Securities Code: 002378 Securities Abbreviation: Zhangyuan Tungsten Announcement No.: 2026-037 Zhangyi Zhangyuan Tungsten Co., Ltd. Announcement on Provision for Asset Impairment for January-March 2026 The Company and the Board of Directors guarantee the content of this information disclosure is true, accurate, and complete, and that there are no false records, misleading statements, or significant omissions. Special Note: The reporting period in this announcement refers to January 1, 2026, to March 31, 2026. To accurately reflect the financial position and operating results of Zhangyi Zhangyuan Tungsten Co., Ltd. (hereinafter referred to as the "Company") as of March 31, 2026, the Company conducted a comprehensive inventory of various assets of the Company and its subsidiaries. After thorough analysis and evaluation, it was determined that there was asset impairment in January-March 2026. The Company held the 26th meeting of the Sixth Board of Directors on April 25, 2026, and deliberated and approved the "Proposal on the Company's Provision for Asset Impairment for January-March 2026." The specific details are as follows: I. Provision for Asset Impairment for January-March 2026 (I) Inventory Impairment Provision In accordance with the "Accounting Standards for Enterprises" and the Company's accounting policies, at the balance sheet date, inventory is measured at the lower of cost and net realizable value. If the inventory cost is lower than the net realizable value, the inventory is measured at cost; if the inventory cost is higher than the net realizable value, the inventory is measured at net realizable value, and an inventory impairment provision is recognized for the difference between the cost and the net realizable value, which is included in current profit and loss. If an inventory impairment provision has been recognized for sold inventory, the recognized inventory impairment provision should be transferred to offset the current cost of goods sold.
- Parent Company Transfer and Provision for Inventory Impairment At the end of the reporting period, the difference between the cost and net realizable value of inventory such as finished goods and work-in-progress of the parent company was calculated. It was found that some existing orders showed signs of impairment upon testing. During the reporting period, an inventory impairment provision of 16.6178 million yuan was recognized, and the transfer of inventory impairment provision due to product sales was 8.0206 million yuan.
- Subsidiary Transfer and Provision for Inventory Impairment (1) Ganzhou Aoketai Tool Technology Co., Ltd. At the end of the reporting period, Ganzhou Aoketai Tool Technology Co., Ltd., a wholly-owned subsidiary of the Company, calculated the difference between inventory cost and net realizable value and confirmed the reversal of the inventory impairment provision of 0.9819 million yuan, and the transfer of inventory impairment provision due to product sales was 6.7968 million yuan. (2) Shenzhen Zhangyuan Precision Tool Technology Co., Ltd. At the end of the reporting period, Shenzhen Zhangyuan Precision Tool Technology Co., Ltd., a wholly-owned subsidiary of Zhangyuan International Technology Innovation (Shenzhen) Co., Ltd., a wholly-owned subsidiary of the Company, experienced a decline in order volume and high processing costs. Some processed parts showed signs of impairment upon calculation. The calculated provision for inventory impairment was 0.6334 million yuan, and the transfer of inventory impairment provision due to product sales was 0.4665 million yuan. Unit: Ten Thousand Yuan Item Opening Balance Current Period Increase (Provision) Current Period Decrease (Transfer) Closing Balance Parent Company 829.38 1,661.78 802.06 1,689.10 Subsidiaries 2,345.85 -34.85 726.33 1,584.67 Subtotal 3,175.23 1,626.93 1,528.39 3,273.77 Consolidation Elimination -769.89 -257.81 -559.83 -467.87 Post-Elimination Consolidated Total 2,405.34 1,369.12 968.56 2,805.90 In summary, after eliminating unrealized intercompany sales of inventory and reversing the inventory impairment provision recognized by subsidiaries for this portion of inventory in the consolidated financial statements, the cumulative provision for inventory impairment in the consolidated statements as of March 2026 was 13.6912 million yuan, and the cumulative transfer of inventory impairment provision due to product sales was 9.6856 million yuan. (II) Provision for Bad Debts for Accounts Receivable The Company conducted impairment tests on accounts receivable. Among them, for accounts receivable for which the provision for expected credit losses is determined based on the credit risk characteristic combination, the amount determined by the aging combination and the expected credit loss rate is used as the standard for recognizing the provision for bad debts. For accounts receivable whose credit risk is significantly different from that of the combination, the Company recognizes expected credit losses on a single-item basis. As of the end of the reporting period, the provision for bad debts for accounts receivable was 49.2055 million yuan, of which the provision for bad debts for notes receivable was 0.0379 million yuan, the provision for bad debts for accounts receivable was 46.9221 million yuan, and the provision for bad debts for other receivables was 2.2455 million yuan. The cumulative provision for bad debts for accounts receivable during the reporting period was 17.3985 million yuan, which reduced the total profit by 17.3985 million yuan. During the reporting period, 0.0904 million yuan of accounts receivable bad debts were written off, reducing the provision for bad debts. The changes in the provision for bad debts for accounts receivable are as follows: Unit: Ten Thousand Yuan Category Item Opening Balance Current Period Change (Provision/Reversal) Write-off Closing Balance Provision for Notes Receivable Provision based on combination 5.70 -1.91 3.79 Subtotal 5.70 -1.91 3.79 Provision for Accounts Receivable Provision based on single item 1,795.87 6.23 9.04 1,793.06 Provision based on combination 1,162.79 1,736.36 2,899.15 Subtotal 2,958.66 1,742.59 9.04 4,692.21 Provision for Other Receivables Provision based on single item 145.99 0.00 145.99 Provision based on combination 79.39 -0.83 78.56 Subtotal 225.38 -0.83 224.55 Total Provision for Bad Debts 3,189.74 1,739.85 9.04 4,920.55 (III) Summary of Asset Impairment Data for January-March 2026 Unit: Ten Thousand Yuan Asset Impairment Category Provision (Reversal) Write-off (Transfer) Impact on Total Profit Inventory Impairment Provision 1,369.12 968.56 -400.56 Total Provision for Bad Debts 1,739.85 9.04 -1,739.85 Total 3,108.97 977.60 -2,140.41 Note: The 9.04 million yuan of accounts receivable to be written off in this batch has been fully provided for impairment. The recognition of this loss and the impairment transfer will not affect the Company's current profit. II. Impact of This Provision for Asset Impairment on the Company In January-March 2026, the Company recognized a provision for asset impairment of 31.0897 million yuan and transferred out inventory impairment of 9.6856 million yuan, resulting in a total reduction in profit of 21.4041 million yuan. The net profit attributable to the owners of the parent company decreased by 21.1732 million yuan, and the owners' equity attributable to the shareholders of the listed company decreased by 21.1732 million yuan. III. Explanation of the Reasonableness of the Board of Directors' Audit Committee on the Asset Impairment The Fourth Meeting of the Sixth Board of Directors' Audit Committee in 2026 deliberated and approved the "Proposal on the Company's Provision for Asset Impairment for January-March 2026." After deliberation, the Audit Committee believes that the Company's asset impairment matters have complied with the provisions of the "Accounting Standards for Enterprises" and the Company's relevant accounting policies, are well-founded, and fairly reflect the Company's financial position and operating results as of March 31, 2026. The Audit Committee agrees with the Company's asset impairment matters. IV. Documents for Inspection
- Resolution of the 26th Meeting of the Sixth Board of Directors;
- Resolution of the 26th Meeting of the Sixth Board of Directors' Audit Committee in 2026. Hereby announced. Board of Directors of Zhangyi Zhangyuan Tungsten Co., Ltd. April 28, 2026