Earnings release
Page 1
1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. SUNNY OPTICAL TECHNOLOGY (GROUP) COMPANY LIMITED ʮ̡ (Incorporated in the Cayman Islands with limited liability) (Stock Code: 2382.HK) INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2026 RESULTS HIGHLIGHTS For the six months ended 30 June 2026, the Group ’s unaudited revenue was approximately Renminbi ( “RMB”) 21,905.7 million, representing an increase of approximately 11.5% as compared to the corresponding period of last year. For the six months ended 30 June 2026, the Group ’s gross profit was approximately RMB4,268.7 million, representing an increase of approximately 9.6% as compared to the corresponding period of last year. For the six months ended 30 June 2026, the Group ’s profit for the period attributable to owners of the Company was approximately RMB1,808.4 million, representing an increase of approximately 9.9% as compared to the corresponding period of last year. FINANCIAL RESULTS The board (the “Board”) of directors (the “Directors ”, and each a “Director ”) of Sunny Optical Technology (Group) Company Limited (the “Company ”) presents the unaudited condensed consolidation interim results of the Company and its subsidiaries (collectively referred to as the “Group”) for the six months ended 30 June 2026, together with the comparative figures for the corresponding period of the year 2025 as follows:
Page 2
2 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2026 For the six months ended 30 June NOTES 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Revenue 3 21,905,704 19,651,919 Cost of sales (17,637,038) (15,757,471) Gross profit 4,268,666 3,894,448 Other income 4A 504,299 518,369 Other gains and losses 5 20,039 20,122 Impairment losses under expected credit loss ( “ECL”) model, net of reversal (16,928) (5,487) Selling and distribution expenses (182,923) (184,244) Research and development expenditure (1,650,726) (1,633,607) Administrative expenses (571,078) (592,788) Share of results of associates (5,426) 92,251 Finance costs (163,699) (243,814) Profit before tax 2,202,224 1,865,250 Income tax expense 6 (252,234) (141,066) Profit for the period 7 1,949,990 1,724,184 Other comprehensive (expense) income: Item that will not be reclassified subsequently to profit or loss: Fair value (losses) gains on investments in equity instruments at fair value through other comprehensive income ( “FVTOCI ”), net of income tax 4B (44,903) 46,298 Item that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (29,187) (42,544) Other comprehensive (expense) income for the period (74,090) 3,754 Total comprehensive income for the period 1,875,900 1,727,938
Page 3
3 For the six months ended 30 June NOTE 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Profit for the period attributable to: Owners of the Company 1,808,364 1,646,133 Non-controlling interests ( “NCI”) 141,626 78,051 1,949,990 1,724,184 Total comprehensive income for the period attributable to: Owners of the Company 1,735,863 1,648,740 Non-controlling interests 140,037 79,198 1,875,900 1,727,938 Earnings per share – Basic (RMB cents) 8 168.03 151.56 – Diluted (RMB cents) 8 167.66 150.96
Page 4
4 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2026 30 June 31 December NOTES 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) NON-CURRENT ASSETS Property, plant and equipment 10(a) 10,618,503 9,817,671 Right-of-use assets 10(b) 671,703 656,961 Investment properties 14,740 16,957 Intangible assets 37,045 61,830 Interests in associates 3,893,233 3,866,428 Deferred tax assets 11 189,861 210,424 Deposits and prepayments paid for acquisition of property, plant and equipment and land use right 12 309,456 379,559 Derivative financial assets 14 – 27 Equity instruments at FVTOCI 226,513 127,041 Financial assets at fair value through profit or loss ( “FVTPL ”) 13 139,048 16,189 Time deposits 505,448 1,696,302 Goodwill 2,119 2,119 16,607,669 16,851,508 CURRENT ASSETS Inventories 15 6,533,883 7,179,714 Trade and other receivables and prepayments 16 9,139,401 10,012,673 Receivables at FVTOCI 16A 710,059 1,508,907 Derivative financial assets 14 43,566 3,580 Financial assets at FVTPL 13 13,326,538 11,407,427 Amounts due from related parties 503,631 550,727 Time deposits 1,687,299 2,154,406 Pledged bank deposits 14,774 71,801 Short term fixed deposits 1,685,304 1,972,079 Cash and cash equivalents 3,499,067 7,482,149 37,143,522 42,343,463 Assets classified as held for sale – 19,780 37,143,522 42,363,243
Page 5
5 30 June 31 December NOTES 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) CURRENT LIABILITIES Trade and other payables 18 16,373,753 21,559,266 Amounts due to related parties 39,715 25,508 Derivative financial liabilities 14 17,496 33,977 Contract liabilities 373,477 300,072 Tax payable 425,455 416,393 Bank borrowings 19 2,589,877 1,769,969 Lease liabilities 50,249 51,457 Deferred income 7,883 2,600 Bonds payable 20 2,797,993 2,885,040 22,675,898 27,044,282 NET CURRENT ASSETS 14,467,624 15,318,961 TOTAL ASSETS LESS CURRENT LIABILITIES 31,075,293 32,170,469 NON-CURRENT LIABILITIES Deferred tax liabilities 11 827,644 818,602 Derivative financial liabilities 14 – 3,287 Bank borrowings 19 500,000 1,405,760 Lease liabilities 113,423 131,873 Deferred income 36,651 46,621 1,477,718 2,406,143 NET ASSETS 29,597,575 29,764,326 CAPITAL AND RESERVES Share capital 21 104,967 104,967 Reserves 28,795,593 29,043,621 Equity attributable to owners of the Company 28,900,560 29,148,588 Non-controlling interests 697,015 615,738 TOTAL EQUITY 29,597,575 29,764,326
Page 6
6 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2026 1. GENERAL INFORMATION AND BASIS OF PREPARATION The Company was incorporated in the Cayman Islands on 21 September 2006 as an exempted company under the Companies Act Chapter 22 (Law 3 of 1961 as consolidated and revised, formerly known as Companies Law) of the Cayman Islands and its shares have been listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange ”) with effect from 15 June 2007. The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 ( “HKAS 34 ”) “Interim Financial Reporting ” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA ”) as well as the applicable disclosure requirements of the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules ”). The Directors have, at the time of approving the condensed consolidated financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the condensed consolidated financial statements. 2. ACCOUNTING POLICIES The condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values, as appropriate. Other than changes in accounting policies resulting from application of amendments to HKFRS Accounting Standards, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2026 are the same as those presented in the Group ’s annual consolidated financial statements for the year ended 31 December 2025. Application of amendments to Hong Kong Financial Reporting Standards ( “HKFRS ”) Accounting Standards In the current interim period, the Group has applied the following amendments to a HKFRS Accounting Standard issued by the HKICPA, for the first time, which are mandatorily effective for the Group ’s annual period beginning on 1 January 2026 for the preparation of the Group ’s condensed consolidated financial statements: Amendments to HKFRS 9 and HKFRS 7 Amendments to the Classification and Measurement of Financial Instruments Amendments to HKFRS 9 and HKFRS 7 Contracts Referencing Nature-dependent Electricity Amendments to HKFRS Accounting Standards Annual Improvements to HKFRS Accounting Standards – Volume 11 Except for the Amendments to HKFRS 7 mentioned below, the application of the amendments to a HKFRS Accounting Standards in the current interim period has had no material impact on the Group ’s financial positions and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements. Impacts on application of Amendments to HKFRS 7 Amendments to the Classification and Measurement of Financial Instruments Additional disclosure requirements The Group has provided additional disclosures of investment in equity instrument which the Group has elected on initial recognition to measure at FVTOCI as required by the amended HKFRS 7. Such disclosures are set out in Note 4B.
Page 7
7 3. REVENUE AND SEGMENT INFORMATION Information reported to the Board, being the chief operating decision maker ( “CODM”), for the purpose of resource allocation and assessment of segment performance focuses on types of goods delivered because the Board has chosen to organise the Group among different major products. No operating segments identified by CODM have been aggregated in arriving at the reportable segments of the Group. The Group ’s reportable segments under HKFRS 8 Operating Segments are handset products, vehicle products, extended reality ( “XR”) products and other products, which represent the major types of products sold by the Group. In prior years, the Group had three reportable segments: (i) optical components; (ii) optoelectronic products; and (iii) optical instruments, based on the performance of different businesses reviewed by the CODM. In 2025, the CODM reviewed the performance of products across different industries under the new reportable structure, and segment information has been updated to reflect this change. The management of the Group considers that this change in segment disclosure better reflects the Group ’s business strategies, development stages and financial performance of each business, and is more consistent with the Group ’s resource allocation. Revenue and costs of each segment have respectively classified into handset, vehicle, XR and others to align more precisely with the Group ’s business development and resource allocation. Accordingly, the reportable segments have been reorganised. Prior year segment disclosures have been restated to conform to the current year ’s presentation. The comparative figures of segment disclosures for the period ended 30 June 2025 have been restated in order to conform with the current period ’s presentation format. The following is an analysis of the Group ’s revenue and results by operating and reportable segments. For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) (Restated) Revenue Handset products 13,148,628 13,248,009 Vehicle products 3,761,928 3,400,448 XR products 955,720 860,643 Other products 4,039,428 2,142,819 21,905,704 19,651,919 Segment Margin Handset products 1,615,297 1,899,622 Vehicle products 1,138,644 1,137,357 XR products 124,503 148,879 Other products 1,390,222 708,590 4,268,666 3,894,448 Unallocated amounts: Other income 504,299 518,369 Other gains and losses 20,039 20,122 Impairment losses under ECL model, net of reversal (16,928) (5,487) Selling and distribution expenses (182,923) (184,244) Research and development expenditure (1,650,726) (1,633,607) Administrative expenses (571,078) (592,788) Share of results of associates (5,426) 92,251 Finance costs (163,699) (243,814) Profit before tax 2,202,224 1,865,250
Page 8
8 The accounting policies of the operating segments are the same as the Group ’s accounting policies described in Note 2. Segment margin represents the profit earned by each segment without allocation of other income, impairment losses under ECL model, net of reversal, selling and distribution expenses, other gains and losses, research and development expenditure, administrative expenses, share of results of associates and finance costs. This is the measure reported to the key operating decision makers for the purpose of resource allocation and performance assessment. The CODM makes decisions according to operating results of each segment. No analysis of segment asset and segment liability is presented as the CODM does not regularly review such information for the purposes of resources allocation and performance assessment. Therefore, only segment revenue and segment margin are presented. Depreciation and amortisation charges related to assets employed by different segments are presented to the CODM for review. Geographical information The Group ’s operations are mainly located in China, Vietnam, Korea, Japan, India and the United States. The Group ’s revenue from continuing operations from external customers is presented based on the domiciles of customers. For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Geographical markets The People ’s Republic of China ( “PRC” or “China ”) 15,088,235 14,123,914 Asia (except for China) 3,876,407 3,732,544 Europe 1,305,588 930,293 North America 1,544,935 768,862 Others 90,539 96,306 21,905,704 19,651,919 4A. OTHER INCOME For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Government grants (Note) 129,913 89,109 Interest income from time deposits, short term fixed deposits, pledged bank deposits and bank balances 158,758 142,012 Investment income from unlisted financial products at FVTPL 121,296 168,117 Interest income from small loan services 2,692 3,094 Income from sales of moulds and scrap materials 22,567 57,280 Others 69,073 58,757 504,299 518,369 Note: The amounts represent unconditional subsidies related to research and development of technology projects and incentive subsidies. There are no unfulfilled conditions or contingencies relating to the above subsidies.
Page 9
9 4B. FAIR VALUE LOSS ON INVESTMENTS IN EQUITY INSTRUMENTS AT FVTOCI For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Fair value loss during the period arising from: – Investments in equity instruments held at the end of the period 44,699 N/A Income tax relating to fair value loss during the period 204 N/A Total losses on equity instruments at FVTOCI recognized in other comprehensive income 44,903 N/A 5. OTHER GAINS AND LOSSES For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Net foreign exchange (loss) gain (126,126) 28,020 Gain on disposal of property, plant and equipment 33,782 5,422 Gain (loss) on changes in fair value of derivative financial instruments 59,727 (24,045) Gain on disposal of investment in an associate 36,307 – Others 16,349 10,725 20,039 20,122 6. INCOME TAX EXPENSE For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Current tax: PRC Enterprise income tax 130,169 92,455 Withholding tax expense 279 19,514 Other jurisdiction 41,681 28,905 Top-up tax under Pillar Two rules 50,704 10,489 222,833 151,363 Deferred tax (Note 11) : Current period 29,401 (10,297) 252,234 141,066 The Group is subject to the global minimum top-up tax Pillar Two Rules. Pillar Two Rules has become effective in certain countries in which the certain group entities are incorporated. The top-up tax relates to the Group ’s operation in applicable countries, where the annual effective income tax rates are estimated to be below 15 per cent. Therefore, a top-up tax is accrued in the current interim period using the tax rate based on the estimated adjusted covered taxes and net globe income for the year. The Group has recognised a current tax expense of RMB50,704,000 related to the Pillar Two Rules for the six months ended 30 June 2026 (corresponding period of 2025: RMB10,489,000) which is expected to be levied on relevant group entities. The Group has applied the temporary mandatory exception for recognising and disclosing deferred tax assets and liabilities for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.
Page 10
10 7. PROFIT FOR THE PERIOD For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Profit for the period has been arrived at after crediting (charging) the following items: Depreciation of property, plant and equipment 1,313,304 1,174,648 Depreciation of investment properties 2,217 2,376 Depreciation of right-of-use assets 32,776 34,625 Amortisation of intangible assets 24,785 28,105 (Reversals of allowance) allowance for inventories (included in cost of sales) (21,399) 44,928 8. EARNINGS PER SHARE The calculation of basic and diluted earnings per share attributable to the owners of the Company is based on the following data: For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Earnings Earnings for the purposes of basic and diluted earnings per share 1,808,364 1,646,133 For the six months ended 30 June 2026 2025 Number of shares ’000 ’000 Weighted average number of ordinary shares for the purpose of basic earnings per share (Note) 1,076,196 1,086,161 Effect of dilutive potential ordinary shares – restricted shares 2,423 4,313 Weighted average number of ordinary shares for the purpose of diluted earnings per share 1,078,619 1,090,474 Note: The weighted average number of ordinary shares for the purpose of basic earnings per share has been calculated taking into account the shares held by the Group under share award scheme.
Page 11
11 9. DIVIDENDS For the six months ended 30 June 2026 2025 RMB’000 RMB’000 (Unaudited) (Unaudited) Dividends for ordinary shareholders of the Company recognised as distribution during the period: Final dividend paid in 2026 for 2025 of Hong Kong Dollar ( “HKD”) 120.60 cents per share (2025: HKD53.20 cents per share for 2024) 1,131,317 531,562 The Directors do not recommend the payment of an interim dividend for the six months ended 30 June 2026 (corresponding period of 2025: RMB nil). 10. PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS (a) Property, plant and equipment During the current interim period, the Group acquired manufacturing equipment and incurred construction costs for manufacturing plants of approximately RMB2,371,073,000 (corresponding period of 2025: RMB1,185,773,000) in order to upgrade its manufacturing capabilities and capacity expansion. In addition, the Group disposed of certain plant and equipment with carrying amount of approximately RMB218,491,000 (corresponding period of 2025: RMB19,206,000) which resulted in a gain on disposal of approximately RMB33,782,000 (corresponding period of 2025: RMB5,422,000). As at 30 June 2026, no property, plant and equipment of the Group were pledged to secure bank borrowings granted. (b) Right-of-use assets During the current interim period, the Group entered into several new lease agreements for the use of office and manufactory for fixed term of 2 to 3 years (corresponding period of 2025: 2 to 5 years). On the lease commencement date, the Group recognised right-of-use assets of RMB7,547,000 (corresponding period of 2025: RMB20,497,000) and lease liabilities of RMB7,443,000 (corresponding period of 2025: RMB20,408,000). During the current interim period, leasehold land of RMB44,992,000 was recognised as right-of-use assets upon obtaining the land use right certificates (corresponding period of 2025: RMB nil). As at 30 June 2026, no leasehold lands of the Group were pledged to secure bank borrowings granted.
Page 12
12 11. DEFERRED TAXATION For the purpose of presentation in the condensed consolidated statement of financial position, certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances for financial reporting purposes: 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Deferred tax assets (189,861) (210,424) Deferred tax liabilities 827,644 818,602 637,783 608,178 The following are the major deferred tax liabilities (assets) recognised and movements thereon during the current and preceding interim periods: Withholding tax on undistributed profit from the PRC Allowance for inventories and ECL provision Deferred subsidy income Accelerated depreciation Accrued bonus Right-of- use assets Lease liabilities Tax losses Timing difference on gain on share swap transaction Others Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 At 1 January 2025 98,062 (98,685) (16,689) 903,768 (70,235) 33,192 (33,211) (329,410) – 49,807 536,599 Charge (Credit) to profit or loss 40,461 (14,366) 11,997 (61,182) (12,517) (11,334) 11,318 (55,918) 133,102 27,521 69,082 Credit to other comprehensive income – – – – – – – – – 2,497 2,497 At 31 December 2025 (Audited) 138,523 (113,051) (4,692) 842,586 (82,752) 21,858 (21,893) (385,328) 133,102 79,825 608,178 Charge (credit) to profit or loss (Note 6) 22,578 824 1,703 145,676 17,550 (2,024) 2,096 (139,585) – (19,417) 29,401 Credit to other comprehensive income – – – – – – – – – 204 204 At 30 June 2026 (Unaudited) 161,101 (112,227) (2,989) 988,262 (65,202) 19,834 (19,797) (524,913) 133,102 60,612 637,783 12. DEPOSITS AND PREPAYMENTS PAID FOR ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT AND LAND USE RIGHT The deposits and prepayments are paid for construction of factory buildings, acquisition of lands, plants and equipment located in the PRC and other regions for the expansion of Group ’s production plants. During the current interim period, the Group paid an amount of approximately RMB262,151,000 (corresponding period of 2025: RMB558,821,000) as the deposits and prepayments for acquisition of property, plant and equipment and transferred an amount of approximately RMB289,354,000 (corresponding period of 2025: RMB250,883,000) to property, plant and equipment and an amount of approximately RMB42,900,000 to land use right (corresponding period of 2025: RMB nil).
Page 13
13 13. FINANCIAL ASSETS AT FVTPL 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Current assets Unlisted financial products (Note a) 13,326,538 11,407,427 Non-current assets Equity investments (Note b) 16,189 16,189 Investment in shares with preferential rights (Note c) 122,859 – Notes: a. Unlisted financial products The Group entered into several contracts of unlisted financial products with banks, which are managed by related banks in the PRC to invest principally in certain financial assets including bonds, trusts and cash funds, etc. The unlisted financial products have been accounted for as financial assets at FVTPL on initial recognition in which the return on the unlisted financial products was determined by reference to the performance of the underlying investment assets and as at 30 June 2026, the expected return rates stated in the contracts range from 0.70% to 2.70% (31 December 2025: 0.70% to 3.26%) per annum. b. Equity investments The Group ’s equity investments in several partnership enterprises amounting to RMB16,189,000 (31 December 2025: RMB16,189,000) were classified as financial assets at FVTPL. In the opinion of the Directors, the fair value change of the equity investments is insignificant in the current interim period. c. Investment in shares with preferential rights On 12 June 2026, Zhejiang Sunny Optics Co., Ltd., a wholly owned subsidiary of the Company, entered into a series of Subscription Agreement for subscription shares with preferential rights of ߅ ʮ̡ (“ၾΈ”) at a consideration of RMB93,830,000. The principal activity of ၾΈ is dedicated to cutting-edge photonic chips for photonic perception and computing. In assessing whether the Group ’s investment in shares with preferential rights of ၾΈ should be accounted for using equity method under HKAS 28 Investments in Associates and Joint Ventures , the Directors consider the key features of the shares which include redemption feature and these shares do not carry rights that are substantially the same as the ၾΈ ’s ordinary shares and accordingly these shares with preferential rights are accounted for as financial instruments measured at FVTPL under HKFRS 9.
Page 14
14 14. DERIVATIVE FINANCIAL ASSETS AND LIABILITIES At the end of the reporting period, the Group held certain derivatives classified as held for trading and not under hedge accounting as follows: Assets Liabilities 30 June 31 December 30 June 31 December 2026 2025 2026 2025 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) (Audited) (Unaudited) (Audited) Foreign currency forward contracts 17,620 27 – 3,287 Foreign exchange swap contracts 25,946 3,580 17,496 33,977 43,566 3,607 17,496 37,264 As at 30 June 2026, the notional amount of outstanding foreign currency forward contracts amounted to approximately HKD1,649,879,000 and RMB1,350,610,000 (31 December 2025: HKD1,649,879,000). The notional amount of outstanding foreign exchange swap contracts amounted to approximately Japanese Yen (“JPY”) 11,760,000,000 and RMB523,051,000 (31 December 2025: JPY 11,760,000,000, HKD896,237,000 and RMB2,508,574,000). The Group entered the above contracts with banks in the PRC and Vietnam in order to manage the Group ’s foreign currency risk. All these foreign currency forward contracts and foreign exchange swap contracts are matured within one year.
Page 15
15 15. INVENTORIES 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Raw materials 1,207,515 1,195,043 Work in progress 882,207 347,909 Finished goods 4,444,161 5,636,762 6,533,883 7,179,714 16. TRADE AND OTHER RECEIVABLES AND PREPAYMENTS 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Trade receivables 8,381,272 9,174,695 Less: allowance for ECL (120,461) (103,522) 8,260,811 9,071,173 Loan receivables 133,861 176,382 Other receivables and prepayments: Value added tax and other tax receivables 219,591 274,720 Advance to suppliers 177,131 124,801 Prepaid expenses 133,777 81,223 Utilities deposits and prepayments 82,056 140,697 Advances to employees 105,524 111,698 Others 26,650 31,979 744,729 765,118 9,139,401 10,012,673 The Group allows an average credit period of 90 days to its trade customers. The following is an aged analysis of trade receivables, net of allowance for credit losses, presented based on revenue recognition dates. 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Within 90 days 7,667,320 8,645,486 91 to 180 days 516,708 370,976 Over 180 days 76,783 54,711 8,260,811 9,071,173
Page 16
16 Movement in the allowance for expected credit losses: 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Balance at the beginning of the reporting period 103,522 97,277 Changes due to financial assets recognised at: – Impairment losses reversed (9,908) (4,648) – Write offs (402) (125) New financial assets originated 26,836 10,876 Exchange realignment 413 142 Balance at end of the reporting period 120,461 103,522 16A. RECEIVABLES AT FVTOCI 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Receivables at FVTOCI comprise: Bill receivables (Note) 710,059 1,508,907 Note: The balance represents bills receivables held by the Group which is measured at FVTOCI since the bills are held within the business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets, and the contractual cash flows are solely payments of principal and interest on the principal amount outstanding. The Group has discounted certain bills receivables to banks or endorsed certain bills receivables to its suppliers to settle its payables. These bills are issued or guaranteed by reputable PRC banks with high credit ratings. As the Group has transferred substantially all the risks of these bills to relevant banks/ suppliers, it has derecognised these bills receivables. The following table shows Group ’s bill receivables amounted to RMB20,446,000 (31 December 2025: RMB1,564,000) being endorsed to certain suppliers for settlement of trade payables or being discounted to certain banks to obtain the funding which the management considered that the Group has not transferred the significant risks and rewards relating to the bill receivables, it continues to recognise the full amount of bill receivables.
Page 17
17 As at 30 June 2026 Bills discounted to banks with full resources Bills endorsed to suppliers with full resources Total RMB’000 RMB’000 RMB’000 (Unaudited) (Unaudited) (Unaudited) Carrying amount of transferred assets 18,938 1,508 20,446 Carrying amount of associated liabilities (18,938) (1,508) (20,446) Net position – – – As at 31 December 2025 Bills discounted to banks with full resources Bills endorsed to suppliers with full resources Total RMB’000 RMB’000 RMB’000 (Audited) (Audited) (Audited) Carrying amount of transferred assets – 1,564 1,564 Carrying amount of associated liabilities – (1,564) (1,564) Net position – – – The Group ’s receivables at FVTOCI were bill receivables with the following maturity: 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Within 90 days 579,654 1,225,463 91 to 180 days 130,405 283,444 710,059 1,508,907
Page 18
18 17. IMPAIRMENT ASSESSMENT ON TRADE RECEIVABLES SUBJECT TO ECL MODEL As part of the Group ’s credit risk management, except for the debtors with credit-impaired the Group uses debtors ’ aging to assess the impairment for its customers which are with common risk characteristics that are representative of the customers ’ abilities to pay all amounts due in accordance with the contractual terms. Debtors with credit-impaired are assessed individually by the Group. The following table provides information about the exposure to credit risk and ECL for trade receivables which are assessed collectively based on provision matrix with lifetime ECL (not credit impaired) as at 30 June 2026. Average loss rate Gross carrying amount Impairment loss allowance RMB’000 RMB’000 1 to 90 days 0.09% 7,674,357 7,037 91 to 120 days 0.92% 363,352 3,326 121 to 180 days 1.19% 158,562 1,880 More than 180 days 22.20% 98,698 21,915 8,294,969 34,158 The basis of determining the inputs and assumptions and the estimation techniques used in the condensed consolidated financial statements for the six months ended 30 June 2026 are the same as those followed in the preparation of the Group ’s annual financial statements for the year ended 31 December 2025. The estimated loss rates are estimated based on historical observed default rates over the expected life of the debtors and are adjusted for forward-looking information that is available without undue cost or effort. The grouping is regularly reviewed by management to ensure relevant information about specific debtors is updated. As at 30 June 2026, the Group provided impairment allowance for trade receivables of RMB120,461,000 (31 December 2025: RMB103,522,000), among which RMB34,158,000 (31 December 2025: RMB14,458,000) was made based on the provision matrix with life time ECL (not credit-impaired) while RMB86,303,000 (31 December 2025: RMB89,064,000) was assessed individually on the credit-impaired debtors.
Page 19
19 18. TRADE AND OTHER PAYABLES The following is an aged analysis of trade payables presented based on the invoice date and note payables presented based on issue date at the end of the reporting period. 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Current liabilities Trade payables Within 90 days 5,924,384 7,332,035 91 to 180 days 752,487 1,191,724 Over 180 days 25,323 10,871 Accrued purchases 974,933 1,147,854 Total trade payables and accrued purchases 7,677,127 9,682,484 Note payables (Note) Within 90 days 2,848,579 2,235,494 91 to 180 days 1,608,390 3,308,203 Over 180 days 959,217 3,192,172 5,416,186 8,735,869 Advance deposits from a customer 137,679 175,348 Payables for purchase of property, plant and equipment 874,427 276,237 Staff salaries and welfare payables 1,357,675 1,782,088 Labor outsourcing payables 105,293 133,666 Payables for acquisition of patents 33,978 35,695 Value added tax payables and other tax payables 294,063 221,310 Interest payables 13,348 3,443 Rental and utilities payables 52,794 56,709 Warranty provision 7,228 4,359 Others 403,955 452,058 3,280,440 3,140,913 16,373,753 21,559,266 Note: During the six months ended 30 June 2026 and 30 June 2025, certain of the Company ’s subsidiaries received bills from the other subsidiaries and discounted the certain bills to banks. The cash flows of such transactions have been presented in cash flow statement as financing activities. The average credit period on purchases of goods is 180 days (31 December 2025:180 days) and the term for note payables is 90 days to 365 days (31 December 2025: 90 days to 365 days). The Group has financial risk management policies in place to ensure that all payables are settled within the credit time frame.
Page 20
20 19. BANK BORROWINGS During the current interim period, the Group obtained new bank borrowings amounting to approximately RMB1,088,864,000 (corresponding period of 2025: RMB4,505,372,000), and the proceeds were used to meet the working capital requirement. Repayments of bank borrowings amounting to approximately RMB1,059,469,000 (corresponding period of 2025: RMB3,960,874,000) were made in line with the relevant repayment terms. As at 30 June 2026, the bank borrowings amounted to a total of RMB2,589,877,000 (31 December 2025: RMB1,769,969,000) were repayable within one year, and RMB500,000,000 (31 December 2025: RMB1,405,760,000) were repayable within a period of more than one year. As at 30 June 2026, the bank borrowings amounting to approximately RMB2,559,877,000 (31 December 2025: RMB2,642,829,000) were denominated in USD. The Group ’s bank borrowings amounting to RMB1,210,409,000 carried fixed-rate of 2.15% to 3.05% per annum (31 December 2025: RMB1,235,780,000 with fixed-rate of 2.70% to 3.05% per annum) and RMB1,879,468,000 carried variable-rate of 3.43% to 4.83% per annum (31 December 2025: RMB1,939,949,000 with variable-rate of 3.43% to 4.83% per annum). As at 30 June 2026, no bank borrowing was secured by any assets of the Group. 20. BONDS PAYABLE On 9 January 2023, the Company issued unsecured sustainability-linked bonds in the amount of USD400 million at the rate of 5.95% per annum which will be due by year 2026 to professional investors outside of the United States in accordance with Regulation S under the U.S. Securities Act. The issuance has been successfully completed on 17 January 2023 and the listing of the bonds in the Stock Exchange became effective on 18 January 2023. The Company had fully used the net proceeds from the bonds for refinancing existing indebtedness. During the current interim period, interest expense of approximately RMB84,332,000 (corresponding period of 2025: RMB87,904,000) was recognised in the profit or loss. On 26 June 2026, the Company proposed to issue unsecured bonds in the amount of RMB2,700 million at the rate of 2.15% per annum to professional investors outside of the United States in accordance with Regulation S under the U.S. Securities Act. The issuance had been successfully completed on 7 July 2026 and the listing of the bonds in the Stock Exchange became effective on 8 July 2026. 21. SHARE CAPITAL Number of shares Amount Equivalent to HKD’000 RMB’000 Authorised: Ordinary share of HKD0.10 each at 1 January 2025 (Audited), 30 June 2025 (Unaudited), 1 January 2026 (Audited) and 30 June 2026 (Unaudited) 100,000,000,000 10,000,000 Issued & fully paid: Ordinary shares of HKD0.10 each at At 1 January 2025 (Audited), 30 June 2025 (Unaudited), 1 January 2026 (Audited) and 30 June 2026 (Unaudited) 1,094,804,800 109,481 104,967 During the six months ended 30 June 2026, the Company repurchased 15,840,000 of its own ordinary shares through the Stock Exchange with an aggregate consideration of HKD1,019,059,000 (including commission and other expense), equivalent to RMB915,200,000 (corresponding period of 2025: RMB nil). No shares (corresponding period of 2025: nil) were cancelled upon repurchase.
Page 21
21 22. SHARE AWARD SCHEME The fair value of the Company ’s restricted shares award was determined based on the market values of the Company ’s shares at the grant dates. Movements in the number of restricted shares granted and related fair value are as follows: Weighted average fair value (per share) Number of restricted shares HKD (’000) At 1 January 2025 (Audited) 62.961 9,444 Forfeited 58.211 (455) Vested 62.585 (5,403) Granted 74.421 1,204 At 31 December 2025 and 1 January 2026 (Audited) 66.718 4,790 Forfeited 52.408 (86) Vested 44.279 (1,926) Granted (Note) 59.400 405 As at 30 June 2026 (Unaudited) 79.756 3,183 Note: The fair value of restricted shares granted is measured on the basis of an observable market price which was determined to be HKD59.40 per share at grant date. The Group recognised the total expense of RMB74,218,000 for the period ended 30 June 2026 (30 June 2025: RMB129,816,000) in related to restricted shares granted by the Company. 23. COMMITMENTS 30 June 31 December 2026 2025 RMB’000 RMB’000 (Unaudited) (Audited) Capital expenditure in respect of acquisition of property, plant and equipment contracted for but not provided in the condensed consolidated financial statements 804,319 556,432
Page 22
22 MANAGEMENT DISCUSSION AND ANALYSIS The Group is a global leading manufacturer of integrated optical products with large-scale and a globally competitive provider of intelligent optical system solutions (whole device). The Group is engaged in the design, research and development ( “R&D”), production and sales of integrated optical products and intelligent optical system solutions (whole device). By deeply integrating cutting edge technologies such as optics, electronics, algorithms, software, mechanics, and artificial intelligence ( “AI”), the Group empowers global clients to achieve innovative breakthroughs and value growth across application fields including smartphones, vehicles, XR, pan Internet of things (“Pan-IoT ”) and optical interconnection. Save as disclosed in this announcement, there have been no material changes in the development or future development of the Group ’s business and financial position since the publication of the annual report of the Company for the year ended 31 December 2025. IMPORTANT EVENTS AFFECTING THE GROUP WHICH HAVE OCCURRED SINCE 30 JUNE 2026 1. Issuance of RMB Denominated Bonds References are made to the announcements of the Company dated 26 June 2026, 7 July 2026 and 8 July 2026 as well as the offering circular of the Company dated 29 June 2026. On 7 July 2026, the Company issued RMB2,700,000,000 bonds at the rate of 2.15% per annum, which will be due by year 2031. The listing of the bonds on the Stock Exchange became effective on 8 July 2026. 2. Resignation of the Vice President and Joint Company Secretary Reference is made to the announcement of the Company dated 30 June 2026. With effect from 1 July 2026, Mr. Ma Jianfeng, has resigned as the vice president and joint company secretary of the Company in order to devote more time to his personal commitments. BUSINESS REVIEW For the six months ended 30 June 2026, the Group ’s business review shall be presented across the following four operating segments, namely (A) handset products; (B) vehicle products; (C) XR products; and (D) other products.
Page 23
23 A. Handset Products 1. Handset Lens Sets Against the backdrop of declining global smartphone shipments, competition in the smartphone market has further intensified in the AI, imaging, and slim foldable segments. In the first half of 2026, the Group accurately identified industry trends, actively embraced the rapidly iterative demands of terminal devices, adjusted its operational strategies, and achieved stable deliveries, further consolidating its industry leadership position. Among these, the Group ’s large-image size main cameras, telephoto periscope, and hybrid glass-plastic handset lens sets continued to gain favor of customers, firmly securing the position as the preferred imaging solution for flagship terminal models. At the same time, the Group capitalized on future trends in square front cameras, wide-angle optical image stabilization (“OIS”), and variable aperture upgrades, consistently maintaining its product leadership advantage. Furthermore, to balance imaging performance with slim and lightweight handset designs, hybrid glass-plastic handset lens sets have become a critical solution for main cameras and periscope cameras in high-end flagship models. The Group adopts innovative molding structures, significantly improving the molding utilization rates. Under comparable conditions, actual production capacity of aspherical glass lenses has increased more than tripled compared to conventional solutions, while the products ’ yield rates have been increased significantly, further reinforcing the advantages in scaled manufacturing. Notably, in the first half of 2026, benefiting from the sustained recovery of large-scale offline events such as concerts and sports tournaments, the market for smartphone imaging extended lens sets experienced broad development opportunities. Leveraging the Group ’s forward-looking strategic positioning and leading optical R&D and manufacturing capabilities, the Group has achieved mass production of an ultra-lightweight 200mm focal-length extended lens sets and a 400mm focal-length extended lens sets that set a new industry record for teleconverter focal-length range, injecting new growth momentum into the handset business. 2. Handset Camera Modules In the first half of 2026, the Group has been deeply committed to the development of high-end products of handset camera modules and integrated solutions, achieving mass production of industry-leading products with ultra-large image size as well as wide-angle OIS and high-precision products with ultra-large-aperture as well as equipped with multi-group periscope lens sets. The Group has also achieved mass production of high-difficulty main-camera modules with self-developed integrated actuators and periscope modules with self-developed integrated actuators. In addition, the Group continued to increase R&D investment in core foundational technologies, iteratively upgrading ultra-miniaturized molding packaging technology, ultra-high-precision optical assembly technology, and high-precision actuation technology. These efforts have further enhanced the overall competitive strength in the high-end products and expanded the technological leadership advantage of the Group.
Page 24
24 B. Vehicle Products References are made to the announcements of the Company dated 5 January 2026 and 27 January 2026. In order to promote the rapid development of the Company ’s vehicle products, the Company was considering seeking equity financing, by way of a separate listing and spin-off of Ningbo Sunny Smart Autotech Co., Ltd. (the “Spin-off Company ”), a subsidiary of the Company. The Spin-off Company, through its joint sponsors, has submitted an application form (Form A1) to the Stock Exchange for approval of the listing and trading of H shares of the Spin-off Company on the Main Board of the Stock Exchange (the “Proposed Spin–off ”). The Company considers the Proposed Spin-off to be commercially beneficial to the Company and the Spin-off Company and in the interests of the shareholders of the Company (the “Shareholders ”) as a whole. The Company will continue to keep Shareholders and investors updated on material developments regarding the spin-off and business performance of vehicle products through announcements to be issued from time to time. C. XR Products In the first half of 2026, the deep integration of AI technology with consumer-grade hardware propelled the smart glasses and augmented reality ( “AR”) glasses market into a new phase of rapid growth cycle, with multiple brands launching new products. The Group seized this market opportunity by maintaining deep strategic partnerships with globally renowned top-tier clients, further solidifying its industry leadership. The Group has established full-chain vertically integrated system-level capabilities in XR, spanning “fundamental optical components + diverse optical modules/ optical engines + software-hardware integrated systems ”, further reinforcing the leading position in the industry. The XR fundamental optical component product portfolio continues to be expanded and iterated, with core products evolving toward miniaturization and integration: the prism product line has been extended from single polarization beam splitter ( “PBS”) prisms to color-combining prisms (X-cube) and optical-power prisms, so as to accommodate two major XR display technology paths, namely micro light-emitting diode ( “Micro-LED ”) and liquid crystal on silicon ( “LCoS”). Furthermore, leveraging industry-leading miniaturized packaging technologies, the Group has achieved technical breakthroughs in both performance and form-factor dimensions for optical engine products, while accelerating mass production progress. At the same time, backed by advanced assembly and testing processes, the Group ’s ultra-thin full-color AR display modules have achieved small-volume production, consistently advancing the commercialization of AR glasses toward consumer-grade adoption. D. Other Products In the first half of 2026, benefiting from the dual drivers of continued AI technology upgrades and scenario deployment, other products with Pan-IoT products as the primary revenue contribution experienced rapid growth. The Pan-IoT products mainly include: 1. robotics products; 2. intelligent imaging products; and 3. optical instrument products.
Page 25
25 1. Robotics Products Leveraging its capabilities in navigation, obstacle avoidance and visual recognition modules, and embedded system development, combined with its technological accumulation and continuous innovation in the integration of visual perception and AI, and by further expanding its advantages in vertical integration and scaled manufacturing, the Group continues to deepen its presence in the robotics business. In the first half of 2026, the Group ’s projects of robot lawn mowers and warehouse automation robotics have achieved mass production, receiving positive appreciation from key customers, and the Group has obtained multiple new projects of whole devices and system solutions. At the same time, the Group is actively expanding into new smart hardware markets, building end-to-end development and manufacturing capabilities from core modules to whole devices, thereby establishing a systematic foundation for future growth. 2. Intelligent Imaging Products Leveraging rapid response capabilities, intelligent manufacturing systems, and advantages in scaled delivery, the Group has established close partnerships with multiple strategic clients of intelligent imaging devices, penetrating into their new product matrices. In the first half of 2026, the Group has achieved stable delivery of lens sets and modules for handheld imaging devices, with shipment volumes growing significantly as compared to the corresponding period of last year. Concurrently, the Group continues to drive technological iteration in areas such as autofocus, variable aperture, low flare, miniaturization and low power consumption, further strengthening product competitiveness and enhancing customer retention. 3. Optical Instrument Products The Group ’s high-end microscopic instruments have been developing rapidly. Among them, AI medical microscopy products have achieved breakthroughs in intelligent medical scenarios such as pathological testing and genetic diagnosis, with orders growing substantially. The high-end three dimensional ( “3D”) ultra-depth-of-field microscopes and laser confocal microscopes have been developed into product series, covering industrial, scientific research, and educational markets. In addition, the Group has made significant breakthroughs in leading industry customers in terms of semiconductor wafer defect inspection equipment and has achieved horizontal business expansion into the glass wafer industry.
Page 26
26 OUTLOOK AND FUTURE STRATEGIES Looking forward, new technological breakthroughs and emerging application scenarios are reshaping the competitive landscape of the optics industry. The accelerating penetration of AI has evolved from an enabling tool into a fundamental driving force, as optoelectronic technologies achieve unprecedented cross-disciplinary integration with AI, new materials, biological perception and other fields. As the critical gateway for capturing physical world information, optics continues to see its strategic value rise steadily. With AI empowerment, the Group will further leverage its optical systems to acquire and simulate vast amounts of data, accelerate intelligent iteration across materials simulation, optical design, process control, and other stages, thereby continuously improving production efficiency. At the same time, the Group will dynamically adjust the flexible responsiveness based on customer needs, enabling agile delivery and value co-creation. Moreover, the Group is fully aware that long-term competitiveness stems not only from refining existing businesses but also from forward-looking positioning in future growth areas. Therefore, through more open ecosystem partnerships and a more determined R&D deployment, the Group is poised to seize the historic opportunities arising from the convergence of AI and optical technologies, so as to deliver sustainable, long-term value to the customers, the industry and the Shareholders. FINANCIAL REVIEW Revenue For the six months ended 30 June 2026, the Group ’s revenue was approximately RMB21,905.7 million, representing an increase of approximately 11.5% as compared to the corresponding period of last year. The increase in revenue was mainly attributable to the increase in revenues of vehicle products, XR products and other products. For the six months ended 30 June 2026, revenue generated from the handset products was approximately RMB13,148.6 million, representing a decrease of approximately 0.8% as compared to the corresponding period of last year. The slight decrease in revenue was mainly attributable to a lower shipment volume of the Group ’s handset camera modules compared to the corresponding period of last year due to the decrease in the shipment volume of global smartphones, but it was largely offset by an increase in the average selling price, which benefited from an increased contribution from high-end products. For the six months ended 30 June 2026, revenue generated from the vehicle products was approximately RMB3,762.0 million, representing an increase of approximately 10.6% as compared to the corresponding period of last year. The increase in revenue was mainly attributable to the increase in revenues in vehicle camera products and other vehicle optical products. For the six months ended 30 June 2026, revenue generated from the XR products was approximately RMB955.7 million, representing an increase of approximately 11.0% as compared to the corresponding period of last year. The increase in revenue was mainly attributable to the increase in revenues of smart glasses and AR glasses related products. For the six months ended 30 June 2026, revenue generated from the other products was approximately RMB4,039.4 million, representing an increase of approximately 88.5% as compared to the corresponding period of last year. The increase in revenue was mainly attributable to the significant increase in revenues of robotics, intelligent imaging and other Pan-IoT related products.
Page 27
27 Gross Profit and Gross Profit Margin The gross profit of the Group for the six months ended 30 June 2026 was approximately RMB4,268.7 million, representing an increase of approximately 9.6% as compared to the corresponding period of last year. The increase in gross profit was mainly attributable to the increase in gross profit of other products. For the six months ended 30 June 2026, the gross profit margin of the Group was approximately 19.5% (corresponding period of last year: approximately 19.8%). The gross profit margins of handset products, vehicle products, XR products and other products were approximately 12.3%, 30.3%, 13.0% and 34.4%, respectively (corresponding period of last year: approximately 14.3%, 33.4%, 17.3% and 33.1%, respectively). Selling and Distribution Expenses The selling and distribution expenses of the Group for the six months ended 30 June 2026 were approximately RMB182.9 million, representing a decrease of approximately 0.7% as compared to the corresponding period of last year. There was no significant change in the absolute amounts and no particular attribution. R&D Expenditure The R&D expenditure of the Group for the six months ended 30 June 2026 was approximately RMB1,650.7 million, representing an increase of approximately 1.0% as compared to the corresponding period of last year. There was no significant change in the absolute amounts and no particular attribution. Administrative Expenses The administrative expenses of the Group for the six months ended 30 June 2026 were approximately RMB571.1 million, representing a decrease of approximately 3.7% as compared to the corresponding period of last year. The decrease in absolute amount was mainly attributable to the strengthened control of the administrative expenses by the Group. Income Tax Expense The income tax expense of the Group for the six months ended 30 June 2026 was approximately RMB252.2 million, representing an increase of approximately 78.8% as compared to the corresponding period of last year. The increase in income tax expense was mainly attributable to the increase in the profit before tax. The Group ’s effective tax rate was approximately 11.5%, as compared to approximately 7.6% for the corresponding period of last year. For details related to the income tax expense, please refer to Note 6 to the condensed consolidated financial statements in this announcement. Net Profit and Net Profit Margin The net profit of the Group for the six months ended 30 June 2026 was approximately RMB1,950.0 million, representing an increase of approximately 13.1% as compared to the corresponding period of last year. The increase in net profit was mainly attributable to the increase in the gross profit. The net profit margin was approximately 8.9%, as compared to approximately 8.8% for the corresponding period of last year.
Page 28
28 Profit for the Period Attributable to Owners of the Company and Basic Earnings per Share The profit for the period attributable to owners of the Company for the six months ended 30 June 2026 was approximately RMB1,808.4 million, representing an increase of approximately 9.9% as compared to the corresponding period of last year. The increase in absolute amount was mainly attributable to the increase in gross profit. The basic earnings per share of the Company (the “Share(s) ”) for the six months ended 30 June 2026 was approximately RMB168.0 cents, representing an increase of approximately 10.9% as compared to the corresponding period of last year. Interim Dividend The Company has paid the dividend for the year ended 31 December 2025 in June 2026, which was HKD120.60 cents per Share, representing the dividend payout ratio was approximately 25.0% of the profit for the year attributable to owners of the Company. The Board does not recommend the payment of an interim dividend for the six months ended 30 June 2026 (corresponding period of last year: nil). LIQUIDITY AND FINANCIAL RESOURCES Cash Flows The table below summarises the Group ’s cash flows for the six months ended 30 June 2026 and 30 June 2025: For the six months ended 30 June 2026 2025 RMB million RMB million Net cash from operating activities 3,426.1 2,356.4 Net cash (used in) from investing activities (1,425.0) 1,424.4 Net cash (used in) from financing activities (5,894.3) 121.8 The Group derives its working capital mainly from cash on hand and net cash generated from operating activities. The Board expects that the Group will rely on net cash generated from operating activities, bank borrowings and debt financing in the short run to meet its working capital and other needs. In the long run, the Group will be mainly funded by net cash from operating activities and, if necessary, by additional bank borrowings, debt financing or equity financing. There were no material changes in the funding and treasury policy of the Group for the six months ended 30 June 2026. As at 30 June 2026, the Group had current assets of approximately RMB37,143.5 million (31 December 2025: approximately RMB42,363.2 million); and current liabilities of approximately RMB22,675.9 million (31 December 2025: approximately RMB27,044.3 million). The Group ’s current ratio was approximately 1.6 times (31 December 2025: approximately 1.6 times). The Group’s total assets as at 30 June 2026 were approximately RMB53,751.2 million, representing a decrease of approximately 9.2% as compared to that as at 31 December 2025.
Page 29
29 As at 30 June 2026, the Group ’s cash and cash equivalents were approximately RMB3,499.1 million (31 December 2025: approximately RMB7,482.1 million). The cash and cash equivalents were mainly denominated in RMB and United States dollar ( “USD”). Capital Expenditure For the six months ended 30 June 2026, the Group ’s capital expenditure amounted to approximately RMB1,636.9 million, which was mainly used for the purchases of property, plant and equipment. All of the capital expenditure was financed by internal resources. CAPITAL STRUCTURE Indebtedness Bank borrowings Bank borrowings of the Group as at 30 June 2026 amounted to approximately RMB3,089.9 million (31 December 2025: approximately RMB3,175.7 million). As at 30 June 2026, the bank borrowings were denominated in RMB and USD. No bank borrowings were secured by certain buildings and land of the Group as at 30 June 2026. Details of the bank borrowings are set out in Note 19 to the condensed consolidated financial statements of this announcement. Banking facilities Banking facilities have been put in place for contingency purposes by the Group with certain banks in certain countries and regions. As at 30 June 2026, the Group ’s total banking facilities amounted to RMB33,745.0 million and USD535.0 million and Indian Rupee 4,500.0 million respectively (31 December 2025: RMB35,719.0 million, USD545.0 million, Indian Rupee 3,000.0 million and Vietnamese Dong 280,000.0 million respectively). Debt securities As at 30 June 2026, debt securities of the Group amounted to approximately RMB2,798.0 million (31 December 2025: approximately RMB2,885.0 million).
Page 30
30 Gearing Ratio As at 30 June 2026, the Group ’s gearing ratio was approximately 11.0% (31 December 2025: approximately 10.2%), which refers to the ratio of total borrowings to total capital (total capital being the sum of total liabilities and shareholders ’ equity), reflecting the Group ’s sound financial position. Contingent liabilities As at 30 June 2026, the Group did not have any material contingent liabilities or guarantees. Financing and funding and treasury policies and objectives The Group adopts prudent financing and funding and treasury policies. The Group will seek bank borrowings, debt financing or equity financing when its operating demand grows, and will regularly review its bank borrowings and debt securities to achieve a sound financial position. PLEDGE OF ASSETS The Group did not have any pledge or charge on assets as at 30 June 2026, except for the pledged bank deposits of approximately RMB14.8 million (31 December 2025: approximately RMB71.8 million). COMMITMENTS As at 30 June 2026, the capital expenditure of the Group in respect of acquisition of property, plant and equipment contracted for but not provided in the condensed consolidated financial statements amounted to approximately RMB804.3 million (31 December 2025: approximately RMB556.4 million). As at 30 June 2026, the Group had no other capital commitments save as disclosed above. OFF-BALANCE SHEET TRANSACTIONS As at 30 June 2026, the Group did not enter into any material off-balance sheet transactions.
Page 31
31 PERFORMANCE OF INVESTMENTS MADE AND FUTURE INVESTMENTS PLAN The Group ’s investing activities primarily include the purchase and redemption of unlisted financial products, release of time deposits and purchase of property, plant and equipment. Among them, unlisted financial products are managed by relevant banks in China, mainly investing in certain financial assets such as bonds, trusts and cash funds, and their investment incomes are determined based on the performance of the underlying debt instruments and treasury notes. Investments Held Significant Investments For the six month ended 30 June 2026, the significant investments held by the Group were set out as below. 1. Investment in Ant Consumer Finance Zhejiang Sunny Optics Co., Ltd. ( “Sunny Zhejiang Optics ”), a wholly-owned subsidiary of the Company, through the relevant subscription, held 6% equity interests of Chongqing Ant Consumer Finance Co., Ltd. (the “Ant Consumer Finance ”). The relevant aggregate investment cost of RMB1,380.0 million represented approximately 2.6% the Company ’s total assets as at 30 June 2026. To the best knowledge of the Board, after reviewing the unaudited management accounts of Ant Consumer Finance as at 30 June 2026, no fair value or impairment regarding this investment case was issued or noted by the Board. Based on the information available to the Company immediately preceding the publication of this announcement, the performance of this investment was positive for the six month ended 30 June 2026. The Board considered this investment to be a long-term investment, which may bring relatively better financial returns to the Group. 2. Investment in Goertek Optical Prior to the reporting period, the Group executed a share swap and subscription (the “Share Swap and Subscription ”). This transaction involved transferring a subsidiary ’s entire equity interests in exchange for shares in Goertek Optical Technology Co., Ltd. ( “Goertek Optical ”), alongside a further equity subscription. Consequently, Sunny OmniLight Technology Co., Ltd. ( “Ningbo OmniLight ”) secured approximately 31.31% equity interests, positioning itself as the second largest owner of Goertek Optical.
Page 32
32 To the best knowledge of the Board, after reviewing the unaudited management accounts of Goertek Optical as at 30 June 2026, no fair value impairment regarding this investment case was noted by the Board. The Board considers that the Share Swap and the Subscription complement advantages between the Group and Goertek Optical, and significantly enhance Goertek Optical ’s core competitiveness in sectors such as optical waveguide and other wafer-level micro-nano optics devices particularly for uses in AI and AR products. As such, the Board is of the view that the Share Swap and Subscription are in the best interests of the Group and the Shareholders as a whole. Reference is made to the announcement of the Company dated 25 June 2026. During the reporting period, on 18 June 2026, the Board resolved that Ningbo OmniLight and Goertek Inc. ( “Goertek ”), as subscribers, and Goertek Optical would enter into a subscription agreement (the “Subscription Agreement ”), pursuant to which Ningbo OmniLight and Goertek would agree to subscribe for the new registered capital of Goertek Optical of approximately RMB109.76 million and approximately RMB109.76 million, respectively, by way of capital injection into Goertek Optical in the respective sums of RMB500.0 million and RMB500.0 million (the “Further Subscription ”). Upon the completion of the Further Subscription, Ningbo OmniLight will hold approximately 33.27% equity interests in Goertek Optical as enlarged by the Further Subscription and will still be the second largest equity owner of Goertek Optical. On 31 July 2026, all the conditions precedent under the Subscription Agreement have been fulfilled and the completion of the Subscription Agreement took place on the same day. Pursuant to Rule 14.22 of the Listing Rules, a series of transactions will be aggregated and treated as if they were one transaction if they were all completed within a 12-month period or were otherwise related. When the Share Swap and Subscription, and Further Subscription are aggregated, none of the applicable percentage ratios (as defined in the Listing Rules) exceed 5%. As such, the Share Swap and Subscription, and Further Subscription do not, in aggregate, constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. Save as disclosed above, to the best of the Directors ’ knowledge, information and belief having made all reasonable enquiries, Goertek Optical and its respective ultimate beneficial owners are independent of the Company and connected persons of the Company (as defined in the Listing Rules). Accordingly, the transactions contemplated under the Subscription Agreement do not constitute connected transactions of the Company under Chapter 14A of the Listing Rules. Important Investment As at 30 June 2026, the Group maintained a portfolio of unlisted financial products with the total carrying amount of approximately RMB13,326.5 million (31 December 2025: approximately RMB11,407.4 million), of which approximately RMB3,871.6 million has been released on or before the latest practicable date (i.e. 20 August 2026) before the publication date of this announcement. As at 30 June 2026, the fair value of the unlisted financial products subscribed by the Group in aggregate represented approximately 24.8% of the Group ’s total assets (31 December 2025: approximately 19.3%).
Page 33
33 As at 30 June 2026, the investment costs for the unlisted financial products subscribed were approximately RMB13,124.0 million (31 December 2025: approximately RMB11,159.3 million). For the six months ended 30 June 2026, the amount of investment income from the unlisted financial products at FVTPL was approximately RMB121.3 million (corresponding period of last year: approximately RMB168.1 million). The following table sets out the breakdown of the major unlisted financial products subscribed by the Group as at 30 June 2026 (in descending order): Name of the unlisted financial products* Name of banks Investment costs Fair value of the unlisted financial products as at 30 June 2026 Percentage of fair value of the unlisted financial products relative to the total assets of the Group as at 30 June RMB’000 RMB’000 Agricultural Bank wealth management Nong Yin Tong Xin • daily return preferred allocation wealth product (corporate low volatility premium enjoyment) Agricultural Bank of China Limited 1,337,000 1,337,392 2.5% Agricultural Bank wealth management Nong Yin Tong Xin • Ling Dong ninety-day preferred allocation RMB wealth product (corporate premium enjoyment) Agricultural Bank of China Limited 600,000 603,741 1.1% “Hui Li Feng ”2026 5838 th customized RMB structured deposit products for corporates Agricultural Bank of China Limited 600,000 600,000 1.1% Bank of Ningbo wealth management Ning Xin fixed-income category one-year open-ended wealth management No. 26-E share Bank of Ningbo Co., Ltd. 500,000 522,153 1.0% Bank of Ningbo wealth management Jing Yao fixed-income category one-year open-ended wealth management No. 5-E share Bank of Ningbo Co., Ltd. 400,000 411,685 0.8% Agricultural Bank wealth management Nong Yin Jiang Xin • Ling Dong sixty-day RMB wealth products (corporate enjoyment) Agricultural Bank of China Limited 400,000 404,038 0.8% Bank of Ningbo wealth management Ning Xin fixed-income category daily-traded wealth management No. 10 (minimum holding period: 30 days) Bank of Ningbo Co., Ltd. 400,000 402,496 0.7% “Hui Li Feng ” 2026 5837 th customized RMB structured deposit products for corporates Agricultural Bank of China Limited 400,000 400,000 0.7% Others # 8,487,000 8,645,033 16.1% Total 13,124,000 13,326,538 24.8% * The English names are unofficial English translations of unlisted financial products with Chinese names only. If there is any inconsistency, the Chinese names shall prevail.
Page 34
34 # Other unlisted financial products included 52 unlisted financial products with 8 different banks to lower the concentration risk. The average fair value of these 52 unlisted financial products as at 30 June 2026 was approximately RMB166.3 million. The unlisted financial products were measured at fair value as at 30 June 2026. Such investment activities were funded primarily by the idle self-owned funds of the Group. The Board considers that the terms of such unlisted financial products are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. For the six months ended 30 June 2026, the Group ’s capital expenditure amounted to approximately RMB1,636.9 million, which was primarily for the purchases of property, plant and equipment. These investments enhanced the Group ’s R&D and technological application capability and production efficiency, and thus expanded the sources of revenue. Save as disclosed above, to the best knowledge of the Directors, there were no new significant and/ or important investments held by the Group for the six months ended 30 June 2026. Future Plans for Material Investments or Capital Assets Acquisition The Group will continue to further diversify its investments among different banks to mitigate concentration risk and will closely monitor the performance of investments made and future investment plans in accordance with its prudent funding and treasury policy to utilise and to increase the yield of the idle funds of the Group while maintaining a high level of liquidity and a low level of risk. Such investment activities were made and will be made on the premises that it would not adversely affect the working capital of the Group or the operation of the Group ’s principal business. In addition, the Group will strengthen management in capital investment, improve input – output efficiency and focus on optimizing operational efficiency. The Group will rely on the internal resources, bank borrowings, debt financing or equity financing to meet the future demands for material investments or capital assets acquisition.
Page 35
35 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Interest Rate Risk The Group is exposed to interest rate risks arising from its bank borrowings for working capital, capital expenditure for expansion and other purposes of the Group and refinancing. The rising of interest rates increases the costs of both existing and new debts. As at 30 June 2026, the effective interest rate on fixed-rate bank borrowings was 2.15% to 3.05% per annum, while the effective interest rate of variable-rate bank borrowings was 3.43% to 4.83% per annum. Foreign Exchange Rate Fluctuation Risk The Group exports a portion of its products to and purchases a considerable amount of products from international markets where transactions are denominated in USD or other foreign currencies. Except for certain investments which are in line with the Group ’s business and denominated in foreign currencies, the Group did not and has no plan to make any other foreign currency investment. The Group will take necessary measures to mitigate any impacts caused by exchange rate fluctuations. For details of the Group ’s foreign currency forward contracts and foreign exchange swap contracts, please refer to Note 14 to the condensed consolidated financial statements in this announcement. Credit Risk The Group ’s financial assets include derivative financial assets, cash and cash equivalents, pledged bank deposits, short-term fixed deposits, time deposits, financial assets at FVTPL, trade and other receivables and prepayments, amounts due from related parties, receivables at FVTOCI and equity instruments at FVTOCI, which represent the Group ’s maximum exposure to credit risk in relation to financial assets. In order to minimise the credit risk in relation to trade receivables, the management of the Company (the “Management ”) has delegated a team responsible for the determination of credit limits, credit approvals and other monitoring procedures to ensure that appropriate follow-up actions are taken to recover overdue debts. The Group has also purchased insurance relating to trade receivables. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. Therefore, the Directors consider that the Group ’s credit risk was significantly reduced. The amounts presented in the condensed consolidated statement of financial position are net of allowance for the ECL, estimated by the Management based on prior experience and historically observed default rates, their assessment of the current economic environment and the discounted cash flows to be received in future. The Group has no significant concentration of credit risk since its trade receivables are dispersed over a large number of counterparties and customers. The credit risk on liquidity is limited because the majority of the counterparties are banks with high credit ratings by international credit-rating agencies.
Page 36
36 Cash Flow Interest Rate Risk The Group ’s cash flow interest rate risk is primarily related to variable rates applicable to bank borrowings. The Management will review the proportion of borrowings in fixed and variable rates and ensure they are within reasonable range. Therefore, any future variations in interest rates will not have any significant impact on the results of the Group. Liquidity Risk The Group manages liquidity risk by maintaining an adequate level of cash and cash equivalents through continuously monitoring the forecast and actual cash flows and matching them with the maturity profiles of financial assets and liabilities. OTHER INFORMATION A. PURCHASE, SALE OR REDEMPTION OF THE COMPANY ’S SHARES The Company is empowered by the applicable Cayman Islands Companies Act and the newly amended and restated memorandum of association and second amended and restated articles of association of the Company to repurchase its Shares subject to certain restrictions and the Board may only exercise this power on behalf of the Company subject to any applicable requirements imposed from time to time by the Stock Exchange. During the period from 8 January 2026 to 28 January 2026, the Company repurchased an aggregate of 15,840,000 Shares on the Stock Exchange (the “Share Repurchase ”), representing approximately 1.447% of the total number of issued Shares (including treasury shares) as at 30 June 2026. The aggregate amount involved in the Share Repurchase was approximately HKD1,015,500,470 (excluding commission and other expenses), at the highest, lowest and average price of approximately HKD66.60, HKD61.40, and HKD64.1099 per Share, respectively. The Company held the repurchased Shares as treasury shares and will subsequently use them to incentivise employees by way of equity incentive plans. The Directors believed that the Share Repurchase demonstrate the Company ’s confidence in its own business outlook and prospects and would, ultimately, benefit the Company and the Shareholders. As at 30 June 2026, the Company held a total of 15,840,000 treasury shares. Save as disclosed above, other than the purchases of the Shares made by the trustee of the restricted share award scheme of the Company (the “Restricted Share Award Scheme ”), neither the Company nor any of its subsidiaries purchased, sold, redeemed, or wrote off any Shares (including treasury shares) for the six months ended 30 June 2026. B. ISSUE OF EQUITY SECURITIES OR SALE OF TREASURY SHARES For the six months ended 30 June 2026, the Company did not issue any equity securities (including securities convertible into equity securities) for cash or conduct any sale of treasury shares for cash.
Page 37
37 C. RESTRICTED SHARE AWARD SCHEME AND 2026 SHARE AWARD SCHEME The Company has adopted a Restricted Share Award Scheme and a 2026 share award scheme of the Company (the “2026 Share Award Scheme ”), respectively, details of which are set out below: Restricted Share Award Scheme 2026 Share Award Scheme Adoption Date 22 March 2010 27 May 2026 Purpose Assist the Company in attracting new staff as well as motivating and retaining its existing staff Provide participants with an opportunity to acquire a proprietary interest in the Company, encourage and retain them to work with the Group, incentivize performance to increase Company value, and align their interests directly with Shareholders Participants Directors, senior staff, agents and consultants of the Group Employees (such as Directors and employees of the Group) and service providers (such as independent service providers, suppliers, agents and contractors who provides services to the Group on a continuing basis) For more details of the Restricted Share Award Scheme, please refer to Note 22 to the condensed consolidated financial statements in this announcement and the interim report for the six months ended 30 June 2026 to be published by the Company. For more details of the 2026 Share Award Scheme, please refer to the circular of the Company dated 24 April 2026. For the avoidance of doubt, no share awards have been granted under the 2026 Share Award Scheme. D. CORPORATE GOVERNANCE AND SECURITIES TRANSACTIONS BY DIRECTORS Corporate Governance For the six months ended 30 June 2026, the Company complied with all of the mandatory disclosure requirements set out in Part 1 of the Corporate Governance Code (the “Corporate Governance Code ”) contained in Appendix C1 to the Listing Rules. Meanwhile, the Company has applied the principles of good corporate governance (the “Governance Principles ”) and complied with the code provisions set out in Part 2 of the Corporate Governance Code. The Company annually reviews the application of the Governance Principles and will improve its corporate governance practices with the reference to the latest development of corporate governance. Securities Transactions by Directors The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code ”) as set out in Appendix C3 of the Listing Rules. Having made specific enquiry with regard to securities transactions of the Directors, all Directors have confirmed their compliance with the required standards set out in the Model Code and its code of conduct regarding Directors ’ securities transactions for the six months ended 30 June 2026.
Page 38
38 E. AUDIT COMMITTEE As at 30 June 2026, the audit committee of the Board (the “Audit Committee ”) consists of three independent non-executive Directors (namely Ms. Ching Wan Fung (chairwoman), Mr. Feng Hua Jun and Mr. Chen Gang). The Audit Committee and the Company ’s external auditors have reviewed the interim report of 2026 and the unaudited condensed consolidated financial statements for the six months ended 30 June 2026. Members of the Audit Committee agreed with the accounting treatment adopted in the preparation of the condensed consolidated financial statements for the six months ended 30 June 2026. By order of the Board Sunny Optical Technology (Group) Company Limited Wang Tan Jiong Chairman and Executive Director Hong Kong, 26 August 2026 As at the date of this announcement, the Board comprises Mr. Wang Tan Jiong, Mr. Wang Wenjie and Mr. Ni Wenjun, who are executive Directors; Mr. Wang Wenjian, who is a non-executive Director, and Mr. Feng Hua Jun, Mr. Chen Gang and Ms. Ching Wan Fung, who are independent non-executive Directors.