Stock Code: 002407 Stock Abbreviation: Duofudu Announcement No.: 2026-025 Announcement on Provision for Asset Impairment, Asset Disposal, and Write-off of Receivables for 2025 The Company and all members of its Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed, and that there are no false records, misleading statements, or material omissions. Duofudu New Material Co., Ltd. (hereinafter referred to as the "Company") held the fifth meeting of the eighth Board of Directors on April 14, 2026, and deliberated and approved the "Proposal on Provision for Asset Impairment, Asset Disposal, and Write-off of Receivables for 2025". The details are as follows: I. Provision for Asset Impairment (1) Reasons for the Provision for Asset Impairment in this Period To fairly reflect the Company's financial position as of December 31, 2025, and its operating results for 2025, in accordance with the "Accounting Standards for Business Enterprises" and relevant accounting policies and estimates, and adhering to the principle of prudence, the Company and its holding subsidiaries have conducted a thorough review, analysis, and evaluation of various assets, and have made provisions for impairment losses on assets that may have suffered value impairment. (2) Scope of Assets, Total Amount, and Reporting Period for the Provision for Asset Impairment in this Period The scope of assets for which the Company may incur impairment losses includes accounts receivable, notes receivable, other receivables, financial assets at fair value through other comprehensive income, long-term receivables, inventory, fixed assets, construction in progress, intangible assets, etc. In 2025, a total impairment loss of 13,396.24 million yuan was provided for, of which 7,630.79 million yuan was for credit impairment losses and 5,765.45 million yuan was for asset impairment losses. The specific details are as follows: Item Provision for Impairment Amount for 2025 (million yuan) I. Credit Impairment Losses 7,630.79 Of which: Accounts receivable 3,508.94 Other receivables 1,022.47 Notes receivable 638.03 Financial assets at fair value through other comprehensive income/Accounts receivable financing -345.70 Long-term receivables 2,807.05 II. Asset Impairment Losses 5,765.45 Of which: Inventory price decline loss 1,593.73 Fixed asset impairment loss 3,667.02 Intangible asset impairment loss 116.34 Construction in progress impairment loss 388.36 Total 13,396.24 The reporting period for the provision for impairment losses in this period is from January 1, 2025, to December 31, 2025. (3) Confirmation Standards and Methods for Provision for Credit and Asset Impairment Losses in this Period
- Credit Impairment Losses In 2025, the Company provided for credit impairment losses of 7,630.79 million yuan. The confirmation standards and methods are as follows: As of the balance sheet date, the Company assesses the expected credit losses of financial instruments on a single-item and collective basis. When assessing expected credit losses, it considers reasonable and supportable information about past events, current conditions, and future economic outlook. (1) Impairment of Accounts Receivable. For accounts receivable that are overdue, in default, disputed, or litigated, or whose credit risk has significantly increased, or for which credit impairment has already occurred, the Company conducts an individual expected credit loss test. The loss provision is calculated as the present value of the difference between the contractual cash flows and the expected cash flows, and is recognized in current profit or loss. When it is not possible to reasonably assess the expected credit loss for a single instrument at a reasonable cost, the Company classifies accounts receivable into several portfolios based on credit risk characteristics, referencing historical credit loss experience, current conditions, and judgments about future economic conditions, and calculates the expected credit loss based on the portfolio. The basis for determining the portfolios is as follows: Portfolio Name Basis for Determining Portfolio Method of Calculation Accounts receivable from low credit risk customer portfolios Accounts receivable from related parties within the consolidated scope No provision for bad debts Accounts receivable calculated based on aging Excluding accounts receivable for which individual expected credit loss has been provided and those with extre