Securities Code: 002361 Securities Abbreviation: ShenJian Co. Announcement No.: 2026-015 Anhui ShenJian New Material Co., Ltd. Announcement on Provision for Asset Impairment Losses for 2025 The Company and all members of the Board of Directors guarantee the authenticity, accuracy, and completeness of the information disclosed in this announcement, and that there are no false records, misleading statements, or material omissions. Anhui ShenJian New Material Co., Ltd. (hereinafter referred to as the "Company") held its second extraordinary meeting of the seventh Board of Directors on April 24, 2026, and deliberated and passed the "Proposal on Provision for Asset Impairment Losses for 2025". The specific situation is hereby announced as follows:
I. Overview of Provision for Asset Impairment Losses
(I) Reason for Provision for Impairment Losses
In accordance with the "Accounting Standards for Business Enterprises," "Shenzhen Stock Exchange Listed Company Self-Regulatory Supervision Guidelines No. 1 - Norms for Operations of Main Board Listed Companies," and other relevant regulations, based on the principle of prudence, to truly and accurately reflect the Company's financial position, asset value, and operating results as of December 31, 2025, a comprehensive inspection and impairment test of all assets within the scope of the consolidated financial statements were conducted, and corresponding impairment provisions were made for assets that may be impaired.
(II) Scope of Assets, Total Amount, and Reporting Period for This Provision for Impairment Losses
The total amount of asset impairment losses to be provided for this time is RMB 60.0781 million, which will be included in the reporting period from January 1, 2025, to December 31, 2025. The specific details are as follows:
| Item | Amount of Provision for Asset Impairment Losses (RMB million) |
|---|---|
| 1. Credit impairment losses: | -2,034.64 |
| Of which: Bad debt losses on notes receivable | 313.09 |
| Bad debt losses on accounts receivable | -2,339.39 |
| Bad debt losses on other receivables | -8.34 |
| 2. Asset impairment losses: | -3,973.17 |
| Of which: Inventory price decline provision | -1,319.46 |
| Fixed asset impairment loss | -1,443.24 |
| Intangible asset impairment loss | -1,061.19 |
| Construction in progress impairment loss | -45.08 |
| Contract asset impairment loss | -104.20 |
| Total | -6,007.81 |
II. Explanation of the Provision for Asset Impairment Losses
(I) Measurement of Expected Credit Losses
For notes receivable, accounts receivable, accounts receivable financing, and contract assets, the Company measures the loss allowance based on the expected credit losses over the entire contract period, regardless of whether there is a significant financing component. Accounts Receivable/Contract Assets For notes receivable, accounts receivable, other receivables, accounts receivable financing, contract assets, and long-term receivables for which there is objective evidence of impairment, or which are applicable to individual assessment, individual impairment testing is performed to confirm expected credit losses and to make provisions for individual impairment losses. For notes receivable, accounts receivable, other receivables, accounts receivable financing, contract assets, and long-term receivables for which there is no objective evidence of impairment, or when it is not possible to reasonably estimate the expected credit losses of individual financial assets at a reasonable cost, the Company classifies these notes receivable, accounts receivable, other receivables, accounts receivable financing, contract assets, and long-term receivables into several combinations based on credit risk characteristics and calculates the expected credit losses based on the combinations. The basis for determining the combinations is as follows: Basis for determining combinations of notes receivable and accounts receivable financing: Combination 1: Bank acceptance bills Combination 2: Commercial acceptance bills For notes receivable classified into combinations, the Company refers to historical credit loss experience, considers the current situation and forecasts of future economic conditions, and calculates expected credit losses through the default risk exposure and the expected credit loss rate over the entire contract period. The Company assesses that bank acceptance bills have no risk of recovery and does not provide for expected credit losses. The provision for expected credit losses on commercial acceptance bills is calculated with reference to accounts receivable, and the aging start date of commercial acceptance bills is traced back to the aging start date of the corresponding accounts receivable. Basis for determining combinations of accounts receivable and other receivables: Combination 1: Accounts receivable within the consolidated scope Combination 2: Third-party accounts receivable For accounts receivable classified into combinations, the Company refers to historical credit loss experience, considers the current situation and forecasts of future economic conditions, and compiles a table of accounts receivable aging and expected credit loss rates over the entire contract period to calculate expected credit losses. For Combination 1, unless there is objective evidence that the Company will be unable to recover the accounts receivable under the original terms, no bad debt provision is made for accounts receivable from companies within the consolidated scope. For Combination 2, the Company uses aging as the credit risk characteristic combination and calculates expected credit losses for third-party accounts receivable based on the credit risk characteristic combination. Basis for determining combinations of contract assets: Combination 1: Unexpired warranty deposits For contract assets classified into combinations, the Company refers to historical credit loss experience, considers the current situation and forecasts of future economic conditions, and calculates expected credit losses through the default risk exposure and the expected credit loss rate over the entire contract period. The Company's aging calculation method for determining credit risk characteristic combinations of accounts receivable is as follows:
| Aging | Provision Rate for Accounts Receivable | Provision Rate for Other Receivables |
|---|---|---|
| Within 1 year | 5% | 5% |
| 1 to 2 years | 10% | 10% |
| 2 to 3 years | 30% | 30% |
| 3 to 4 years | 50% | 50% |
| 4 to 5 years | 80% | 80% |
| Over 5 years | 100% | 100% |
(II) Method for Provision for Inventory Price Decline
At the balance sheet date, inventory is measured at the lower of cost and net realizable value. If the inventory cost is higher than its net realizable value, an inventory price decline provision is made and included in current profit or loss. When determining the net realizable value of inventory, it is based on reliable evidence obtained, and considers factors such as the purpose of holding the inventory and the impact of subsequent events at the balance sheet date.
- For finished products, goods, and materials held for sale that are directly for sale in the normal course of production and operation, their net realizable value is determined by deducting the estimated selling expenses and related taxes and fees from the estimated selling price. For inventory held to fulfill sales contracts or service contracts, the contract price is used as the basis for measuring net realizable value; if the quantity of inventory held exceeds the quantity ordered in the sales contract, the excess portion of the inventory is measured at the general sales price. For materials held for sale, the market price is used as the basis for measuring net realizable value.
- For materials that require processing, in the normal course of production and operation, their net realizable value is determined by deducting the estimated costs to completion, estimated selling expenses, and related taxes and fees from the estimated selling price of the finished products to be produced. If the net realizable value of the finished products produced from these materials is higher than the cost, the materials are measured at cost; if the decline in material prices indicates that the net realizable value of the finished products is lower than the cost, the materials are measured at net realizable value, and the difference is provided for as an inventory price decline provision.
- The provision for inventory price decline is generally made on a per-item basis; for inventory with large quantities and low unit prices, the provision is made by inventory category.
- If, at the balance sheet date, the factors causing the previous reduction in inventory value have disappeared, the reduced amount is reversed, and the amount reversed is within the amount of the previously made inventory price decline provision. The reversed amount is included in current profit or loss.
(III) Method for Impairment of Long-Term Assets
For impairment of long-term equity investments in subsidiaries, joint ventures, and associates, investment properties measured under the cost model, fixed assets, construction in progress, biological assets measured under the cost model, right-of-use assets, intangible assets, goodwill, proven oil and gas mining rights and related facilities (excluding inventory, investment properties measured under the fair value model, deferred tax assets, and financial assets), the impairment is determined as follows: At the balance sheet date, if there are indications that an asset may be impaired, the Company estimates its recoverable amount and performs an impairment test. For goodwill arising from business combinations, intangible assets with indefinite useful lives, and intangible assets that have not yet reached a usable state, an impairment test is performed annually, regardless of whether there are indications of impairment. The recoverable amount is determined as the higher of the net fair value of the asset less disposal costs and the present value of the asset's expected future cash flows. The Company estimates the recoverable amount 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 determined. An asset group is identified based on whether the main cash inflows generated by the asset group are independent of the cash inflows from other assets or asset groups. If the recoverable amount of an asset or asset group is lower than its carrying amount, the Company reduces the carrying amount of the asset to its recoverable amount. The amount of the reduction is included in current profit or loss, and the corresponding asset impairment provision is made.
III. Impact of This Provision for Impairment Losses on the Company's Financial Position
The Company incurred RMB 60.0781 million in credit impairment losses and asset impairment losses in 2025, which will reduce the Company's total profit for 2025 by RMB 60.0781 million.
IV. Board of Directors' Explanation on the Reasonableness of the Company's Provision for Asset Impairment Losses for 2025
The Company made the above asset impairment provisions in accordance with the principle of prudence for 2025, which complies with the "Accounting Standards for Business Enterprises," relevant regulations, and the Company's actual situation. It helps to provide investors with true and reliable accounting information and fairly reflects the Company's financial position and operating results.
V. Audit Committee's Review Opinion on This Provision for Asset Impairment Losses
The Company's provision for asset impairment losses is based on the principle of prudence, complies with the "Accounting Standards for Business Enterprises" and other relevant regulations, and is consistent with the Company's actual situation. It objectively and fairly reflects the Company's financial position and operating results, and does not harm the interests of the Company and all shareholders, especially small and medium shareholders. The deliberation procedures are legal and compliant. The provision for asset impairment losses is agreed upon.
VI. Documents for Reference
- Resolution of the Second Extraordinary Meeting of the Seventh Board of Directors;
- Resolution of the Special Meeting of Independent Directors; Hereby announced. Anhui ShenJian New Material Co., Ltd. Board of Directors April 24, 2026