Securities Code: 002348 Securities Abbreviation: Gaole Shares Announcement No.: 2026-046 Guangdong Gaole Co., Ltd. Announcement on Provision for Asset Impairment for 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 representations, misleading statements, or material omissions. Guangdong Gaole Co., Ltd. (hereinafter referred to as the "Company") held the second meeting of the Ninth Board of Directors on April 27, 2026, and deliberated and approved the "Proposal on Provision for Asset Impairment for 2025". In accordance with the "Accounting Standards for Business Enterprises", accounting policies, and accounting estimates, and based on the principle of prudence, the Company made provisions for asset impairment for 2025. The specific details are as follows: I. Overview of the Provision for Asset Impairment This Time
- Reason for the Provision for Asset Impairment This Time In accordance with the requirements of the "Accounting Standards for Business Enterprises" and the "Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange", to more truthfully and accurately reflect the Company's financial position, asset value, and operating results as of December 31, 2025, and based on the principle of prudence, the Company conducted a comprehensive inspection and impairment test of various assets in accordance with relevant regulations. Provisions for impairment were made for relevant assets within the scope of the consolidated financial statements as of December 31, 2025.
- Scope of Assets, Total Amount, and Reporting Period for the Provision for Asset Impairment This Time After the Company and its subsidiaries conducted a comprehensive investigation and impairment test of assets with potential impairment indicators at the end of 2025, the scope includes accounts receivable, other receivables, and inventory. The total amount of provisions for asset impairment to be made in 2025 is RMB 17,992,097.59, with the following breakdown: 2025 Provision for Impairment (Unit: RMB) Item | Provision Amount ---|--- Accounts Receivable | 15,077,859.89 Other Receivables | 736,638.98 Inventory | 2,177,598.72 Total | 17,992,097.59 The reporting period for which the provision for asset impairment is to be made this time is from January 1, 2025, to December 31, 2025. II. Explanation of the Provision for Impairment
- Explanation of the Provision for Bad Debt for Accounts Receivable, Other Receivables, and Notes Receivable The Company provides for impairment losses on accounts receivable, other receivables, and notes receivable based on the expected credit loss measurement method, recognizing impairment losses on credit. Credit loss refers to the present value of the difference between all contractual cash flows that the Company is entitled to receive and all cash flows that the Company expects to receive, discounted at the original effective interest rate, i.e., the present value of the total cash shortfall. Among them, for financial assets that the Company has purchased or originated and for which credit impairment has already occurred, the actual interest rate adjusted for credit of such financial assets shall be discounted. The general method for measuring expected credit losses is as follows: the Company assesses whether the credit risk of a financial asset has increased significantly since initial recognition on each balance sheet date. If the credit risk has increased significantly since initial recognition, the Company measures the provision for losses at an amount equivalent to the expected credit loss for the entire contract period; if the credit risk has not increased significantly since initial recognition, the Company measures the provision for losses at an amount equivalent to the expected credit loss for the next 12 months. When assessing expected credit losses, the Company considers all reasonably available and supportable information, including forward-looking information. For financial instruments with low credit risk on the balance sheet date, the Company assumes that their credit risk has not increased significantly since initial recognition and chooses to measure the provision for losses at the expected credit loss for the next 12 months. The Company re-measures expected credit losses on each balance sheet date. The increase or reversal of the provision for losses formed thereby is recognized as impairment loss or gain in current profit or loss. After calculation, the Company provided RMB 15,077,859.89 for bad debts of accounts receivable and RMB 736,638.98 for bad debts of other receivables in 2025. Reversals of bad debt provisions for accounts receivable amounted to RMB 3,843,017.21, reversals of bad debt provisions for other receivables amounted to RMB 4,194.23, write-offs of bad debt provisions for other receivables amounted to RMB 39,378.17, reversals of bad debt provisions for notes receivable amounted to RMB 1,059.67, and foreign currency statement translation differences and disposal of subsidiary changes amounted to RMB 1,638.77. Bad Debt Provision Situation (Unit: RMB) Category | Opening Balance | Current Period Changes | Closing Balance ---|---|---|--- | Provision for Bad Debts | 170,396,385.64 | 15,814,498.87 | 3,848,271.11 | 39,378.17 | 1,638.77 | 182,321,596.46 Among them: Accounts Receivable | 170,082,529.96 | 15,077,859.89 | 3,843,017.21 | 0.00 | 0.00 | 181,317,372.64 Other Receivables | 312,796.01 | 736,638.98 | 4,194.23 | 39,378.17 | 1,638.77 | 1,004,223.82 Notes Receivable | 1,059.67 | 0.00 | 1,059.67 | 0.00 | 0.00 | 0.00
- Explanation of the Provision for Inventory Price Decline On the balance sheet date, after a comprehensive inventory count, inventory is 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 is made and included in current profit or loss. The difference between the cost of individual inventory items and their net realizable value is recognized as a provision for inventory price decline and included in current profit or loss; however, for inventory items that are numerous and low in unit price, the provision for inventory price decline is made based on inventory categories. For inventory items that are related to product lines produced and sold in the same region, have the same or similar end-use or purpose, and cannot be separately measured from other items, the provision for inventory price decline is made on a consolidated basis. Net realizable value refers to the estimated selling price of inventory minus the estimated costs to complete, estimated selling expenses, and related taxes and fees in the normal course of business. If the factors that previously caused the inventory value to be written down have disappeared, the amount of the write-down is reversed and included in current profit or loss within the amount of the provision for inventory price decline previously made. After calculation, the Company made a provision for inventory price decline of RMB 2,177,598.72 in 2025, and RMB 11,220,019.93 was transferred out due to consumption or sale. Provision for Inventory Price Decline (Unit: RMB) Category | Opening Balance | Current Period Increase | Current Period Decrease | Closing Balance ---|---|---|---|--- | Provision for Inventory Price Decline | 19,176,750.58 | 2,177,598.72 | 0 | 11,220,019.93 | 0 | 10,134,329.37 Among them: Raw Materials | 4,563,392.02 | 136,944.46 | 0 | 236,830.11 | 0 | 4,463,506.37 Work in Progress | 273,735.73 | 64,819.50 | 0 | 34,795.50 | 0 | 303,759.73 Finished Goods | 14,303,617.04 | 1,975,834.76 | 0 | 10,948,394.32 | 0 | 5,331,057.48 Goods Delivered | 36,005.79 | 0.00 | 0 | 0 | 0 | 36,005.79
- Explanation of the Provision for Fixed Asset Impairment On the balance sheet date, for assets with impairment indicators, an impairment test is conducted. If the test results show that the recoverable amount of the asset is lower than its carrying amount, the difference is recognized as a provision for impairment and included in impairment loss. The recoverable amount is the higher of the asset's fair value less disposal costs and the present value of the asset's estimated future cash flows. The provision for asset impairment is calculated and recognized on a single asset basis. If it is difficult to estimate the recoverable amount of a single asset, the recoverable amount of the asset group to which the asset belongs is used. An asset group is the smallest group of assets that can generate independent cash inflows. After evaluation and calculation, fixed assets were transferred out due to disposal in 2025, amounting to RMB 1,780,412.09. Provision for Fixed Asset Impairment (Unit: RMB) Category | Opening Balance | Current Period Increase | Current Period Decrease | Closing Balance ---|---|---|---|--- | Provision for Fixed Asset Impairment | 8,724,133.23 | 0.00 | 0 | 1,780,412.09 | 0 | 6,943,721.14 Among them: Buildings and Structures | 4,617,551.73 | 0.00 | 0 | 0 | 0 | 4,617,551.73 Transportation Equipment | 30,136.64 | 0.00 | 0 | 15,068.32 | 0 | 15,068.32 Machinery and Other Equipment | 4,076,444.86 | 0.00 | 0 | 1,765,343.77 | 0 | 2,311,101.09 III. Impact of the Provision for Asset Impairment on the Company The total amount of the provision for asset impairment planned by the Company this time is RMB 17,992,097.59, accounting for 41.62% of the absolute value of the net profit attributable to the parent company owners for 2025. After considering the impact of income tax, this provision for asset impairment will reduce the net profit attributable to the parent company owners for 2025 by RMB 15,752,837.79, and reduce the owners' equity attributable to the parent company owners for 2025 by RMB 15,752,837.79. The provision for asset impairment this time has been audited by Uni-China Certified Public Accountants (Special General Partnership). The impact on the Company has been reflected in the Company's 2025 financial report. IV. Statement of the Board of Directors on the Reasonableness of the Provision for Asset Impairment for 2025 The Board of Directors of the Company believes that: This provision for asset impairment complies with the "Accounting Standards for Business Enterprises" and the Company's relevant accounting policies, reflects the principle of prudence in accounting treatment, is well-founded, and more fairly reflects the Company's asset and financial position, making the Company's accounting information more truthful and reliable, and more reasonable. It does not involve profit manipulation, and therefore agrees to this provision for asset impairment. V. Audit Opinion of the Independent Directors' Special Meeting The provision for asset impairment this time complies with the requirements of the "Accounting Standards for Business Enterprises" and the Company's accounting policies. The basis is sufficient and reasonable, and it objectively and fairly reflects the Company's asset and financial position. The decision-making process of the Board of Directors for this matter is legal and compliant, and does not harm the interests of the Company and shareholders, especially small and medium shareholders. VI. Documents for Reference
- Resolution of the Second Meeting of the Ninth Board of Directors of the Company;
- Resolution of the First Special Meeting of Independent Directors of the Ninth Board of Directors in 2026. Hereby announced. Guangdong Gaole Co., Ltd. Board of Directors April 29, 2026