/

Stockcode:603298Companyname:HangchaGroup

HangchaGroupCo.,Ltd.

2024AnnualReport

April2025

/

ImportantNotes

1.TheBoardofDirectorsandtheBoardofSupervisorsoftheCompanyanditsdirectors,supervisorsandseniormanagementherebywarrantthattheinformationcontainedinthisannualreportistrue,accurateandcompletewithoutanyfictitiousrecords,misleadingstatementsormaterialomissions,andseverallyandjointlyassumelegalresponsibilitythereof.

2.AllthedirectorsoftheCompanyattendedthemeetingoftheBoardofDirectors.

3.Pan-ChinaCertifiedPublicAccountantsLLP(SpecialGeneralPartnership)hasissuedastandardunqualifiedauditreportfortheCompany.

4.ZhaoLimin,thepersoninchargeoftheCompany,ZhangShutong,theofficerinchargeof

accountingworkandYuanGuanghui,theofficerinchargeoftheaccountinginstitution(AccountingOfficer),herebydeclareandwarrantthatthefinancialstatementsintheannualreportareauthentic,accurate,andcomplete.

5.Theprofitdistributionplanortheplanforconvertingpublicreservefundsintoadditional

sharecapitalforthereportingperiodafterconsiderationbytheBoardofDirectorsAccordingtothePan-ChinaAudit[2025]No.5468issuedbyPan-ChinaCertifiedPublicAccountantsLLP(SpecialGeneralPartnership),theconsolidatedfinancialstatementsoftheCompanyshowedoperatingrevenueofRMB16,485,830,318.58asofDecember31,2024,andnetprofitattributabletoshareholdersofthelistedcompanyofRMB2,022,025,698.99.In2024,thecompanymadeaprovisionofRMB95,232,251.25forstatutorysurplusreserves,andnoprovisionwasmadefordiscretionarysurplusreserves.Ofwhich,theprofitavailablefordistributionbytheparentcompanywasRMB5,758,885,171.56.AsresolvedbytheBoardofDirectors,theprofitdistributionplanisasfollows:

1.TheCompanyintendstopayacashdividendofRMB5(taxinclusive)per10sharestoallshareholders.AsofDecember31,2024,basedonthetotalsharecapitalof1,309,812,049sharesoftheCompany,thetotalcashdividendamounttobedistributedisRMB654,906,024.50(taxinclusive).Theproportionofcashdividendis32.39%ofthenetprofitattributabletotheparentcompanyoftheCompanyfortheyear.Theremainingundistributedprofitsoftheparentcompany,amountingtoRMB5,103,979,147.06,arecarriedovertothefollowingyear.

2.Nobonusshareswillbeissued,norwillthecapitalreservebeconvertedintosharecapitalthisyear.IfthereisanychangeinthetotalsharecapitaloftheCompanyduringtheperiodfromthedateofdisclosureofthisannouncementtotherecorddateoftheequitydistribution,thedistributionpersharewillberemainedunchangedwithacorrespondingadjustmenttothetotaldistributionamount.TheprofitdistributionplanisyettobesubmittedtotheCompany's2024AnnualGeneralMeetingforconsideration.

6.Riskstatementregardingforward-lookingstatementsApplicable"□Notapplicable"Prospectivestatementscarriedinthisreport,suchasfutureplans,donotconstituteanysubstantialcommitmentsoftheCompanytoinvestors.Pleasebecautioustotheinvestmentrisks.

7.Whetherthereisanynon-operatingcapitaloccupationbythecontrollingshareholderandanyotherrelatedpartyNo

/

8.Whetherthereisanyexternalguaranteeprovidedinviolationoftheprescribeddecision-makingproceduresNo

9.Whethertherearemorethanhalfofthedirectorswhocannotguaranteetheauthenticity,accuracyandcompletenessoftheannualreportdisclosedbytheCompanyNo

10.SignificantriskstatementTheReporthasdescribedthesignificantrisksthatmayadverselyaffectthefuturedevelopmentoftheCompanyandtherealizationofitsbusinessobjectivesindetailin"SectionIIIManagementDiscussionandAnalysis”.Apartfromthis,therearenoothersignificantrisksthattheCompanyneedstodiscloseseparately.

11.Other"□Applicable"N/A

/

TableofContents

Chapter1Definitions ...... 5

Chapter2CompanyProfileandKeyFinancialIndicators ...... 9

Chapter3ManagementDiscussionandAnalysis ...... 14

Chapter4CorporateGovernance ...... 55

Chapter5EnvironmentandSocialResponsibility ...... 83

Chapter6ImportantMatters ...... 99

Chapter7ShareChangesandShareholderInformation ...... 124

Chapter8InformationRelatedtoPreferredShares ...... 131

Chapter9Bond-RelatedInformation ...... 131

Chapter10FinancialReporting ...... 132

/

Chapter1Definitions

1.DefinitionsUnlessotherwisestatedinthecontext,thefollowingwordsandtermsinthisreportshallbeconstruedasfollows:

/

/

/

/

Chapter2CompanyProfileandKeyFinancialIndicators

1.CompanyProfile

2.ContactPersonandContactInformation

3.BriefIntroductiontoCompanyProfile

4.InformationDisclosureandPlaceforInspection

5.StockProfile

/

6.OtherRelevantInformation

7.KeyAccountingDataandFinancialIndicatorsfortheLastThreeYears

(1)Keyaccountingdata

Unit:Currency:CNY

/

(2)Keyfinancialindicators

NotestothekeyaccountingdataandfinancialindicatorsoftheCompanyforthelastthreeyearsattheendoftheReportingPeriod"√Applicable""□Notapplicable"

1.InJanuary2024,HangchaIntelligent,awhollyownedsubsidiaryoftheCompany,purchased100%ofthesharesofZhejiangGuoziRoboticsCo.,Ltd.incash.Therefore,ZhejiangGuoziRoboticsCo.,Ltd.wasincludedintheconsolidationscopeoftheconsolidatedfinancialstatementsduringtheReportingPeriod.Sincethiswasabusinesscombinationinvolvingenterprisesundercommoncontrol,retroactiveadjustmentsweremadetothepreviousconsolidatedfinancialstatementsinaccordancewiththerequirementsofaccountingstandards.

2.TheaforementionedearningspersharearecalculatedbasedonthelatestsharecapitaloftheCompanyasofDecember31,2024.

3.Thedifferencesinthetrailingdigitsofthequotients,totals,andsumsoftheaddendsafterdivisionintheabovetableandthisReportareduetorounding.

8.DifferenceinAccountingDataunderDomesticandOverseasAccountingStandards

(1)DifferencesinnetprofitandnetassetsattributabletoshareholdersofthelistedcompanyinfinancialreportsdisclosedinaccordancewithInternationalAccountingStandardsandChinaAccountingStandards"□Applicable""√Notapplicable"

(2)DifferencesinnetprofitandnetassetattributabletoshareholdersofthelistedcompanyinfinancialreportdisclosedinaccordancewithoverseasaccountingstandardsandChinaAccountingStandards"□Applicable""√Notapplicable"

/

(3)Explanationonthedifferencebetweenthedomesticandoverseasaccountingstandards:

"□Applicable""√Notapplicable"

9.KeyFinancialDatafor2022byQuarter

Unit:YuanCurrency:CNY

Explanationonthedifferencesbetweentheabovequarterlydataandwhathavebeendisclosedinpastperiodicreports"□Applicable""√Notapplicable"

10.Non-recurringGainsandLossesItemsandAmounts"√Applicable""□Notapplicable"

Unit:YuanCurrency:CNY

/

Foritemsofnon-recurringgainsandlossesdefinedbytheCompanythatareofasignificantamountandnotlistedinthe"ExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSharestothePublic—Non-recurringGainsandLosses",aswellasforitemsofrecurringgainsandlossesdefinedbytheCompanythatarelistedinthe"ExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSharestothePublic—Non-recurringGainsandLosses"asnon-recurringgainsandlosses,reasonsshallbespecified."□Applicable""√Notapplicable"

11.ItemsMeasuredatFairValue"√Applicable""□Notapplicable"

Unit:YuanCurrency:CNY

12.Others"□Applicable""√Notapplicable"

/

Chapter3ManagementDiscussionandAnalysisI.DiscussionandAnalysisonOperationsIn2024,theglobaleconomicstructurehasundergoneprofoundadjustmentandthecomplexchangesintheexternaldevelopmentenvironmenthavebroughtmanydifficultiesandchallengestoChina'seconomicactivities.However,thankstoourcountry'ssolideconomicfoundation,diversifieddevelopmentadvantages,strongdevelopmentresilienceandhugedevelopmentpotential,thefundamentalsforandthebasicdevelopmenttrendoflong-termeconomicdevelopmentremainunchanged.Theyear2025marksthefinalyearofthe"14thFive-YearPlan",anditisalsoacriticalyearforChinatoacceleratethetransformationandupgradingandpromotehigh-qualitydevelopment.Withaseriesofnationalpoliciesgraduallyimplementedtostabilizeexpectations,stimulatevitalityandpromoteasustainedeconomicrecovery,China'seconomicoutlookisworthlookingforwardto.Inthefaceofcyclicalfluctuationsandstructuralcontradictionsintheglobaleconomy,theBoardofDirectorsoftheCompanyhasstayedfocusedonthestrategicdirection,adheringtotheinnovation-drivenstrategytoleadallemployeestoemancipatetheirminds,strivetoforgeaheadandeffectivelyrespondtothecomplexchallengesof"involutionandexternalpressure"intheindustrialvehicleindustry.Asaresult,ithasachievedsuccessinthemidstofdifficultiesandstabilizedthesounddevelopmentmomentumoftheCompany.Facedwiththedownwardpressureintheindustry,theCompanyhastakentheinitiativetostabilizethedomesticmarketandmakeactivedeploymentsintheoverseasincrementalmarket,takingnewenergyproductsasthemaindrivingforcetointroduceChina'sindustrialvehiclebrandtotheworldandtakingthetechnologyandproductinnovationasthecorestrategyfordifferentiationandcompetition.Basedonanumberofinnovativeinitiativessuchasproductmixoptimizationandadjustmentandindustrialtransformationandupgrading,theCompanyhasperformedwellinoperation,maintainingabenefitincreasemuchgreaterthanthesalesincrease,achievinganoperatingincomeofRMB16.486billion,up1.15%year-on-year,andnetprofitattributabletoshareholdersofthelistedcompanyofRMB2.022billion,up17.86%year-on-year.Overthepastyear,theCompanyhaslaidamoresolidfoundationandbasefordevelopment,furtherstrengtheningthefoundationforsustainableandsteadygrowthinthefuture.

/

KeyBusinessDatafor2024DuringtheReportingPeriod,thecompanywonnumerousawardsinmanyfieldsthankstoitsexcellentcomprehensivestrengthandinnovativedevelopmentachievements,demonstratingitsstrongindustrialcompetitivenessandsocialinfluence.IthasbeenhonoredasoneoftheTop100EnterprisesinChina'sMachineryIndustry,aLargeKeyBackboneEnterpriseintheMachineryIndustry,aSingleChampionEnterpriseintheManufacturingIndustryandanInfluentialEnterpriseintheConstructionMachineryIndustry,andhasbeenincludedintheTop100LeadingEnterprisesforZhejiangPrivateEnterpriseSocialResponsibility,theTop50ChineseListedCompanieswithNewQualityProductivityissuedbySecuritiesTimes,theTop500InnovativeHigh-TechEnterprisesinZhejiangProvince(ranked59th),theTop100ManufacturingEnterprisesinZhejiangProvince,theTop100FastestGrowingEnterprisesinZhejiangProvinceandtheListofLeadingPrivateEconomyHeadquartersEnterprisesinZhejiangProvince.TheCompany's"HCQM(HangchaQualityManagement)Mode"projectwontheSilverPrizeintheThirdNationalMachineryIndustryProductQualityInnovationCompetition.Meanwhile,theCompanyhasachievedaseriesoffruitfulresultsthroughcontinuousinnovationinfieldssuchasproductresearchanddevelopment,marketexpansion,intelligentmanufacturinganddigitaltransformation.Theseeffortsnotonlypromotethecontinuousupgradingofitsproductsandservicesandtheexpansionofitsmarketcoverage,butalsogreatlyimproveitsproductionefficiencyandmanagementeffectiveness,helpingtomaintaintheleadingpositionoftheCompanyintheglobalindustrialvehicleindustry.

Netprofitattributabletotheshareholdersofthelistedcompanyafterthedeductionofnon-recurringgainsandlosses(RMBHundredmillion)

Netprofitattributabletotheshareholdersofthelistedcompanyafterthedeductionofnon-recurringgainsandlosses(RMBHundredmillion)Salesvolume(Tenthousandunits)

Salesvolume(Tenthousandunits)2023

/

1.Enhanceinnovation-drivendevelopmentandstrengthentechnologyempowermentInthefaceofanewcontextofglobalcompetition,theCompanyiscommittedtopursuingintelligent,greenandglobaldevelopmentofitsproducts,andmakeseveryefforttocultivatenewqualityproductiveforces.TheCompany'sproductresearchanddevelopmentactivitiesarecloselyalignedtomarketdemand,whichfocusonmarketaccessandinternationalbenchmarksandactivelypracticethetechnologicalinnovationconceptof“competingwithbenchmarkingenterprises,surpassingthecompetitors,anddevelopingtheworld'sbestforklifts".Inthisway,theCompanyhassignificantlyenhancedmultipleaspectsofitsproducts,includingperformance,quality,andservice.DuringtheReportingPeriod,basedontheintegrationofglobaltechnologicalresources,theCompanytooknewenergytechnologiessuchasbattery,electricdriveandelectriccontrolasthecoreand“userdemand+technologicalinnovation”asthemajordrive,achieving52researchanddevelopmentprojectswithproductsavailableforbulksale,aswellas25technologicalresearchanddevelopmentprojectswithresultsappliedintheindustry.TheCompanyhaslaunchedseveralnewenergyforkliftseries,includingtheXAandXEseries,whichincludeproductssuchashigh-performancelithium-ionforklifts,permanentmagnetlithium-ionforklifts,smallwheelbaselithium-ionforklifts,man-upthree-waystackersandmulti-directionalelectricsideforklifts.Intermsoftechnologyresearchanddevelopmentandkeycomponents,theCompanyhasachievedabreakthroughinkeycomponentsandaseriesofnewtechnologies,includingitselectricvehiclebrakeassistanddistributionsystem,integratedcontrolsystemforheavy-dutyvehicles,momentlimitcontrolsystemfortelescopichandlers,hydrostaticdriveelectro-hydrauliccontrolsystem,specializeddriveaxleforoff-roadforklifts,handheldvehiclecontrolunitandcoldstoragelithium-ionbatteries,withtechnologyreachingacountry-leadingandevenaworld-leadinglevel.Thecompany'sexcellenceintechnologicalinnovationisdemonstratedbyitsnumerousproductandtechnologyR&Dachievements,suchas“ResearchandApplicationofKeyTechnologyforSafeOperationofUnmannedForkliftsinComplexApplicationScenarios”and

SingleChampionEnterprise

intheManufacturing

IndustryHonorandAwardsofHangchaGroup

HonorandAwardsofHangchaGroup

InfluentialEnterpriseintheConstructionMachineryIndustry

ZhejiangPrivateEnterprise

SocialResponsibilityTop100LeadingEnterprises

Top100ManufacturingEnterprises

inZhejiangProvince

Top100ManufacturingEnterprises

inZhejiangProvinceTop100FastestGrowing

EnterprisesinZhejiang

Province

/

“ResearchandApplicationofForkliftSafetyMonitoringandInspectionSystem”,whichhavewontheMachineryIndustryScienceandTechnologyAward,theProvincialScienceandTechnologyProgressAward,andtheBICES2023ConstructionMachineryTechnologyInnovationProductGoldenAward.

TheCompanyhasfocusedondevelopingcorecompetitivenessintechnologyresearchanddevelopment,drivenbyinventionpatentsandledbystandards.Duringthereportingperiod,theCompanywasgranted129patents,including82inventionpatents,representingayear-on-yearincreaseofover60%.Thecompanyhaspresidedoverandparticipatedintheformulationandrevisionofoneinternationalstandard,ninenationalstandards,fourindustrystandardsandtwogroup/localstandards,andhastakentheleadindraftingthenationalstandard"QuantificationMethodandRequirementsforProductCarbonFootprintofGreenhouseGases—IndustrialVehicles",promotingtechnologicalprogressintheindustrywhileconsolidatingandenhancingtheCompany'spositionandcompetitivenessintheindustry.

2.RespondrapidlytothemarketandcomprehensivelyadvancemarketingtransformationInlinewiththeneweconomictrend,theCompanyhasgivenprioritytoincreasingmarketshareandhaspromotedin-depthmarketingtransformationinthedomesticmarket,continuingtopromotethetransformationandupgradingoftheorganizationalstructure,businesssystemandoperationmechanismandrespondingrapidlytothemarketdemandwithusersasthecenter.Intheprocessoftransformationtothenewenergysegment,theCompanyhasfocusedontheprofessionalmarket.Ithasformulatedandimplementedtargetedactionplansandplannedandpromotednewenergyforkliftbrands,suchasJinniuandTianma.TheCompanyhasalsolaunchedaseriesofinnovativemarketingincentivepoliciesandbusinessdevelopmentstrategies,suchasquarterlypromotions,annualexclusivesales,freeofinterest,andsubleasing,inordertoensurethattheCompany'ssalesgrowthinthedomesticmarketexceedsthatoftheentireindustry.TheCompanypromptlyseizedtheopportunitypresentedbytheprosperousdevelopmentoftheleasingbusinessbyintegratingandrevitalizingtheunifiednationalmarket,realizingthesharingofleasingbusinessresources,jointconstructionandwin-winresults.DuringtheReportingPeriod,theCompany,whileensuringitsstabledevelopmentinthedomesticmarket,integrateditsadvantageousresourcesandstrengthstosecurelargeprojectsandexplorehigh-qualityclientsinthe

2024NewEnergyProductsofHangchaGroupHangcha,leadingthewayintheall-electricera

/

automotive,logistics,airport,portterminal,retailandotherindustries,whichgraduallyincreasedthepenetrationrateoftheCompany'shigh-valuenewenergyproducts,andcontinuedtopromotetherevitalizationanddevelopmentofthebrand.

Inthecontextofatraffic-driveneconomy,theCompanyactivelygraspsthetrendofmarketingtransformation,exploringnewpathsforproductpromotionandbrandvalueenhancementandcontinuouslystrengtheningtheoutputofhigh-qualitycontent.TheCompanyhasestablishedadomesticandinternationalnewmediaoperationandmanagementteamwiththeMarketingDepartmentsoftheE-commerceCompanyandtheImportandExportCompanyasthetwomainpillars,andclarifiedtheoverallobjectivesandkeytasksofthenewmediamarketingtransformation.Ithassetupaninformationcommunicationmechanismandconductedin-depthanalysesofbrandtrafficandconversionrates,activelyexploringwaystoefficientlyutilizethetrafficresources.Throughin-depthcooperationwithleadingInternetplatformssuchasTencent,ByteDanceandFacebook,theCompanyhasmadeeffortstocultivateagroupof"influentiallivestreamers",therebyimprovingitsoperationalandservicecapabilitiestargetingonlinecustomersanddirectusers.ThankstoadvancementsinInternetmarketing,theCompany'snewproducts,newtechnologies,newpoliciesandnewdevelopmentachievementscanquicklyreachtargetcustomers.ThetransformationofthemarketingmodelhasnotonlyenhancedtheCompany'sbrandinfluence,butalsoensuredaddedvalueforcustomers.

Jinniu/TianmaNewEnergySeries

Hangcha,leadingthewayintheall-electricera

/

3.ConsolidatethetraditionalmarketsanddeepenglobalmarketexpansionTheCompanyhasconsistentlyadvanceditsinternationalexpansionstrategy,acceleratingtheconstructionofaglobaloperationalsystem,seizingopportunitiesinoverseasmarkets,strengtheningtheallocationofoverseasresources,andcontinuingtoexpandanddeepentheglobalmarketplanningthroughaseriesofinitiativessuchastheestablishmentofoverseassubsidiaries,thelaunchofnewenergyproductsandtheintroductionofnewenergymodels.Accordingly,theCompanyhasmaderemarkableprogressinoperationalcapabilitydevelopmentandchannelconstruction.DuringtheReportingPeriod,theCompanyhasestablishednewcompaniesinvariousregionsandcountries,includingtheUnitedStates,France,Japan,Indonesia,Malaysia,VietnamandtheMiddleEast,andhassuccessfullyopenedmorethan10overseascompaniesinimportantglobalmarkets,achievingaqualitativeleapinitsownmarketingandservicenetworkbylinkingindividualsites.Whilepromotingtheorderlydevelopmentofitsmarketingservicesystem,theCompanytookakeystepwithprofoundinfluenceinthestrategicplanningofglobalizationbyinvestinginThailandtosetupamanufacturingcompanyofHangchaGroup.ThislandmarkmovesignifiesapivotalshiftinChina'sforkliftindustry,shiftingthefocusfrommarketingservicestoindustrialmanufacturinginoverseasmarkets,therebyleadingtheindustry'stransformationandupgrading.Inviewoftheunbalancedmarketdemandinregionalmarketsworldwide,theCompanyadjusteditsproductdesignandmarketingstrategyaccordingtolocalconditionsandincreasedmarketingguaranteesandservicesupportinmajormarkets,soastofurtherincreaseitsoverseasmarketshare.DuringtheReportingPeriod,thesalesvolumeoftheCompany'soverseasproductsexceeded100,000units,reachingarecordhigh.Whileconsolidatingitsadvantagesintraditionalhigh-endmarketssuchasEuropeandNorthAmerica,theCompanyincreaseditsdevelopmenteffortsinemergingmarketssuchasBrazil,SoutheastAsiaandtheMiddleEast,achievingasubstantialyear-on-yearincreaseinproductsales,andattractingmanypotentnewclientswillingtocooperatewiththeCompany.Themarketing

HangchaheldanationaldealerconferenceDomesticSalesBusinessof

HangchaGroup

DomesticSalesBusinessof

HangchaGroupHangchawithinnovativeproductsatthefirstConstructionMachineryIndustryScienceandTechnologyFestival

HangchawithinnovativeproductsatthefirstConstructionMachineryIndustryScienceandTechnologyFestivalHangchawithnumerouseye-catchingproductsat

CeMATAsia2024inShanghai

Lithium-ionproductsofHangchawereready

forshipment

/

strategiestargetinglargeclients,portmachineryandlarge-tonnageforkliftsprovidetheCompanywithanewopportunitytoestablishacomprehensiveprojectmanagementorganizationandsetupprofessionalpre-salesandafter-salesbusinessteams,whichwouldensuretheserviceassurancerequiredbylargeclientsandlargeprojectswhileimprovingthepaceofserviceresponse.

Intermsofinternationalcooperation,theCompanyhasassistedManitouandothercompaniesincomprehensivetransformationandupgradingconcerningnewenergyproductsthroughtechnologyempowerment,productempowermentandserviceempowerment,settingupamodelofcooperationandmutualtrustwhileexportingtheentireindustrialvaluechainoverseas.

ThefirstHangchaBrazilDistributorConferencewassuccessfullyheldOverseasSalesBusinessofHangchaGroup

OverseasSalesBusinessofHangchaGroupThelithium-ionluggagetractorswereofficiallylaunchedinKualaLumpurInternationalAirport,Malaysia

50unitsoftowtractorwereshippedtotheSoutheastAsiamarket

HangchaOverseasTechnicalTrainingProgram-Li-ionBattery-HangchaMéxico

“CooperationwithHangcha”Activityof

HangchaGroup

/

4.Convergemultidimensionalresourcesandbuildthe"GreatHangcha"industrialecosystemDuringtheReportingPeriod,theCompanyfollowedtheconceptofawholeindustrychainwiththemainindustryasthecoreandleverageditsstrengthsasthemainfactoryinthechain,whichhasastrongcapacitytopromotetheindustryandasignificantindustrialclustereffect.Ithascontinuedtoexpandandstrengthenitsdiversifiedbusinesssegments,mainlycenteringonintelligentlogistics,newenergylithium-ionbatteries,andaerialequipment,therebyinjectingastrongimpetusfortheCompany'shigh-qualitydevelopment.Forthefirsttime,thecontractvalueoftheCompany'sintelligentlogisticssolutionsexceededRMB1billion,andthecompanyachievedremarkabledevelopmentintheoverseasmarket,successfullywinningprojectordersfromtopglobalcompaniesinthefieldsofFMCG,retail,automotive,andtires.Regardingitsaerialequipmentsegment,theCompanyhasformulatedaforward-lookingplantoaddressoverseastradebarriers,acceleratedthespeedofnewproductdevelopment,extendedtheproductchain,andintroducedavarietyofforkliftswithscissorsandtelescopichandlerstothemarketthroughouttheyear,largelyenrichingitsproductmatrix.Concerningitsnewenergylithium-ionbatterysegment,theCompanyhasachievedoverRMB100millioninrevenuefromexportsofitslithium-ionbatteryproductsthankstotheefficiencyadvantagesofitsnewworkshop'shigh-endautomatedproductionequipment,thequalityassurancecapabilitiesandthescaleadvantagesoftheindustry,providingstrongsupportforthedevelopmentoftheCompany.Relyingonthepowerfullithium-ionbatteryindustryandthestrongbrandinfluenceofHangcha,theCompanyhasalsoperformedwellinbusinesssegmentssuchasinstrumentation,wiringharnessesandelectricdrives,fullydemonstratingthepositiverolethatHangcha'snewenergyproductstrategyplaysinupgradingtheindustrialchainandpromotingthetechnologicaliterationofthekeyproductcomponents.Uptonow,the"GreatHangcha"industrialecosystemhasformed,withallbusinesssegmentscooperatingwithandpromotingeachother,creatingasolidindustrialecologicalfoundationforthesustainabledevelopmentoftheCompany.

OverseasExhibitionsofHangcha

GroupLogiMAT(Germany)

LogiMAT(Germany)MODEX(TheUnitedStates)

The135thCantonFair

The135thCantonFair

LogisticsWorldSummit&Expo(Mexico)

CeMATAustralia2024

CeMATAustralia2024DTI-CX2024(Indonesia)

LogiMATSEA2024

/

5.Strengthenindustrialfoundationsandestablishahigh-endindustrialchainsystemAsthereisacrucialwindowofopportunityarisingfromthenewroundofinternationalcompetitionandindustrialrevolution,theCompanyhasseizedthehistoricopportunitywhenthecountryvigorouslypromotedthedevelopmentofnewqualityproductiveforces,consolidatingandenhancingthecomprehensiveleadingadvantagesofHangchaGroupinthefieldsofnewenergyproductsandintelligentlogistics.Thecompanyhastakentechnologicaltransformationasthestartingpoint,optimizingandadjustingtheproductionplanningofproducts,focusingoncoretechnologyresearchandqualityimprovementofcorecomponents,andactivelyplanningforindustrialchainupgrading.DuringtheReportingPeriod,theconstructionoftheHangchaIntelligentProductionBaseProjectwithanannualoutputof10,000unitsofautomationequipmentwasstartedinHangchaHengfanScienceandTechnologyParkPhaseIV,inwhichtheCompanyinvestedhundredsofmillionsofRMB.TheprojectwillpowerfullypromotetheCompany'sproductsandsolutions,guidingthemtowardhigh-end,intelligentupgradesandgreentransformation.Meanwhile,theprojectwillcontinuouslyenhancethedevelopmentvitalityandinternationalcompetitivenessoftheCompany,andcontinuetooptimizeitsone-stopintelligentlogisticssolutionsthatareindependent,controllable,safeandhighlyefficient.TheIntelligentTransformationProjectforHigh-endLarge-TonnageForkliftsandRide-onWarehouseForkliftswithanannualoutputof3,000unitswaspromotedsteadily,inwhichtheCompanyinvestedatotalofRMB160million.Largehigh-endprocessingequipment,suchasthedouble-endedboringmachineandthegantrymillingmachine,hasbeenputintooperation,contributingtosignificantYoYgrowthoftheCompany'shigh-endlarge-tonnageforklifts,andensuringthatthesalesoflarge-tonnageforkliftsrankthehighestinthedomesticindustrialvehicleindustry.Thankstotheirexcellentqualityandmanufacturingcapability,thelarge-tonnageforkliftsofHangchahavenotonlywonhighrecognitionfromclients,butalsosuccessfullysecuredsupportfromultra-long-termspecialtreasurybondsforthe"twonew"fieldsin2024.Theprojecthasmadeinitialachievements.

EcologicalIndustryChainofHangcha

GroupAutomationLogisticsEquipment

Aftermarket

Aftermarketininvestments

ininvestmentsOthers

ComprehensiveIntelligentLogisticsSolution

/

Intermsofindustrialcooperation,theCompanyhasachievedaleap-forwarddevelopment.IthasfurtherrefineditsindustrialplanningofitscoretechnologyfornewenergyindustrialvehiclesanddevelopedZhejiangHangboElectricDriveCo.,Ltd.,ajointventurespecializinginpermanentmagnetmotorsforindustrialvehicles,incooperationwithZhuhaiEnpowerElectricCo.,Ltd.Therefore,theCompanyhasdevelopedcomprehensivetechnicalinnovationcapabilitiesandsolidindustrialsupportintermsofcoretechnologiesofbattery,electricdriveandelectriccontrolfornewenergyindustrialvehicles,buildingacompletelyindependentandcontrollablehigh-endsupplychainsystem.Currently,Hangchahassuccessfullybuiltanintelligent,distinctivegigafactorywithtwoparksinQingshanandHengfanatthecore,whichfeaturesthesynergisticdevelopmentofmultipleindustriessuchastheindustrialvehiclemachineindustry,theintelligentlogisticsindustry,thepartsandcomponentsindustryandthemodernserviceindustry,andthedeepintegrationofthesupplychain,industrialchainandinnovationchain.Inthisway,theCompanyhaslaidasolidindustrialfoundationforitslong-termdevelopment.II.IntroductiontotheIndustrywheretheCompanyOperatesduringtheReportingPeriodAsthecorecategoryofindustrialvehicles,forkliftsarethekeyequipmentformechanizedloadingandunloading,intelligentstackingandefficientshort-distancetransportinthemodernlogisticssystem.Itsapplicationscenarioscoverlogisticsandwarehousing,manufacturingandprocessing,transporthubsandotherkeyareasofthenationaleconomy,anditplaysanirreplaceableroleinstations,ports,airportsandintelligentfactories.Astheglobalindustrialvehicleindustrycontinuestodeepenitselectrificationtransformationandintelligentupgrades,thedemandofthenewenergyforkliftmarketcontinuestoclimbandtheoveralltransformationandupgradingoftheindustryhasachievedremarkableresults,signifyingthatChina'shigh-endequipmentmanufacturingfieldisacceleratingtowardgreen,digitized,andintelligentpractices.Thesalesvolumeofindustrialmotorvehiclesexceeded1.09millionunitsin2021.Followingthat,Chinamaintainedasalesvolumeofoveronemillionunitsfrom2022to2024and

ProjectConstructionofHangcha

GroupTheconstructionprojectoftheScienceandTechnologyInnovationParkinShiqiaoofHangchaGroupwasopenforinvestment

TheconstructionprojectoftheScienceandTechnologyInnovationParkinShiqiaoofHangchaGroupwasopenforinvestmentThegroundbreakingceremonyfortheHangchaIntelligentProductionBaseinHangchaScienceandTechnologyParkPhaseIV,withanannualoutputof10,000unitsofautomationequipment,washeldsuccessfully

ThegroundbreakingceremonyfortheHangchaIntelligentProductionBaseinHangchaScienceandTechnologyParkPhaseIV,withanannualoutputof10,000unitsofautomationequipment,washeldsuccessfullyThegroundbreakingceremonyfortheHangchaManufacturingPlantinThailandwasheld

/

rankedastheworld'slargestforkliftproductionandconsumptionmarketforseveralconsecutiveyears.In2024,thetotalsalesvolumeofindustrialmotorvehiclesreached1,285,500units,up9.52%comparedto2023.Ofthose,800,500unitsweresolddomestically,up4.77%comparedto2023,while480,500unitswereexported,up18.53%comparedto2023.Thismarksnewrecordhighsintermsofthetotalsalesvolume,domesticsalesandexportvolume.Consideringtheindustrysalesstructurebymodel,electricforkliftshavemaintainedgoodgrowthmomentum.Incontrast,internalcombustionforkliftshaveseenadecreaseofover10%,withaparticularlysignificantdeclineof13.16%inthedomesticmarket.Thewarehouseforklifthasachievedthehighestincrease,andthesalesvolumeofelectricride-onwarehouseforkliftsandelectricwalkiewarehouseforkliftsincreasedbyover20%,respectively,withrespectiveincreasesof15%and27%inthedomesticandinternationalmarkets.Theforkliftindustryhasseencontinuedprogress,drivenmainlybythesynergyofinternalandexternalcycles.Inthedomesticmarket,thereisacontinuousandstabledemandformaterialhandlingthankstoChina'seconomicandpopulationadvantagesandthedepthcharacteristicsofitsterritorialspace.Withtheaccelerationinpopulationagingandthewaveofindustrialautomationupgrading,thestagedtrendof"replacinghumanworkerswithrobots"istransformingintoanirreversibleindustrialrevolution.Intheinternationalmarket,China'sindustrialvehicleshavedemonstratedgreatresilienceinthefaceofacomplexglobaleconomicandtradeenvironment.The9.52%increaseinexportsdemonstratesthecomprehensivecompetitiveadvantagesof"IntelligentManufacturinginChina"intechnologicalinnovation,costcontrol,andthesynergyoftheentireindustrychain.Theincreasingdemandinboththedomesticandoverseasmarketsnotonlyreflectthebasicmanufacturingindustry'sattributeoflivelihoodprotection,butalsohighlightsthehigh-qualitydevelopmentpathoftheequipmentmanufacturingfield.

TrendofAnnualTotalSalesVolumeofChina'sIndustrialVehicleIndustry(Units)In2024,fromamodelstructureperspective,electricride-oncounterbalanceforklifts(ClassIvehicles)achievedsalesof185,900units,up8.90%YoY;electricride-onwarehouseforklifts(ClassIIvehicles)achievedsalesof29,700units,up24.03%YoY;electricwalkiewarehouseforklifts(ClassIIIvehicles)achievedsalesof730,600units,up21.39%YoY;andinternalcombustioncounterbalanceforklifts(ClassIVandVvehicles)achievedsalesof339,300units,down10.06%YoY.Lithium-ionforklifts

/

accountedfor47.43%ofelectricforkliftsales,with448,800unitssold.Lithium-ioncounterbalanceforkliftsaccountedfor71.71%ofelectriccounterbalanceforkliftsales.In2024,thesalesvolumeoflithium-ionbatterymodelsinthethreemajorelectricforkliftcategories(ClassI,IIandIII)isasfollows:

lithium-ionride-oncounterbalanceforkliftsof133,300units,lithium-ionride-onwarehouseforkliftsof10,600units,andlithium-ionwalkiewarehouseforkliftsof304,900units.Intermsofregionaldistribution,lithium-ionforkliftsachieveddomesticsalesof244,000unitsandexportsalesof204,800units,withtheexportsalesaccountingfor45.63%ofthetotal.

IndustrySalesStructurebyModelin2024Accordingtotheindustrydataanalysis,thecompetitivenessofthemodelsrepresentedbytheelectricforkliftandthenewenergylithium-ionbatteryforklifthasimprovedsignificantly,achievingsubstantialgrowthintheirdomesticandinternationalmarketshares.Theproportionofelectricforkliftshasreached

73.61%,theproportionofelectriccounterbalanceforkliftshasexceeded35.40%,andtheproportionoflithium-ionbatteryforkliftsamongelectricforkliftshasgrownsignificantly,reaching47.43%.Meanwhile,thepromotionandapplicationofthedomestichydrogenfuelcellforkliftisinfullswing,anddemonstrationapplicationshavebeencarriedout.Undertheguidanceoftheindustrialpolicyofacceleratingthehigh-qualitydevelopmentofthemanufacturingindustry,theindustrialvehicleindustryisactivelypromotingatransformationfrom"quantitativeexpansion"to"qualitativeleap",whichprovidestheindustrywithanewdevelopmentideaanddirection,andgraduallyformsanewgrowthmomentum.Intermsofproductresearchanddevelopment,wefocusmainlyonhigh-end,digital-intelligentandgreendevelopment.Inadditiontothetraditionalcompletemachineenterprisesandoriginalsupportingindustrialenterprises,somepotentpartsandcomponentssuppliersfromthenewenergy,automotive,constructionmachineryandotherfieldsareenteringtheindustrialvehicleindustry,providingnewdriversfortheinnovationanditerationofnewtechnologiesandproducts,andvigorouslypromotingtheindustry'stechnologicalprogressandproductupgrading.Majorexistingenterprisesarealsoacceleratingtheirstrategicplanningfortheinternationalmarket,aimingtopromotemorebalanced

Electricride-onwarehouseforkliftSalesvolumeof2,9700unitsAYoYgrowthof24.03%Internalcombustioncounterbalanceforklift339,300unitsAYoYdecreaseof10.06%

Internalcombustioncounterbalanceforklift339,300unitsAYoYdecreaseof10.06%Electricride-oncounterbalanceforkliftSalesvolumeof185,900unitsAYoYgrowthof8.90%

Electricride-oncounterbalanceforkliftSalesvolumeof185,900unitsAYoYgrowthof8.90%ElectricwalkiewarehouseforkliftSalesvolumeof730,600unitsAYoYgrowthof21.39%

ElectricwalkiewarehouseforkliftSalesvolumeof730,600unitsAYoYgrowthof21.39%ClassIVandClassVVehicles,

26.39%

ClassIVandClassVVehicles,

26.39%ClassIVehicles,

14.46%

ClassIVehicles,

14.46%ClassⅡVehicles,

2.31%

ClassⅡVehicles,

2.31%

ClassI

ClassIClassⅡ

ClassⅢ

ClassⅢClassIIIVehicles,

56.84%

/

andsteadydevelopmentofthedomesticandinternationalmarketsandfurtherenhancetheindustry'sinfluenceandcompetitivenessintheglobalmarket.(Note:ThedatacomesfromtheIndustrialVehicleBranchoftheChinaConstructionMachineryAssociationandhasbeenroundeduptotwodecimalplaces)III.IntroductiontotheCompany’sBusinessduringtheReportingPeriod

1.MajorbusinessoftheCompanyTheCompanyfocusesontheoperationofthewholeindustrychainofindustrialvehiclesandrelatedproducts.Itsmajorbusinessincludestheresearchanddevelopment,manufactureandsalesofindustrialvehicles,includingforklifts,warehouseforklifts,towtractors,automatedguidedvehicles(AGVs)andintelligenthandlingrobots,andcompletemachines,suchasaerialworkvehicles,dynamiccompactors,automationequipmentandcleaningequipment,alongwiththeirkeycomponents.Moreover,itdesigns,implements,andmaintainscomprehensiveintelligentlogisticssystems,andprovidesaftermarketservices,includingthesalesofindustrialvehicleaccessories,partsandkits,vehiclerepairandmodification,industrialvehicleleasing,andleasing,manufacturingandremanufacturingofintelligenthandlingrobots.

/

ClassIVehicl

es

Class

IV&ClassVVehicles

Class

IV&ClassVVehiclesReachtruckOrderpicker

ReachtruckOrderpickerInternalcombustioncounterbalance

forklift

Internalcombustioncounterbalance

forkliftIntelligentLogistics

IntelligentLogisticsIntelligentHandlingRobot

IntelligentHandlingRobotIntelligentWarehousing

IntelligentWarehousingPort

Machinery

Port

MachineryOtherCompleteMachine

OtherCompleteMachineOtherVehicles

OtherVehicles

Parts&Kits

Parts&Kits

Keycomponents

Keycomponents

Lithium-ionBattery

ConveyorLine

ConveyorLineDiversifiedProductsofHangchaGroup

DiversifiedProductsofHangchaGroupForklift

ForkliftClassⅡVehicles

ClassⅡVehiclesClassⅢVehicles

ClassⅢVehiclesElectriccounterbalanceforklift

ElectriccounterbalanceforkliftWarehouseforklift

/

2.businessmodeloftheCompanyTheCompanyadoptsabusinessmodelcenteringonR&D,manufacturing,marketingandservicestopromotethecoordinateddevelopmentoftheupstreamanddownstreamoftheindustrialchain.Thecompanyspecializesinindustrialvehiclesandadherestoaninnovation-drivenstrategy,activelycultivatingthenewqualityproductiveforcesthatintegratehigh-tech,high-efficiencyandhigh-qualityfeatures.Throughyearsofendeavor,thecompanyhasaccumulatednumerouscapabilities,includingstrongtechnologicalinnovationcapabilities,excellentqualityassurancecapabilities,asafeandefficientsupplychainsystemandaperfectmarketingandservicenetwork.Leveragingthesestrengths,theCompanyhastransformedintoaleadingmodernserviceenterprisethatprovides“manufacturing-relatedservicesandsolutions”intheindustry.Intermsofproductsales,theCompanyadoptsadiversifiedproductsalesmodelof“directsales+distribution+e-commerce”,developingdirectlyaffiliatedsalescompanies,authorizedandfranchiseddealers,ande-commerceplatformsathomeandabroadandbuildingupaglobalmarketingandservicesystem,soastoprovideusersworldwidewithhigh-qualityindustrialvehiclesandcustomizedlogisticssolutions.IV.CoreCompetenciesAnalysisfortheReportingPeriod"√Applicable""□Notapplicable"Guidedbyourmissionof"Makematerialhandlingeasier,"wepursuediversifieddevelopmentcenteredaroundourcoreindustrialvehiclebusiness.Byfocusingondigitalempowerment,refinedmanagement,innovation-drivendevelopment,low-carbontransformation,andintegrateddevelopment,wehavecontinuouslydriventhetransformationandupgradingoftheforkliftindustry,cultivatednewqualityproductiveforceswithintheindustry,takentheleadintheindustry'shigh-qualitydevelopment,andenhancedourcorecompetencies.Wecloselytrackindustrytrendsandmarketdemandchangesandadheretoamarket-orientedapproachinadjustingourstrategies,optimizingourstructure,andmaintainingsteadygrowth.Thishasledtofurtherconsolidationofourmarketshare,asignificantincreaseinouroverallstrength,andthereinforcementofourleadingpositionintheindustry,ultimatelyachievinghigh-qualitydevelopment.Ourcorecompetenciesareprimarilyreflectedinthefollowingaspects:

1.R&DandInnovation-DrivenAdvantagesWekeenlyunderstandthedevelopmenttrendsofindustrytransformationandupgrading.Byadheringtothephilosophyof"targetingbenchmarks,surpassingcompetitors,anddevelopingtheworld'sbestforkliftproducts,"wehavebuiltatechnologicalinnovationsystemcharacterizedby"onecore,twowings,andcomprehensivecoordination."Weleverageresourcesandteamsfromourprovincialandnational-leveltechnologicalinnovationplatforms,includingtheNationalEnterpriseTechnologyCenter,theNationalAccreditedLaboratory,theNationalIndustrialDesignCenter,theNationalPostdoctoralResearchWorkstation,theZhejiangProvincialIndustrialVehicleEngineeringTechnologyResearchCenter,theZhejiangProvincialAcademicianandExpertWorkstation,andtheZhejiangProvincialKeyEnterpriseResearchInstitute.Wefocuson"green,intelligent,andservice-oriented"technological

/

innovation,integratethein-depthapplicationsofcutting-edgetechnologiessuchasartificialintelligence,newenergy,5G,andtheInternetofThings,andconcentrateontechnologicalareassuchasgreenandintelligentindustrialvehicles,comfortableandsafeoperation,highefficiencyandreliability,intelligentlogistics,anddigitalR&D.WecontinuetoincreaseinvestmentintheR&Dofcoretechnologiesforindustrialvehicles.Wehavemasteredkeytechnologiesincludinglithium-ionbattery-specificarchitecturesforindustrialvehicles,high-efficiencyhigh-torquepermanentmagnetsynchronousmotors,high-voltageplatforms,intelligentsafetysystems,multi-sensorfusionactivesafetysystems,andclustercollaborativeschedulingalgorithms.Wecontinuouslyandefficientlydevelopandlaunchawidearrayofnewenergyproductsandintelligentindustrialvehicles.Currently,theCompanyhassuccessfullybuilttheindustry'smostcompletenewenergyproductportfolio.Someproducts,includingthe48thigh-voltagelithium-ionforklift,the45thigh-voltagelithium-ioncontainerreachstacker,the48thydrogenfuelcellforklift,andthehigh-voltagelithium-ionroughterrainforklift,haveachievedindustry-leadingstatus.Theseproductshavefrequentlywonnational,provincial,andmunicipalscienceandtechnologyawards,fullydemonstratingtheCompany'soutstandingR&Dandinnovationcapabilities.

Technologicalachievementsof

HangchaGroup

SecondPrizeoftheMachineryIndustryScienceandTechnologyAwards

2024GaogongGoldenGlobeAwardforApplications(GaogongHydrogen&Electricity)

2024GaogongGoldenGlobeAwardforApplications(GaogongHydrogen&Electricity)InnovationandApplicationAwardinForkliftCategory

InnovationandApplicationAwardinForkliftCategoryHangchasuccessfullyhostedtheexpertreviewmeetingsfor

industrystandards(draftforreview)

/

2.LeadingAdvantageinNewEnergyProductsAsaleadingenterpriseintheforkliftindustry,theCompanyhasbuiltacompleteproductrangeofnewenergyindustrialvehiclesandestablishedaproprietaryandcontrollablekeycorecomponentindustrialecologicalchainthroughcontinuousengagementinthenewenergyfield.Tosupportanewenergyindustrialvehicleproductmatrixcenteredonlithium-ionbatteries,hydrogenenergy,andhybridpower,wehaveengagedinstrategicforward-lookingplanninginthekeycomponentsupplychain,ensuringthestablesupplyandcostadvantagesoflithiumbatteries,drivemotors,andvehicleelectricalcontrols.Inmanufacturing,wehavecontinuouslyincreasedinvestmentintechnologicalrenovationandbuiltandsuccessfullylauncheda"futurefactory"fornewenergyforkliftcomponentsandcompletemachines.Thishasachievedahighdegreeofautomationandintelligenceintheproductionprocess.InR&D,wehavedevelopedaseriesofcoretechnologies,includinglithium-ionbattery-specificarchitectureplatforms,permanentmagnetsynchronousdrives,andhigh-voltageplatforms.Wehavelaunchedafullrangeofnewenergyproducts,includingtheXCserieslithium-ionspecial-purposeforklifts,theXEserieslithium-ionbatteryspecial-purposeforklifts,theXHseriesall-weatherheavy-dutyhigh-voltagelithium-ionspecial-purposeforklifts,andtheXCserieshydrogenfuelcellforklifts.Wereplacelead-acidbatterieswithlow-voltagelithium-ionbatteries,andourhigh-voltagelithium-ionbatterieshaveperformancesurpassinginternalcombustionengines.Ourproductlinecoverstherangefrom0.6tto48t,offeringsuperiorperformance,safety,efficiency,reliability,andhighindustrysatisfaction.OurnewenergyproductshavegainedwidespreadrecognitioninbothdomesticandinternationalmarketsandhavefrequentlywonindustryscienceandtechnologyawardsandrecognitionsforbeingthefirstoftheirkindinChina.Withleadingtechnology,acompleteproductrange,astablesupplychain,andhighbrandrecognition,wehavebuiltcomprehensiveandmulti-layeredcompetitiveadvantagesinthenewenergyproductfield,leadingtheindustrytowardsanacceleratedtransitiontotheall-electricera.

HangchaGroup'sR&Dinvestmentin

thepastfiveyears

2020

Capitalinvestment(RMB100million)

Hundredmillionyuan

/

3.AdvantagesinGlobalPresenceWecontinuetoexpandourglobalpresencebystrengtheningtheoverseasmarketingandafter-salesservicenetwork.Athree-tierservicenetworkhasbeenformed,consistingof"headquarters-overseascompanies-agents,"includingmorethan70wholly-ownedsalescompanies,morethan600dealers,andmorethan10overseascompanies,coveringmorethan200countriesandterritories.Wehaveestablishedmorethan10overseassalescompaniesandpartsservicecentersinmajorcountriesandregionssuchasEurope,NorthAmerica,SouthAmerica,SoutheastAsia,andOceania.Theexpansionofourownchannelshasachievedfullcoverageofourmarketingandservicenetworkinmajorglobalindustrialvehiclemarkets,includingEurope,NorthAmerica,SouthAmerica,Australia,andSoutheastAsia.OurinnovativemarketingmodelcomprehensivelyintegratestheCompany'shuman,financial,material,andinformationresourcestocarryoutmulti-channelsales,includingdirectsalestolargecustomers,cross-bordere-commerce,andnewmediamarketing.Itenablesrapidresourceallocation,directlinkswithcustomersforinformation,improvedresponsespeed,andenhancedcustomerloyalty.Weactivelydeployedoverseasmanufacturingbasesduringthereportingperiodtoaddresstheuncertaintiesintheinternationaltradeenvironment.Awholly-ownedmanufacturingsubsidiarywasestablishedinThailand,withadesigncapacityof10,000counterbalanceforkliftsandaerialworkplatformsperyear,andalsoincludinglithiumbatteryassembly.SucheffortsnotonlyenhancethelocalizedsupplycapacityintheSoutheastAsianmarketbutalsoeffectivelyreducetariffcoststhroughtheASEANFreeTradeArea,improvingourabilitytocopewithtradebarrierrisks.WehavesuccessivelyestablishedsalescompaniesinMalaysiaandaleasingcompanyinVietnam,furtherimprovingthesalesandservicenetworkinSoutheastAsia.Throughtheimplementationofathree-in-oneglobalstrategyof"technology+manufacturing+service,"wehaveimprovedourabilitytowithstandmarketrisksandsteadilyexpandedourmarketshare.Moreimportantly,byleveragingourleadingadvantagesinnewenergyandintelligence,wetaketheleadinindustrytransformationanddevelopment,injectingimpetusintotheCompany'slong-termsustainablegrowth.

NewEnergyProductProfileofHangchaGroupin2024Hangcha,leadingthewayintheall-electric

era

Hangcha,leadingthewayintheall-electric

era

Stockname:HangchaGroupStockcode:603298

/

4.AdvantagesfromEmpowermentbyIntelligentManufacturingWehavedevelopedsolidadvantagesinintelligentmanufacturingthroughforward-lookingandeffectiveinnovativemeasuresamidstthewaveofintelligenttransformationintheforkliftindustry.Weworktorevolutionizeproductionprocessesbyactivelyintroducingadvancedtechnologiessuchasdigitaltwins,5Gapplications,andtheIndustrialInternet.Inproductionprocesses,data-drivensystematicreconstructinghascomprehensivelyimprovedproductionefficiencyandqualitycontrolcapabilities.Theapplicationofintelligentweldingtechnologynotonlyimprovesweldingprecisionbutalsosignificantlyshortensproductiontime.Automatedpaintingprocessesensuretheconsistencyanddurabilityofproductappearance.Wearevigorouslybuildingintelligentsuper-factoriestoachievethescaleeffectofintelligentproduction.Currently,thetwointelligentproductionbasesattheQingshanIndustrialParkandtheHengfanTechnologyParkhaveattainedalargescale,possessingmorethan600intelligentrobotsofvarioustypes,morethan20intelligentintegratedproductionlines,andmorethan10spraypaintinglines,amongotheradvancedfacilities.Theyconstituteahighlyautomatedandintelligentproductionsystem,achievingfull-processintelligencefromautomatedmaterialfeedingandpreciseweldingtofinepainting,efficientassembly,andlogistics.Astrongproductsupplycapacityhasbeenformedwithanannualproductioncapacityof400,000industrialvehiclesandotherlogisticsequipment.

Headquarters

Distributors

DistributorsHangchaForkliftCanada

HangchaForkliftCanadaHCForkliftAmerica

HCForklift

AmericaForeignsubsidiariesofHangchaGroup

ForeignsubsidiariesofHangchaGroup

Hangcha

México

Hangcha

MéxicoHCForkliftAmericaHangchaUSsuppliesgenerallithiumbatteriestoempowerintelligentlogistics

HCForkliftAmericaHangchaUSsuppliesgenerallithiumbatteriestoempowerintelligentlogistics

HangchaNetherlands

HangchaNetherlands

Hangcha

Europe

Hangcha

EuropeHangcha

Japan

Hangcha

JapanHangchaMiddle

East

Hangcha

Middle

EastHangchamakesproductsinThailand

HangchaForkliftVietnam

HangchaForkliftVietnam

Hangcha

Malaysia

Hangcha

MalaysiaHangchaIndonesia

China

ChinaHangcha

Brasil

Hangcha

Brasil

Headquarters

HeadquartersSubsidiary

SubsidiaryDistributors

Distributors

HangchaGroupcurrentlyhasmorethan60domesticsubsidiariesandmorethan300domesticdistributors.

HangchaEurope

Rental

/

Ourexplorationandpracticeinintelligentmanufacturinghavebeenwidelyrecognized.Duringthereportingperiod,theZhejiangprovincialkeyR&Dprojectweundertook,"ResearchandApplicationofIntelligentFactoryIntegrationTechnologyforIndustrialVehiclestoAccommodateDiverseVarietiesandVariableBatchSizes,"achievedremarkableresults,providingvaluableexperienceandtechnicalsupportfortheintelligentupgradingofproductionmodeswithdiversevarietiesandvariablebatchsizeswithintheindustry.HangchahasbeeninscribedinhonorablelistsasaNationalService-OrientedManufacturingDemonstrationEnterprise,NationalGreenSupplyChainManagementEnterprise,"FutureFactory"inZhejiangProvince,andChinaBenchmarkIntelligentFactoryforitsoutstandingperformanceinintelligentmanufacturing,greendevelopment,andservice-orientedmanufacturing.TheCompanyhasbecomeamodelforintelligentmanufacturingintheindustry.Weareabletoeffectivelycontrolcosts,shortendeliverycycles,andquicklyrespondtomarketdemandthroughthecontinuousoptimizationofourproductionandmanufacturingsystem.

5.AdvantagesinIntegrationofIntelligentLogisticsSolutionsThemarketdemandforintelligentlogisticscontinuestogrowinthecontextofintelligenttransformationandupgradingacrossvariousindustries.Wewereamongthefirstintheindustrytodeployintheemergingsegmentsofintelligentlogisticsbydevelopingaseriesofstacking,omnidirectional,forward-moving,andcounterbalancedseriesofAGVspoweredbynavigationmethods.Wehaveestablishedthreemajorbusinessgroups,namelyHangchaIntelligent,HangaoIntelligent,andHanheIntelligent.Throughtheintegratedconstructionoftheindustrialchain.Weofferacomprehensiverangeofintelligentlogisticssolutions,encompassingAGVproducts,verticalstorage,andsoftwareintegrationsystems,aswellascustomizedandscenario-basedproductdevelopmentandengineeringservicesadaptedtocustomerneeds.Withextensiveprojectexperience,ourprofessionaltechnicalteamshavesuccessfullyimplementedmorethan1,000projects,helpingcustomersinindustriessuchasphotovoltaics,rubber,lithiumbatteries,3Celectronics,food,pharmaceuticals,andceramicsto

HangchaQingshanIndustrialParkIntelligentfactoriesof

HangchaGroup

Intelligentfactoriesof

HangchaGroupHangchaflexibleassemblyproductionline

HangchaHengfanTechnologyPark

HangchaHengfanTechnologyParkIntelligentfactoriesAnnualcapacityof400,000unitsperyear

/

overcomethechallengesofintelligentlogisticsindiverseandcomplexscenarios.Wehavedeliveredanumberofbenchmarkprojects,includingfinishedproductfactoriesforleadingbeveragecompaniesandintelligentlogisticssystemintegrationprojectsforthemetalproductsindustry.

Duringthereportingperiod,HangchaIntelligent,asubsidiaryofHangcha,receivednumerousindustryawards,includingthe"2024Top100High-GrowthHigh-techEnterprisesofZhejiang"designatedbytheDepartmentofEconomyandInformationTechnologyofZhejiangProvince,the"GaogongGoldenGlobeAwardforEnterprise'sIndustryContributioninPastFiveYears"fromGaogongRobotics,andthe"OutstandingContributionAwardforEnterpriseinIndustryStandardDevelopment"fromtheChinaMobileRobot&AGV/AMRIndustryAllianceAssociation.HangchaIntelligenthasalsoestablishedaprovincial-levelR&Dcenterformobilerobots,continuouslystrengtheningitstechnologicalR&D

Storageequipment

Othersupportingequipment

OthersupportingequipmentPalletstackingsystem

Two-wayRGV

Robotarm

Stocker

StockerIntelligentlogisticsbusinessofHangchaGroup

IntelligentlogisticsbusinessofHangchaGroupHandlingequipment

HandlingequipmentIntelligentlogisticsproductseries

IntelligentlogisticsproductseriesIntelligentbusinessofHangchaGroup

IntelligentbusinessofHangchaGroupAnAGVprojectsiteHangchainthetextileindustry

AnintelligentwarehouseprojectundertakenbyHangchaforthewineindustryisputintouse

HangchaAGVsdeliverytoacustomerintheceramicindustry

/

capabilities,layingasolidfoundationfortheCompany'scontinueddevelopmentintheintelligentlogisticsfield,andfurthersolidifyingitscompetitiveadvantageanddevelopmentpotentialintheindustry.

6.AdvantagesinCulture-LeadingDevelopmentHangchahasforgedaleadingadvantagewithauniqueandinfluentialcultureintheindustrialvehicleindustryformorethan60yearsofprofounddevelopmentandmorethan20yearsofboldreformandinnovation."Tobethebestforklifttruckmanufacturerintheworld,"wetakeonthemissionof"Makematerialhandlingeasier"whileupholdingourcorevaluesof"integrity,responsibility,andsharing."WecarryforwardtheHangchaspiritof"progress,pragmatism,innovation,andharmony,"andpromoteour"family"culture.TheseculturalconceptswerefurtherintegratedintoallaspectsoftheCompany'soperationsduringthereportingperiod.Intalentdevelopmentandmotivation,wefullyleveragetheadvantagesofflexiblehumanresourcemanagementmechanismsandsoundmanagementregulationsandactivelyorganizevarioustrainingprogramsandskillscompetitionswithdiverseformsandrichcontent,providingemployeeswithcontinuouslearningopportunitiesandbroaddevelopmentspace,respectingandstimulatingtheirindividualityandabilities.Inpromotingourcorporateculture,wemakethebestofdiversifiedchannels,suchasonlinelearningplatformsandcorporateculturalactivities,tostrengthenemployees'strongidentificationwiththeCompany'svaluesandenhancetheirsenseofbelongingandcohesion.Inthefaceofintensemarketcompetition,wecontinuouslylaunchnewproductsandservicesthatmeetmarketdemands,satisfyingthediverseandpersonalizedneedsofdifferentcustomergroupsthroughefficientteamcollaborationandaspiritofinnovationthatdarestobreakboundaries.Meanwhile,weactivelyfulfilloursocialresponsibilitiesandproactivelyparticipateinpublicwelfareactivities,givingbacktosocietythroughconcreteactions,improvingHangcha'sbrandimageandsocialreputation,andattractingtheattentionandfavorofmorehigh-qualitytalentandpartners,furthersolidifyingourstrongholdintheindustry.Throughculturalguidance,wehavecultivatedahighdegreeofloyaltyandidentificationamongemployees,improvedemployeesatisfaction,andenhancedtheinternalimpetusforsustainabledevelopment.ThislaysasolidculturalfoundationforHangcha'sadvancementtowardbecomingaworld-classlogisticsequipmentmanufacturer.

/

V.MainOperatingResultsduringtheReportingPeriodForthereportingperiod,theCompanyachievedanoperatingincomeofRMB16,486million,representingaYoYincreaseof1.15%,netprofitattributabletoshareholdersofthelistedcompanyofRMB2,022million,aYoYincreaseof17.86%,andnetprofitafterdeductionofnon-recurringgainsandlossesattributabletotheshareholdersofthelistedcompanyofRMB1,989million,aYoYincreaseof

17.82%.

1.MainOperatingResults

(1)AnalysisofchangesinrelateditemsofincomestatementsandcashflowstatementsUnit:YuanCurrency:CNY

Reasonforchangeinoperatingincome:N/AReasonforchangeinoperatingcost:N/AReasonforchangeinsellingexpenses:N/A

HangchaGroupparticipatedintheMinistryofEducation's24/365"InternetplusEmploymentGuidance"liveclassrooms2024HangchaGroupSkillCompetition

2024HangchaGroupSkillCompetition2024"HangchaCup"Lin'anDistrictEmployeeSkillsCompetition

2024"HangchaCup"Lin'anDistrictEmployeeSkillsCompetition2024"ZhejiangYouth·LoveSports"Hangzhou

YouthBasketballGame

CorporatecultureofHangcha

Group

CorporatecultureofHangcha

GroupHangchaqualitymonthactivities

/

Reasonforchangeinadministrativeexpenses:N/AReasonforchangeinfinancialexpenses:Mainlyduetoincreaseininterestincomeandchangesinforeignexchangerates.ReasonforchangeinR&Dexpenses:N/AReasonforchangeinnetcashflowsfromoperatingactivities:N/AReasonforchangeinnetcashflowsfrominvestingactivities:N/AReasonforchangeinnetcashflowsfromfinancingactivities:N/ADetailsofsignificantchangesinbusinesstypes,profitcomposition,orprofitsourcesoftheCompanyinthecurrentperiod"□Applicable""√Notapplicable"

2.Incomeandcostanalysis"√Applicable""□Notapplicable"Forthereportingperiod,theCompanyrecordedanoperatingincomeofRMB16,486million,aYoYincreaseof1.15%,andanoperatingcostofRMB12,603million,aYoYdecreaseof2.42%.

(1).Mainoperatingresultsbyindustry,product,region,andsalesmodelUnit:TenthousandyuanCurrency:CNY

Notesformainoperatingresultsbyindustry,product,region,andsalesmodelNone

(2).Analysisofproductionandsalesvolumes"√Applicable""□Notapplicable"

/

NotesforproductionandsalesvolumesNone

(3).Performanceofsignificantpurchaseandsalescontracts"□Applicable""√Notapplicable"

(4).CostanalysisUnit:TenthousandyuanCurrency:RMB

NotesforotherinformationincostanalysisNone

/

(5).Changesinthescopeofconsolidationresultingfromchangesinequityinterestsinmajorsubsidiariesduringthereportingperiod"□Applicable""√Notapplicable"

(6).DetailsregardingsignificantchangesoradjustmentsintheCompany'sbusiness,products,orservicesduringthereportingperiod"□Applicable""√Notapplicable"

(7).KeyclientsandsuppliersA.Keyclients"√Applicable""□Notapplicable"ThesalesfromthetopfiveclientswereRMB113,602.85Tenthousandyuan,accountingfor6.89%ofthetotalannualsales;therelatedpartysalesinsalesfromthetopfiveclientswereRMB0,accountingfor0%ofthetotalannualsales.Duringthereportingperiod,theproportionofsalestoasinglecustomerexceeds50%ofthetotal,ortherearenewcustomersoraheavyrelianceonafewcustomersamongthetop5customers"□Applicable""√Notapplicable"B.Keysuppliers"√Applicable""□Notapplicable"ThepurchasesfromthetopfivesupplierswereRMB217,734.35Tenthousandyuan,accountingfor

18.59%ofthetotalannualpurchases;therelatedpartypurchasesinpurchasesfromthetopfivesupplierswereRMB116,831.06Tenthousandyuan,accountingfor9.97%ofthetotalannualpurchases.Duringthereportingperiod,theproportionofpurchasesfromasinglesupplierexceeds50%ofthetotal,ortherearenewsuppliersorheavyrelianceonafewsuppliersamongthetop5suppliers"□Applicable""√Notapplicable"Othernotes:

None

3.Expenses"√Applicable""□Notapplicable"

Unit:RMB10,000Currency:RMB

/

4.R&Dinvestment

(1).R&Dinvestment"√Applicable""□Notapplicable"

Unit:YuanCurrency:RMB

(2).R&Dpersonnel"√Applicable""□Notapplicable"

(3).Notes"□Applicable""√Notapplicable"

(4).ReasonsformaterialchangesinthecompositionofR&DpersonnelandtheirimpactontheCompany'sfuturedevelopment"□Applicable""√Notapplicable"

5.Cashflows"√Applicable""□Notapplicable"

Unit:RMB10,000Currency:RMB

/

2.NotesforSignificantChangesinProfitsduetoNon-OperatingActivities

"□Applicable""√Notapplicable"

3.AnalysisofAssetsandLiabilities"√Applicable""□Notapplicable"

(1)Assetsandliabilities

Unit:TenthousandyuanCurrency:RMB

/

/

/

Othernotes:

None

(2)Overseasassets"√Applicable""□Notapplicable"a.SizeWhere:Theoverseasassetswere171,638.72(Unit:TenthousandyuanCurrency:CNY),accountingfor10.49%ofthetotalassets.b.Notesfortherelativelyhighproportionofoverseasassets"□Applicable""√Notapplicable"

(3)Majorassetrestrictionsasoftheendofthereportingperiod"√Applicable""□Notapplicable"Unit:RMBCurrency:RMB

/

(4)Othernotes"□Applicable""√Notapplicable"

4.IndustryOperatingInformationAnalysis"√Applicable""□Notapplicable"Fordetails,refertotherelevantinformationin"SectionIIIManagementDiscussionsandAnalyses"ofthereport.

/

5.InvestmentAnalysis

Generalanalysisofexternalequityinvestment"√Applicable""□Notapplicable"TheCompanycontinuedtoexpandupstreamanddownstreamarounditsmainbusinessandstrengthenedthecapacitybuildingofkeybusinessmodulesandtheservicecapacitybuildingofaftermarket.TheCompanyincreasedthecapitalofHangchaGaokong,HangchaLeasing,andTianjinFinancing,amongothers,byRMB276million,andinvestedRMB37.7millioninnewlyestablishedHangchaYunruiandHangboElectric.TheactualinvestmentininternationalmarketdevelopmentreachedmorethanRMB33million.ThetotalinvestmentreachedRMB349millioninthewholeyear.

(1)Significantequityinvestments"□Applicable""√Notapplicable"

(2)Significantnon-equityinvestments"□Applicable""√Notapplicable"

(3)Financialassetsmeasuredatfairvalue"√Applicable""□Notapplicable"

Unit:YuanCurrency:CNY

Securitiesinvestment

/

"□Applicable""√Notapplicable"Notesforsecuritiesinvestment"□Applicable""√Notapplicable"Investmentinprivateequityfunds

"□Applicable""√Notapplicable"Investmentinderivative"√Applicable""□Notapplicable"a.Investmentinderivativesforhedgingpurposeduringthereportingperiod"√Applicable""□Notapplicable"

Unit:YuanCurrency:CNY

/

/

b.Investmentinderivativesforspeculativepurposesduringthereportingperiod"□Applicable""√Notapplicable"Othernotes:

None

(4).Detailsonprogressofmajorassetrestructuringandintegrationduringthereportingperiod"□Applicable""√Notapplicable"

6.SignificantAssetandEquitySales"□Applicable""√Notapplicable"

7.AnalysisofMajorCompanieswithControllingorMinorInterests"√Applicable""□Notapplicable"

Unit:RMB10,000Currency:RMB

8.StructuredEntitiesControlledbytheCompany"□Applicable""√Notapplicable"VI.DiscussionsandAnalysesoftheCompany'sFutureDevelopment

1.IndustryLandscapeandTrends"√Applicable""□Notapplicable"a.Industrycompetitionlandscape2024witnesseddramaticchangesintheglobalpoliticalandeconomiccontext.Theworldeconomysloweddownamidstdifferentiation,withintensifyingpressuresofadownwardtrajectory.Globalmarketdemanddeclined.However,theChineseindustrialvehicleindustryonceagaindemonstratedstrong

/

resilienceinwithstandingmarketshocksandchallenges.Theindustry'sannualproductionandsalesvolumesremainedaboveonemillionunits,continuingtoleadtheglobalmarket.Theindustryforgedaheadwithacceleratingpacesofhigh-end,digital,andgreendevelopment.Whileexperiencingrapiddevelopment,enterpriseshaveyettoenhancetheirinnovationawarenessandtechnologicallevelintheindustry.Theirqualitymanagementandserviceawarenessalsoneedsfurtherstrengthening.Homogenizationandlow-pricecompetitionpersist,highlightingtheincreasingimportanceofenterprises'comprehensivecompetitiveadvantages.Single-dimensionaladvantagesarenolongersufficienttosupportthelong-termdevelopmentofenterprises,andtheentireindustrychainrequiresimprovementandcollaboration.Asaresult,underthecurrenthighlycompetitiveforkliftmarket,industry-leadingenterpriseswithsignificantadvantagesinbranding,scale,R&D,technology,channels,quality,andservicewillgaingreatercompetitiveadvantages.Theeconomyofscaleisbecomingincreasinglyapparent,andindustryconcentrationisrapidlyintensifying,withthemarketgraduallyconcentratingtowardslarge-scale,strongenterprises.Withtherapiddevelopmentofindustryleaders,theglobalcompetitivenessofChineseindustrialvehicleenterprisescontinuestoimprove,theirglobalmarketsharegraduallyexpands,andtheirmarketinfluencecontinuestostrengthen.b.IndustrytrendsAnewroundoftechnologicalandindustrialrevolutionsisburgeoningglobally.Thedeepintegrationofdigitalization,newenergy,andintelligentmanufacturingwithindustrialactivitiesisinjectingdiversegrowthmomentumintotheindustrialvehicleindustry,includingnewtechnologies,models,businessformats,andplatforms.Digitalization,electrification,andinternationalizationarebecomingmajortrendsintheindustrialvehicleindustry,whiletheapplicationscenariosofindustrialvehiclesbecomingincreasinglybroad.Countriesaroundtheworldarecontinuouslystrengtheningenvironmentalprotectionrequirements;Chinakeepsimplementingthenationalstrategyforcarbonpeakingandneutralizationandsupply-sidestructuralreforms;industryemissionstandardsaregraduallybeingupgraded;theproductstructureofindustrialvehiclesiscontinuouslyoptimized;thesalesvolumeofforkliftswithtraditionalinternalcombustionenginesareexpectedtograduallydecrease;thetrendtowardsnewenergy,intelligence,segmentation,andscenario-specificproductsisbecomingmorepronounced;technologicalinnovationisleadingtheaggregationofproductionfactorstowardsthehighend;theratioinforkliftsusingfuelstothoseusingelectricpowerisalsoundergoingpositivechanges.In2024,thesalesvolumeofelectricindustrialvehiclesaccountedfor73.61%,andtheproportionofelectricindustrialvehicleswillcontinuetoincreaseinChina.Theexpansioninthesalesofnewenergyindustrialvehicles,warehousevehicles,intelligentindustrialvehiclesandparts,forkliftleasing,andafter-salesmarketssuchasre-manufacturinghavebecomenewgrowthhotspotsanddirectionsfortheindustry'sdevelopment.Enterpriseswithleadingcapabilitiesintechnologicalsystemintegrationwithintheindustryaregraduallytransformingfromproductsupplierstooverallsolutionprovidersagainstthebackdropoftheincreasinglyurgentneedforcomprehensive,professional,high-quality,andefficientservicesinintelligentmanufacturing,intelligentlogistics,andartificialintelligence.Artificialintelligencetechnologyisalsowidelyappliedtotheproductionandmanufacturingprocessesofindustrialvehicles.

/

Intelligentproductionmanagementsystemshelprealizeprecisecontrolandoptimizationofproductionprocesses,reduceproductioncosts,andimproveproductqualityandproductionefficiency.

2.CompanyDevelopmentStrategy"√Applicable""□Notapplicable"Upholdingitsmissionof"Makingmaterialhandlingeasier,"wewillfocusonadevelopmentstrategycenteredaround"specializedproduction,brand-orientedoperation,groupoperation,andinternationalintegration."Keyinitiativesincludeoptimizingourproductstructure,buildinginnovativeplatforms,promotingdigitalandintelligentmanufacturing,improvingorganizationalsystemgovernance,andforgingabrandculture.Wewillcloselytrackthetrendsofdigitalization,greendevelopment,intelligence,high-endmanufacturing,andinternationalizationwithintheindustrialvehicleindustry.Onanewjourneytobuildaworld-classhigh-endequipmentmanufacturer,weprovideintelligentlogisticssolutionstotheglobalmarketinpursuingthevisionof"Tobethebestforklifttruckmanufacturerintheworld."

3.OperationalPlan"√Applicable""□Notapplicable"In2025,undertheleadershipoftheBoardofDirectors,wewillleverageourstrengthsinforward-lookingstrategicdecision-makingandefficientstrategicexecution,adheretohigh-levelplanning,solidifythefoundationforbusinessdevelopment,driveindustrialinnovationthroughmulti-facetedefforts,acceleratetheformationofnewqualityproductiveforces,andpromotehigh-qualitydevelopmentoftheCompany.TheCompanywilldiligentlycarryoutproductionandoperationtaskswiththeoverallgoalsof"continuouslyincreasingtheintensityoftechnologicalinnovation,steadilyandrapidlyadvancinginternationalization,andvigorouslydevelopingstrategicemergingindustries."Wewillcontinuetoexplorethenewenergyandintelligentmanufacturingfields,deployinnovationchainsalongtheindustrialchain,keeptechnologicalrenovation,facilitatetheconstructionofintelligentmanufacturingindustrialbasesforhigh-end,large-tonnageforkliftsandreachtrucks,enhancethecorecompetenciesoftheGroupindifferentiatedproductioncapabilitiesacrosstheentireindustrialchain,andapplytechnologicalinnovationstoindustrialdevelopment.Wewillfurtherintegrateresources,deeplyfuseindustrialecologicaladvantagesandinnovativethinking,andcontinuouslytransformthemintostronginnovativedriversforindustrialdevelopment.Wewillmakeallpossibleeffortstofacilitatetheconstructionofintelligentlogisticsindustryprojectsandforgenewadvantagesincapabilitiesforexecutingprojectsdeliveringthousandsofunitsworthhundredsofmillionsofyuan.Wewillfurtheracceleratethetransformationandupgradingoftraditionaladvantageousindustriestostrategicemergingindustriessuchasintelligentlogisticsandnewenergy,allowingstrategicemergingindustriestocontinuouslybecomenewpillarsastheydevelopandexpand.WewillactivelyembraceartificialintelligenceandpreciselyseizethewindowofAItechnologydevelopment.Byleveragingourrichexperiencein5G,theIndustrialInternet,andbigdata,wewillgoalloutinthein-depthapplicationofAI

/

technologytointelligentlogistics,activelyinvestingintheR&Dofhumanoidintelligentlogisticsrobots,creatingcomprehensiveAIintelligentlogisticssolutions,leadingthetransformationoftheintelligentlogisticsindustrythroughinnovation,andseizingthecommandingheightsofindustrydevelopment.WewillcarefullypreparefortheopeningandrunningoftheShiqiaoScienceandTechnologyParktowelcomeglobalcustomerswithanewposture,andcomprehensivelyenhancetheCompany'sstandingandinfluenceworldwide.Intermsofmarketexpansion,wewilladheretoadual-drivestrategyencompassingbothdomesticandinternationalmarkets.Wewilleffectivelyaddressincreasinglyfiercemarketcompetitionthroughstrongresourceallocationcapabilitiesandhighoperationalefficiency.Inthedomesticmarket,wewillcontinuetoenhanceourmarketingteam'sstrengthandimplementprojecttargetsandtaskswithinnovativeconceptsandeffectivepolicies.Wewillconductin-depthanalysesanddrawlessonsfromthebusinessdevelopmentmodelsofleadingenterprisesworldwidetoachieveleapfrogdevelopmentintheexpansionofaftermarketsofleasing,spareparts,andservices.Intheinternationalmarket,wewillcontinuetopromotetheworldwidelaunchingofproducts,technologies,andleasing/sparepartsaftermarkets,focusingonbrandpotential,productportfolio,channelbuilding,efficiencyimprovement,andsupportingpoliciesandmechanisms.Ourinternationalbusinessteamwillfurtherwidentheirmindset,clarifyroles,graduallyestablishaglobalkeyaccountmanagementmodel,andbuildadedicatedsoftwareandhardwareplatformforkeyaccountservices.WewillfurtherstrengthencommunicationandcooperationbetweenbusinessteamsandR&Dteams,fullysupportpre-launchpromotion,andcompetitorcomparisons,andhighlightextractionfornewproducts.Wewillcontinuetofacilitatetheoverseasdeploymentoflithiumbatteriesandentirevehicleleasingprojectstoachievenewbreakthroughsinbusinessmodeltransformationandupgrading.Intermsofenterpriseoperationandmanagement,wewillacceleratethetransformationofmarketingwithInternetthinkingandreshapemanagementandbusinessmodelsusingdigitalization.Wewilldeepenthedevelopmentofdigitalplatformsforoverseasoperations,builddigitaltwinmappingmechanisms,andcreatehighlyefficientmanagementmodelsbasedondigitalsystems.Bymanagingglobalmarketswithdigitalsystems,wewillbeabletodirectlyaddresstherealneedsofglobalcustomers,andcomprehensivelyimprovetheCompany'scapabilitiesinR&Dinnovation,productiteration,delivery,andriskmanagement.

4.PossibleRisks"√Applicable""□Notapplicable"a.RisksfromtheexternaloperatingenvironmentThecurrentinternationalenvironmentishighlycomplexanduncertainwithongoinggeopoliticalconflicts.Thenumerouschallengesfacingtheglobaleconomyintroduceuncertaintyintothestabilityoftheglobalandregionalmarkets.Theseadversefactorshaveledtoasignificantslowdownindomesticandinternationalmarketdemandforlogisticsequipment.PotentialchangesintariffpoliciesandotheraspectsoftheinternationalbusinessenvironmentcoulddirectlyimpacttheCompany'sexportbusiness.

/

TherobustgrowthoftheCompany'sbusinessiscloselyrelatedtochangesinthedomesticandinternationalpoliticalandeconomicenvironment,particularlyinimportantoverseasmarketssuchasEuropeandtheAmericas,wherelong-termpartnershipsexist.Countermeasures:Wewillempoweroperationsthroughmulti-dimensionalinnovationinmanagement,R&D,marketing,andproductiontobuildcorecompetenciesandenhanceriskresistance.WearealsoactivelyplanningandoptimizingtheCompany'soverseaslayout.Throughequityinvestment,acquisitions,andownoperations,wewillrapidlybuildcompletevehiclemanufacturingbasesglobally,acceleratetheCompany'sinternationalizationandlocalization,flexiblyandrationallyavoidtariffbarriersindifferentregions,andfurtherexpandourinternationalmarketshare.b.RiskofintensifyingindustrycompetitionTheforkliftmarketisexperiencingintensecompetitionagainstthebackdropofcontinuouslyrisingglobaleconomicuncertainty.Homogeneousproductsareaprominentproblemintheindustrialvehiclesector,andtheinfluxofnewengineeringmachinerybrandshassignificantlyincreasedtheriskofcompetition.Theindustryisundergoingprofoundchangesinside.Themarketoftraditionalforkliftswithinternalcombustionenginesisundergoingcontinuousshrinking,whiletheelectricforkliftmarket,particularlythenewenergyforkliftsector,isshowingstronggrowthmomentum.Demandforautomatedguidedvehicles(AGVs)issurging,andtheproportionofelectricvehiclesandwarehouseforkliftsinsalesissteadilyincreasing,becominganewenginedrivingindustrydevelopment.Thischangehasnotonlyreshapedthemarketdemandstructurebuthasalsointensifiedmarketcompetition.Countermeasures:Toeffectivelyaddressthecomplex,volatile,andincreasinglycompetitivemarketenvironment,wepayspecialattentiontodeepeningourcorecompetencies,concentrateonkeyareassuchasmarketingservices,R&Dinnovation,intelligentproduction,andbrandpromotion,continuouslyconsolidateandexpandouradvantagesintechnologicalleadership,costcontrol,channelexpansion,productquality,andafter-salesservice.IntermsofR&Dinnovation,wewillcloselyfollowournewenergydevelopmentstrategyandcontinuouslyincreaseR&Dinvestmentandmarketpromotionfornewenergyforklifts,intelligentlogisticsoverallsolutions,andsystemintegrationproducts.Wewillacceleratethetransformationandupgradingofkeyproducts,continuouslybroadeninganddeepeningourproductlinetomeetdiversifiedmarketdemands.Intermsofmarketingservices,wewillflexiblyadjustourbusinessstructure,optimizeoperatingstrategies,strengthentheafter-salesservicesystem,andactivelypromoteinternationalization.Weworktoenhancemarketcompetitivenessandbrandvaluethroughdifferentiatedproductsandservices.Bydeepeningcustomerinsightsandimprovingsupportandservicelevelsfordealers,wewillmoreaccuratelygraspmarketdynamics,effectivelyexpandmarketshare,furtherconsolidateourleadingpositioninthedomesticmarket,andgraduallybuildasignificantcompetitiveadvantageintheinternationalhigh-endmarket.ThesemeasureswillhelptheCompanyensureitsabilitytocontinuouslyspearheadindustrytrends,meettheever-changingneedsofcustomers,andachievesustainabledevelopment.c.Riskofexchangeratefluctuations

/

TheCompany'ssalesinoverseasmarketsexpandcontinuouslyastheCompany'sinternationalizationprocesssteadilyprogressesanddeepens.TheCompany'sinternationalaccountswillbesubjecttoexchangeratefluctuationstoagreaterextent.Giventheongoingescalationofgeopoliticalconflictsandthecomplexandvolatileinternationalenvironment,thetrendofoverseasmarketsandtheRenminbiexchangerateishauntedbyextremeuncertainty,whichwillhaveasignificantimpactontheCompany'searnings.Countermeasures:Wewillcloselyandactivelymonitorthedynamicsoftheglobalfinancialmarketandchangestonationalexchangeratepolicies.Wewillstrengthenriskpreventionawarenessandrationallyutilizefinancialinstrumentstoactivelymanageexchangerateriskanddiversifytheimpactofexchangeratefluctuations.ForregionswheretransactionscanbesettledinRenminbi,wewillstipulateRenminbipaymentsincontractstoavoidexchangeratefluctuationrisks.Wewillaccelerateoptimizingourinternationalmarketingnetwork,establishingmoresubsidiariesandsalesnetworksinkeyforeignmarkets,andbuildingamulti-tieredpartssupplyandafter-salesservicesystemcoveringmajormarkets.Thiswillfurtherenhanceourproductmarketingandservicecapabilitiesandreducetheadverseimpactofpotentialexchangeratefluctuations.dManagementrisksassociatedwithexpansionTheCompany'sbusinessscalehascontinuedtogrow,directlyresultinginasignificantincreaseintheCompany'sassetsandpersonnelalongwiththeCompany'scomprehensiveexpansioninbothinternationalanddomesticmarketsinrecentyears.Asthescalecontinuestoexpand,finemanagementisincreasinglycriticalinimprovingtheCompany'soperationalefficiencyandeffectiveness.Lookingahead,wewillfacegreatermanagementchallengesinbuildingefficientoperatingmechanisms,formulatingforward-lookingstrategicplans,optimizingorganizationalstructuredesign,strengtheningoperationalmanagementlevels,refiningcapitalallocation,andimprovingtheinternalcontrolsystem.Wewillfacemanagementrisksassociatedwithbusinessexpansionifwefailtoadjustourmanagementconceptsandmethodsinatimelyandeffectivemanner.Countermeasures:Wewillimplementanexcellentperformancemanagementmodel,continuouslyinnovatemanagementmechanisms,anddrawonandpromoteadvancedmanagementexperiencessuitablefortheCompany'sdevelopment.Wewillbuildadigitalgroupgovernancesystemtoachievereal-timemonitoring,dataanalysis,andintelligentdecision-makingforallaspectsoftheCompany'sbusiness,improvingtheaccuracyandtimelinessofmanagement.Wewillestablishamodern,scientificmanagementsystemthatadaptstotheCompany'sdevelopmentneedstoensurestandardized,scientific,andefficientmanagementthroughregulationsandprocedures.Theseeffortswillensurethatwemaintainastableandefficientoperatingmomentumwhilecontinuingtoexpand,achievingoursustainabledevelopmentgoals.

5.Other"□Applicable""√Notapplicable"

/

VII.Notesfornon-disclosureaccordingtothestandardsduetospecialreasonssuchasnon-applicabilityofthestandardsorstatesecretsandcommercialsecretsandreasons"□Applicable""√Notapplicable"

Chapter4CorporateGovernance

1.StatementonCorporateGovernanceSituation"√Applicable""□Notapplicable"Duringthereportingperiod,thecompanystrictlyadheredtotheCompanyLaw,SecuritiesLaw,theCodeofCorporateGovernanceforListedCompanies,andtherelevantrequirementsoftheChinaSecuritiesRegulatoryCommission(CSRC)andShanghaiStockExchange.Wecontinuouslyoptimizedthestandardizedoperationalmechanismofthe"threemeetingsandonelevel"(i.e.,theShareholders'Meeting,BoardofDirectors,BoardofSupervisors,andthemanagementlevel).Throughtheiterativeupgradesofourinformationplatform,wefurtherstrengthenedtheinternalcontrolsystemtoensurescientificandefficientdecision-making,preciseexecution,andcomprehensivesupervision.Weconsistentlyenhancedthequalityofinformationdisclosuretoensurethattheinformationisreal,accurate,andcomplete,whilealsobeingexpressedinaclear,straightforward,andeasilyunderstandablemanner.Weactivelyexpandedcommunicationchannelswithinvestorstoeffectivelyprotectthelegalrightsofinvestors,especiallythoseofsmallandmedium-sizedinvestors.Ourdirectors,supervisors,andseniormanagementstrictlycomplywithlawsandregulationsaswellasthecompany’sinternalrules,faithfullyfulfillingtheirresponsibilitiestopromotethecompany’slegalcompliance,integrity,andsteadydevelopment.

(1)ImprovementoftheSystemFramework:Werevisedandaddedgovernancesystemstoenhancethecompany'sstandardizationlevel.Basedonthelatestlaws,regulations,andexchangerules,werevisedfourexistingsystems:the"WorkingRulesforIndependentDirectors,"the"WorkingRulesfortheAuditCommitteeoftheBoard,"the"WorkingRulesfortheNominationCommitteeoftheBoard,"andthe"WorkingRulesfortheCompensationandAssessmentCommitteeoftheBoard."Wealsoaddedanew"AnnualSelectionSystemforAuditAccountingFirms"toensurethatourcorporategovernancesystemsareup-to-dateandalignedwithregulatoryrequirements.

(2)RegulatedandEffectiveOperationsoftheShareholders'Meeting,BoardofDirectors,andBoardofSupervisors.Sincebeinglisted,thecompanyhasestablishedrelevantgovernancesystems,includingthe"RulesofProcedureforShareholders'Meetings,”"RulesofProcedureforBoardMeetings,"and"RulesofProcedureforSupervisoryMeetings."Theresponsibilitiesofthethreemeetingsareclearlydefined,reasonable,rigorous,andstandardized,andtheseresponsibilitiesareeffectivelyimplemented.Theoperatingproceduresofthethreemeetingscomplywithrelevantlaws,regulations,andtheprovisionsoftheArticlesofAssociation,andtheoperationrecordsarestandardizedandcomplete.Thearchivemanagementisorganized,categorized,andorderly.a.RegardingShareholdersandtheShareholders'Meeting:Duringthereportingperiod,thecompanyheldoneShareholders'Meeting.ThecompanystrictlyadheredtotherequirementsoftheCompanyLaw,

/

theShanghaiStockExchangeListingRules,andtheRulesofProcedureforShareholders'Meetingsinconveningandconductingthemeeting.Thepreparationforthemeeting,theproposals,themeetingprocedures,thevotingandresolutions,aswellasinformationdisclosureallcompliedwithregulatoryrequirements.Thecompanyensuredthatallshareholdersexercisedtheirlegalrightsthroughvariouschannels.Amechanismforseparatevotingforsmallandmedium-sizedinvestorswasestablishedfortherelevantresolutionsreviewedattheShareholders'Meeting,whichutilizedacombinationofon-sitevotingandonlinevotingfordecision-making.AlawyerwaspresentattheShareholders'Meetingtoprovideon-siteverificationandissuealegalopinion.b.RegardingDirectors,theBoardofDirectors,andSpecializedCommittees:Duringthereportingperiod,thecompanyheldtenBoardofDirectorsmeetings.Alldirectorsattendedthemeetingswithdiligenceandintegrity,stayedinformedaboutrelevantlawsandregulations,andcarefullyreviewedproposalstoensurethescientificandrationalnatureofmajordecisions.Theindependentdirectorsmaintainedtheirindependence,activelyparticipatedintheirduties,expressedindependentopinionsonrelevantmatters,playedasupervisoryrole,andsafeguardedtheinterestsofthecompanyandmediumtosmallshareholders.ThefourspecializedcommitteesundertheBoardofDirectors—namelytheStrategyCommittee,AuditCommittee,NominationCommittee,andCompensationandAssessmentCommittee—boastedreasonablememberstructuresandstrongprofessionalexpertise,workingcollaborativelytoensuretheBoard'sefficientperformance.c.RegardingSupervisorsandtheBoardofSupervisors:Duringthereportingperiod,thecompanyheldfourmeetingsoftheBoardofSupervisors,effectivelyexercisingitssupervisoryfunction.TheBoardofSupervisorsstrictlyimplementedtherelevantprovisionsoftheCompanyLaw,theArticlesofAssociation,andtheRulesofProcedureforSupervisoryMeetings,diligentlyfulfillingitsresponsibilities.TheBoardsupervisedandinspectedthecompany'sfinances,significantmatters,relatedpartytransactions,andtheperformanceofdirectorsandseniormanagement,andprovidedindependentopinionsontheperiodicreports,effectivelysafeguardingtherightsandinterestsofthecompanyanditsshareholders.

(3)StandardizationoftheBehaviorofControllingShareholdersandActualControllers.Thecompany'scontrollingshareholderexercisesrightsandfulfillsobligationsinaccordancewiththelaw,strictlyadheringtotheprincipleofgoodfaith,withoutinterferinginthecompany'sdecision-makingandoperationsbeyondtheauthorityoftheShareholders'Meeting.Thecompanymaintainsindependencefromthecontrollingshareholderintermsofpersonnel,assets,finances,organizationalstructure,andbusiness,ensuringthattheBoardofDirectors,BoardofSupervisors,andinternalmanagementoperateindependently.Therearenoactionstakenbythecontrollingshareholderoractualcontrollerthatwouldinfringeonthecompany'sfundsorassets,orharmtheinterestsofthecompanyandothershareholders,throughrelatedpartytransactions,assetrestructuring,externalinvestments,guarantees,profitdistributions,etc.Duringthereviewofrelevantproposals,astrictconflict-of-interestavoidancesystemisimplemented.

/

(4)StrengtheningInformationDisclosureandPreventingInsiderTrading.Thecompanystrictlyfollowstherequirementsofrelevantlawsandregulationsaswellasitsown"InformationDisclosureManagementSystem,"ensuringthatcompanyinformationisdisclosedinatruthful,accurate,complete,andtimelymannerthroughtheShanghaiStockExchangewebsiteandtheSecuritiesTimes,amongothers.Thisguaranteesthatthecompany'sinformationdisclosureispublic,fair,andjust,ensuringthatallinvestorscanaccesscompanyinformationequitably,enhancingthetargetspecificityandeffectivenessoftheinformationdisclosed,andfacilitatinginvestors'valuejudgmentsandinvestmentdecisions.Thecompanyalsomanagesconfidentialitypriortoinformationdisclosureandmaintainsaregistryofinsidersrelatedtomajormatters.The"InsiderInformationRegistryManagementSystem"isstrictlyimplementedforregisteringinsiders,continuouslyreinforcinginsiderinformationmanagement,adheringtoapreventiveprinciple,prudentlyhandlingvariousconfidentialmatters,andstrivingtominimizethescopeofknowledge.Theregistrationofinsidersisconductedduringboardmeetings,supervisorymeetings,andmanagementteammeetingspriortothedisclosureofperiodicreports.Thecompanystrictlycontrolstheexternaltransmissionofundisclosedfinancialinformation.

(5)ActivelyMaintainingInvestorRelationsandCommunication.Thecompanyhasalwaysemphasizedthebalancebetweensustainabledevelopmentandthereturnoninvestmentforshareholders,successfullyimplementingtheprofitdistributionplanfor2023tocreatesubstantialeconomicreturnsforinvestors.Thecompanyplaceshighimportanceoninvestorrelations,ledbytheBoardSecretary,withadedicatedpersonintheBoardOfficeresponsibleforinvestorrelationsmanagement.Variousmethodssuchastelephonecommunication,emailexchanges,onlineperformancebriefings,investorstrategymeetings,ShanghaiStockExchangeE-interaction,on-sitecommunications,investorengagementactivities,collectivereceptiondays,roadshows,andcounterroadshowsareusedtocomprehensivelyandsystematicallyconveythecompany'soperatingstatustoinvestors,answertheirquestions,andunderstandtheiropinionsandsuggestionsregardingcorporategovernanceanddevelopment,therebyimprovingthebidirectionalcommunicationmechanismwithinvestors.IsthereasignificantdifferencebetweencompanygovernanceandtheregulationsoftheChinaSecuritiesRegulatoryCommission(CSRC)?Iftherearesignificantdifferences,thereasonsshouldbeexplained."□Applicable""√Notapplicable"

2.SpecificMeasuresTakenbytheCompany'sControllingShareholdersandActualControllerstoEnsuretheIndependenceofCompanyAssets,Personnel,Finances,OrganizationalStructure,andBusiness,aswellasSolutions,WorkProgress,andFutureWorkPlansRelatedtoIssuesAffectingCompanyIndependence"√Applicable""□Notapplicable"HangchaHolding,astheactualcontrollingentityofthecompany,strictlyfulfillsitsrelevantobligationsinaccordancewiththeCompanyLaw,SecuritiesLaw,andotherlegalregulations,ensuring

/

independenceintermsofpersonnel,assets,finances,organizationalstructure,andbusiness.Duringthereportingperiod,thecompanymadeandimplementedmajordecisionsindependently,andtherewerenoinstancesoftheactualcontrollingentityinterveninginthecompany'sdecisionsoroperationalactivitiesbypassingtheShareholders'Meeting.TheSituationRegardingtheControllingShareholder,ActualControllers,andTheirControlledEntitiesEngaginginSimilarorRelatedBusinesses,theImpactofSignificantChangesinIndustryCompetitionontheCompany,MeasuresTaken,ProgressofSolutions,andFutureResolutionPlans"□Applicable""√Notapplicable"

3.OverviewoftheShareholders'Meeting

Preferredshareholderswhosevotingrightshavebeenrestoredrequestanextraordinarygeneralmeetingofshareholders"□Applicable""√Notapplicable"ExplanationoftheShareholders'Meeting"√Applicable""□Notapplicable"Duringthereportingperiod,thecompanyheldoneshareholders'meeting,convenedbythecompany'sBoardofDirectors.ThemeetingwaschairedbyMr.ZhaoLimin,thecompany'sChairman.Thecompany'sdirectors,supervisors,seniorexecutives,andlegaladvisorsparticipatedinthemeeting.Theconveningandproceduresofthemeetingcompliedwiththelaws,regulations,andthecompany'sArticlesofAssociation.Thequalificationsoftheconvenerandtheattendeeswerelegalandvalid,andthevotingprocedurescompliedwiththeprovisionsoftheArticlesofAssociation,makingthevotingresultslegalandvalid.

/

4.Directors,Supervisors,andSeniorManagementSituation:

(1)Changesinshareholdingsandremunerationofcurrentanddepartingdirectors,supervisors,andseniorexecutivesduringthereportingperiod."√Applicable""□Notapplicable"

Unit:Share

/

/

Name

/

/

/

/

/

/

AdditionalInformation"□Applicable""√Notapplicable"

/

2.CurrentandResignedDirectors,Supervisors,andSeniorManagementPersonnelduringtheReportingPeriod

(1)Employmentincorporateshareholders"√Applicable""□Notapplicable"

(2)Employmentinotherorganizations"√Applicable""□Notapplicable"

/

/

/

/

/

(3)ChangesinRemunerationofDirectors,SupervisorsandSeniorManagers"√Applicable""□Notapplicable"

(4)Changesindirectors,supervisorsandseniormanagementpersonneloftheCompany"□Applicable""√Notapplicable"

(5)StatementonPenaltiesfromSecuritiesRegulatoryAuthoritiesintheLastThreeYears"□Applicable""√Notapplicable"

(6)Other"□Applicable""√Notapplicable"

5.InformationRegardingBoardMeetingsHeldDuringtheReportingPeriod

/

/

6.Directors'PerformanceofDutiesandAttendance

(1)AttendanceofDirectorsatBoardMeetingsandShareholders'Meetings

/

ExplanationforConsecutiveAbsencesfromBoardMeetings:

"□Applicable""√Notapplicable"

(2)ObjectionsRaisedbyDirectorsonMattersRelatedtotheCompany"□Applicable""√Notapplicable"

(3)Other"□Applicable""√Notapplicable"

7.SituationofSpecializedCommitteesundertheBoardofDirectors"√Applicable""□Notapplicable"

(1)MembersofSpecializedCommittees

(2)TheAuditCommitteeheld5meetingsduringthereportingperiod.

/

(3)TheCompensationandAssessmentCommitteeheld1meetingduringthereportingperiod.

(4)TheStrategyCommitteeheld1meetingduringthereportingperiod.

(5)SpecificsofDisputedMatters:

"□Applicable""√Notapplicable"

8.DescriptionofRisksIdentifiedbytheSupervisoryBoard"□Applicable""√Notapplicable"TheBoardofSupervisorsraisednoobjectiontothesupervisorymattersduringthereportingperiod.

/

9.EmployeeSituationattheEndoftheReportingPeriodfortheParentCompanyandMajorSubsidiaries

(1)EmployeeSituation

(2)CompensationPolicy"√Applicable""□Notapplicable"ThecompanystrictlymanagesemployeecompensationinaccordancewiththenationalLaborContractLawandotherrelevantpolicies,establishingacomprehensivecompensationmanagementsystem.Thecompensationisdeterminedbasedonjobpositionsandguidedbylabormarketprices,providingemployeeswithahighlycompetitiveexternalandfairinternalcompensationpolicy.Thecompanyoffersvariousincentivemeasures,includingpositionallowancesandprofessionalqualificationsubsidies.

(3)TrainingPlan"√Applicable""□Notapplicable"Thetrainingplaniscloselyalignedwiththecompany’sproductionandoperationaldevelopmentstrategy,combinedwiththeannualeducationandtrainingplan,toeffectivelypromotetalentdevelopment.Throughvariousformsofonlineandofflinetrainingsuchascollaborationswithuniversities,internaltraining,externaltraining,andlectures,thecompanystrivestofosteralearning-orientedcorporateculturetoprovidetalentsupportforsustainabledevelopment.

(4)LaborOutsourcingSituation"□Applicable""√Notapplicable"

/

10.ProfitDistributionorCapitalReserveIncreasePlan

(1)CashDividendPolicyDevelopment,Execution,orAdjustmentStatus"√Applicable""□Notapplicable"Thecompany'sArticlesofAssociationclearlyspecifytheprinciplesandformsofprofitdistribution,especiallydetailingtheconditionsandproportionsforcashdividends.Whenproposingadividendplan,theBoardofDirectorsstrictlyadherestotheregulationsoncashdividendsissuedbytheChinaSecuritiesRegulatoryCommission(CSRC)andtheShanghaiStockExchange(SSE).Thedecision-makingproceduresonprofitdistributionbytheBoardofDirectorsandtheshareholders'meetingarerelativelystandardized.Duringthereportingperiod,thecompany'sprofitdistributionpolicyhasconsistentlycompliedwiththeaforementionedprofitdistributionplansandreviewproceduresoftheCSRC,the"GuidelinesfortheRegulatoryofListedCompaniesNo.3—CashDividendsforListedCompanies"(2023revision),theSSE’s"GuidelinesforCashDividendsforListedCompanies,"aswellasrelatedprovisionsandproceduralrequirementsintheArticlesofAssociation,ensuringtheprotectionofthelegitimaterightsandinterestsofminorityinvestors,withnoadjustmentsmadetothecashdividendpolicy.

(2)Specialnoteofthecashdividendpolicy"√Applicable""□Notapplicable"

(3)Ifthecompanyisprofitableduringthereportingperiodandtheparentcompany'sdistributableprofitsforshareholdersarepositive,butnocashdividenddistributionplanhasbeenproposed,thecompanyshoulddisclosethereasonsindetailandtheintendeduseandplansfortheundistributedprofits."□Applicable""√Notapplicable"

(4)ProfitDistributionandCapitalReserveIncreasePlanforThisReportingPeriod"√Applicable""□Notapplicable"Unit:YuanCurrency:CNY

/

(5)CashDividendSituationfortheLastThreeAccountingYears"√Applicable""□Notapplicable"Unit:YuanCurrency:CNY

11.Statusofthecompany'sequityincentiveplan,employeestockownershipplan,orotheremployeeincentivemeasuresandtheirimpact

(1)Relatedincentivemattershavebeendisclosedinatemporaryannouncement,andtherehasbeennoprogressorchangeinsubsequentimplementation."□Applicable""√Notapplicable"

(2)StatusofincentivemattersnotdisclosedinthetemporaryannouncementorwithsubsequentprogressEquityincentivestatus"□Applicable""√Notapplicable"Othernotes:

"□Applicable""√Notapplicable"Employeestockownershipplanstatus"□Applicable""√Notapplicable"

/

Otherincentivemeasures"□Applicable""√Notapplicable"

(3)EquityIncentiveStatusGrantedtoDirectorsandSeniorManagementDuringtheReportingPeriod"□Applicable""√Notapplicable"

(4)EvaluationMechanismforSeniorManagementDuringtheReportingPeriod,andtheEstablishmentandImplementationoftheIncentiveMechanism"□Applicable""√Notapplicable"

12.DevelopmentandImplementationofInternalControlSystemsDuringtheReportingPeriod"√Applicable""□Notapplicable"Pleaserefertothe"2024AnnualInternalControlEvaluationReport"disclosedbythecompanyonApril18,2025,ontheShanghaiStockExchangewebsite(www.sse.com.cn).ExplanationofSignificantDeficienciesinInternalControlDuringtheReportingPeriod"□Applicable""√Notapplicable"

13.ManagementControlOverSubsidiariesDuringtheReportingPeriod"√Applicable""□Notapplicable"Thecompanyhasestablishedoperationalstrategiesandriskmanagementstrategiesforitsholdingsubsidiariesthroughdocumentssuchasthe"EnterpriseInternalControlManual,""SubsidiaryManagementRegulations,"and"RegulationsontheManagementofOverseasInstitutionsofHangchaGroupCo.,Ltd."Itsupervisesholdingsubsidiariestodeveloprelevantbusinessoperationplans,riskmanagementprocedures,andinternalcontrolsystemsbasedontheseframeworks.Thecompanyalsoformulatesperformanceevaluationandincentivesystemsforholdingsubsidiariesandestablishesinternalreportingsystemsforsignificantmattersandforthedisclosureofmajorissues.Thecompanycanregularlyobtainandanalyzemonthlyorquarterlyreportsfromeachholdingsubsidiary,whiletheinternalauditdepartmentandrelevantbusinessmanagementdepartmentsconducttimelyinspectionsofholdingsubsidiariestostandardizevariousoperationalbehaviors.Accordingtorelevantregulations,thecompanycommissionsaccountingfirmstoauditthefinancialreportsofholdingsubsidiariesandisabletoevaluatetheimplementationandsupervisionofinternalcontrolsystemsofholdingsubsidiaries.

14.DescriptionoftheInternalControlAuditReportRelatedCircumstances"√Applicable""□Notapplicable"Inaccordancewiththe"GuidelinesforInternalControlAudits"andrelevantrequirementsofChineseCPAprofessionalstandards,TianjianAccountingFirm(SpecialGeneralPartnership)auditedtheeffectivenessoftheinternalcontrolofthecompany'sfinancialreportasofDecember31,2024,andissuedareportstatingthat"HangchaGroupCo.,Ltd.maintainedeffectiveinternalcontroloverfinancialreportingasofDecember31,2024,inallmaterialrespectsinaccordancewiththe'BasicNormsforEnterpriseInternalControl'andrelatedregulations."

/

IstheInternalControlAuditReportDisclosed?TypeofInternalControlAuditReportOpinion:

15.Self-InspectionIssueRectificationStatusforListedCompanyGovernanceSpecialActionNone

16.Others"□Applicable""√Notapplicable"

/

Chapter5EnvironmentandSocialResponsibility

1.EnvironmentalInformationSituation

(1)EnvironmentalProtectionSituationofCompaniesDesignatedasKeyPollutingUnitsbytheEnvironmentalProtectionDepartmentandTheirMainSubsidiaries:

"√Applicable""□Notapplicable"a.PollutionDischargeInformation"√Applicable""□Notapplicable"

/

/

/

/

b.ConstructionandOperationofPollutionPreventionandControlFacilities"√Applicable""□Notapplicable"Inrecentyears,thecompanyanditssubsidiarieshavecontinuouslyincreasedtheirinvestmentinenvironmentalprotectionequipmentandfacilities,ensuringthattheconfigurationofenvironmentalprotectionequipmentandfacilitiesmatchesproductioncapacity.Byestablishingawastewatertreatmentstationandinstallingdustremovalfacilitiessuchasfiltration,watercyclones,andadsorption,thecompanyachievescompliantdischargeofwastewaterandexhaustgas.Duringthereportingperiod,theenvironmentalprotectionfacilitiesoperatednormally.

1)WaterPollutantsThecompany’sproductionanddomesticwaterarebothsuppliedbythemunicipalwatersupplysystem.Productionwaterisprimarilyusedforproducingpurewater,defatting,silaneprocessing,spraypainting,andworkshopcleaning.Domesticwaterismainlyusedforemployees'dailylivinganddininghallneeds.Thegeneratedwastewatermainlyincludesspraypaintingwastewater,defattingsilanewastewater,workshopcleaningwastewater,concentratedwastewater,dininghallsewage,anddomesticsewage.Themainpollutantsinclude:pH,COD(ChemicalOxygenDemand),SS(SuspendedSolids),petroleumsubstances,ammonianitrogen,totalphosphorus,andtotalnitrogen.Thecompany’sdrainagesystemisconstructedbasedontherequirementsforseparatingrainwaterandwastewater.Strictimplementationofrainwaterandwastewaterseparationisenforced.Rainwateriscollectedintheonsitecollectiontank(regularlycleaned)andisthendischargedintothemunicipalrainwaterpipes.Dininghallwastewaterispre-treatedinanoilseparationtank(regularlycleaned)beforebeingaggregatedintothetotalwastewateroutlet.Employeedomesticsewageandworkshopcleaningwastewaterarepre-treatedinaseptictank(regularlycleaned)beforebeingaggregatedintothetotalwastewateroutlet(regularlycleaned).Spraypaintingwastewateranddefattingsilanewastewaterarecombinedandtreatedinthewastewatertreatmentstationusing“flocculationreaction+sedimentation+flocculationreaction+airflotation”beforebeinggatheredatthetotalwastewateroutlet.ThisisultimatelyroutedtoHangzhouQingshanhuScienceandTechnologyCityDrainageCo.,Ltd.ThewastewaterdischargestandardsenforcedbyHangzhouQingshanhuScienceandTechnologyCityDrainageCo.Ltd.complywiththe“StandardsforDischargeofMainWaterPollutantsfromUrbanWastewaterTreatmentPlants”(DB33/2169-2018)issuedbytheZhejiangProvincialPeople'sGovernment.COD,NH3-N,TN(TotalNitrogen),andTP(TotalPhosphorus)aredischargedaccordingtothestandardsforClassWsurfacewaterenvironmentalquality,whileotherindicatorsfollowtheClassAdischargestandardsinthe“PollutantDischargeStandardsforUrbanWastewaterTreatmentPlants”(GB18918-2002).

2)AirPollutantsThemainexhaustgasesgeneratedduringthecompany’sproductionprocessincludeshotblastingdust,grindingdust,weldingsmoke,puttydryingexhaust,moisturedryingexhaust,curingbakingexhaust,spraypaintingexhaust,paintmixingexhaust,andpaintdryingexhaust.Themainpollutantsintheexhaustgasesare:toluene,xylene,methylacetate,ethylacetate,butylacetate,non-methanetotal

/

hydrocarbons,particulatematter,andstyrene.Theimplementationofexhaustgaspreventionandcontrolmeasuresisasfollows:

1.Dustgeneratedfromshotblastingistreatedbyahigh-efficiencybagfilterbeforebeingdischargedatahighaltitude.2.Grindingdustissettledinabottomwatertankandtreatedinasidesuctionbagfilterbeforebeingdischargedatahighaltitude.3.Adedicatedfixedweldingpointissetupfortheweldingprocess,withcurtainsarounditforsemi-enclosure.Collectedweldingsmokeisfilteredthroughmultiplemeshlayersbeforebeingdischargedatahighaltitude.4.Moisturedryingexhaustisdischargedatahighaltitudeafterpassingthroughafilterandquadcombustion.5.Curingbakingexhaustisdischargedatahighaltitudeafterpassingthroughafilterandquadcombustion.6.Naturalgascombustionexhaustisdischargedatahighaltitudethroughanexhaustpipe.7.Organicexhaustgeneratedduringthepaintingprocess(mixing+spraying+drying)isdischargedatahighaltitudeafterpassingthroughafilter,zeolitewheeladsorption,andCOtreatment.8.Organicexhaustgeneratedduringthefinishingtouchesandrepaintingofvehiclesisdischargedatahighaltitudeafterbeingtreatedbywatercycloneandactivatedcarbonadsorption.

3)SolidWasteThecompany’ssolidwastemainlyincludes:edgematerials,oil-contaminatedrags,wastepaintbuckets,puttyresidue,paintresidue,sludge,wastehydraulicoil,wasteemulsions,wasteactivatedcarbon,wastemetalshavings,wastepackagingmaterials,wasteweldingslag,troughslag,troughliquid,anddomesticwaste.Generalsolidwaste,suchasedgematerials,puttyresidue,wastemetalshavings,wastepackagingmaterials,andwasteweldingslag,iscollectedandtemporarilystoredbythecompanybeforebeingsoldforcomprehensiveutilization.DomesticwasteishandledandtransportedbytheQingshanhuStreetEnvironmentalHygieneManagementOffice.Hazardouswasteincludesoil-contaminatedrags,sludge,wastehydraulicoil,wastepaintbuckets,paintresidue,wasteemulsions,wasteactivatedcarbon,troughslag,andtroughliquid.Ahazardouswastetemporarystorageareahasbeenconstructedinthefactoryinaccordancewiththe“PollutionControlStandardsforHazardousWasteStorage”(GB18597-2023).Varioustypesofhazardouswastearecollectedandstoredseparately,andqualifiedthirdpartiesareentrustedtodisposeofthem.

4)NoiseThenoisewithinthecompanyprimarilycomesfromtheoperationofproductionandauxiliaryequipmentintheworkshops.Toreducethenoiseatthesource,thecompanyhasselectedlow-noisefans,aircompressors,andsimilarequipment;thelayoutofthefactoryisdesignedrationally,withhigh-noiseequipmentandoperationsplacedinthecenteroftheworkshop.Soundproofingmeasuresareimplementedtocutoffthepathwaysfornoisetransmission:soundproofroomsarebuiltaroundhigh-noiseequipmentsuchasfans,silencersareinstalledattheintakeandexhaustoffans,andvibrationisolationmeasuresaretakentoreducethestrengthofnoisesources.Managementisstrengthenedforlargevehiclesenteringandexitingthefactory,andhonkingisprohibitedwithinthefactoryandnearentrancesandexits,withspeedlimitsenforced.Afterimplementingvariousnoisereductionmeasures,thedaytimeandnighttimenoiselevelsatthefactoryboundariescomplywiththeClass3standardsfor

/

daytimeandnighttimenoiseemissionsoutlinedinthe“IndustrialEnterpriseBoundaryEnvironmentalNoiseEmissionStandards”(GB12348-2008).

(3).EnvironmentalImpactAssessmentandOtherEnvironmentalProtectionAdministrativeLicensingSituations"√Applicable""□Notapplicable"Thecompanyadherestothedevelopmentconceptof"optimizingtheenvironment,savingenergy,andreducingconsumption"andstrictlycomplieswithrelevantnationallawsandregulations.Accordingtotheprovisionsofthe“EnvironmentalProtectionLawofthePeople'sRepublicofChina”andthe“RegulationonEnvironmentalProtectionManagementofConstructionProjects,”thecompanyhasconductedanenvironmentalimpactassessmentthathaspassedenvironmentalprotectionapproval.Therequirementsandregulationsoftheenvironmentalimpactassessmentandtheenvironmentalprotectionauthorityhavebeenfundamentallyimplemented,ensuringthatenvironmentalprotectionfacilitiesaredesigned,constructed,andputintooperationsimultaneouslywiththemainproject.Thespecificsituationsareasfollows:

InApril2014,thecompanycommissionedZhejiangUniversitytocompletethe“EnvironmentalImpactReportofHangchaGroupCo.,Ltd.IntegratedPlatformProjectBasedontheInternetofThingsandCloudComputing.”OnMay26,2014,theLin'anEnvironmentalProtectionBureauapprovedthisproject’senvironmentalimpactreportwithdocumentnumber“LinHuanShen[2014]No.121.”ThisprojectcommencedinApril2017andwascompletedinMarch2020,withtrialoperationstartinginthesamemonth.InMay2014,thecompanycommissionedZhejiangUniversitytocompletethe“EnvironmentalImpactReportofHangchaGroupCo.,Ltd.IntelligentIndustrialVehicleR&DandManufacturingProject.”OnJune12,2014,theLin'anEnvironmentalProtectionBureauapprovedthisproject’senvironmentalimpactreportwithdocumentnumber“LinHuanShen[2014]No.137.”ThisprojectalsocommencedinApril2017andwascompletedinMarch2020,beginningtrialoperationinthesamemonth.InMay2014,thecompanycommissionedZhejiangUniversitytocompletethe“EnvironmentalImpactReportofHangchaGroupCo.,Ltd.Environmental-FriendlyForkliftProductionCapacityExpansionTechnologicalTransformationProject.”OnJune12,2014,theHangzhouLin'anDistrictEnvironmentalProtectionBureauapprovedthisproject’senvironmentalimpactreportwithdocumentnumber“LinHuanShen[2014]No.137.”ThisprojectlikewisecommencedinApril2017andwascompletedinMarch2020,withtrialoperationstartinginthesamemonth.InAugust2018,thecompanycommissionedZhejiangUniversitytocompletethe“EnvironmentalImpactReportofHangchaGroupCo.,Ltd.50,000ElectricIndustrialVehiclesExpansionandTransformationProject.”OnSeptember10,2018,theHangzhouLin'anDistrictEnvironmentalProtectionBureauapprovedthisproject’senvironmentalimpactreportwithdocumentnumber“LinHuanQingShen[2018]No.50.”ThisprojectcommencedinNovember2018andwascompletedinMarch2020,alsobeginningtrialoperationinthesamemonth.

/

InApril2023,thecompanycommissionedZhejiangMetallurgyEnvironmentalProtectionDesignResearchCo.,Ltd.tocompletethe“EnvironmentalImpactReportofHangchaGroup's100,000InternalCombustionForklift/YearExpansionandTransformationProject.”InApril2023,theHangzhouEcologicalEnvironmentBureauLin'anBranchapprovedthisproject’senvironmentalimpactreportwithdocumentnumber“HangLinHuanPingShen[2023]No.41.”ThisprojecthascommencedinApril2023andwillbeacceptedandputintoproductionaftercompletion.OnAugust25,2023,thecompanysubmittedanapplicationforapollutantdischargepermitontheNationalPollutantDischargePermitInformationManagementPlatformandpassedthereview.Thepermitnumberis9133000014304182XR001V,validuntilAugust24,2028.

(4)EmergencyResponsePlanforEnvironmentalIncidents"√Applicable""□Notapplicable"InOctober2024,the"EmergencyResponsePlanforEnvironmentalIncidents"wasrevised,andtheplanpassedexpertreviewandwasfiledwiththelocalenvironmentalprotectionbureau,withthefilingnumber330185—2024-101-L.Theplanprovidesadetaileddescriptionofemergencymeasuresforenvironmentalincidents,andthecompanyconductsirregular(atleastonceayear)emergencydrills,effectivelyenhancingitsabilityandmeasurestorespondtosuddenenvironmentalincidents.

(5)Self-MonitoringProgram"√Applicable""□Notapplicable"TheSelf-MonitoringProgramisestablishedtoconsciouslyfulfilltheobligationtoprotecttheenvironment,activelyacceptsocialsupervision,andcomplywithrelevantnationallawsandstandards.In2024,thecompanyformulatedthecorrespondingself-monitoringplanandstrictlycarriedoutmonitoringworkaccordingtotherequirementsoftheself-monitoringprogram.Atthesametime,thecompanycontinuouslyimprovesitsenvironmentalself-monitoringcapabilitiesandcommissionsqualifiedtestingagenciestoconductregularpollutantemissionmonitoringasrequired,ensuringcompliancewithemissionstandards.Inaccordancewiththerequirementsofthelocalenvironmentalprotectiondepartment,pollutantmonitoringinformationismadepublic.Themonitoringindicatorsinclude:1.ExhaustGas:Toluene,Xylene,Non-methaneTotalHydrocarbons,ParticulateMatter,SO2,NOX,EthylAcetate,ButylAcetate,MethylAcetate,Styrene;2.Wastewater:pH,COD,AmmoniaNitrogen,SS,TotalPhosphorus,TotalNitrogen,Petroleum,AnionicSurfactants,Five-dayBiochemicalOxygenDemand;3.BoundaryNoise:NoiselevelsattheEast,West,South,andNorthboundariesofthefactory.Theparkhasestablishedastandardizedtotalwastewaterdischargeoutletandinstalledonlinemonitoringequipmentforwastewater,withthemainmonitoringindicatorsbeingpH,COD,andflowrate.

(6)Administrativepunishmentforenvironmentalproblemsduringthereportingperiod"□Applicable""√Notapplicable"

/

(7)OtherRequiredEnvironmentalInformationDisclosure"√Applicable""□Notapplicable"Accordingtothe"EnvironmentalProtectionLawofthePeople'sRepublicofChina"andthe"MeasuresfortheDisclosureofEnvironmentalInformationbyEnterprisesandPublicInstitutions"(MinistryofEnvironmentalProtectionOrderNo.31),thecompanyhassetuprelevantsectionsonitsofficialwebsitetopubliclydiscloseenvironmentalinformationrelatedtothecompany.

2.EnvironmentalSituationoftheCompanyOutsideofKeyPollutantDischargeUnits"√Applicable""□Notapplicable"

(1)SituationsRegardingAdministrativePenaltiesforEnvironmentalIssues"□Applicable""√Notapplicable"

(2)Refertootherenvironmentalinformationdisclosedbykeypollutantdischargeunits"√Applicable""□Notapplicable"Inadditiontokeypollutantdischargeunits,HangchaGroupanditsother10holdingsubsidiarieshaveestablishedanenvironmentalmanagementsystem.Environmentalprotectionworkreliesonadvancedtechnologiesandprocesses.Thecompanycontinuouslyimplementsengineeringpreventivecontrolsbyadoptingnewtechnologiesandprocessesatthesource,followedbyprocesscontrolandmanagementcontrol,andfinallyconsideringend-of-pipetreatment.Forexample,techniquessuchaspowdercoatingandwater-basedpaintareusedtoreplaceoil-basedpaints,graduallyreducingexhaustemissions.Thecompanycommissionsthird-partyagenciesannuallyforthetestingofwastewater,exhaustgas,andnoise.In2024,wastewaterandexhaustgasemissionsmetthestandards,andhazardouswastewasdisposedofin100%compliance.

(3)Reasonsfornotdisclosingotherenvironmentalinformation"□Applicable""√Notapplicable"

3.InformationBeneficialforEcologicalProtection,PollutionPrevention,andEnvironmentalResponsibilityFulfillment"√Applicable""□Notapplicable"Thecompanyusesadvancedproductionequipment,ensuringthattheexhaustgasandwastewaterproducedareprocessedeffectivelybeforemeetingdischargestandards.Allsolidwastesaredisposedofandutilizedbyqualifiedentities.

4.MeasuresTakentoReduceitsCarbonEmissionsduringtheReportingPeriodandtheirEffects

/

/

SpecificStatement"□Applicable""√Notapplicable"II.SocialResponsibilityWorkStatus

1.DisclosureofSocialResponsibilityReport,SustainableDevelopmentReport,orESGReportSeparately"√Applicable""□Notapplicable"

/

Thefulltextofthecompany'sESGreportcanbefoundontheShanghaiStockExchangewebsite(http://www.sse.com.cn/).

2.SpecificSituationofSocialResponsibilityWork"√Applicable""□Notapplicable"

SupportingZitongTownthroughthe"Close-PersonalConnectionsThreeServices"initiative,pairedassistancedonationstoBaiyuCounty,Sichuan,etc.

SpecificStatement"□Applicable""√Notapplicable"III.SpecificSituationofConsolidatingandExpandingAchievementsinPovertyAlleviationandRuralRevitalization"√Applicable""□Notapplicable"

/

SpecificStatement"√Applicable""□Notapplicable"ThecompanyactivelyrespondedtothecalloftheHangzhoumunicipalgovernmentandwasamongthefirstunitstobecomeamemberoftheHangzhouAssistanceGroup.Since2000,ithaspairedassistancewith"ZuokouTownship"and"ZitongTown"inChun'anCounty,aswellasTianmushanTowninLin'anDistrict.Overnearly20years,atotalofover10millionyuaninfundsandmaterialshavebeenprovidedforassistance.Duringthereportingperiod,thecompany’spairedassistanceunit,ZitongTowninChun'anCounty,firmlyfocusedon"reducingpovertyandincreasingincome"and"artisticindustry,"activelydemonstratingtheleadershiproleofthefundsallocatedthroughthe“pairedassistance”mechanism,basedonactualconditions,highlightingkeyareas,andimplementingvariouslivelihoodprojectssuchascollectiveeconomicincomeprojectsinFushiVillage,procurementprojectsforbeekeepingforlow-incomehouseholdsinvariousadministrativevillages,andrenovationprojectsforartgalleries.The“pairedassistance”strategyhasplayedasignificantroleinstrengtheningcollectivevillageeconomiesandaidinghouseholdsinincreasingtheirincomeandwealth.Duringthereportingperiod,thecompanyestablisheda"three-sharedconstructionmechanism"involving"alliance,partybuilding,andindustry"withtheTianmuCommonProsperityAlliance.Thisnotonlychangedthepreviousone-to-onepairedassistancemodelbutalsoenhancedtheparty-ledcooperationworkinvillage-enterprisecollaborationthroughpartybuilding,drivingindustrialdevelopmentwithtalentsupport.Asacorporaterepresentativeofthe"TianmuCommonProsperity"AllianceinLin'anDistrict,HangchaGroupactivelyfulfillsitssocialresponsibilitiesandcontributestothecommonprosperityeffortsinGuifangqiaoVillage,Lin'anDistrict,supportingruralrevitalizationinitiativeswhilealsobeingconfidentinthefutureadvancementofenterprise-villagepairingprojects.Everyyear,togetherwithGreatStarGroup,thecompanyvisitsYankouPrimarySchoolinYuqianTownship,Lin'anDistrict,tobringgiftsforChildren’sDay.In2024,topromotethepairingassistanceworkbetweenLin'anDistrictandBaiyuCounty,effectivelyconsolidatingandexpandingtheachievementsinpovertyalleviationandtheconnectionwithruralrevitalization,anddeepeningcomprehensivesupportbetweenLin'anandBaiyu,HangchaGroupdonated30,000yuantoBaiyuCountyforimprovinglivingconditions.

/

CaringEnterprisesSupportingBaiyuCountyinGanziPrefecture,Hangzhou,ZhejiangProvinceDuringthereportingperiod,asacorporaterepresentativeofthe"TianmuCommonProsperity"AllianceinLin'anDistrict,thecompanyactivelyfulfilleditssocialresponsibilityandcontributedtothecommonprosperityeffortsinGuifangqiaoVillage,ZuokouTownship,andotherareas,aidingruralrevitalizationinitiatives.InApril2024,HangchaGroupwasrecognizedasanExcellentTeamEnterpriseinthe2023"TenThousandEnterprisesSupportTenThousandVillages"ActionbytheleadershipgroupofHangzhou'sLin'anDistrict.ItwasalsohonoredasanAdvancedUnitinSocialPublicWelfarebytheHangzhouLin'anDistrictFederationofIndustryandCommerce.

Achievementsinthe2023"TenThousandEnterprisesSupportTenThousandVillages"Action

/

2023AdvancedUnitinSocialPublicWelfareDuringthereportingperiod,thecompany,havingmadeitsfirstappearanceonthelistofthetop100leadingprivateenterprisesinZhejiangforsocialresponsibilityin2022,wasagainrecognizedin2023.OnMarch21,2024,the"2024ZhejiangPrivateEnterprisesSocialResponsibilityandZhejiangBusinessESGSeminar"washeldinLin'an,Hangzhou,whereparticipantsvisitedtheHangchaGroupexhibitionhall,smartlogisticsworkshop,andotherfacilities.WangFuxi,theDeputySecretaryofthePartyCommitteeofHangchaGroup,providedacomprehensiveexplanationtoattendeesonthecompany’seffortsandachievementsinsustainabledevelopmentin2023,touchinguponaspectssuchasintegrityinoperations,standardizedgovernance,technologicalinnovation,greenproducts,energyconservationandemissionsreduction,intelligentfactories,beingpeople-oriented,caringforemployees,practicingpublicwelfare,andgivingbacktosociety.

/

Participantsofthe2024ZhejiangPrivateEnterprisesSocialResponsibilityandZhejiangBusiness

ESGSeminarVisitHangchaGroupOvertheyears,HangchaGrouphasadheredtoitscorevaluesof"IntegrityFirst,PerformancePriority;SustainableDevelopment,SocialContribution,"activelyimprovingtheworkenvironment,fulfillingsocialresponsibilities,andimplementinggovernancesystems.Thecompanyincorporatesvariouselementsofsocialresponsibilityintoitsdailymanagementandoperations,strivingforharmoniousandwin-windevelopmentbetweentheenterpriseanditsemployees,theenterpriseandsociety,andtheenterpriseandtheenvironment.Itseekstoorganicallycombineitsdevelopmentwithsocialprogressandembodiesthewin-winphilosophyinfulfillingthesocialresponsibilitiesofalistedcompany.Movingforward,HangchaGroupwilltakenewstepsindeepeningitssocialresponsibilityphilosophy,makingnewcontributionstohigh-qualitydevelopmentinZhejiang,showcasingnewinitiativesinestablishingasocialresponsibilitybrand,andachievingbreakthroughsinenhancingthecompany'sESGgovernancecapabilities.HangchaGroupisdeterminedtousethisasanewstartingpointtocontinuouslyelevateitseffortsintherealmofsocialresponsibilityandachievenewprogress.

/

Chapter6ImportantMattersI.CommitmentFulfillment

1.Thecommitmentsmadebythecompany'sactualcontrollers,shareholders,relatedparties,acquirers,andotherrelevantpartiesduringthereportingperiodorcontinuingintothereportingperiod."√Applicable""□Notapplicable"

/

/

/

/

/

/

/

/

/

/

/

/

/

/

2.Ifthecompanyhasprofitforecastsforassetsorprojects,andthereportingperiodisstillwithintheforecastperiod,pleaseexplainwhethertheassetsorprojectshavemettheoriginalprofitforecastandthereasonsforthis."□Achieved""□NotAchieved""√Notapplicable"

3.CompletionStatusofPerformanceCommitmentsandItsImpactonGoodwillImpairmentTesting"□Applicable""√Notapplicable"II.Non-operatingFundOccupationbyControllingShareholdersandOtherRelatedPartiesDuringtheReportingPeriod"□Applicable""√Notapplicable"III.IllegalGuaranteeSituations"□Applicable""√Notapplicable"IV.BoardofDirectors'ExplanationRegarding"Non-standardOpinionAuditReport"fromtheAccountingFirm"□Applicable""√Notapplicable"V.AnalysisandExplanationoftheReasonsandImpactofChangesinAccountingPolicies,AccountingEstimates,orCorrectionsofSignificantAccountingErrors

1.ExplanationofReasonsandImpactofChangesinAccountingPoliciesandEstimates"√Applicable""□Notapplicable"OnOctober25,2023,theMinistryofFinanceissued"InterpretationNo.17oftheAccountingStandardsforEnterprises"(CaiKuai[2023]No.21),whichstipulatesrelevantcontentregarding"theclassificationofcurrentliabilitiesandnon-currentliabilities,""disclosureofsupplierfinancingarrangements,"and"theaccountingtreatmentofsale-and-leasebacktransactions."ThisinterpretationwillcomeintoeffectonJanuary1,2024.OnDecember6,2024,theMinistryofFinanceissued"InterpretationNo.18oftheAccountingStandardsforEnterprises"(CaiKuai[2024]No.24),whichstipulatesrelevantcontentregarding"subsequentmeasurementofinvestmentpropertiesheldunderabasisprojectusingthefairvaluemodel"and"theaccountingtreatmentofqualityguaranteesthatdonotconstituteindividualperformanceobligations."Thisinterpretationwillcomeintoeffectfromthedateofissuanceandallowsenterprisestoimplementitinadvanceoftheissuedyear.

/

2.Company'sAnalysisandExplanationoftheReasonsandImpactofCorrectionsofSignificantAccountingErrors"□Applicable""√Notapplicable"

3.CommunicationStatuswiththeFormerAccountingFirm"□Applicable""√Notapplicable"

4.ApprovalProceduresandOtherExplanations"□Applicable""√Notapplicable"VI.AppointmentandDismissalofAccountingFirmsUnit:TenthousandyuanCurrency:CNY

Item

ExplanationofAppointmentandDismissalofAccountingFirms"√Applicable""□Notapplicable"OnApril17,2024,theCompany'sseventhboardofdirectorshelditstenthmeeting,duringwhichitapprovedtheproposalregardingthereappointmentoftheauditfirmforthefiscalyear2024.TheresolutiondecidedtoreappointTianjianCertifiedPublicAccountants(SpecialGeneralPartnership)astheCompany'sauditfirmforthefiscalyear2024.ExplanationoftheSituationRegardingtheReappointmentofAccountingFirmsDuringtheAuditPeriod"□Applicable""√Notapplicable"ExplanationofAuditFeesDecreasingbyMoreThan20%ComparedtothePreviousYear(Including20%)"□Applicable""√Notapplicable"VII.SituationsFacingDelistingRisk

1.ReasonsLeadingtotheWarningofDelistingRisk"□Applicable""√Notapplicable"

/

2.ProposedMeasurestoAddresstheSituation"□Applicable""√Notapplicable"

3.SituationsandReasonsforFacingTerminationofListing"□Applicable""√Notapplicable"VIII.MattersRelatedtoBankruptcyReorganization"□Applicable""√Notapplicable"IXMajorLitigationandArbitrationMatters

"□TheCompanyhasmajorlitigationorarbitrationmattersthisyear.""√TheCompanydoesnothaveanymajorlitigationorarbitrationmattersthisyear."X.CircumstancesoftheListedCompanyandItsDirectors,Supervisors,SeniorManagement,ControllingShareholders,andActualControllersSuspectedofViolatingLawsandRegulations,andTheirPunishmentsandRectifications"□Applicable""√Notapplicable"XIExplanationoftheIntegrityoftheCompany,ItsControllingShareholders,andActualControllersDuringtheReportingPeriod"√Applicable""□Notapplicable"Duringthereportingperiod,theintegrityoftheCompany,itscontrollingshareholders,andactualcontrollersisgood.XIIMajorRelatedPartyTransactions

1.RelatedPartyTransactionsRelatedtoDailyOperations

(1)Mattersdisclosedinthetemporaryannouncementwithnosubsequentprogressorchanges"□Applicable""√Notapplicable"

(2)Mattersdisclosedinthetemporaryannouncementbutwithsubsequentprogressorchanges"√Applicable""□Notapplicable"

(3).MattersNotDisclosedintheTemporaryAnnouncement"□Applicable""√Notapplicable"

/

2.RelatedPartyTransactionsOccurringfromAssetorEquityAcquisitionsorSales

(1)Mattersdisclosedinthetemporaryannouncementwithnosubsequentprogressorchanges"□Applicable""√Notapplicable"

(2)Mattersdisclosedinthetemporaryannouncementbutwithsubsequentprogressorchanges"□Applicable""√Notapplicable"

(3)MattersNotDisclosedintheTemporaryAnnouncement"√Applicable""□Notapplicable"

Unit:YuanCurrency:CNY

DescriptionofRelatedPartyTransactionsOccurringfromAssetAcquisitionsorSalesNone

(4)IfInvolvingPerformanceAgreements,PerformanceAchievementDuringtheReportingPeriodShouldBeDisclosed"□Applicable""√Notapplicable"

/

3.MajorRelatedPartyTransactionsofJointExternalInvestment

(1)Mattersdisclosedinthetemporaryannouncementwithnosubsequentprogressorchanges"□Applicable""√Notapplicable"

(2)Mattersdisclosedinthetemporaryannouncementbutwithsubsequentprogressorchanges"□Applicable""√Notapplicable"

(3)MattersNotDisclosedintheTemporaryAnnouncement"□Applicable""√Notapplicable"

4.RelatedPartyDebtandCreditorTransactions

(1)Mattersdisclosedinthetemporaryannouncementwithnosubsequentprogressorchanges"□Applicable""√Notapplicable"

(2)Mattersdisclosedinthetemporaryannouncementbutwithsubsequentprogressorchanges"□Applicable""√Notapplicable"

(3)MattersNotDisclosedintheTemporaryAnnouncement"□Applicable""√Notapplicable"

5.FinancialTransactionsBetweentheCompanyandFinancialCompanieswithRelatedRelationships,andFinancialCompaniesControlledbytheCompanywithRelatedParties"□Applicable""√Notapplicable"

6.Other"□Applicable""√Notapplicable"XIII.SignificantContractsandTheirPerformance

1.Entrustment,Contracting,andLeasingMatters

(1)EntrustmentSituation"□Applicable""√Notapplicable"

(2)ContractingSituation"□Applicable""√Notapplicable"

(3)LeasingSituation"□Applicable""√Notapplicable"

/

2.GuaranteeSituation"√Applicable""□Notapplicable"

Unit:HundredmillionyuanCurrency:CNY

TotalGuaranteeAmountDuringtheReportingPeriod(ExcludingGuaranteesforSubsidiaries)

/

3.SituationofEntrustingOthersforCashAssetManagement

(1)EntrustmentWealthManagementSituationa.OverallSituationofEntrustmentWealthManagement"√Applicable""□Notapplicable"

Unit:YuanCurrency:CNY

OtherSituations"□Applicable""√Notapplicable"b.SingleEntrustedWealthManagementSituation"□Applicable""√Notapplicable"OtherSituations"□Applicable""√Notapplicable"c.ImpairmentProvisionforEntrustedWealthManagement"□Applicable""√Notapplicable"

/

(2)EntrustedLoanSituationa.OverallSituationofEntrustedLoans"□Applicable""√Notapplicable"OtherSituations"□Applicable""√Notapplicable"b.SingleEntrustedLoanSituation"□Applicable""√Notapplicable"OtherSituations"□Applicable""√Notapplicable"c.ImpairmentProvisionforEntrustedLoans"□Applicable""√Notapplicable"

(3)OtherSituations"□Applicable""√Notapplicable"

4.OtherSignificantContracts"□Applicable""√Notapplicable"XIVProgressExplanationofRaisedFundsUsage"√Applicable""□Notapplicable"

1.OverallUsageofRaisedFunds"√Applicable""□Notapplicable"

Unit:

/

Othernotes"√Applicable""□Notapplicable"AsofMarch31,2024,allinvestmentprojectsusingtheraisedfundsbythecompanyhavebeencompletedandareinastateofavailability.Anyremainingraisedfundshavebeenpermanentlyusedtosupplementworkingcapital,andthespecializedaccountforraisedfundshascompletedtheclosureprocedures.Fordetailedinformation,pleaserefertotheannouncementtitled"AnnouncementontheCompletionofFund-RaisingProjectandPermanentSupplementationofWorkingCapitalwithRemainingRaisedFunds"(AnnouncementNo.:2024-013)disclosedbythecompanyonApril18,2024,ontheShanghaiStockExchangewebsite,aswellastheannouncementtitled"AnnouncementontheCompletionofClosureofSpecializedAccountforRaisedFunds"(AnnouncementNo.:2024-024)disclosedonJune12,2024.

2.DetailsofFund-RaisingProjects:

"√Applicable""□Notapplicable"

(1)UsageSituationofRaisedFundsDetails"√Applicable""□Notapplicable"Unit:

/

/

(2)DetailsoftheUseofOverraisedFunds"□Applicable""√Notapplicable"

3.ChangesorTerminationofFundraisingInvestmentsduringtheReportingPeriod"□Applicable""√Notapplicable"

4.OtherSituationsRegardingtheUseofRaisedFundsduringtheReportingPeriod

(1)Advanceinvestmentandfundreplacementoftheraisedfundsinvestmentproject"□Applicable""√Notapplicable"

(2)Descriptionoftemporaryreplenishmentofworkingcapitalwithidleraisedfunds"□Applicable""√Notapplicable"

(3)CashManagementofIdleRaisedFundsandInvestmentinRelatedProducts"□Applicable""√Notapplicable"

(4)Other"□Applicable""√Notapplicable"XV.ExplanationofOtherSignificantMattersThatHaveaMajorImpactonInvestors'ValueJudgmentsandInvestmentDecisions"□Applicable""√Notapplicable"

/

Chapter7ShareChangesandShareholderInformationI.ChangesinShareCapital

1.ShareChangeTable

(1).ShareChangeTableUnit:Share

(2)ExplanationofShareChanges"√Applicable""□Notapplicable"Thecompany,atthe10thmeetingofthe7thBoardofDirectorsonApril17,2024,andatthe2023AnnualShareholdersMeetingonMay10,2024,approvedtheproposalregardingthedistributionofprofitsandcapitalreservetoincreasesharecapitalfortheyear2023.Allshareholderswillreceive4additionalsharesforevery10sharesheld,usingthecapitalreserve.Afterthisstockallocation,thecompany’stotalsharecapitalwillincreasefrom935,580,035sharesto1,309,812,049shares.For

/

specificdetails,pleaserefertothe"AnnouncementontheImplementationofthe2023AnnualProfitDistributionbyHangchaGroupCo.,Ltd."(AnnouncementNumber:2024-022)disclosedonMay24,2024,ontheShanghaiStockExchange(www.sse.com.cn).

(3)ImpactofShareChangesonFinancialIndicatorssuchasEarningsPerShareandNetAssetsPerSharefortheLastYearandtheMostRecentPeriod(ifapplicable)"√Applicable""□Notapplicable"Duetotheimplementationofthe2023profitdistributionplanduringthisreportingperiod,resultinginanincreaseof4sharesforevery10sharesheld,thecompletionofthisstockallocationwillcausethecompany’searningspershareandnetassetspersharein2024tobediluted.

(4)OthercontentsthattheCompanyconsidersnecessary,orarerequiredbythesecuritiesregulatoryauthorities,todisclose"□Applicable""√Notapplicable"

2.ChangesinRestrictedShares"□Applicable""√Notapplicable"II.SecuritiesIssuanceandListingSituation

1.SecuritiesIssuanceSituationuptotheReportingPeriod"□Applicable""√Notapplicable"ExplanationofSecuritiesIssuanceSituationuptotheReportingPeriod(Forbondswithdifferentinterestratesduringtheduration,pleaseexplainseparately):

"□Applicable""√Notapplicable"

2.ChangesinTotalSharesandShareholderStructureoftheCompany,andChangesinAssetandLiabilityStructure"□Applicable""√Notapplicable"

3.ExistingInternalEmployeeSharesSituation"□Applicable""√Notapplicable"III.ShareholderandActualControllerInformation

1.TotalNumberofShareholders

/

ShareholdingInformationoftheTopTenShareholdersandTopTenCirculatingShareholders(orShareholderswithNoSaleRestrictions)asoftheEndoftheReportingPeriod

Unit:Share

disclosure:

ShareholdingInformationoftheTopTenShareholders(excludingshareslentthroughmargintrading)

/

StatusofShareholdersHoldingMorethan5%ofShares,theTopTenShareholders,andtheTopTenShareholderswithUnrestrictedCirculatingSharesParticipatinginTransferforFinancingActivities"√Applicable""□Notapplicable"

Unit:Share

/

ChangesintheTopTenShareholdersandtheTopTenShareholderswithUnrestrictedCirculatingSharesDuetoLending/ReturningofSharesinTransferforFinancing"√Applicable""□Notapplicable"

Unit:Share

NumberofSharesHeldandLock-upConditionsoftheTopTenShareholderswithRestrictedShares"□Applicable""√Notapplicable"

2.StrategicInvestorsorGeneralCorporationsBecomingTop10ShareholdersDuetotheDistributionofNewShares"□Applicable""√Notapplicable"IV.SituationofControllingShareholdersandActualControllers

1.ControllingShareholderInformation

(1)LegalEntity"√Applicable""□Notapplicable"

(2)NaturalPerson"□Applicable""√Notapplicable"

(3)SpecialExplanationsfortheAbsenceofControllingShareholdersintheCompany"□Applicable""√Notapplicable"

/

(4)ExplanationforChangesinControllingShareholdersDuringtheReportingPeriod"□Applicable""√Notapplicable"

(5)DiagramofPropertyRightsandControlRelationshipBetweentheCompanyandtheControllingShareholder"√Applicable""□Notapplicable"

2.SituationofActualControllers

(1)LegalEntity"□Applicable""√Notapplicable"

(2)NaturalPerson"√Applicable""□Notapplicable"

(3)SpecialExplanationsfortheAbsenceofanActualControllerintheCompany"□Applicable""√Notapplicable"

HangchaGroupCo.,LtdHangchaHolding

/

(4)ExplanationforChangesinCompanyControlduringtheReportingPeriod"□Applicable""√Notapplicable"

(5)BlockdiagramshowingthepropertyrightsandcontrolrelationshipsbetweentheCompanyandtheactualcontroller"√Applicable""□Notapplicable"

(6)TheactualcontrollercontrolstheCompanyviaassetmanagementmethodssuchastrust"□Applicable""√Notapplicable"

3.OtherInformationonControllingShareholdersandActualControllers"□Applicable""√Notapplicable"V.HavetheNumberofPledgedSharesoftheControllingShareholderortheLargestShareholderandTheirConcertedActorsReached80%orMoreoftheSharesHeldbyThem?"□Applicable""√Notapplicable"VI.OtherLegalEntityShareholdersHoldingMoreThan10%ofShares"√Applicable""□Notapplicable"

Unit:TenthousandyuanCurrency:CNY

QiuJianping

QiuJianpingGreatStarHoldings

GreatStarHoldingsGreatStarHoldings

HangchaHolding

HangchaHoldingHangchaGroupCo.,

Ltd.

/

VIIExplanationofShareholdingRestrictionsonReductions"□Applicable""√Notapplicable"VIIIImplementationprogressofsharerepurchaseduringthereportingperiod"□Applicable""√Notapplicable"

Chapter8InformationRelatedtoPreferredShares"□Applicable""√Notapplicable"

Chapter9Bond-RelatedInformationI.CompanyBonds(IncludingCorporateBonds)andNon-FinancialEnterpriseDebtFinancingInstruments"□Applicable""√Notapplicable"II.ConvertibleCorporateBonds"□Applicable""√Notapplicable"

/

Chapter10FinancialreportingI.AuditReport"√Applicable""□Notapplicable"ToallshareholdersofHangchaGroupCo.,Ltd.,

1.OpinionWehaveauditedtheaccompanyingfinancialstatementsofHangchaGroupCo.,Ltd.(hereinafterreferredtoas“HangchaGroupCompany”),whichcomprisetheconsolidatedandparentcompany'sbalancesheetsasatDecember31,2024,theconsolidatedandparentcompany’sincomestatements,theconsolidatedandparentcompany’sstatementsofcashflows,theconsolidatedandparentcompany’sstatementsofchangesinowners’equityfortheyearthenended,andtherelatednotestothefinancialstatements.Inouropinion,theaccompanyingfinancialstatementshavebeenprepared,inallmaterialrespects,inaccordancewiththeAccountingStandardsforBusinessEnterprises,andgiveafairviewoftheconsolidatedandparentcompany’sfinancialpositionofHangchaGroupCompanyasatDecember31,2024,andtheconsolidatedandparentcompany’soperatingresultsandcashflowsfortheyearthenended.2BasisforOpinionWeconductedourauditinaccordancewiththeprovisionsofChinaCPAStandardonAuditing(CSA).OurresponsibilitiesunderthosestandardsarefurtherdescribedintheCPA'sResponsibilitiesfortheAuditoftheFinancialStatementssectionoftheAuditReport.WeareindependentofHangchaGroupCompanyandhavefulfilledourotherethicalresponsibilitiesinaccordancewiththeCodeofEthicsforCertifiedPublicAccountantsofChina.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

3.CriticalAuditMattersCriticalauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditoftheFinancialStatementsofthecurrentperiod.ThesemattersshallbeaddressedinthecontextofourauditoftheFinancialStatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.

(1)Revenuea.DescriptionFordetailsonrelevantinformationdisclosures,pleaserefertoNotes3.26and5.2.1tothefinancialstatements.TheoperatingrevenueofHangchaGroupCompanyprimarilystemsfromthesalesofforkliftsandparts.In2024,itsoperatingrevenueamountedtoRMB16,485,830,300.HangchaGroupCompanymainlyengagesinthesalesofforkliftsandparts,whichrepresentperformanceobligationssatisfiedatapointintime.DomesticsalesrevenueisrecognizedwhenHangchaGroupCompanydeliverstheproductstothebuyerasagreedinthecontract,receivesthe

/

paymentorobtainstherighttopayment,anditisprobablethattheassociatedeconomicbenefitswillflowintoHangchaGroupCompany.ExportsalesrevenueisrecognizedwhenHangchaGroupCompanycompletescustomsclearanceasagreedinthecontract,receivesabilloflading,receivethepaymentforgoodsorobtainstherighttopayment,anditisprobablethattheassociatedeconomicbenefitswillflowintoHangchaGroupCompany.AsoperatingrevenueisoneofthekeyperformanceindicatorsofHangchaGroupCompany,thereexistsaninherentriskthatmanagementofHangchaGroupCompany(hereinafterreferredtoas“Management”)maymeetspecifictargetsorexpectationsthroughinappropriaterevenuerecognition.Therefore,weincludedrevenuerecognitionasacriticalauditmatter.b.Auditresponse

(1)Obtainedanunderstandingofthekeyinternalcontrolsrelatedtorevenuerecognition,evaluatedthedesignofthesecontrols,identifiedwhethertheyareimplemented,andtestedwhethertherelevantinternalcontrolsfunctioneffectively;

(2)Performanalyticalproceduresonoperatingrevenuebyyear,month,product,andcustomertoidentifysignificantorunusualfluctuationsandinvestigatetheircauses;

(3)Analyzebusinessmodelsandsalescontractstoidentifycontractualtermsandconditionsrelatedtothetransferofcontrolovergoodsandrelatedperformanceobligations,andevaluatewhetherrevenuerecognitionpoliciescomplywiththeAccountingStandardsforBusinessEnterprises;

(4)Fordomesticsalesrevenue:Selectitemstoverifysupportingdocumentsincludingsalescontracts,deliverynotes,shippingdocuments,salesinvoices,andacceptancecertificates.Forexportsalesrevenue:

Selectitemstoverifysupportingdocumentssuchassalescontracts,exportcustomsdeclarations,billsoflading,andsalesinvoices,andconductinterviewswithcertainkeycustomers;

(5)Performconfirmationproceduresonaccountsreceivableandselectkeycustomerstoconfirmsalesrevenueforthecurrentperiod;

(6)Performedacut-offtestontheoperatingrevenuesrecognizedbeforeandafterthebalancesheetdatetoevaluatewhethertheoperatingrevenueshavebeenrecognizedwithintheappropriateperiod;and

(7)AssessedwhethertheinformationrelatedtotheoperatingrevenueshasbeenappropriatelypresentedintheFinancialStatements.

2.Impairmentofaccountsreceivableandcontractassets

(1).DescriptionFordetailsonrelevantinformationdisclosure,pleaserefertoNotes3.12,5.1.4and5.1.9tothefinancialstatements.AsofDecember31,2024,HangchaGroupCompanyreportedabookbalanceofaccountsreceivableofRMB2,642,728,100,withtheprovisionforbaddebtsofRMB176,330,700,resultinginthecarryingamountofRMB2,466,397,400,andabookbalanceofcontractassetsofRMB121,510,000,withtheprovisionforimpairmentofRMB13,410,400,resultinginthecarryingamountofRMB108,099,600.ManagementmeasureslossprovisionsforamountsreceivableandcontractassetsatanamountequaltolifetimeECL,eitherindividuallyorcollectively,basedontheircreditriskcharacteristics.Duetothe

/

significantamountsofaccountsreceivableandcontractassetsandthesignificantmanagementjudgmentinvolvedintheirimpairmenttesting,weidentifiedtheimpairmentofaccountsreceivableandcontractassetsasakeyauditmatter.

2.AuditresponseWeperformedthefollowingauditproceduresforimpairmentofaccountsreceivableandcontractassets,amongothers:

(1)Obtainanunderstandingofinternalcontrolsrelevanttotheimpairmentofaccountsreceivableandcontractassets,evaluatethedesignofthesecontrols,determinewhethertheyhavebeenimplemented,andtesttheoperationaleffectivenessofrelevantinternalcontrols;

(2)ReviewtheresultsofManagement’sestimatesofprovisionsforbaddebtsandimpairmentinpreviousyearsorsubsequentre-estimatesthereofmadebyManagement;

(3)ReviewtherelevantconsiderationsandobjectiveevidenceofManagement’screditriskevaluationofaccountsreceivableandcontractassets,andevaluatewhetherManagementhasproperlyidentifiedthecreditriskcharacteristicsofallaccountsreceivableandcontractassets;

(4)Foraccountsreceivableandcontractassetsmeasuredforexpectedcreditlossesonanindividualbasis,reviewManagement’sforecastofexpectedcashflows,evaluatetheappropriatenessofsignificantassumptionsandtheappropriateness,relevanceandreliabilityofdatausedintheforecast,andverifythemagainsttheexternalevidenceobtained;

(5)foraccountsreceivableandcontractassetsmeasuredforexpectedcreditlossesonaportfoliobasis,evaluatethereasonablenessofManagement’sclassificationofportfoliosbycreditriskcharacteristics;evaluatethereasonablenessoftheexpectedcreditlossratesforaccountsreceivableandcontractassetsdeterminedbyManagement,includingtheappropriatenessofsignificantassumptionsusedandtheappropriateness,relevanceandreliabilityofdata;andtesttheaccuracyofManagement’scalculationofprovisionsforbaddebtsandimpairment;

(6)EvaluatethereasonablenessofManagement’sprovisionforbaddebtsandimpairmentbycombiningtheconfirmationproceduresonaccountsreceivableandcontractassetswiththesubsequentpaymentsaftertheperiod;

(7)Verifywhethertheinformationrelatedtotheimpairmentofaccountsreceivableandcontractassetshasbeenappropriatelypresentedinthefinancialstatements.IV.OtherinformationTheManagementoftheCompanyareresponsiblefortheotherinformation.TheotherinformationcomprisesalltheinformationincludedintheannualreportotherthantheFinancialStatementsandourAuditReportthereon.OurauditopinionontheFinancialStatementsdoesnotcovertheotherinformationandwedonotexpressanyformofappraisalconclusionthereon.WeareresponsibleforreadingtheotherinformationbasedonourauditoftheFinancialStatementsand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththeFinancialStatementsorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.

/

Ifweconcludethatthereisamaterialmisstatementoftheotherinformationbasedontheworkwehaveperformed,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.V.ResponsibilitiesoftheManagementandthosechargedwithgovernancefortheFinancialStatementsTheManagementoftheCompanyisresponsibleforthepreparationoftheFinancialStatementsthatgiveatrueandfairviewinaccordancewiththeAccountingStandardsforBusinessEnterprises,andforthedesign,implementationandmaintenanceofsuchinternalcontrols,soastoensurethattheFinancialStatementsarefreefrommaterialmisstatement,whetherduetofraudorerror.Inpreparingthefinancialstatements,ManagementisresponsibleforassessingHangchaGroupCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessmanagementeitherintendstoliquidateHangchaGroupCompanyortoceaseoperations,orhasnorealisticalternativebuttodoso.ThosechargedwithgovernanceofHangchaGroupCompany(hereinafterreferredtoas“ThoseChargedwithGovernance”)areresponsibleforoverseeingthepreparationofthosefinancialstatementsofHangchaGroupCompany.VI.ResponsibilitiesoftheCPAsfortheauditoftheFinancialStatementsWeaimtoobtainreasonableassuranceaboutwhethertheFinancialStatementsarefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditreportthatincludesourauditopinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewiththeCSAwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheseFinancialStatements.AspartofanauditinaccordancewiththeCSA,weexerciseprofessionaljudgmentandmaintainprofessionalscepticismthroughouttheaudit.Wealso:

1.IdentifyandassesstherisksofmaterialmisstatementoftheFinancialStatements,whetherduetofraudorerror,designandperformauditprocessesresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol,theriskoffailingtodetectamaterialmisstatementresultingfromfraudishigherthantheriskoffailingtodetectamaterialmisstatementresultingfromerror.

2.Obtainanunderstandingofinternalcontrolsrelevanttotheauditinordertodesignappropriateauditprocesses.

3.EvaluatetheappropriatenessofaccountingpoliciesusedbytheManagementandtherationalityofaccountingestimatesandrelateddisclosuresmadebytheManagement.

4.ConcludeontheappropriatenessoftheManagement'suseoftheassumptionofongoingconcern,and,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtonHangchaGroupCompany’sabilitytocontinueasagoing

/

concern.InaccordancewiththeCSA,wearerequiredtodrawattentioninourauditreporttotherelateddisclosuresintheFinancialStatementsifweconcludethatamaterialuncertaintyexists,ortoissueanauditreportcontainingthemodifiedopinionifsuchdisclosuresareinadequate.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditreport.However,futureeventsorconditionsmaycauseHangchaGroupCompanytoceasetocontinueasagoingconcern.

5.Evaluatetheoverallpresentation,structureandcontentoftheFinancialStatements,andwhethertheFinancialStatementsgiveatrueandfairviewoftheunderlyingtransactionsandevents.

6.ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithinHangchaGroupCompanytoexpressanopiniononthefinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit,andweremainsolelyresponsibleforourauditopinion.Wecommunicatewiththosechargedwithgovernanceregardingmatterssuchastheplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemonallrelationshipsandothermattersthatmayreasonablybeconsideredtobearonourindependence,andrelevantpreventivemeasureswhichareapplicable.Basedonthematterscommunicatedwiththosechargedwithgovernance,wedeterminethemattersthatareofmostsignificanceintheauditoftheFinancialStatementsofthecurrentperiodandarethereforethecriticalauditmatters.Wedescribesuchmattersinourauditreportunlesslaworregulationprecludespublicdisclosureofthemattersorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.

Pan-ChinaCertifiedPublicAccountantsLLPChineseCPA:XuJinbo

(ProjectPartner)Hangzhou,ChinaChineseCPA:TangZheren

April17,2025

/

II.FinancialStatements

ConsolidatedBalanceSheet

12/31/2024Preparedby:HangchaGroupCo.,Ltd.

Unit:YuanCurrency:CNY

/

/

HeadoftheCompany:ZhaoLiminChiefAccountant:ZhangShutongHeadofAccountingDepartment:YuanGuanghui

ParentCompany’sBalanceSheet

12/31/2024Preparedby:HangchaGroupCo.,Ltd.

Unit:YuanCurrency:CNY

/

HeadoftheCompany:ZhaoLiminChiefAccountant:ZhangShutongHeadofAccountingDepartment:YuanGuanghui

/

ConsolidatedIncomeStatementJanuary-December2024

Unit:YuanCurrency:CNY

/

Inthecaseofabusinesscombinationunderthesamecontrolinthecurrentperiod,thenetprofitrealizedbytheacquireebeforethecombinationis:RMB-1,983,591.63,andthenetprofitrealizedbytheacquireeinthepreviousperiodwas:RMB-5,804,004.79.

/

HeadoftheCompany:ZhaoLiminChiefAccountant:ZhangShutongHeadofAccountingDepartment:YuanGuanghui

ParentCompany’sIncomeStatement

January-December2024

Unit:YuanCurrency:CNY

/

HeadoftheCompany:ZhaoLiminChiefAccountant:ZhangShutongHeadofAccountingDepartment:YuanGuanghui

ConsolidatedStatementofCashFlows

January-December2024

Unit:YuanCurrency:CNY

/

/

HeadoftheCompany:ZhaoLiminChiefAccountant:ZhangShutongHeadofAccountingDepartment:YuanGuanghui

ParentCompany’sStatementofCashFlows

January-December2024

Unit:YuanCurrency:CNY

/

HeadoftheCompany:ZhaoLiminChiefAccountant:ZhangShutongHeadofAccountingDepartment:YuanGuanghui

/

ConsolidatedStatementofChangesinOwners’Equity

January-December2024

Unit:YuanCurrency:CNY

/