Securities Code: 002358 Securities Abbreviation: Senyuan Electric Announcement No.: 2026-009 Henan Senyuan Electric Co., Ltd. Announcement on Provision for Asset Impairment in 2025 The Company and the entire Board of Directors guarantee that the information disclosed is true, accurate, and complete, and contains no false records, misleading statements, or significant omissions. Henan Senyuan Electric Co., Ltd. (hereinafter referred to as "Senyuan Electric" or the "Company") held the ninth meeting of the eighth Board of Directors on April 28, 2026, and deliberated and passed the "Proposal on Provision for Asset Impairment in 2025". The specific situation is hereby announced as follows: I. Overview of Provision for Asset Impairment in This Period
- Basis and Reasons for Provision for Asset Impairment in This Period The provision for asset impairment in this period is made in accordance with the "Shenzhen Stock Exchange Stock Listing Rules", "Enterprise Accounting Standards", and relevant provisions of the Company's accounting policies. Based on the principle of prudence, to accurately and truthfully reflect the Company's financial, asset, and operating conditions, the Company (including all subsidiaries within the consolidated financial statements, hereinafter referred to as the same) conducted a comprehensive inventory of assets such as accounts receivable, notes receivable, inventory, other receivables, long-term equity investments, fixed assets, construction in progress, and intangible assets as of December 31, 2025. The possibility of impairment of each asset was fully assessed and analyzed to determine the provision for asset impairment required.
- Provision for Asset Impairment in This Period In 2025, the Company's total provision for bad debts for accounts receivable, other receivables, notes receivable, and inventory, and provision for asset impairment amounted to RMB 15,288.97 million, with write-offs, recoveries, or reversals of RMB 27,376.16 million. The details are as follows: Unit: RMB million Category Item Opening Book Balance Period-end Book Balance Provision for Bad Debts Accounts Receivable Accounts Receivable Individually Assessed for Impairment Accounts Receivable Assessed by Group for Impairment Subtotal Other Receivables Accounts Receivable Individually Assessed for Impairment Accounts Receivable Assessed by Group for Impairment Subtotal Notes Receivable Notes Receivable Individually Assessed for Impairment Notes Receivable Assessed by Group for Impairment Subtotal Asset Impairment Loss Inventory Devaluation Provision Total 54,722.62 75,358.30 130,080.92 2,727.18 2,631.05 5,358.22 440.55 440.55 14,915.35 150,795.04 4,292.02 9,488.55 13,780.57 36.30 1,618.38 1,654.68 -276.48 -276.48 130.20 15,288.97 Period Increase Provision Other 4.00 474.02 23,216.53 35,324.08 2,226.60 82,624.25 25,443.13 117,948.33 20.91 155.00 2,587.57 4,249.43 6,837.00 164.08 164.08 1,283.10 13,762.44 494.93 26,881.23 138,711.85 Note: The accounts receivable written off in the above table are not from related parties of the Company. After the Company writes off these accounts receivable, a separate file is established for these customers, and the responsible person will continuously track them and retain the right to pursue recovery. If the counterparty is found to have the ability to repay, recovery will be pursued immediately. II. Confirmation Standards and Methods for Provision for Asset Impairment in This Period
- Confirmation Standards and Methods for Provision for Bad Debts of Accounts Receivable Since January 1, 2019, the Company has implemented the new financial instrument standards. The Company measures its loss provision at an amount equal to the expected credit loss over the entire term of the accounts receivable. Based on the customer's credit rating, business scale, historical repayment and credit loss situation, etc., expected credit loss is estimated using individual and group assessment methods: (1) For accounts receivable involving significant amounts, or those with long-term cooperation relationships or abnormal cooperation situations, individual assessment is used to estimate impairment losses. Based on the specific credit risk characteristics of the accounts receivable, such as the customer's credit rating, industry and business characteristics, historical repayment and bad debt loss situation, etc., the loss provision is recognized at the amount of expected credit loss over the entire term at the initial recognition of the accounts receivable. At each reporting date, the change in the expected credit loss amount for the remaining term of the accounts receivable is reassessed, and the loss provision is adjusted. (2) For accounts receivable not falling under the above circumstances, impairment losses are assessed using the group method. The Company refers to historical credit loss experience, combined with the current situation and forecasts of future economic conditions, to compile a table of expected credit loss rates for accounts receivable over their entire term, and calculates the expected credit loss. The basis for determining the groups is as follows: Accounts Receivable Assessed for Expected Credit Risk and Expected Credit Loss: Item Basis for Provision Accounts Receivable Group Except for accounts receivable for which impairment has been individually provided, the Company adjusts the historical credit loss rate for the entire term of accounts receivable on a group basis, combined with the current situation and forecasts of future economic conditions. At each reporting date, the Company updates the historical credit loss rate and analyzes changes in forward-looking estimates. If the credit loss rate needs to be adjusted, it is adjusted and the loss provision is recognized according to the changes. Related Party Group Accounts receivable within the scope of consolidated financial statements between parent and subsidiary companies, and between subsidiary companies based on equity relationships, are not subject to bad debt provision. Accounts Receivable Bad Debt Provision for This Period: Unit: RMB million Category Opening Book Balance Period-end Book Balance Period Increase Provision Other Accounts Receivable Individually Assessed for Impairment Accounts Receivable Assessed by Group for Impairment Total 54,722.62 75,358.30 130,080.92 4,292.02 9,488.55 13,780.57 474.02 2,226.60 25,443.13 35,324.08 82,624.25 117,948.33
- Confirmation Standards and Methods for Other Receivables The Company estimates the expected credit loss of other receivables using individual or group assessment methods, considering all reasonable and evident information, including forward-looking information. The measurement of expected credit loss depends on whether the credit risk of other receivables has increased significantly since initial recognition. If the credit risk of other receivables has increased significantly since initial recognition, the Company measures its loss provision at an amount equal to the expected credit loss over the entire term of such other receivables; if the credit risk of such other receivables has not increased significantly since initial recognition, the Company measures its loss provision at an amount equal to the expected credit loss over the next 12 months. The increase or reversal of the loss provision formed thereby is recognized as impairment loss or gain in current profit and loss. If the credit risk of other receivables is low at the balance sheet date, the Company considers that the credit risk of such other receivables has not increased significantly since initial recognition. Other Receivables Bad Debt Provision for This Period: Unit: RMB million Category Opening Book Balance Period-end Book Balance Period Increase Provision Other Receivables Individually Assessed for Impairment Other Receivables Assessed by Group for Impairment Total 2,727.18 2,631.05 5,358.22 36.30 1,618.38 1,654.68 20.91 155.00 2,587.57 4,249.43 6,837.00
- Confirmation Standards and Methods for Notes Receivable The Company estimates the expected credit loss of notes receivable using individual or group assessment methods, considering all reasonable and evident information, including forward-looking information. The measurement of expected credit loss depends on whether the credit risk of notes receivable has increased significantly since initial recognition. If the credit risk of notes receivable has increased significantly since initial recognition, the Company measures its loss provision at an amount equal to the expected credit loss over the entire term of such notes receivable; if the credit risk of notes receivable has not increased significantly since initial recognition, the Company measures its loss provision at an amount equal to the expected credit loss over the next 12 months. The increase or reversal of the loss provision formed thereby is recognized as impairment loss or gain in current profit and loss. If the credit risk of notes receivable is low at the balance sheet date, the Company considers that the credit risk of notes receivable has not increased significantly since initial recognition. Notes Receivable Bad Debt Provision for This Period: Unit: RMB million Category Opening Book Balance Period-end Book Balance Period Increase Provision Other Notes Receivable Individually Assessed for Impairment Notes Receivable Assessed by Group for Impairment Total 440.55 440.55 -276.48 -276.48 164.08 164.08
- Basis for Determining Net Realizable Value of Inventory and Method for Provision for Inventory Devaluation The Company measures inventory at the lower of cost and net realizable value. The provision for inventory devaluation is made for the difference between the cost of individual inventory and its net realizable value. For inventory such as finished products, inventory goods, and materials directly for sale, in the normal production and operation process, the net realizable value is determined by deducting estimated selling expenses and related taxes and fees from the estimated selling price of such inventory. For inventory that requires processing, in the normal production and operation process, the net realizable value is determined by deducting the estimated costs to complete, estimated selling expenses, and related taxes and fees from the estimated selling price of the finished products produced. For inventory held to fulfill sales contracts or service contracts, the net realizable value is calculated based on the contract price. If the quantity of inventory held exceeds the quantity ordered in the sales contract, the net realizable value of the excess inventory is calculated based on the general sales price. At the end of the period, the provision for inventory devaluation is made for each inventory item; however, for inventory with large quantities and low unit prices, the provision for inventory devaluation is made by inventory category; for inventory that is produced and sold in the same region and related to the same product series, and has the same or similar final use or purpose, and cannot be separated from other items, the provision for inventory devaluation is made in a consolidated manner. Inventory Devaluation Provision for This Period: Unit: RMB million Category Opening Book Balance Period-end Book Balance Period Increase Provision Inventory Devaluation Provision Total 14,915.35 14,915.35 130.20 130.20 1,283.10 1,283.10 13,762.44 13,762.44 III. Statement of the Board of Directors on the Reasonableness of the Provision for Asset Impairment in This Period The provision for asset impairment in this period complies with the "Enterprise Accounting Standards" and the Company's relevant accounting policies, adheres to the principle of prudence, and is based on sufficient grounds. After the provision for asset impairment, the Company's 2025 financial statements can more fairly reflect the Company's financial position, asset value as of December 31, 2025, and operating results for 2025. The Company's accounting information is more true and reliable, and more reasonable, without harming the interests of the Company and all shareholders, especially small and medium shareholders. IV. Impact of the Provision for Asset Impairment in This Period on the Company The Company's total provision for asset impairment in this period is RMB 15,288.97 million, and the amount recovered or reversed is RMB 494.93 million. This will reduce the net profit of the consolidated income statement for 2025 by RMB 14,794.04 million. The provision for asset impairment in this period complies with the "Enterprise Accounting Standards" and relevant policy regulations, conforms to the Company's actual asset situation, can more fairly reflect the Company's asset status, and makes the Company's accounting information regarding asset value more true and reliable, and reasonable. Hereby announced. Board of Directors of Henan Senyuan Electric Co., Ltd. April 29, 2026