Nanjing Panda Electronics : 2023 Annual Report 2024-04-28

Contents

Section I	Definitions	2
Section II	Company Profile and Major Financial Indicators	5
Section III	Management Discussion and Analysis	12
Section IV	Corporate Governance	64
Section V	Environmental and Social Responsibility	112
Section VI	Significant Events	116
Section VII	Changes in Shares and Information of Shareholders	150
Section VIII	Information on Preferred Shares	161
Section IX	Information on Corporate Bonds	162
Section X	Financial Report	163
DOCUMENTS	1.	Original financial statements signed and sealed under the hand of the head of the
AVAILABLE FOR	Company, the chief accountant and the head of the accounting department (accounting
INSPECTION		supervisor) of the Company.
	2.	Original copy of audit report sealed by the accounting firm, and signed and sealed under
		the hand of the certified public accountants.
	3.	Original copies of all documents and announcements of the Company publicly disclosed on
		websites designated by the CSRC during the Reporting Period.
	4.	This report is prepared in both Chinese and English. In the event of any discrepancy
		between the two versions, the Chinese version shall prevail.

IMPORTANT NOTICE

1. The board of directors, the supervisory committee and the directors, supervisors and senior management of the Company confirm that the information contained in this annual report is true, accurate and complete without any misrepresentation, misleading statements, or material omissions, and severally and jointly accept legal responsibility for the contents herein.
2. All directors of the Company attended the 24th meeting of the tenth session of the Board of the Company held on March 28, 2024.
3. WUYIGE Certified Public Accountants LLP issued an unqualified auditors' report for the Company. The Company's financial statements for the year were prepared in accordance with the PRC Accounting Standards for Business Enterprises, and complied with the Hong Kong Companies Ordinance and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules.
4. Mr. Hu Huichun, the head of the Company, Mr. Hu Shoujun, the chief accountant, and Mr. Xue Gang, the head of the accounting department (accounting supervisor) of the Company, declared that they confirmed the truthfulness, accuracy and completeness of the financial report contained in this annual report.
5. Proposal of profit distribution or capitalization of capital reserves of the Company for the reporting period considered by the Board: After audit, the Company recorded net loss of RMB237,862,230.10 attributable to shareholders of listed companies in 2023. According to relevant provisions of the "Regulatory Guidelines for Listed Companies No. 3-Cash Dividend for Listed Companies", "the Articles of Association" and "the Shareholder Return Plan (2022-2024)", in order to ensure the Company's sustainable and stable operation and the long-term interests of all shareholders, the Board gave overall consideration to the Company's business plan and capital demand for 2024, and formulated the profit distribution plan for 2023 as follows: The Company would not make any profit distribution, capitalization of capital reserves or other forms of distribution.
6. Forward looking statements, including future plans and development strategies, contained in this annual report do not constitute a substantive commitment to investors by the Company. Investors are advised to pay attention to investment risks.
7. Neither the Company's controlling shareholder nor any of its related parties have misappropriated the Company's funds for non-operating purposes.
8. The Company did not provide external guarantees in violation of any specified decision-making procedures.
9. The situation where the majority of the directors cannot warrant the authenticity, accuracy and completeness of the information contained in the annual report does not exist.
10. Major risk warning: The Company has elaborated the potential risks in this annual report. For their details and the corresponding countermeasures, please refer to the paragraph headed "Potential Risks" under Section III "Management Discussion and Analysis" in this annual report.

1

Section I Definitions

1. Definitions

Unless the context otherwise requires, the following terms should have the following meanings in this report:

Definitions of frequently-used terms

Company/Nanjing Panda	Nanjing Panda Electronics Company Limited
Group	Nanjing Panda Electronics Company Limited and its subsidiaries
PEGL	Panda Electronics Group Limited
PEGL Group	Panda Electronics Group Limited and its subsidiaries
NEIIC	Nanjing Electronics Information Industrial Corporation
NEIIC Group	Nanjing Electronics Information Industrial Corporation and its
	subsidiaries
CEC	China Electronics Corporation
CEC Group	China Electronics Corporation and its subsidiaries
Financial Company	China Electronics Financial Co., Ltd.
CEC Home Appliances	Nanjing CEC-Panda Home Appliances Co., Ltd.
ENC	Nanjing Ericsson Panda Communication Co., Ltd.
EAB	ERICSSON AB
MAP	The mutual agreement procedure submitted by EAB and ENC
	according to the agreement on avoidance of double taxation
	between China and Sweden

2

Section I Definitions (Continued)

LG-Panda	Nanjing LG-Panda Appliances Co., Ltd.
Shenzhen Jingwah	Shenzhen Jingwah Electronics Co., Ltd.
Electronics Equipment	Nanjing Panda Electronics Equipment Co., Ltd.
Company
Information Industry	Nanjing Panda Information Industry Co., Ltd.
Company
Electronic Manufacture	Nanjing Panda Electronic Manufacture Co., Ltd.
Company
Communications Technology	Nanjing Panda Communications Technology Co., Ltd.
Company
Technology Development	Nanjing Panda Electronic Technology Development Company Limited
Company
Chengdu Electronic	Chengdu Panda Electronic Technology Co., Ltd.
Technology
Chengdu Display	Chengdu BOE Display Technology Co., Ltd. (formerly known as
Technology	Chengdu Cec Panda Display Technology Co., Ltd.)
Huage Plastic	Nanjing Huage Appliance and Plastic Industrial Co., Ltd.
Panda Zhicheng	Nanjing Panda Zhicheng Technology Co., Ltd.
China Huarong	China Huarong Asset Management Co., Ltd.
the Ministry of Finance	the Ministry of Finance of the People's Republic of China
CSRC	China Securities Regulatory Commission
SFC	Securities and Futures Commission of Hong Kong

3

Section I Definitions (Continued)

Shanghai Stock Exchange	Shanghai Stock Exchange
Hong Kong Stock Exchange	The Stock Exchange of Hong Kong Limited
CSRC Jiangsu Bureau	Jiangsu Securities Regulatory Bureau of China Securities Regulatory
	Commission
Company Law	Company Law of the People's Republic of China
Securities Law	Securities Law of the People's Republic of China
Articles of Association	Articles of Association of Nanjing Panda Electronics Company Limited
AFC	Auto Fare Collection
ACC	AFC Clearing Center
EMS	Electronic Manufacturing Services
MES	Manufacturing Execution System, a management system of
	information-based production aiming at execution on plant floors of
	manufacturers
SAP-ERP	SAP (System Applications and Products), a software company in
	Germany; SAP-ERP, generally referring to the ERP products under
	SAP
CNAS	China National Accreditation Service for Conformity Assessment

4

Section II Company Profile and Major Financial Indicators

I.	Company Information
	Chinese name of the Company	南京熊猫電子股份有限公司
	Abbreviation of the Chinese name	南京熊猫
	English name of the Company	Nanjing Panda Electronics Company Limited
	Abbreviation of the English name	NPEC
	Legal representative of the Company	Hu Huichun (Executive Director and General Manager)

1. Contact Persons and Contact Information

	Secretary to the Board	Securities Affairs Representative
Name	Wang Dongdong	Wang Dongdong
Correspondence address	7 Jingtian Road, Nanjing, the People's	7 Jingtian Road, Nanjing, the People's
	Republic of China	Republic of China
Telephone	(86 25) 84801144	(86 25) 84801144
Facsimile	(86 25) 84820729	(86 25) 84820729
Email	[e-mail]	[e-mail]
III. Basic Information
Registered address		7 Jingtian Road, Nanjing, Jiangsu Province, the People's Republic
		of China
Historical changes of Registered	In 2019, the Company's registered address was changed to Room
address of the Company		1701, 301 Zhongshan East Road, Xuanwu District, Nanjing,
		Jiangsu Province, the People's Republic of China; In 2021, the
		Company's registered address was changed to 7 Jingtian Road,
		Nanjing, Jiangsu Province, the People's Republic of China
Office address		7 Jingtian Road, Nanjing, Jiangsu Province, the People's Republic
		of China
Postal code of the office address	210033
Website of the Company		http://www.panda.cn
Email		[e-mail]

5

Section II Company Profile and Major Financial Indicators (Continued)

IV. Places for Information Disclosure and Inspection

Designated media for information disclosure International websites for the publication

of the Company's annual report and information disclosure

Place for inspection of the Company's annual report

Shanghai Securities News, China Securities Journal Shanghai Stock Exchange: http://www.sse.com.cn Hong Kong Stock Exchange: http://www.hkex.com.hk

Office of the Secretary to the Board, 7 Jingtian Road, Nanjing, the People's Republic of China

1. Information of the Company's Shares

Overview of the Company's shares

	Stock exchange			Stock
Class of	on which the	Stock		abbreviation
shares	shares are listed	abbreviation	Stock code	before change
A shares	Shanghai Stock Exchange	Nanjing Panda	600775	N/A
H shares	Hong Kong Stock Exchange	Nanjing Panda	00553	N/A

VI. Other Relevant Information

Domestic auditors of	Name	WUYIGE Certified Public Accountants LLP
the Company	Office address	Room 2206, 22/F, 1 Zhichun Road, Haidian District, Beijing
	Name of signing	Gong Ronghua, Zhong Quanbing
	accountants
Overseas auditors of	Name	N/A
the Company	Office address	N/A
	Name of signing	N/A
	accountants
Long-term domestic	Name	Grandall Law Firm (Nanjing)
legal advisers	Office address	7th-8th Floor, Building B, No.309 Hanzhong Gate Avenue,
		Nanjing
Long-term overseas	Name	Philip K. H. Wong, Kennedy Y. H. Wong & Co., Solicitors
legal advisers	Office address	23rd Floor, Admiralty Centre Tower II, 18 Harcourt Road,
		Queensway, Hong Kong

6

Section II Company Profile and Major Financial Indicators (Continued)

VI. Other Relevant Information (Continued)

Share Registrars and	Name	China Securities Depository and Clearing Corporation
Transfer Office (A		Limited Shanghai Branch
shares)	Office address	188 South Yanggao Road, Pudong New Area, Shanghai
Share Registrars and	Name	Computershare Hong Kong Investor Services Limited
Transfer Office (H	Office address	17M Floor, Hopewell Centre, 183 Queen's Road East,
shares)		Wanchai, Hong Kong

VII. Major accounting data and financial indicators (prepared in accordance with the PRC Accounting Standards of Business Enterprises)

1. Principle accounting data

				Unit: Yuan	Currency: RMB
			Year-on-
			year increase/
Principle accounting data	2023	2022 (Adjusted)	decrease	2021	2020	2019
			(%)
Operating revenue	2,912,311,480.01	4,154,295,003.26	-29.90	4,531,842,430.51	3,952,265,022.15	4,660,047,001.92
Net profit attributable to
shareholders of the Company	-237,862,230.10	39,873,197.73	-696.55	41,928,543.18	77,318,175.74	52,657,894.58
Net profit attributable to
shareholders of the Company
after extraordinary items	-257,009,511.61	10,520,082.28	-2,543.04	11,888,072.43	18,254,992.01	25,447,136.36
Net cash flows from operating
activities	-65,851,054.62	150,320,717.60	-143.81	208,170,561.48	534,653,617.28	-341,233,848.13
			Year-on-
	As of the end of	As of the end of	year increase/	As of the end of	As of the end of	As of the end of
	2023	2022 (Adjusted)	decrease	2021	2020	2019
			(%)
Net assets attributable to
shareholders of the Company	3,303,235,992.24	3,553,958,826.75	-7.05	3,527,207,782.36	3,509,430,717.97	3,448,072,752.25
Total assets	5,540,955,892.33	5,865,289,811.26	-5.53	6,057,982,752.18	6,001,947,699.44	6,020,147,479.47

7

Section II Company Profile and Major Financial Indicators (Continued)

VII. Major accounting data and financial indicators (prepared in accordance with the PRC Accounting Standards of Business Enterprises) (Continued)

(II)	Key financial indicators
				Year-on-year
			2022	increase/
	Key financial indicators	2023	(Adjusted)	decrease (%)	2021	2020	2019
	Basic earnings per share(RMB/share)	-0.2603	0.0436	-696.55	0.0459	0.0846	0.0576
	Diluted earnings per share(RMB/share)	-0.2603	0.0436	-696.55	0.0459	0.0846	0.0576
	Basic earnings per share after extraordinary	-0.2812	0.0115	-2,543.04	0.0130	0.0200	0.0278
	items(RMB/share)
	Weighted average return on net assets(%)	-6.92	1.12	Decreased by 8.04	1.12	2.22	1.49
				percentage point
	Weighted average return on net assets after	-7.48	0.3	Decreased by 7.78	0.32	0.52	0.72
	extraordinary items(%)			percentage point

Explanations on major accounting data and financial indicators of the Company as at the end of the Reporting Period:

The Company's decrease in operating income was mainly due to the structural adjustment of some products which did not meet the market expectation. Some businesses adjusted their delivery cycle and failed to meet the settlement requirements, while some business changed their model, with revenue and cost decreased year on year. The net profit attributable to shareholders of listed companies decreased mainly due to the significant uncertainty in ENC's recovery of other non- current assets, which was likely to have a significant impact on the Company's long-term equity investment. In the principle of prudence, the Company made full provision for impairment of ENC's long-term equity investment in the Financial Statement for 2023. The decrease in net cash flows from operating activities was mainly due to the year-on-year decrease in cash received from sales of goods and rendering of services for the period.

8

Section II Company Profile and Major Financial Indicators (Continued)

VIII. Differences between accounting data prepared under overseas and domestic accounting standards

1. Differences in the net profit and net assets attributable to shareholders of the Company in the financial statements disclosed under the International Accounting Standards and the
   PRC GAAP: N/A

1. Difference in the net profit and net assets attributable to shareholders of the Company in the financial statements disclosed under the foreign accounting standards and the PRC GAAP: N/A

(III) Explanations on differences under the foreign and domestic accounting standards: N/A

IX. Major quarterly accounting data in 2023

			Unit: Yuan	Currency: RMB
	Q1 (January	Q2 (April	Q3 (July	Q4 (October
	to March)	to June)	to September)	to December)
Operating Revenue	558,119,921.10	804,745,724.64	583,458,072.22	965,987,762.05
Net profit attributable to shareholders of the
Company	-30,450,577.25	3,110,190.32	-4,374,606.82	-206,147,236.35
Net profit attributable to shareholders of the
Company after extraordinary items	-35,580,878.66	-2,788,024.61	-6,791,342.76	-211,849,265.58
Net cash flows from operating activities	-173,980,108.81	44,454,709.76	47,236,226.75	16,438,117.68

Explanation on the differences between quarterly data and disclosed regular reporting data: N/A

9