Securities Code: 002292 Securities Abbreviation: Aofei Entertainment Announcement Number: 2026-018 Aofei Entertainment Co., Ltd. Announcement on Asset Impairment, Credit Impairment Provisions, and Asset Write-offs The Company and the Board of Directors guarantee that the information disclosed is true, accurate, and complete, and contains no false records, misleading statements, or significant omissions. In accordance with the relevant regulations of the "Shenzhen Stock Exchange Stock Listing Rules," Aofei Entertainment Co., Ltd. (hereinafter referred to as the "Company" or "the Company"), based on the "Enterprise Accounting Standards" and the Company's relevant accounting policies, announces the details of the Company's asset impairment, credit impairment provisions, and asset write-offs as follows: I. Overview of Asset Impairment and Credit Impairment Provisions (I) Reasons for Asset Impairment and Credit Impairment Provisions In accordance with the requirements of the "Enterprise Accounting Standards," "Shenzhen Stock Exchange Stock Listing Rules," and other relevant regulations, to more truthfully and accurately reflect the Company's financial status, asset value, and operating results for 2025 and the first quarter of 2026, based on the principle of prudence, the Company has conducted a comprehensive review and impairment test of all types of assets in accordance with relevant regulations, and has made corresponding impairment provisions for assets that may incur impairment losses as of December 31, 2025, and March 31, 2026, within the scope of the consolidated financial statements. (II) Scope and Total Amount of Relevant Assets The Company has conducted a comprehensive review and impairment test of various assets as of December 31, 2025, and March 31, 2026. The scope includes accounts receivable, other receivables, long-term receivables, inventory, fixed assets, intangible assets, long-term equity investments, goodwill, etc. After assessing and analyzing whether these assets are impaired, the assets for which impairment provisions and credit impairment losses are recognized in this period are long-term equity investments, inventory, accounts receivable, long-term receivables, and other receivables. The specific details are as follows:
- Specifics of Impairment Provisions for 2025 | Asset Category | 2025 Provision Amount | Impairment Reason | |---|---|---| | Long-term Equity Investment Impairment Provision | 708.63 | Mainly due to impairment provisions recognized for some investee companies, based on the difference between the net book value and its recoverable amount. | | Inventory Price Decline Provision | 5,379.25 | Mainly due to provisions for inventory whose cost is expected to be irrecoverable. | | Accounts Receivable and Other Receivables, Long-term Receivables Bad Debt Provision | 85.43 | Mainly based on expected credit loss, using individual or collective assessment methods for accounts receivable, other receivables, and long-term receivables to determine bad debt provisions. | | Total | 6,173.31 | | The reporting period for the asset impairment losses and credit impairment losses recognized above is from January 1, 2025, to December 31, 2025.
- Specifics of Impairment Provisions for the First Quarter of 2026 | Asset Category | 2026 Q1 Provision Amount | Impairment Reason | |---|---|---| | Inventory Price Decline Provision | 713.86 | Mainly due to provisions for inventory whose cost is expected to be irrecoverable. | | Accounts Receivable and Other Receivables, Long-term Receivables Bad Debt Provision | 259.56 | Mainly based on expected credit loss, using individual or collective assessment methods for accounts receivable, other receivables, and long-term receivables to determine bad debt provisions. | | Total | 973.42 | | The reporting period for the asset impairment losses and credit impairment losses recognized above is from January 1, 2026, to March 31, 2026. (III) Basis, Data, and Reasons for Asset Impairment Provisions
- Long-term Equity Investment Impairment for 2025 In accordance with relevant regulations such as the "Enterprise Accounting Standards," a comprehensive review of long-term equity investments as of December 31, 2025, was conducted, and an impairment test was performed to re-estimate the recoverable amount of the relevant assets. The specific situation is as follows: | Impaired Asset Name | Net Book Value at Year-End | Impairment Provision Amount | Book Value | |---|---|---|---| | Guangdong Jiajia Cartoon Film and Television Co., Ltd. | 930.39 | 708.63 | 221.76 | | Total | 930.39 | 708.63 | 221.76 | The basis and reasons for the long-term equity investment impairment provision are as follows: Guangdong Jiajia Cartoon Film and Television Co., Ltd. (hereinafter referred to as "Jiajia Cartoon") focuses on TV broadcasting platforms, integrating animation film promotion, animation IP promotion, program industrialization, advertising marketing, and event planning to create a parent-child growth industry ecosystem. In 2025, the traditional film and television industry is undergoing a period of deep adjustment under the impact of streaming media and micro-dramas, with overall volume increasing but supply shrinking, intensified head-company monopolies, and continued decline in traditional channels. Advertising revenue in the TV industry has fallen sharply, with non-advertising revenue accounting for more than half. The audience is aging rapidly, and third- and fourth-tier cities are becoming the few incremental bright spots. The industry is accelerating its transformation towards "reducing quantity, improving quality, increasing efficiency, and integrating." Head companies are consolidating their advantages, small and medium-sized entities are accelerating their exit, and the complementary nature of long and short dramas, the integration of online and offline platforms, and the combination of online and offline are becoming the main breakthrough paths. In 2025, Jiajia Cartoon's full-year revenue decreased by 45.82%, with program production revenue down by 48% and animation broadcast revenue down by 80.12%. Net profit decreased by -329.03%, and operating pressure further intensified, indicating signs of impairment. In 2026, Jiajia Cartoon will promote business development through various measures such as resource integration and innovative cooperation models, utilization of platform resources, consolidation of evening gala business, launch of dance competition business, improvement of brand marketing service system, innovation in thematic promotion, and expansion of new media layout. The Company referred to the evaluation basis, parameters, and results of the asset appraisal report issued by the professional appraisal institution, Zhongtianhua (Guangzhou) Asset Appraisal Co., Ltd. Using the present value of future cash flows method, the recoverable amount of the long-term equity investment in Guangdong Jiajia Cartoon Film and Television Co., Ltd. as of December 31, 2025, was assessed. Based on the present value of future cash flows calculation, assuming the evaluation assumptions and limiting conditions are met, the recoverable amount of Guangdong Jiajia Cartoon Film and Television Co., Ltd. is RMB 504.02 million. Based on the 44.00% shareholding ratio, the impairment provision for long-term equity investment recognized in this period is RMB 708.63 million. II. Overview of Asset Write-offs In accordance with relevant regulations such as the "Enterprise Accounting Standards," the Company has cleaned up and written off a portion of unrecoverable accounts receivable and other receivables as of December 31, 2025. The total amount of accounts receivable and other receivables written off this time is RMB 739.40 million. The specific situation is as follows: | Asset Category | Write-off Amount | Reason for Write-off | |---|---|---| | Accounts Receivable | 459.81 | Confirmed as unrecoverable | | Other Receivables | 79.59 | Confirmed as unrecoverable | | Long-term Receivables | 200.00 | Confirmed as unrecoverable | | Total | 739.40 | | The accounts receivable and other receivables written off this time have already been fully provided for credit impairment losses in previous periods, so they will not affect the Company's 2025 profit and loss and financial position.