Securities Code: 001914 Securities Abbreviation:招商积余 Announcement No.: 2026-03 China Merchants Property Operation & Service Co., Ltd. Announcement on Provision for Asset Impairment in 2025 The Company and all members of the Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed in this announcement, and that there are no false records, misleading statements, or material omissions. In accordance with the requirements of the "Enterprise Accounting Standards" and the Company's accounting policies, to more truthfully and accurately reflect the Company's asset status and financial situation as of December 31, 2025, China Merchants Property Operation & Service Co., Ltd. (hereinafter referred to as the "Company") has conducted a comprehensive inventory and impairment test of relevant assets. Based on the principle of prudence, the Company intends to make provisions for impairment losses on assets that may incur impairment losses. The specific situation is as follows: I. Provision for Inventory Price Decline (I) Basis In accordance with the "Enterprise Accounting Standards" and the relevant provisions of the Company's accounting policies, inventory should be measured at the lower of cost and net realizable value. If the cost of inventory is higher than its net realizable value, a provision for inventory price decline should be made and included in current profit and loss. (II) Scope of Assets
- Hengyang COSCO Properties Co., Ltd. (hereinafter referred to as "Hengyang COSCO") is a controlling subsidiary of the Company, established on October 30, 2007. The Company holds 60% of its shares, and Hengyang Baisha Development and Construction Investment Co., Ltd. holds 40%. In accordance with the Company's arrangement for the transfer of its 60% equity in Hengyang COSCO, the Company engaged an appraisal institution to conduct a special impairment test on Hengyang COSCO's inventory project. Based on the results of this impairment test, a provision for inventory price decline of RMB 70,212,621.23 was made. When the Company transferred its 60% equity in Hengyang COSCO, the impact of the aforementioned provision for inventory price decline of Hengyang COSCO was already considered.
- The Company holds 24 units in the COSCO Lingshui Bay Garden project. The overall transportation convenience in this area is poor, and the surrounding supporting facilities are not yet perfect. Moreover, the building structures and housing units of the target properties are somewhat aged, making it difficult to sell these assets. The Company, after comprehensively considering factors such as recent transaction prices of similar properties in this project, the actual condition of the target assets, and the market environment, calculated that the expected selling price of this portion of inventory cannot cover its book cost. Based on the prudent accounting principle, the Company made a provision for inventory price decline of RMB 1,260,743.00. II. Provision for Credit Impairment (I) Method and Recognition Standard for Provision Basis for judging single provision for credit impairment: Accounts receivable whose credit risk has significantly changed. Method for single provision for credit impairment: Conduct a separate impairment test. If there is objective evidence of impairment, a provision for credit impairment shall be made for the difference between the present value of future cash flows and its book value. (II) Scope of Assets According to the "Agreement on the Construction of COSCO Technology Industrial Park and Supporting Infrastructure" signed between Hengyang COSCO and the former Baisha Industrial Park Management Committee (now Hengyang High-tech Industrial Development Zone Management Committee, hereinafter referred to as "Hengyang Management Committee") on December 18, 2008, Hengyang COSCO advanced and constructed projects for the Baisha Industrial Park on behalf of the Hengyang Management Committee from 2009 to 2019. As of August 31, 2025, there was an outstanding amount of RMB 240,593,179.13 receivable for advance construction and overdue interest. After negotiation between Hengyang COSCO and the Hengyang Municipal Government, the Company's tenth board of directors, at its forty-second meeting, approved the write-down of overdue interest on accounts receivable from advance construction and advances by Hengyang COSCO by RMB 184,619,676.74. Based on the foregoing, the Company made a provision for credit impairment of RMB 184,619,676.74 for the accounts receivable from Hengyang Management Committee in 2025. III. Deliberation and Voting Results (I) Deliberation by the Board of Directors' Audit Committee On March 11, 2026, the third meeting of the Company's Board of Directors' Audit Committee in 2026 deliberated and passed the "Proposal on Provision for Asset Impairment in 2025" (5 votes in favor, 0 votes against, 0 abstentions). The Audit Committee believes that the Company's provision for asset impairment in 2025 complies with accounting standards and the Company's relevant regulations, is consistent with the Company's actual asset situation, objectively and fairly reflects the Company's financial status, asset value, and operating results in 2025, is conducive to providing investors with more truthful and reliable accounting information, and does not harm the interests of the Company and small and medium shareholders. It is agreed to submit this proposal to the Board of Directors for deliberation. (II) Deliberation by the Board of Directors On March 12, 2026, the fourth meeting of the eleventh Board of Directors deliberated and passed the "Proposal on Provision for Asset Impairment in 2025" (11 votes in favor, 0 votes against, 0 abstentions). The Board of Directors believes that the Company's provision for asset impairment in this instance complies with the "Enterprise Accounting Standards" and the Company's relevant accounting policies. It was made based on the actual situation of the relevant assets after an impairment test. The basis for the provision for asset impairment is sufficient, which can more fairly reflect the Company's financial status, asset value, and operating results as of the end of 2025, and make the Company's accounting information more reasonable. IV. Impact of This Provision for Asset Impairment on the Company The Company's provision for inventory price decline of RMB 71,473,364.23 will reduce the net profit attributable to shareholders of the listed company in 2025 by RMB 53,623,739.27. The provision for credit impairment of RMB 184,619,676.74 will reduce the net profit attributable to shareholders of the listed company in 2025 by RMB 184,619,676.74. The total of these two items will reduce the net profit attributable to shareholders of the listed company in 2025 by RMB 238,243,416.01. The Company's announcement on November 12, 2025, "Announcement on the Proposed Transfer of 60% Equity in a Subsidiary" and "Announcement on the Determination of Claims and Debts of a Subsidiary" already estimated the aforementioned impairment situation. V. Documents for Inspection (I) Resolution of the third meeting of the Board of Directors' Audit Committee in 2026; (II) Resolution of the fourth meeting of the eleventh Board of Directors. Hereby announced China Merchants Property Operation & Service Co., Ltd. Board of Directors March 14, 2026