三花智控:Zhejiang Sanhua Intelligent Controls Co.,Ltd.2023 Semi-Annual Report

Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Zhejiang Sanhua Intelligent Controls Co. Ltd.2023 Semi-Annual Report
August 2023
1Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section I Important Notes Contents and Definitions
The Board of Directors Board of Supervisors Directors Supervisors and Senior Management
of Zhejiang Sanhua Intelligent Controls Co. Ltd. (hereinafter referred to as the “Company”) hereby
guarantee that the information presented in this report shall be authentic accurate complete and free
from material misstatement whether due to false record misleading statement or significant omission
and they will bear both individual and joint legal liabilities.Zhang Yabo the Company's legal representative Yu Yingkui the person in charge of the
accounting work and Sheng Xiaofeng the person in charge of accounting department (Accounting
Officer) hereby declare and warrant that the financial statements in this report are authentic accurate
and complete.All directors attended the board meeting to review this report.The Company describes in detail concerning the possible risks and countermeasures in Section
X "Risks and Countermeasures of the Company" under Section III "Management’s Discussion and
Analysis of Operations". Please pay particular attention to relevant contents.The profit distribution proposal approved by the board of directors is as follows: Based on
provisional 3726786475 shares of capital stock as of August 20 2023 [note] cash dividend of RMB
0.50 (tax inclusive) will be distributed to all shareholders for every 10 shares. The Company will not
distribute bonus shares or convert capital reserves to share capital.Note: As of August 20 2023 the share capital of the Company is 3732795935 shares of which the number
of repurchased shares is 6009460. According to the provisions of the Company Law the shares held by the listed
company through the repurchase account do not enjoy the right to participate in profit distribution or the conversion
of capital reserve into share capital.If the total share capital of the Company changes due to the conversion of convertible bonds share repurchase
exercise of equity incentive scheme refinancing and listing of new shares before the implementation of the
distribution plan the total distribution amount shall be adjusted accordingly based on the principle of unchanged
distribution proportion.
2Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
CONTENTS
Section I Important Notes Contents and Definitions... 2
Section II Corporate Profile and Key Financial Ind... 6
Section III Management’s Discussion and Analysis o.. 10
Section IV Corporate Governance .................... 30
Section V Environmental and Social Responsibility .. 34
Section VI Significant Events ...................... 43
Section VII Changes in Shares and Information abou.. 66
Section VIII Information of Preferred Shares ....... 74
Section IX Bonds ................................... 75
Section X Financial Report ......................... 78
3Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
List of Documents Available for Inspection
1. The 2023 Semi-Annual Report signed by the chairman of the board
2. The financial report signed and sealed by the Company's legal representative chief finance officer and
person in charge of accounting department
3. The Company’s articles of association
4. Original copy of all the Company's documents and announcements published on the newspapers designated
by CSRC within the reporting period
5. Other documents available for inspection
4Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Definitions
Items Refers to Definition
The Company Company Refers to Zhejiang Sanhua Intelligent Controls Co. Ltd.The Articles of Association Refers to Articles of Association for Zhejiang Sanhua Intelligent Controls Co. Ltd.The CSRC Refers to China Securities Regulatory Commission
SZSE Refers to Shenzhen Stock Exchange
Zhejiang Securities Regulatory Zhejiang Securities Regulatory Bureau of China Securities Regulatory
Refers to
Bureau Commission
General Meeting Refers to General Meeting of Zhejiang Sanhua Intelligent Controls Co. Ltd.The Board of Directors Refers to The Board of Directors of Zhejiang Sanhua Intelligent Controls Co. Ltd.The Board of Supervisors Refers to The Board of Supervisors of Zhejiang Sanhua Intelligent Controls Co. Ltd.Yuan Refers to RMB
5Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section II Corporate Profile and Key Financial Indicators
I. Corporate Information
Stock abbreviation Sanhua Intelligent Controls Stock code 002050
Stock Exchange where the
shares of the Company are Shenzhen Stock Exchange
listed
Name of the Company in浙江三花智能控制股份有限公司
Chinese
Abbr. of the Company name三花智控
in Chinese (if any)
Name of the Company in
ZHEJIANG SANHUA INTELLIGENT CONTROLS CO. LTD.English (if any)
Abbr. of the Company name
SANHUA
in English (if any)
Legal Representative Zhang Yabo
II. Contacts and Contact Information
Board Secretary Securities Affairs Representative
Name Hu Kaicheng Wang Yutong
No. 289 12th Street Xiasha Baiyang Street Sanhua Industrial Park No. 219 Woxi
Address Hangzhou Economic and Technological Avenue Chengtan Street Xinchang
Development Area China Shaoxing Zhejiang China
Tel. 0571-28020008 0575-86255360
Fax 0571-28876605 0575-86563888-8288
E-mail shc@zjshc.com shc@zjshc.com
III. Other Relevant Information
1. Company’s contact information
Whether there is any change in the Company’s registered address office address zip code website or email
address during the reporting period.√Applicable □Not applicable
6Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
No. 219 Woxi Avenue Chengtan Street Xinchang Shaoxing Zhejiang
Registered address of the Company
China
Zip code of the Company's registered address 312530
No. 219 Woxi Avenue Chengtan Street Xinchang Shaoxing Zhejiang
Office address
China
Zip code of the Company's office address 312530
Website http://www.zjshc.com
E-MAIL shc@zjshc.com
2. Information disclosure and place of the report
Whether there is any change in information disclosure and place of the report during the reporting period.□Applicable √Not applicable
During the reporting period there were no changes in the stock exchange website media and website for disclosing
the semi-annual report as well as the location of the Company's semi-annual report. Please refer to the 2022 Annual
Report for details.
3. Other relevant information
Whether other relevant information has changed during the reporting period
□Applicable √Not applicable
IV. Key Accounting Information and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□Yes √ No
Corresponding Period of Last
Current Reporting Period YoY Change (%)
Year
Total Revenue (RMB) 12528920625.59 10159952995.52 23.32%
Net Profit Attributable to
Shareholders of the Listed 1394760848.85 1003187335.23 39.03%
Company (RMB)
Net Profit Attributable to
Shareholders of the Listed
Company after Deducting 1467390266.69 1030047529.50 42.46%
Non-recurring Gains and
Losses (RMB)
Net Cash Flow Generated
from Operational Activities 1718673593.61 761013129.16 125.84%
(RMB)
Basic Earnings per Share
0.390.2839.29%
(RMB/Share)
Diluted Earnings per Share
0.390.2744.44%
(RMB/Share)
7Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Weighted Average ROE 10.17% 8.74% 1.43%
At the End of the Current
At the End of Last Year YoY Change (%)
Reporting Period
Total Assets (RMB) 29158975279.09 27961214156.28 4.28%
Net Assets Attributable to
Shareholders of the Listed 13893398852.72 12941310409.42 7.36%
Company (RMB)
V. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in net profits and net assets of this financial report between International Financial Reporting
Standards and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in net profits and net assets of this financial report between International Financial
Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
2. Difference in net profits and net assets of this financial report between Overseas Accounting Standards
and China Accounting Standards
□ Applicable √ Not applicable
There is no difference in net profits and net assets of this financial report between Overseas Accounting Standards
and China Accounting Standards in the reporting period.VI. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Items Amount Note
Gains or Losses from Disposal of Non-
current Assets (Including the Write-off -3064084.40
for the Accrued Impairment of Assets)
The Government Subsidies Included in
the Current Gains and Losses (Excluding
the Government Subsidies Closely
Related to Regular Businesses of the 44899780.71
Company and Issued in the Quota or
Quantity Based on the National
Standards)
Gains or Losses Attributed to the In order to avoid the price risk of raw
Changes in Fair Value for Holding Held- materials and prevent exchange rate risk
for-trading financial assets Derivative the Company and its subsidiaries have
Financial Assets Trading Financial carried out derivatives business
Liabilities Derivative Financial
including futures contracts and foreign
Liabilities and Investment Income from -133362738.92
Disposal of Held-for-trading financial exchange forward contracts. From
assets Derivative Financial Assets January to June 2023 the profit of
Trading Financial Liabilities Derivative futures is 4.3452 million yuan and the
Financial Liabilities and Other Debt forward loss is 137.708 million yuan.Investment Excluding Hedging From January to June 2022 the futures
8Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Businesses Related to the Regular loss is 9.5117 million yuan and the
Business Operation of the Company forward loss is 64.9561 million yuan.Therefore the amount of non-recurring
profit and loss items fluctuated greatly in
the first half of the two years.Meanwhile the exchange gain from
January to June 2023 is 194.1929 million
yuan and the exchange loss from
January to June 2022 was 100.6505
million yuan. According to the
Explanatory Announcement No. 1 of
Information Disclosure of Listed
Companies – Non-recurring Gains and
Losses foreign exchange gains and
losses are recurring gains and losses
while futures and forward gains and
losses are non-recurring gains and losses.Non-operating Revenue and
1961169.92
Expenditures Other Than the Above
Other Gains and Losses Items that Fit in
the Definition of Non-recurring Gains 2096067.98
and Losses
Less: Impact of Income Tax -15456546.00
Impact of Minority Equity (after
616159.13
tax)
Total -72629417.84
Details of other gains and losses items that meet the definition of non-recurring gains and losses:
□Applicable √ Not applicable
The Company has no circumstances of other gains and losses items that meet the definition of non-recurring gains
and losses.The reasons for the non-recurring gains and losses items defined or listed in the Explanatory Announcement No. 1
of Information Disclosure of Listed Companies – Non-recurring Gains and Losses are defined as recurring gains
and losses items
□Applicable √ Not applicable
In the reporting period the Company did not define any non-recurring gains and losses items defined and listed in
the Explanatory Announcement No. 1 of Information Disclosure of Listed Companies – Non-recurring Gains and
Losses as recurring gains and losses items.
9Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section III Management’s Discussion and Analysis of Operations
I. The Principal Business of the Company during the Reporting Period
1. Industry development
(1) Refrigeration and air conditioning electrical components industry
China is the largest manufacturing base of A/C and refrigerators in the world and its production and sales volume
ranks first globally. In line with the trend of environmental protection in the world energy-saving inverter and
intelligent technology have become the trend which puts forward a series of new requirements for the market of
control components and also brings new development opportunities. Relying on strong manufacturing capabilities
and a well-established supply chain Chinese manufacturers are expected to continue to lead global supply. As a
leading enterprise in the refrigeration control components industry the Company will follow the trend firmly seize
this opportunity and develop steadily.
(2) Automotive components industry
The global automobile industry has been developing rapidly which also drives the market demand of automotive
thermal management products to continue to grow substantially. In recent years the development of new energy
vehicles has become a certain trend which puts forward higher and more updated requirements for thermal
management products no matter in hybrid pure electric or hydrogen energy vehicles. The Company is positioned
in the field of new energy vehicle thermal management system gradually expands from components to module and
subsystems and has become the supplier of Valeo Volkswagen Mercedes Benz BMW Volvo Toyota GM Geely
BYD SAIC NIO and other cooperative partners.
2. Industry status
The Company is the world's largest manufacturer of refrigeration control components and the world's leading
manufacturer of automotive thermal management system control components. "Sanhua" refrigeration intelligent
control components have become a world-famous brand and a strategic partner of many automobile enterprises and
air-conditioning refrigeration appliance manufacturers in the world. The Company takes improving energy
efficiency level of various end products as its responsibility leading the global transformation of energy-saving and
environmental protection products. After more than 30 years of development the Company has established a leading
position in the global market of refrigeration and automotive thermal management. The market share of the
Company's Electronic Expansion Valve Four-way Reversing Valve Solenoid Valve Microchannel Heat
Exchanger Automotive Electric Expansion Valve Thermal Management Integrated Module for new energy vehicle
Omega Pump ranks first globally. The market share of the Company's Service Valve Automotive Thermal
Expansion Valve and Receiver Drier is in the leading position in the world.II. Core Competitiveness Analysis
1. Clear strategic layoutThe Company adheres to the "Focus Lead Innovate and Transcend” business path takes the research and
application of heat pump technology and thermal management system products as the core firmly grasps the
development theme of energy conservation environmental protection and intelligent control upgrades from
"mechanical parts development" to "system control technology solution development of electronic control
10Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
integration". The Company’s products series are expanded from household A/C and refrigerator components to the
field of commercial A/C and commercial refrigeration and extending to the direction of inverter control technology
and system integration and upgrading. Meanwhile after the injection of automotive components business it gives
full play to the synergy effect with the original business continues to deepen the research and development of new
energy vehicle thermal management system components and actively explores the deeper application of thermal
management components and subsystems in the automotive field so as to provide global customers with
competitive environmental intelligent control solutions.
2. Technology leading customer oriented
As a national high-tech enterprise the Company has always adhered to the technological route of independent
development and innovation. For decades it has focused on the field of intelligent control and vigorously cultivated
core technologies with independent intellectual property rights. It has been authorized with 3622 patents both
domestic and abroad including 1779 invention patents. The Company has established a comprehensive multi-
disciplinary R&D team for product development and technical research and established a matrix R&D
organizational structure. Utilizing the model of product development driven by technological research we can
promote innovation. Meanwhile a technical expert committee has been established to guide and manage
technological development. All products services and quality of the Company take meeting the needs of customers
as the first priority.
3. Quality assurance scale economy effect
The Company's products cover refrigeration A/C electrical components and automotive components industry. The
market share of the Company's Electronic Expansion Valve Four-way Reversing Valve Solenoid Valve
Microchannel Heat Exchanger Automotive Electric Expansion Valve Thermal Management Integrated Module for
new energy vehicle Omega Pump ranks first globally. The market share of Service Valve Automotive Thermal
Expansion Valve and Receiver Drier is in the leading position in the world. The Company has established a complete
and strict quality assurance system achieved ISO9001 IATF16949 QC080000 quality system certification. The
Company won the National Quality Award Zhejiang Quality Award National Technological Innovation
Demonstration Enterprise and won the high comments from JCI Daikin Carrier Midea Gree Haier Toyota Benz
Volkswagen Valeo and other well-known enterprises at home and abroad.
4. Advantages of global marketing network and production base
Since the 1990s the Company has focused on expanding the international market and has established overseas
subsidiaries in Japan South Korea Singapore the United States Mexico Germany and other places to build a
global marketing network. At the same time it has established overseas production bases in the United States
Poland Mexico Vietnam India and other places. And in practice we have trained a number of management talents
who can meet the needs of business development in different countries and regions.III. Main Business Analysis
Overview
In the first half of 2023 with the comprehensive restoration of normalized operation of China's economy and society
as well as the effective implementation of macroeconomic policies the national economy has recovered and steadily
advanced towards high-quality development. At the same time in the context of the continuous acceleration of
11Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
global energy transformation and intelligent development the market growth of new energy vehicles heat pumps
commercial refrigeration energy storage artificial intelligence and other industries is strong.Specifically in the industry where the Company operates due to the combined stimulation of high temperature
weather and consumer recovery the Company's refrigeration and air conditioning electrical components business
has steadily increased its market share both domestically and internationally and its performance has steadily
increased. While the automotive components business has achieved rapid growth in performance thanks to the
vigorous development of the new energy vehicle industry and the continuous release of orders.During the reporting period the Company’s total revenue is RMB 12.529 billion with year-on-year increase of
23.32%; the net income is RMB 1.679 billion with year-on-year increase of 35.57%; the net profit attributable to
shareholders of the listed Company is RMB 1.395 billion with year-on-year increase of 39.03%. The revenue of
refrigeration and air conditioning electrical components business is RMB 7.706 billion with year-on-year increase
of 10.70%; the revenue of automotive components business is RMB 4.823 billion with year-on-year increase of
50.78%.
1. Focus on operation and deepen industrial layout
(1). Refrigeration and air conditioning electrical components business
The refrigeration and air conditioning electrical components business seizes the development opportunities of
related business products in the fields of energy efficiency upgrading refrigerant switching VRF kitchen
appliances and energy storage. In the first half of 2023 due to the Company's focus on increasing market share the
market share of its leading products steadily increased. The Company has achieved comprehensive cost reduction
and improved its profitability by focusing on high margin products continuous technological iteration and
innovation as well as optimizing procurement management. At the same time we will take multiple measures in
new fields new customers new products and other directions to break through the bottleneck in the development
of the home appliance stock market and achieve continuous growth. In addition in the process of globalization we
will continue to increase the layout of overseas factories in Vietnam Mexico and Thailand for global manufacturing
R&D and the construction of talent teams.
(2). Automotive components business
Under the opportunity of rapid development in the new energy vehicle thermal management industry the
automotive components business utilizes the benchmark customer demonstration effect to strengthen its first mover
advantage accelerates the construction of a supporting system with customers enriches product series deepens
industry technical barriers and maintains a leading technological level in industry development. The Company
continues to promote intelligent manufacturing and lean production improve equipment automation and self-
production capabilities and continuously improve profitability. At the same time we strengthen technological
innovation and joint development with strategic customers and create value for customers through standard module
thermal management defined by Sanhua in vehicle design. In addition in order to achieve rapid growth in the wave
of global automotive electrification and intelligence we accelerate the construction of domestic and foreign
production bases in the process of globalization increase production capacity layout emphasize talent team
construction and promote global standards in the aspects of manufacturing production material flow operation
management etc.
12Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
(3). Other business
In the first half of 2023 the energy storage business successfully broke through industry benchmark customers and
achieved revenue. The Company seizes the time window of demand explosion in the energy storage industry
comprehensively expands and strives to become a leading supplier of global energy storage thermal management
solutions
In the field of biomimetic robots the Company focuses on electromechanical actuators fully cooperating with
customer product R&D trial production adjustment and ultimately achieving mass production and landing. At the
same time we actively plan the overseas production layout of electromechanical actuator in line with the customer's
mass production goals.
2. Strengthen the creation of product strength and promote industry development through technological progress
During the reporting period the Company's R&D investment was 580 million yuan with year-on-year increase of
21.16%. The Company strengthens its product strength through continuous investment in R&D continuously
optimizes iterations participates in market competition with new products new technologies and differentiation
and responds to market changes with the best products.
3. Accelerate the construction of a clean low-carbon safe and efficient energy system and promote carbon
neutrality
In terms of carbon emission reduction the Company has accelerated the application of photovoltaic and energy
storage in our industry parks. The energy utilization efficiency of the Company's smart micro-grid project has
achieved multi energy complementarity and has been included in the "Zhejiang Province 2023 New Power System
Pilot Project Plan". In July 2023 the Company disclosed 2022 Carbon Disclosure Project (CDP).
4. Proposed issuance of Global Depositary Receipts (GDR) and listing on the Swiss Stock Exchange
In order to further promote the globalization strategy The Company is continuously promoting this GDR issuance.The raised funds are intended to expand the Company's global business layout strengthen the production and
manufacturing of refrigeration control components new energy thermal management and robot electromechanical
actuator businesses improve the Company's R&D investment and technological innovation and enhance the
Company's intelligent manufacturing digitization and informatization level.Changes in key financial data over the corresponding period of last year
Unit: RMB
Current Reporting Corresponding Period
YoY Change (%) Note of Change
Period of Last Year
Mainly due to the
increase in market
share of refrigeration
and air conditioning
Total Revenue 12528920625.59 10159952995.52 23.32% control components
and the rapid
development of new
energy vehicle
industry which
13Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
promotes the steady
development of the
Company's sales
Mainly due to the cost
Cost of sales 9295615081.75 7702347707.94 20.69% growth driven by the
sales growth
Selling Expenses 277177564.79 219831170.12 26.09%
Mainly due to the
increase in labor costs
Administrative depreciation and
619856574.65468457579.1332.32%
Expenses amortization and
office expenses during
the current period
Mainly due to the
increase in exchange
Financial Expenses -151660370.01 -85227439.31 -77.95%
gains in the current
period
Income Tax Expenses 263470197.45 224588797.63 17.31%
Mainly due to the
increase in R&D
personnel salaries
R&D Investments 580269632.04 478918631.31 21.16%
material and power
investment in this
period
Mainly due to the
increase in cash
Net Cash Flows from received from sales of
1718673593.61761013129.16125.84%
Operating Activities goods and provision of
services in the current
period
Mainly due to
receiving land
Net Cash Flows from
-990771136.32 -1493780685.20 33.67% compensation of 546
Investment Activities
million yuan from
Xialiquan in this period
Mainly due to a
decrease in cash
received from
Net Cash Flows from borrowings in the
-877206246.29-123929030.92-607.83%
Financing Activities current period and an
increase in cash paid
for dividend
distribution
Net Increase in Cash
271578.55-769569702.01100.04%
and Cash Equivalents
Whether there is significant change in Company’s profit structure or profit source during the reporting
period
□ Applicable √ Not applicable
There is no such case during the reporting period
14Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Revenue structure
Unit: RMB
Current Reporting Period Corresponding Period of Last Year
YoY Change (%)
Proportion to total Proportion to total
Amount Amount
revenue revenue
Total Revenue 12528920625.59 100% 10159952995.52 100% 23.32%
Classified by Industry
General
Equipment
12528920625.59100.00%10159952995.52100.00%23.32%
Manufacturing
Industry
Classified by Product
Refrigeration A/C
Electrical 7706021104.32 61.51% 6961386065.52 68.52% 10.70%
Components
Automotive
4822899521.2738.49%3198566930.0031.48%50.78%
Components
Classified by Region
Domestic Sales 6776150179.62 54.08% 5237886317.54 51.55% 29.37%
Overseas Sales 5752770445.97 45.92% 4922066677.98 48.45% 16.88%
Industries products or regions accounting for more than 10% of the Company’s operating revenue or
operating profit
√ Applicable □ Not applicable
Unit: RMB
YoY Change
YoY Change YoY Change
Gross (%) of
Revenue Cost of sales (%) of Cost of (%) of gross
margin operating
sales margin
revenue
Classified by industry
General
Equipment
12528920625.599295615081.7525.81%23.32%20.69%1.62%
Manufacturing
Industry
Classified by product
Refrigeration
A/C Electrical 7706021104.32 5713713098.06 25.85% 10.70% 7.50% 2.20%
Components
Automotive
4822899521.273581901983.6925.73%50.78%50.04%0.37%
Components
Classified by region
15Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Domestic Sales 6776150179.62 5088723058.93 24.90% 29.37% 27.70% 0.98%
Overseas Sales 5752770445.97 4206892022.82 26.87% 16.88% 13.16% 2.40%
In the case that the Company's main business data statistics are adjusted during the reporting period the
Company's main business data of the latest reporting period were adjusted according to the statistics at the
end of the last reporting period
□ Applicable √ Not applicable
IV. Non-Main Business Analysis
√Applicable □Not applicable
Unit: RMB
Amount Proportion to net profit Note of Change Sustainability
Floating gains and
losses on futures
derivatives floating
gains and losses on
Investment Income -46142073.31 -2.75% exchange rate No
derivatives gains and
losses on bank wealth
management products
etc.Floating gains and
losses on exchange rate
Gains and Losses from derivatives futures
-88814525.03 -5.29% No
Change of Fair Value derivatives and bank
wealth management
products
Payment exemption
compensation and
Non-operating
4564351.93 0.27% penalty gains fixed No
Revenue
asset retirement gains
etc.Fixed asset retirement
losses compensation
Non-operating
5260738.91 0.31% and breach of contract No
Expenditures
expenses donation
expenses etc.Credit Impairment
-72153972.68 -4.30% bad debt losses No
Loss
Inventory impairment
Assets Impairment
-24923403.90 -1.49% loss goodwill No
Loss
impairment loss etc.Gains on Disposal of Gains from disposal of
-406527.50 -0.02% No
Properties fixed assets
Government subsidies The value-added tax
value-added tax refund for "
Other Gains 62816875.53 3.74% refunds for " Employment of
Employment of Persons with
Persons with Disabilities " and
16Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Disabilities " software software product value-
product value-added added tax refund are
tax refunds etc sustainable while the
rest are not sustainable
V. Analysis of Assets and Liabilities
1. Material changes of assets
Unit: RMB
At the End of Current Reporting
At the End of Last Year
Period Note of YoY Change
significant
Percentage of Percentage of (%)
Amount Amount change
total assets total assets
Cash and bank 5576764606. 5878243652.
19.13%21.02%-1.89%
balance 33 55
Accounts 6386811942. 5228117225.
21.90%18.70%3.20%
receivable 25 57
4005376113.4334875287.
Inventories 13.74% 15.50% -1.76%
4986
Real estate held
8303262.370.03%8204266.970.03%0.00%
for investment
Long-term
equity 35234954.43 0.12% 32438204.13 0.12% 0.00%
investment
6693075353.6374896070.
Fixed assets 22.95% 22.80% 0.15%
0441
Construction in 2030840443. 1032505633.
6.96%3.69%3.27%
progress 80 51
Assets with
285384456.500.98%284277365.321.02%-0.04%
right of use
Short-term 1141938063. 1294083319.
3.92%4.63%-0.71%
borrowings 73 58
Contractual
86674142.260.30%57955080.600.21%0.09%
liabilities
Long-term 1801574166.
660544808.742.27%6.44%-4.17%
borrowings 67
Lease liabilities 204812488.97 0.70% 202028482.09 0.72% -0.02%
Notes 2117646111.4 2203948983.
7.26%7.88%-0.62%
receivable 1 83
2755748552.2580274767.
Notes payable 9.45% 9.23% 0.22%
4464
Accounts 4186618386. 3884603370.
14.36%13.89%0.47%
payable 31 16
Non-current
1718720282.
liabilities due 5.89% 568126341.67 2.03% 3.86%
57
within one year
17Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
2801454320.2776763361.
Bonds payable 9.61% 9.93% -0.32%
4883
2. Main overseas assets
√Applicable □ Not applicable
Proportion
Whether
Control of overseas
Assets there is
Content of Operation measures to Income assets in
Formation Scale Location significant
Assets Mode ensure (RMB) net assets
(RMB) impairment
asset safety of the
risk
Company
R&D
Sanhua Manufactur Financial
Internation ing supervision
-
al Inc. Equity 29082002 The United Marketing and
8.129660.8 No
(USA) Investment 13.01 States and entrusted
(Consolidat Investment external 6
ed) Manageme audit
nt
Sanhua Manufactur
Financial
Internation ing
supervision
al Marketing -
Equity 47170321 and
Singapore Singapore and 23070002. No
Investment 18.69 entrusted Pte. Ltd. Investment
external 7
(Consolidat Manageme
audit
ed) nt
3. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Profit and
Cumulative
loss of fair Impairment
changes in Current Current
Opening value accrued in Other Closing
Items fair value purchase sale
balance change in the current changes balance
included in amount amount
the current period
equity
period
Financial Assets
1. Held-
for-trading
financial
assets 10002598 30000000. 13000000
388505.61414485.69
(Excluding 0.08 00 0.00
Derivative
Financial
Assets)
2.Derivativ -
8938874.03841336.0
e Financial 5097538.0
Assets 5 4 1
-
10896485130000004255821.7
Subtotal 4709032.4
4.130.003
0
-
10896485130000004255821.7
Total 4709032.4
4.130.003
0
Financial 48671373. 84105492. 13277686
Liabilities 81 63 6.44
18Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Whether there were any material changes on the measurement attributes of major assets of the Company
during the reporting period:
□ Yes √ No
4. Limitation of asset rights as of the end of reporting period
Items Closing Book value (RMB) Reasons for being restricted
71979671.11 Margin deposit
Cash and Bank Balance 213176666.67 Pledge financing
2046000.00 Judicial restrictions
Notes Receivable 1927529849.96 Pledge financing
Total 2214732187.74 --
VI. Analysis of Investments
1. Overview
√Applicable □ Not applicable
Investment during the Reporting Period Investment over the Corresponding
Fluctuation Rate (%)
(RMB) Period of Last Year (RMB)
145114207.25547740000.00-73.51%
2. Significant equity investment during the reporting period
□Applicable √Not applicable
3. Significant non-equity investment during the reporting period
□Applicable √ Not applicable
4. Financial asset investment
（1）Securities Investments
□ Applicable √ Not applicable
No securities investments during this reporting period.
19Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
（2）Derivatives Investments
√Applicable □ Not applicable
1）Derivative investments for hedging purposes during the reporting period
√Applicable □ Not applicable
Unit: RMB in 10 thousand
Ratio of
closing
Gains and
Accumulated Purchase amount to
losses from Sales amount
Type of fair value amount the
Opening changes in during the Closing
derivatives changes during the company's
amount fair value in reporting amount
investment recognized in reporting net assets at
the current period
equity period the end of the
period
reporting
period
Futures
contracts
foreign
exchange
contracts
Total
Accounting
policies and
specific
accounting
principles for
hedging
business
during the
reporting
period as
well as N/A
explanations
on whether
there have
been
significant
changes
compared to
the previous
reporting
period
Explanation
of actual
gains and
losses during
the reporting
period
Explanation
of hedging
effectiveness
Capital
Company’s self-owned fund
source of
20Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
derivatives
investment
Risk analysis
and control
measures
(including
but not
limited to
market risk
In order to avoid the price risk of raw materials and exchange rate risk the Company and its subsidiaries have
liquidity risk
carried out derivative business including futures contracts and foreign exchange forward contracts. The Company
credit risk
and its subsidiaries strictly comply with the relevant provisions listed in the Management Measures for Future
operational
Hedging Business and Management Measures for Foreign Exchange Hedging Business.risk legal
risk etc.) of
holding
derivatives
during the
reporting
period
Change of
market price
or fair value
of invested
derivatives
during the
reporting
period;
specific
methods
Not applicable
related
assumptions
and
parameter
setting of the
derivatives’
fair value
analysis
should be
disclosed
Litigation (if
N/A
applicable)
1. After verification the independent directors made the following independent opinions: The approval process of
the Company and its subsidiaries to carry out futures hedging business with their own funds complies with
relevant national laws regulations and the relevant provisions of the Articles of Association. At the same time the
Company has formulated the Management Measures for the Operation of Futures Hedging Business which can
Special effectively carry out internal control and management and implement risk prevention and control measures. On
opinions of the premise of ensuring normal production and operation the Company's hedging business is conducive to
independent avoiding market risks hedging the impact of raw material prices on the Company's production and operation and
realizing the Company's long-term steady development. Therefore we agree that the Company and its
directors on
subsidiaries carry out futures hedging business and agree to submit the proposal to the general meeting of
derivatives shareholders of the Company for deliberation.investment 2. After verification the independent directors made the following independent opinions: The approval process of
and risk the Company and its subsidiaries to carry out foreign exchange hedging business complies with relevant national
control of the laws regulations and the relevant provisions of the Articles of Association. At the same time the Company has
Company formulated the Management System of Foreign Exchange Hedging Business which can effectively carry out
internal control and management and implement risk prevention and control measures. On the premise of
ensuring normal production and operation the Company's foreign exchange hedging business is conducive to
controlling exchange rate risks reducing exchange losses reducing the impact of exchange rate fluctuations on
21Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
the Company's normal operations and realizing the long-term steady development of the Company. Therefore
we agree that the Company and its subsidiaries carry out foreign exchange hedging business and agree to submit
the proposal to the general meeting of shareholders of the Company for deliberation.
2) Derivatives investments for speculative purposes during the reporting period
□ Applicable √ Not applicable
No derivative investments for speculative purposes during this reporting period.
22Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
5. Use of raised funds
√ Applicable □ Not applicable
（1） Overall use of raised funds
√ Applicable □ Not applicable
Unit: RMB in 10 thousand
Proporti
on of
Total accumul
Total amount Accumul ated
Raised
amount Accumul of raised ated amount Total
Raised funds
Total of raised ated funds amount of raised amount
funds has not
amount funds amount with use of raised funds of
Year Method has not been
of raised invested of raised alteratio funds with use unused
been used for
funds in the funds n during with use alteratio raised
used two
report invested the alteratio n to the funds
years
period reporting n total
period amount
of raised
funds
Public 298753. 20957.3 193738. 109035.
2021年
offering 1 3 68 57
298753.20957.3193738.109035.
Total -- --
136857
Description of Overall Usage of Raised Funds
1. The actual amount of raised fund and date of transfer in
In June 2021 with the approval of China Securities Regulatory Commission (CSRC) [2021] No. 168 the Company publicly
issued 30 million convertible corporate bonds (Sanhua convertible bond) with a par value of RMB 100 issued at face value
raising RMB 3 billion in total. The net amount of raised funds after deducting the issuance expenses of 12468991.59 yuan is
2987531008.41 yuan. The above-mentioned receipt of raised funds has been verified by Tianjian accounting firm who issued
the Capital Verification Report (TJY [2021] No. 277).Since Zhejiang Sanhua Commercial Refrigeration Co. Ltd. (hereinafter referred to as "Sanhua Commercial") is one of the
implementation subjects the Company has allocated 1487 million yuan of the raised funds to Sanhua Commercial in the form of
capital increase.
2. Usage and balance of raised funds
Amount (Unit: RMB in 10
Items Index
thousand)
Net amount of funds raised in the current period A 298753.10
Project investment B1 172781.35
Accumulated amount as of the
beginning of the period
Net income from raised funds B2 2979.99
Project investment C1 20957.33
Amount incurred in this
reporting period
Net income from raised funds C2 1041.16
23Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Project investment D1=B1+C1 193738.68
Accumulated amount by the
end of the period
Net income from raised funds D2=B2+C2 4021.15
Calculated balance of raised funds E=A-D1+D2 109035.57
Actual balance of raised funds F 109035.57
Difference G=E-F 0.00
（2） Promised fund-raising projects
√ Applicable □ Not applicable
Unit: RMB in 10 thousand
Committ
Investme
ed
Accumul nt Whether
investme Total
Whether ative progress Whether feasibilit
nt committ Total Date of Benefits
project Investme investme at the expected y of
projects ed investme asset achieved
has been nt in the nt at the end of benefits project
and investme nt after ready for in the
(or current end of the have has
allocatio nt of alteratio intended current
partially) year the period been changed
n of raised n (1) use year
altered period (%) achieved significa
over- funds
(2) (3)=(2)/( ntly
raised
1)
funds
Committed investment projects
Construc
tion
project
of
commer
cial
refrigera
tion and
air
conditio
ning 16905.0 95258.8 May 1
No 148700 148700 64.06% N/A No
intellige 3 2 2025
nt
control
compone
nts with
an
annual
output of
65
million
sets
Technica
l
transfor
mation
project
of high- 17206.9 August
No 69800 69800 4052.3 24.65% N/A No
efficienc 3 1 2024
y and
energy-
saving
refrigera
tion and
24Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
air
conditio
ning
control
compone
nts with
an
annual
output of
50.5
million
sets
Supplem
entary of 81272.9
No 81500 81500 99.72% N/A No
working 3
capital
Subtotal
of
committ
20957.3193738.
ed -- 300000 300000 -- -- -- --
368
investme
nt
projects
Investment of over raised funds
/
20957.3193738.
Total -- 300000 300000 -- -- -- --
368
Circumst
ances
and
reasons
for not
reaching
the
planned N/A
progress
or
expected
income
(by
specific
project)
Significa
nt
changes
in the N/A
feasibilit
y of
projects
Amount
usage
and use
N/A
progress
of over-
raised
25Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Funds
Change
in
impleme
ntation
location
of
N/A
investme
nt
projects
of
Raised
Funds
Adjustm
ent to
impleme
ntation
method
of
N/A
investme
nt
projects
of
Raised
Funds
Advance
Applicable
investme
nt and
substitut
ion of
projects
invested In 2021 the Company substituted the initial investment amount of 179.3857 million yuan with raised funds.with
raised
funds
Tempora
ry
supplem
ent of
working N/A
capital
with idle
raised
funds
The
amount
and
reasons
of the
balance
N/A
of raised
funds in
the
project
impleme
ntation
Applicat
Deposited in the special account for raised funds and the subscription of large amount certificates of deposit.ions of
26Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
unused
raised
funds
Problem
s or
other
situation
s in the
N/A
use and
disclosur
e of
raised
funds
（3） Changes of raised funds
□ Applicable √ Not applicable
There was no change of raised funds in the reporting period.VII. Disposal of Significant Assets and Equity
1. Disposal of significant assets
□ Applicable √ Not applicable
During the reporting period there was no disposal of significant assets
2. Sale of significant equity
□ Applicable √ Not applicable
VIII. Analysis of Major Subsidiaries and Investees
√ Applicable □ Not applicable
Information about major subsidiaries and investees that contribute above 10% of the Company’s net profit
Unit：RMB
Company Company Principal Registered Operating Operating
Total assets Net assets Net profit
name type business capital revenue profit
Manufactur
ing and
Zhejiang
sales of
Sanhua
refrigeratio
Commercia 1655.29 31256610 19422185 11229395 24802532 21700738
Subsidiary n and air
l million 42.33 26.44 30.02 6.41 7.07
conditionin
Refrigerati
g electrical
on Co. Ltd
component
s
Sanhua Manufactur
(Hangzhou ing and 21412957 12192773 10294781 13888646 10970183
Subsidiary 360 million
) Micro sales of 09.28 94.39 62.87 4.07 2.34
Channel refrigeratio
27Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Heat n and air
Exchanger conditionin
Co.Ltd. g electrical
component
s
Sales of
refrigeratio
Zhejiang
n and air - -
Sanhua 46659837 12426926 28968326
Subsidiary conditionin 50 million 37025835. 30042966.Trading 16.55 2.11 92.68
g electrical 84 66
Co. Ltd.component
s
Zhejiang Manufactur
Sanhua
ing and
Automotiv 2160 97747045 54493133 48228995 72975361 63097103
Subsidiary sales of
e million 17.62 86.74 21.27 7.95 4.91
Component automotive
s Co. Ltd parts
Manufactur
ing and
sales of
Sanhua refrigeratio
Internation
n and air 37.55 - -
al Inc. 29082002 38835903 25617534
Subsidiary conditionin million 11942181. 8129660.8
(USA) 13.01 5.48 04.65
(Consolidat g electrical USD 35 6
ed) component
investment
manageme
nt
Manufactur
ing and
sales of
Sanhua
Internation refrigeratio
al n and air 150.5805 - -
471703211111515632792363
Singapore Subsidiary conditionin million 19534205. 23070002.Pte. Ltd. 18.69 78.38 47.03 g electrical USD 50 70
(Consolidat component
ed)
investment
manageme
nt
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Methods of acquiring and disposing Impact on overall production operation
Company name
subsidiaries during the reporting period and performance
Guangdong Sanhua New Energy Vehicle
Establishment of subsidiaries No significant impact
Components Co. Ltd.Hangzhou Sanhua Intelligent Equipment
Establishment of subsidiaries No significant impact
Co. Ltd.Shenyang Sanhua New Energy Vehicle
Establishment of subsidiaries No significant impact
Components Co. Ltd
Sanhua Industry(Thailand) Co. Ltd Establishment of subsidiaries No significant impact
Minth Sanhua Auto Parts Poland Sp.zoo Establishment of subsidiaries No significant impact
28Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Suzhou Xinzhi Automotive Parts Co.Liquidation and cancellation No significant impact
Ltd.IX. Structural Entities Controlled by the Company
□ Applicable √ Not applicable
X. Risks and Countermeasures of the Company
(1) Risk of price fluctuation of raw materials
The raw materials needed by the Company are copper and aluminum which account for a large proportion of the
cost composition of the products. Therefore the fluctuation of the market price of raw materials will bring large
cost pressure to the Company. The Company will reduce the adverse impact of raw material price fluctuations
through the establishment of linkage pricing mechanism hedging operation of commodity futures and timely
negotiation with customers.
(2) The risk of rising labor cost
The labor costs are rising year by year which reduces the profit margin of the Company to a certain extent. In the
future the Company will continue to improve the level of intelligent manufacturing by continuously promoting lean
production process improvement and technical transformation.
(3) Exchange rate fluctuation risks
The Company's export volume is large involving North America Europe Japan Southeast Asia and other regions.Due to the changes in regional trade policies the Company's daily operation will be affected. The Company deals
with interregional trade risks through transferring production capacity to foreign countries. In addition the
fluctuation of exchange rate will also have a certain impact on the profit. According to the actual situation the
Company deals with and reduces this risk by means of forward foreign exchange settlement and establishing
overseas production bases in the United States Poland Mexico Vietnam India and other places.
29Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section IV Corporate Governance
I. Annual General Meeting and Extraordinary General Meetings Convened During the
Reporting Period
1. Annual General Meeting convened during the current reporting period
Proportion of
Meeting Nature participating Convened Date Disclosure Date Disclosure Index
investors
The announcement
of resolutions of
the 2022 annual
general meeting of
2022 Annual Annual General shareholders
General Meeting Meeting of 66.89% May 19 2023 May 20 2023 (2023-036) was
of Shareholders Shareholders published in the
Securities Times
Shanghai
Securities Journal
and CNINFO.
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed voting
rights
□ Applicable √ Not applicable
II. Changes of directors supervisors and senior management personnel
□ Applicable √ Not applicable
There were no changes in the Company's directors supervisors and senior management during the reporting
period. Please refer to the 2022 Annual Report for details
III. Profit distribution and conversion of capital reserve to share capital during the
reporting period
√Applicable □Not applicable
Bonus share issued per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax inclusive) 0.50
Total capital share basis for the distribution proposal (share) 3726786475
Total cash dividend (RMB) (tax inclusive) 186339323.75
Cash dividend amount in other ways (such as share repurchase)
0.00
(RMB)
30Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Total cash dividends (including other ways) (RMB) 186339323.75
Distributable profits (RMB) 1026080660.48
Percentage of cash dividends in the total distributed profit (%) 100%
Cash dividends
Other
Detailed description of profit distribution or capital reserves conversion plan
Based on provisional 3726786475 shares of capital stock as of August 20 2023 [note] cash dividend of RMB 0.50 (tax inclusive)
will be distributed to all shareholders for every 10 shares. The Company will not distribute bonus shares or convert capital reserves
to share capital. A total of RMB 186339323.75 will be distributed and the Company's remaining undistributed profits are carried
forward to the next year.Note: As of August 20 2023 the share capital of the Company is 3732795935 shares of which the number of repurchased shares
is 6009460. According to the provisions of the Company Law the shares held by the listed company through the repurchase account
do not enjoy the right to participate in profit distribution or the conversion of capital reserve into share capital.If the total share capital of the Company changes due to the conversion of convertible bonds share repurchase exercise of equity
incentive scheme refinancing and listing of new shares before the implementation of the distribution plan the total distribution
amount shall be adjusted accordingly based on the principle of unchanged distribution proportion.IV. The Implementation of an Equity Incentive Plan Employee Stock Incentive Plan or
Other Incentive Plans
√Applicable □Not applicable
1. Equity incentive plan
In order to further improve the Company's governance structure promote to establish and improve the incentive
and restraint mechanism attract and retain excellent talents and effectively mobilize the enthusiasm of the core
talents the Company has continuously launched equity incentive schemes.
1. In 2020 the Company launched the 2020 restricted stock incentive plan granting 12.045 million shares of
restricted stock to 914 incentive objects. The granting date of this equity incentive plan is February 24 2020 and
the granting price of restricted stock is 9.85 yuan/share. The listing date of this restricted stock is March 20 2020.
(1) On November 5 2020 the fourth extraordinary general meeting of shareholders of 2020 was held in which the
Resolution on repurchase and cancellation of some restricted stocks was approved. The Company repurchased
and cancelled all or part of the restricted stocks held by unqualified incentive objects in 2020 restricted stock
incentive plan totaling of 104000 shares.
(2) On June 8 2021 the Company held the 18th interim meeting of the 6th board of directors and the 16th interim
meeting of the 6th board of supervisors respectively in which Proposal on adjusting the repurchase price of
2020 restricted stock incentive plan Proposal on repurchase and cancellation of some restricted stocks and
31Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Proposal on the achievement of unlocking conditions of the first vesting period of the restricted stock incentive
plan in 2020 were approved. The listing date of the restricted shares was June 18 2021. The number of
shareholders meeting the unlocking condition was 883. A total of 4.59615 million shares were released.
(3) On June 24 2021 the second extraordinary general meeting of shareholders in 2021 was held in which
Proposal on repurchase and cancellation of some restricted shares was approved. The Company repurchased
and cancelled 229450 restricted shares held by unqualified incentive objects in the 2020 restricted stock
incentive plan.
(4) On November 16 2021 the fourth extraordinary general meeting of shareholders in 2021 was held in which
Proposal on repurchase and cancellation of some restricted shares was approved. The Company repurchased
and cancelled 113750 restricted shares held by unqualified incentive objects in the 2020 restricted stock
incentive plan.
(5) On May 9 2022 the Company held the 4th interim meeting of the 7th board of directors and the 4th interim
meeting of the 7th board of supervisors respectively in which Proposal on adjusting the repurchase price of
2020 restricted stock incentive plan Proposal on repurchase and cancellation of some restricted stocks and
Proposal on the achievement of unlocking conditions of the second vesting period of the restricted stock
incentive plan in 2020 were approved. The listing date of the restricted shares was May 19 2022. The number
of shareholders meeting the unlocking condition was 844. A total of 4.4343 million shares were released.
(6) On May 25 2022 the second extraordinary general meeting of shareholders in 2022 was held in which
Proposal on repurchase and cancellation of some restricted shares was approved. The Company repurchased
and cancelled 268450 restricted shares held by unqualified incentive objects in the 2020 restricted stock
incentive plan.
(7) On April 27 2023 the Company held the 11st interim meeting of the 7th board of directors and the 9th interim
meeting of the 7th board of supervisors in which Proposal on the achievement of unlocking conditions of the
third vesting period of the restricted stock incentive plan in 2020 was approved. The listing date of the restricted
shares was May 15 2023. The number of shareholders meeting the unlocking condition was 825. A total of 5.85
million shares were released.
2. In 2022 the Company launched the 2022 restricted stock incentive plan and stock appreciation right incentive
plan granting 17.585 million restricted shares to 1366 incentive objects and 485000 stock appreciation rights to
41 incentive objects. The granting date of this equity incentive plan is May 31 2022. The granting price of restricted
shares and stock appreciation rights is 10 yuan/share. The listing date of the restricted shares is June 30 2022.
(1) On June 20 2023 the Company held the 12nd interim meeting of the 7th board of directors and the 10th interim
meeting of the 7th board of supervisors in which following proposals were approved: Proposal on Adjusting
the Exercise Price of the 2022 Stock Appreciation Rights Incentive Plan Proposal on the Achievement of
Exercise Conditions during the First Vesting Period of the 2022 Stock Appreciation Rights Incentive Plan
Proposal on Cancellation of Partial Stock Appreciation Rights Proposal on Adjusting the Repurchase Price of
2022 Restricted Stock Incentive Plan Proposal on Repurchase and Cancellation of some Restricted Stocks and
Proposal on the Achievement of Unlocking Conditions of the First Vesting Period of the Restricted Stock
Incentive Plan in 2022. The listing date of the restricted shares was June 30 2023. The number of shareholders
meeting the unlocking condition was 1345. A total of 5.238 million shares were released. The total number of
incentive objects eligible for the exercise of stock appreciation rights was 39 and the number of exercisable
shares was 139500.
32Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
2. Employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive schemes
□ Applicable √ Not applicable
33Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section V Environmental and Social Responsibility
I. Significant environmental issues
Whether the Company or the Company’s subsidiaries are critical pollutant enterprises disclosed by National
Environmental Protection Department
√Yes □No
Environmental protection related policies and industry standards
During the reporting period the Company strictly adhered to national environmental protection related laws and
regulations in its daily production and operation such as the Environmental Protection Law the Air Pollution
Prevention and Control Law the Water Pollution Prevention and Control Law the Solid Waste Pollution
Environmental Prevention and Control Law the Environmental Noise Pollution Prevention and Control Law the
Soil Pollution Prevention and Control Law the Environmental Impact Assessment Law etc. The Company strictly
implements national environmental protection related industry standards such as the Electroplating Pollutant
Discharge Standard (GB2190-2008) Comprehensive Air Pollutant Discharge Standard (GB16297-1996)
Comprehensive Wastewater Discharge Standard (GB8978-1996) Emission Standard for Air Pollutants from Boilers
(GB13271-2014) Emission Standard for Pollutants in the Synthetic Resin Industry (GB31572-2015) Unorganized
Emission Control Standard for volatile organic compounds (GB37822-2019) the Electroplating Water Pollutant
Discharge Standard (DB33/2260-2020) in Zhejiang Province and Indirect Emission Limits of Nitrogen and
Phosphorus Pollutants in Industrial Enterprise Wastewater (DB33/887-2013) and Emission Standard for
Environmental Noise at the Boundary of Industrial Enterprises (GB 12348-2008).Administrative permits for environmental protection
1. Since 2010 the Company has invested in the construction of Meizhu Sanhua Industrial Estate in Xinchang County
and has obtained 24 EIA permits. All the projects have passed. In August 2020 the Company obtained the national
emission permit.
2. Since 2013 Zhejiang Sanhua Climate & Appliance Controls Group Co. Ltd. has invested in Xialiquan of
Xinchang County and has obtained 6 EIA permits. All the projects have passed. In July 2020 the Company obtained
the national version of the pollution discharge license. In June 2022 it was relocated to the new factory of Daming
City and the production entity was changed to Zhejiang Sanhua Commercial Refrigeration Co. Ltd. The new
company has obtained the pollution discharge permit.Industry emission standards and specific situations of pollutant emissions involved in production and business
activities
Main Name of
pollutant main
Name of
s and pollutant Distribut Emissio Emissio
Compan Number Total Approve Over
types of s and Emissio ion of n n
y or of emission d total standard
character character n mode emission concentr standard
subsidiar outlets s emission emission
istic istic outlets ation s
y
pollutant pollutant
s s
Zhejiang Waste COD Sewer 1 North ≦ The 21.63T 61.867 T Not
34Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Sanhua water system 500mg/L limitatio /year exceedin
Intellige n of g the
nt COD in standard
Controls GB8978
Co. Ltd. -1996
Integrate
d
Wastewa
ter
Emissio
n
Standard
is
500mg /
L
The
limitatio
n listed
in
DB33/8
Indirect
Zhejiang Emissio
Sanhua n Limits
Not
Intellige Ammoni of
Waste Sewer ≦ 6.186 T exceedin
nt a 1 North Nitrogen 2.16T
water system 35mg/L /year g the
Controls Nitrogen and
standard
Co. Ltd Phospho
rus
Pollutan
ts from
Industri
al
Wastewa
ter is
35mg / L
The
limitatio
n listed
in
GB1327
Zhejiang 1-2014
Sanhua Emissio Not
≦
Intellige Waste Direct n 2.15 T exceedin
SO2 1 North 50mg/m 0.12T
nt gas emission Standard /year g the
3
Controls of Air standard
Co. Ltd Pollutant
s for
Boilers
is
50mg/m
3
Zhejiang Accordi
Sanhua ng to the Not
≦
Intellige Waste Nitrogen Direct low 10.06 T exceedin
1 North 50mg/m 0.11T
nt gas Oxide emission Nitrogen /year g the
3
Controls emission standard
Co. Ltd requirem
35Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
ents of
local
governm
ent the
limitatio
n of gas-
fired
boiler is
50mg /
m3
The
Zhejiang
limitatio
Sanhua
n from Not
Commer
Waste Sewer ≦ GB8979 20.73T exceedin
cial COD 1 Inside 9.39T
water system 500mg/l -1996 is /year g the
Refriger
500mg / standard
ation
L
Co. Ltd.The
limitatio
n listed
in
DB33/8
Indirect
Zhejiang Emissio
Sanhua n Limits
Not
Commer of
Waste Sewer ≦ 2.07T exceedin
cial COD 1 Inside Nitrogen 0.939T
water system 35mg/L /year g the
Refriger and
standard
ation Phospho
Co. Ltd. rus
Pollutan
ts from
Industri
al
Wastewa
ter is
35mg / L
Zhejiang
The
Sanhua Not
limitatio
Commer exceedin
Waste Total Sewer ≦ n from
cial 1 South 0.0511T / g the
water Copper system 2.0mg/l GB8979
Refriger standard
-1996 is
ation
2.0mg/l
Co. Ltd.Treatment of pollutants
The Company has established a comprehensive EHS (environment safety and health) management system set up
a "Safety Committee" leading organization to implement the relevant work and also formulated Sewage Prevention
and Control Procedures Waste Gas Prevention and Control Procedures Solid Waste Control Procedures and other
procedural control documents. The Company has formed an environmental protection system mainly based on
Productive Waste Management Measures Regulations on the Treatment of Non-productive Waste Materials Solid
36Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Waste Control Procedures Hazardous Waste Management Measures and etc.During the reporting period the Company actively constructed and optimized the EHS (environment safety and
health) management system. Relying on the "Safety Committee" and other leading organizations we
comprehensively promote energy conservation and emission reduction strictly comply with the Sewage Prevention
and Control Procedures Waste Gas Prevention and Control Procedures Solid Waste Control Procedures and other
procedural control documents. We also continuously operate and optimize the Productive Waste Management
Measures Regulations on the Treatment of Non-productive Waste Materials Solid Waste Control Procedures
Hazardous Waste Management Measures and etc.Adhering to the advanced management concept the Company takes "developing energy-saving and low-carbon
economy creating a green quality environment" as its own responsibility constantly surpasses and becomes an
important creator and contributor of human green quality living environment with limited resources and unlimited
wisdom.
1. Waste water treatment: The Company responded to the construction of "five water treatment" "eliminating
inferior V-type water" and "zero direct discharge of sewage" in the whole province. The Company renovated
the rainwater and sewage outlets in the factory area implemented the separation of rainwater and sewage and
installed cut-off valves and video monitoring equipment at the Company's rainwater discharge outlets and
collected and treated the early rainwater. There are two wastewater treatment stations in the factory. The sewage
treatment stations have been equipped with standardized sewage outlets and set up discharge outlet signs.Online monitoring device solenoid valve flowmeter and card swiping sewage system are installed at the
discharge outlet which has been connected with the environmental protection department. The monitoring
indicators include pH COD total copper total zinc total chromium total nickel and flow. Wastewater treatment:
The Company has entrusted a third-party professional treatment unit for treatment. The discharge indicators of
the Company's internal control wastewater are stricter than the environmental discharge standard. The final
treated wastewater is discharged into the sewage collection pipe network of the industrial zone and sent to
Shengxin sewage treatment plant for retreatment.
2. Waste gas treatment: The Company has acid pickling electroplating waste gas welding dust and other waste
gas. All kinds of waste gas discharge cylinders are equipped with corresponding waste gas treatment devices.The acid pickling and electroplating waste gas absorption and treatment tower is installed with automatic dosing
system and the waste gas is discharged to air after treatment. At the same time in order to win the blue-sky
defense activity the Company carried out low Nitrogen emission transformation of the Company's gas boilers
in accordance with the requirements of relevant official departments in 2019. In 2021 the transformation and
upgrading of VOCs treatment facilities in industrial enterprises have been implemented. At the same time the
process has been improved and the water cleaning is used to replace the organic solvent cleaning so as to
reduce the generation of VOCs. In 2022 the Company carried out an upgrade and transformation of diesel
powered mobile source emissions upgrading from the original National II emission standard to National IV
greatly reducing particulate matter emissions.
3. Solid waste and soil treatment: All kinds of hazardous waste of the Company are entrusted to the third qualified
party for disposal the general solid waste with utilization value is recycled the domestic waste is cleared and
37Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
transported by the environmental sanitation station and the construction waste is cleaned and transported by
the construction unit. In July 2020 the Company became one of the first "waste free factories" in Shaoxing.The Company commissioned a third-party testing agency to conduct soil and groundwater testing in 2022 and
no contamination was found. Among them hazardous waste management is an important risk in environmental
protection management. For hazardous waste according to the Company's Hazardous Waste Management
Measures we make a list of hazardous wastes for ledger management and implement the whole process of
control to ensure compliance throughout the collection storage and disposal. We also sign a hazardous waste
disposal agreement with qualified third parties to entrust the disposal and fill out the transfer linkage list on the
Solid Waste Supervisory Information System of Zhejiang Province and upload it to the national platform.
4. Noise control: The Company's existing main noise is workshop production noise air compressor room waste
gas and waste water treatment equipment noise. Equipment layout is reasonable and trees are planted around
the workshop. Noise at factory meets the standard.
5. The "three wastes" pollution control facilities of the Company are in normal and stable operation. The pollutants
are discharged based on the standard and there is no environmental pollution event.Emergency Response Plan
1. The Company re-prepared the Emergency Response Plan in April 2021 and filed with Xinchang Environmental
Protection Bureau on June 10 2021 (Record No. 330624-2021-06-M).
2. In order to improve the management ability and emergency response ability of Zhejiang Sanhua Commercial
Refrigeration Co. Ltd. for sudden environmental incidents and reduce the environmental hazards caused by sudden
environmental pollution accidents Zhejiang Sanhua Commercial Refrigeration Co. Ltd. reprepared the Emergency
Plan for Sudden Environmental Pollution Accidents of Zhejiang Sanhua Commercial Refrigeration Co. Ltd.(simplified version) in August 2022 which was filed with the Environmental Protection Bureau of Xinchang County
on September 27 2022 (Record No. 330624-2022-51-1)
Investment in environmental governance and protection and payment of environmental protection taxes
During the reporting period the Company's environmental governance investment and payment of environmental
protection tax amounted to 13.06 million yuan.Environmental self-monitoring program
The Company formulated Self-monitoring Scheme of Zhejiang Sanhua Intelligent Control Co. Ltd. according to the
requirements of the superior environmental protection department combined with the actual production situation
and the actual needs of environmental management of the Company. The sewage station of the Company is equipped
with a laboratory and the detection is conducted by a specially assigned person. On line automatic monitoring
equipment such as pH COD TOC total copper total zinc total chromium total nickel flow rate etc. are installed
at the Company's total wastewater discharge outlet so as to achieve the combination of automatic monitoring and
manual testing. For the pollution factors such as suspended matters total Phosphorus Ammonia Nitrogen total Iron
and Petroleum the Company entrusts a third-party testing agency to carry out regular monitoring. The monitoring
results are published regularly on the enterprise self-monitoring information disclosure platform of Zhejiang
38Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Province.Zhejiang Sanhua Commercial Refrigeration Co. Ltd. Daming Industrial Park has good pollutant emission
monitoring and management ability and can timely inform the environmental protection administrative department
and the public of the monitoring information. According to the actual production situation and the actual needs of
environmental management the environmental protection laboratory of wastewater treatment station is set up and
the detection is carried out by specially assigned person daily. On line automatic monitoring equipment such as pH
COD TOC total copper and flow rate are installed at the total wastewater discharge outlet of the Company. The
combination of automatic monitoring and manual testing effectively ensures the timeliness and effectiveness of
monitoring. The Company obtained the national pollution discharge license in January 2022. At the same time a
third-party testing Company is entrusted to carry out regular monitoring. The monitoring results are published
regularly on the enterprise self-monitoring information disclosure platform of Zhejiang Province.Administrative penalties for environmental problems during the reporting period
Not applicable
Other environmental information that should be disclosed
Not applicable
Measures and effects in reducing carbon emissions during the reporting period
√ Applicable □ Not applicable
There are direct greenhouse gas emissions from the use of natural gas gasoline and diesel fuel as well as indirect
greenhouse gas emissions from purchased electricity in the Company's production and operations. In this regard
the Company is committed to energy saving and emission reduction practices as well as continues to innovate green
product technologies to ensure effective use of resources and improve operational efficiency. As of the end of the
reporting period the Company had prepared and issued the Energy Management Measures Gas and Liquid
Management Measures Compressed Air Use Inspection and Reward & Penalty Management Regulations Trial
Management Measures for Compressed Air Cost Reduction Program on the Implementation of Peak and Valley
Electricity Tariff Incentives of the Business Unit in 2022 and Water Conservation System and other management
systems relating to resource conservation. By regularly checking usage we aim to minimize the consumption of
water electricity fuel and other resources and actively assist society in energy conservation and emission reduction
while optimizing our own energy resource costs. At the same time the Company has always adhered to the business
philosophy of energy saving and environmental protection constantly innovating products and technologies and is
committed to promoting the green and low-carbon development of the industry.
1. Low carbon design: Introduce low-carbon thinking from the design and development stage follow the low-carbon
management throughout the product lifecycle and prioritize the selection of low-carbon raw materials (including
but not limited to hydroelectric smelting of metals recycled metals etc.) recyclable materials and miniaturized
design while ensuring technical requirements.
2. Optimize the energy structure: In order to achieve the goals of clean energy and higher resource utilization
efficiency distributed photovoltaics are widely used in industrial areas to replace the original purchased electricity
and adopt waste heat recovery technology. On the other hand the energy storage system in the production park can
39Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
comprehensively take advantage of peak and valley electricity which improves the efficiency of distributed
photovoltaic utilization.
3. Accurate control of energy efficiency: The Company continues to promote the application of smart energy IOT
platform and effectively controls the use efficiency of all energy within the scope through real-time display of
digital information traceability technical transformation and energy conservation and consumption reduction
analysis.
4. Promote green technology: The Company reduces energy consumption and improves energy efficiency through
the improvement of manufacturing and technological process. Reduce energy consumption and carbon emission by
troubleshooting of air leakage point of compressed air pipeline of equipment upgrading and transformation of air
compressor emission reduction of triple supply and nitrogen recycling.
5. Strengthen green cooperation: In order to reduce the energy consumption required for liquefaction during the
transportation of oxygen and nitrogen and reduce the impact on climate the company has replaced the method of
purchasing liquid oxygen and nitrogen with self-made oxygen and nitrogen.
6. Production layout: Sanhua adheres to the concept of "wherever customers are Sanhua is there" By setting up
factories nearby we not only serve customers but also reduce carbon emissions in transportation. We have
established production bases in Mexico Poland Vietnam India Hangzhou Wuhu Zhongshan and other areas.At the same time as a leading global manufacturer of thermal management system control components for new
energy vehicles the Company fully grasps the business opportunities brought by the development of the global
new energy vehicle industry actively explores green and efficient refrigeration technology and continues to bring
professional and green product solutions to the industry.Other environmental information
Not applicable
II. Social responsibility
Corporate Integrity Related Policies and Standards
The Company is striving to cultivate a good atmosphere of doing business in a positive and smooth manner and to
continuously promote the healthy and sustainable development of the Company in terms of high quality.For employees the Company has formulated and released the Employee Integrity and Self-Discipline Agreement.We promote the study and implementation of the Company's cleanliness and self-discipline provisions in the
Company consciously enhance the awareness of cleanliness and self-discipline and strictly fulfill the clean practice
of the system. As of the end of the reporting period the Company and its business units have completed the signing
of all employees belonging to the Company. For suppliers the Company has formulated the Integrity and Self-
Discipline Cooperation Agreement advocating the common purpose of pursuing a fair and transparent business
environment with suppliers in order to ensure the smooth progress of sunshine cooperation and transactions and
safeguard the legitimate interests of both parties.
40Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Company Integrity Practice Work
Integrity building is an important work that the Company has been working on for a long time. In order to give full
play to the supervisory role of employees and external affiliates to effectively protect the legitimate rights and
interests of whistleblowers to further establish a positive atmosphere to create a fair open and impartial working
environment of integrity and to stimulate positive energy the Company has carried out a number of integrity
practice work:
1. For behaviors that violate the construction of integrity the Company's internal system shall be notified and taken
as a warning; organize training activities to promote integrity build-in during the Reporting Period the Company
conducted a training program in Hangzhou and Xinchang to promote the awareness of management and employees
of their obligations under anti-corruption laws and the practice of business ethics.
2. The Company has publicized complaint and reporting channels (including reporting phone numbers reporting
email addresses microblogging addresses etc.) and encouraged employees or third parties to report any corruption
malpractice and misconduct in the course of business operations. The Company accepts anonymous reports and
also encourages real-name reports to improve the efficiency of follow-up investigations strict and high
confidentiality of the informant's information and strictly prohibit any blowback retaliation and unfair treatment
of the informant and other behavior.Employee Rights and Interests Protection
The Company has formulated a perfect system of human resources rules and regulations including the Recruitment
Management Measures Attendance and Vacation Management Measures Quota Employee Management Measures
and so on. During the recruitment process the identity of applicants is strictly verified to ensure that no child labor
is employed. At the same time the Company respects the human rights of employees strictly prohibits the
employment of child labor and forced labor and organizes internal inspections from time to time to ensure that the
employment of labor is legal and compliant to the maximum extent.The Company has formulated a series of systems related to labor security employee compensation and benefits
such as the Attendance and Vacation Management System Year-end Bonus Management System Labor Contract
Management System etc. which comprehensively clarify the provisions on labor employment employee vacations
overtime etc. and strictly comply with the implementation of national labor laws and regulations to protect the
lawful rights and interests of workers. Employees are provided with additional benefits such as annual physical
examination and holiday benefits. At the same time the Company attaches great importance to the construction of
relations with employees regular communication with employees the establishment of communication channels
such as the Mid-Autumn Festival Symposium excellent cadres Symposium and so on. We also organize
satisfaction surveys on catering vehicles etc. and listens extensively to the opinions of employees to continuously
optimize the Company's management and promote the achievement of the company's business objectives.Employee Training and Development
The Company attaches importance to talent cultivation and builds targeted training systems at different levels and
in different sequences including but not limited to "Overseas Factory Manager Training Camp" "Purchasing Elite
Class" "Performance Training for Managers" "Management Training Program" "TDR Training" and other
thematic training methods to provide a more systematic and comprehensive cultivation for managers technical and
41Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
professional talents. The Company has also optimized its employee training program in line with the Company's
strategic needs and has increased its efforts to cultivate talents in areas such as international talent cultivation and
digital transformation empowerment.
42Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section VI Significant Events
I. Complete and Incomplete Commitments of the Company and Its Actual Controller
Shareholders Related parties Acquirers and Other Related Parties by the End of the
Reporting Period
√ Applicable □ Not applicable
Commitment Details of Date of Term of
Commitments Nature Performance
party commitments commitments commitments
When the
number of
shares sold
through listing
and trading in
Shenzhen Stock
Exchange
Zhang Yabo
Commitment reaches 1% of
controlling
from Other the total number November 21st Strict
shareholder Long term
reformation of commitment of shares of the 2005 performance
Sanhua Holding
shareholding Company it
Group Co. Ltd.shall make an
announcement
within two
working days
from the date of
the occurrence
of the fact.Zhang Daocai
and Sanhua
holding group
the controlling
shareholder of
Commitment
the Company
Zhang Daocai on horizontal
promise that
controlling competition
there will not be January 5th Strict
shareholder related party Long term
any competition 2009 performance
Sanhua Holding transactions and
with Sanhua
Group Co. Ltd. capital
intelligent
occupation
Commitments controls in the
from assets business scope
reorganization being or already
carried out in
the future.Sanhua Holding
Commitment Group
Zhang Daocai on horizontal promises: after
controlling competition the completion
January 5th Strict
shareholder related party of this Long term
2009 performance
Sanhua Holding transactions and transaction
Group Co. Ltd. capital Sanhua Holding
occupation Group and
Sanhua
43Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
intelligent
controls will
sign an
agreement
according to
law perform
legal
procedures
fulfill the
obligation of
information
disclosure and
handle
significant
matters for
approval in
accordance
with relevant
laws
regulations and
articles of
association of
Sanhua
intelligent
controls. In the
process of
implementation
of related party
transactions we
will follow the
principle of
legality and
reasonableness
ensure the
fairness of
prices and
procedures and
make certain
that the
legitimate
interests of
Sanhua
intelligent
controls and
other
shareholders
will not be
damaged
through related
party
transactions.Zhang Daocai Commitment In order to
Zhang Yabo on horizontal avoid
Zhang Shaobo competition horizontal
competition Strict
controlling related party July 24th 2015 Long term
with Sanhua performance
shareholder transactions and intelligent
Sanhua Holding capital controls Zhang
Group Co. occupation Daocai Zhang
44Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Ltd. Zhejiang Yabo Zhang
Sanhua Lvneng Shaobo Sanhua
Holding Group
Industrial
the controlling
Group Co. Ltd. shareholder of
the Company
and Sanhua
Lvneng
Industry the
trading partner
made the
following
commitments:
1. I (or the
Company) will
not directly or
indirectly
engage in or
participate in
the business
that constitutes
potential direct
or indirect
competition
with Sanhua
Intelligent
Controls and its
subordinate
enterprises;
guarantee that
legal and
effective
measures shall
be taken to urge
other
enterprises
controlled by
me (or the
Company) not
to engage in or
participate in
any business
competing with
Sanhua
Intelligent
Controls and its
subordinate
enterprises.
2. If Sanhua
Intelligent
Controls further
expands its
business scope
I (or the
Company) and
other controlled
enterprises will
not compete
with Sanhua
Intelligent
Controls'
expanded
business; if it is
possible to
compete with
Sanhua
Intelligent
45Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Controls'
business after
expansion I (or
the Company)
and other
controlled
enterprises will
withdraw from
Sanhua
Intelligent
Controls in the
following ways
of competition:
A. Stop the
businesses that
compete or may
compete with
Sanhua
Intelligent
Controls; B.Inject the
competitive
business into
Sanhua
Intelligent
Controls; C.Transfer the
competitive
business to an
unrelated third
party.
3. If I (or the
Company) and
other
enterprises
controlled by
me (or the
Company) have
any business
opportunities to
engage in and
participate in
any activities
that may
compete with
Sanhua
Intelligent
Controls'
business
operation they
shall
immediately
inform Sanhua
Intelligent
Controls of the
above business
opportunities. If
Sanhua
Intelligent
Controls makes
an affirmative
reply to take
advantage of
the business
opportunity
within a
reasonable
46Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
period specified
in the notice it
shall do its best
to give the
business
opportunity to
Sanhua
Intelligent
Controls.
4. In case of
breach of the
above
commitment I
(or the
Company) is
willing to bear
all
responsibilities
arising
therefrom and
fully
compensate all
direct or
indirect losses
caused to
Sanhua
Intelligent
Controls.In order to
standardize the
related party
transactions
with Sanhua
Intelligent
Controls Zhang
Daocai Zhang
Yabo Zhang
Shaobo Sanhua
Holding Group
the controlling
Zhang Daocai shareholder of
Zhang Yabo the Company
Zhang Shaobo Commitment and Sanhua
controlling on horizontal Lvneng
Industrial the
shareholder competition
trading partner Strict
Sanhua Holding related party July 24th 2015 Long term
made the performance
Group Co. transactions and following
Ltd. Zhejiang capital commitments:
Sanhua Lvneng occupation 1. I (or the
Industrial Company) and
Group Co. Ltd. the controlled
enterprises will
reduce the
related party
transactions
with Sanhua
intelligent
controls as far
as possible and
will not use
their own status
as shareholders
of Sanhua
47Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
intelligent
controls to seek
for superior
rights in terms
of business
cooperation and
other aspects
compared with
other third
parties;
2. I (or the
Company) will
not take
advantage of
the right to enter
into a
transaction with
Sanhua
intellectual
controls using
the position as a
shareholder.
3. If there are
necessary and
unavoidable
related party
transactions I
(or the
Company) and
the controlled
enterprises will
sign agreements
with Sanhua
intelligent
controls in
accordance
with the
principles of
fairness follow
legal
procedures and
perform the
information
disclosure
obligations in
accordance
with the
requirements of
relevant laws
regulatory
documents and
the articles of
association. It
shall also
perform
relevant
internal
decision-
making and
approval
procedures to
48Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
ensure that it
will not conduct
transactions
with Sanhua
intelligent
controls on
terms that are
obviously
unfair
compared with
the market
price and will
not use such
transactions to
engage in any
behavior that
damages the
legitimate
rights and
interests of
Sanhua
intelligent
controls and
other
shareholders.Zhang Daocai
Zhang Yabo
Zhang Shaobo
and Sanhua
holding Group
the controlling
shareholder of
the Company
made the
following
commitments:
after the
completion of
Zhang Daocai the transaction
Zhang Yabo Sanhua
Zhang Shaobo intelligent
Other Strict
controlling controls will July 24th 2015 Long term
Commitment performance
shareholder continue to
Sanhua Holding improve the
Group Co. Ltd. corporate
governance
structure and
independent
operation of the
Company
management
system in
accordance
with the
requirements of
relevant laws
and regulations
and the articles
49Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
of Association
and continue to
maintain the
independence
of Sanhua
intelligent
controls in
business assets
finance
institutions
personnel etc.to protect the
interests of all
shareholders.
1. I (or the
Company) and
the controlled
enterprises will
reduce the
related party
transactions
with Sanhua
intelligent
controls as far
as possible and
will not use the
position as a
shareholder of
Sanhua
intellectual
controls to seek
the superior
rights for
Zhang Daocai business
Zhang Yabo cooperation
Zhang Shaobo Commitment with Sanhua
controlling on horizontal intelligent
controls
shareholder competition
compared with September 18th Strict
Sanhua Holding related party other third Long term 2017 performance
Group Co. transactions and parties;
Ltd. Zhejiang capital 2. I (or the
Sanhua Lvneng occupation Company) will
Industrial not use my
position as a
Group Co. Ltd.shareholder of
Sanhua
intellectual
controls to seek
for the priority
right to
cooperate with
Sanhua
intellectual
controls;
3. If there are
necessary and
unavoidable
related party
transactions I
(or the
Company) and
the controlled
50Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
enterprises will
sign agreements
with Sanhua
intelligent
controls in
accordance
with the
principles of
fairness follow
legal
procedures and
perform the
information
disclosure
obligations in
accordance
with the
requirements of
relevant laws
regulatory
documents and
the articles of
association. It
shall also
perform
relevant
internal
decision-
making and
approval
procedures to
ensure that it
will not conduct
transactions
with Sanhua
intelligent
controls on
terms that are
obviously
unfair
compared with
the market
price and will
not use such
transactions to
engage in any
behavior that
damages the
legitimate
rights and
interests of
Sanhua
intelligent
controls and
other
shareholders.
51Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
1. I (or the
Company) will
not directly or
indirectly
engage in or
participate in
any business
that may
constitute
potential direct
or indirect
competition
with Sanhua
intelligent
controls and its
subordinate
enterprises;
guaranteed that
legal and
effective
measures will
be taken to urge
other
enterprises
controlled by
me (or the
Company) not
Zhang Daocai to engage in or
participate in
Zhang Yabo
any business
Zhang Shaobo Commitment
that is
controlling on horizontal competitive
shareholder competition with Sanhua
September 18th Strict
Sanhua Holding related party intelligent Long term
2017 performance
Group Co. transactions and controls and its
Ltd. Zhejiang capital subordinate
enterprises
Sanhua Lvneng occupation
Business.Industrial 2. If Sanhua
Group Co. Ltd. intelligent
controls further
expands its
business scope
I (or the
Company) and
other
enterprises
controlled by
me (or the
Company) will
not compete
with Sanhua
intelligent
controls'
expanded
business; if it is
possible to
compete with
Sanhua
intelligent
controls'
business after
expansion I (or
the Company)
and other
enterprises
controlled by
52Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
me (or the
Company) will
withdraw from
Sanhua
intelligent
controls in the
following ways
of competition:
A. stop the
businesses that
compete or may
compete with
Sanhua
intelligent
controls; B.inject the
competitive
business into
Sanhua
intelligent
controls; C.transfer the
competitive
business to an
unrelated third
party.
3. If I (or the
Company) and
other
enterprises
controlled by
me (or the
Company) have
any business
opportunities to
engage in and
participate in
any activities
that may
compete with
Sanhua
intelligent
controls'
business
operation they
shall
immediately
inform Sanhua
intelligent
controls of the
above business
opportunities. If
Sanhua
intelligent
controls makes
an affirmative
reply to take
advantage of
the business
opportunity
within a
reasonable
period specified
in the notice it
shall do its best
to give the
business
53Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
opportunity to
Sanhua
intelligent
controls.
4. In case of
breach of the
above
commitment I
(or the
Company) is
willing to bear
all
responsibilities
arising
therefrom and
fully
compensate all
direct or
indirect losses
caused to
Sanhua
intelligent
controls.After the
completion of
the transaction
the listed
Company will
continue to
improve the
corporate
governance
structure and
independent
operation of the
Zhang Daocai Company
Zhang Yabo management
Zhang Shaobo system in
controlling accordance
shareholder with the
Other September 18th Strict
Sanhua Holding requirements of Long term
commitment 2017 performance
Group Co. relevant laws
Ltd. Zhejiang and regulations
Sanhua Lvneng and the articles
Industrial of association
Group Co. Ltd. continue to
maintain the
independence
of the listed
Company in
business assets
finance
institutions
personnel and
other aspects
and effectively
protect the
interests of all
54Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
shareholders.The
commitment
made at the time
of IPO it shall
not engage in
the same
production
operation or
business as the
Company in the
future. In order
to avoid
business
competition
Commitment with the
Commitment Zhang Daocai on horizontal Company and
made during controlling competition clarify the non-
Strict
initial public shareholder related party competition June 7th 2005 Long term
offering or Sanhua Holding transactions and obligations
performance
Sanhua Holding
refinancing Group Co. Ltd. capital
Group on
occupation behalf of itself
and its
subsidiaries
with more than
50% equity
makes a
commitment to
Sanhua
intelligent
controls to
avoid possible
horizontal
competition.The controlling
shareholders of
Will not
the listed
actively reduce
Other Company
holdings of the
commitments Sanhua Holding
Company's
made to Group Co. Other August 18th Strict
shares within 18 months
minority Ltd. Zhejiang commitment 2022 performance
eighteen
shareholders of Sanhua Lvneng
months from
the Company Industrial
August 18
Group Co.
2022.
Ltd. and Mr.Zhang Yabo
Are the
commitments Yes
fulfilled on time
II. The Company’s funds used by the controlling shareholder or its related parties for non-
operating purposes.□ Applicable √ Not applicable
No such case during the reporting period.
55Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
III. Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such case during the reporting period.IV. Engagement and disengagement of the CPA firm
Whether this financial report was audited
□Yes √ No
This report was not audited.V. Explanation Given by the Board of Directors and Supervisory Committee Regarding
the “Non-standard Auditor’s Report” Issued by the CPA Firm for the Reporting Period
□ Applicable √ Not applicableVI. Explanation Given by the Board of Directors Regarding the “Non-standard Auditor’sReport” Issued by the CPA Firm for the Prior Year
□ Applicable √ Not applicable
VII. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such case during the reporting period.VIII. Material Litigation and Arbitration
Material Litigation and Arbitration
□ Applicable √ Not applicable
No such case during the reporting period.Other litigations
□ Applicable √ Not applicable
IX. Punishments and Rectifications
□ Applicable √ Not applicable
No such case during the reporting period.X. Integrity of the Company and Its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
56Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
XI. Significant Related-party Transaction
1. Significant related-party transactions arising from routine operation
□Applicable √Not applicable
No such case in the reporting period.
2. Related-party transactions regarding purchase and disposal of assets or equity
□Applicable √Not applicable
No such case in the reporting period.
3. Significant related-party transactions arising from joint investments on external parties
□Applicable √Not applicable
No such case in the reporting period.
4. Related credit and debt transactions
□ Applicable √Not applicable
No such case in the reporting period.
5. Transactions with related financial companies
□Applicable √Not applicable
No such case in the reporting period.
6. Transactions between financial companies controlled by the Company and related parties
□Applicable √Not applicable
No such case in the reporting period.
7. Other significant related party transactions
□Applicable √Not applicable
No such case in the reporting period.XII. Significant Contracts and Execution
1. Matters on trusteeship contracting and leasing
（1）Trusteeship
□ Applicable √ Not applicable
No such case in the reporting period.
57Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
（2）Contracting
□ Applicable √ Not applicable
No such case in the reporting period.
（3）Leasing
√Applicable □ Not applicable
Please refer to the notes of leasing instructions for details under Section X Financial Report.Projects with gains and losses exceeding 10% of the Company's total profit during the reporting period
□ Applicable √ Not applicable
No such case in the reporting period.
2. Significant guarantees
√Applicable □ Not applicable
Unit: RMB in 10 thousand
External Guarantees from the Company and its Subsidiaries (Excluding Guarantees to the Subsidiaries)
Disclosu
re date
Guarante
of Actual
Guarant Guarante Actual Type of Counter Term of e for
announc Guarante Collatera Due or
eed e Occurre Guarante guarante Guarante Related
ement of e l (if any) Not
Party Cap nce Date e e (if any) e Parties
the Amount
or Not
guarante
e cap
Company's Guarantees to Subsidiaries
Disclosu
re date
Guarante
of Actual
Guarant Guarante Actual Type of Counter Term of e for
announc Guarante Collatera Due or
eed e Occurre Guarante guarante Guarante Related
ement of e l (if any) Not
Party Cap nce Date e e (if any) e Parties
the Amount
or Not
guarante
e cap
SANHU
A
AWECO
ELECT Joint 2022.04.RICAL March April 1 liability 01-
5000 3816.17 Yes Yes
EQUIP 25 2022 2022 guarante 2023.04.MENT e 01
(WUHU
) CO.LTD.SANHU
A Joint 2022.05.INTER March May 10 liability 10-
230000 3938.55 Yes Yes
NATIO 25 2022 2022 guarante 2023.05.NAL e 10
SINGAP
58Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
ORE
PTE.LTD.SANHU
A
INTER
Joint 2022.11.NATIO Novemb
August liability 11-
NAL 240000 er 11 7877.1 Yes Yes
13 2022 guarante 2023.5.1
SINGAP 2022 e 0
ORE
PTE.LTD.SANHU
A
INTER
Joint 2022.05.NATIO
March May 23 liability 23-
NAL 230000 5780.64 Yes Yes
25 2022 2022 guarante 2023.05.
SINGAP e 23
ORE
PTE.LTD.SANHU
A Joint 2022.06.INTER March June 17 liability 17-
50000 10838.7 Yes Yes
NATIO 25 2022 2022 guarante 2023.06.NALIN e 09
C.SANHU
A
INTER
NATIO Septemb Joint 2022.9.5
August liability
NAL 240000 er 5 7877.1 - Yes Yes
13 2022 guarante
SINGAP 2022 e 2023.9.4
ORE
PTE.LTD.SANHU
A
INTER
Joint 2022.10.NATIO
August October 10240.2 liability 19-
NAL 240000 No Yes
13 2022 19 2022 3 guarante 2023.10.
SINGAP e 18
ORE
PTE.LTD.SANHU
A
INTER
Joint 2022.10.NATIO
August October liability 21-
NAL 240000 5513.97 No Yes
13 2022 21 2022 guarante 2023.10.
SINGAP e 20
ORE
PTE.LTD.SANHU Joint 2022.10.August October liability
A 240000 5513.97 21- Yes Yes
13 2022 21 2022 guarante
INTER e 2023.10.
59Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
NATIO 20
NAL
SINGAP
ORE
PTE.LTD.SANHU
A
INTER
Joint 2022.10.NATIO
August October liability 26-
NAL 240000 4726.26 No Yes
13 2022 26 2022 guarante 2023.10.
SINGAP e 25
ORE
PTE.LTD.SANHU
A
INTER
Joint 2022.11.NATIO Novemb
August liability 21-
NAL 240000 er 21 7877.1 No Yes
13 2022 guarante 2023.11.
SINGAP 2022 e 20
ORE
PTE.LTD.SANHU
A
INTER
Joint 2022.11.NATIO Novemb
August liability 21-
NAL 240000 er 21 7225.8 No Yes
13 2022 guarante 2023.11.
SINGAP 2022 e 20
ORE
PTE.LTD.SANHU
A
INTER
2022.11.
NATIO Novemb Joint
August liability 25-
NAL 240000 er 25 14451.6 Yes Yes
13 2022 guarante 2023.11.
SINGAP 2022 e 24
ORE
PTE.LTD.SANHU
A
INTER
Joint 2022.12.NATIO Decemb
August liability 20-
NAL 240000 er 20 7225.8 Yes Yes
13 2022 guarante 2023.12.
SINGAP 2022 e 19
ORE
PTE.LTD.SANHU
A
Joint 2023.3.2
INTER
August March liability 4-
NATIO 240000 5513.97 No Yes
13 2022 24 2023 guarante 2024.3.2
NAL e 3
SINGAP
ORE
60Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
PTE.LTD.SANHU
A
INTER
NATIO Joint 2023.5.4
April 29 May 4 liability
NAL 340000 3150.84 - No Yes
2023 2023 guarante
SINGAP e 2024.5.3
ORE
PTE.LTD.SANHU
A
INTER
Joint
NATIO 2023.5.4
April 29 May 4 liability
NAL 340000 4726.26 - No Yes
2023 2023 guarante
SINGAP e 2024.5.3
ORE
PTE.LTD.SANHU
A
INTER
Joint 2023.5.1
NATIO
April 29 May 11 liability 1-
NAL 340000 3938.55 No Yes
2023 2023 guarante 2024.5.1
SINGAP e 0
ORE
PTE.LTD.SANHU
A
INTER
Joint 2023.5.1
NATIO
April 29 May 19 liability 9-
NAL 340000 14451.6 No Yes
2023 2023 guarante 2024.5.1
SINGAP e 8
ORE
PTE.LTD.SANHU
A
INTER
Joint 2023.5.2
NATIO
April 29 May 22 liability 2-
NAL 340000 7225.8 No Yes
2023 2023 guarante 2024.5.2
SINGAP e 1
ORE
PTE.LTD.SANHU
A
INTER
Joint 2023.5.2
NATIO
April 29 May 22 14966.4 liability 2-
NAL 340000 No Yes
2023 2023 9 guarante 2024.5.2
SINGAP e 1
ORE
PTE.LTD.
61Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
SANHU
A
INTER
2023.5.2
NATIO Joint
April 29 May 23 liability 3-
NAL 340000 5780.64 No Yes
2023 2023 guarante 2024.5.2
SINGAP e 2
ORE
PTE.LTD.SANHU
A
INTER
Joint 2023.5.3NATIO
April 29 May 31 liability 1-
NAL 340000 7877.1 No Yes
2023 2023 guarante 2024.5.3
SINGAP e 0
ORE
PTE.LTD.SANHU
A Joint 2023.6.9
INTER April 29 June 9 liability
95000 10838.7 - No Yes
NATIO 2023 2023 guarante
e 2024.6.5 NALIN
C.Total Amount of Total Amount of
Guarantees to Guarantees to
Subsidiaries Subsidiaries Actually
55000078469.95
Approved during the Occurred during the
Reporting Period Reporting Period
(B1) (B2)
Total Amount of Total Balance of
Guarantees to Guarantees Actually
Subsidiaries Paid to Subsidiaries
550000114053.31
Approved by the by the End of the
End of the Reporting Reporting Period
Period (B3) (B4)
Subsidiaries' Guarantees to Subsidiaries
Disclosu
re date
Guarante
of Actual
Guarant Guarante Actual Type of Counter Term of e for
announc Guarante Collatera Due or
eed e Occurre Guarante guarante Guarante Related
ement of e l (if any) Not
Party Cap nce Date e e (if any) e Parties
the Amount
or Not
guarante
e cap
The total amount of the Company's guarantees (the total of the above three items)
Total Amount of Total Amount of
Guarantees Guarantees Actually
Approved during the 550000 Occurred during the 78469.95
Reporting Period Reporting Period
(A1+B1+C1) (A2+B2+C2)
Total Amount of Total Balance of
Guarantees Guarantees Actually
Approved by the 550000 Paid by the End of 114053.31
End of the Reporting the Reporting Period
Period (A3+B3+C3) (A4+B4+C4)
Total Amount of Actual Guarantees
8.21%
(A4+B4+C4) as a Percentage of the
62Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Company's Net Assets
Of which：
Balance of Debt Guarantees Directly or
Indirectly Offered to Guaranteed Objects 114053.31
with Asset-liability Ratio Exceeding 70% (E)
Total Amount of the Above Three Guarantees
114053.31
(D+E+F)
3. Entrusted wealth management
√Applicable □ Not applicable
Unit: RMB in 10 thousand
Accrued
Overdue impairment
Balance before
Specific types Capital source Amount uncollected amount of overdue
maturity
amount unrecovered
financial product
Bank financial The Company’s
13000
products self-owned funds
Total 13000
Specific situation of high-risk entrusted financial management with large single amount or low security and poor
liquidity
√Applicable □ Not applicable
63Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Unit: RMB in 10 thousand
Future
Actual
Amount entruste
Referen Actual recover Event
of Throug d
Determi ce profit y of overvie
Type Termina Capital Expecte provisio h legal financia
Name of Product Amoun Capital Start nation annualiz and loss profit w and
of tion investm d return n for procedu l
trustee type t source date of ed rate in the and loss relevant
trustee date ent (if any) impair res or manage
return of reportin in the index
ment (if not ment
return g period reportin (if any)
any) plan or
g period
not
12 month
maturity Floating
Zhejiang RMB income
Sanhua structured Self- with
June 16 June 13
Intelligent bank deposits 5000 owned guarant Yes
20222023
Controls linked to a funds ee of
Co. Ltd. basket of principa
customize l
d indices
100%
guarantee Floating
Zhejiang d income
Sanhua structured Self- with
June 27 June 27
Intelligent bank deposits 5000 owned guarant 41.45 41.45 Yes
20222023
Controls in the funds ee of
Co. Ltd. JPMorgan principa
XRP l
index
Galaxy
Jinshan
Floating
"Income
Zhejiang income
Voucher
Sanhua Self- March April with
securit 13459
Intelligent 3000 owned 21 17 guarant 4.00% 3.62 3.62 Yes
y (Principal
Controls funds 2022 2023 ee of
Guarantee
Co. Ltd. principa
d Fixed
l
Income
Vouche)
1300
Total -- -- -- -- -- -- 45.07 -- -- -- --
0
64Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Entrusted financial management is expected to be unable to recover the principal or there are other situations that
may lead to impairment
□ Applicable √ Not applicable
4. Other significant contracts
□ Applicable √ Not applicable
No such case in the reporting period.XIII. Other significant events
□ Applicable √ Not applicable
No such case in the reporting period.XIV. Significant events of the Company’s subsidiaries
□ Applicable √ Not applicable
No such case in the reporting period.
65Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section VII Changes in Shares and Information about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Share
Before the change Changes in the period (+ -) After the change
Share
transferreNew
Bonus d
Shares Ratio Shares Others Sub-total Shares Ratio
share from
Issued
capital
reserve
1. Shares
subject to
--
condition 5341359 4270259
1.49%107110010711001.19%
al 1 1
00
restriction
(s)
1)
Shares
held by
the states
2)
Shares
held by
State-
owned
corporate
3)
--
Other 5319059 4264139
1.48%105492010549201.18%
domestic 1 1
00
shares
Of
which:
Shares
held by
domestic
legal
person
Shar
es held by - -
53190594264139
domestic 1.48% 1054920 1054920 1.18%
11
natural 0 0
person
4)
Shares
held by 223000 0.01% -161800 -161800 61200 0.00%
overseas
investors
66Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Of
which:
Shares
held by
overseas
legal
person
Shar
es held by
overseas 223000 0.01% -161800 -161800 61200 0.00%
natural
person
2. Shares
3537455122628012262803549718
without 98.51% 98.81%
87433677
restriction
1)
RMB 3537455 1226280 1226280 3549718
98.51%98.81%
common 874 3 3 677
shares
2)
Domestic
ally listed
foreign
shares
3)
Foreign
shares
listed
overseas
4)
Others
35908693592421
3. Total 100.00% 1551803 1551803 100.00%
465268
Reason for the changes in share capital
√ Applicable □ Not applicable
1. At the beginning of each year the number of locked shares held by senior executives of the Company shall be
recalculated according to 75% of the total shares held by senior executives.
2. May 15 2023 the third vesting period of the 2020 Restricted stock incentive plan matured and 5.85 million
Restricted stock of 825 incentive objects who meet the conditions were listed for circulation.
3. June 30 2023 the first vesting period of the 2022 Restricted stock incentive plan matured and 5.238 million
Restricted stock of 1345 incentive objects who meet the conditions were listed for circulation.
4. From January 1 2023 to June 30 2023 the "Sanhua convertible bonds" decreased by RMB 32744000 (327440
pieces) due to share conversion and the number of shares converted was 1551803.Approval for changes in share capital
√ Applicable □ Not applicable
67Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
1. April 27 2023 the Company held the 11st interim meeting of the 7th board of directors and the 9th interim
meeting of the 7th board of supervisors in which Proposal on the achievement of unlocking conditions of the
third vesting period of the restricted stock incentive plan in 2020 was approved. The number of shareholders
meeting the unlocking condition was 825. A total of 5.85 million shares were released.
2. June 20 2023 the Company held the 12nd interim meeting of the 7th board of directors and the 10th interim
meeting of the 7th board of supervisors in which Proposal on adjusting the repurchase price of 2022 restricted
stock incentive plan Proposal on repurchase and cancellation of some restricted stocks and Proposal on the
achievement of unlocking conditions of the first vesting period of the restricted stock incentive plan in 2022
were approved. The number of shareholders meeting the unlocking condition was 1345. A total of 5.238 million
shares were released.Transfer of shares
□Applicable √Not applicable
Information about the implementation of share repurchase
√ Applicable □ Not applicable
As of June 30 2023 the number of shares repurchased by the Company through the special securities account for
share repurchases through centralized bidding transactions were 1395400 shares accounting for about 0.0389%
of the Company's current total share capital. The highest repurchase price is 21.97 yuan / share the lowest
repurchase price is 21.09 yuan / share and the total transaction amount is RMB 29993731 (excluding transaction
costs).The progress on reduction of re-purchase shares by means of centralized bidding
□Applicable √Not applicable
Effects of changes in share capital on the basic earnings per share ("EPS") diluted EPS net assets per share
attributable to common shareholders of the Company and other financial indexes over the last year and last
period
√Applicable □Not applicable
Please refer to the financial report for details.Other contents that the Company considers necessary or required by the securities regulatory authorities to
disclose
□ Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
Opening
Closing balance Note for
Name of balance of Vested in Increased in Date of
of restricted restricted
shareholder restricted current period current period unlocking
shares shares
shares
According to According to
the relevant the relevant
Zhang Yabo 29268150 29268150
provisions of provisions of
shares shares
68Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
management management
for senior for senior
executives executives
According to According to
the relevant the relevant
provisions of provisions of
shares shares
Wang Dayong 252562 252562 management management
for senior for senior
executives executives
+ equity + equity
incentive incentive
According to According to
the relevant the relevant
provisions of provisions of
shares shares
Ni Xiaoming 245062 245062 management management
for senior for senior
executives executives
+ equity + equity
incentive incentive
According to According to
the relevant the relevant
provisions of provisions of
shares shares
Chen Yuzhong 252562 252562 management management
for senior for senior
executives executives
+ equity + equity
incentive incentive
According to According to
the relevant the relevant
provisions of provisions of
shares shares
Hu Kaicheng 252562 252562 management management
for senior for senior
executives executives
+ equity + equity
incentive incentive
According to According to
the relevant the relevant
provisions of provisions of
shares shares
Yu Yingkui 276042 276042 management management
for senior for senior
executives executives
+ equity + equity
incentive incentive
According to According to
the relevant the relevant
provisions of provisions of
Mo Yang 10926 10926 shares shares
management management
for senior for senior
executives executives
According to According to
the relevant the relevant
provisions of provisions of
Chen Xiaoming 8325 8325 shares shares
management management
for senior for senior
executives executives
According to According to
the relevant the relevant
Other incentive
22847400 10711000 12136400 provisions of provisions of
objects
shares shares
management management
69Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
for equity for equity
incentive incentive
Total 53413591 10711000 0 42702591 -- --
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: Share
Total Number of Preferred Shareholders
Total Number of Common
(If Any) (Refer to Note 8) Whose Voting
Shareholders at the End of 61865 0
the Reporting Period Rights Have Been Recovered at the End
of the Reporting Period
Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them
The
Total The
Increase/ number of Pledged or frozen
Share- shares held number of
decrease common
Name of Nature of holding at the end shares held
during the shares held
shareholder shareholder percentage of the without
reporting with
(%) reporting trading Status Amount
period trading
period restrictions
restrictions
Sanhua Domestic
Holding non-state- 95001232 - 95001232
26.44% Pledged 47222593
Group Co. owned 6.00 28853459 6.00
Ltd. corporation
Zhejiang
Sanhua Domestic
Lvneng non-state- 74274795 74274795 15000000
20.68% 4160000 Pledged
Industrial owned 4.00 4.00 0
Group Co. corporation
Ltd.Hong Kong
Central Overseas 58711503 58711503
16.34%39476144
Clearing corporation 3.00 3.00
Limited
Zhang Domestic 39024200.
1.09%0292681509756050
Yabo Individual 00
China
Merchants
Bank Co.Ltd. -
Quanguo
Xuyuan 32325419. 32325419.Others 0.90% 11027377
three-year 00 00
holding
period
hybrid
Investment
fund
Industrial
31406574.31406574.
and Others 0.87% 0
0000
Commercia
70Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
l Bank of
China
Limited GF
Multi
factor
Flexible
Allocation
Hybrid
Investment
fund
China Life
Insurance
Company
Co. Ltd. -
Traditional
18767212.18767212.
- General Others 0.52% 18767212
0000
Insurance
Products -
005L -
CT001
Shanghai
Kuwait
Overseas 17558823. 17558823.Investment 0.49% 17558823
corporation 00 00
Authority
Fang Domestic 16786200. 16786200.
0.47%16786200
Wenyan Individual 00 00
Agricultura
l Bank of
China Co.Ltd. -
Cathay
14160202.14160202.
Pacific Others 0.39% 14160202
0000
Intelligent
Automobil
e Stock
Investment
fund
Information about
Strategic Investors’ or
General Legal Persons’
Becoming Top Ten No
Common Shareholders for
Placement of New Shares
(If Any) (Refer to Note 3)
Explanation on Among the above shareholders Sanhua Holding Group Co. Ltd. Zhejiang Sanhua Lvneng Industrial
Associated Relationship Group Co. Ltd. and Zhang Yabo are the persons acting in concert. The Company does not know
or Concerted Actions whether there is any related relationship between other shareholders or whether they belong to the
among the Above- persons acting in concert stipulated in the Administrative Measures for the Acquisition of Listed
Mentioned Shareholders Companies.Particulars about Shares Held by Top Ten Common Shareholders Holding Shares That Are Not Subject to Trading Restrictions
Type of shares
Number of Common Shares Held without Restrictions at the End of
Name of Shareholder
the Reporting Period
Type Amount
RMB
Sanhua Holding Group 95001232
950012326.00 common
Co. Ltd.stock 6.00
71Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
RMB
Zhejiang Sanhua Lvneng 74274795
742747954.00 common
Industrial Group Co. Ltd
stock 4.00
RMB
Hong Kong Central 58711503
587115033.00 common
Clearing Limited
stock 3.00
China Merchants Bank
Co. Ltd. - Quanguo RMB
32325419.
Xuyuan three-year 32325419.00 common
holding period hybrid stock
00
Investment fund
Industrial and
Commercial Bank of RMB
31406574.
China Limited GF Multi 31406574.00 common
factor Flexible Allocation stock
00
Hybrid Investment fund
China Life Insurance
Company Co. Ltd. - RMB
18767212.
Traditional - General 18767212.00 common
00
Insurance Products -005L stock
- CT001 Shanghai
RMB
Kuwait Investment 17558823.
17558823.00 common
Authority stock 00
RMB
16786200.
Fang Wenyan 16786200.00 common
stock 00
Agricultural Bank of
China Co. Ltd. - Cathay RMB
14160202.
Pacific Intelligent 14160202.00 common
00
Automobile Stock stock
Investment fund
Bank of China Limited -
RMB
Huaxia CSI New Energy 12761613.
12761613.00 common
Vehicle Trading Open stock 00
Index Investment fund
Explanation of Associated
Relationship or Concerted
Actions among Top Ten
Common Shareholders
Among the above shareholders Sanhua Holding Group Co. Ltd. and Zhejiang Sanhua Lvneng
without Trading
Industrial Group Co. Ltd. are the persons acting in concert. The Company does not know whether
Restrictions and among
there is any related relationship between other shareholders or whether they belong to the persons
Top Ten Common
acting in concert stipulated in the Administrative Measures for the Acquisition of Listed Companies.Shareholders without
Trading Restrictions and
Top Ten Common
Shareholders
Explanation of Top Ten
Common Shareholders’
Participation in Securities No
Margin Trading (If Any)
(Refer to Note 4)
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted any
agreed buy-back in the reporting period
□ Applicable √ Not applicable
No such cases during the current reporting period.
72Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
IV. Shareholding changes of directors supervisors senior management personnel
□ Applicable √ Not applicable
There was no change in the shareholding of the company's directors supervisors and senior management during
the reporting period. Please refer to the 2022 annual report for details.V. Changes in Controlling Shareholders or Actual Controllers
Change of the controlling shareholder during the current reporting period
□ Applicable √ Not applicable
No such cases in the reporting period.Change of the actual controller during the reporting period
□ Applicable √ Not applicable
No such cases in the current reporting period.
73Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section VIII Information of Preferred Shares
□ Applicable √ Not applicable
No existed preferred shares for the Company during the current reporting period.
74Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section IX Bonds
√ Applicable □ Not applicable
I. Enterprise bond (hereinafter referred to as the bond issued by domestic state-owned
entity)
□ Applicable √ Not applicable
II. Corporate bond
□ Applicable √ Not applicable
III. Debt financing instruments of non-financial enterprises
□ Applicable √ Not applicable
IV. Convertible bond
√ Applicable □ Not applicable
1. Previous Adjustments of Stock Conversion Price
June 9 2023 the Company completed the 2022 annual equity distribution plan. According to the relevant provisions
on the price adjustment of convertible bonds the conversion price of "Sanhua convertible bonds" was adjusted from
21.30 yuan / share to 21.10 yuan / share. The adjusted conversion price took effect since June 9 2023.
2. Share Conversions (Accumulative)
√ Applicable □ Not applicable
Proportion
of the
number of Proportion
converted of the
Cumulative Cumulative shares to Amount of amount of
Convertible Start and
Total Total amount of number of the total shares not non-
bond end date of
issuance issuance share shares share yet converted
abbreviatio share
(piece) amount conversion transferred capital of converted shares to
n conversion
(yuan) (shares) the (yuan) the total
Company amount of
before the issuance
date of
conversion
December
Sanhua
72021-3000000034298300.29657017
Convertible 30000000 1624110 0.05% 98.86%
May 31 00.00 00 00.00
Bond
2027
75Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
3. Top 10 Holders of the Convertible Bond
Number of Amount of Proportion of
Nature of convertible bonds convertible bonds convertible bonds
Name of convertible bond holder convertible bond held at the end of held at the end of held at the end of
holders the reporting the reporting the reporting
period (share) period (yuan) period
Bank of China Limited - China
Merchants Advantage Enterprise
1 Others 2734393 273439300.00 9.22%
Flexible Allocation of Hybrid
Investment fund
China Minsheng Bank Co. Ltd. -
2 Everbright Prudential Credit Others 1859293 185929300.00 6.27%
Tianyi Bond Investment fund
Huatai Financial Holdings (Hong Overseas
378533378533300.002.65%
Kong) Limited - Customer Funds corporation
Bank of China Limited - Ping An
4 Strategic Pioneer Hybrid Others 702447 70244700.00 2.37%
Investment fund
China Merchants Bank Co. Ltd.
5 - Huabao Convertible Bond Others 642189 64218900.00 2.17%
Investment fund
Industrial Bank Co. Ltd. - GF
6 Others 502867 50286700.00 1.70%
Chuyu Bond Investment fund
Taikang Asset Credit Increase
7 Fixed Income Pension Product - Others 480000 48000000.00 1.62%
Bank of China Limited
Agricultural Bank of China Co.
8 Ltd. - Penghua Convertible Bond Others 467311 46731100.00 1.58%
Investment fund
Kunlun Health Insurance Co.
9 Ltd. - Traditional Insurance Others 375008 37500800.00 1.26%
Product 1
Guotai Jun'an Financial Holdings Overseas
1037415937415900.001.26%
Co. Ltd. - Customer Funds corporation
4. The Profitability Asset and Credit Status of the Guarantor Have Changed Significantly
□ Applicable √ Not applicable
5. The company's debt situation credit changes and cash arrangements for debt repayment in future
years at the end of the reporting period
During the reporting period CSCI Pengyuan issued the Tracking Rating Report on the Public Issuance of
Convertible Corporate Bonds by Zhejiang Sanhua Intelligent Controls Co. Ltd. in 2021 on June 27 2023 according
to which the credit rating of Sanhua convertible bonds remains AA + the Company's credit rating remains AA +
and the rating outlook remains stable. The result of this rating has not changed compared with the last one.The specific content of the Company's financial indicators at the end of the reporting period is detailed in "VI The
main accounting data and financial indicators of the Company for the past two years as of the end of the reporting
period ".The convertible corporate bonds have triggered the conditional redemption clause stipulated in the Zhejiang Sanhua
76Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Intelligent Controls Co. Ltd. Public Issuance of Convertible Corporate Bonds Prospectus. On July 7 2023 the
Company held the 13rd extraordinary meeting of the 7th Board of Directors and the 11st extraordinary meeting of
the 7th Board of Supervisors which reviewed and passed the Proposal on Early Redemption of Sanhua Convertible
Bonds and agreed to the Company's exercise of the conditional redemption right and redemption of all unconverted
Sanhua Convertible Bonds registered with China Securities Depository and Clearing Corporation Shenzhen Branch
after the close of the market on the redemption registration date at the price of the face value plus accrued interest.Redemption registration date: July 31 2023 redemption date: August 1 2023 redemption price: 100.10 yuan/piece
(including accrued interest annual interest rate is 0.60% and tax inclusive).V. The loss within the scope of consolidated statements in the reporting period exceeded
10% of the net assets at the end of the previous year
□ Applicable √ Not applicable
VI. Main accounting data and financial indicators of the Company in recent two years by
the end of the reporting period
Unit: RMB in 10 thousand
At the end of the reporting
Item At the end of last year YoY Change (%)
period
Current ratio 1.72 1.98 -13.13%
Asset liability ratio 51.72% 53.08% -1.36%
Quick ratio 1.35 1.53 -11.76%
Corresponding Period of Last
Current Reporting Period YoY Change (%)
Year
Net profit after deducting
146739.03103004.7542.46%
non-recurring profit and loss
EBITDA total debt ratio 23.90% 18.69% 5.21%
Time interest earned ratio 14.24 12.12 17.49%
Cash interest guarantee times 22.63 19.40 16.65%
EBITDA Time interest earned
17.2414.4918.98%
ratio
Repayment of debt (%) 100.00% 100.00%
Payment of interest (%) 100.00% 100.00%
77Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Section X Financial Report
I. Audit report
Whether the semi-annual report is audited
□ Yes √ No
The Company’s 2023 Semi-annual Financial Report has not been audited.II. Financial Statements
Units of financial reports in the notes: RMB
1. Consolidated balance sheet
Prepared by: Zhejiang Sanhua Intelligent Controls Co. Ltd.June 30 2023
Unit: RMB
Items June 30 2023 January 1 2023
Current asset：
Cash and Bank Balances 5576764606.33 5878243652.55
Settlement funds
Loans to other banks
Held-for-trading financial
414485.69100025980.08
assets
Derivative financial assets 3841336.04 8938874.05
Notes receivable 2117646111.41 2203948983.83
Accounts receivable 6386811942.25 5228117225.57
Receivable financing
Advances paid 172047557.20 117887007.07
Premium receivable
Reinsurance accounts
receivable
Reinsurance reserves
receivable
Other receivables 221023564.86 726641478.35
Including: Interest
receivable
Dividends
receivable
Repurchasing of financial
assets
Inventories 4005376113.49 4334875287.86
Contract assets
Assets held for sales
Non-current assets due
within one year
Other current assets 220859769.86 157025076.05
Total current assets 18704785487.13 18755703565.41
Non-current assets:
78Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Loans and advances paid
Debt investments
Other debt investments
Long-term receivable 3939553.50 3712290.00
Long-term equity
35234954.4332438204.13
investments
Other equity instrument
investments
Other non-current financial
assets
Investment property 8303262.37 8204266.97
Fixed assets 6693075353.04 6374896070.41
Construction in progress 2030840443.80 1032505633.51
Productive biological assets
Oil & gas assets
Right-of-use assets 285384456.50 284277365.32
Intangible assets 837562783.11 727263351.69
Development expenditures
Goodwill 6986878.69 7591830.61
Long-term prepayments 72388825.74 56157277.16
Deferred tax assets 76462638.89 221158674.48
Other non-current assets 404010641.89 457305626.59
Total non-current assets 10454189791.96 9205510590.87
Total assets 29158975279.09 27961214156.28
Current liabilities:
Short-term borrowings 1141938063.73 1294083319.58
Central bank loans
Loans from other banks
Held-for-trading financial
3500000.003500000.00
liabilities
Derivative financial liabilities 129276866.44 45171373.81
Notes payable 2755748552.44 2580274767.64
Accounts payable 4186618386.31 3884603370.16
Advances received
Contract liabilities 86674142.26 57955080.60
Selling of repurchased
financial assets
Absorbing deposit and
interbank deposit
Deposit for agency security
transaction
Deposit for agency security
underwriting
Employee benefits payable 390573261.52 475157429.15
Taxes and rates payable 187312069.77 190789559.16
Other payables 265496861.29 354255114.06
Including: Interest
Payable
Dividends
Payable
Handling fee and
commission payable
Reinsurance accounts
payable
Liabilities classified as
79Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
held for sale
Non-current liabilities due
1718720282.57568126341.67
within one year
Other current liabilities 2007578.03
Total current liabilities 10865858486.33 9455923933.86
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 660544808.74 1801574166.67
Bonds payable 2801454320.48 2776763361.83
Including: Preferred shares
Perpetual bonds
Lease liabilities 204812488.97 202028482.09
Long-term payables 63262764.23 4831202.13
Long-term employee
36945945.75
benefits payable
Provisions
Deferred income 249767960.07 254044715.64
Deferred tax liabilities 174337414.74 288757921.37
Other non-current liabilities 23729805.25 57990181.87
Total non-current liabilities 4214855508.23 5385990031.60
Total liabilities 15080713994.56 14841913965.46
Equity:
Share capital 3592240868.00 3590869465.00
Other equity instruments 405072140.01 409544970.41
Including: Preferred shares
Perpetual bonds
Capital reserve 369819924.10 282602695.98
Less: Treasury shares 233984615.53 330022975.53
Other comprehensive income 85602895.80 -8543048.33
Special reserve
Surplus reserve 863523059.01 863523059.01
General risk reserve
Undistributed profit 8811124581.33 8133336242.88
Total equity attributable to the
13893398852.7212941310409.42
parent Company
Non-controlling interest 184862431.81 177989781.40
Total equity 14078261284.53 13119300190.82
Total liabilities & equity 29158975279.09 27961214156.28
Legal representative：Zhang Yabo Officer in charge of accounting：Yu Yingkui Head of accounting
department：Sheng Xiaofeng
2. Parent Company Balance Sheet
Unit: RMB
Items June 30 2023 January 1 2023
Current assets:
Cash and bank balances 3216031781.02 3453268955.31
Held-for-trading financial
414485.69100025980.08
assets
Derivative financial assets 661200.00 3754234.25
Notes receivable 1125402238.14 1108678741.44
Accounts receivable 989149311.68 804258235.12
Receivables financing
80Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Advances paid 7215018.78 9470841.56
Other receivables 1232345466.82 650791643.96
Including: Interest
Receivable
Dividends
Receivable
Inventories 492989775.48 719679218.08
Contract assets
Assets classified as held for
sale
Non-current assets due
within one year
Other current assets
Total current assets 7064209277.61 6849927849.80
Non-current assets:
Debt investments
Other debt investments
Long-term receivable 420000.00 420000.00
Long-term equity investments 7714021993.16 7542658709.77
Other equity instrument
investments
Other non-current financial
assets
Investment property
Fixed assets 1565873423.71 1593110699.80
Construction in progress 62133822.40 36026798.77
Productive biological assets
Oil & gas assets
Right-of-use assets 9851350.52 11493242.24
Intangible assets 139179020.58 142723611.23
Development expenditures
Goodwill
Long-term prepayments 1119708.52 2396803.91
Deferred tax assets 35642621.40 33318204.92
Other non-current assets 42346736.73 40289058.97
Total non-current assets 9570588677.02 9402437129.61
Total assets 16634797954.63 16252364979.41
Current liabilities:
Short-term borrowings 199743666.65
Held-for-trading financial
liabilities
Derivative financial liabilities 11750.00
Notes payable 685644161.87 510877753.94
Accounts payable 1472100070.44 1384664289.76
Advances received
Contract liabilities 159784.37 154996.96
Employee benefits payable 79279194.84 111391004.02
Taxes and rates payable 30696445.75 45225803.58
Other payables 2334308482.53 1852846536.99
Including: interest
payable
Dividends
Payable
Liabilities classified as held for
sale
81Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Non-current liabilities due
1644682005.03503606063.10
within one year
Other current liabilities
Total current liabilities 6246870144.83 4608521865.00
Non-current liabilities:
Long-term borrowings 660544808.74 1801574166.67
Bonds payable 2801454320.48 2776763361.83
Including: Preferred shares
Perpetual bonds
Lease liabilities 6853563.31 8472484.42
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 50976410.45 49178671.24
Deferred tax liabilities 82857002.38 85516449.61
Other non-current
liabilities
Total non-current liabilities 3602686105.36 4721505133.77
Total liabilities 9849556250.19 9330026998.77
Equity:
Share capital 3592240868.00 3590869465.00
Other equity instruments 405072140.01 409544970.41
Including: Preferred shares
Perpetual bonds
Capital reserve 1260401764.79 1180826355.13
Less: treasury shares 233984615.53 330022975.53
Other comprehensive income
Special reserve
Surplus reserve 735430886.69 735430886.69
Undistributed profit 1026080660.48 1335689278.94
Total equity 6785241704.44 6922337980.64
Total liabilities & equity 16634797954.63 16252364979.41
3. Consolidated Income statement
Unit: RMB
Items 2023Interim 2022 Interim
I. Total operating revenue 12528920625.59 10159952995.52
Including: Operating revenue 12528920625.59 10159952995.52
Interest income
Premium earned
Revenue from handling
charges and commission
II. Total operating cost 10680635898.54 8827805669.58
Including: Operating cost 9295615081.75 7702347707.94
Interest expenses
Handling charges and
commission expenditures
Surrender value
Net payment of insurance
claims
Net provision of insurance
policy reserve
82Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Premium bonus
expenditures
Reinsurance expenses
Taxes and surcharges 59377415.32 43478020.39
Selling expenses 277177564.79 219831170.12
Administrative expenses 619856574.65 468457579.13
R&D expenses 580269632.04 478918631.31
Financial expenses -151660370.01 -85227439.31
Including: Interest expenses 126688323.68 111508677.30
Interest income 87661462.57 99255925.36
Add: Other income 62816875.53 57394745.60
Investment income (or less:
-46142073.3147271481.68
losses)
Including: Investment
income from associates and joint 5296750.30 6300850.84
ventures
Gains from derecognition
of financial assets at amortized -8174613.92 -1716468.88
cost
Gains on foreign
exchange (or less: losses)
Gains on net exposure to
hedging risk (or less: losses)
Gains on changes in fair
-88814525.03-114976611.99
value (or less: losses)
Credit impairment loss (or
-72153972.68-71124663.90
less: losses)
Assets impairment loss
-24923403.90-11922725.03
(or less: losses)
Gains on asset disposal (or
-406527.50-525838.34
less: losses)
III. Operating profit (or less:
1678661100.161238263713.96
losses)
Add: Non-operating revenue 4564351.93 4109594.03
Less: Non-operating
5260738.912949255.42
expenditures
IV. Profit before tax (or less: total
1677964713.181239424052.57
loss)
Less: Income tax expense 263470197.45 224588797.63
V. Net profit (or less: net loss) 1414494515.73 1014835254.94
(I) Categorized by the continuity
of operations
1. Net profit from continuing
1414494515.731014835254.94
operations (or less: net loss)
2. Net profit from
discontinued operations (or
less: net loss)
(II) Categorized by the portion of
equity ownership
1. Net profit attributable to
owners of parent Company (or 1394760848.85 1003187335.23
less: net loss)
2. Net profit attributable to
non-controlling shareholders 19733666.88 11647919.71
(or less: net loss)
83Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
VI. Other comprehensive income
94145944.1387126884.95
after tax
Items attributable to the
94145944.1387126884.95
owners of the parent Company
(I) Not to be reclassified
subsequently to profit or loss
1.Changes in remeasurement
on the net defined benefit plan
2. Items under equity method
that will not be reclassified to
profit or loss
3. Changes in fair value of
other equity instrument
investments
4. Changes in fair value of
own credit risk
5. Others
(II) To be reclassified
94145944.1387126884.95
subsequently to profit or loss
1. Items under equity method
that may be reclassified to
profit or loss
2. Changes in fair value of
other debt investments
3. Profit or loss from
reclassification of financial
assets into other
comprehensive income
4. Provision for credit
impairment of other debt
investments
5.Cash flow hedging reserve
6. Translation reserve 94145944.13 87126884.95
7. Others
Items attributable to non-
controlling shareholders
VII. Total comprehensive income 1508640459.86 1101962139.89
Items attributable to the
1488906792.981090314220.18
owners of the parent Company
Items attributable to non-
19733666.8811647919.71
controlling shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS (yuan per share) 0.39 0.28
(II) Diluted EPS (yuan per share) 0.39 0.27
Legal representative：Zhang Yabo Officer in charge of accounting：Yu Yingkui Head of accounting
department：Sheng Xiaofeng
4. Income statement of the Parent Company
Unit: RMB
Items 2023Interim 2022 Interim
I. Operating revenue 3376084891.56 3193327856.30
Less: Operating cost 2625734196.14 2583435014.85
84Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Taxes and surcharges 16723005.44 11476966.33
Selling expenses 16652349.86 14635706.60
Administrative expenses 134058887.06 95902750.30
R&D expenses 153802234.31 132514241.91
Financial expenses 44791262.57 13812595.95
Including: Interest expenses 106958559.19 102596230.96
Interest income 59962732.06 52980388.10
Add: Other income 18207329.04 9961694.64
Investment income (or less:
64615265.38766572383.64
losses)
Including: Investment
income from associates and 4605330.06 5599588.25
joint ventures
Gains from derecognition of
financial assets at amortized
cost
(or less: losses)
Gains on net exposure to
hedging (or less: losses)
Gains on changes in fair
-2692778.64-8372200.65
value (or less: losses)
Credit impairment loss (or
-3773476.35-822121.28
less: losses)
Assets impairment loss (or
less: losses)
Gains on asset disposal (or
102873.1116472.35
less: losses)
II. Operating profit (or less:
460782168.721108906809.06
losses)
Add: Non-operating revenue 522218.81 798996.34
Less: Non-operating
622679.5012253.93
expenditures
III. Profit before tax (or less:
460681708.031109693551.47
total loss)
Less: Income tax expense 53317816.09 64027813.00
IV. Net profit (or less: net loss) 407363891.94 1045665738.47
(I) Net profit from continuing
407363891.941045665738.47
operations (or less: net loss)
(II) Net profit from discontinued
operations (or less: net loss)
V. Other comprehensive income
after tax
(I) Not to be reclassified
subsequently to profit or loss
1.Changes in remeasurement
on the net defined benefit
plan
2. Items under equity method
that will not be reclassified
to profit or loss
3. Changes in fair value of
other equity instrument
investments
4. Changes in fair value of
own credit risk
5. Others
85Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
(II) To be reclassified
subsequently to profit or loss
1. Items under equity method
that may be reclassified to
profit or loss
2. Changes in fair value of
other debt investments
3. Profit or loss from
reclassification of financial
assets into other
comprehensive income
4. Provision for credit
impairment of other debt
investments
5. Cash flow hedging reserve
(profit or loss on cash flow
hedging)
6. Translation reserve
7. Others
VI. Total comprehensive income 407363891.94 1045665738.47
VII. Earnings per share (EPS):
(I) Basic EPS
(II) Diluted EPS
5. Consolidated Cash Flow Statement
Unit: RMB
Items 2023 Interim 2022 Interim
I. Cash flows from operating
activities:
Cash receipts from sale of goods or
12310137775.429386162507.29
rendering of services
Net increase of client deposit and
interbank deposit
Net increase of central bank loans
Net increase of loans from other
financial institutions
Cash receipts from original
insurance contract premium
Net cash receipts from reinsurance
Net increase of policy-holder
deposit and investment
Cash receipts from interest
handling charges and commission
Net increase of loans from others
Net increase of repurchase
Net cash receipts from agency
security transaction
Receipts of tax refund 230989224.84 393707345.33
Other cash receipts related to
115095499.27153194318.48
operating activities
Subtotal of cash inflows from
12656222499.539933064171.10
operating activities
Cash payments for goods
8435913051.147083109034.49
purchased and services received
86Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Net increase of loans and advances
to clients
Net increase of central bank
deposit and interbank deposit
Cash payments for insurance
indemnities of original insurance
contracts
Net increase of loans to others
Cash payments for interest
handling charges and commission
Cash payments for policy bonus
Cash paid to and on behalf of
1745042767.201407338536.02
employees
Cash payments for taxes and rates 370908197.71 278913274.35
Other cash payments related to
385684889.87402690197.08
operating activities
Subtotal of cash outflows from
10937548905.929172051041.94
operating activities
Net cash flows from operating
1718673593.61761013129.16
activities
II. Cash flows from investing
activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment
11925092.6443500525.32
income
Net cash receipts from the disposal
of fixed assets intangible assets and 560463829.79 1192948.89
other long-term assets
Net cash receipts from the disposal
of subsidiaries & other business units
Other cash receipts related to
454311380.20646640000.00
investing activities
Subtotal of cash inflows from
1026700302.63691333474.21
investing activities
Cash payments for the acquisition
of fixed assets intangible assets and 1938773141.25 1373819652.01
other long-term assets
Cash payments for investments 3500000.00
Net increase of pledged
borrowings
Net cash payments for the
acquisition of subsidiaries & other
business units
Other cash payments related to
75198297.70811294507.40
investing activities
Subtotal of cash outflows from
2017471438.952185114159.41
investing activities
Net cash flows from investing
-990771136.32-1493780685.20
activities
III. Cash flows from financing
activities:
Cash receipts from absorbing
7090938.20175850000.00
investments
Including: Cash received by
7090938.20
subsidiaries from non-controlling
87Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
shareholders as investments
Cash receipts from borrowings 918843500.00 1243594000.00
Other cash receipts related to
39626352.75149041182.61
financing activities
Subtotal of cash inflows from
965560790.951568485182.61
financing activities
Cash payments for the repayment
967560802.011002826150.00
of borrowings
Cash payments for distribution of
dividends or profits and for interest 806707757.88 583563129.96
expenses
Including: Cash paid by
subsidiaries to non-controlling 19951954.67
shareholders as dividend or profit
Other cash payments related to
68498477.35106024933.57
financing activities
Subtotal of cash outflows from
1842767037.241692414213.53
financing activities
Net cash flows from financing
-877206246.29-123929030.92
activities
IV. Effect of foreign exchange rate
149575367.5587126884.95
changes on cash & cash equivalents
V. Net increase in cash and cash
271578.55-769569702.01
equivalents
Add: Opening balance of cash and
2050328601.772690002225.09
cash equivalents
VI. Closing balance of cash and cash
2050600180.321920432523.08
equivalents
6. Cash Flow Statement of the Parent Company
Unit: RMB
Items 2023 Interim 2022 Interim
I. Cash flows from operating activities:
Cash receipts from sale of goods and
2915020263.222899104267.44
rendering of services
Receipts of tax refund 59871119.99 76326054.50
Other cash receipts related to
59140225.4732979392.30
operating activities
Subtotal of cash inflows from
3034031608.683008409714.24
operating activities
Cash payments for goods purchased
1801889579.352017479986.14
and services received
Cash paid to and on behalf of
310450399.64288368735.03
employees
Cash payments for taxes and rates 81786514.53 49746243.40
Other cash payments related to
51315280.7060695494.49
operating activities
Subtotal of cash outflows from
2245441774.222416290459.06
operating activities
Net cash flows from operating
788589834.46592119255.18
activities
II. Cash flows from investing
activities:
Cash receipts from withdrawal of
88Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
investments
Cash receipts from investment
61868191.54775597711.02
income
Net cash receipts from the disposal
of fixed assets intangible assets and 91582409.06 18700.00
other long-term assets
Net cash receipts from the disposal
of subsidiaries & other business units
Other cash receipts related to
462874796.10123910705.51
investing activities
Subtotal of cash inflows from investing
616325396.70899527116.53
activities
Cash payments for the acquisition of
fixed assets intangible assets and other 82942530.86 92038000.65
long-term assets
Cash payments for investments 145114207.25 11500000.00
Net cash payments for the
acquisition of subsidiaries & other
business units
Other cash payments related to
979549544.591272858190.07
investing activities
Subtotal of cash outflows from
1207606282.701376396190.72
investing activities
Net cash flows from investing
-591280886.00-476869074.19
activities
III. Cash flows from financing
activities:
Cash receipts from absorbing
175850000.00
investments
Cash receipts from borrowings 1070000000.00
Other cash receipts related to
573060328.066000000.00
financing activities
Subtotal of cash inflows from
573060328.061251850000.00
financing activities
Cash payments for the repayment of
199092500.00900000000.00
borrowings
Cash payments for distribution of
dividends or profits and for interest 768979698.33 578648166.97
expenses
Other cash payments related to
1711728.0076447283.64
financing activities
Subtotal of cash outflows from
969783926.331555095450.61
financing activities
Net cash flows from financing
-396723598.27-303245450.61
activities
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
-199414649.81-187995269.62
equivalents
Add: Opening balance of cash and
996678169.381379413954.98
cash equivalents
VI. Closing balance of cash and cash
797263519.571191418685.36
equivalents
89Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
90Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Unit: RMB
2023 Interim
Equity Attributable to parent Company
Other equity
Gen Non-
instruments Other Spe
Items Share Less: eral Undistrib controlli
Prefe Perpe Capital compre cial Surplus Oth Total equity
Capita treasury risk uted Subtotal ng
rred tual Oth reserve hensive rese reserve ers
l shares reser profit interest
share bond ers income rve
ve
s s
409
I. Balance at 3590 -
5442826023300228635238133331294131177989131193001
the end of 8694 85430
970.695.98975.53059.016242.880409.42781.4090.82
prior year 65.00 48.33
41
Add:
Cumulative
changes of
accounting
policies
Error
correction of
prior period
Business
combination
under
common
control
Others
II. Balance at 409
3590-
the beginning 544 282602 330022 863523 813333 1294131 177989 131193001
869485430
of current 970. 695.98 975.53 059.01 6242.88 0409.42 781.40 90.82
65.0048.33
year 41
III. Current -
1371-
period 447 872172 94145 677788 9520884 687265 958961093.
403.0960383
increase (or 283 28.12 944.13 338.45 43.30 0.41 71
060.00
less: decrease) 0.40
(I) Total 94145 139476 1488906 197336 150864045
0.00
comprehensiv 944.13 0848.85 792.98 66.88 9.86
91Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
e income
(II) Capital -
1371-
contributed or 447 872172 1801541 709093 187245098.
403.0960383
withdrawn by 283 28.12 60.72 8.20 92
060.00
owners 0.40
1. Ordinary
---
shares 709093
18041392361572767090938.20
contributed by 8.20
00.000.000.00
owners
2. Capital
-
contributed by 1551
447338345309135230913523.7
holders of 803.0
28351.103.700
other equity 0
0.40
instruments
3. Amount of
share-based
390798390798839079881.1
payment
81.171.177
included in
equity
-
1569511101607110160755.
4. Others 944656
55.8555.8585
00.00
----
(III) Profit
7169727169725199519736924465.
distribution
510.4010.4054.6707
1.
Appropriation
of surplus
reserve
2.
Appropriation
of general risk
reserve
3.
----
Appropriation
7169727169725199519736924465.
of profit to
510.4010.4054.6707
owners
4. Others
92Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
(IV) Internal
carry-over
within equity
1. Transfer of
capital reserve
to capital
2. Transfer of
surplus
reserve to
capital
3. Surplus
reserve to
cover losses
4. Changes in
defined
benefit plan
carried over
to retained
earnings
5. Other
comprehensiv
e income
carried over
to retained
earnings
6. Others
(V) Special
reserve
1.
Appropriation
of current
period
2. Application
of current
period
(VI) Others
IV. Balance at 3592 405 369819 233984 85602 863523 881112 1389339 184862 140782612
the end of 2408 072 924.10 615.53 895.80 059.01 4581.33 8852.72 431.81 84.53
93Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
current period 68.00 140.
01
Amount of Previous Period
Unit: RMB
2022 Interim
Equity Attributable to parent Company
Other equity
instruments Other Spec
Items Share Less: Gener Non-
Prefe Perpe Capital compreh ial Surplus al risk Undistribute Othe controlling Total equity
Capita treasury Subtotal interest
rred tual Oth reserve ensive reser reserve reserv d profit rs
l shares e
share bond ers income ve
s s
409
I. Balance at 3591 - 70178 111503
684373419411949661568102282112525906
the end of 0902 129410 4529.7 08271.4
602.775.02612.909606.07337.3008.73
prior year 18.00 847.39 0 3
93
Add:
Cumulative
changes of
accounting
policies
Error
correction of
prior period
Business
combination
under
common
control
Others
II. Balance at 409
3591-70178111503
the beginning 684 373419 411949 661568 102282 112525906
09021294104529.708271.4
of current 602. 775.02 612.90 9606.07 337.30 08.73
18.00847.3903
year 93
III. Current 1351 - - - 871268 467852 530709 116479 542357792.
94Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
period 6.00 398 936139 693709 84.95 298.03 872.66 19.71 37
increase (or 18.9 55.15 47.73
less: decrease) 0
(I) Total
871268100318109031116479110196213
comprehensiv
84.957335.234220.1819.719.89
e income
(II) Capital -
----
contributed or 1351 398
93613969370924269324269310.3
withdrawn by 6.00 18.9
55.1547.7310.322
owners 0
1. Ordinary
-
shares 287338 287338900.
287338
contributed by 900.00 00
900.00
owners
2. Capital
-
contributed by
1351398287694.261391.
holders of 261391.88
6.0018.97888
other equity
0
instruments
3. Amount of
share-based - -
175872143388
payment 125800 125800927.
50.07177.50
included in 927.43 43
equity
---
745797
4. Others 111488 186068 186068674.
74.77
900.00674.7777
---
(III) Profit
535335535335535335037.
distribution
037.20037.2020
1.
Appropriation
of surplus
reserve
2.
Appropriation
of general risk
reserve
95Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
3.
---
Appropriation
535335535335535335037.
of profit to
037.20037.2020
owners
4. Others
(IV) Internal
carry-over
within equity
1. Transfer of
capital reserve
to capital
2. Transfer of
surplus
reserve to
capital
3. Surplus
reserve to
cover losses
4. Changes in
defined
benefit plan
carried over to
retained
earnings
5. Other
comprehensiv
e income
carried over to
retained
earnings
6. Others
(V) Special
reserve
1.
Appropriation
of current
period
2. Application
96Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
of current
period
(VI) Others
409
IV. Balance at 3591 - 70178 116810
644279805342578708354113930117949484
the end of 1037 422839 4529.7 18144.0
784.819.87665.171904.10257.0101.10
current period 34.00 62.44 0 9
03
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
Unit: RMB
2023 Interim
Other equity instruments Other Spec
Less:
Items Share Prefer Perpet Capital comprehe ial Surplus Undistribute Oth
treasury Total equity
Capital red ual Others reserve nsive reser reserve d profit ers
shares
shares bonds income ve
I. Balance at the 35908
4095449711808263330022977354308813356892769223379
end of prior 69465.
0.4155.135.536.698.9480.64
year 00
Add:
Cumulative
changes of
accounting
policies
Error correction
of prior period
Others
II. Balance at 35908
4095449711808263330022977354308813356892769223379
the beginning 69465.
0.4155.135.536.698.9480.64
of current year 00
III. Current
----
period increase 13714 79575409.
4472830.96038360.309608618.137096276
(or less: 03.00 66
400046.20
decrease)
97Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
(I) Total
407363891.407363891
comprehensive
94.94
income
(II) Capital
--
contributed or 13714 79575409. 172512342
4472830.96038360.
withdrawn by 03.00 66 .26
4000
owners
1. Ordinary
---
shares
180401392360.01572760.0
contributed by
0.0000
owners
2. Capital
contributed by -
1551833834551.30913523.
holders of other 4472830.
03.001070
equity 40
instruments
3. Amount of
share-based
39079881.39079881.
payment
1717
included in
equity
-
8053337.3102518937
4. Others 94465600.
9.39
00
--
(III) Profit
716972510.716972510
distribution
40.40
1.
Appropriation
of surplus
reserve
2.
--
Appropriation
716972510.716972510
of profit to
40.40
owners
3. Others
(IV) Internal
carry-over
98Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
within equity
1.Transfer of
capital reserve
to capital
2.Transfer of
surplus reserve
to capital
3.Surplus
reserve to cover
losses
4. Changes in
defined benefit
plan carried
over to retained
earnings
5. Other
comprehensive
income carried
over to retained
earnings
6. Others
(V) Special
reserve
1.
Appropriation
of current
period
2. Application
of current
period
(VI) Others
IV. Balance at 35922
4050721412604017233984617354308810260806667852417
the end of 40868.
0.0164.795.536.690.4804.44
current period 00
Amount of Previous Period
Unit: RMB
2022 Interim
Items
Share Other equity instruments Capital Other Spec Surplus Othe Total equity
99Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Capital Prefer Perpet reserve Less: comprehen ial reserve rs
Undistribute
red ual Others treasury sive reser
d profit
shares bonds shares income ve
I. Balance at
35910940968460126760784119496157309735768646528619817695
the end of
0218.002.9357.612.907.38.982.00
prior year
Add:
Cumulative
changes of
accounting
policies
Error
correction of
prior period
Others
II. Balance at
the beginning 359109 40968460 12676078 41194961 57309735 768646528 619817695
of current 0218.00 2.93 57.61 2.90 7.38 .98 2.00
year
III. Current
period - -
13516.0510330701486061390.
increase (or -39818.90 93613955. 69370947
0.2795
less: 15 .73
decrease)
(I) Total
10456657104566573
comprehensiv
38.478.47
e income
(II) Capital
---
contributed or 13516.0
-39818.9093613955.6937094724269310.3
withdrawn by 0
15.732
owners
1. Ordinary
-
shares 287338900.
28733890
contributed 00
0.00
by owners
2. Capital
13516.0
contributed -39818.90 287694.78 261391.88
0
by holders of
100Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
other equity
instruments
3. Amount of
share-based -
17587250.14338817
payment 125800927.
077.50
included in 43
equity
--
74579774
4. Others 111488900 186068674..77.0077
--
(III) Profit
535335037535335037.
distribution.2020
1.
Appropriation
of surplus
reserve
2.
--
Appropriation
535335037535335037.
of profit to.2020
owners
3. Others
(IV) Internal
carry-over
within equity
1.Transfer of
capital
reserve to
capital
2.Transfer of
surplus
reserve to
capital
3.Surplus
reserve to
cover losses
4. Changes in
defined
101Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
benefit plan
carried over
to retained
earnings
5. Other
comprehensiv
e income
carried over
to retained
earnings
6. Others
(V) Special
reserve
1.
Appropriation
of current
period
2. Application
of current
period
(VI) Others
IV. Balance
3591104096447811739939342578665730973512789772668423834
at the end of
3734.004.0302.465.177.3830.252.95
current period
102Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
III. Company profile
The Company was established by the original Sanhua Fuji Koki Co. Ltd. The Company currently holds a
business license with a unified social credit code of 913300006096907427 registered and issued by Zhejiang
Administration of Industry and Commerce with headquarter in Shaoxing City Zhejiang Province. The registered
capital of 3590797158.00 yuan total share of 3592240868 shares (each with par value of one yuan). The
Company’s shares were listed at Shenzhen Stock Exchange.The Company operates in the machinery manufacturing industry. Business scope includes production and
marketing of refrigeration equipment automatic control components pressure pipeline components
electromechanical hydraulic control pump electromechanical hydraulic control components undertaking services
of inspection test and analysis of refrigeration accessories and engaging in import and export business. Main
products include refrigeration control components and automotive thermal management system control
components.The financial statements have been approved by the board of directors of the Company and disclosed on
August 22nd 2023.Zhejiang Sanhua Commercial Refrigeration Co. Ltd. and other subsidiaries are included in the scope of
consolidated financial statements in the current period. For further details please refer to the change of
consolidation scope in the notes to the financial report and the description of equity in other entities.IV. Preparation basis of the financial statements
1. Preparation basis
The financial statements have been prepared on the basis of going concern.
2. Going concern
The Company has no events or conditions that may cast significant doubts upon the Company’s ability to
continue as a going concern within the 12 months after the balance sheet date.V. Significant accounting policies and estimates
Tips on specific accounting policies and accounting estimates:
1.Statement of compliance with China Accounting Standards for Business Enterprises
The financial statements have been prepared in accordance with the requirements of China Accounting
Standards for Business Enterprises (CASBEs) and present truly and completely the financial position results of
operations and cash flows of the Company.
103Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
2. Accounting period
The accounting year of the Company runs from January 1 to December 31 under the Gregorian calendar.The
accounting period for the financial information contained in this financial statement is from January 1 2023 to
June 30 2023.
3. Operating cycle
The Company has a relatively short operating cycle for its business an asset or a liability is classified as
current if it is expected to be realized or due within 12 months.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (RMB) Yuan while the
functional currency of subsidiaries engaged in overseas operations including SANHUA AWECO Appliance
Systems GmbH、Sanhua International Inc etc. is the currency of the primary economic environment in which
they operate.
5. Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of the combined
party included in the consolidated financial statements of the ultimate controlling party at the combination date.Difference between carrying amount of the equity of the combined party included in the consolidated financial
statements of the ultimate controlling party and that of the combination consideration or total par value of shares
issued is adjusted to capital reserve if the balance of capital reserve is insufficient to offset any excess is adjusted
to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value share of identifiable net assets obtained from the
acquiree at the acquisition date the excess is recognized as goodwill; If the combination cost is less than the fair
value share of identifiable net assets obtained from the acquiree the fair value of the identifiable assets liabilities
and contingent liabilities obtained from the acquiree as well as the measurement of the combination cost need to
be reviewed at first. After review if the combination cost is still less than the fair value share of the identifiable
net assets obtained from the acquiree the difference is recognized in profit or loss.
6. Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. The consolidatedfinancial statements are compiled by the parent company according to “CASBE 33 – Consolidated FinancialStatements” based on relevant information and the financial statements of the parent company and its
subsidiaries.
104Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
7. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for payment. Cash
equivalents refer to short-term highly liquid investments that can be readily converted to cash and that are subject
to an insignificant risk of changes in value.
8. Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchange rate or the
approximate exchange rate similar to the spot exchange rate at the transaction date at initial recognition. At the
balance sheet date monetary items denominated in foreign currency are translated at the spot exchange rate at the
balance sheet date with difference except for those arising from the principal and interest of exclusive borrowings
eligible for capitalization included in profit or loss; non-cash items carried at historical costs are translated at the
spot exchange rate at the transaction date with its RMB amount unchanged; non-cash items carried at fair value in
foreign currency are translated at the spot exchange rate at the date when the fair value was determined with
difference included in profit or loss or other comprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated at the spot rate at the balance sheet date; the
equity items other than undistributed profit are translated at the spot rate at the transaction date; the revenues and
expenses in the income statement are translated at the approximate exchange rate similar to the systematically and
rationally determined spot exchange rate at the transaction date. The difference arising from foreign currency
translation is included in other comprehensive income.
9．Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1) financial
assets at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets
at fair value through profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1) financial
liabilities at fair value through profit or loss; (2) financial liabilities that arise when a transfer of a financial asset
does not qualify for derecognition or when the continuing involvement approach applies; (3) financial guarantee
contracts not fall within the above categories (1) and (2) and commitments to provide a loan at a below-market
interest rate which do not fall within the above category (1); (4) financial liabilities at amortized cost.
2. Recognition criteria measurement method and derecognition condition of financial assets and financial
liabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument it is recognized as a financial asset or
financial liability. The financial assets and financial liabilities initially recognized by the Company are measured
at fair value; for the financial assets and liabilities at fair value through profit or loss the transaction expenses
thereof are directly included in profit or loss; for other categories of financial assets and financial liabilities the
transaction expenses thereof are included into the initially recognized amount. However at initial recognition for
accounts receivable that do not contain a significant financing component or in circumstances where the Company
does not consider the financing components in contracts within one year the Company measures the transaction
105Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
price in accordance with “CASBE 14 – Revenues”.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized costs
The Company measures its financial assets at the amortized costs using effective interest method. Gains or
losses on financial assets that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial assets are derecognized reclassified through the amortization
process or in order to recognize impairment gains or losses.
2) Debt instrument investments at fair value through other comprehensive income
The Company measures its debt instrument investments at fair value. Interests impairment losses or gains
and gains and losses on foreign exchange that calculated using effective interest method shall be included into
profit or loss while other gains or losses are included into other comprehensive income. Accumulated gains or
losses that initially recognized as other comprehensive income should be transferred out into profit or loss when
the financial assets are derecognized.
3) Equity instrument investments at fair value through other comprehensive income
The Company measures its equity instrument investments at fair value. Dividends obtained (other than those
as part of investment cost recovery) shall be included into profit or loss while other gains or losses are included
into other comprehensive income. Accumulated gains or losses that initially recognized as other comprehensive
income should be transferred out into retained earnings when the financial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes in fair value
(including interests and dividends) shall be included into profit or loss except for financial assets that are part of
hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities (including
derivatives that are liabilities) and financial liabilities designated as at fair value through profit or loss. The
Company measures such kind of liabilities at fair value. The amount of changes in the fair value of the financial
liabilities that are attributable to changes in the Company’s own credit risk shall be included into other
comprehensive income unless such treatment would create or enlarge accounting mismatches in profit or loss.Other gains or losses on those financial liabilities (including interests changes in fair value that are attributable to
reasons other than changes in the Company’s own credit risk) shall be included into profit or loss except for
financial liabilities that are part of hedging relationships. Accumulated gains or losses that originally recognized as
other comprehensive income should be transferred out into retained earnings when the financial liabilities are
derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or
when the continuing involvement approach appliesThe Company measures its financial liabilities in accordance with “CASBE 23 – Transfer of FinancialAssets”.
3) Financial guarantee contracts not fall within the above categories 1) and 2) and commitments to provide a
loan at a below-market interest rate which do not fall within the above category 1)
The Company measures its financial liabilities at the higher of: a. the amount of loss allowances in
accordance with impairment requirements of financial instruments; b. the amount initially recognized less the
amount of accumulated amortization recognized in accordance with “CASBE 14 – Revenues”.
4) Financial liabilities at amortized cost
106Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
The Company measures its financial liabilities at amortized cost using effective interest method. Gains or
losses on financial liabilities that are measured at amortized cost and are not part of hedging relationships shall be
included into profit or loss when the financial liabilities are derecognized and amortized using effective interest
method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire;
b. the financial assets have been transferred and the transfer qualifies for derecognition in accordance with
“CASBE 23 – Transfer of Financial Assets”.
2) Only when the underlying present obligations of a financial liability are relieved totally or partly may the
financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to the ownership of the
financial asset it derecognizes the financial asset and any right or liability arising from such transfer is
recognized independently as an asset or a liability. If it retained substantially all of the risks and rewards related to
the ownership of the financial asset it continues recognizing the financial asset. Where the Company does not
transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset it is dealt
with according to the circumstances as follows respectively: (1) if the Company does not retain its control over the
financial asset it derecognizes the financial asset and any right or liability arising from such transfer is
recognized independently as an asset or a liability; (2) if the Company retains its control over the financial asset
according to the extent of its continuing involvement in the transferred financial asset it recognizes the related
financial asset and recognizes the relevant liability accordingly.If the transfer of an entire financial asset satisfies the conditions for derecognition the difference between the
amounts of the following two items is included in profit or loss: (1) the carrying amount of the transferred
financial asset as of the date of derecognition; (2) the sum of consideration received from the transfer of the
financial asset and the accumulative amount of the changes of the fair value originally included in other
comprehensive income proportionate to the transferred financial asset (financial assets transferred refer to debt
instrument investments at fair value through other comprehensive income). If the transfer of financial asset
partially satisfies the conditions to derecognition the entire carrying amount of the transferred financial asset is
between the portion which is derecognized and the portion which is not apportioned according to their respective
relative fair value and the difference between the amounts of the following two items is included into profit or
loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of the portion
which is derecognized and the portion of the accumulative amount of the changes in the fair value originally
included in other comprehensive income which is corresponding to the portion which is derecognized (financial
assets transferred refer to debt instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data and information are available to measure fair value. The inputs to valuation techniques used to measure fair
value are arranged in the following hierarchy and used accordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the
Company can access at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset
or liability either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in
active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other
107Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
than quoted prices that are observable for the asset or liability for example interest rates and yield curves
observable at commonly quoted intervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interest rate that is
not observable and cannot be corroborated by observable market data at commonly quoted intervals historical
volatility future cash flows to be paid to fulfill the disposal obligation assumed in business combination financial
forecast developed using the Company’s own data etc.
5. Impairment of financial instruments
(1) Measurement and accounting treatment
The Company on the basis of expected credit loss recognizes loss allowances of financial assets at
amortized cost debt instrument investments at fair value through other comprehensive income contract assets
leases receivable loan commitments other than financial liabilities at fair value through profit or loss financial
guarantee contracts not belong to financial liabilities at fair value through profit or loss or financial liabilities that
arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement
approach applies.Expected credit losses refer to the weighted average of credit losses with the respective risks of a default
occurring as the weights. Credit loss refers to the difference between all contractual cash flows that are due to the
Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash
shortfalls) discounted at the original effective interest rate. Among which purchased or originated credit-impaired
financial assets are discounted at the credit-adjusted effective interest rate.At the balance sheet date the Company shall only recognize the cumulative changes in the lifetime expected
credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial
assets.For leases receivable and accounts receivable and contract assets resulting from transactions regulated in
“CASBE 14 – Revenues” the Company chooses simplified approach to measure the loss allowance at an amount
equal to lifetime expected credit losses.For financial assets other than the above on each balance sheet date the Company shall assess whether the
credit risk on the financial instrument has increased significantly since initial recognition. The Company shall
measure the loss allowance for the financial instrument at an amount equal to the lifetime expected credit losses if
the credit risk on that financial instrument has increased significantly since initial recognition; otherwise the
Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected
credit loss.Considering reasonable and supportable forward-looking information the Company compares the risk of a
default occurring on the financial instrument as at the balance sheet date with the risk of a default occurring on the
financial instrument as at the date of initial recognition so as to assess whether the credit risk on the financial
instrument has increased significantly since initial recognition.The Company may assume that the credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have relatively low credit risk at the balance sheet
date.The Company shall estimate expected credit risk and measure expected credit losses on an individual or a
collective basis. When the Company adopts the collective basis financial instruments are grouped with similar
credit risk features.The Company shall remeasure expected credit loss on each balance sheet date and increased or reversed
amounts of loss allowance arising therefrom shall be included into profit or loss as impairment losses or gains. For
a financial asset measured at amortized cost the loss allowance reduces the carrying amount of such financial
108Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
asset presented in the balance sheet; for a debt investment measured at fair value through other comprehensive
income the loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying
amount of such financial asset.
(2) Financial instruments with expected credit risk assessed on a collective basis and expected credit losses
measured using three-stage model
Items Basis for determination Method for measuring expected
of portfolio credit loss
Based on historical credit loss
experience the current situation and
the forecast of future economic
Other receivables – Portfolio grouped
Ages conditions the Company calculates
with ages
expected credit loss through
exposure at default and 12-month or
lifetime expected credit loss rate.
(3) Accounts receivable and contract assets with expected credit losses measured on a collective basis using
simplified approach
1) Specific portfolios and method for measuring expected credit loss
Items Basis for determination Method for measuring expected
of portfolio credit loss
Based on historical credit loss
Notes receivable-Bank acceptance experience the current situation and
Bank acceptance
receivable the forecast of future economic
conditions the Company calculates
expected credit loss through
Notes receivable -Trade acceptance Trade acceptance exposure at default and lifetime
receivable expected credit loss rate.Based on historical credit loss
experience the current situation and
the forecast of future economic
Accounts receivable – Portfolio
Ages conditions the Company prepares
grouped with ages
the comparison table of ages and
lifetime expected credit loss rate so
as to calculate expected credit loss.
2) Comparison table of ages and lifetime expected credit loss rate of portfolio grouped with ages
Ages Expected credit loss rate (%)
Within 1 year 5%
1-2 years 10%
2-3 years 30%
Over 3 years 50%
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.However the Company offsets a financial asset and a financial liability and presents the net amount in the balance
sheet when and only when the Company: (1) currently has a legally enforceable right to set off the recognized
amounts and this legal right is currently enforceable; (2) intends either to settle on a net basis or to realize the
asset and settle the liability simultaneously.For a transfer of a financial asset that does not qualify for derecognition the Company does not offset the
transferred asset and the associated liability.
109Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
10．Inventories
1. Classification of inventories
Inventories include finished goods or goods held for sale in the ordinary course of business work in process
in the process of production materials or supplies etc. to be consumed in the production process or in the
rendering of services.
2. Accounting method for dispatching inventories
Inventories calculated by actual cost inventories dispatched from storage are accounted for with weighted
average method or specific identification method at the end of each month. Inventories calculated by planned
costthe company carry forward cost differences simultaneously at the end of the month.
3. Basis for determining net realizable value
At the balance sheet date inventories are measured at the lower of cost or net realizable value; provisions for
inventory write-down are made on the excess of its cost over the net realizable value.
4. Inventory system
The perpetual inventory system is adopted.
5. Amortization method of low-value consumables and packages
Low-value consumables and packages are amortized with one-off method.
11. Contract costs
Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected
to be recovered. The costs of obtaining a contract shall be included into profit or loss when incurred if the
amortization period of the asset is one year or less.If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories fixed
assets or intangible assets etc. the Company shall recognize the costs to fulfil a contract as an asset if all the
following criteria are satisfied:
1. The costs relate directly to a contract or to an anticipated contract including direct labor direct materials
manufacturing overhead cost (or similar cost) cost that are explicitly chargeable to the customer under the
contract and other costs that are only related to the contract;
2. The costs enhance resources of the Company that will be used in satisfying performance obligations in the
future;
3. The costs are expected to be recovered.
An asset related to contract costs shall be amortized on a systematic basis that is consistent with related
goods or services with amortization included into profit or loss.The Company shall make provision for impairment and recognize an impairment loss to the extent that the
carrying amount of an asset related to contract costs exceeds the remaining amount of consideration that the
Company expects to receive in exchange for the goods or services to which the asset relates less the costs
expected to be incurred. The original provision for asset impairment shall be reversed and included in the current
profit and loss when the impairment conditions no longer exist or have improved. The carrying amount of the
asset after the reversal shall not exceed the amount that would have been determined on the reversal date if no
provision for impairment had been made previously.
110Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
12．Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant
influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control if the consideration of the combining party is that it
makes payment in cash transfers non-cash assets assumes its liabilities or issues equity securities on the date of
combination it regards the share of the carrying amount of the equity of the combined party included the
consolidated financial statements of the ultimate controlling party as the initial cost of the investment. The
difference between the initial cost of the long-term equity investments and the carrying amount of the combination
consideration paid or the par value of shares issued offsets capital reserve; if the balance of capital reserve is
insufficient to offset any excess is adjusted to retained earnings.
(2) For business combination not under common control investment cost is initially recognized at the
acquisition-date fair value of considerations paid.
(3) Long-term equity investments obtained through ways other than business combination the initial cost of
a long-term equity investment obtained by making payment in cash is the purchase cost which is actually paid.
3. Subsequent measurement and recognition method of profit or loss
For long-term equity investments with control relationship it is accounted for with cost method; for long-
term equity investments of associated enterprises and cooperative enterprises it is accounted for with equity
method.
13. Investment property
Measurement model of investment property
Cost method measurement
Depreciation or amortization method
1. Investment property includes land use right of leased-out property and of property held for capital
appreciation and buildings that have been leased out.
2. The initial measurement of investment property is based on its cost and subsequent measurement is made
using the cost model the depreciation or amortization method is the same as that of fixed assets and intangible
assets.
14. Fixed assets
（1）Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production of goods or rendering of services for rental to
others or for administrative purposes and expected to be used during more than one accounting year. Fixed assets
are recognized if and only if it is probable that future economic benefits associated with the assets will flow to
the Company and the cost of the assets can be measured reliably.
111Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
（2）Depreciation method of different categories of fixed assets
Categories Depreciation Estimated residual Annual depreciation Useful life (years)
method value proportion (%) rate (%)
Buildings and Straight-line
20-300-53.17～5.00
structures method
Machinery and Straight-line
5-120-57.92～20.00
equipment method
Measurement Straight-line
5-100-59.50～19.00
analysis equipment method
Straight-line
Vehicle 5-8 0-5 11.88～20.00
method
Office equipment Straight-line
5-80-511.88～20.00
and others method
15．Construction in progress
1. Construction in progress is recognized if and only if it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be measured reliably.Construction in progress is measured at the actual cost incurred to reach its designed usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches the designed
usable conditions. When the auditing of the construction in progress was not finished while reaching the designed
usable conditions it is transferred to fixed assets using estimated value first and then adjusted accordingly when
the actual cost is settled but the accumulated depreciation is not to be adjusted retrospectively.
16．Borrowing costs
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization it is capitalized and included in the costs of relevant
assets; other borrowing costs are recognized as expenses on the basis of the actual amount incurred and are
included in profit or loss.
17．Intangible assets
(1) Valuation method service life impairment testing
1) Intangible assets include land use right land ownership application software and intellectual property etc.
The initial measurement of intangible assets is based on its cost.
2) Amortization method
Amortization
Categories Amortization period (years)
method
Land use rights Straight-line method Contractual service life
Application software Straight-line method 1-4
Intellectual property Straight-line method 5-10
Intangible assets with indefinite useful life are not amortized but their useful life is reviewed annually. The
indefinite land ownership held by overseas subsidiaries abroad is not amortized due to uncertain service life.
(2) Internal research and development expenditure accounting policy
Expenditures on the research phase of an internal project are recognized as profit or loss when they are
112Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
incurred. An intangible asset arising from the development phase of an internal project is recognized if the
Company can meet relevant conditions.
18．Impairment of part of long-term assets
For long-term assets such as long-term equity investments investment property at cost model fixed assets
construction in progress right-of-use assets intangible assets with finite useful lives etc. if at the balance sheet
date there is indication of impairment the recoverable amount is to be estimated. For goodwill recognized in
business combination and intangible assets with indefinite useful lives no matter whether there is indication of
impairment impairment test is performed annually. Impairment test on goodwill is performed on related asset
group or asset group portfolio.When the recoverable amount of such long-term assets is lower than their carrying amount the difference is
recognized as provision for assets impairment through profit or loss.
19．Long-term prepayments
Long-term prepayments are expenses that have been recognized but with amortization period over one year
(excluding one year). They are recorded with actual cost and evenly amortized within the beneficiary period or
stipulated period. If items of long-term prepayments fail to be beneficial to the following accounting periods
residual values of such items are included in profit or loss.
20．Employee benefits
1. Short-term employee benefits
The Company recognizes in the accounting period in which an employee provides service short-term
employee benefits actually incurred as liabilities with a corresponding charge to profit or loss or the cost of a
relevant asset.
2. Post-employment benefits
Post-employment benefit plans are mainly classified as defined contribution plans. During the accounting
period employees provide services according the defined contribution plan the amount payable is recognized as
liabilities and included in the current profits and losses or relevant asset costs.
3. Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability with a
corresponding charge to profit or loss at the earlier of the following dates: (1) when the Company cannot
unilaterally withdraw the offer of termination benefits because of an employment termination plan or a
curtailment proposal; (2) when the Company recognizes cost or expenses related to a restructuring that involves
the payment of termination benefits.
4. Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions for classifying as
a defined contribution plan those benefits are accounted for in accordance with the requirements relating to
defined contribution plan while other benefits are accounted for in accordance with the requirements relating to
defined benefit plan. The Company recognizes the cost of employee benefits arising from other long-term
employee benefits as the followings: (1) service cost; (2) net interest on the net liability or net assets of other long-
term employee benefits; and (3) changes as a result of remeasurement of the net liability or net assets of other
long-term employee benefits. As a practical expedient the net total of the aforesaid amounts is recognized in
113Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
profit or loss or included in the cost of a relevant asset.
21．Provisions
1. Provisions are recognized when fulfilling the present obligations arising from contingencies such as
providing guarantee for other parties litigation products quality guarantee onerous contract etc. may cause the
outflow of the economic benefit and such obligations can be reliably measured.
2. The initial measurement of provisions is based on the best estimated expenditures required in fulfilling
the present obligations and its carrying amount is reviewed at the balance sheet date.
22．Share-based payment
1. Types of share-based payment
Share-based payment consists of equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment for settlements modifications and cancellations of share-based payment terms and
conditions
(1) Equity-settled share-based payment
For equity-settled share-based payment transaction with employees if the equity instruments granted vest
immediately the fair value of those equity instruments is measured at grant date and recognized as transaction
cost or expense with a corresponding adjustment in capital reserve; if the equity instruments granted do not vest
until the counterparty completes a specified period of service at the balance sheet date within the vesting period
the fair value of those equity instruments measured at grant date based on the best estimate of the number of
equity instruments expected to vest is recognized as transaction cost or expense with a corresponding adjustment
in capital reserve.
(2) Cash-settled share-based payment
For cash-settled share-based payment transactions with employees if share appreciation rights vest
immediately the fair value of the liability incurred as the acquisition of goods or services is measured at grant
date and recognized as transaction cost or expense with a corresponding increase in liabilities; if share
appreciation rights do not vest until the employees have completed a specified period of service the liability is
measured at each balance sheet date until settled at the fair value of the share appreciation rights measured at
grant date based on the best estimate of the number of share appreciation right expected to vest.
(3) Modifications and cancellations of share-based payment terms and conditions
If the modification increases the fair value of the equity instruments granted measured immediately before
and after the modification the Company includes the incremental fair value granted in the measurement of the
amount recognized for services received as consideration for the equity instruments granted; similarly if the
modification increases the number of equity instruments granted the Company includes the fair value of the
additional equity instruments granted measured at the date of the modification in the measurement of the amount
recognized for services received as consideration for the equity instruments granted; if the Company modifies the
vesting conditions in a manner that is beneficial to the employee the Company takes the modified vesting
conditions into account.If the modification reduces the fair value of the equity instruments granted measured immediately before and
after the modification the Company does not take into account that decrease in fair value and continue to measure
the amount recognized for services received as consideration for the equity instruments based on the grant date
fair value of the equity instruments granted; if the modification reduces the number of equity instruments granted
to an employee that reduction is accounted for as a cancellation of that portion of the grant; if the Company
114Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
modifies the vesting conditions in a manner that is not beneficial to the employee the Company does not take the
modified vesting conditions into account.If the Company cancels or settles a grant of equity instruments during the vesting period (other than a grant
cancelled by forfeiture when the vesting conditions are not satisfied) the Company accounts for the cancellation
or settlement as an acceleration of vesting and therefore recognizes immediately the amount that otherwise would
have been recognized for services received over the remainder of the vesting period.
23. Convertible bonds
The Company classifies convertible bonds at initial recognition as a financial asset or liability or equity
instrument based on contract terms and economic essence it reveals instead of its legal form combining with the
definitions of financial asset liability and equity instrument.At the balance sheet date for a financial instrument classified as an equity instrument its interest expenditure
or dividend distribution is treated as profit distribution and share repurchase and cancellation are treated as
changes in equity; for a financial instrument classified as a financial liability its interest expenditure or dividend
distribution is treated as borrowing expense and gain or loss on repurchase or redemption is included in profit or
loss.
24．Revenue
Accounting policies adopted for revenue recognition and measurement
1. Revenue recognition principles
At contract inception the Company shall assess the contracts and shall identify each performance obligation
in the contracts and determine whether the performance obligation should be satisfied over time or at a point in
time.The Company satisfies a performance obligation over time if one of the following criteria is met otherwise
the performance obligation is satisfied at a point in time: (1) the customer simultaneously receives and consumes
the benefits provided by the Company’s performance as the Company performs; (2) the customer can control
goods or services as they are created by the Company’s performance; (3) the Company’s performance does not
create goods or services with an alternative uses and the Company has an enforceable right to payment for
performance completed to date.For each performance obligation satisfied over time the Company shall recognize revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. In the circumstance that the
progress cannot be measured reasonably but the costs incurred in satisfying the performance obligation are
expected to be recovered the Company shall recognize revenue only to the extent of the costs incurred until it can
reasonably measure the progress.For each performance obligation satisfied at a point in time the Company shall recognize revenue at the
time point that the customer obtains control of relevant goods or services. To determine whether the customer has
obtained control of goods the Company shall consider the following indicators: (1) the Company has a present
right to payment for the goods i.e. the customer is presently obliged to pay for the goods; (2) the Company has
transferred the legal title of the goods to the customer i.e. the customer has legal title to the goods; (3) the
Company has transferred physical possession of the goods i.e. the customer has physically possessed the goods;
(4) the Company has transferred significant risks and rewards of ownership of the goods i.e. the customer has
obtained significant risks and rewards of ownership of the goods; (5) the customer has accepted the goods; (6)
other indicators showing the customer has obtained control over the goods.
115Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to each performance
obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring goods or services to a customer excluding amounts collected on behalf of third parties
and those expected to be refunded to the customer.
(2) If the consideration promised in a contract includes a variable amount the Company shall confirm the
best estimate of variable consideration at expected value or the most likely amount. However the transaction price
that includes the amount of variable consideration only to the extent that it is high probable that a significant
reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the
variable consideration is subsequently resolved.
(3) In the circumstance that the contract contains a significant financing component the Company shall
determine the transaction price based on the price that a customer would have paid for if the customer had paid
cash for obtaining control over those goods or services. The difference between the transaction price and the
amount of promised consideration is amortized under effective interest method over contractual period. The
effects of a significant financing component shall not be considered if the Company expects at the contract
inception that the period between when the customer obtains control over goods or services and when the
customer pays consideration will be one year or less.
(4) For contracts containing two or more performance obligations the Company shall determine the stand-
alone selling price at contract inception of the distinct good underlying each performance obligation and allocate
the transaction price to each performance obligation on a relative stand-alone selling price basis.
3. Revenue recognition method
The company's main business activities are the R&D production and sales of control components and parts
of household appliances and automobiles which belong to the performance obligations at a certain point in time.The revenue from domestic sales of products shall be recognized based on sales contracts settlement
vouchers (delivery or usage)and other documents upon completion of product delivery; and the revenue from
export of products shall be recognized according to the sales contract customs declaration form bill of lading
and other documents upon completion of customs declaration and export. The sales revenue of metal scrap is
recognized after weighing and picking up the goods and obtaining the receipt certificate.
25．Government grants
1. Government grants shall be recognized if and only if the following conditions are all met: (1) the
Company will comply with the conditions attaching to the grants; (2) the grants will be received. Monetary
government grants are measured at the amount received or receivable. Non-monetary government grants are
measured at fair value and can be measured at nominal amount in the circumstance that fair value can’t be
assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company construct or otherwise
acquire long-term assets under requirements of government. In the circumstances that there is no specific
government requirement the Company shall determine based on the primary condition to acquire the grants and
government grants related to assets are government grants whose primary condition is to construct or otherwise
acquire long-term assets. They offset carrying amount of relevant assets or recognized as deferred income. If
recognized as deferred income they are included in profit or loss on a systematic basis over the useful lives of the
relevant assets. Those measured at notional amount is directly included into profit or loss. For assets sold
116Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
transferred disposed or damaged within the useful lives balance of unamortized deferred income is transferred
into profit or loss of the year in which the disposal occurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. For
government grants that contain both parts related to assets and parts related to income in which those two parts
are blurred and thus collectively classified as government grants related to income. For government grants related
to income used for compensating the related future cost expenses or losses of the Company are recognized as
deferred income and are included in profit or loss or offset relevant cost during the period in which the relevant
cost expenses or losses are recognized; for government grants related to income used for compensating the
related cost expenses or losses incurred to the Company they are directly included in profit or loss or directly
offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into other income or offset
relevant cost based on business nature while those not related to the ordinary course of business shall be included
into non-operating revenue.
5. Policy interest subvention
(1) In the circumstance that government appropriates interest subvention to lending bank who provides loans
for the Company with a policy subsidised interest rate borrowings are carried at the amount received with
relevant borrowings cost computed based on the principal and the policy subsidised interest rate.
(2) In the circumstance that government directly appropriates interest subvention to the Company the
subsidised interest shall offset relevant borrowing cost.
26．Contract assets contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship
between its performance obligations and customers’ payments. Contract assets and contract liabilities under the
same contract shall offset each other and be presented on a net basis.The Company presents an unconditional right to consideration (i.e. only the passage of time is required
before the consideration is due) as a receivable and presents a right to consideration in exchange for goods that it
has transferred to a customer (which is conditional on something other than the passage of time) as a contract
asset.The Company presents an obligation to transfer goods to a customer for which the Company has received
consideration (or the amount is due) from the customer as a contract liability.
27．Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference
between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and
tax base of items not recognized as assets and liabilities but with their tax base being able to be determined
according to tax laws) and in accordance with the tax rate applicable to the period during which the assets are
expected to be recovered or the liabilities are expected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income which it is most likely
to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date if there
is any exact evidence that it is probable that future taxable income will be available against which deductible
117Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
temporary differences can be utilized the deferred tax assets unrecognized in prior periods are recognized.
3. At the balance sheet date the carrying amount of deferred tax assets is reviewed. The carrying amount of a
deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be
available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to
the extent that it becomes probable that sufficient taxable income will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or income through profit
or loss excluding those arising from the following circumstances: (1) business combination; and (2) the
transactions or items directly recognized in equity.
28. Leases
1. The Company as lessee
At the commencement date the Company recognizes a lease that has a lease term of 12 months or less as a
short-term lease which shall not contain a purchase option; the Company recognizes a lease as a lease of a low-
value asset if the underlying asset is of low value when it is new.For all short-term leases and leases of low-value assets lease payments are recognized as cost or profit or loss
with straight-line method over the lease term.Apart from the above-mentioned short-term leases and leases of low-value assets with simplified approach the
Company recognizes right-of-use assets and lease liabilities at the commencement date.
(1) Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initial measurement
of the lease liabilities; 2) any lease payments made at or before the commencement date less any lease incentives
received; 3) any initial direct costs incurred by the lessee; and 4) an estimate of costs to be incurred by the lessee in
dismantling and removing the underlying asset restoring the site on which it is located or restoring the underlying
asset to the condition required by the terms and conditions of the lease.The Company depreciates the right-of-use asset using the straight-line method. If it is reasonable to be certain
that the ownership of the underlying asset can be acquired by the end of the lease term the Company depreciates
the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise
the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful
life of the right-of-use asset or the end of the lease term.
(2) Lease liabilities
At the commencement date the Company measures the lease liability at the present value of the lease payments
that are not paid at that date discounted using the interest rate implicit in the lease.Unrecognized financing expenses
calculated at the difference between the lease payment and its present value are recognized as interest expenses
over the lease term using the discount rate which has been used to determine the present value of lease payment and
included in profit or loss. Variable lease payments not included in the measurement of lease liabilities are included
in profit or loss in the periods in which they are incurred.
2. The Company as lessor
At the commencement date the Company classifies a lease as a finance lease if it transfers substantially all the
risks and rewards incidental to ownership of an underlying asset. Otherwise it is classified as an operating lease.
118Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
For operating leaselease receipts are recognized as lease income with straight-line method over the lease term.Initial direct costs incurred shall be capitalized amortized on the same basis as the recognition of lease income and
included into profit or loss by installments. Variable lease payments related to operating lease which are not included
in the lease payment are charged as profit or loss in the periods in which they are incurred.
29. Segment reporting
Operating segments are determined based on the structure of the Company’s internal organization
management requirements and internal reporting system. An operating segment is a component of the Company:
1. That engages in business activities from which it may earn revenues and incur expenses;
2. Whose financial performance is regularly reviewed by the Management to make decisions about resource
to be allocated to the segment and to assess its performance;
3. For which accounting information regarding financial position financial performance and cash flows is
available through analysis.
30. Share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital or rewarding its
employees. The amount actually paid shall be treated as treasury stock and registered for future reference at the
same time. If the purchased shares are to be retired the difference between the total book value of shares retired
and the cash distributed to existing shareholders for repurchase is to reduce capital reserve or retained earnings
when the capital reserve is not enough to reduce. If the Company repurchases vested equity instruments in equity-
settled share-based payment transactions with employees cost of treasury shares granted to employees and capital
reserve (other capital reserve) accumulated within the vesting period are to be written off on the payment made to
employees with a corresponding adjustment in capital reserve (share premium).
31. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ Not applicable
Changes in accounting policies arising from changes in CASBEsSince 2023 the company has implemented the 《Accounting Standards for Business EnterprisesInterpretation No. 16》 promulgated by the Ministry of Finance "Accounting treatment of deferred income tax
related to assets and liabilities arising from a single transaction not applicable to initial recognition exemption".The individual transactions applicable to this regulation occurring between the beginning of the earliest period
presented in the financial statements and the date of initial implementation shall be adjusted according to this
regulation. For the lease liabilities and right-of-use assets recognized as a result of individual transactions
applying the regulations at the beginning of the earliest period when the regulations are first implemented as well
119Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
as the estimated liabilities related to the disposal obligations and the corresponding assets confirmed taxable
temporary In case of temporary differences and deductible temporary differences in accordance with the
regulations and the provisions of "Accounting Standards for Business Enterprises No. 18 - Income Tax" the
cumulative impact amount is adjusted to the beginning retained earnings and other related financial statement
items of the earliest period presented in the financial statements . This accounting policy change has no impact on
the company's financial statements.
(2)Changes in significant accounting estimates
□ Applicable √ Not applicable
(3) From 2023 the new accounting standards will be implemented for the first time to adjust the relevant
items of the financial statements at the beginning of the year
□ Applicable √ Not applicable
Ⅵ. Taxes
1. Major categories of taxes and tax rates
Tax Type Taxation basis Tax rate
Enterprise income
Taxable income 15%25%
tax
The output tax calculated based on the revenue from sales of goods or
VAT rendering of services in accordance with the tax law net of the input tax 13%9%6%
that is allowed to be deducted in the current period
Different enterprise income tax rates applicable to different taxpayers:
Taxpayers Income tax rate
Zhejiang Sanhua Intelligent Controls Co. Ltd 15%
Zhejiang Sanhua Commercial Refrigeration Co. Ltd 15%
Sanhua (hangzhou) Micro Channel Heat Exchanger Co. Ltd 15%
Zhejiang Sanhua Automotive Components Co. Ltd. 15%
Shaoxing Sanhua New Energy Automotive Components Co. 15%
Ltd
Wuhu Sanhua Auto-control Components Co. Ltd and other 15%
subsidiaries
Domestic taxpayers other than the above-mentioned 25%
2. Tax preferential policies
In January 1st to June 30th 2023 the company and several subsidiaries can enjoy tax incentives for high-
tech enterprises. The income tax expenses are temporarily calculated at a preferential tax rate of 15%.The
information related to the income tax incentive period is shown in the table below:
120Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Certificate number of high-tech Income tax preferential
Taxpayers
enterprise period
Zhejiang Sanhua Intelligent Controls Co. Ltd GR202033004835 Year 2020—Year 2022
Zhejiang Sanhua Commercial Refrigeration Co.GR202233002834 Year 2022—Year 2024
Ltd
Sanhua (hangzhou) Micro Channel Heat
GR202233000735 Year 2022—Year 2024
Exchanger Co. Ltd
Zhejiang Sanhua Automotive Components Co.GR202133004115 Year 2021—Year 2023
Ltd.Shaoxing Sanhua New Energy Automotive
GR202133007810 Year 2021—Year 2023
Components Co. Ltd
Sanhua AWECO Appliance Systems (Wuhu) Co.GR202234002629 Year 2022—Year 2024
Ltd.Wuhu Sanhua Automatic Control Components
GR202234001441 Year 2022—Year 2024
Co. Ltd
Hangzhou Leaderway Electronics Co. Ltd GR202133004649 Year 2021—Year 2023
Sanhua (Jiangxi) Self - control Components Co.GR202036001021 Year 2020—Year 2022
Ltd
Wuhu Sanhua Refrigeration Parts Co. Ltd GR202234004635 Year 2022—Year 2024
Wuhan Sanhua Refrigeration Components Co.GR202142001949 Year 2021—Year 2023
Ltd
Zhuhai Hengtu Electronics Co. Ltd GR202244013952 Year 2022—Year 2024Several subsidiaries enjoy the preferential policy of immediate collection and refund for the “providingemployment opportunities for disabled people”. The exceeding portion over the 3% VAT payable of the certified
software products enjoy the immediate refund policy. Export goods enjoy the VAT exemption and refund policy.
3. Others
The overseas subsidiary shall be subject to the tax regulations of its host country.
121Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Ⅶ. Notes to Items in the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB
Items Closing balance Opening balance
Cash on hand 189169.27 329823.40
Cash in bank 5491499794.08 5790429124.91
Other cash and bank balances 85075642.98 87484704.24
Total 5576764606.33 5878243652.55
Including: Deposited overseas 630843003.55 425176344.58
Other remarks:
As of June 30 2023 bank deposits containing large deposit certificates with fixed interest rates amounted to
3454.0468 million yuan.
2. Held-for-trading financial assets
Unit: RMB
Items Closing balance Opening balance
Financial assets at fair value through profit
414485.69100025980.08
or loss
Including:
Bank financial products 414485.69 100025980.08
Including:
Total 414485.69 100025980.08
3. Derivative Financial Assets
Unit: RMB
Items Closing balance Opening balance
Foreign exchange tool 2801336.04 3320177.30
Futures tools 1040000.00 5618696.75
Total 3841336.04 8938874.05
4. Notes receivable
（1）Categories of notes receivable
Unit: RMB
Items Closing balance Opening balance
Bank acceptance 2047547653.05 1542383601.65
Trade acceptance 6114097.15 12037004.98
Finance company acceptance 63984361.21 649528377.20
Total 2117646111.41 2203948983.83
Unit: RMB
Categori Closing balance Opening balance
122Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
es
Provision for Provision for
Book balance Book balance
bad debt bad debt
Amount Proport Amount Pro
Pro
Carrying ion visi Carrying
visi
Proport amount on amount
Amoun on
Amount pro
t ion pro
port
port
ion
ion
Including
:
Notes
receivabl
e with
provision
21179
for bad 100.0 321794. 0.02 211764 220458 100.00 633526. 0.03 22039489
67905.
debt 0% 56 % 6111.41 2510.42 % 59 % 83.83
97
made on
a
collectiv
e basis
Including
:
Bank 20475
96.6820475415423815423836
acceptan 47653. 69.97%
%7653.053601.6501.65
ce 05
Finance
company 63984 3.02 639843 649528 64952837
29.46%
acceptan 361.21 % 61.21 377.20 7.20
ce
Trade
643580.30321794.5.00611409126705633526.5.0012037004.
acceptan 0.57%
91.71%56%7.1531.5759%98
ce
21179
100.0321794.0.02211764220458100.00633526.0.0322039489
Total 67905.
0%56%6111.412510.42%59%83.83
97
Provision for bad debt made on a collective basis:
Unit: RMB
Closing balance
Items Provision proportion
Book balance Provision for bad debt
(%)
Bank acceptance portfolio 2047547653.05
Finance company acceptance
63984361.21
portfolio
Trade acceptance portfolio 6435891.71 321794.56 5.00%
Total 2117967905.97 321794.56 --
If the provision for bad debt of notes receivable is in accordance with the general expected credit loss model
123Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
please refer to the disclosure of the bad debt provision for other receivables:
√ Applicable □ Not Applicable
Phase I Phase II Phase III
Provision for bad Subtotal
debt 12?month expected credit Lifetime expected Lifetime expected credit losses
losses credit losses
(credit not impaired)
(credit impaired)
Balance on January
12023633526.59633526.59
The balance as of —— —— —— ——
January 1 2023 is in
the current period
--Transferred to
phase II
--Transferred to
phase III
--Reversed to phase
II
--Reversed to phase I
Provision made in
the current period -311732.03 -311732.03
Provision recovered
in current period
Provision reversed in
current period
Provision written off
in current period
Other changes
Balance on June 30
2023321794.56321794.56
（2）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of this period
Opening Closing
Categories Recovered or
balance Accrual Write off Others balance
reversed
Provision for bad debt -
made on a collective 633526.59 311732.0 321794.56
basis 3
124Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
-
Total 633526.59 311732.0 321794.56
Remarks on the determination basis of portfolio:
Including significant provision for bad debt recovered or reversed amount:
□ Applicable √ Not Applicable
（3）Pledged notes at the balance sheet date
Unit: RMB
Items Closing balance of pledged notes
Bank acceptance 1927529849.96
Total 1927529849.96
（4）Endorsed or discounted but undue notes at the balance sheet date
Unit: RMB
Closing balance not yet
Items Closing balance derecognized
derecognized
Bank acceptance 20904346.23
Total 20904346.23
Remarks: 1. The Company derecognized the endorsed or discounted bank acceptance and financial company
acceptance. However if any bank acceptance is not recoverable when it is due the company still holds joint liability
on such acceptance.
5. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
Book balance Book balance
Categ bad debt bad debt
ories Amount Prop Amount Accr Carrying Amount Prop Amount Accr Carrying
ortio ued amount ortio ued amount
n propo n propo
rtion rtion
125Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Recei
vables
with
provis
ion 131287 0.19 13128 100.0 464198 0.08 46419 100.0
0.000.00
made 46.08 % 746.08 0% 2.82 % 82.82 0%
on an
indivi
dual
basis
Includ
ing:
Recei
vables
with
provis
ion 672421 99.81 337401 5.02 638681 550420 99.92 276086 5.02 522811
made 3035.73 % 093.48 % 1942.25 4109.60 % 884.03 % 7225.57
on a
collect
ive
basis
Includ
ing:
673734100.03505295.20638681550884100.02807285.10522811
Total
1781.810%839.56%1942.256092.420%866.85%7225.57
Provision made on an individual basis:
Unit: RMB
Closing balance
Debtors Book Provision for bad Accrued proportion
Reasons
balance debts
The credit status of the
5805795.5 customer is abnormal it
Dayou Vinya (Thailand) Co. Ltd 5805795.56 100.00%
6 is expected to be
irrecoverable
The credit status of the
Nanjing Zhixing Electric Vehicle 2921871.9 customer is abnormal it
2921871.93100.00%
Co. Ltd 3 is expected to be
irrecoverable
The credit status of the
Evergrande New Energy Vehicles 1329997.7 customer is abnormal it
1329997.79100.00%
(Tianjin) Co. Ltd 9 is expected to be
irrecoverable
Tianji Automobile (Changsha) The credit status of the
903780.78903780.78100.00%
Group Co. Ltd customer is abnormal it
126Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
is expected to be
irrecoverable
The credit status of the
2167300.0 customer is abnormal it
Others 2167300.02 100.00%
2 is expected to be
irrecoverable
13128746.
Total 13128746.08 -- --
08
Provision made on a collective basis:
Unit: RMB
Closing balance
Items
Book balance Provision for bad debt Accrued proportion
Within 1 year 6712614677.94 335630733.89 5.00%
1 to 2 years 9838383.97 983838.40 10.00%
2 to 3 years 467328.62 140198.59 30.00%
Over 3 years 1292645.20 646322.60 50.00%
Total 6724213035.73 337401093.48 --
Remarks on the determination basis of portfolio:
If the provision for bad debt of accounts receivable is in accordance with the general expected credit loss model
please refer to the disclosure of bad debt provision for other receivables:
□Applicable √Not Applicable
Disclosure by aging
Unit: RMB
Aging Book balance
Within 1 year（including 1 year） 6715455809.58
1 to 2 years 15872541.23
2 to 3 years 2460903.66
Over 3 years 3552527.34
Total 6737341781.81
（2）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Opening Recovered Closing
Categories
balance Accrued or Write off Others balance
reversed
Receivables with
provision made
4641982.828486763.2613128746.08
on an individual
basis
Receivables with
provision made
276086884.0361860299.76546090.31337401093.48
on a collective
basis
Total 280728866.85 70347063.02 546090.31 350529839.56
127Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
（3）Details about accounts receivable actually written off in the current period
Unit: RMB
Item Write off
Small sporadic accounts 546090.31
（4）Other remarks
1. Closing balance of top 5 debtors totaled 3215504200 yuan accounting for 48.13% of the total closing
balance of accounts receivable.
2. Some of the company's accounts receivable are collected by digital and electronic debt vouchers. These
debt vouchers have certain credit liquidity and can be used for discount financing or transfer payment. As of June
30 2023 the company holds a total of 1297506100 yuan of digital and electronic debt vouchers.
6. Advances paid
（1）Advances paid by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 166755326.18 96.93% 111759824.57 94.80%
1 to 2 years 3319469.51 1.93% 3542204.41 3.01%
2 to 3 years 1568716.61 0.91% 1425109.32 1.21%
Over 3 years 404044.90 0.23% 1159868.77 0.98%
Total 172047557.20 -- 117887007.07 --
（2）Top 5 debtors with the largest advances paid balances
Closing balance of top 5 debtors totaled 47772873.47 yuan accounting for 27.77% of the total closing
balance.
7. Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 221023564.86 726641478.35
Total 221023564.86 726641478.35
（1）Other receivables
1）Other receivables categorized by nature
Unit: RMB
Items Closing balance Opening balance
Land compensation accounts
546216590.00
receivable
128Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Tax refund receivable 133037184.08 123916253.13
Guarantee deposits 51502794.89 36247343.32
Others 43808149.00 25467213.32
Total 228348127.97 731847399.77
2）Provision of bad debt
Unit: RMB
Phase I Phase II Phase III
Provision for bad debt 12?month Lifetime expected Lifetime expected credit Subtotal
expected credit credit losses (credit
losses (credit not impaired)
losses impaired)
Balance on January 1
1690955.36927834.882587131.185205921.42
2023
The balance as of
January 1 2023 is in —— —— —— ——
the current period
--Transferred to phase
-476459.45476459.45
II
--Transferred to phase
-716938.18716938.18
III
Provision made in the
1404093.40265562.76448985.542118641.69
current period
Balance on June 30
2618589.31952918.913753054.907324563.11
2023
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
Disclose by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 165194584.06
1 to 2 years 45113175.17
2 to 3 years 3584690.92
Over 3 years 14455677.82
Total 228348127.97
3）Details of the top 5 debtors with largest balances
Unit: RMB
Proportion to Provision for
Nature of Closing the total balance bad debt at the
Items Ages
receivables balance of other end of the
receivables period
Mexico VAT tax Within 2
Tax refund 97567578.97 42.73%
refund receivables year
Domestic export tax Within 1
Tax refund 29764150.13 13.03% refund receivables year
Within 3
US Customs Customs deposit 19871672.58 8.70%
year“Placement of thedisabled in Within 1
Tax refund 5053986.20 2.21%employment” VAT tax year
refund receivables
129Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Shanghai
Yingheng Performance Within 1
3494680.001.53%174734.00
Electronics Co. bond year
Ltd
155752067.8
Total -- -- 68.20% 174734.00
8
4）Other receivables related to Government grants
Unit: RMB
Estimated receipt
Items Government grant Closing balance Ages time amount and
basis
Expected to be fully
received from July
Local finance and VAT tax refund of
to October 2023taxation “Placement of the 5053986.20 Within 1 yeardisabled in employment” based on the tax departments
refund application
form.
8. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industry
No
（1）Categories of inventories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
decline in decline in
value of value of
inventories or inventories or
Items
Book balance provision for Carrying amount Book balance provision for Carrying amount
impairment of impairment of
contract contract
performance performance
costs costs
Raw
1126208615.4348374602.961077834012.471050007307.6959101594.10990905713.59
materials
Work-in-
607381285.941747580.63605633705.31711592586.632028013.70709564572.93
progress
Finished
2398396894.8377295162.972321101731.862696034401.1366515797.402629518603.73
goods
Others 806663.85 806663.85 4886397.61 4886397.61
Total 4132793460.05 127417346.56 4005376113.49 4462520693.06 127645405.20 4334875287.86
（2）Provision for decline in value of inventories and Provision for impairment of contract performance
costs
Unit: RMB
Items Opening Increase in current period Decrease in current period Closing
130Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
balance Reversal or write balance
Accrued Others Others
off
7322036.548374602.9
Raw materials 59101594.10 18049027.66
26
Work-in-
2028013.70108952.38389385.451747580.63
progress
17051961.77295162.9
Finished goods 66515797.40 6272595.81
387
127645405.224482950.127417346.
Total 24711008.92
02856
The determination of the net realizable value of the excess & obsolete inventories of metal materials at the
end of the period is the scrap metal recovery price. The determination of the net realizable value of the excess &
obsolete inventories of electronic components is RMB 0.
9. Other current assets
Unit: RMB
Items Closing balance Opening balance
Deductible input tax 184263698.55 133303058.03
Prepaid Enterprise income tax 36234514.12 22470498.36
Others 361557.19 1251519.66
Total 220859769.86 157025076.05
10. Long-term receivable
（1）Long-term receivable
Unit: RMB
Closing balance Opening balance
Provisi Range of
Provisio
Items Book on for Carrying Book Carrying discount
n for bad
balance bad amount balance amount rate
debt
debt
Employee home 3939553. 3939553. 3712290. 3712290.loan 50 50 00 00
3939553.3939553.3712290.3712290.
Total --
50500000
11. Long-term equity investments
Unit: RMB
Increase/Decrease
Closing
Investm Cash
Adjustm balance
ent dividend
Investm Investm ent in Provisio of
Investee Opening income Changes / Profit Closing
ents ents other n for provisio
s balance recogniz in other declared Others balance
increase decrease compreh impairm n for
ed under equity for
d d ensive ent impairm
equity distribut
income ent
method ion
1. Associates
2. Joint ventures
131Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Guochu
ang
Energy
Internet
Innovati -
507846497995
on 98509.8
5.125.23
Center 9
(Guangd
ong)
Co.Ltd.Chongqi
ng
Tainuo 161304 285432 250000 164847
Machine 24.27 7.80 0.00 52.07
ry Co.Ltd.Ningbo
Jinlifeng
214190512325.265422
Machine
4.04439.47
ry Co.Ltd.Qingdao
Sanhua
Jinlifeng 514656 169460 684117
Machine 8.55 3.80 2.35
ry Co.Ltd.Zhongsh
an
Xuanyi
Pipe 219322 267769. 246099
Manufa 1.72 29 1.01
cturing
Co.Ltd.Xinchan
g
zhejiang
energy
17476266233.8181385
sanhua
0.4374.30
compreh
ensive
energy
co. LTD
324382529675250000352349
Subtotal
04.130.300.0054.43
324382529675250000352349
Total
04.130.300.0054.43
132Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
12. Investment property
（1）Investment property measured by cost method
√ Applicable □ Not Applicable
Unit: RMB
Land use right and
Items Buildings and structures Overseas land Total
ownership
?. Original Carrying amount
1.Opening balance 11995674.89 3273498.90 15269173.79
2.Increase in current period 734003.62 200302.20 934305.82
（1）Acquisition
（2）Transferred in from
inventory\fixed assets\ construction
in progress
（3）Acquisition
（4）Converted difference in
734003.62200302.20934305.82
Foreign Currency Statements
3.Decrease in current period
（1）Disposal
（2）Other transfer out
4.Closing balance 12729678.51 3473801.10 16203479.61
?. Accumulated depreciation and
amortization
1.Opening balance 7064906.82 7064906.82
2. Increase in current period 835310.42 835310.42
（1）Accrual or amortization 403015.67 403015.67
（2）Converted difference in
432294.75432294.75
Foreign Currency Statements
3.Decrease in current period
（1）Disposal
（2）Other transfer out
4.Closing balance 7900217.24 7900217.24
?. Provision for impairment
1.Opening balance
2. Increase in current period
（1）Accrual
3.Decrease in current period
（1）Disposal
（2）Other transfer out
4.Closing balance
?. Carrying amount
1.Closing balance 4829461.27 3473801.10 8303262.37
2.Opening balance 4930768.07 3273498.90 8204266.97
133Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
13. Fixed assets
Unit: RMB
Items Closing balance Opening balance
Fixed assets 6693075353.04 6374896070.41
Total 6693075353.04 6374896070.41
（1）Fixed assets
Unit: RMB
Measurement Office and
Buildings and Machinery and Transportation
Items analysis other Total
structures equipment vehicles
equipment equipment
?. Original
book
value:
1.Opening 3360496386. 5701259308. 135378683.0 255616625.9 9495081290.
42330286.64
balance 32 59 4 8 57
2. Increase
129516306.5677542919.7
in current 512607774.11 9438033.89 3428296.85 22552508.37
35
period
（1）212330535.6236483622.3
9715323.731648853.062980873.299808036.67
Acquisition 1 6
（2）
Transferred in
224546392.2303275746.6
from 63151602.34 6157813.05 214867.25 9205071.67
90
construction in
progress
（3）Business
combination
（4）
Transferred in
137783550.7
from 56649380.46 75730846.21 1631367.78 232556.31 3539400.03
9
investment
property
3. Decrease
in current 1229819.56 80011913.32 356013.43 3308266.38 8432447.84 93338460.53
period
（1）
Disposal or 1229819.56 80011913.32 356013.43 3308266.38 8432447.84 93338460.53
scrap
（2）
Other decrease
4.Closing 3488782873. 6133855169. 144460703.5 269736686.5 1007928574
42450317.11
balance 29 38 0 1 9.79
?.Accumulated
depreciation
1.Opening 617289101.8 2265586904. 141787435.5 3108417016.
54450679.8929302894.64
balance 6 96 4 89
2. Increase
255876680.3345614474.1
in current 70978487.42 5297693.22 1936020.41 13545214.43
69
period
（1）Accrual 64942064.33 228323126.8 4668677.44 1821898.64 11937253.67 311693020.95
134Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
7
(2)Transferred
in from
6036423.0927553553.49629015.78114121.771607960.7633921453.24
investment
property
3. Decrease
in current 60197795.84 9354913.45 2986022.86 8621129.59 79140240.09
period
（1）Disposal
60197795.849354913.452986022.868621129.5979140240.09
or scrap
4.Closing 688267589.2 2461265789. 3374891250.
50393459.6628252892.19146711520.38
balance 8 48 99
?. Provision
for
impairment
1.Opening
11341489.66426713.6111768203.27
balance
2. Increase
in current
period
（1）Accrual
3. Decrease
in current 449057.51 449057.51
period
（1）Disposal
449057.51449057.51
or scrap
4.Closing
10892432.15426713.6111319145.76
balance
?. Carrying
amount
1.Closing 2800515284. 3661696947. 122598452.5 6693075353.
94067243.8414197424.92
balance 01 75 2 04
2.Opening 2743207284. 3424330913. 6374896070.
80928003.1513027392.00113402476.83
balance 46 97 41
（2）Fixed assets leased out through operating leases
Unit: RMB
Item Closing balance
Buildings and structures 12007357.74
（3）Fixed assets with certificate of titles being unsettled
Unit: RMB
Item Carrying amount Reasons for unsettlement
New assets the certificate of title to be
Sitong factory 63597001.77 processed uniformly after the overall
completion
13-15# factory in Meizhu North 145245769.29 New assets the certificate of title to be
135Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
district processed uniformly after the overall
completion
New assets the certificate of title to be
Meizhu North District finished
31255987.05 processed uniformly after the overall
product and class A warehouse
completion
New assets the certificate of title to be
Commercial refrigeration factory
515787316.70 processed uniformly after the overall
(phase I and phase II projects)
completion
New assets the certificate of title to be
Wuhu Sanhua Automatic Control
67314593.81 processed uniformly after the overall
dormitory
completion
New assets the certificate of title to be
Shaoxing Thermal Management
89905266.36 processed uniformly after the overall
Factory Phase III Plant
completion
14. Construction in progress
Unit: RMB
Items Closing balance Opening balance
Construction in progress 2030840443.80 1032505633.51
Total 2030840443.80 1032505633.51
（1）Details of construction in progress
Unit: RMB
Closing balance Opening balance
Items Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Annual
production of
65 million sets
of commercial
refrigeration
and air 259382236.2 259382236.2 224972262.4 224972262.4
conditioning 4 4 2 2
intelligent
control
components
construction
project
Annual
production of
1.5 million sets
of new energy 147253180.7 147253180.7 108269402.4 108269402.4
thermal 7 7 1 1
management
components
project
Annual output
of 11 million
sets of new 201876489.4 201876489.4 139499206.9 139499206.9
energy vehicles 6 6 4 4
high efficiency
heat exchanger
136Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
assembly
project
Annual output
of 14 million
sets cooling
parts of new
72367521.9772367521.9762488698.2562488698.25
energy vehicles
technical
transformation
project
Annual output
of 3 million
sets thermal
management
parts of new 8477446.60 8477446.60 29805708.02 29805708.02
energy vehicles
technical
transformation
project
Annual output
of 11 million
sets of parts
and
95179742.6795179742.6794275393.2494275393.24
components
technical
transformation
project
Annual
production of 3
million sets of
plate heat
exchanger
technical
transformation
project and 2
12552311.9412552311.945808045.045808045.04
million sets of
EXV electronic
expansion
valve
components
technical
transformation
project
Annual
production of 4
million sets of
new energy
vehicles
15327780.7615327780.767109389.237109389.23
technical
transformation
project of heat
pump
components
Annual
production of
225840.24225840.24
7.3 million sets
of new energy
137Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
vehicle thermal
management
system
components
project
Mexico
industrial plant 95960946.45 95960946.45 3725739.80 3725739.80
project
Annual
production of
1.13 million
sets of 46165833.96 46165833.96
controller
components
project
Annual
production of
7.05 million
sets of
microchannel 47759926.10 47759926.10
heat
exchangers
construction
project
Sanhua poland
automotive
parts 126286425.11 126286425.11
production line
project
Annual
production of
12 million sets
of new energy
vehicle
intelligent 165658729.3 165658729.3
thermal 9 9
management
components
technical
transformation
project
Annual output
of 12.5 million
sets of
intelligent
thermal
management 62051301.71 62051301.71
modules for
new energy
vehicles
construction
project
Automotive
component 56965944.24 56965944.24
shift dormitory
Tianjin
50089833.1950089833.19
automotive
138Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
component
factory area
project
567484793.2567484793.2356325947.9356325947.9
Others
4422
2030840443.2030840443.1032505633.1032505633.
Total
80805151
（2）Changes of significant construction in progress in current period
Unit: RMB
Transfe Includi
Other Accum Capitali
rred Accum ng:
amount Comple ulated zation
Increas to fixed ulated capitali
Openin s tion amount rate for
Budge ed in assets Closing investm zed Fund
Items g decreas percent of interest
t current in balance ent to interest source
balance ed in age capitali in
period the budget in
current (%) zed current
current (%) current
period interest period
period period
Annual
producti
on of 65
million
sets of
commer
cial
refrigera
tion and
17802249725938
air 97279 62869
550002262.42236.256.86%
conditio 068.02 094.20
0.0024
ning
intellige
nt
control
compon
ents
construc
tion
project
Annual
producti
on of 1.5
million
sets of
new 76050 10826 14725
8754548561113.95
energy 0000. 9402.4 3180.7
162.81384.45%
thermal 00 1 7
manage
ment
compon
ents
project
Annual 76000 13949 13224 69869 20187 71.32%
139Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
output 0000. 9206.9 6830.8 548.34 6489.4
of 11 00 4 6 6
million
sets of
new
energy
vehicles
high
efficienc
y heat
exchang
er
assembl
y project
Annual
output
of 14
million
sets
cooling
21778
parts of 62488 20193 10314 72367
1500.60.74%
new 698.25 374.26 550.54 521.97
00
energy
vehicles
technical
transfor
mation
project
Annual
output
of 3
million
sets
thermal
manage
20629
ment 29805 66151 27943 84774
0400.91.68%
parts of 708.02 07.48 368.90 46.60
00
new
energy
vehicles
technical
transfor
mation
project
Annual
output
of 11
million
sets of
parts 22860
94275247222381795179
and 0000. 60.96%
393.24017.44668.01742.67
compon 00
ents
technical
transfor
mation
project
140Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Annual
producti
on of 3
million
sets of
plate
heat
exchang
er
technical
transfor
mation
project 19550
58080888262138312552
and 2 0000. 18.32%
45.0409.1942.29311.94
million 00
sets of
EXV
electroni
c
expansio
n valve
compon
ents
technical
transfor
mation
project
Annual
producti
on of 4
million
sets of
new
energy
16125
vehicles 71093 12075 38569 15327
4500.98.71%
technical 89.23 382.68 91.15 780.76
00
transfor
mation
project
of heat
pump
compon
ents
Annual
producti
on of
50.5
million
sets of
78557
high- 20121 20121
0000.20.92%
efficienc 586.67 586.67
00
y
energy-
saving
refrigera
tion and
air-
141Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
conditio
ning
control
compon
ents
Annual
producti
on of 7.3
million
sets of
new
energy 46860
2258422584
vehicle 0000. 89.53%
0.240.24
thermal 00
manage
ment
system
compon
ents
project
Mexico
$397410805
industria 37257 15821 95960 122.11
5600.6869.1
l plant 39.80 662.47 946.45 %
002
project
Annual
producti
on of
1.13
million $2000
4616546165
sets of 0000. 32.98%
833.96833.96
controlle 00
r
compon
ents
project
Annual
producti
on of
7.05
million
sets of
1061
microch 47759 47759
000004.50%
annel 926.10 926.10
0.00
heat
exchang
ers
construc
tion
project
Sanhua
poland
automoti €2100 12628 12628
ve parts 0000. 6425.1 6425.1 77.10%
producti 00 1 1
on Line
Project
Annual 29112 16565 16565 56.90%
142Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
producti 0000. 8729.3 8729.3
on of 12 00 9 9
million
sets of
new
energy
vehicle
intellige
nt
thermal
manage
ment
compon
ents
technical
transfor
mation
project
Annual
output
of 12.5
million
sets of
intellige
nt
thermal 1405
6205162051
manage 80000 4.41%
301.71301.71
ment 0.00
modules
for new
energy
vehicles
construc
tion
project
Automot
ive
20000
compon 56965 56965
0000.28.48%
ent shift 944.24 944.24
00
dormitor
y
Tianjin
automoti
ve
16975
compon 50089 50089
2300.29.51%
ent 833.19 833.19
00
factory
area
project
67617107272855414633
Total 9685.5 16002. 0037.2 55650.
923656
15. Right-of-use assets
Unit: RMB
143Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Items Houses and buildings Vehicle Total
?. Original Carrying
amount
1.Opening balance 416197719.61 5551120.98 421748840.59
2.Increased in current
48499757.51339371.6448839129.15
period
(1) Rent 33568195.20 33568195.20
(2) Effect of Foreign
14931562.31339371.6415270933.95
Currency Translation
3.Decreased in current
1776271.431776271.43
period
（1）Disposal 1776271.43 1776271.43
4.Closing balance 462921205.69 5890492.62 468811698.31
?. Accumulated
amortization
1.Opening balance 135550130.72 1921344.55 137471475.27
2.Increased in current
47425653.41306384.5647732037.97
period
(1) Accrual 45263856.36 188819.36 45452675.72
(2) Converted difference
in Foreign Currency 2161797.05 117565.20 2279362.25
Statements
3. Decreased in
1776271.431776271.43
current period
(1) Disposal 1776271.43 1776271.43
4.Closing balance 181199512.70 2227729.11 183427241.81
?. Provision for
impairment
1.Opening balance
2. Increased in current
period
（1）Accrual
3. Decreased in
current period
（1）Disposal
4.Closing balance
?. Carrying amount
1.Closing balance 281721692.99 3662763.51 285384456.50
2.Opening balance 280647588.89 3629776.43 284277365.32
16. Intangible Assets
（1）Details of intangible assets
Unit: RMB
Overseas land Application Intellectual
Items Land use right Total
ownership software property
?. Original Carrying amount
1.Opening balance 907737839.3
713720608.5583863040.6144529249.8365624940.36
5
2.Increased in current 108306062.55 13819950.91 3400485.00 125526498.4
144Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
period 6
（1）Acquisition 110857398.7
106110527.292294904.152451967.26
0
（2）Internal research
and development
（3）Business
combination
（4）Translation
difference of foreign currency 2195535.26 11525046.76 948517.74 14669099.76
statements
3.Decreased in current
3473801.10532262.934006064.03
period
（1）Disposal 3473801.10 532262.93 4006064.03
1029258273.
4.Closing balance 822026671.10 94209190.42 47397471.90 65624940.36
78
?.Accumulated amortization
176351747.7
1.Opening balance 103834913.72 596533.10 32928912.94 38991387.94
0
2.Increased in current
8666289.0690583.101293820.771368640.4411419333.37
period
（1）Accrual 8431619.06 65409.94 1139707.89 1368640.44 11005377.33
（2) Translationdifference of foreign currency 234670.00 25173.16 154112.88 413956.04
statements
3. Decreased in current
443902.77443902.77
period
（1）Disposal 443902.77 443902.77
187327178.3
4.Closing balance 112501202.78 687116.20 33778830.94 40360028.38
0
?. Provision for impairment
1.Opening balance 4122739.96 4122739.96
2. Increased in current
245572.41245572.41
period
（1）Accrual
（2) Translation difference
245572.41245572.41
of foreign currency statements
3. Decreased in current
period
（1）Disposal
4.Closing balance 4368312.37 4368312.37
?. Carrying amount
837562783.1
1.Closing balance 709525468.32 89153761.85 13618640.96 25264911.98
1
727263351.6
2.Opening balance 609885694.83 79143767.55 11600336.89 26633552.42
9
145Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
17. Goodwill
（1）Original Carrying amount of goodwill
Unit: RMB
Investee or Increased in current period Decreased in current period
events Opening Due to Closing
resulting in balance business Disposal balance
goodwill combination
R-Squared
31959091.6031959091.60
Puckett Inc.Zhejiang
Sanhua plate
Exchange
5839387.565839387.56
Technology
Co. Ltd-asset
group
Zhejiang
Sanhua plate
Exchange
1752443.051752443.05
Technology
Co. Ltd-non
asset group
Total 39550922.21 39550922.21
（2）Provision for goodwill impairment
Unit: RMB
Investee or Increased in current period Decreased in current period
events Opening Closing
Provision
resulting in balance Disposal balance
made
goodwill
R-Squared 31959091.6 31959091.6
Puckett Inc. 0 0
Zhejiang
Sanhua plate
Exchange
604951.92604951.92
Technology
Co. Ltd-non
asset group
31959091.632564043.5
Total 604951.92
02
18. Long-term prepayments
Unit: RMB
Opening Increased in
Items Amortization Other decreases Closing balance
balance current period
Rental housing
construction
45670895.5327445071.305326583.2867789383.55
and
transformation
146Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
expenditure
Compensated
use fee for 4878409.32 4878409.32
emission rights
Others 5607972.31 60451.74 1068981.86 4599442.19
Total 56157277.16 27505523.04 11273974.46 72388825.74
19. Deferred tax assets / deferred tax liabilities
（1）Deferred tax assets before offset
Unit: RMB
Closing balance Opening balance
Items Deductible temporary Deferred tax Deductible temporary Deferred tax
difference assets difference assets
Provision for bad
283245689.5458828508.89195934543.9239038062.56
debt
Provision for
89822313.6816538444.5168011211.8211412992.83
inventory write-down
Unrealized profit
from internal 326641776.89 21306703.26 332697154.63 32810835.04
transactions
Deductible losses 188714802.13 28435572.13 380148112.81 58645816.34
Deferred income
248371586.8837255737.95253297140.8642600561.83
(government grants)
Provision for fixed
8571816.591285772.499930453.591533546.13
assets impairments
Provision for
intangible assets 4368312.37 917345.60
impairments
Lease liabilities 119600619.20 21230371.49
Share-based payment
expenses (accounting 37540078.55 5754329.79 71597367.25 11139948.95
standards)
Share-based payment
expenses (difference
54802475.008437172.2646031824.127065126.85
between tax and
accounting standards)
Convertible corporate
bonds (difference
125548038.6418832205.80108793134.6716318970.20
between accounting
and tax costs)
Floating loss of
derivative 3152880.00 472932.00 3949625.00 592813.75
instruments
Total 1490380389.47 219295096.17 1470390568.67 221158674.48
（2）Deferred tax liabilities before offset
Unit: RMB
Items Closing balance Opening balance
147Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Taxable temporary Deferred tax Taxable temporary Deferred tax
difference liabilities difference liabilities
Appreciation of
assets appraisal of the
business
10928486.901639273.0411345644.731701846.71
combinations not
under common
control
Accelerated
depreciation of 1771834875.15 266010284.22 1688493838.12 263941331.71
equipment
Floating gain on
1040000.00156000.005585129.251048679.39
derivatives
Accrued interest of
176251109.2127432340.83142322188.5322066063.56
certificate of deposit
Right of use assets 125430255.46 21931973.93
Total 2085484726.72 317169872.02 1847746800.63 288757921.37
（3）Deferred tax assets or liabilities after offset shown on a net offsetting basis
Unit: RMB
Deferred tax assets Deferred tax assets
Closing balance of Opening balance of
and liabilities offset and liabilities offset
deferred tax assets deferred tax assets
Items amount at the end amount at the
or liabilities after or liabilities after
of the balance beginning of the
offset offset
amount balance amount
Deferred tax assets 142832457.28 76462638.89 221158674.48
Deferred tax
142832457.28174337414.74288757921.37
liabilities
（4）Details of unrecognized deferred tax assets
Unit: RMB
Items Closing balance Opening balance
Provision for bad debt 74930507.69 90633770.94
Provision for inventory write-down 37595032.88 59634193.38
Deductible losses of subsidiaries 186247490.60 137111606.69
Investment losses recognized by the equity
17634954.4314838204.13
method
Floating loss on derivatives 122282650.40 44721748.81
Deferred income-government grants 1396373.19 747574.78
Total 440087009.19 347687098.73
（5）Deductible losses of unrecognized deferred tax assets will expire in the following years
Unit: RMB
Maturity years Closing balance Opening balance Remarks
Year 2025 1173108.75 1176424.56
Year 2026 521923.98 673774.12
148Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Year 2027 19167919.77 20123335.62
Year 2028 51643721.67 10478078.42
Year 2029 16716170.44 7488066.67
Year 2030 12549643.88 16606149.99
Year 2031 69321405.03 66879893.60
Year 2032 3108373.33 13685883.71
Year 2033 12045223.75
Total 186247490.60 137111606.69
20. Other non-current assets
Unit: RMB
Closing balance Opening balance
Provision Provision
Items Book Carrying Carrying
for Book balance for
balance amount amount
impairment impairment
Advanced
payment for
404010641.404010641.8457305626.5457305626.5
non-current
89999
assets
purchasing
404010641.404010641.8457305626.5457305626.5
Total
89999
21. Short-term borrowings
（1）Categories of short-term borrowings
Unit: RMB
Items Closing balance Opening balance
Credit borrowings 100000000.00
Overseas loan under domestic
1140533100.00943525006.00
guarantee
Bill discount financing 99642500.00
Factoring financing 149714725.37
Pledge and guaranteed loan 220000.00
Accrued interest 1404963.73 981088.21
Total 1141938063.73 1294083319.58
22. Trading financial liabilities
Unit: RMB
Items Closing balance Opening balance
Including:
149Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Financial liabilities designated as
3500000.003500000.00
at fair value through profit or loss
Including:
Payable of contingent
consideration in business 3500000.00 3500000.00
combination
Total 3500000.00 3500000.00
23. Derivative financial liabilities
Unit: RMB
Items Closing balance Opening balance
Exchange rate derivative 126114386.44 44709998.81
Futures derivative 3162480.00 461375.00
Total 129276866.44 45171373.81
24. Notes payable
Unit: RMB
Categories Closing balance Opening balance
Bank acceptance 2755748552.44 2580274767.64
Total 2755748552.44 2580274767.64
25. Accounts payable
（1）Details of accounts payable
Unit: RMB
Items Closing balance Opening balance
Within 1 year 4134426482.60 3851682948.05
1 to 2 years 42072015.21 18716087.91
2 to 3 years 3798306.72 7655237.97
Over 3 years 6321581.78 6549096.23
Total 4186618386.31 3884603370.16
26. Contract liabilities
Unit: RMB
Items Closing balance Opening balance
Advance payment for sales 86674142.26 57955080.60
Total 86674142.26 57955080.60
27. Employee benefits payable
（1）Details of employee benefits payable
Unit: RMB
Opening Increased in Decreased in Closing
Items
balance current period current period balance
?. Short-term employee benefits 464664017.26 1603494608.20 1686512218.80 381646406.66
150Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
?. Post-employment benefits -
6840467.1150192849.4850218860.176814456.42
defined contribution plan
?. Termination benefits 3652944.78 1540546.34 2112398.44
Total 475157429.15 1653687457.68 1738271625.31 390573261.52
（2）Details of Short-term employee benefits
Unit: RMB
Increased in current Decreased in current
Items Opening balance Closing balance
period period
1. Wage bonus
allowances and 426154617.00 1195430365.73 1302842543.34 318742439.39
subsidy
2. Employee welfare
522798.2357552930.9757315364.30760364.90
fund
3. Social insurance
12990659.8882606713.9775518453.1320078920.72
premium
Including:
3780914.4928312117.9027946795.574146236.82
Medicare premium
Occupational injuries 265634.67 1981473.48 1723723.83 523384.32
premium
Overseas social
8944110.7252313122.5945847933.7315409299.58
security contributions
4. Housing provident
1329442.4031570705.3531926220.95973926.80
fund
5. Trade union fund
and employee 1133382.46 9776244.65 8844515.69 2065111.42
education fund
Dispatching
17315817.31217541947.53210065121.3924792643.45
remuneration
Cash stock
5217299.989015700.0014232999.98
appreciation option
Total 464664017.26 1603494608.20 1686512218.80 381646406.66
（3）Details of defined contribution plan
Unit: RMB
Opening Increased in current Decreased in current Closing
Items
balance period period balance
1. Basic endowment insurance
6609221.1948557865.0948585247.566581838.72
premium
2. Unemployment insurance
231245.921634984.391633612.61232617.70
premium
Total 6840467.11 50192849.48 50218860.17 6814456.42
28. Taxes and rates payable
Unit: RMB
Items Closing balance Opening balance
Enterprise income tax 57811356.01 71995026.46
VAT 26997605.32 18411585.20
151Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Urban maintenance and
3797883.074291676.87
construction tax
Education surcharge 2065827.39 2043785.75
Local education surcharge 1172096.57 1362523.90
Housing property tax 11391713.20 18812611.09
Land use tax 6516939.06 12197167.13
Local foundation for water works 126322.01 497420.79
Individual income tax 4095075.96 9417459.50
Overseas tax 68355475.27 46713362.21
Others 4981775.91 5046940.26
Total 187312069.77 190789559.16
29. Other payables
Unit: RMB
Item Closing balance Opening balance
Other payables 265496861.29 354255114.06
Total 265496861.29 354255114.06
（1）Other payables
1）Other payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Restricted shares repo obligations 120194060.00 214659660.00
Compensation for product quality
9913165.1415270978.03
loss
Guarantee deposit 21484778.08 13673464.47
Rent and property fee 3349917.37 4859929.85
Collection of talent awards 4972661.00 4592661.00
Shareholding transfer payment 3500000.00
Loan 11837146.85
Accrued expenses 56352103.98 52914800.82
Others 37393028.87 44783619.89
Total 265496861.29 354255114.06
30. Non-current liabilities due within one year
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 1640000000.00 500000000.00
Accrued interest 1492691.27 465277.78
Lease liabilities 77227591.30 67661063.89
Total 1718720282.57 568126341.67
31. Other current liabilities
Unit: RMB
Items Closing balance Opening balance
152Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Output tax to be written off 2007578.03
Total 2007578.03
32. Long-term borrowings
（1）Categories of long-term borrowings
Unit: RMB
Items Closing balance Opening balance
Guaranteed borrowings 660000000.00 1800000000.00
Accrued interest 544808.74 1574166.67
Total 660544808.74 1801574166.67
33. Bonds payable
（1）Bonds payable
Unit: RMB
Items Closing balance Opening balance
Sanhua Convertible bonds 2801454320.48 2776763361.83
Total 2801454320.48 2776763361.83
（2）Changes of bonds payable（does not include preferred shares perpetual bonds and other financialinstruments classified as financial liabilities）
Unit: RMB
Bon Curre Amortizatio Curren Conversion
Par Issuanc Openin Accrued Current Ending
d Releas Bond nt n in t from shares to
valu e g interest at interest balanc
nam e date term issua discount or repay equity
e amount balance par value payable e
e nce premium ment instruments
Sanh
ua
Con 30000 27767 2801
100. Jun 6 6500000 61098047. - 11993
verti 00000. 63361. 45432
00 2021 years .00 15 30913523.70 564.80
ble 00 83 0.48
bond
s
30000277672801
650000061098047.-11993
Total -- -- -- 00000. 63361. 45432.001530913523.70564.80
00830.48
（3）Explanation of conditions and time of share conversion for convertible bonds
With the approval of China Securities Regulatory Commission in document zjxk [2021] No. 168 the company
publicly issued 30 million convertible corporate bonds (hereinafter referred to as Sanhua convertible bonds) in
June 2021 with a face value of 100 yuan each and a total issuance amount of 300 million yuan.The start and end date of Sanhua convertible bonds is from December 7 2021 to May 31 2027 and the initial
conversion price is 21.55 yuan / share. 72307 shares were transferred in the prior period and 1551803 in the
current period for a total of 1624110 shares.
153Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
34. Leased liabilities
Unit: RMB
Items Closing balance Opening balance
Leased liabilities 282040080.27 269689545.98
Less：Leased liabilities due within 1
-77227591.30-67661063.89
year
Total 204812488.97 202028482.09
35. Long-term payables
Unit: RMB
Items Closing balance Opening balance
Long-term payables 63262764.23 4831202.13
Total 63262764.23 4831202.13
（1）Long-term payables listed by nature
Unit: RMB
Items Closing balance Opening balance
Energy fees payable 50257642.96
Compensation for product quality
7948380.00
losses
Stock appreciation rights deposit 5056741.27 4831202.13
36. Long-term employee benefits payable
Unit: RMB
Items Closing balance Opening balance
Long term employee rights
36945945.75
protection fund
Total 36945945.75
37. Deferred income
Unit: RMB
Opening Increased in current Decreased in Closing Reasons for
Items
balance period current period balance balance
Government Related to
254044715.6411052900.0015329655.57249767960.07
grants assets
Total 254044715.64 11052900.00 15329655.57 249767960.07 --
38. Other non-current liabilities
Unit: RMB
Items Closing balance Opening balance
Engineering agent construction
23729805.2523729805.25
fund
Long-term employee rights 34260376.62
154Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
protection payment
Total 23729805.25 57990181.87
39. Share capital
Unit: RMB
Changed amount of current period（+/-）
Issue
Reserve
Opening balance of Bonus Closing balance
transferred Others Subtotal
new shares
to shares
shares
Total
3590869465.001371403.001371403.003592240868.00
shares
Other remarks:
In the current period 1551803 shares were increased due to the conversion of "Sanhua convertible bonds"
and 180400 shares were reduced due to the repurchase and cancellation of restricted shares.
40. Other equity instruments
(1) Basic information of preferred shares perpetual bonds and other financial instruments issued at the end
of the period
(2) Statement of changes in preferred shares perpetual bonds and other financial instruments issued at the
end of the period
Unit: RMB
Financial Increased in current Decreased in current
Opening balance Closing balance
instruments period period
issued Qty Book value Qty Book value Qty Book value Qty Book value
Convertible 40954497 4472830.4 2965701 405072140.
29984457327440
bonds 0.41 0 7 01
409544974472830.42965701405072140.
Total 29984457 327440
0.410701
With the approval of the CSRC in document zjxk [2021] No. 168 the company publicly issued 30 million
convertible corporate bonds in June 2021 each with par value of 100 RMB with a total issuance amount of 300
million RMB. The initial classification of the convertible corporate bonds as equity instruments is 409766556.24
RMB. In this period due to convertible corporate bonds converted into stocks equity instruments decreased by
4472830.40 RMB.
41. Capital reserve
Unit: RMB
Increased in current Decreased in
Items Opening balance Closing balance
period current period
Capital premium
（Share 81960309.01 143642955.40 225603264.41premium）
Other capital 200642386.97 -55033367.28 1392360.00 144216659.69
155Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
reserve
Total 282602695.98 88609588.12 1392360.00 369819924.10
42. Treasury shares
Unit: RMB
Increased in current Decreased in
Items Opening balance Closing balance
period current period
Restricted shares 214659660.00 96038360.00 118621300.00
Repo shares 115363315.53 115363315.53
Total 330022975.53 96038360.00 233984615.53
43. Other comprehensive income (OCI)
Unit: RMB
Changed amount of the current period
Less:
Current OCI Less: OCI
Attributable Attributable
period carried carried Less:
to to
Opening cumulat forwar forward incom Closing
Items the parent Non-
balance ive d transferre e tax balance
Company controlling
before transfer d to expen
after interest
income red to undistribu se
tax after tax
tax profit ted profit
or loss
Items to be
reclassified -
94145944.85602
subsequentl 8543048.3
13895.80
y to profit 3
or loss
-
Converted 94145944. 85602
8543048.3
difference 13 895.80
3
in Foreign
Other
comprehen -
94145944.85602
sive 8543048.3
13895.80
income in 3
total
The translation differences of foreign currency statements belong to the parent company and have no impact on
corporate income tax.
44. Surplus reserve
Unit: RMB
Opening Increased in current Decreased in current Closing
Items
balance period period balance
Statutory surplus
837028002.43837028002.43
reserve
Discretionary surplus
8681137.208681137.20
reserve
156Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Reserve fund 17813919.38 17813919.38
Total 863523059.01 863523059.01
45. Undistributed profit
Unit: RMB
Items Current period Previous period
Balance before adjustment at the end of the
8133336242.886615689606.07
previous period
Balance after adjustment at the end of the
8133336242.88
previous period
Add: Net profit attributable to shareholders
1394760848.852573344179.92
of the parent Company for current year
Less: Appropriation of statutory surplus
161738529.31
reserve
Payable dividends on ordinary shares 716972510.40 893959013.80
Closing balance 8811124581.33 8133336242.88
46. Operating revenue and Operating cost
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 12098477558.91 8883027725.42 9759983794.33 7315858292.73
Other operations 430443066.68 412587356.33 399969201.19 386489415.21
Total 12528920625.59 9295615081.75 10159952995.52 7702347707.94
47. Taxes and surcharges
Unit: RMB
Items Current period cumulative Preceding period comparative
Urban maintenance and construction
19076010.0814118529.65
tax
Education surcharge 9549962.48 7275685.11
Housing property tax 13259614.90 10682933.54
Land use tax -2555201.21 1342126.29
Stamp duty 9273589.74 3437021.16
Local education surcharge 6366641.58 4850456.76
Local foundation for water works 615607.60 507592.79
Others 3791190.15 1263675.09
Total 59377415.32 43478020.39
48. Selling expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 144826488.29 131724833.74
157Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Warehousing freight and
45966149.4432810085.05
miscellaneous charges
Entertainment expense 23340048.05 15770497.66
Travel expense 15714428.65 8570995.46
Market maintenance fee 24713506.79 4799215.10
Advertising expense 11667636.92 11067900.52
Others 10949306.65 15087642.59
Total 277177564.79 219831170.12
49. Administrative expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 375657341.88 299492155.36
Share-based payment
33770669.9514034920.50
remuneration
Depreciation and amortization
69142975.3143663581.82
expense
Office expense 76921701.21 54516043.03
Intermediary organ expense 28816004.69 24628138.08
Entertainment expense 10229586.21 7065836.80
Vehicle expense 6229475.81 4892943.15
Sporadic renovation expense in the
4904430.902953281.75
park
Others 14184388.69 17210678.64
Total 619856574.65 468457579.13
50. R&D expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Labor cost 336153051.01 240163086.77
Direct input expense 176171267.76 167084372.30
Depreciation and amortization
20543216.5619284261.30
expense
Mold manufacturing expense 29986237.50 29526485.35
Royalties 4486936.80 3108071.99
Outsourcing R&D expense 784296.40 2289971.70
Others 12144626.01 17462381.90
Total 580269632.04 478918631.31
51. Financial expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Interest expense 126688323.68 111508677.30
Including: bond payable interest 67598047.15 65470705.84
Interest on lease
795945.00681129.80
liabilities
Interest income -87661462.57 -99255925.36
Exchange gains or losses -194192937.27 -100650468.17
Others 3505706.15 3170276.92
158Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Total -151660370.01 -85227439.31
52. Other income
Unit: RMB
Source of the other income Current period cumulative Preceding period comparative
Government subsidies related to
15329655.5710325749.85
assets
Government subsidies related to
45391151.8645626781.55
revenue
Handling fees for withholding
2096068.101442214.20
individual income tax
Total 62816875.53 57394745.60
53. Investment income
Unit: RMB
Items Current period cumulative Preceding period comparative
Investment income from long-term
5296750.306300850.84
equity investments under equity method
Gains and losses on bank financial
86531.503321714.32
products
Gains and losses on exchange rate
-53498269.4229992896.35
derivatives
Gains and losses on futures derivatives 9338561.14 9372489.05
Gains and losses on derecognition of
-8174613.92-1716468.88
financial assets
Other 808967.09
Total -46142073.31 47271481.68
54. Gains or losses on changes in fair value
Unit: RMB
Items Current period cumulative Preceding period comparative
Floating income of bank financing
388505.61-1143374.74
products
Floating income of futures
-4993318.34-18884225.18
derivatives
Floating income of foreign
-83834712.30-94949012.07
exchange derivatives
Floating income of option
-375000.00
derivatives
Total -88814525.03 -114976611.99
55. Credit impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
Provision for bad debt -72153972.68 -71124663.90
Total -72153972.68 -71124663.90
159Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
56. Assets impairment loss
Unit: RMB
Items Current period cumulative Preceding period comparative
?. Inventory write-down loss and
contract performance cost -24318451.98 -11922725.03
impairment loss
XI. Goodwill impairment loss -604951.92
Total -24923403.90 -11922725.03
57. Gains on asset disposal
Unit: RMB
Items Current period cumulative Preceding period comparative
Gains on disposal of assets -406527.50 -525838.34
58. Non-operating revenue
Unit: RMB
Current period Preceding period Amount recorded into the current non-
Items
cumulative comparative recurring profit and loss
Exempted payment 2349197.54 1104324.28 2349197.54
Compensation and
1610099.341620977.491610099.34
penalty income
Gains from retirement of
152173.06983385.08152173.06
fixed assets
Others 452881.99 400907.18 452881.99
Total 4564351.93 4109594.03 4564351.93
59. Non-operating expenditures
Unit: RMB
Current period Preceding period Amount included in non-
Items
cumulative comparative recurring profit or loss
Losses on retirement of
2809729.962617627.822809729.96
fixed assets
Litigation for damages 1767511.58 165164.19 1767511.58
Donation expenditures 106988.95 128378.69 106988.95
Others 576508.42 38084.72 576508.42
Total 5260738.91 2949255.42 5260738.91
60. Income tax expenses
（1）Income tax expenses
Unit: RMB
Items Current period cumulative Preceding period comparative
Current period income tax
231976676.94200318842.19
expenses
Deferred income tax expenses 31493520.51 24269955.44
Total 263470197.45 224588797.63
160Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
（2）Reconciliation of accounting profit to income tax expenses
Unit: RMB
Items Current period cumulative
Income before tax 1677964713.18
Income tax expense calculated at the applicable tax rate 277285173.57
Adjustment of preliminary income tax expense
10518549.10
settlement and payment
Plus deduction of R&D expenses -57372248.40
Others 33038723.17
Income tax expenses 263470197.45
61. Other comprehensive income
Please refer to the notes of balance sheet items and other comprehensive income for details.
62. Notes to items of the consolidated cash flow statement
（1）Other cash receipts related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Government grants 41527261.26 71493052.09
Interest income 54965021.52 46515534.24
Rental income 5521293.13 5622360.24
Guarantee deposit 7811313.61 29563371.91
Other 5270609.75
Total 115095499.27 153194318.48
（2）Other cash payments related to operating activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Guarantee deposit 15255451.57
Net change in restricted funds 2046000.00 5315140.43
Expense payments for the period 368383438.30 397375056.65
Total 385684889.87 402690197.08
（3）Other cash receipts related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Redemption of bank financing
440000000.00646640000.00
products
Net change in restricted funds 14311380.20
Total 454311380.20 646640000.00
161Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
（4）Other cash payments related to investing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Subscription of large certificates of
20000000.00784775000.00
deposit
Net change in restricted funds 1700028.28 26519507.40
Loss on exchange rate derivatives
53498269.42
instrument settlement
Total 75198297.70 811294507.40
（5）Other cash receipts related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Net change in restricted funds 27789205.90
Borrowing capital 11837146.85
Accounts receivable factoring
149041182.61
financing
Total 39626352.75 149041182.61
（6）Other cash payments related to financing activities
Unit: RMB
Items Current period cumulative Preceding period comparative
Repo shares (include Restricted
77021741.42
stock) expenses
Rental expenses 45508985.35 28835570.33
Net change in restricted funds 22989492.00
Other 167621.82
Total 68498477.35 106024933.57
63. Supplement information to the cash flow statement
（1）Supplement information to the cash flow statement
Unit: RMB
Supplement information Current period cumulative Preceding period comparative
1. Reconciliation of net profit to
----
cash flow from operating activities:
Net profit 1414494515.73 1014835254.94
Add: Provision for assets
97077376.5883047388.93
impairment loss
Depreciation of fixed assets
oil and gas assets productive 312096036.62 283016679.51
biological assets
Amortization of right-of-use
45452675.7227459958.12
assets
Amortization of intangible
11005377.3313614220.13
assets
Amortization of Long-term
11273974.461290270.02
prepayments
162Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Loss on disposal of
fixed assets intangible assets and 406527.50 525838.34
other long-term assets (Less: gains)
Loss on retirement of
2657556.901634242.74
fixed assets (Less: gains)
Losses on changes in fair
88814525.03114976611.99
value (Less: gains)
Financial expenses (Less:
94787827.6358906550.50
gains)
Investment losses (Less: gains) 38728801.02 -48987950.56
Decrease of deferred tax
144696035.59-12561892.68
assets (Less: increase)
Increase of deferred tax
-114420506.6336831848.12
liabilities (Less: decrease)
Decrease of inventories (Less:
305426294.80-271165971.52
increase)
Decrease of operating
-1460686740.42-1280367182.45
receivables (Less: increase)
Increase of operating
672088278.73720370012.96
payables (Less: decrease)
Others 54775037.02 17587250.07
Net cash flows from operating
1718673593.61761013129.16
activities
2. Significant investing and
financing activities not related to -- --
cash receipts and payments:
Conversion of debt into capital
Convertible bonds due within
one year
Fixed assets leased in under
finance leases
3. Net changes in cash and cash
----
equivalents:
Cash at the end of the period 2050600180.32 1920432523.08
Less: Cash at the beginning of
2050328601.772690002225.09
the period
Add: Cash equivalents at the
end of the period
Less: Cash equivalents at the
beginning of the period
Net increase of cash and cash
271578.55-769569702.01
equivalents
（2）Composition of cash and cash equivalents
Unit: RMB
Items Closing balance Opening balance
? .Cash 2050600180.32 2050328601.77
Including: Cash on hand 189169.27 329823.40
Cash in bank that can be
2035406952.372049996724.25
readily drawn on demand
Other monetary funds that can 15004058.68 2054.12
163Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
be readily for payment
?. Cash and cash equivalents at end of
2050600180.322050328601.77
year
Other remarks:
On June 30 2023，monetary funds include RMB 3454046841.71 of principal and interest of CDS and
time deposits RMB 2046000.00 of frozen bank deposits RMB 42284972.76 of margin deposits and RMB
27786611.54 of futures contract deposits totals RMB 3526165274.89. Such monetary funds do not belong to
cash and cash equivalents.
64. Assets with restriction on ownership or use rights
Unit: RMB
Carrying amount at the end of the
Items Cause of restriction
period
Cash and Bank Balances 71979671.11 Guarantee deposit
Cash and Bank Balances 213176666.67 Pledge financing
Cash and Bank Balances 2046000.00 Judicial restrictions
Notes receivable 1927529849.96 Pledge financing
Total 2214732187.74 --
65. Monetary items in foreign currencies
（1）Monetary items in foreign currencies
Unit: RMB
Closing balance in foreign Exchange rate RMB equivalent
Items
currencies
Cash and Bank Balances -- --
Including: USD 61895096.90 7.2258 447241591.20
EUR 37234552.24 7.8771 293300291.45
Other currencies 11454677000.82 70442765.85
Accounts receivable -- --
Including: USD 237084195.59 7.2258 1713122980.50
EUR 68192671.16 7.8771 537160490.00
Other currencies 2015500203.56 99014376.26
Other receivables -- --
Including: USD 3763106.82 7.2258 27191457.28
EUR 149857.43 7.8771 1180441.96
Other currencies 2862116329.26 110810806.47
Long-term receivable
EUR 85000.00 7.8771 669553.50
Short-term borrowings
Including: USD 48000000.00 7.2258 346838400.00
EUR 87000000.00 7.8771 685307700.00
Derivative financial
liabilities
USD 17453345.85 7.2258 126114386.44
Accounts payable
164Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Including: USD 21565554.85 7.2258 155828386.25
EUR 11464436.04 7.8771 90306509.13
Other currencies 29726621056.68 53166041.89
Other payable
Including: USD 3193214.33 7.2258 23073528.08
EUR 4436520.06 7.8771 34946912.16
Other currencies 3491150360.11 13298018.69
Non-current liabilities due
within one year
USD 10318158.87 7.2258 74556952.36
Lease liabilities
USD 6777469.03 7.2258 48972635.72
Long-term payable
Including: USD 6466009.35 7.2258 46722090.36
EUR 325873.29 7.8771 2566936.49
Other currencies 2921402.00 255096.23
（2）Notes on overseas operating entities including for the significant overseas operating entities its main
operating locations reporting currency and the basis for selection should be disclosed and the reason for
changes in reporting currency should also be disclosed.√ Applicable □ Not Applicable
The Company has several overseas subsidiaries locate in the United States Europe Japan Poland Mexico
Vietnam and other countries where US dollars Euro Japanese yen Polish zloty Mexican pesos Vietnamese
dong etc. are used as the standard reporting currency.
66. Government grants
（1）Details
1) Government grants related to assets
Unit: RMB
Items Openin Increase Amorti Closing Current
g d in zation balance amortiza
balance current in the of tion
of period current deferred financial
deferred period income reporting
income items
Other
Grant for innovation ability construction project of 18750 31249 15625
income
National Enterprise Technology Center 00.24 9.98 00.26
Grant for construction project of 25 million sets of new Other
68000.68000.
energy-saving and environmental protection variable income
3636
frequency air conditioning expansion valve
Intelligent factory technological transformation project Other
262492499923750
based on the Internet of things technology income
99.969.7600.20
Other
Annual production of 3 million self-circulating 519750 49500. 470250
income
superconducting plates technology project .00 00 .00
165Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Grant for comprehensive upgrading and technical Other
414274142737284
transformation project of intelligent manufacturing of income
50.044.9875.06
refrigeration components
Grant for technical transformation project of 30 million Other
479994000043999
sets of high efficiency energy saving refrigeration and income
99.960.0299.94
air conditioning control components
Grant for technical transformation project for the high Other
efficiency and energy saving refrigeration and air 95919 60580 89861 income
conditioning control components with an annual output 12.50 5.00 07.50
of 30 million sets
Grant for an annual output of 50.5 million sets of Other
technical transformation of high-efficiency and energy- 18556 99780 17558 income
saving refrigeration and air conditioning control 258.30 0.00 458.30
components
Grant for an annual production of 1 million sets of Other
700003499966500
efficient and energy-saving plate heat exchangers income
00.009.9800.02
project
Grant for technical transformation project for the high Other
efficiency and energy saving refrigeration and air 52897 44080. 52456 income
conditioning control components with an annual output 00.00 83 19.17
of 20 million sets
Grant for project of an intelligent factory with an Other
annual output of 35 million sets of commercial 39899 20461 37853 income
refrigeration and air conditioning intelligent control 92.50 5.00 77.50
components 1
Grant for project of an intelligent factory with an Other
annual output of 35 million sets of commercial 57632 57632 income
refrigeration and air conditioning intelligent control 00.00 00.00
components 2
Other
Special fund grant for multistory factory buildings of 45512 19071 43605
income
small and medium-sized enterprises 94.18 1.62 82.56
Technical transformation project for the production Other
line of energy-saving residential air-conditioning 243269 10197. 233071 income
control components with an annual output of 50 .48 99 .49
million sets
Other
Industrial transfer projects and single equipment 41476. 1911.2 39564.income
investment grant 01 3 78
Other
25333310619.242713
Four-way reversing valve optimization project income.5288.64
Comprehensive award and compensation for Other
1399858593.13413
investment in technological transformation of income
98.760405.72
industrial enterprises
Other
1549262834.14864
New industrialization fund subsidy income
37.196602.53
Other
1815778228.17375
Grant for technical renovation equipment income
86.709457.76
Other
755993169172430
Grant for affordable rental housing income
41.676.8024.87
166Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Other
Industrial transformation and upgrading technological 10079 10121 906772
income
transformation and industrial investment 84.67 2.44 .23
Other
Grant for an annual output of 2 million sets of high- 747574 25797 489600
income
efficiency energy-saving inverter controllers .80 3.82 .98
Other
Grant for technical transformation project of newly 758000 37900 379000
income
increased 800000 sets of heat exchanger per year .00 0.00 .00
Other
Technical transformation project of newly increased 33712 42140 29498
income
100000 large heat exchangers per year 40.00 5.00 35.00
Other
Technical transformation project of large heat 46861 33472 43514
income
exchanger with annual output of 700000 sets 50.00 5.00 25.00
Other
Grant for the technical transformation project with an 35846 89616 26884
income
annual output of 2 million sets of air-conditioning parts 40.08 0.00 80.08
Grant for 1 million sets of air-conditioning thermal Other
366144576732037
sensor technology transformation of new energy income
00.294.9625.33
vehicle
Grant for an annual output of 7.3 million sets of new Other
323042019030285
energy vehicle thermal management system income
000.0000.00000.00
components technical transformation
Other
Grant for the annual production of 11.5 million sets of 80832 44455 76386
income
new energy auto parts project 202.99 30.23 672.76
Grant for an annual output of 11 million sets of new Other
460591161144898
energy vehicles high efficiency heat exchanger income
908.4774.18734.29
assembly project
Other
Comprehensive investment award for technological 22694 17894 20905
income
transformation of industrial enterprises in Wuhu City 72.00 4.00 28.00
Other
Policy grant for Wuhu City's strong industrial base and 525000 45000. 480000
income
manufacturing strong province .00 00 .00
Other
Grant for equipment of new technological 10101 65889. 944294
income
transformation for industrialization 83.26 04 .22
Grant for promoting new industrialization and support 367536 20601. 346935 Other
technological transformation of enterprises .86 86 .00 income
Grant for technological transformation investment in 22765 118774 21577 Other
manufacturing enterprises 20.85 .98 45.87 income
Total 254044 11052 15329 249767
715.64900.00655.57960.07
2) Government grants related to income and used to compensate relevant cost expenses or losses
Unit: RMB
Items Current period cumulative Financial Report
Items
VAT refund on software products in excess of tax burden 9066856.84 Other incomeVAT refund of “Placement of employment for people with Other income
6754170.00disabilities”
Tax refund for attracting employment for key groups 1093000.00 Other income
Award of enterprise R&D investment 7183275.10 Other income
Talent introduction and job stabilization subsidies 4546903.04 Other income
167Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Subsidy for numerical construction 2984400.00 Other income
Rewards for major technological innovation 2850100.00 Other income
Business economic rewards in 2022 1585000.00 Other income
Rewards for technical renovation 1547300.00 Other income
Reward for heat exchange technology innovation team of Other income
1300000.00
Xianji
Open economy incentive fund 1131013.00 Other income
Subsidy for manufacturing industry in 2023 1000000.00 Other income
Rewards for national technological innovation Other income
1000000.00
demonstration enterprises
Other 3349133.88 Other income
Subtotal 45391151.86 Other income
(2)The amount of government grant included in the profit or loss statement in the current period
Items Current period cumulative
Related to assets 15329655.57
Related to income 45391151.86
Total 60720807.43
The government subsidies included in the current profit and loss are presented in the "other income" item.Ⅷ. Interest in other entities
1. Interest in subsidiaries
（1）Composition of enterprise group
Main Holding proportion
Subsidy Place of Business Acquisition
operating
name registration nature Direct Indirect method
place
Zhejiang
Sanhua Business
Climate and combination
Refrigeration
Appliance Zhejiang Zhejiang 74.00% 26.00% under
components
Controls common
Group Co. control
Ltd.Zhejiang Business
Sanhua combination
Automotive
Automotive Zhejiang Zhejiang 100.00% under
components
Components common
Co. Ltd. control
Sanhua
Business
(hangzhou)
combination
Micro Refrigeration
Zhejiang Zhejiang 100.00% under
Channel Heat components
common
Exchanger
control
Co. Ltd
Zhejiang
Sanhua Refrigeration Establishmen
Zhejiang Zhejiang 100.00%
Trading Co. components t
Ltd
Zhejiang Zhejiang Zhejiang Refrigeration 100.00% Establishmen
168Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Sanhua components t
Commercial
Refrigeration
Co. Ltd
2. Changes in owner's equity share in subsidiaries and still controls transactions with subsidiaries
（1）Explanation of changes in owner's equity shares in subsidiaries
Shareholding ratio Shareholding ratio After
Subsidy name Change time
before change change
Xinchang Sitong
Electrical and 2023-05-31 70% 86.5%
Mechanical Co. Ltd
Due to our company's capital increase in Xinchang Sitong Electrical and Mechanical Co. Ltd. the company’s
equity ratio has increased from 70% to 86.50%.
（2）Impacts of the transactions on minority shareholders' equity and owner's equity attributable to the
parent company
Current period cumulative
(Sitong Electrical and Mechanical)
Purchase cost/disposal consideration 86609061.80
--Cash 86609061.80
--Fair value of non cash assets
Total purchase cost/disposal consideration
Less：net asset share of subsidiaries calculated
86609061.80
based on the proportion of equity acquired/disposed
Difference
Wherein：Adjusting capital reserves
Adjusting surplus reserves
Adjusting undistributed profits
3. Interest in joint venture or associates
（1）Aggregated financial information of insignificant joint ventures and associates
Items Closing balance/Current Opening balance/Preceding
period cumulative period comparative
Joint ventures -- --
Total of the following items calculated by
----
shareholding ratio
169Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Items Closing balance/Current Opening balance/Preceding
period cumulative period comparative
Associates -- --
Total book value of investment 35234954.43 32438204.13
Total of the following items calculated by -- --
shareholding ratio
-Net profit 5296750.30 6300850.84
-Total comprehensive income 5296750.30 6300850.84
IX. Risks Related to Financial Instruments
In risk management the Company aims to seek the appropriate balance between the risks and benefits from
its use of financial instruments and to mitigate the adverse effects that the risks of financial instruments have on
the Company’s financial performance so as to maximize the profits of shareholders and other equity investors.Based on such risk management objectives the Company’s risk management policies are established to identify
and analyze the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and
adherence to limits on a timely and reliable basis.(I) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date the Company assesses whether the credit risk on a financial instrument has
increased significantly since initial recognition. When assessing whether the credit risk has increased significantly
since initial recognition the Company takes into account reasonable and supportable information which is
available without undue cost or effort including qualitative and quantitative analysis based on historical data
external credit risk rating and forward-looking information. The Company determines the changes in default risk
of financial instruments during the estimated lifetime through comparison of the default risk at the balance sheet
date and the initial recognition date on an individual basis or a collective basis.The Company considers the credit risk on a financial instrument has increased significantly when one or
more of the following qualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which at the balance sheet date the probability of
default in the remaining lifetime has risen by more than a certain percentage compared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation or financial
position present or expected changes in technology market economy or legal environment that will have
significant adverse impact on the debtor’s repayment ability.
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred of which
the standard is consistent with that for credit-impairment:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor for economic or contractual reasons relating to the debtor’s financial difficulty
having granted to the debtor a concession(s) that the creditor would not otherwise consider.
170Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default loss rate of
default and exposure to default risk. The Company develops a model of the probability of default loss rate of
default and exposure to default risk on the basis of quantitative analysis of historical data (e.g. counterparty
rating guarantee measures and collateral type payment method etc.) and forward-looking information.
3. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control
such risks the Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutions with
relatively high credit levels hence its credit risk is relatively low.
(2) Receivables
The Company performs credit assessment on customers using credit settlement on a continuous basis. The
Company selects credible and well-reputed customers based on credit assessment result and conducts ongoing
monitoring on balance of receivables to avoid significant risks in bad debts.The Company conducts transactions with recognized and creditworthy customers and credit risk is centrally
managed by customers. As of June 30 2023 the Company had certain credit concentration risks.The accounts receivable from the Company's customers have been digitized and electronic with certain
credit liquidity. In addition the balance of the Company's accounts receivable basically does not hold collateral or
other credit enhancements.The maximum amount of exposure to credit risk of the Company is the carrying amount of each financial
asset at the balance sheet.(II) Liquidity risk
Liquidity risk is the risk that the Company may encounter deficiency of funds in meeting obligations
associated with cash or other financial assets settlement which is possibly attributable to failure in selling
financial assets at fair value on a timely basis or failure in collecting liabilities from counterparties of contracts or
early redemption of debts or failure in achieving estimated cash flows.In order to control such risk the Company comprehensively utilizes financing tools such as notes settlement
bank borrowings etc. and adopts long-term and short-term financing methods to optimize financing structures
and finally maintains a balance between financing sustainability and flexibility. The Company has obtained credit
limit from several commercial banks to meet working capital requirements and expenditures.The financial liabilities of the company are classified and presented based on remaining time period till
maturity in the table below:
Closing balance
Items Carrying amount Contract
amount not yet Within 1 year 1-3 years Over 3 years
discounted
Short-term borrowings 1141938063.73 1176811676.44 1176811676.44
Held-for-trading financial liabilities 3500000.00 3500000.00 3500000.00
Notes payable 2755748552.44 2755748552.44 2755748552.44
Accounts payable 4186618386.31 4186618386.31 4186618386.31
Other payable 265496861.29 265496861.29 265496861.29
Non-current liabilities due within 1718720282.57 1776754924.63 1776754924.63
171Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
one year
Long-term borrowings 660544808.74 699409472.23 699409472.23
Bonds payable 2801454320.48 2801454320.48 2801454320.48
Lease liabilities 204812488.97 204812488.97 920237.66 110086890.06 93805361.25
Subtotal 13735262192.03 13867035110.29 12963733386.75 809496362.29 93805361.25
(Continued)
Opening balance
Items Carrying Contract
amount amount not yet Within 1 year 1-3 years Over 3 years
discounted
Short-term borrowings 1294083319.58 1318138966.95 1318138966.95
Held-for-trading financial liabilities 3500000.00 3500000.00 3500000.00
Notes payable 2580274767.64 2580274767.64 2580274767.64
Accounts payable 3884603370.16 3884603370.16 3884603370.16
Other payable 354255114.06 354255114.06 354255114.06
Non-current liabilities due within
568126341.67576413851.86576413851.86
one year
Long-term borrowings 1801574166.67 1885327439.31 1885327439.31
Bonds payable 2776763361.83 3403596480.69 12858645.48 63972770.23 3326765064.98
Lease liabilities 202028482.09 202028482.09 1905044.87 101977666.94 98145770.28
Subtotal 13465208923.70 14208138472.76 8731949761.02 2051277876.48 3424910835.26
(III) Market risk
Market risk is the risk that the Company may encounter fluctuation in fair value or future cash flows of
financial instruments due to changes in market price. Market risk mainly includes interest rate risk and exchange
rate risk.
1. Interest Rate Risk
The Company’s interest risk in cash flows relates mainly to bank borrowings with floating interest rate.The
Company’s the cash flow interest risks arise from floating-rate financial instruments while fair value interest risks
arise from fixed-rate financial instruments. The Company determines the proportion of fixed-rate financial
instruments and floating-rate financial instruments based on the financing environment.The scale of the company's liabilities need to pay interest is controlled at a reasonable level and the burden
of financial expenses is not heavy. An increase in interest rates within a reasonable range will not have a
significant adverse impact on financial performance. The company's management will continue to monitor interest
rate levels and take necessary response measures in a timely manner based on the latest market conditions
2. Exchange Rate Risk
The company's production base and sales market are distributed in major developed and developing
countries including the United States the European Union Japan India Mexico etc. The business volume
settled in euros and dollars has a certain proportion and it faces significant exchange rate risks. Based on internal
risk control policies the company's management has taken several measures to respond exchange rate risks.Firstly based on the trend of exchange rate fluctuations timely settlement or delayed settlement of export
receipts; Secondly hedge foreign currency monetary assets and control net risk exposure by overseas financing
through domestic guarantee and external loan; Thirdly carry out forward exchange settlement and foreign
currency swap business and lock in exchange rates.
172Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
The company's foreign currency monetary assets and liabilities are detailed in the notes to the financial
statements for foreign currency monetary items.X. Disclosure of Fair Values
1. Fair values of the assets and liabilities at the end of the period
Unit: RMB
Fair value as of the balance sheet date
Item
Level 1 Level 2 Level 3 Total
I. Constant measurement at fair value -- -- -- --
1.Held-for-trading financial assets 1040000.00 3215821.73 4255821.73
Financial assets measured at fair value through
1040000.003215821.734255821.73
profit or loss
(1) Debt instrument investments 414485.69 414485.69
(2) Derivative financial assets 1040000.00 2801336.04 3841336.04
Total amount of assets constantly measured at their
1040000.003215821.734255821.73
fair values
6. Held-for-trading liabilities 3162480.00 126114386.44 3500000.00 132776866.44
Derivative financial liabilities 3162480.00 126114386.44 129276866.44
Contingent payment consideration of business
3500000.003500000.00
combination
Total amount of liabilities constantly measured at
3162480.00126114386.443500000.00132776866.44
their fair values
II. Non-constant measurement at fair value -- -- -- --
2. Basis for determining the market price of items under first level constant and non-constant measurement
at fair value.The fair value of futures contracts is measured at the exchange's open market quotes.
3. Items under second level constant and non-constant measurement at fair value valuation technique
adopted and qualitative and quantitative information of important parameters
The fair value of exchange rate contracts is measured based on the valuation amount of the host bank or the
forward foreign exchange rate announced by the Bank of China. Bank financing products are measured based on
the valuation amount of the issuer or manager.
4. Items under third level constant and non-constant measurement at fair value valuation technique adopted
and qualitative and quantitative information of important parameters
Contingent payment consideration of business combination are measured according to the contract agreement
based on the company's (Zhejiang Sanhua Board Exchange Technology Co. Ltd) 2023 profit data forecast.
173Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
XI. Related party relationships and transactions
1. Parent Company
Holding Voting right
Parent Place of Registered
Business nature proportion over proportion over
Company registration capital
the Company the Company
Sanhua Holding Zhejiang Industrial 730 million
47.12%47.12%
Group Co. Ltd Province Investment yuan
Remarks on the parent Company:
As of June 30 2023 Sanhua Holding Group Co. Ltd. (Hereinafter referred to as SHG) directly holds
26.44% of the Company's shares and indirectly holds 20.68% of the shares through its subsidiaries for a total of
46.18% of the shares. The final controllers of the Company are Mr Zhang Daocai Mr Zhang Yabo and Zhang
Shaobo.
2. Information about the Company's subsidiaries
Please refer to interest in other entities of notes to financial statements.
3. Joint ventures and associates of the Company
Please refer to notes to financial statements for details on the Company’s significant joint ventures and associates.Details of other joint ventures or associates carrying out related party transactions with the Company in current
period or in preceding period but with balance in current period are as follows:
Associates or joint ventures Relationship with the Company Abbreviation of associate
Chongqing Tainuo Machinery Co. Ltd Joint ventures CTMC
Qingdao Sanhua Jinlifeng Machinery Co. Joint ventures QSJM
Ltd
Zhongshan Xuanyi Pipe Making Co. Ltd Joint ventures ZXPM
4. Other related parties of the Company
Relationship with the Company Abbreviation of
Other related parties of the Company
associate
Zhejiang Sanhua Green Energy Industrial Group Shareholders under the control of ZSGE
Co. Ltd. the same parent company
Hangzhou Sanhua Research Institute Co. Ltd. Under the control of the same HSRI
parent company
Hangzhou Lvneng New Energy Vehicle Parts Co. Previously controlled by Sanhua HLNE
Ltd Research Institute
Xinchang County Sanhua Property Management Under the control of the same XCSP
Co. Ltd. parent company
Shanghai Sanhua Electric Co. Ltd Under the control of the same SSE
parent company
Zhejiang Sanhua Zhicheng Real Estate Under the control of the same ZSZR
Development Co. Ltd. parent company
Zhejiang Haoyuan Technology Co. Ltd. Under the control of the same ZHT
parent company
Ningbo Fuerda Smartech Co. Ltd. Under the control of the same NFS
parent company
174Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Wuhu Alda Technology Co. Ltd. Joint-stock enterprise of the parent WAT
company
Hangzhou Formost Material Technology Co. Ltd Joint-stock enterprise of the parent HFMT
company
5. Related party transactions
（1）Purchase and sale of goods rendering and receiving services
Purchase of goods and receiving of services
Unit: RMB
Approved Over the
Related Content of Current period Preceding period
Transaction Transaction Limit
parties transaction cumulative comparative
Limit or No
SHG Goods 6273.30 500000.00 No
SHG Services 4182.20 74600000.00 No
ZSGE Services 1143487.12 74600000.00 No 372182.27
HLNE Services 74600000.00 No 272851.46
HSRI Services 22686.23 74600000.00 No 19087.92
NFS Goods 500000.00 No 27620720.03
ZXPM Goods 10034439.41 22400000.00 No 9758753.69
ZHT Services 374957.03 74600000.00 No 444993.31
QSJM Goods 3405710.00 4500000.00 No
WAT Goods 25823.00 500000.00 No
Sale of goods and rendering of services
Unit: RMB
Related parties Content of transaction Current period cumulative Preceding period comparative
SHG Goods 1344.00 10213.26
SHG Services 842009.44 842009.42
HFMT Services 74377.36 74377.36
ZHT Services 509001.99 526.19
QSJM Goods 168571.15 1234589.15
HLNE Goods 4167522.63
CTMC Goods 298843.05
HSRI Goods 910665.24 5928205.09
WAT Services 39875.00 18384.00
ZSZR Goods 7893.80
Remarks of related transactions related to the purchase and sale of goods and the provision and acceptance of
services
Due to the large number of related parties involved in related party transactions between the parent
Company Sanhua Holding Group Co. Ltd and its subsidiaries the transaction limit with Sanhua Holdings Group
Co. Ltd. and its subsidiaries is approved through a consolidated summary with a purchase goods limit of 0.5
million yuan and a purchase rent equipment lease property management water and electricity power and service
fee limit of 74.60 million yuan.
（2）Related party leases
The Company as the lessor：
Unit: RMB
175Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Lessees Types of asset leased Lease income for current period Lease income for the preceding period
SHG Office building 2654669.72 2654669.71
HFMT Plant 150171.42 150171.40
WAT Plant 624733.92
The Company as the lessee：
Unit: RMB
Lessor Types of asset leased Lease income for current period Lease income for the preceding period
HSRI Office building 528514.29 444685.71
Dormitory 317647.48 71536.06
ZSGE
Plant 1531999.30 1804315.01
（3）Related party guarantees
The Company as guaranteed parties
Unit: RMB
Commencement Maturity date Whether the Guaranteed parties Amount guaranteed
date guarantee is mature
SHG RMB September 28 No
October 13 2025
2303000000.002021
Remarks of related party guarantees
The information in the table does not include related guarantees within the scope of consolidation nor related
guarantees that have been performed.The above guarantee amount is the total data. The guarantee starting date is the earliest guarantee starting
date and the guarantee expiration date is the latest guarantee expiration date.
（4）Assets transfer and debt restructuring of the related parties
Unit: RMB
Related
Content of related party transactions Current period cumulative Preceding period comparative
parties
HTM Equipment 517522.13
HSRI Equipment 14207.44
（5）Key management’s emoluments
Unit: RMB
Items Current period cumulative Preceding period comparative
Key management’s emoluments 9480670.20 9109655.39
（6）Other related party transactions
Unit: RMB
Preceding period
Abbreviation of associate Content of transaction Current period cumulative
comparative
Water and electricity
ZSGE 4557949.51 3724311.83
payment
176Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
ZHT Steam payment 18426129.97 6793343.17
Water and electricity
SHG 365648.52 399027.82
collection
Water and electricity
HFMT 308968.43 446984.64
collection
Water and electricity
HSRI 765838.12 761519.04
collection
Water and electricity
WAT 268572.72 133665.88
collection
Water and electricity
ZSGE 359981.97 308105.81
collection
Water and electricity
ZHT 11096279.60 86271.57
collection
6. Balance due to or from related parties
（1）Receivables
Unit: RMB
Closing balance Opening Balance
Items Related parties Book balance Provision for Book balance Provision for
bad debts bad debts
Accounts receivable HSRI 814463.21 40723.16 577932.65 28896.63
Accounts receivable HLNE 9075252.25 453762.61
Accounts receivable ZSGE 71193.51 3559.68
Accounts receivable WAT 336559.61 16827.98 6139.97 307.00
Accounts receivable HFMT 585654.33 29282.72
Accounts receivable QSJM 13385.72 669.29
Prepayments ZHT 670000.00
Other receivables ZHT 670000.00 51475.00
（2）Payables
Unit: RMB
Items Related parties Closing balance Opening Balance
Accounts payable QSJM 1017127.13 380902.10
Accounts payable ZXPM 7090811.70 14415289.63
Accounts payable ZHT 100458.61 352333.66
Accounts payable HSRI 719760.50 719760.50
Accounts payable HSRI 81177.00
Received advances HFMT 100000.00 100000.00
Other payable ZSGE 72576.31
Other payable HSRI 20000.00
XII. Share-based payment
1. Overall information
√ Applicable □ Not applicable
Unit: Shares
177Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Total equity instruments granted in current period 0.00
Total equity instruments exercised in current period 5989500.00
Total equity instruments retired in current period 200400.00
The adjusted restricted stock grant price is
The range of exercise prices of share options outstanding at RMB 9.70 which will be unlocked in batches
the end of the period and the remaining contractual life within 12 months after 12 months 24 months
and 36 months from the grant date.
2020 Restricted Stock Incentive Plan: The
adjusted restricted stock grant price is RMB
6.6615 which will be unlocked in batches
within 12 months after 12 months 24 months
and 36 months from the grant date.The range of exercise prices of other equity instruments at the
2022 Restricted Stock Incentive Plan: The
end of the period and the remaining contractual life
adjusted restricted stock grant price is RMB
9.70 which will be unlocked in batches
within 12 months after 12 months 24 months
and 36 months from the grant date.Other remarks
(1) Incentive plan for Restricted stock implemented in 2020
In February 2020，the Company implemented a restricted stock incentive plan for core employees. Among
them，the number of restricted stocks granted was 12.045 million shares and the grant price per share was RMB
9.85，The grant date was February 24 2020 and it will be unlocked year by year in batches at a ratio of
30%:30%:40%.
In June 2020 the Company implemented the 2019 equity distribution. In September 2020 the company
implemented the 2020 semi-annual equity distribution. In May 2021 the company implemented the 2020 equity
distribution. In April 2022 the company implemented the 2021 equity distribution. In September 2022 the
company implemented half of year 2022 equity distribution. In June 2023 the company implemented the 2022
equity distribution. According to the method stipulated in the "2020 Restricted Stock Incentive Plan" the exercise
price and quantity of the underlying stocks involved were adjusted accordingly. After the adjustment the number
of restricted stocks granted was 15.6585 million shares and the grant price per share was RMB 6.6615.
(2) Incentive plan for Restricted stock implemented in 2022
In May 2022，the Company implemented a restricted stock incentive plan for core employees. Among
them，the number of restricted stocks granted was 17.5850 million shares the number of stock appreciationrights granted was 0.4850 million shares and the grant price per share was RMB 10.00，The grant date was May
31 2022 and it will be unlocked year by year in batches at a ratio of 30%:30%:40%.
In September 2022 the company implemented half of year 2022 equity distribution. In June 2023 the
company implemented the 2022 equity distribution. According to the method stipulated in the "2022 Restricted
Stock Incentive Plan"and"2022 Stock Appreciation Rights Incentive Plan" the exercise price and quantity of the
underlying stocks involved were adjusted accordingly. After the adjustment the number of restricted stocks
granted was 17.5850 million shares the number of stock appreciation rights granted was 0.4850 million shares
and the grant price per share was RMB 9.70.
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
178Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Determination method for grant-date fair value of Calculated based on the closing price of the stock on the
equity instruments grant date minus the grant price of the restricted stock.Determination method for the number of equity
[Note]
instruments expected to vest
Reasons for significant difference between the
Not applicable
estimates in current period and preceding period
Capital reserve accumulated due to equity-settled
254824066.82
share-based payment
Total expenses incurred due to equity-settled
39079881.17
share-based payment
Other remarks
Note：In 2020 the company initially granted 12.045 million restricted stocks to incentive object. Later it
was adjusted to 15.6585 million shares due to the annual distribution of equity in 2019. In 2022 the company
initially granted 17.5850 million restricted stocks to incentive object .The number is the base，it will be unlockedyear by year in batches at a ratio of 30%:30%:40%. The Company estimates the number of exercisable equity
instruments on the following basis: the Company's operating performance can meet the target，the futurevoluntary turnover rate of the incentive objects is 0%，and the performance appraisal level is above C (theunlocking coefficient is 1).
3. Cash-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Determination method for the fair value of liability Calculated based on the closing price of the stock on
incurred by the Company and to be settled in cash or the balance sheet date minus the grant price of the
other equity instruments stock appreciation rights
Accumulated amount of liabilities incurred due to
14232999.98
cash-settled share-based payment
Total expenses incurred due to cash-settled share-
9015700.00
based payment
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments existing on the balance sheet date
With the approval of the CSRC in document CSRC License [2021] No. 168 the company publicly issued 30
million convertible corporate bonds in June 2021 with a face value of 100 yuan each and net amount of raised
funds is 2987.53 million yuan. In addition to replenishing working capital the raised funds are committed to the
following projects:
Investment projects with raised funds Committed capital
Annual production of 65 million sets of commercial
refrigeration and air conditioning intelligent control 1487 million yuan
components construction project
Annual output of 50.5 million sets of high efficiency and
energy saving refrigeration and air conditioning control 698 million yuan
components project
179Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
2. Contingencies
（1）Significant contingencies existing on the balance sheet date
As of June 30 2023 there are no significant contingencies that need to be disclosed by the company.
（2）If no significant contingent matter to be disclosed by the Company it should also be noted accordingly
No important contingent matter needs to be disclosed by the Company.XIV. Events after the balance sheet date
1. Notes of other events after the balance sheet date
（1）Stock issue
Approved by resolution of the company's shareholders' meetingthe company submits the "Issuance Plan for
Adding Domestic Basic A-share Shares through Overseas Issuance of Global Depositary Receipts (GDR)" to the
Shenzhen Stock Exchange.According to the plan the newly added A-share basic securities represented by the
company's GDR issuance this time shall not exceed 6.43% of the total common stock capital of the company before
this issuance (According to the total share capital of the company as of June 15 2023 it does not exceed 230893309
shares)(including securities issued due to the exercise of any over-allotment rights if any).
（2）Redemption of convertible company bonds
Due to the triggering of the redemption clause of the "Sanhua Convertible Bond" by the closing price of the
company's stock and with the approval of the company's board of directors the company plans to exercise the
early redemption right of the convertible bond and redeem all the "Sanhua Convertible Bond" registered after the
closing of the redemption registration date at the price of the bond face value plus accrued interest for the current
period. On August 8 2023 the company completed the redemption of convertible bonds.XV. Other Significant Events
1. Segment information
（1）Basis for reportable segments and the accounting policy
Reportable segments are identified based on operating segments which are determined based on the structure
of the Company’s internal organization management requirements and internal reporting system etc. and
identified the reportable segments based on products.
180Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
（2）Financial information of the reporting subsection
Unit: Ten thousand yuan RMB
January 2023 to June 2023
Items Operating Total
Operating cost Total assets
revenue liabilities
Refrigeration and air-conditioning
770602.11571371.311921013.831067515.32
electrical parts business
Auto parts business 482289.95 358190.20 994883.70 440556.08
Total 1252892.06 929561.51 2915897.53 1508071.40
January 2022 to June 2022
Items Operating Total
Operating cost Total assets
revenue liabilities
Refrigeration and air-conditioning
696138.61531498.741872337.661092225.60
electrical parts business
Auto parts business 319856.69 238736.03 668836.68 269453.90
Total 1015995.30 770234.77 2541174.34 1361679.50
XVI. Notes to items of parent Company financial statements
1. Accounts receivable
（1）Disclosure of accounts receivable by categories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
Book balance Book balance
bad debt bad debt
Categ
Accru Carrying Accru Carrying
ory
Propo ed amount Propo ed amount
Amount Amount Amount Amount
rtion propo rtion propo
rtion rtion
Receiv
ables
with
provisi
on 8403988 83.78 58057 0.69 834593 605744 74.35 605744
made 29.60 % 95.56 % 034.04 200.07 % 200.07
on an
indivi
dual
basis
Includ
ing:
Receiv 1626908 16.22 81345 5.00 154556 208963 25.65 10449 5.00 198514
ables 18.57 % 40.93 % 277.64 287.00 % 251.95 % 035.05
181Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
with
provisi
on
made
on a
collect
ive
basis
Includ
ing:
1003089100.0139401.39989149814707100.0104491.28804258
Total
648.170%336.49%311.68487.070%251.95%235.12
Provision made on an individual basis:
Unit: RMB
Closing balance
Name Book balance Provision for Accrued Accrued
bad debt proportion reason
Several subsidiaries 834593034.04
Dayou Vinya (Thailand) Co. Ltd 5805795.56 5805795.56 100.00%
Total 840398829.60 5805795.56 -- --
Provision made on a collective basis:
Unit: RMB
Closing balance
Items
Book balance Book balance Book balance
Within 1 year 162690818.57 8134540.93 5.00%
Total 162690818.57 8134540.93 --
The remarks of determination of a collective basis:
If the provision for bad debt of accounts receivable is accrued in accordance with the general expected credit loss
model please refer to the disclosure of other receivables to disclose the relevant information about the provision
for bad debt:
□Applicable √Not applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 997283852.61
1 to 2 year 5805795.56
Total 1003089648.17
（2）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Opening Closing
Category Recovered Write
balance Accrued Others balance
or reversed off
Receivables with provision
10449251.953491084.5413940336.49
made on a collective basis
Total 10449251.95 3491084.54 13940336.49
Closing balance of top 5 debtors totaled 847783578.16 yuan accounting for 84.52% of the total closing
balance of accounts receivable and provision for bad debts made thereon totaled 3553371.17 yuan.
182Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
2. Other receivables
Unit: RMB
Items Closing balance Opening balance
Other receivables 1232345466.82 650791643.96
Total 1232345466.82 650791643.96
（1）Other receivables
1）Other receivables categorized by nature
Unit: RMB
Other receivables categorized by nature Closing balance Opening balance
Principal and interest of capital assistance to subsidiaries 1220352748.49 532760000.00
Land accounts receivable 90383016.00
Tax refund receivable 2035577.53 18982883.07
Guarantee deposit 5317310.00 5300385.80
Others 5260570.05 3703706.53
Total 1232966206.07 651129991.40
2）Provision for bad debt
Unit: RMB
Phase I Phase II Phase III
Provision for bad Next 12?month Lifetime expected Lifetime expected Total
debt expected credit credit losses (credit credit losses (credit
losses not impaired) impaired)
Balance on January
161075.01100006.5377265.90338347.44
12023
Balance in current
period on January —— —— —— ——
12023
--Transferred to
-78517.0578517.05
phase II
--Transferred to
-127944.20127944.20
phase III
Provision made in
96660.39106454.7279276.70282391.81
current period
Balance on June 30
179218.35157034.10284486.80620739.25
2023
Loss provisions for significant changes in book balances in current period
□ Applicable √ Not Applicable
Disclosure by aging
Unit: RMB
Aging Closing balance
Within 1 year (including 1 year) 961525241.46
1 to 2 years 266935792.61
2 to 3 years 639721.00
Over 3 years 3865451.00
Total 1232966206.07
183Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
3）Provision for bad debt accrued recovered or reversed in current period
Provision for bad debt accrued in current period:
Unit: RMB
Changed amount of the current period
Opening Closing
Category Recovered or Write
balance Accrued Others balance
reversed off
Receivables with provision made
338347.44282391.81620739.25
on a collective basis
Total 338347.44 282391.81 620739.25
4）Top 5 debtors with the largest other receivables balances
Unit: RMB
Proportion to
Provision for
the total
Nature of Closing bad debt at the
Debtors Age balance of
receivables balance end of the
other
period
receivables
Zhejiang Sanhua
Financial Within 1
Commercial Refrigeration 495850000.00 40.22%
aid year
Co. Ltd
Sanhua International Financial Within 1
232900000.0018.89%
Singapore Pte. Ltd. aid year
Hangzhou Leaderway Financial
91180000.00 0-2 year 7.40%
Electronics Co. Ltd aid
Shaoxing Shangyu Sanli Financial
70076800.00 1-2 year 5.68%
Copper Industry Co. Ltd aid
Wuhu Sanhua Refrigeration Financial
43771344.59 0-2 year 3.55%
Parts Co. Ltd aid
Total -- 933778144.59 -- 75.74%
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Book balance Provision Book balance Provision
Investees Carrying Carrying
for for
amount amount
impairment impairment
Investments
in 7682958322.83 7682958322.83 7513700369.50 7513700369.50
subsidiaries
Investments
in associates
31063670.3331063670.3328958340.2728958340.27
and joint
ventures
Total 7714021993.16 7714021993.16 7542658709.77 7542658709.77
（1）Investments in subsidiaries
Unit: RMB
Investees Opening Changed amount of the current period Closing Closing
184Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
balance(Carryin Investments Investment balance balance of
Provision
g amount) increased s (Carrying provision
for Other
decreased amount) for
impairme s
impairme
nt
nt
Zhejiang
Sanhua
2732292045.1
Automotive 2722469868.51 9822176.62
3
Component
s Co. Ltd.Sanhua
(Hangzhou)
Micro
Channel 657057189.81 3174347.46 660231537.27
Heat
Exchanger
Co. Ltd
Zhejiang
Sanhua
Climate &
Appliance 328576392.73 0.00 328576392.73
Controls
Group Co.Ltd
Sanhua
Internationa 307539173.79 224344.17 307763517.96
l Inc.Sanhua
Internationa
950862026.271153098.69952015124.96
l Singapore
Pte. Ltd
Wuhu
Sanhua
Automatic
261737631.1318985696.86280723327.99
Control
Component
s Co. Ltd
Sanhua
(Jiangxi)
Self -
94024591.81142150.7494166742.55
control
Component
s Co. Ltd
Xinchang
Sitong
Electrical
48551469.5587271732.79135823202.34
and
Mechanical
Co. Ltd
Zhejiang
Sanhua
1657452724.9
Commercial 1653158817.69 4293907.23
2
Refrigeratio
n Co. Ltd
Zhejiang
Sanhua 57843827.50 1243219.18 59087046.68
Trading Co.
185Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Ltd
Changzhou
Lanke four-
62541614.600.0062541614.60
way valve
co. LTD
Hangzhou
Leaderway
55607396.181355103.0056962499.18
Electronics
Co. Ltd
Shaoxing
Shangyu
Sanli
33369324.24224343.9633593668.20
Copper
Industry
Co. Ltd
Zhongshan
Sanhua Air
conditionin
g
5556306.77147835.925704142.69
Refrigeratio
n
Component
s Co. Ltd
Wuhan
Sanhua
Refrigeratio
4959860.95226713.695186574.64
n
Component
s Co. Ltd
Zhongshan
Sanhua
Refrigeratio
6587521.80195066.186782587.98
n
Component
s Co. Ltd
Suzhou
Sanhua Air-
Conditioner 9079389.05 124220.76 9203609.81
Parts
Co.Ltd
Sanhua
AWECO
Appliance
152877775.96437362.44153315138.40
Systems
(Wuhu)
Co. Ltd.Zhejiang
Sanhua
Minshi
51000000.000.0051000000.00
Automotive
Component
s Co. Ltd
Sanhua
New
Energy 50300191.16 40236633.64 90536824.80
Thermal
Managemen
186Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
t
Technology
(Hangzhou)
Co. Ltd
169257953.37682958322.8
Total 7513700369.50
33
（2）Investments in associates and joint ventures
Unit: RMB
Changed amount of the current period
Invest Closin
Openi Closin
ment g
ng Cha Cash g
incom Adjustm balanc
balanc nges dividen Provis balanc
Invest Invest e ent in e of
Investee e in d/profit ion e
ments ments recog other Oth provis
s (Carry othe declared for (Carry
increa decrea nized compreh ers ion
ing r for impair ing
sed sed under ensive for
amoun equit distribut ment amoun
equity income impair
t) y ion t)
metho ment
d
?. Joint ventures
?. Associates
Guochu
ang
Energy
Internet
Innovati -
5078449799
on 98509.
65.1255.23
Center 89
(Guangd
ong)
Co.Ltd.Chongqi
ng
Tainuo 16130 28543 2500000 16484
Machine 424.27 27.80 .00 752.07
ry Co.Ltd.Ningbo
Jinlifeng
214195123226542
Machine
04.045.4329.47
ry Co.Ltd
Qingdao
Sanhua
Jinlifeng 38599 12709 51308
Machine 26.41 52.85 79.26
ry Co.Ltd.Xinchan
g
1747666233.18138
zhejiang
20.438754.30
energy
sanhua
187Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
compreh
ensive
energy
co. LTD
2895846053250000031063
Subtotal
340.2730.06.00670.33
2895846053250000031063
Total
340.2730.06.00670.33
（3）Other remarks
Due to the implementation of the enterprise group share payment transactions the company as a settlement
enterprise，according to the fair value of the granted entity instrument. Confirm equity investments insubsidiaries (service receivers). At the same time increase capital reserves 24143746.08 yuan.
4. Operating revenue and Operating cost
Unit: RMB
Current period cumulative Preceding period comparative
Items
Revenue Cost Revenue Cost
Main operations 3187342829.65 2446105548.71 2989734423.46 2394290430.11
Other operations 188742061.91 179628647.43 203593432.84 189144584.74
Total 3376084891.56 2625734196.14 3193327856.30 2583435014.85
5. Investment income
Unit: RMB
Items Current period Preceding period
cumulative comparative
Long-term equity investment income calculated by cost
46862001.82750000000.00
method
Long-term equity investment income calculated by equity
4605330.065599588.25
method
Investment income of bank financing products 86531.50 3136982.23
Gains and losses on settlement of futures contracts 4141032.14 2520275.99
Gains and losses on settlement of foreign exchange contract 530000.00 -1483174.62
Income of fund using fee 7748626.08 6798711.79
Others 641743.78
Total 64615265.38 766572383.64
6. Others
R&D expenses
Unit: RMB
Items Current period cumulative Preceding period
comparative
Labor cost 79766562.72 61231867.97
Material and power expense 66348245.97 63136509.25
Depreciation and amortization expense 5448825.42 4620689.50
188Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Mold manufacturing expense 911150.50 1913032.09
Royalties 632046.18 727637.07
Outsourcing R&D expense 356340.18 433214.76
Others 339063.34 451291.27
Total 153802234.31 132514241.91
XVII. Supplementary information
1. Non-recurring profit or loss in current period
√ Applicable □ Not Applicable
Unit: RMB
Items Amount Remarks
Gains or loss on disposal of non-current
assets (Including the offsetting portion of the -3064084.40
accrued provision for impairment of assets)
Government grants included in profit or loss
(excluding those closely related to operating
activities of the Company satisfying
44899780.71
government policies and regulations and
continuously enjoyed with certain
quantity/quota based on certain standards)
In order to avoid the price risk of raw
materials and prevent exchange rate risk the
company and its subsidiaries have carried out
derivatives business including futures
contracts and foreign exchange forward
contracts. January to June 2023 the futures
income was 4.3452 million yuan and the
forward loss was 137.708 million yuan;
January to June 2022 the futures loss was
Gains or losses on changes in fair value of
9.5117 million yuan and the forward loss was
held-for-trading financial assets held-for-
64.9561 million yuan. Therefore there were
trading financial liabilities and investment
significant fluctuations in the amount of non-
income from disposal of held-for-trading
-133362738.92 recurring profit and loss items in the first half
financial assetsheld-for-trading financial
of the two years. Meanwhile the exchange
liabilities and other debt investments
gain from January to June 2023 was
excluding those arising from hedging
194.1929 million yuan. The exchange income
business related to operating activities
from January to June 2022 was 100.6505million yuan. According to “the No. 1Explanatory Announcement on Information
Disclosure for Companies Offering Their
Securities to Public - Non-recurring Profit orLoss” exchange gains and losses are
recurring gains and losses and Futures and
forward gains and losses are non-recurring
gains and losses.Other non-operating revenue or expenditures
1961169.92
except the above items
Other profit or loss satisfying the definition
2096067.98
of non-recurring profit or loss
Less: Enterprise income tax affected -15456546.00
Non-controlling interest affected 616159.13
Total -72629417.84 --
189Zhejiang Sanhua Intelligent Controls Co. Ltd. 2023 Semi-Annual Report
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable √ Not Applicable
The company has no specific circumstances of other profit and loss items that meet the definition of non-recurring
profit and loss.For items defined as non-recurring profit or loss according to “the No. 1 Explanatory Announcement onInformation Disclosure for Companies Offering Their Securities to Public - Non-recurring Profit or Loss” non-
recurring profit or loss items listed in the said document defined as project of recurring profit or loss specify the
reason
□ Applicable √ Not Applicable
2. ROE and EPS
EPS (yuan/share)
Weighted
Profit of the reporting period Basic Diluted
average ROE
EPS EPS
Net profit attributable to shareholders of ordinary shares 10.17% 0.39 0.39
Net profit attributable to shareholders of ordinary shares after
10.70%0.410.41
deducting non-recurring profit or loss
3. Financial data variance between financial reporting prepared under domestic and abroad accounting
standards
（1）Differences of net profits and net assets in the financial reports disclosed according to the IFRS and
Chinese Accounting Standards
□ Applicable √ Not Applicable
（2）Differences of net profits and net assets in the financial reports disclosed according to the overseas
accounting standards and Chinese Accounting Standards
□ Applicable √ Not Applicable
190