total -51781709.55 -151660370.01

51. Other income

Unit: RMB

Source of the other income Current period cumulative Preceding period comparative

Government subsidies related to

34482332.4515329655.57

assets

Government subsidies related to

63514083.3245391151.86

revenue

VAT extra deductions 28494105.96

Handling fees for withholding

2061490.412096068.10

individual income tax

Total 128552012.14 62816875.53

52. Gains or losses on changes in fair value

Unit: RMB

162Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Items Current period cumulative Preceding period comparative

Floating income of bank financing

388505.61

products

Floating income of futures

1735630.85-4993318.34

contracts

Floating income of foreign

-44954858.33-83834712.30

exchange contract

Floating income on option

141659.20-375000.00

contracts

Total -43077568.28 -88814525.03

53. Investment income

Unit: RMB

Items Current period cumulative Preceding period comparative

Investment income from long-term

5419862.015296750.30

equity investments under equity method

Gains and losses on bank financial

1168153.4586531.50

products

Gains and losses on exchange rate

-31194534.61-53498269.42

derivatives

Gains and losses on futures derivatives 11406235.86 9338561.14

Income from derecognition of financial

-8174613.92

assets

Others 1520214.66 808967.09

Total -11680068.63 -46142073.31

54. Credit impairment loss

Unit: RMB

Items Current period cumulative Preceding period comparative

Provision for bad debt -76800982.89 -72153972.68

Total -76800982.89 -72153972.68

55. Assets impairment loss

Unit: RMB

Items Current period cumulative Preceding period comparative

I. Inventory write-down loss and contract

-44232452.69-24318451.98

performance cost impairment loss

II. Goodwill impairment loss -201650.64 -604951.92

Total -44434103.33 -24923403.90

56. Gains on asset disposal

Unit: RMB

Items Current period cumulative Preceding period comparative

163Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Gains on disposal of assets -245261.28 -406527.50

57. Non-operating revenue

Unit: RMB

Amount recorded into the

Current period Preceding period

Items current non-recurring profit

cumulative comparative

and loss

Exempted payment 996334.93 2349197.54 996334.93

Compensation and penalty income 721658.19 1610099.34 721658.19

Gains from retirement of fixed

894349.32152173.06894349.32

assets

Others 1946688.19 452881.99 1946688.19

Total 4559030.63 4564351.93 4559030.63

58. Non-operating expenditures

Unit: RMB

Current period Preceding period Amount included in non-

Items

cumulative comparative recurring profit or loss

Losses on retirement of

6795429.612809729.966795429.61

fixed assets

Litigation for damages 1173340.79 1767511.58 1173340.79

Donation expenditure 103060.00 106988.95 103060.00

Others 455874.02 576508.42 455874.02

Total 8527704.42 5260738.91 8527704.42

59. Income tax expenses

（1）Income tax expenses

Unit: RMB

Items Current period cumulative Preceding period comparative

Current period income tax

334407725.47231976676.94

expenses

Deferred income tax expenses -2111579.48 31493520.51

Total 332296145.99 263470197.45

（2）Reconciliation of accounting profit to income tax expenses

Unit: RMB

Items Current period cumulative

Income before tax 1853961798.16

Income tax expense calculated at the applicable tax rate 347144631.93

Adjustment of preliminary income tax expense

21374962.41

settlement and payment

Plus deduction of R&D expenses -72486768.71

Others 36263320.36

Income tax expenses 332296145.99

164Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

60. Other comprehensive income

Please refer to the notes of balance sheet items and other comprehensive income for details.

61. Notes to items of the consolidated cash flow statement

（1）Cash related to operating activities

Other cash receipts related to operating activities

Unit: RMB

Items Current period cumulative Preceding period comparative

Government grants 86791211.40 41527261.26

Interest income 102038912.05 54965021.52

Rental income 5453306.75 5521293.13

Guarantee deposit 19792809.15 7811313.61

Net change of restricted funds 19574857.22

Others 4520771.35 5270609.75

Total 238171867.92 115095499.27

Other cash payments related to operating activities

Unit: RMB

Items Current period cumulative Preceding period comparative

Guarantee deposit 10451246.05 15255451.57

Net change of restricted funds 2046000.00

Period expense payments 476515154.85 368383438.30

Total 486966400.90 385684889.87

（2）Cash related to investment activities

Other cash receipts related to investing activities

Unit: RMB

Items Current period cumulative Preceding period comparative

Redemption of certificates of deposit

569000000.00440000000.00

and financial products

Net change of restricted funds 19157342.43 14311380.20

Income from futures contract

10804591.38

derivatives settlement

Income from national debt reverse

496290.86

repurchase

Total 599458224.67 454311380.20

Important cash received related to investment activities

Unit: RMB

165Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Items Current period cumulative Preceding period comparative

Compensation for land collection

546216590.00

and storage

Total 546216590.00

Other cash payments related to investing activities

Unit: RMB

Items Current period cumulative Preceding period comparative

Subscription of certificates of

300000000.0020000000.00

deposit

Net change of restricted funds 5512961.02 1700028.28

Loss on exchange rate derivatives

30592890.1353498269.42

instrument settlement

Payment of subsidiaries'

performance commitments to 3500000.00

minority shareholders

Purchase of financial products 100000000.00

Total 439605851.15 75198297.70

（3）Cash related to financing activities

Other cash receipts related to financing activities

Unit: RMB

Items Current period cumulative Preceding period comparative

Net change of restricted funds 13000000.00 27789205.90

Loans from other banks 11837146.85

Accounts receivable factoring 16918063.05

Total 29918063.05 39626352.75

Other cash payments related to financing activities

Unit: RMB

Items Current period cumulative Preceding period comparativeRepo shares expenses（including

299977735.21

restricted stock)

Rental expenses 51687909.71 45508985.35

Net change of restricted funds 7000000.00 22989492.00

Interest of loans from other banks 3898060.02

Total 362563704.94 68498477.35

Changes in liabilities related to financing activities

√ Applicable □ Not Applicable

166Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Unit: RMB

Increase Decrease

Opening Closing

Items

balance Changes in Changes in Changes in Changes in balance

cash non-cash cash non-cash

Short-term 1212150378. 1398200202.

200000000.0013747755.93202420.10

borrowings 85 82

Long-term

borrowings

(including

2401996388.1140000000.1140000000.2451904138.

long-term 49907750.00

91000091

borrowings

due within

one year)

Lease

liabilities

(lease

290193458.0120673084.3651687909.71170887.66259007745.00

liabilities due

within one

year)

Dividends

926626153.00926626153.00

payable

3904340225.1340000000.2132061818.4109112086.

Total 997206987.36 373307.76

77006473

62. Supplement information to the cash flow statement

（1）Supplement information to the cash flow statement

Unit: RMB

Supplement information Current period cumulative Preceding period comparative

1. Reconciliation of net profit to

----

cash flow from operating activities:

Net profit 1521665652.17 1414494515.73

Add: Provision for assets

121235086.2297077376.58

impairment loss

Depreciation of fixed assets

oil and gas assets productive 345804856.82 312096036.62

biological assets

Amortization of right-of-use

47364402.3445452675.72

assets

Amortization of intangible

18005860.4211005377.33

assets

Amortization of Long-term

17683080.1011273974.46

prepayments

Loss on disposal of

fixed assets intangible assets and 245261.28 406527.50

other long-term assets (Less: gains)

Loss on retirement of

5901080.292657556.90

fixed assets (Less: gains)

Losses on changes in fair

43077568.2888814525.03

value (Less: gains)

167Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

Financial expenses (Less:

-10579748.2194787827.63

gains)

Investment losses (Less: gains) 13200283.29 38728801.02

Decrease of deferred tax

53908640.08144696035.59

assets (Less: increase)

Increase of deferred tax

-59642332.57-114420506.63

liabilities (Less: decrease)

Decrease of inventories (Less:

46793721.65305426294.80

increase)

Decrease of operating

-1646868032.49-1460686740.42

receivables (Less: increase)

Increase of operating

609592921.15672088278.73

payables (Less: decrease)

Others 34241575.35 54775037.02

Net cash flows from operating

1161629876.171718673593.61

activities

2. Significant investing and

financing activities not related to

cash receipts and payments:

Conversion of debt into capital

Convertible bonds due within

one year

Fixed assets leased in under

finance leases

3. Net changes in cash and cash

equivalents:

Cash at the end of the period 2575560166.98 2050600180.32

Less: Cash at the beginning of

3624955498.842050328601.77

the period

Add: Cash equivalents at the

end of the period

Less: Cash equivalents at the

beginning of the period

Net increase of cash and cash

-1049395331.86271578.55

equivalents

（2）Composition of cash and cash equivalents

Unit: RMB

Items Closing balance Opening balance

I.Cash 2575560166.98 3624955498.84

Including: Cash on hand 611537.90 291216.13

Cash in bank that can be

2574871533.063624655126.84

readily drawn on demand

Other monetary funds that can

77096.029155.87

be readily for payment

III. Cash and cash equivalents at end

2575560166.983624955498.84

of year

168Zhejiang Sanhua Intelligent Controls Co. Ltd. 2024 Semi-Annual Report

63. Assets with restricted ownership or usage

Unit: RMB

Items Book Balance Carrying amount Reasons for restriction

Cash and bank balances 50256461.32 50256461.32 Margin Deposit

Notes receivable 1866025559.72 1862419818.56 Pledge financing

Electronic debt

instruments that have

been transferred for

Accounts receivable 62493748.40 59369060.98

payment or factored for

financing but not yet

matured

Total 1978775769.44 1972045340.86

64. Monetary items in foreign currencies

（1）Monetary items in foreign currencies

Unit: RMB

Closing balance in foreign Exchange rate RMB equivalent

Items

currencies

Cash and Bank Balances

Including: USD 153701911.69 7.1268 1095402784.21

EUR 17117419.72 7.6617 131148534.65

Other currencies 159052672.82

Subtotal 1385603991.68

Accounts receivable

Including: USD 302133839.07 7.1268 2153247444.28

EUR 62781538.94 7.6617 481013316.87

Other currencies 139979881.67

Subtotal 2774240642.82

Other receivables

Including: USD 536034.19 7.1268 3820208.47

EUR 190570.11 7.6617 1460091.03

Other currencies 20848051.54

Subtotal 26128351.04

Short-term borrowings

Including: USD 45000000.00 7.1268 320706000.00

EUR 87000000.00 7.6617 666567900.00

Subtotal 987273900.00

Derivative financial

liabilities

Including: USD 4605710.49 7.1268 32823977.52

Accounts payable

Including: USD 35988707.73 7.1268 256484322.25

EUR 2240643.81 7.6617 17167140.70

Other currencies 172265323.10

Subtotal 445916786.05

Other payables

Including: USD 6036575.43 7.1268 43021465.77

EUR 833491.45 7.6617 6385961.44