Hunan Hualing Cable Co., Ltd. 2025 Annual Report Summary

I. Important Notice

This annual report summary is based on the full text of the annual report. To fully understand the Company’s operating results, financial condition, and future development plans, investors should read the full text of the annual report carefully in the media designated by the CSRC.

All directors have attended the board of directors meeting deliberating this report.

Non-standard audit opinion notice

□ Applicable √ Not applicable

Profit distribution proposal for the reporting period or proposal for capitalization of capital reserve to share capital considered by the board of directors

√ Applicable □ Not applicable

Whether to capitalize capital reserve into share capital

□ Yes √ No

The profit distribution proposal approved by this board of directors is as follows: based on 638,350,432 as the base, cash dividends of RMB 0.65 per 10 shares to all shareholders (including tax), bonus shares of 0 shares (including tax), and no capitalization of capital reserve into share capital.

Preferred share profit distribution proposal for the reporting period approved by the board of directors

□ Applicable □ Not applicable

II. Basic Information on the Company

1. Company Profile

2. Description of the Company’s Main Business or Products During the Reporting Period

(1) Industry conditions in which the Company operates during the reporting period

As one of the largest supporting industries in the national economy, the wire and cable industry serves as a foundation for various sectors of the national economy. It is known as the “blood vessels” and “nerves” of the national economy. The current industry scale has reached one trillion yuan. The industry’s products are widely used in many fields such as power, rail transit, metallurgy, mining, new energy, aerospace, integrated equipment, construction, engineering equipment, data communications, and more.

Compared with developed countries in Europe, the United States, and Japan, China’s wire and cable market has many companies and is mainly dominated by small and medium-sized enterprises, resulting in relatively low industry concentration and intense competition, with severe product homogenization. At present, there are more than 4,000 wire and cable enterprises above designated size.

From the perspective of the product composition of wire and cable, general products have lower technical content, leading to fierce competition. In contrast, the customized demand for special-purpose cables in subdivided segments is abundant, production technology requirements are higher, profit margins are larger, and it belongs to the “blue ocean market” in the cable industry. Currently, in some key areas of China’s wire and cable industry, the reliance on imported technologies and products remains very high, and domestic demand for special-purpose cables in subdivided segments is gradually increasing.

Based on the development history of the wire and cable industry in developed countries in Europe, the United States, and Japan, in the future, China’s wire and cable industry will accelerate its pace of mergers and acquisitions and restructuring. Market share will gradually shift toward large-scale manufacturing enterprises with brand, quality, and technological advantages, and industry concentration will gradually increase.

(2) The Company’s main business, main products, and operating model

1. Main products of the Company

The Company is mainly engaged in the research, production, and sales of wires and cables. It is one of the leading special-purpose cable manufacturers in China. The Company’s main products include special cables, power cables, cables for electrical equipment, bare conductors and wire harnesses, and more. The Company adheres to the business philosophy and development concept of “building the business with premium products and winning with high-end capabilities.” It continuously expands the special cable segment market to provide specialized, high-quality special cable products for fields such as aerospace and integrated equipment, data communications, robotics, rail transit, metallurgy and mines, new energy, marine engineering, and engineering equipment.

2. Main products and their applications

The Company’s main products are divided into special cables, power cables, cables for electrical equipment, bare conductors and wire harnesses, and more. The details are as follows:

2.1 Special cables

Special cables refer to cables that adopt special structural designs and processing technologies, meeting the functional requirements of special environments. Depending on the specific application fields and model specifications, the Company’s special cables can be categorized into product series such as cables for aerospace and integrated equipment, data communication cables, robotics cables, rail transit cables, mining, new energy-specific weather-resistant flexible cables, high fire-retardant and fire-resistant cables, cables for special engineering equipment, and others. The Company’s main special cable products are as follows:

2.2 Power cables

Power cables are cable products used to transmit and distribute high-power electrical energy in the main trunk lines of power systems. The Company’s power cables mainly include low-voltage cables with rated voltage below 1.8/3KV, medium-voltage cables with rated voltage from 3.6/6KV to 26/35KV, and 1KV and 10KV overhead insulated cables. The conductor materials are mainly copper, aluminum, aluminum alloy, etc., and insulation materials are mainly polyvinyl chloride and cross-linked polyethylene. The Company’s main power cable products are as follows:

2.3 Cables for electrical equipment

Cables for electrical equipment refer to cables used as power connection lines for directly transmitting electrical energy from the distribution point in the power system to various electrical equipment, as well as wiring lines for electrical installations and cables for transmitting control signals. The Company’s cables for electrical equipment mainly include home wiring cables and plastic flexible cables, rubber-sheathed flexible wires, and control cables. Conductive materials are copper cores or aluminum cores, and insulating materials are polyvinyl chloride, polyethylene, and rubber. They are mainly suitable for power connection and control signal transmission for electrical equipment with rated voltage below 450/750V. The Company’s main cables for electrical equipment are as follows:

2.4 Bare conductors

Bare conductors mainly refer to finished conductor wires without an insulating layer and a jacket layer. The Company’s main bare conductors include overhead stranded cables, copper stranded cables, and anti-wave sleeves. Overhead stranded cables are used for long-distance transmission, large spans, and ultra-high-voltage power transmission. Copper stranded cables and anti-wave sleeves are mainly used for lightning protection grounding grids, tension conductors, power station transmission busbars, electrical connection wires, and the like. The Company’s main bare conductor products are as follows:

(3) Company operating model

The Company’s wire and cable products come in many types and specifications. To meet different customers’ different needs, the Company’s operating model places emphasis differently. For customers with relatively concentrated procurement in key fields such as aerospace and integrated equipment, mines, power and new energy, metallurgy, and rail transit, the Company generally adopts a direct sales or agency model; while for civilian fields such as construction and home decoration where user groups are relatively dispersed, it mainly uses a distribution (dealer) model. Overall, the Company’s operating model is primarily direct sales, with agency and distribution as supplements.

(4) Industry position of the Company

The Company is one of the leading special-purpose cable manufacturers in China. It is a member unit of the National Wire and Cable Standardization Technical Committee, and has clear competitiveness in special cable application fields such as aerospace and integrated equipment, metallurgy and mines, power and new energy, rail transit, and special machinery. According to the joint evaluation by the China Cable Enterprises Competitiveness Research project team composed of the Wire and Cable Branch of the China Electrical Equipment Industry Association and the Cable Information Research Institute, the Company ranks among the top 30 on the “Top 100 China Cable Industry” list. For many consecutive years, it has been awarded the “Top Ten Brands of China Special Cables.” In February 2023, the Company was selected as a demonstration enterprise for creating world-class “specialized, refined, distinctive and innovative” enterprises, as announced by the State-owned Assets Supervision and Administration Commission of the State Council. The Company’s industry position and competitiveness continue to improve. In recent years, some key projects in various application fields in which the Company has participated are as follows:

3. Main accounting data and financial indicators

(1) Main accounting data and financial indicators for the past three years

Whether the Company needs to make retrospective adjustments or restate accounting data for previous years

□ Yes √ No

Unit: RMB

(2) Main accounting data by quarter

Unit: RMB

Whether the above financial indicators or the sum thereof have significant differences from the relevant financial indicators already disclosed in the Company’s quarterly reports and semi-annual reports

□ Yes √ No

4. Share capital and shareholder information

(1) Number of ordinary shareholders and the number of preferred shareholders whose voting rights were restored, and table showing shareholding of the top 10 shareholders

Unit: shares

Shareholding of shareholders with more than 5%, and shareholding of the top 10 shareholders and the top 10 shareholders of tradable shares without restrictions participating in securities lending through the securities lending/borrowing service

□ Applicable √ Not applicable

Changes among the top 10 shareholders and the top 10 shareholders of tradable shares without restrictions caused by reasons such as securities lending/redeeming through the securities lending/borrowing service compared with the prior period

□ Applicable √ Not applicable

(2) Total number of preferred shareholders of the Company and table of shareholding of the top 10 preferred shareholders

□ Applicable √ Not applicable

There are no preferred shareholders in the Company’s reporting period.

(3) Disclose the Company’s property rights and control relationship between the Company and the actual controller in the form of a block diagram

5. Bonds existing as of the date of approval and issuance of the annual report

□ Applicable √ Not applicable

III. Important Matters

None

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