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. * SHANGHAI ELECTRIC GROUP COMPANY LIMITED 上海電氣集團股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 02727) 2026 INTERIM RESULTS PERFORMANCE HIGHLIGHTS The board of directors (the "Board") of Shanghai Electric Group Company Limited (the "Company") hereby announces the interim results of the Company and its subsidiaries (the "Group" or "Shanghai Electric") for the six months ended 30 June 2026 (the "Reporting Period"). The results have not been audited but have been reviewed by the audit committee of the Company (the " Audit Committee "). The interim results of the Company for the six months ended 30 June 202 6 have been prepared in a ccordance with China Accounting Standards for Business Enterprises. ► Total revenue of the Company for first half of 20 26 was RMB63,332 million, an increase of 16.6% as compared with the corresponding period of last year ► Profit attributable to owners of the Company for first half of 202 6 was RMB970 million, an increase of 18.2% as compared with the corresponding period of last year ► Basic earnings per share of the Company for first half of 2026 was RMB0.062 yuan, an increase of 17.0% as compared with the corresponding period of last year ► New orders for first half of 2026 amounted to RMB100.39 billion ► The Board did not propose to declare an interim dividend of 2026
Page 2
SHANGHAI ELECTRIC GROUP COMPANY LIMITED CONSOLIDATED BALANCE SHEET (UNAUDITED) AS AT 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 2 - Notes Unaudited 30 June 2026 Audited 31 December 2025 RMB’000 RMB’000 Current assets Cash at bank and on hand 43,576,694 37,308,176 Clearing settlement funds 12,540 1,041 Placements with banks and other financial institutions 18,432,820 17,728,894 Held-for-trading financial assets 6,688,883 8,387,470 Derivative financial assets 6,488 14,734 Notes receivable 2,419,023 3,180,093 Accounts receivable 3 36,335,388 37,032,557 Receivables financing 1,460,887 2,102,130 Prepayments 12,282,364 11,501,808 Other receivables 3,771,356 3,526,815 Financial assets purchased under resale agreements 1,626,457 2,585,101 Inventories 53,789,306 47,296,351 Contract assets 23,302,758 22,347,381 Non-current assets due within one year 3,326,132 2,150,433 Other current assets 24,041,768 25,944,203 Total current assets 231,072,864 221,107,187 Non-current assets Loans and advances 6,582,682 8,708,524 Debt investments 151,895 152,040 Other debt investments 2,424,482 1,260,962 Long-term receivables 1,017,085 1,755,225 Long-term equity investments 14,977,754 14,664,306 Investment in other equity instruments 79,800 - Other non-current financial assets 4,112,201 5,846,082 Investment properties 882,643 925,337 Fixed assets 21,883,338 23,336,971 Constructions in progress 6,483,531 5,449,861 Right-of-use assets 2,246,720 2,306,519 Intangible assets 10,527,449 10,909,957 Research and development expenditures 91,584 86,683 Goodwill 2,971,524 3,070,023 Long-term deferred expenses 540,531 512,387 Deferred tax assets 8,168,746 8,278,845 Other non-current assets 17,416,677 16,999,857 Total non-current assets 100,558,642 104,263,579 TOTAL ASSETS 331,631,506 325,370,766
Page 3
SHANGHAI ELECTRIC GROUP COMPANY LIMITED CONSOLIDATED BALANCE SHEET (UNAUDITED) (CONT’D) AS AT 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 3 - Notes Unaudited 30 June 2026 Audited 31 December 2025 RMB’000 RMB’000 Current liabilities Short-term borrowings 12,174,829 10,066,806 Held-for-trading financial liabilities 9,968 38,564 Derivative financial liabilities 14,190 2,386 Notes payable 16,399,570 16,702,781 Accounts payable 4 75,538,491 70,637,292 Advances from customers 510,183 985,368 Contract liabilities 72,217,805 69,000,076 Deposits from customers, banks and other financial institutions 6,118,278 6,167,406 Employee benefits payable 3,993,437 5,247,768 Taxes payable 1,599,283 2,605,825 Other payables 8,412,019 8,355,843 Non-current liabilities maturing within one year 5,576,440 7,032,995 Other current liabilities 15,219,740 12,434,453 Total current liabilities 217,784,233 209,277,563 Non-current liabilities Long-term borrowings 19,509,588 25,835,719 Bonds payable 5 6,994,240 2,997,452 Lease liabilities 1,791,900 1,793,077 Long-term payables 982,788 1,063,791 Long-term employee benefits payable 166,349 180,141 Provisions 1,982,437 2,447,630 Deferred income 1,204,491 1,141,957 Deferred tax liabilities 630,087 648,569 Other non-current liabilities 123,329 78,113 Total non-current liabilities 33,385,209 36,186,449 Total liabilities 251,169,442 245,464,012 Owners’ equity Share capital 15,540,122 15,540,122 Capital surplus 19,079,887 18,998,926 Other comprehensive income (62,499) 129,282 Special reserve 149,964 132,699 Surplus reserve 6,044,402 6,044,402 Retained earnings 6 14,597,836 13,849,289 Total equity attributable to equity owners of the Company 55,349,712 54,694,720 Minority interests 25,112,352 25,212,034 Total owners’ equity 80,462,064 79,906,754 TOTAL LIABILITIES AND OWNERS’ EQUITY 331,631,506 325,370,766
Page 4
SHANGHAI ELECTRIC GROUP COMPANY LIMITED CONSOLIDATED INCOME STATEMENT (UNAUDITED) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 4 - Unaudited For the six months ended 30 June Notes 2026 2025 RMB’000 RMB’000 Total revenue 63,331,968 54,303,335 Including: Operating revenue 7 63,030,610 54,007,759 Interest income 7 299,543 295,015 Income from handling charges and commissions 7 1,815 561 Total cost of sales 60,955,177 52,136,586 Including: Operating cost 7 51,512,786 43,963,452 Interest expenses 7 26,335 43,242 Handling charges and commissions expenses 7 365 351 Taxes and surcharges 8 344,791 360,202 Selling and distribution expenses 1,553,811 1,481,932 General and administrative expenses 3,785,727 3,436,117 Research and development expenditures 3,086,809 2,545,795 Financial expenses - net 644,553 305,495 Including: Interest expenses 594,117 676,205 Interest income 246,534 275,260 Add: Other income 662,408 465,798 Investment income 1,403,810 1,058,818 Including: Share of profit of associates and joint ventures 1,112,920 822,267 Gain/(Loss) arising from derecognition of financial assets measured at amortized cost 10,086 (3,181) Exchange (loss)/gain (3,306) 4,722 (Loss)/ Gain on changes in fair value (62,202) 25,700 Loss from credit impairment (1,035,489) (780,260) Loss from asset impairment (755,245) (163,936) (Loss)/ Gain on disposals of assets (18,392) 35,682 Operating profit 2,568,375 2,813,273 Add: Non-operating income 46,262 41,643 Less: Non-operating expenses 43,770 23,249 Total profit 2,570,867 2,831,667 Less: Income tax expenses 9 898,450 784,753 Net profit 1,672,417 2,046,914 Attributable to equity owners of the Company 969,994 820,752 Minority interests 702,423 1,226,162
Page 5
SHANGHAI ELECTRIC GROUP COMPANY LIMITED CONSOLIDATED INCOME STATEMENT (UNAUDITED) (CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 5 - Unaudited For the six months ended 30 June Notes 2026 2025 RMB’000 RMB’000 Other comprehensive income, net of tax (194,885) 176,368 Attributable to equity owners of the Company (191,781) 165,687 Other comprehensive income that will be subsequently reclassified to profit or loss (191,781) 165,687 Changes in fair value of other debt investments (10,148) (1,658) Provision for credit impairment of other debt investments and receivables financing (5,403) 174 Cash flow hedges, net of tax (730) 5,102 Exchange differences on translation of foreign operations (175,500) 159,928 Others - 2,141 Attributable to minority interests (3,104) 10,681 Total comprehensive income 1,477,532 2,223,282 Attributable to equity owners of the Company 778,213 986,439 Attributable to minority interests 699,319 1,236,843 Earnings per share 10 Basic earnings per share (RMB yuan/ share) 0.062 0.053 Diluted earnings per share (RMB yuan/ share) 0.062 0.053
Page 6
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) 1 Company information Shanghai Electric Group Company Limited (the “Company”) is a joint stock limited liability company established in the People ’s Republic of China (the “PRC”) on 1 March 2004. The registered office of the Company is located on No. 16, Lane 1100, Huashan Road, Changning District, Shanghai, the PRC. During the half year, the Group was engaged in the following principal activities: (a) The energy equipment segment: design, manufacture and sales of nuclear power equipment, energy storage equipment, coal-fired power generation and corollary equipment, gas -fired power generation equipment, wind power equipment, hydrogen energy equipment, photovoltaic equipment, high-end vessels for chemical industry; as well as providing power grid and industrial intelligent power supply system solutions; (b) The industrial equipment segment: design, manufacture and sales of elevators, large and medium-sized electric motors, intelligent manufacturing equipment, industrial basic parts and construction industrialization equipment; (c) The integration services segment: provision of energy , environmental protection and automation engineering and services, including all kinds of traditional and new energy , comprehensive utilisation of solid wastes, sewage treatment, flue gas treatment, rail transit; provision of industrial Internet services; provision of financial services, including corporate finance , financial leasing , factoring, asset management and insurance brokerage; provision of park and property management services based on industrial real estate. In the opinion of the Board, the parent and the ultimate holding company of the Group is Shanghai Electric Holding Group Co., Ltd (“SEGC”), a state-owned enterprise established in the PRC. The Company has its ordinary shares listed on both the Stock Exchange of Hong Kong Limited and Shanghai Stock Exchange. 2 Summary of important accounting policies The main accounting policies used in the preparation of these consolidated financial statements are set out below. Unless otherwise stated, these policies are applied in all reported periods. These consolidated financial statements include Shanghai Electric Group Company Limited and its subsidiaries. 2.1 Basis of preparation The financial statements were prepared in accordance with the Accounting Standard for Business Enterprises - Basic Standard, and the specific accounting standards and other relevant regulations (hereafter collectively referred to as “the Accounting Standards for Business Enterprises ” or “CAS”) issued by the Ministry of Finance on 15 February 2006 and in subsequent periods and the disclosure requirements in the Preparation Convention of Information Disclosure by Companies Offering Securities to the Public No. 15 - General Rules on Financial Reporting issued by the CSRC. The financial statements are prepared on a going concern basis. The new Hong Kong Companies Ordinance came into effect on 3 March 2014. Certain related matters in the financial statements have been disclosed in accordance with the requirements of the Hong Kong Companies Ordinance.
Page 7
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION (CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 7 - 3 Accounts receivable 30 June 2026 31 December 2025 (Unaudited) (Audited) Accounts receivable 54,610,362 54,810,769 Less: Provision for bad debts 18,274,974 17,778,212 36,335,388 37,032,557 The aging of accounts receivables was analysed as follows: (i) The accounts receivable based on overdue aging was analysed as follows: 30 June 2026 31 December 2025 (Unaudited) (Audited) Not overdue 20,904,860 23,091,096 Overdue within 1 year 9,668,522 8,287,332 Overdue 1 to 2 years 3,747,382 4,646,754 Overdue 2 to 3 years 3,035,306 2,630,070 Overdue 3 to 4 years 2,898,938 2,220,749 Overdue 4 to 5 years 2,055,321 4,294,992 Overdue over 5 years 12,300,033 9,639,776 54,610,362 54,810,769 (ii) The aging of accounts receivable based on the date of entry was analysed as follows: 30 June 2026 31 December 2025 (Unaudited) (Audited) Within 1 year 27,212,271 26,408,936 1 to 2 years 6,072,396 7,134,944 2 to 3 years 3,404,538 3,167,224 3 to 4 years 2,511,318 2,559,992 4 to 5 years 2,441,460 5,175,577 Over 5 years 12,968,379 10,364,096 54,610,362 54,810,769
Page 8
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION (CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 8 - 4 Accounts payable 30 June 2026 31 December 2025 (Unaudited) (Audited) Accounts payable 75,538,491 70,637,292 The aging of accounts payable was analysed as follows: 30 June 2026 31 December 2025 (Unaudited) (Audited) Within 3 months 50,373,183 46,242,745 3 to 6 months 5,384,494 4,567,391 6 months to 1 year 8,320,488 9,803,960 1 to 2 years 4,327,389 3,920,194 2 to 3 years 2,358,124 1,741,891 Over 3 years 4,774,813 4,361,111 75,538,491 70,637,292 As of 30 June 2026, accounts payable over one year amounted to RMB 11,460,326 thousand (31 December 2025: RMB 10,023,196 thousand), mainly for project payments and material costs. Since the projects are not completed yet, this amount hasn’t been finally settled.
Page 9
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 9 - 5 Bonds payable 31 December 2025 Addition in the current period Interest accrued at par value Amortisation of premium or discount Repayment in the current period 30 June 2026 (Audited) (Unaudited) 25 Hudian MTN001(a) 1,000,086 - 9,670 173 - 1,009,929 25 Hudian MTN002(a) 1,000,086 - 9,670 173 - 1,009,929 26 Hudian MTN001(b) - 2,000,000 9,416 (1,828) - 2,007,588 26 Hudian MTN002(b) - 2,000,000 9,416 (1,828) - 2,007,588 25 Hufeng MTN002(c) 1,001,077 - 10,364 98 - 1,011,539 Less: Bonds payable due within one year 3,797 52,333 2,997,452 6,994,240 (a) On 11 December 2025, the Company issued the first and second tranches of its 2025 Innovation and Technology Bonds. The bonds have a term of 3 years, with an issue date of 12 December 2025 and a maturity date of 12 December 2028. They were issued at par value, with a total issuance amount of RMB 1 billion for each tranche, a coupon rate of 1.85%, and interest payable annually. (b) On 26 March 2026, the Company issued the first and second tranches of its 2026 Innovation and Technology Bonds. The bonds have a term of 3 years, with an issue date of 27 March 2026 and a maturity date of 27 March 2029. They were issued at par value, with a total issuance amount of RMB 2 billion for each tranche, a coupon rate of 1.69%, and interest payable annually. (c) On 2 December 2025, Shanghai Electric Wind Power Group Co., Ltd., a subsidiary of the Group, issued its second tranche of 202 5 Innovation and Technology Bonds. The bonds have a term of 3 years, with an issue date of 2 December 2025 and a maturity date of 2 December 2028. They were issued at par value, with a total issuance amount of RMB 1 billion, a coupon rate of 2.09%, and interest payable annually.
Page 10
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 10 - 6 Dividends On June 5, 2026, the 2025 annual general meeting of the Company approved the 2025 annual profit distribution plan, distributing a cash dividend of RMB 0.01425 per share (including tax) to all shareholders registered as of the record date. The Board did not propose to declare an interim dividend of 2026. 7 Operating revenue and operating cost For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Revenue from main operations 61,214,794 51,581,756 Revenue from other operations 1,815,816 2,426,003 Interest income 299,543 295,015 Income from handling charges and commissions 1,815 561 63,331,968 54,303,335 For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Cost of sales from main operations 50,608,397 42,645,324 Cost of sales from other operations 904,389 1,318,128 Interest expenses 26,335 43,242 Handling charges and commissions expenses 365 351 51,539,486 44,007,045
Page 11
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 11 - 7 Operating revenue and operating cost (Cont’d) Revenue from main operations includes sales revenue from energy equipment, industrial equipment and integration services. Cost of sales refers to those of products related to main operations. The Group’s segment information has been presented in Note 11. Details of revenue from main operations are as follows: For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Sale of goods 49,982,915 42,868,244 Engineering construction 6,134,865 3,623,076 Rendering of services 5,097,014 5,090,436 61,214,794 51,581,756 Details of revenue from other operations are as follows: For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Sales of raw materials and goods 867,454 1,608,493 Operating lease income 283,335 294,760 Finance lease income 34,492 39,311 Non-industrial labor services 376,619 130,775 Others 253,916 352,664 1,815,816 2,426,003
Page 12
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 12 - 7 Operating revenue and operating cost (Cont’d) For the six months ended 30 June 2026(Unaudited) Sales of Goods Engineering construction Rendering of services Others Total China Other Asian countries/ geographical areas Other regions China Other Asian countries/ geographical areas Other regions Revenue from main operations 42,526,533 1,390,141 6,066,241 2,656,368 3,303,714 174,783 5,097,014 - 61,214,794 Including: Recognised at a point in time 42,526,533 1,390,141 6,066,241 - - - 515,617 - 50,498,532 Recognised over time - - - 2,656,368 3,303,714 174,783 4,581,397 - 10,716,262 Revenue from other operations 740,752 30,970 95,732 - - - 376,619 571,743 1,815,816 43,267,285 1,421,111 6,161,973 2,656,368 3,303,714 174,783 5,473,633 571,743 63,030,610 For the six months ended 30 June 2025(Unaudited) Sales of Goods Engineering construction Rendering of services Others Total China Other Asian countries/ geographical areas Other regions China Other Asian countries/ geographical areas Other regions Revenue from main operations 36,149,374 1,184,391 5,534,479 1,906,365 1,372,384 344,327 5,090,436 - 51,581,756 Including: Recognised at a point in time 36,149,374 1,184,391 5,534,479 - - - 752,057 - 43,620,301 Recognised over time - - - 1,906,365 1,372,384 344,327 4,338,379 - 7,961,455 Revenue from other operations 1,562,841 14,138 31,514 - - - 130,775 686,735 2,426,003 37,712,215 1,198,529 5,565,993 1,906,365 1,372,384 344,327 5,221,211 686,735 54,007,759 (i) For the six-month period ended 30 June 2026, the Group did not receive any additional rewards for the early completion of labour services. The Group's revenue from sales of materials is recognised at a time point.
Page 13
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 13 - 8 Taxes and surcharges For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Real estate tax 82,143 77,365 City maintenance and construction tax 95,380 102,647 Stamp duty 60,107 58,945 Educational surcharge 73,903 74,249 Land use tax 19,896 19,195 Others 13,362 27,801 344,791 360,202
Page 14
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 14 - 9 Income tax expenses For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Current tax 803,833 670,291 Deferred tax 94,617 114,462 898,450 784,753 The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the consolidated income statement to the income tax expenses is listed below: For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Total profit 2,570,867 2,831,667 Tax at the statutory tax rate (Note 1) 642,717 707,917 Lower tax rates for specific districts or concessions (186,790) (215,659) Adjustments for current income tax of prior periods 36,782 39,685 Profits and loss attributable to joint ventures and associates (274,049) (192,029) Income not subject to tax (2,910) (10,711) Expenses not deductible for tax 33,347 46,101 Tax incentives on eligible expenditures (131,983) (105,298) Utilization of previously unrecognised tax loss and deductible temporary differences (47,230) (36,538) Tax loss and deductible temporary differences for which no deferred tax assets was recognised 828,566 551,285 Income tax expenses 898,450 784,753 Note 1: The Group's income tax is provided based on estimated taxable income in China and the applicable tax rates. Taxes on income assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.
Page 15
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 15 - 10 Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing net profit for the current period attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding. Newly issued ordinary shares are included in the weighted average number of shares from the date consideration is receivable (which is generally the date of their issue) according to specific terms of the issuance contract. Basic earnings per share are calculated as follows: For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Consolidated net profit attributable to ordinary shareholders of the parent company 969,994 820,752 Weighted average number of ordinary shares outstanding (Unit: 1,000 shares) 15,540,122 15,579,125 Basic earnings per share RMB0.062 yuan RMB0.053 yuan Including: - Basic earnings per share from continuing operations: RMB0.062 yuan RMB0.053 yuan - Basic earnings per share from discontinued operations: - - Diluted earnings per share Diluted earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the parent company adjusted based on the dilutive potential ordinary shares by the adjusted weighted average number of outstanding ordinary shares of the Company. For the six -month period ended 30 June 2026, the Company has no dilutive potential ordinary shares. Therefore, diluted earnings per share equals basic earnings per share.
Page 16
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 16 - 11 Segment information The Group’s businesses are organised and managed separately based on business nature and the products and services provided. Each operating segment of the Group is a business group, which, distinctive from other operating segments, has its own risks in products and services and gains its own rewards. Information of each operating segment is summarised as follows: (a) The energy equipment segment: design, manufacture and sales of nuclear power equipment, energy storage equipment, coal-fired power generation and corollary equipment, gas-fired power generation equipment, wind power equipment, hydrogen energy equipment, photovoltaic equipment, high-end vessels for chemical industry; as well as providing power grid and industrial intelligent power supply system solutions; (b) The industrial equipment segment: design, manufacture and sales of elevators, large and medium -sized electric motors, intelligent manufacturing equipment, industrial basic parts and construction industrialization equipment; (c) The integration services segment: provision of energy , environmental protection and automation engineering and services, including all kinds of traditional and new energy, comprehensive utilisation of solid wastes, sewage treatment, flue gas treatment, rail transit; provision of industrial Internet services; provision of financial services, including corporate finance, financial leasing, factoring, asset management and insurance brokerage; provision of park and property management services based on industrial real estate. Management monitors the results of the business units separately for the purpose of making decisions on resource allocation and performance assessment. Segment performance is e valuated based on reported segment profit. Segment profit is an indicator of adjusted total profit, which is consistent with the Group's total profit but excludes interest income, financial expenses, dividend income, gains from changes in fair value of fin ancial instruments and expenses of headquarters. Financial assets held for trading, derivatives, dividends receivable, interest receivable, long -term equity investments, debt investments, other debt investments, investment in other equity instruments, other non-current financial assets, deferred tax assets and other undistributed assets of headquarters are not included in segment assets, which are under the unified management of the Group. Financial liabilities held for trading, derivatives, dividends payable, interest payable, borrowings, income taxes payable, deferred tax liabilities and other undistributed liabilities of headquarters are not included in segment liabilities, which are under the unified management of the Group. Inter-segment transfer prices are measured by reference to the prices of transactions with third parties.
Page 17
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 17 - 11 Segment information (Cont'd) (a) Segment information as at and for the six months ended 30 June 2026 was as follows (unaudited): Energy equipment Industrial equipment Integration services Others Unallocated Elimination Total Revenue Including: Revenue from external customers 35,425,172 18,368,625 9,531,499 5,748 924 - 63,331,968 Inter-segment revenue 1,132,965 585,449 1,330,438 9,424 49,119 (3,107,395) - 36,558,137 18,954,074 10,861,937 15,172 50,043 (3,107,395) 63,331,968 Cost of sales 29,727,675 15,525,518 9,311,632 1,715 98 (3,027,152) 51,539,486 Loss from credit impairment 96,033 298,432 643,141 8 39,780 (41,905) 1,035,489 Loss from asset impairment 317,801 276,806 104,983 - - 55,655 755,245 Depreciation and amortisation 1,005,209 467,620 419,828 14,757 104,612 - 2,012,026 Financial expenses - - - - 644,553 - 644,553 Share of profit of associates and joint ventures - - - - 1,112,920 - 1,112,920 Operating profit/(loss) 2,053,924 412,829 144,218 (138,480) 285,087 (189,203) 2,568,375 Non-operating income or expenses 2,492 Total profit 2,570,867 Assets and liabilities Total assets 249,680,809 62,107,329 155,828,918 716,495 15,062,591 (151,764,636) 331,631,506 Total liabilities 208,241,943 48,510,363 129,326,131 500,180 8,547,423 (143,956,598) 251,169,442 Non-cash expenses other than depreciation and amortisation 770,555 30,708 114,098 - - - 915,361 Increase in non-current assets 1,116,624 348,739 955,230 4,491 25,764 - 2,450,848
Page 18
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 18 - 11 Segment information (Cont'd) (b) Segment information as at and for the six months ended 30 June 2025 was as follows (unaudited): Energy equipment Industrial equipment Integration services Others Unallocated Elimination Total Revenue Including: Revenue from external customers 29,105,813 17,968,807 7,208,778 17,954 1,983 - 54,303,335 Inter-segment revenue 1,010,507 629,396 1,051,653 24,021 36,976 (2,752,553) - 30,116,320 18,598,203 8,260,431 41,975 38,959 (2,752,553) 54,303,335 Cost of sales 24,297,194 15,518,329 7,016,363 25,001 64 (2,849,906) 44,007,045 Loss from credit impairment 243,692 163,814 530,515 (315) 21,254 (178,700) 780,260 Loss from asset impairment 193,558 (17,103) (7,674) (6) - (4,839) 163,936 Depreciation and amortisation 756,965 402,009 394,151 4,830 86,503 - 1,644,458 Financial expenses - - - - 305,495 - 305,495 Share of profit of associates and joint ventures - - - - 822,267 - 822,267 Operating profit/(loss) 1,607,085 620,397 248,368 (136,016) 501,451 (28,012) 2,813,273 Non-operating income or expenses 18,394 Total profit 2,831,667 Assets and liabilities Total assets 173,281,924 59,474,604 138,544,844 974,955 13,847,087 (73,223,324) 312,900,090 Total liabilities 128,495,884 45,294,617 106,651,966 215,902 4,741,235 (50,814,588) 234,585,016 Non-cash expenses other than depreciation and amortisation 547,754 65,771 155,312 - - - 768,837 Increase in non-current assets 2,097,809 409,948 657,404 6,444 22,682 - 3,194,287
Page 19
SHANGHAI ELECTRIC GROUP COMPANY LIMITED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION(CONT’D) FOR THE SIX MONTHS ENDED 30 JUNE 2026 (All amounts in RMB’000 Yuan unless otherwise stated) - 19 - 11 Segment information (Cont'd) (c) Revenue from external customers For the six months ended 30 June 2026 For the six months ended 30 June 2025 (Unaudited) (Unaudited) Mainland China 51,910,893 45,606,847 Other countries and geographical areas 11,421,075 8,696,488 63,331,968 54,303,335 Revenue from external customers is attributed to the region where corresponding customers are located. (d) Total non-current assets 30 June 2026 31 December 2025 (Unaudited) (Audited) Mainland China 75,701,289 75,704,207 Other countries and geographical areas 2,400,262 2,557,694 78,101,551 78,261,901 Non-current assets, excluding financial assets and deferred tax assets, are attributed to the region where the assets are located. No single customer generated more than 10% of the Group's operating income for the six months ended 30 June 2026 and for the six months ended 30 June 2025.
Page 20
- 20 - RESULTS REVIEW AND MANAGEMENT DISCUSSION AND ANALYSIS In the first half of 2026, China’s development took place in a period marked by both strategic opportunities and risks and challenges, accompanied by growing uncertainties. Amidst a complex and turbulent external environment, the domestic economy withstood pressure and sustained an overall stable development trajectory, progressing toward higher quality and more innovative growth. Adhering to the overarching principle of “serving national strategies, aligning closely with national needs, developing new quality productive forces, building core competitiveness, and achieving high-quality development”, the Group advanced all work streams in a solid and orderly manner, laying a strong foundation for accomplishing the full-year targets. RESULTS REVIEW During the Reporting Period, the Company achieved total revenue of RMB63,332 million, representing a year-on-year increase of 16.6%. The gross profit margin of the Company for the Reporting Period was 18.6%. The net profit attributable to owners of the Company for the Reporting Period was RMB970 million, representing a year-on-year increase of 18.2%. The basic earnings per share of the Company for the Reporting Period was RMB0.062 yuan, representing a year-on-year increase of 17.0%. During the Reporting Period, the Company secured new orders totaling RMB 100.39 billion. Of the new orders, energy equipment amounted to RMB 64.24 billion (including: coal-fired power generation equipment of RMB20.23 billion, nuclear power equipment of RMB4.57 billion, wind power equipment of RMB 12.39 billion, and energy storage equipment of RMB 11.44 billion), orders for industrial equipment amounted to RMB21.25 billion, and orders for integration services amounted to RMB14.91 billion. During the Reporting Period, the main business operation of the Company was as follows: 1. Anchoring the Strategic Opening to Elevate Industrial Competitiveness The Company adhered to strategic guidance and focused on its core bu siness of high -end equipment manufacturing. Centered on the theme of “high -quality development”, the Company remained committed to serving national strategies, with comprehensively deepening reforms as the focus, and using the start of the 15th Five -Year P lan as an opportunity to drive industrial upgrading. Aligned with our mission and responsibilities in serving the nation’s quest for strength, advancing new industrialization, and contributing to the city’s “Five Centers” development, the Company was deeply integrated into the transformative trends of intelligence, green development, and industrial convergence. The Company accelerat ed its transformation from a traditional equipment manufacturer to an integrated industrial intelligence service provider. With a firm focus on the strategic goals of the 15th Five-Year Plan, the Company is promoting the coordinated development of traditional industries, strategic emerging industries, and future industries. For traditional industries, the Company will rely on tech nological transformation and digital empowerment to enhance industrial competitiveness, striving to achieve independent control over core technologies and fortify the security foundation of industrial and supply chains. For strategic emerging industries, t he Company will closely align with national strategies, refine technology and market plans, build self -controllable industrial chains, and cultivate diversified growth drivers. For future industries, the Company is making forward -looking arrangements in cutting- edge sectors such as AI -powered high -end equipment, hydrogen energy, intelligent robotics, commercial aerospace, and controlled nuclear fusion equipment, thereby building a tiered and synergistic industrial development pattern.
Page 21
- 21 - We seized the opportunities of the green transformation of the energy structure, driven by the dual engines of technological iteration and model innovation, deepened industrial chain expansion and collaboration, and supported the construction of a new clean, low-carbon, safe and efficient energy system. We deeply participated in national key fusion projects, in which two core equipment for the main machine system of the compact controlled nuclear fusion experimental device (BEST) — the first 1/8-sector vacuum vessel and the first two sets of mid -plane cold screens for the 1/8 sector vacuum vessel as well as the lower -port cold screen — were successfully manufactured, delivered, and accepted, laying a solid foundation for the main machine assembly and system integration of the project. This marked a major step forward in China’s continuous pursuit of engineering-scale, localized, and independent manufacturing capabilities in the extreme manufacturing of fusion reactor components. During the Reporting Period, we continued to advance the core technology R&D and iteration of green fuels. We have built a comprehensive technology matrix covering renewable energy power generation, hydrogen production from electrolyzed water, biomass gasifiers, methanol synthesis and carbon capture . We successfully won the bid for and officially commenced the EPC Phase I, Section 1 of the Lanzhou New Area 100,000-tonne-per-year Biomass Green Methanol Project, the first biomass gasifier -to-green methanol project in Gansu Province, which marked the fo rmal entry into the stage of scalable replication of our proprietary full -industry-chain technology system for green methanol production from biomass gasifiers coupled with green power following its successful validation in the Taonan demonstration project in Jilin Province. During the Reporting Period, we signed a contract with Inner Mongolia Baofeng Coal-based New Materials Co., Ltd. to supply eight 1250 Nm³/h alkaline electrolyzers and the world’s largest single -set 5000 Nm³ /h separation and purification system for the world’s first single-plant largest-scale green hydrogen + coal to olefin coupling demonstration project. We have consolidated our industrial foundation through intelligent manufacturing upgrading, high-end equipment breakthroughs and full life cycle services, and fostered a tiered and coordinated industrial development landscape. Phase I of the Large Forgings and Castings Industrial Capacity Upgrading Project undertaken by Shanghai Electric SHMP Casting & Forging Co., Ltd. officially broke ground in Minhang District. The project aims to build a research, manufacturing and application hub for large high-end materials serving Shanghai and the Yangtze River Delta region, as well as a world -class digital intelligent rapid forging production line for large special alloy ingots with a 100MN capacity, which will primarily cater to strategic frontier sectors including advanced nuclear energy, aviation, aerospace and marine engineering. In the field of industrial basic parts, our blade business has achieved a leap from traditional coal -fired power turbine industry to the aviation, aerospace, and gas turbine industries, a nd upgraded from a single-focus energy blade business to various high -end products such as aviation blades, key core components, and hot -end components, becoming a leading enterprise in the manufacturing of key core components in the "gas turbine and aircr aft engine" field. Our bearing business continues to expand its market in fields such as aerospace and aviation, high -speed rail transit, medical equipment, industrial equipment, and automotive bearings. In terms of elevator segment, Shanghai Mitsubishi El evator Co., Ltd. (“SMEC”), a subsidiary of the Company, was awarded China’s first carbon footprint certificate for high-speed elevators issued by the National Elevator Testing and Evaluation Center (NETEC). SMEC secured the contract for the 180,000th set of the LNK Smart Elevator Digital Solution, with digital transformation and service extension continuously deepened. During the Reporting Period, core manufacturing affiliates of the Company, including Shanghai Generator Works and Shanghai Power Station Aux iliary Machinery Factory Co., Ltd. under Shanghai Electric Power Generation Equipment Co., Ltd., Shanghai No.1 Machine Tool Works Co., Ltd., Wuxi Turbine Blade Co., Ltd. and Shanghai Electric Group (Zhangjiagang) Transformer Co., Ltd., were selected into t he list of newly
Page 22
- 22 - cultivated “Green Factories” for 2025 released by the Ministry of Industry and Information Technology. 2. Accelerating Market Expansion to Expand Diversified Business Landscape We focused on supporting the construction of a new-type power system, consolidated our market position in the coal, gas and nuclear power sectors, strived to enhance our competitiveness in the new energy sector, and accelerated expansion and layout in multiple fields. In the nuclear power sector, we have mastered the manufacturing and inspection (testing) technologies for key nuclear power equipment, supporting China's three-step strategy for nuclear energy development. During the Reporting Period, we undertook a total of 18 nuclear island main equipment units, won bids for 2 sets of conventional island equipment, and successfully produced 9 nuclear island main equipment units, encompassing the fully promoted mass construction of Hualong No.1, the CAP series reactor projects, as well as major national engineering pro jects such as high -temperature gas-cooled reactors. In the field of coal-fired power, we continued to focus on the market of "three reforms linkages (三改聯動) " initiative for coal-fired power generation stations, maintained the global record for the lowest coal consumption of coal-fired power units, achieved coal saving and carbon reduction, deep peak modulation, thermal electric decoupling and efficient heating, and continuously advanced traditional coal-fired power toward a new generation of green, low-carbon, high-efficiency and flexible coal -fired power technologies, providing solid support for China's energy structure optimization and energy security. During the Reporting Period, we won bids for the three main units of projects including SPIC Hainan Prefecture Gobi Base 4× 660MW Project (國家電投海南州戈壁基地4× 660MW) and Zhejiang Energy Changxing Power Plant Relocation 2× 1000MW Project (浙能長興電廠遷建 2× 1000MW項目), as well as China Energy Gan su Badain Jaran Desert 4× 1000MW Project ( 國家能源甘肅巴丹吉林沙漠 4X1000MW項目). In terms of gas turbines, as the only domestic supplier of heavy -duty gas turbines with mature full- life-cycle supply and service capabilities, we signed a supply contract with CGN New Energy and we will provide four sets of gas turbines and the complete main equipment for combined cycles for the Jilin Lishu and Changling gas power projects, which will be supported with tailored special technical solutions and one-stop proprietary services covering the entire life cycle by adopting the “gas turbine + new energy ” model. The No. 4 combined cycle unit of the Jiangyin Gas Turbine Cogeneration Project undertaken by us has successfully passed the 168 -hour full -load trial operation. In terms of wind power, during the Reporting Period, we successively secured full turbine orders for key offshore wind projects including Fujian Changle Offshore Zone K, Hainan CZ2 Phase II, Jiangsu Qidong H4, Binhai South Zone H4 and Dongtai H5. We won bids for offshore w ind projects with a total capacity exceeding 2GW, placing us among the industry leaders in market share. For onshore wind power, Shanghai Electric Wind Power Group Co., Ltd ("SEWP") ( 上海電氣風電集團股份有限公司), a subsidiary of the Company, obtained nearly one million kilowatts of annual wind power centralized procurement orders issued by State Power Investment Corporation, ranking first in both bid capacity and number of bid sections. We delivered a series of landmark onshore wind power projects and successfully expan ded into emerging wind power application scenarios within Sinopec’s oil and gas mining areas. The “Zhizhen 100” ( 至臻100) maintenance mother vessel of SEWP won bids for the safety support service contract for the Qingzhou No.5 and No.7 offshore conversion stations, which ranks as the world’s largest -scale and highest -voltage flexible HVDC transmission project for far -offshore wind power, marking that the offshore operation and maintenance supporting capacity of SEWP has formally joined the service ecosystem f or world -class mega projects. In terms of energy storage, the Huai’an Salt Cavern Compressed Air Energy Storage Demonstration Project, the world’s largest compressed air energy storage power station in which we participated in construction, was fully commi ssioned. We supplied complete sets of equipment including air - cooled generators, electric motors, cold molten salt tanks and hot molten salt tanks for the project.
Page 23
- 23 - The 50MW/200MWh independent energy storage power project located in Shanghai Songjiang Free Trade Zone, where we serve as a participating constructor, officially broke ground. It is the first project to commence construction among Shanghai’s first batch of independent energy storage power station construction schemes for 2026. We advanced our “i nternationalization” strategy in an orderly manner, continuously enhancing our capabilities in global resource integration and system solutions. Through higher -level open collaboration, we promoted the transformation of overseas business from engineering equipment supply to localized in -depth development. During the Reporting Period, by leveraging its technological expertise in premium elevator solutions for high -end scenarios and its continuous expansion into overseas markets, SMEC won bids for the Phase I I of the Palm Jebel Ali project in Dubai, for which it will provide 700 elevators and related supporting services. Our power transmission and distribution business made its maiden entry into the high -end European market at scale, won bids for the supply project for low- and high-voltage switchgear cabinets for hyper- scale data center in Finland, and will deliver highly reliable intelligent power distribution solutions for the campus. During the Reporting Period, we signed the contract for the Minety Phase I I Shiling energy storage 50MW/150MWh project in the United Kingdom ( 英國門迪二期石嶺儲 能50MW/150MWh項目), marking a phased achievement in our deep-rooted presence in the UK’s premium energy storage market. Shenzhen Yinghe Technology Co., Ltd. ("Yinghe Technology") ( 贏合 科 技 股 份 有 限 公 司 ), a subsidiary of the Company, leveraging its technological accumulation and customized service capabilities in lithium battery manufacturing equipment, steadily expanded its overseas footprint, providing comprehensive new energy production solutions to clients across Europe, Southeast Asia, and other regions. 3. Advancing Technological Innovation to Forge New Quality Productive Forces In the first half of 2026, Shanghai Electric advanced technological innovation along its dual tracks of “Energy Equipment + Industrial Intelligence”: the “Suyuan 2.0” humanoid robot made its domestic debut, more than 40 AI agents were deployed across R&D, production, and maintenance scenarios, while green equipment solutions, including 25MW offshore wind turbines, a ll- vanadium redox flow battery/compressed air energy storage, and hydrogen internal combustion engine marine propulsion, continued to achieve breakthroughs, propelling high -end manufacturing toward greater autonomy and AI integration. We regarded technolo gical innovation as the core engine driving development, adhered to organized research, and achieved continuous breakthroughs in both common foundational technologies and critical core technologies, while playing a pioneering and leading role in developing new quality productive forces and attaining high -level self-reliance in science and technology. During the Reporting Period, 1300MW -class nuclear power water -hydrogen-cooled four-pole generator, which was independently developed by Generator Plant of Shanghai Electric Power Generation Equipment Co., Ltd. ( 上 海電 氣 電 站 設 備 有 限 公 司 發 電 機 廠), passed authoritative certification. Featuring proprietary intellectual property rights and overall technical performance reaching the world’s leading level, the generator provided stron g support for the mass construction of the Hualong No. 1 nuclear power units. The Sustainable Aviation Fuel Key Technologies and Pilot-scale Verification project, for which we undertook the construction of the main facilities, successfully produced 100% sustainable aviation fuel (SAF), with designed annual production capacity of up to 5000 tonnes for Grease-based SAF. The implementation plan for the Direct Green Power Supply Projects for Degradable Plastics, jointly filed by us and Shandong UniFortune Group (山東恒信集 團 ), was officially approved, which is oriented toward the degradable plastics industry and aims to build a green resource circular power supply system featuring “new energy + energy storage + direct connection + industrial loads”. In the low-altitude
Page 24
- 24 - economy sector, the megawatt -class aviation hybrid propulsion system, jointly developed with our participation, completed ground performance tests for the megawatt -class hybrid propulsion system, filling the gap in the engineering application of high-power high-speed aviation generator systems. We remained committed to open innovation, deepening collaboration with universities and scientific research institutes to build a robust and efficient ecosystem for scientific and technological innovation. During the Reporting Period, the “Shanghai Key Laboratory of Efficient Synthesis of Green Fuels (under preparation) ( 上海市綠色燃料高效合成系統工程重點實驗室 （籌）)”, led by Shanghai Electric and jointly established with East China University of Science and Technology, was officially i naugurated. The laboratory focuses on addressing forward - looking and disruptive technological challenges in the efficient synthesis and application of green fuels, including green alcohol, green ammonia, and sustainable aviation fuel. The “Shanghai Key Laboratory of Large-scale Casting and Forging Materials and Extreme Manufacturing for High - end Equipment (under preparation) (上海市大型鑄鍛件新材料與極端製造重點實驗室 （籌）)” was also officially inaugurated, integrating Shanghai Electric’s industrial expertise with the innovation resources of Shanghai Jiao Tong University, with a focus on tackling bottleneck material challenges critical to the implementation of major national strategies, including next - generation advanced nuclear power, nuclear fusion, deep -sea equipment, and heavy gas turbine. The Shanghai Electric sub-center (steam turbine) of the “National Key Laboratory of Structural Strength and Life of Major Equipment in Complex Service Environments (複雜服役環境重大裝 備結構強度與壽命全國重點實驗室)” was jointly established by Shanghai Turbine Works Co., Ltd., Shanghai Electric Power Generation Equipment Co., Ltd. (上海電氣電站設備有限公司上 海汽輪機廠) and Xi’an Jiaotong University, and was officially inaugurated. During the Reporting Period, “the Pilot Test Platform for Advanced Nuclear Energy Systems and Key Equipment and Materials for Future Nuclear Energy (先進核能系統及未來核能關鍵裝備及材料中試平台)” of Shanghai Electric Nuclear Power Gr oup Co., Ltd. ( 上海電氣核電集團有限公司), a subsidiary of the Company, was selected for the second batch of the Ministry of Industry and Information Technology’s Key Cultivation Pilot -Scale Platform list. Additionally, Shanghai Electric Power Transmission and Distribu tion Test Center was included in the Ministry of Industry and Information Technology’s “Seventh Batch of Industrial Technology Infrastructure Public Service Platforms” list. Our core industrial technologies have been continuously improved, and our indepen dent R&D projects have received multiple awards. The project “R&D and Industrialization of Steam Generators and Reactor Pressure Vessels for Core Equipment of Hualong No. 1 Nuclear Island” (《華龍一號核島主設備蒸汽發生器、反應堆壓力容器研製及産業化》 ) led by Shanghai Electric Nuclear P ower Equipment Co., Ltd., and the project “Homogenization Thermal Manufacturing Technology and Engineering Application of Large Forgings and Extra -Thick Plates for Extreme Environments” ( 《極端環境用大鍛件及特厚板的均質化熱製造技術與工 程應用》) participated by Shanghai Electric SHMP Casting & Forging Co., Ltd., were awarded the Second Prize of the 2025 Shanghai Science and Technology Progress Award. The project “Key Technologies and Applications for Risk Prevention, Control and Resilience Regulation of High-Density Train Group Operati ons” ( 《高密度列車群運行風險防控與韌性調控關鍵技術 與應用》) participated by Shanghai Electric Trusted & Safe Transportation Limited Company, and the project “High-Hardness and High-Toughness Nano-Multilayer Coated Cutting Tools and Key Technologies and Their Application in Aerospace Material Processing” (《高硬韌納米多層 塗層刀具和關鍵技術及其在航空材料加工的應用》) participated by Shanghai Tool Works Co., Ltd., were awarded the Second Prize of the 2025 Shanghai Technology Invention Award. The project “Lubrication Material Technology and Engineering Application f or Reliable Service of
Page 25
- 25 - Equipment under Extreme Conditions” (《極端工况裝備可靠服役潤滑材料技術及工程應用》) participated by Shanghai Tian’an Bearing Co., Ltd., was awarded the First Prize of the 2025 Gansu Science and Technology Progress Award. The project “Batch Manufacturing a nd Application Demonstration of Hollow Stationary Blades for Steam Turbines Based on Novel LPBF Laser Additive Manufacturing Process” ( 《基于新型LPBF激光增材工藝的汽輪機空心靜葉批量製 造 及 應 用 示 範 》) submitted by Shanghai Electric was selected as a “Typical Application Scenario” case in the Ministry of Industry and Information Technology’s “Outstanding Typical Cases of Future Industry Innovation and Development (First Batch)” (《未來産業創新發展優秀 典型案例（第一批）》). 4. Focusing on Management Efficiency Enhancement to Strengthen the Foundation for Development We have endeavored to enhance the quality and efficiency of management and control, deepened management reform, refined the management and control model, optimized resource allocation, and improved the Group’s overall effectiveness. During the Rep orting Period, the Company’s treasury system was fully put into operation, achieving closed-loop online management across the entire process of core businesses including account management, financing and settlement, thereby building a solid safeguard for t he Group’s secure fund operations and providing strong support for the Group’s digital and intelligent financial transformation and penetrating control. We were approved to access the supply chain note platform of the Shanghai Commercial Paper Exchange, be coming one of the first Shanghai state -owned enterprises to obtain such access qualification. This enables us to provide suppliers with services such as online price comparison and instant note discounting, delivering tangible cost reductions and efficiency improvements for upstream and downstream enterprises in the industrial chain, while significantly enhancing the centralized management and coordinated utilization capabilities of notes, and further advancing the Group’s treasury system development. We ha ve steadily and prudently advanced internationalization, establishing a “1+N+6” international business management architecture to coordinate global footprint expansion and localized operations, and enhance global resource allocation capabilities and manage ment and control levels. During the Reporting Period, we set up regional headquarters in Central Asia, Southeast Asia, and the Middle East and North Africa, driving the Group’s global business from decentralized presence towards collaborative integration, and ushering in a new stage of institutionalized, localized and in-depth development. We have advanced digital transformation by comprehensively strengthening digital management and control, building a unified digital platform to address complex management and control requirements across multiple tiers and business formats, and implementing a tiered, categorized, and precisely delegated management model to enable group -wide visibility, top -down linkage, and intelligent decision-making. We have made all-out efforts to drive digital transformation and upgrading, adhering to the principles of planning -led, phased implementation and dynamic optimization, accelerating enterprise digital transformation and upgrading, so as to promote cost reduction and efficiency improvement, and further realize flexible manufacturing. We have also made comprehensive arrangements for digital business, further optimizing industrial layout, reinforcing service and support capabilities, steadily consolidating and enhancing smart manufacturing and equipment, smart energy, and smart management, control and operation businesses, while accelerating the cultivation of incremental digital businesses and building independent core competencies. We have consistently adhered to the principle of "talent as the primary resource", thoroughly implemented the strategy of strengthening the enterprise with talent in the new era, and continuously deepened the reform of talent development systems and mechanisms. Guided by market-oriented reforms, we have upheld the clear principle of "recognizing achievement through
Page 26
- 26 - action and promoting based on performance", cultivating a composite talent team with international vision. We deepened the reform of the "three-capability mechanism" to stimulate the intrinsic motivation of employees, and fostered more industrial leaders, scientific and technological talents, and highly skilled craftsmen. We innovated incentive and constraint mechanisms driven by value creation and established a more market -competitive compensation allocation system. We improved the training and evaluation mechanism for core talents, launched the "Excellence E+" talent development program to accelerate the building of a high-quality talent team. Focusing on key core technologies, we established a training system for outstanding engineers featuring in-depth integration of "industry, university, research and application", piloted the "selecting the best candidates via open competition（揭榜掛帥）" for R&D mechanism, and innovated the profit-sharing mechanism for the commercialization of scientific and technological achievements. In addition, we organized training programs for chief technicians, model workers and skilled craftsmen, so as to accelerate the cultivation of versatile and highly skilled talents that meet the development needs of the high-end equipment manufacturing industry. OUTLOOK Looking ahead to the second half of 2026, we will take the Group’s 15th Five-Year Strategic Plan as our guide. With “high -quality development” as the theme, we will adhere to the principle of “serving national strategies, aligning closely with national needs”. Taking “full and rigorous Party self-governance” as the fundamental guarantee and with “comprehensively deepening reform” as the focus, we will concentrate on three new breakthroughs in efficient collaboration, internationalization and digitalization. We will firmly grasp the work approach of “serving national strategies, aligning closely with national needs, developing new quality productive forces, building core competitiveness, and achieving high -quality development”, uphold the development direction of “high -endization, intelligence, greenization and integration”, so as to open a new chapter of the high-quality development during the 15th Five-Year Plan period. SIGNIFICANT EVENTS Amendments to the Articles of Association and Its Appendices In order to fully implement laws, regulations and regulatory requirements, and further enhance the level of corporate governance, according to the provisions of the Company Law of the People’s Republic of China, the Guidelines for the Articles of Association of Listed Companies, and other relevant laws, regulations and normative documents, and having regard to the Company’s actual circumstances in connection with its implementation of the repurchase of A shares through centralized price bidding for the purpose of reducing its registered capital, the Company proposed to make amendments to the Articles of Association and its appendices, namely the Rules of Procedure for the General Meeting and the Rules of Procedure for the Board of Directors. On 29 April 2026, t he Board considered and approved, among other things, the resolution on the proposed amendments to the Articles of Association and its appendices. The above proposal was approved at the 2025 annual general meeting, 2026 first A share class meeting and 2026 first H share class meeting of the Company held on 5 June 2026. The latest version of the Articles of Association has been published on the websites of the Company and The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”). Connected Transaction of Disposal of Equity Interest in Five Project Companies
Page 27
- 27 - On 29 April 2026, the Board considered and approved the relevant resolution, pursuant to which Shanghai Electric (Anhui) Investment Co., Ltd. * (上海電氣（安徽）投資有限公司), a wholly- owned subsidiary of the Company, was approved to transfer its 100% equity interest in Shanghai Electric (Wuhe) Biomass Thermal Power Co., Ltd.* (上海電氣（五河）生物質熱電有限公司), Shanghai Electric (Tianchang) Biomass Power Generation Co., Ltd.* (上海電氣（天長）生物質 發電有限公司 ), Shanghai Electric (Mengcheng) Biomass Power Generation Co., Ltd.* ( 上海 電氣（蒙城）生物質發電有限公司) and Shanghai Electric (Suixi) Biomass Power Generation Co., Ltd.* ( 上海電氣（濉溪）生物質發電有限公司) to SEGC by way of non -public transfer agreement, and Shanghai Electric Investment Co., Ltd.* ( 上海電氣投資有限公司), a wholly - owned subsidiary of the Company, was approved to transfer its 100% equity interest in Shanghai Electric Xiangshui Biomass Power Generation Co., Ltd.* (上海電氣響水生物質發電有限公司) to SEGC by way of non -public transfer agreement. The total consideration a mounted to RMB426.91 million. Upon completion of the equity transfers, the five project companies ceased to be subsidiaries of the Company. The Group no longer holds any interest in the five project companies, and their financial results are no longer consolidated into the Group’s accounts. As at the date of this announcement, the above transaction has been completed. Connected Transaction of Acquisition of 58.02% of the Shares in Anwha Automation On 17 June 2026, the Board considered and approved the rel evant resolution, approving Yinghe Technology, a non-wholly owned subsidiary of the Company, to acquire 100% of the shares in Anwha (Shanghai) Automation Engineering Co., Ltd. * (昂華（上海）自動化工程股份有限公 司) ( "Anwha Automation ") by way of non -public agreement transf er. The total transaction amount is RMB204.3484 million. Among the foregoing, Yinghe Technology was approved to acquire 58.02% of the shares in Anwha Automation held by SEGC for a consideration of RMB118.5629 million, and to acquire the remaining 41.98% of the shares from eight shareholders other than SEGC (all being independent third parties of the Company under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Hong Kong Listing Rules”)) for an aggregate consideration of approximately RMB85.7855 million. Upon completion of the share transfer, Yinghe Technology will hold 100% of the shares of Anwha Automation. As at the date of this announcement, the above transaction is still in progress. Material Arbitrations in Relation to the Sasan Project in India In June 2008, the Company and Reliance Infra Projects (UK) Limited ("Reliance UK") entered into the Equipment Supply and Service Contract (the " Contract") with a contracted amount of USD1,311,000,000, pursuant to which, the Company (as the supplier) shall provide major equipment and relevant services for the project of Sasan 6*660MW Ultra Large Supercritical Coal-fired Power Station in India, Reliance Infrastructure Limited ("Reliance") issued the letter of guarantee for the payment obligations of Reliance UK under the Contract, and Sasan Power Limited (the " Sasan Power") owned and operated the power station. Since Reliance UK still failed to pay for the equipment purchased and other relevant p ayables to the Company after the project commenced commercial operation for several years, the Company filed an arbitration application with the Singapore International Arbitration Centre ("SIAC") in December 2019, requiring Reliance to pay for equipment purchased and other relevant payables in the amount of at least USD135,320,728.42 to the Company as agreed in the letter of guarantee issued by Reliance for Reliance UK (the "First Arbitration"). In December 2021, the Company received a notice of acceptance for an arbitration brought by Reliance UK against the Company issued by the SIAC, pursuant to which Reliance UK requested the Company to compensate it for losses of approximately USD388.75 million related to
Page 28
- 28 - the contract (the "Second Arbitration"). Reliance UK also believed that the letter of performance guarantee was unreasonably released and requested the Company to issue a letter of performance guarantee in the amount of approximately USD120.175 million to guarantee its claims. In December 2022, the Company received the award issued by the SIAC for the First Arbitration, which ordered Reliance to pay the sum of USD146,309,239.27 to the Company . In May 2023, the Company received a notice from the Singapore International Commercial Court (the "SICC") that Reliance has filed an application to the SICC seeking to have the award for the First Arbitration by the SIAC set aside. The application was accepted by the SICC. In January 2024, the Company received a notice from the SICC that the SICC had entered a judgment, rejecting Reliance's application to set aside the award for the First Arbitration in its entirety and also ordering Reliance to pay to the Company the litigation costs related to this case. In June 2026, the Company received the award issued by the SIAC for the Second Arbitration, which dismissed all substantive claims brought by Oxagon Enterprises Limited (formerly Reliance UK). The dismissal carries preclusive effect, and the Company prevailed in the case. MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS The Company has adopted the code provisions set out in the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") contained in Appendix C3 to the Hong Kong Listing Rules in relation to dealings in the shares of the Company by the directors of the Company , and all directors of the Company confirmed that they have complied with the requirements set out in the Model Code during the period from 1 January 2026 to 30 June 2026. The Company is not aware of any breach of the Model Code by any of its employees. CORPORATE GOVERNANCE FUNCTIONS During the Reporting Period, the Board of the Company performed the following functions: to formulate and review the Company's policies an d practices on corporate governance and make recommendations; to review and monitor the training and continuous professional development of directors and senior management; to review and monitor the Company's policies and practices on compliance with legal and regulatory requirements; to develop, review and monitor the ethics and compliance of employees and directors; and to review the Company's compliance with the code provisions and disclosure in the Corporate Governance Report. During the Reporting Peri od, the Board was of the view that the Company complied with all applicable provisions of the Corporate Governance Code contained in Appendix C1 to the Hong Kong Listing Rules (the "Code"), except for the deviation from requirements of code provision F.1.3. Pursuant to code provision F.1.3, the chairman of the board should attend the annual general meeting. As Dr. Wu Lei, the chairman of the Board and the executive director of the Company, was unable to attend the 2025 annual general meeting due to business arrangements, Mr. WANG Chenhao, an executive director of the Company, chaired and presided over the 2025 annual general meeting. REVIEW OF INTERIM RESULTS BY AUDIT COMMITTEE The Audit Committee is responsible for the communication, supervision and review of the Company's internal and external audit work and providing professional advice to the Board. The Audit Committee has reviewed and confirmed the Group’s interim results and interim financial report
Page 29
- 29 - for the six months ended 30 June 2026 and has raised no objection to the accounting policies and practices adopted by the Group. PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S SECURITIES During the Reporting Period, no purchase, sale or redemption of the Company's listed securities (including sale of treasury shares (as defined in the Hong Kong Listing Rules)) have been made by the Company or any of its subsidiaries. As at the end of the Reporting Period, the Company did not hold any treasury shares (including any treasury shares held or deposited in the Hong Kong CCASS). INTERIM DIVIDEND The Board did not propose to declare an interim dividend in respect of the Reporting Period. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD During the period from the end of the Reporting Period to the date of this announcement , no significant events have occurred with respect to the Group. DISCLOSURE OF INFORMATION ON HONG KONG STOCK EXCHANGE'S WEBSITE This results announcement will be published on the Company's website (http://www.shanghai - electric.com) and the Hong Kong Stock Exchange's website (http://www.hkexnews.hk). The 2026 interim report will be despatched to the shareholders of the Company who have already provided instructions indicating their preference to receive hard copies and will be made available on the websites of the Company and the Hong Kong Stock Exchange in due course. By order of the Board Shanghai Electric Group Company Limited WU Lei Chairman of the Board Shanghai, the PRC, 28 August 2026 As at the date of this announcement, the executive directors of the Company are Dr. WU Lei, Mr. ZHU Zhaokai and Mr. WANG Chenhao; the non -executive directors of the Company are Ms. ZHU Yun, Mr. ZHU Jiaqi and Mr. CAO Qingwei; and the independent non-executive directors of the Company are Dr. LIU Yunhong, Dr. DU Zhaohui and Dr. CHEN Xinyuan.
Page 30
- 30 - * For identification purposes only