Financial Statements and Audit Report for the Most Recent Year

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Shanghai Xiangfenghua Technology Co., Ltd.

2025 Annual

Financial Statements and Audit Report

Table of Contents

Audit Report

Zhonghua Audit [2026] No. 05507

To the Shareholders of Shanghai Xiangfenghua Technology Co., Ltd.:

I. Audit Opinion

We have audited the financial statements of Shanghai Xiangfenghua Technology Co., Ltd. (hereinafter referred to as "Xiangfenghua"), which comprise the consolidated and company balance sheets as of December 31, 2025, the consolidated and company income statements, the consolidated and company cash flow statements, and the consolidated and company statements of changes in equity for the year 2025, as well as the related notes to the financial statements.

In our opinion, the accompanying financial statements have been prepared in all material respects in accordance with the Accounting Standards for Business Enterprises and fairly present the consolidated and company financial position of Xiangfenghua as of December 31, 2025, and the consolidated and company operating results and cash flows for the year 2025.

II. Basis for Audit Opinion

We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilities under these standards are further described in the "Certified Public Accountant's Responsibilities for the Audit of the Financial Statements" section of this report. We are independent of Xiangfenghua in accordance with the Code of Ethics for Certified Public Accountants of China and have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

III. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

(I) Revenue Recognition

1. Description of Key Audit Matter

Xiangfenghua's sales revenue is primarily derived from the production and sale of anode materials. As described in Note 5.39 to the consolidated financial statements, the operating revenue recognized by Xiangfenghua for the sale of anode materials in 2025 amounted to 1,667,808,313.45 RMB, all of which was generated from the sale of products. Since operating revenue is one of Xiangfenghua's key performance indicators, and the authenticity of revenue recognition and whether revenue is recognized in the appropriate accounting period have a significant impact on Xiangfenghua's operating results, we have identified revenue recognition as a key audit matter.

1. How Our Audit Addressed the Key Audit Matter

(1) We understood, tested, and evaluated the design and execution of internal controls related to sales and collections.

(2) We selected samples to inspect sales contracts, identified terms and conditions related to the transfer of control of goods, and evaluated whether the timing of Xiangfenghua's revenue recognition complied with the Accounting Standards for Business Enterprises.

(3) For revenue transactions recorded in the current year: For domestic sales, we selected samples and verified invoices, sales contracts, outbound delivery orders, and delivery receipts; the company recognizes revenue upon the signing of delivery receipts, with BYD recognizing revenue based on monthly reconciliation amounts. For export sales, we selected samples and verified outbound delivery orders, customs declarations, and bills of lading issued by freight companies; the company recognizes revenue based on bills of lading issued by freight companies, and we verified and evaluated whether the relevant revenue recognition complied with Xiangfenghua's accounting policies.