HARBIN BOSHI AUTOMATION CO., LTD. Semi-Annual Report 2024

（Abstract）Ⅰ. Important Notes

This Abstract is extracted from Semi-Annual Report 2024. In order to have a full understanding of theoperating results, financial condition and future development planning of the Company, investors aresuggested to read the full report carefully on the media designated by the China Securities RegulatoryCommission (the “CSRC”). The Company’s 2024 Semi-Annual Report is prepared and published in Chineseversion, and the English version is for reference only. Should there be any inconsistency between theChinese version and English version, the Chinese version shall prevail.

All directors attended the Board Meeting in person for reviewing of this Semi-Annual Report.

Indicate by check mark if independent auditor issues non-standard unqualified opinion.

□Applicable √Not applicable

Indicate by check mark if there is a pre-arranged plan of profit distribution or transferring capital reserve intocommon stock for the report period which has been reviewed by the Board of Directors.

□Applicable √Not applicable

The Company does not plan to issue cash or equity dividends, nor to convert equity reserve into share capitalof the Company in the mid 2024.

Indicate by check mark if preplan for preferred stocks profit distribution to shareholders for the report periodwhich has been reviewed and approved by the Board of Directors.

□Applicable √Not applicable

II. Basic Situation of the Company

1. Company Profile

In order to speed up the planning and implementation of the construction function of the Company’sregional headquarters and provide convenience for value investment, the Company has set up a “Securitiesand Investment Affairs Office”, at No.18, Hongxin Road, Huaqiao Town, Kunshan, Suzhou, JiangsuProvince. Welcome securities investors to inquire about the further information.

2. Key Financial Data and Financial Indicators

Does the Company need to make retroactive adjustment or restatement of the accounting data of the previousyear.

□Yes √No

3. Number of Shareholders and Shareholding

Unit: Share

Shareholders holding more than 5%, the top 10 shareholders and the top 10 shareholders of unlimitedtradable shares participate in the refinancing business to lend shares.

□Applicable √Not applicable

The top 10 shareholders and the top 10 shareholders of unlimited outstanding shares have changed from theprevious period due to refinancing lending/restitution reasons.

□Applicable √Not applicable

4. Change of the controlling shareholder or the actual controller

Change of the controlling shareholder in the reporting period

□Applicable √Not applicable

The controlling shareholder did not change in the reporting period.

Change of the actual controller in the reporting period

□Applicable √Not applicable

The actual controller did not change in the reporting period.

5. Number of preference shareholders and shareholdings of top 10 of them

□Applicable √Not applicable

The Company had no preference shareholders in the reporting period.

6. Corporate bonds that existed on the date when this Report was authorized for issue

(1) Bond profile

ConvertibleCorporate Bonds of

(2) Financial indicators at the end of reporting period.

(3) Top 10 convertible bond holders

III. Other Significant Events

The Company held the sixth meeting of the fifth Board of Directors on November 1

st

, 2023, reviewed andpassed the Proposal on the Plan to Buy back Part of the Company’s Shares. As of March 15

th

, 2024, theCompany confirmed that this share buy-back plan has been completed, and the Company has done 7,203,019shares buy-back of the Company in total, accounting for 0.70% of the total share capital, with the highesttransaction price of RMB 17.88 per share and the lowest transaction price of RMB 10.58 per share. The totaltransaction amount is RMB 100,125,282.85 (excluding transaction fees).

IV. Operating Performance Discussion and Analysis

1. Company Main Businesses during the Reporting Period

(1) Industry overview during reporting period

①Industry overview

According to the proportion of revenue during the reporting period, the Company’s main businesses in itsindustry are shown in the following figure：

The core growth businesses of the Company are intelligent manufacturing equipment and industrial servicesrooted in intelligent manufacturing equipment, which belong to high-end equipment manufacturing industryand modern service industry respectively. Moreover, they are all key industrial directions supported andencouraged by the State. From the perspective of revenue composition, the revenue of two core growingbusinesses, intelligent manufacturing equipment and industrial services, account for 87% of total,environmental protection process and equipment accounted for 13%, which was supplemented beneficially tothe Company’s overall performance.

Intelligent Manufacturing Equipment：

“Manufacturing is the main body of the national economy, the foundation of building the country, theinstrument of rejuvenating the country and the foundation of strengthening the country.” Made in China2025 points out that “accelerating the integrated development of the new generation of informationtechnology and manufacturing technology and taking intelligent manufacturing are the main direction of thein-depth integration of informatization and industrialization.” In recent years, the state issued the 14

th

Five-Year Plan for Intelligent Manufacturing Development, the 14

th

Five-Year Plan for the Development ofRobot Industry, the 14

th

Five-Year Plan for In-depth Integration of IT Application and Industrialization, the

th

Five-Year Plan for the Development of Digital Economy, “Robot Plus” Application and ImplementationPlan, Implementation Opinions on Promoting Innovative Development of Future Industries, whichestablished the high-end equipment manufacturing industry in the “14

thFive-Year Plan” and 2035 long termgoals, promoted the layout of future industrial innovation and development, provided clear guidelines anddirections for accelerating the construction of a manufacturing power, a digital industry and a digital Chinaand promoted the development of China’s intelligent manufacturing and digital economy.

From the manufactory industry practice, large-scale Chinese manufacturing enterprises generally useautomated product equipment, however, a low percentage of them are digitized among them, not much datais shared among factories, and fewer intelligent technologies are used. The overall level of intelligentmanufacturing in China is still far away from the world’s advanced level. It is foreseeable that the demandfor intelligent manufacturing equipment and intelligent factory overall solutions in internal driving force ofleading manufacturing enterprise has long-term and continuous characteristics, with huge potential andwithout obvious periodicity.

The Company has been engaging in the field of intelligent equipment for a long time, with independentintellectual property rights of intelligent manufacturing equipment products, to help China’s manufacturingpromote quality and efficiency. Replacing imported equipment or industry-first applications to promote thetechnological progress of related industries with scientific and technological innovation. The Company’sintelligent manufacturing equipment are widely applied in petrochemical, sub-merged arc furnace, newenergy, grain, animal feeds, building materials, medicine, food, port, and many other industries, to providecustomers with efficient intelligent manufacturing equipment, and promote the application andimplementation of the overall smart factory solution. In recent years, the State actively advocates theimplementation of industrial digitalization strategies. The Company has accelerated the accumulationapplication of digital and intelligent technologies mastered. Now it has the designing and implementationcapability of digital workshops，intelligent factories and overall solutions in multiple product applicationfields. The Company’s technology and intelligent equipment are in the leading position in the applicationfield of domestic industry, no competitors in the same volume; In some fields, the Company products andtechnology applications are in the world leading level.

The Company implements differentiation competitive strategy (technology leadership). With theaccumulation and industrial application practice in the direction of automation, digital, intelligentmanufacturing, the Company responses and guilds the market demand actively with rich product line andintelligent manufacturing overall solution; In recent years, the Company’s intelligent manufacturingequipment business has achieved sustained good and rapid development in terms of product innovation,application fields, revenue scale and profit level, and has brought desirable returns to shareholders.

Industrial Service：

On March 16

th

, 2021, the National Development and Reform Commission, the Ministry of Science andTechnology, the Ministry of Industry and Information Technology and the like totaling thirteen departmentsjointly issued the Opinions on Accelerating the High-quality Development of the Manufacturing ServiceIndustry, pointing out, “manufacturing service industry is an important support for improving thecompetitiveness and comprehensive strength of manufacturing products.” Service-oriented manufacturing, asa new manufacturing mode and industrial form with the integrated development of manufacturing andservice, is an important measure to promote the integrated development of China’s industries and build amodern industrial system, as well as an important direction for the deep integration of advancedmanufacturing and modern service industries, also an important path to realize the transformation andupgrading of manufacturing and promote the high-quality development of manufacturing. Throughinnovation to optimize the form of production organization, operation management mode and businessdevelopment mode, manufacturing enterprises constantly increase the proportion of service factors in input

and output, transform from processing and assembly to “manufacturing + service”, from the mere sale ofproducts to the sale of “product + service”, these are conducive to extending and upgrading the value chain,increase total factor productivity, product added value and market share.

The production and operation management service of the Company’s for customers in intelligentmanufacturing equipment field includes integrated industrial services for process plant and equipment dailyoperation, repair, maintenance, finished products outbound & inbound, transfer, truck loading and so on. TheCompany’s professional services contribute customers to concentrate resources on core competitiveness,reduce costs and increase efficiency, and achieve high-quality development. The Company relays on theleading technology advantage, and continues to vigorously promote the strategy of product and serviceintegration over the years. The professional, economic, high-quality and efficient industrial service has beenrecognized and praised by customers. Based on the awards and encouragement of Company’s achievementsin “manufacturing + service”, the Company was identified as “Pilot Unit of Advanced Manufacturing andModern Service Industry” in August 2021 by the National Development and Reform Commission. InJanuary 2023, the Company was selected into the “The Fourth Batch of Service-oriented ManufacturingDemonstration List” of the General Office of the Ministry of Industry and Information Technology.

Over the years, based on the manufacturing industry, the Company’s industrial services achieved long-termsustained growth, the service network has covered all provinces, regions and municipalities in China exceptHong Kong, Macao, Taiwan and Xizang; the service scale and profitability are in the leading position in theindustry. The Company’s industrial services, on the one hand, will maintain a steady growth with the growthof product sales and equipment implement stock. On the other hand, this will actively develop the deepservice needs of customers, after the Company undertakes and implements new production and operationindustrial service projects, the service scale expansion is expected to accelerate.

During 2024 H1, The Company’s overall industrial services revenue reached 359 million, increase 9.97%year-on-year. The revenue of industrial services, an important source that constitutes the Company’s revenueand profit, has grown year after year, this will enhance the whole Company’s ability to resist risks.

Environmental Protection Process and Equipment:

“Clear water and green mountains are gold and silver mountains. A sound ecological environment is not onlynatural wealth, but also economic wealth, which is related to the potential and sustainability of economic andsocial development.” Harbin Boao Environmental Technology Co., Ltd, the holding subsidiary of theCompany, can collect and treat industrial waste sulfuric acid and sulfur-containing acid gases in chemicalproduction to produce high-purity sulfuric acid for recycling production, and to recycle and reuse the heatenergy released in the process to achieve energy saving, emission reduction, recycling, economic andenvironmental results.

During the reporting period, due to the completion of the project in execution, delivery and acceptance, andthe recognition of revenue, the proportion of environmental protection technology and equipment revenuehas been greatly improved, reaching 13%, but the gross margin the current period is relatively low,environmental protection process and equipment played a beneficial complementary role in the overallperformance of the Company.

②Industry policy impact

Intelligent manufacturing equipment, industrial services, and environmental protection process andequipment industries all are key industrial directions encouraged by the state and led by policies. In recentyears, the state has issued intensive industrial policies and industry plans related to intelligent manufacturing,robot and digital economy, leading the development of the industry, promoting large-scale equipmentrenewal, and the related field is facing major development opportunities. At the same time, the technologyaccumulation and technological innovation of high-end equipment manufacturing enterprises are constantlyimproved, with the promoting of national digital infrastructure construction, the project application andimplementation ability is becoming increasingly mature. From the Company’s long-term industrial practicein the field of intelligent equipment industry, equipment automation, digitalization and intelligentmanufacturing are in great demand for China’s manufacturing enterprises, and the field of intelligentmanufacturing equipment will continue to develop healthily. During the reporting period, the industrypolicies facing by the Company did not change significantly, please refer to Section Ⅲ: OperatingPerformance Discussion and Analysis，industry policy impact of 2023 Annual Report for details.

(2) Company Main Businesses during the Reporting Period

①Main products, services and application level

In the field of post-processing high-end equipment forpowder and granular materials in China it has obviousadvantages and a stable competitive position. In the fieldof post-processing high-end equipment for the newenergy field irregular polysilicon materials, the originalfirst set of applications has promoted the upgrade ofintelligent manufacturing in the industry.Complete product line, covering natural rubber andsynthetic rubber; It is the only supplier which canprovide complete large-scale systems worldwide.

Complete product line, covering natural rubber andsynthetic rubber; It is the only supplier which canprovide complete large-scale systems worldwide.

Overall Solution for Intelligent Manufacturing Equipment and Intelligent Factory

Overall Solution for Intelligent Manufacturing Equipment and Intelligent Factory

It is applied in the post-processing fields for thepowder, granular materials or irregular materials ofpetrochemical, new energy, grain, animal feeds,building materials, medicine, food, ports etc. (such ascrushing, screening, bagging, boxing and transportationof new energy field polysilicon reduced silicon rods,etc.), providing efficient automatic weighing, packagingand palletizing intelligent manufacturing andproduction equipment and overall solutions of smartfactories.

It is applied in the post-processing fields for thepowder, granular materials or irregular materials ofpetrochemical, new energy, grain, animal feeds,building materials, medicine, food, ports etc. (such ascrushing, screening, bagging, boxing and transportationof new energy field polysilicon reduced silicon rods,etc.), providing efficient automatic weighing, packagingand palletizing intelligent manufacturing andproduction equipment and overall solutions of smartfactories.

Post-processing Intelligent Manufacturing

Equipment for Solid Material

Post-processing Intelligent Manufacturing

Equipment for Solid Material

It is intelligent equipment and intelligent plant overallsolution, applied in production process of syntheticrubber and natural rubber and in the fields of productrefining process, dewatering and drying process(rubber washing, cleaning and impurity removal,dewatering, crushing and drying, etc.) and finishedproduct packaging process (weighing, baling,detecting, conveying, packaging and palletizing, etc.)

It is intelligent equipment and intelligent plant overallsolution, applied in production process of syntheticrubber and natural rubber and in the fields of productrefining process, dewatering and drying process(rubber washing, cleaning and impurity removal,dewatering, crushing and drying, etc.) and finishedproduct packaging process (weighing, baling,detecting, conveying, packaging and palletizing, etc.)

Robot Plus

Robot PlusPost-processing Intelligent Manufacturing

Equipment for Rubber

Post-processing Intelligent Manufacturing

Equipment for RubberIntelligent Logistics, Warehousing Systems

Intelligent Logistics, Warehousing Systems

(High temperature) Operation robot for submerged arcfurnace and serialized intelligent products, completesystem solutions are applied for high-risk workingenvironment as well as other special operation robotsand complete system solutions which can replacehigh-risk, harsh working conditions, and heavy manuallabor.

(High temperature) Operation robot for submerged arcfurnace and serialized intelligent products, completesystem solutions are applied for high-risk workingenvironment as well as other special operation robotsand complete system solutions which can replacehigh-risk, harsh working conditions, and heavy manuallabor.

Connecting solid material post-processing intelligentmanufacturing equipment with rubber post-processingintelligent manufacturing equipment to realizeintelligent identification, outbound and inboundwarehousing management, logistics transshipment,fully automatic vehicle loading, etc., which widely usedin many industries of national economy, to helpcustomers to build smart factory overall solutions.

Connecting solid material post-processing intelligentmanufacturing equipment with rubber post-processingintelligent manufacturing equipment to realizeintelligent identification, outbound and inboundwarehousing management, logistics transshipment,fully automatic vehicle loading, etc., which widely usedin many industries of national economy, to helpcustomers to build smart factory overall solutions.

(High temperature) Operation robot for sub-mergedarc furnace and its surrounding systems are in leadingposition worldwide in the field of calcium carbide;It is carrying out innovative implementation of theintelligent workshop project for the calcium carbide arcfurnace, committed to promoting the production offewer people, unmanned, safe, efficient andenvironmental”, and bringing the traditional industrialtechnology revolution with industry subversivetechnology.

(High temperature) Operation robot for sub-mergedarc furnace and its surrounding systems are in leadingposition worldwide in the field of calcium carbide;It is carrying out innovative implementation of theintelligent workshop project for the calcium carbide arcfurnace, committed to promoting the production offewer people, unmanned, safe, efficient andenvironmental”, and bringing the traditional industrialtechnology revolution with industry subversivetechnology.

Fully automatic loading machine has formed the firstmover advantage of the scale of application, themarket responded positively, the future demand inmany fields and industries has great potential

②Business mode

The business model of large-scale intelligent manufacturing equipment is summarized from sales, productionorganization, product delivery and acceptance, revenue recognition and other links, as shown in thefollowing figure:

Industrial Services

Based on intelligent manufacturing equipment, industrial services are mainly divided into integratedmanaged operation and maintenance services, equipment maintenance, maintenance, spare partssales and other operation and maintenance, after-sales industrial services and supplementary industrialservices for the application field of intelligent manufacturing equipment.

Based on intelligent manufacturing equipment, industrial services are mainly divided into integratedmanaged operation and maintenance services, equipment maintenance, maintenance, spare partssales and other operation and maintenance, after-sales industrial services and supplementary industrialservices for the application field of intelligent manufacturing equipment.

Adhering to the Company’s technological leadership in the field of intelligent equipment, leading service

capabilities and scale in the field

The content characteristics of the operation and maintenance aftermarket and complementary industrialservices business models are summarized in the figure below:

Industrial Services——Operation, Maintenance and After-sales Type Industrial Services

By participating in bidding or negotiating bids, the Company signs integrated service, equipment maintenanceservice agreements with customers (which may include FFS film rolls sales matching with production services),equipment maintenance, operation maintenance and the like to determine the contents and modes of services;For the performance obligations of the service contract performed within a certain period of time, the Companyshall recognize the revenue according to the performance progress within the period of time;The sales mode of spare parts is flexible (the Company initiates stocking or the customer initiates procurement),and the operating revenue is confirmed based on the actual delivery of the product and the time when therevenue confirmation conditions are met

By participating in bidding or negotiating bids, the Company signs integrated service, equipment maintenanceservice agreements with customers (which may include FFS film rolls sales matching with production services),equipment maintenance, operation maintenance and the like to determine the contents and modes of services;For the performance obligations of the service contract performed within a certain period of time, the Companyshall recognize the revenue according to the performance progress within the period of time;The sales mode of spare parts is flexible (the Company initiates stocking or the customer initiates procurement),and the operating revenue is confirmed based on the actual delivery of the product and the time when therevenue confirmation conditions are met

FFS Film roll production enterprise matchingwith industrial services (Nanjing Green NewMaterial Co., Ltd., Company’s holdingsubsidiary) separately sells FFS film rolls, plasticauxiliaries and the like apart from theCompany’s production and operation services;Other kinds with small revenue are not classifiedas material.Revenue recognition: Usually as per the contractsigned with customer, implement the contractand meet the revenue conditions, then confirmthe operating revenue.

FFS Film roll production enterprise matchingwith industrial services (Nanjing Green NewMaterial Co., Ltd., Company’s holdingsubsidiary) separately sells FFS film rolls, plasticauxiliaries and the like apart from theCompany’s production and operation services;Other kinds with small revenue are not classifiedas material.Revenue recognition: Usually as per the contractsigned with customer, implement the contractand meet the revenue conditions, then confirmthe operating revenue.

Industrial Services——Supplementary Industrial Services and Miscellaneous

The following environmental protection process equipment business is a useful complement to theCompany’s intelligent manufacturing equipment and industrial services, two of the Company’s core growthbusinesses.

Energy saving, emission reduction and environmental protection process

equipment field

Harbin Boao Environmental Technology Co., Ltd is currently mainly engaged in the design, production, andsales of energy-saving, emission-reduction and environmental protection process equipment which isrepresented by industrial waste acid regeneration process and equipment. Industrial waste acidregeneration technology and equipment collect and process industrial waste sulfuric acid andsulfur-containing acid gas which are produced in the customer’s chemical production to generatehigh-purity sulfuric acid for recycling production, and release heat energy for recycling and reusing,realizing the effects of energy saving and emission-reduction, recycling uses, economy and environmentprotection and help to achieve carbon peak and carbon neutral emission reduction targets.

Harbin Boao Environmental Technology Co., Ltd is currently mainly engaged in the design, production, andsales of energy-saving, emission-reduction and environmental protection process equipment which isrepresented by industrial waste acid regeneration process and equipment. Industrial waste acidregeneration technology and equipment collect and process industrial waste sulfuric acid andsulfur-containing acid gas which are produced in the customer’s chemical production to generatehigh-purity sulfuric acid for recycling production, and release heat energy for recycling and reusing,realizing the effects of energy saving and emission-reduction, recycling uses, economy and environmentprotection and help to achieve carbon peak and carbon neutral emission reduction targets.Realizing the effects of energy saving and emission-reduction, recycling uses, economy

and environment protection.

Realizing the effects of energy saving and emission-reduction, recycling uses, economy

and environment protection.

Industrial waste sulfuric acid,sulfur-containing acid gas

Industrial waste sulfuric acid,sulfur-containing acid gas

Collection → Catalysis → Heatexchange → Purification

Collection → Catalysis → Heatexchange → PurificationHigh-purity sulfuric acid used forrecycling production

(3)Key performance driving factors

The Company has long been committed to the innovation and development of intelligent manufacturingequipment in the field of product application of intelligent manufacturing equipment, to achieve thesubstitution of domestic equipment for imports and the independent and controllable core technology ofmajor equipment. Through the implementation of differentiated competition strategy of technology leading,the Company continues to open up new markets and lead new demands. The Company’s long-termaccumulation of core technical capabilities formed deep industrial application practical experience, theefficient technology development path, “point → line → whole”, as well as the main R&D of high technicalbarriers positioning, constitute the Company’s sustainable and healthy development of the main internaldriving factors. The medium and long-term strategic plans, China Intelligent Manufacturing 2025 and 2035etc., the intensive introduction of industrial promotion policies such as intelligent manufacturing, robotics,and digital economy, as well as the internal demand for automation, digitalization, and intelligentmanufacturing, constitute the external motivation for the high-quality development of the Company.

In recent years, the Company achieved outstanding results in technology leadership strategy, large systemcomplete strategy, product service integration strategy. In the application field of the Company’s products,the continuous improvement of the Company’s overall solution capability of intelligent manufacturing, theimplementation of smart factories, and the collaborative contribution of “intelligent equipment” + “industrialservices” have consolidated the Company’s core competitive strength and achieved good and rapiddevelopment of business performance. The main business that is highly compatible with the developmentdirection of China’s intelligent manufacturing will continue to contribute to the growth momentum of theCompany.

2.Core Competitiveness Analysis

As a technology innovation enterprise, the Company adheres to a differentiated competitive strategy ofleading technology, and relies on a deep understanding of China’s industrial automation field and long-term

practical experience in industrial applications to maintain a competitive position in the field in which it isengaged over time. The Company’s intelligent manufacturing equipment and industrial service businessesare effectively synergized and optimally linked, and environmental protection process equipment to theCompany’s overall performance constitutes a beneficial supplement. In recent years, the business scale hasgrown rapidly, and profitability has been greatly improved. With the steady improvement of the Company’sdigitalization and intelligence in the direction of intelligent manufacturing equipment products, and theexpansion of product application capabilities in intelligent manufacturing overall solutions and smartfactories, the comprehensive competitiveness has been steadily enhanced.

(1) Industry status

The Company has a solid competitive advantage in the core growth business areas of intelligentmanufacturing equipment and industrial services, and its main product, technology and application scalehave been playing a leading role for a long time in the domestic product application field, and has won anumber of industry awards.

(2) Leading competitiveness of products and technologies

Innovation is the source power to lead the development of technology enterprise, and technology-leading isan important core competitiveness of the Company. Facing the needs of the industry, the Company hasincreased investment in R&D, grasped new opportunities, expanded new fields, and continuously improvedthe product technology innovation ability and application ability. The technological leadership advantagecontinues to enhance and be a competitive position in the industry.

From the perspective of intelligent manufacturing equipment product line, the Company’s intelligentequipment has advantageous technical features of accuracy and high operational reliability suitable for thecustomer production environment with high efficiency, safety and precise production requirements. In thedomestic product application field, products and technology are at domestic leading level and internationaladvanced level, among them, partial of the product applications are in the worldwide leading position.

From the perspective of the overall solution of intelligent manufacturing, The Company applies artificialintelligence technologies such as machine vision recognition, deep learning, and robot control algorithms toinnovative products in multiple categories, to create digital and intelligent production scenarios forcustomers, which realizes the overall solution of solid materials post-processing and sub-merged arc furnacesmelting products intelligent workshop etc., help customers realize the digital and intelligent transformationand realize intelligent manufacturing.

(3) Underlying technology accumulation and application platform technology to enhance thecompetitiveness.

Mastering the underlying technology, algorithm and application platform technology can truly realize theautonomy and control of the core technology, and continuous promotion is the key technological path for theCompany to implement the differentiated competition strategy of the Company’s technology leadership andenhance the core competitiveness. Taking the accumulation and development and application of theCompany’s technology in the field of robot plus as an example, mastering these capabilities can rapidlydevelop robot products of different models and different functions according to the needs of the industry,which is the core technology that the company must master to implement digital workshops and smartfactories and realize industrial digitalization.

Legend：Development platform for mobile robot system based on autonomous navigation

Note: This section is schematic diagram, some photos and blurred images, under the premise of technicalconfidentiality, are used to enhance investors’ understanding of relevant applications, the following isomitted.

Legend：Motion control system

Legend：R&D platform based on artificial intelligence

Legend：Intelligent inspection and digital vision technology

(4) Performance-driven dual engines of two core growth businesses, “intelligent equipment” +“industrial service”.

The Company integrates technology leadership in intelligent equipment and advantages of scale in productapplications with industrial service closely, actively promotes the strategy of products and service integrationand service business has sustained long-term growth. The Company’s professional, high-quality, efficientand advanced industrial service model is a win-win choice for customers’ continuous, stable and efficientproduction intelligent equipment and industrial services promote each other, interact positively and developtogether. During 2024 H1, the Company’s industrial services revenue increased 9.97% year-on-year,reaching RMB 359 million, and continued to maintain steady growth; “intelligent equipment” + “industrialservices” are the Company’s two core growth business, constituting the double engine driving theCompany’s performance.

Legend: The positive interaction between intelligent equipment and industrial service

(5) “Point → Line → Whole”, the efficient R&D pathway.

Throughout the Company’s technology, product development and industrialization process, the Companyenters new industries and new fields usually with key single unit equipment (“points”); after breakthrough insolving the long-term constraints of industrial development pain points, quickly form an automatedproduction line (“line”); With the accumulation of technology and the in-depth understanding of the industry,the Company forms the ability to develop a total solution (“whole”) for intelligent manufacturing in turn.This process of technological path from “point → line → whole” helps the Company to concentrate technicaland financial resources, reduce product development risks, improve the efficiency of R&D investmentoutputs, open the ceiling of growth with new products, new fields, new applications, new markets, andcomprehensively enhance the Company’s core competitiveness.

Single unit sales (“point”), it is inevitable to face large competition, small the project potential contract,limited market space; The complete equipment sales (“line”), the competitive environment improves, thecompetitive pressure decreases, the market space increases, and the potential contract amount is enlarged;The overall solution of intelligent manufacturing (“whole”), limited competitors, strong competitiveness,market space and potential contract amount is expected to expand for several times.

Take the (high temperature) operation robot for sub-merged arc furnace as an example, the urgent demandfor safety production and replacing labors for traditional calcium carbide sub-merged arc furnace industry,based on the industrial robot technology, the Company successfully developed and applied (high temperature)sub-merged arc furnace operation robot which replaces manual work in dangerous and harsh environmentsfor calcium carbide which has epoch-making significance to traditional production (“point”), andsuccessively developed ramming robot for calcium carbide, patrolling robot, intelligent pot transfertechnology and other key production system (“line”), until forming science and technology innovation abilityof an intelligent workshop overall solution that subverts the traditional production operations of the industry(“whole”), realizing few men, unmanned factories and intelligent manufacturing.

(6) Based on the technological breakthroughs and accumulation of technology in a certain field,cross-industry “re-development” and “re-application” accelerate the Company’s core competitiveness.

Based on the technological breakthrough and technology accumulation in the direction of special operationrobots in calcium carbide high-temperature operation environment, the Company has carried out horizontalredevelopment for high temperature furnace operation environments of multiple submerged arc furnace, suchas ferrosilicon, silicon manganese, industrial silicon, etc., also has achieved stage-by-stage application resultsand has signed orders for the products one after another. In the future, the Company may redevelop andreapply the technology formed in the overall solution of the intelligent factory of other calcium carbidesubmerged arc furnace to the field of submerged arc furnace mentioned above, accelerate the enhancement ofthe Company’s core competitiveness.

Legend：The product atlas of special operation robot in high temperature environment

(7) Smart workshops, smart factories, and overall solutions further enhance the Company’scompetitive advantages.

The Company applies intelligent technologies such as visual recognition, deep learning, robot controlalgorithm, and expert control strategy, combined with industrial Internet communication technology, to theoverall solution of smart factories, in order to achieve the minimum number of people and unmannedworkshops, and promote the upgrading of intelligent manufacturing industry in related industries. Customersrelying on intelligent production decision-making management, achieve safe, efficient and preciseproduction.

The after-treatment intelligent workshop project of calcium carbide finished products delivered from theCompany to customers has realized the replacement of manual work under dangerous, harsh and heavyworking conditions with high-tech products, and subverted the traditional process, promote the change ofproduction methods, improve the safety of workers and well-being, is of great significance to the calciumcarbide industry, it is an innovative application that overturns the traditional way of craftsmanship; Secondly,the overall market space of the smart factory theoretically expected to form several times, ten times themarket potential of the original high-temperature furnace operation robot. “Whole” which is the ability ofthe overall solution of the smart factory determines that the Company is in an advantageous position in thefuture market competition.

Legend：Calcium carbide production intelligent workshop to achieve few people, unmanned production operations

(8) Brand competitiveness

The Company builds brand with quality, seeks progress with technology, and wins trust with service.Through high-quality products and efficient services, we strive to realize production automation, digitizationand intelligent manufacturing for customers. The Company’s brand enjoys a constant leading in popularity,high reputation and customer loyalty in the main domestic product application fields. The Company pursuesexcellence, leads the development of intelligent manufacturing equipment in the application industry andbuilds up a stable, cooperative and win-win customer base for a long time. High-quality customer resourcesand huge potential demand for intelligent manufacturing equipment is the foundation and fertile soil of theCompany’s sustainable and rapid development.

(9) Achievements in intellectual property, proprietary technology and software copyright.

During the reporting period, the Company obtained 33 patents approved by the State Intellectual PropertyOffice, including 13 invention patents and 20 utility model patents; 6 software copyrights are approved bythe National Copyright Administration. In addition to patent technology, the Company has a considerableamount of core technical know-how that exists in the form of proprietary technology by relying onconfidentiality measures. The patents, proprietary technology and software copyright owned and mastered bythe Company is the Company’s significant core competitiveness. (Note: The amount of intellectual propertyacquired during the reporting period may have a slight deviation due to the limitation of statistical timepoints, and is only for investors’ trend reference.)

(10) Social and economic benefits

The transformation of traditional industries with high technology is the responsibility and mission given totechnological innovation enterprises by the era. The Company’s overall solution of intelligent manufacturingin the field of calcium carbide submerged arc furnace can be widely used in intelligent manufacturingequipment such as automatic loading logistics system in many industries, have transformative impact onreplacing manual operations in high-risk or heavy manual working conditions to achieve safe efficient andprecise production. Meanwhile, standardized intelligent equipment operations improve the capacityutilization rate, reduce costs and enhance efficiency, and support the early realization of the national doublecarbons goal indirectly.

The Company actively develops new quality productivity, the ability of large-scale intelligent manufacturingequipment and intelligent factory technology can provide customers with one-stop solutions. Customerschoose the Company’s intelligent manufacturing equipment and industrial services, in an intensive way ofproduction, solve the problem of structural labor gap and promote the improvement of social productionefficiency. The continuous expansion of the application scale of the Company’s products and services has notonly achieved good social benefits, but also brought considerable economic operating performance benefitsand improved shareholder returns steadily.

3.Analysis of Main Business

Overview

In the H1 of 2024, in the context of high global interest rates, the growth momentum of the world economyand trade is insufficient, and the external environment is complex and severe. The effects of domestic macropolicies continued to release, new quality productivity accelerated, the economy showed a positive trend, andthe manufacturing industry recovered moderately. On the market point of view, in the face of the urgent needto boost domestic macro demand, scientific and technological innovation can promote the transformation andupgrading of traditional industries, accelerate the integration of manufacturing and service industries, and thedemand for the Company’s products and services is stable and improving.

Benefiting from the Company’s leading technology advantages in intelligent manufacturing equipmentproducts and scale advantages of product application, the Company actively promoted the strategy of product

and service integration. During the reporting period, the Company achieved revenue of RMB 1.452 billion,with an increase of 4.51% over the same period last year, and the weighted average return on equity (ROE)was 7.63%.The revenue of “Intelligent equipment” and “Industrial service” was RMB 1.263 billion,accounting for 86.96% of the total revenue; Among them, the delivery of intelligent manufacturingequipment products was insufficient, and the revenue fell 9.38% year-on-year to RMB 904 million; Therevenue of industrial services revenue increased by 9.97% year-on-year to RMB 359 million, continuing tomaintain good growth. Environmental protection technology and equipment performed brilliantly, achievingrevenue of RMB 189 million, an increase of 188.06%, which ornamented the overall performance. From theperspective of business composition, the intelligent manufacturing equipment and industrial servicesaccounted for 62.25% and 24.71% of the overall revenue, respectively, and accounted for 68.27% and 21.12%of the overall gross profit. From the perspective of profit level, the Company’s net profit to the parentimproved quarter by quarter, compared with the higher index of the base period, the Company’s net profit tothe parent in the reporting period was RMB 273 million, fell by 18.71% year-on-year. In terms of quarterlyindicators, the revenue in the Q2 of 2024 reached the best level in history, the net profit to the parent was thesecond-highest level in history, and performance continued to power.

The Company’s intelligent manufacturing equipment products are widely used in petrochemical, mineralfurnace, new energy, food, feed, building materials, medicine, food, port and other pillar industries of thenational economy. During the reporting period, the Company’s marketing work progressed steadily, and thehead customers in the application field of the Company’s products were optimistic about the long-termdemand for automation, digitalization and intelligent manufacturing transformation and upgrading, whichprovided a platform and opportunity for the Company’s sustained and steady development.

From the perspective of revenue composition, the Company’s revenue and contribution gross profit ratiostructure of intelligent manufacturing equipment, industrial services, environmental protection processequipment are shown in the figure below.

Operating Revenue Contribution Gross Profit

(RMB 0.1 billion) (RMB 0.1 billion)

Note: in the above figure, Contributing Gross profit= Operating revenue of corresponding business – Operating cost, the contributiongross profit does not consider the impact of profit and loss of minority shareholders.

During the reporting period, the key accounting data and financial indicators are listed as follows:

Unit: RMB

Year-on-year changes to major financial data

Unit: RMB

Major changes to the profit structure or sources of the Company in the reporting period:

□ Applicable √ Not applicable

No such cases in the reporting period.

Breakdown of operating revenue:

Unit: RMB

Industries, products, or regions accounting for more than 10% of company revenue or operating profit

Unit: RMB

Where the Company’s statistical criteria for core business data are adjusted during the reporting period, thecore business data for the most recent year have been adjusted based on the statistical criteria effective as ofthe end of the reporting period.

□Applicable √Not applicable

The changes in revenue and gross profit rate of the Company's various businesses are explained asfollows:

During the reporting period, the revenue of intelligent manufacturing equipment was RMB 904 million,decreased by 9.38% year-on-year; The revenue of industrial services was RMB 359 million, increased by

9.97% year-on-year, and maintained steady growth; Environmental protection technology and equipmentrevenue jumped to RMB 189 million, ornamented the Company’s overall performance.

Intelligent manufacturing equipment:

Post-processing intelligent manufacturing equipment for solid material achieved revenue of RMB 723million, continued to remain high, with a slight 2.93% decline year-on-year, affected by a single project withrevenue of about RMB150 million, which profit was relatively low, the gross profit of this kind fell to

38.35%, decreased by 4.70% year-on-year, the comprehensive gross rate of others reached 41.84% excludedthe impact of this project, which was at an excellent level; Intelligent equipment products in the field of newenergy were delivered centrally in this period, with a significant increase in revenue year-on-year, and a goodprofit level contribution and achieved returns of scale.

In the “robot plus” business, due to calcium carbide smart factory project delivered and recognized revenuethis period, which offset the impact of declining revenue of (high temperature) operation robot forsubmerged arc furnace, the revenue of this kind achieved RMB133 million, an increase of 71.10%year-on-year. Due to the relatively high cost of the calcium carbide smart factory that recognized revenuethis period as a demonstration application, the overall gross margin level of “robot plus” was reduced to

29.64%, decreased by 13.27% year-on-year.

The revenue of post-processing intelligent manufacturing equipment for rubber and intelligent logistics,warehousing systems revenue both decreased significantly year-on-year, however, both gross profit rateimproved, due to the decrease in the number of projects delivered during the period and the increase in thelevel of project intrinsic profit respectively. The majority of projects of two businesses above are expected tobe delivered centrally in 2025, and the revenue situation will be significantly improved.

Industrial services: The Company actively implements the strategy of integration of products and services.As one of the Company’s core growth businesses, industrial service enjoys long-term sustained and steadygrowth. “Intelligent equipment” + “industrial services” constitutes two performance-driven engines. Duringthe reporting period, the operating revenue of industrial services was RMB 359 million, an increase of 9.97%.The overall gross profit rate of industrial services was 28.88%, with a significant increase, reaching a betterlevel in recent years, among which, the gross profit rate of operation and maintenance, after-sales industrialservices reached 31.58%, contributing to the Company’s better profit.

Environmental process and complete equipment: During the reporting period, the revenue of environmentalprotection technology and equipment increased significantly, reaching RMB189 million, but due to the lowprofit level of the project, the gross profit rate dropped to 27.50%, the half year contribution about RMB20million to the net profit of the parent company, which was the same as the whole year of 2023 and abeneficial supplement to the Company’s overall performance.

From the region perspective, based on the Company’s business character, the operating revenue usuallyvaries from period to period, which is mainly affected by demand fluctuations from region to region andstructural changes of product demand, as well as Company response demands, completion of productdelivery and acceptance progress, etc. It is not a typical fluctuation of gross profit rate divided by regions,please refer to explanation of operating revenue and gross profit rate changes for details.

4. Analysis of Non-Core Businesses

□Applicable √Not applicable

5. Analysis of Assets and Liabilities

(1) Significant Changes in Asset Composition

Unit: RMB

(2) Major Assets Overseas

□Applicable √Not applicable

(3) Assets and liabilities measured at fair value

√Applicable □Not applicable

Unit: RMB

Note: the financial asset held for trading above-mentioned are currency fund and guaranteed bank structuraldeposits etc., for cash management of unused self-owned capital, based on the resolution of the Board ofDirectors and the Board of Shareholders.

Whether there were any material changes on the measurement attributes of major assets of the Companyduring the reporting period

□ Yes √ No

(4) Restricted asset rights as of the end of this Reporting Period

6. Investment Made

(1) Total investment amount

√Applicable □Not applicable

Due to the listing of the associated company Bloom Technology on the Shanghai Stock Exchange, thebalance of long-term equity investments increased. The above investments are equity investments of theCompany’s ending balance in associated or joint venture companies.

(2) Significant equity investment made in the reporting period

□Applicable √Not applicable

(3) Significant non-equity investments ongoing in the reporting period

□Applicable √Not applicable

(4) Financial investments

① Securities investments

□Applicable √Not applicable

No such cases in the reporting period.

② Derivatives investments

□Applicable √Not applicable

No such cases in the reporting period.

(5) Use of Raised Funds

① Overall usage of funds raised

Unit: RMB’0,000

Note：Total fund raised is the net amount after deducting issuance expenses.

② Commitment projects of fund raised

Unit: RMB’0,000

1. Robot and intelligent factory industrialization

production project.

(6) Collaborative R&D and other related investments progress

①Cooperative R&D project: Humanoid robot key technology and principle prototype

industrialization R&D project

On August 18

th, 2023, the Company signed a “Strategic Cooperation Framework Agreement” with HarbinInstitute of Technology (Hereinafter referred as HIT) to jointly establish a humanoid robot key technologyand principle prototype industrialization R&D project, and jointly promote the industrialization of relatedtechnological achievements and products. The R&D plan of the project focuses on breaking through thedesign of bionic movement structure, realizing key technologies such as high explosive force and flexibledrive, intelligent perception and navigation planning of complex scenes, whole body collaborative movement,humanoid dexterous operation, highly adaptive dynamic balance control and high power density battery.

The setting goal of the project is very challenging, and high level requirement of the robot in the movementability, operation ability and intelligence. Up to now, in the debugging process of the prototype, the wholemachine scheme has been optimized and improved, the structure of the key components has been optimizedand improved, and the manufacturing and performance testing of the improved components have beencarried out. The project also carries out R&D work such as simulation verification of motion controlalgorithm and physical verification of navigation planning algorithm.

②Investment in high-end medical diagnosis and treatment equipment

Celiac minimally invasive surgical robot: The celiac minimally invasive surgical robot project of Harbin SiZhe Rui Smart Medical Equipment Co., Ltd., which is invested and participated by the Company, at the endof reporting period, holds 13.46% of its equity. Electric endoscopic needle forceps (name of registrationcertificate) has been approved in January, 2021 for medical device registration certificate issued by the StateDrug Administration; The endoscopic abdominal surgery system (name of registration certificate) hasobtained medical device registration certificate issued by the State Drug Administration in June, 2022.

Image-guided radiotherapy precise positioning: The image-guided radiotherapy precise positioning project ofJiangsu Rayer Medical Technology Co., Ltd., invested by the Company, at the end of reporting period, holdsits 13.65% equity. The project obtained the registration certificate of IGPS-O, IGPS-V image-guidedradiotherapy positioning system issued by the State Food and Drug Administration in March 2016. InFebruary 2020, the Optical Guidance Tracking System (OGTS) has obtained medical device registrationcertificate issued by the State Drug Administration

Remote assisted minimally invasive pedicle implantation robot: the remote assisted minimally invasivepedicle implantation robot project of Suzhou Zoezen Robot Co., Ltd., invested and participated by thewholly-owned subsidiary of the Company, at the end of reporting period, the Company holds 5.72% of itsequity. The main R&D product of the project, navigation and positioning equipment for spinal surgery hasobtained medical device registration certificate issued by the State Drug Administration in February, 2022.

The field of high-end medical diagnosis and treatment equipment project is characterized by longresearch and development cycle, high barriers to enter, long product registration cycle, and bigclinical risks. There are many risk factors that cannot be determined during type testing and clinicaltrials. For the registered projects, there is also a risk whether the promotion and industrialization canmeet the expectation. Hereby, investors are advised to carefully evaluate the relevant risk factors.

③ Progress of the robot equity investment fund

In 2015, the Company participated in the establishment of Dongguan Boshi Ruidexin Robot EquityInvestment Fund, and established Dongguan Boshi Ruidexin Robot Equity Investment Center (limitedpartnership). The total investment of Boshi was RMB 60 million, accounting for 30% of the subscribedinvestment of the fund. By the end of the reporting period, Boshi had received about RMB 68 million ofproject investment returns and profit distribution, the earnings are good.

④ The Progress of enterprises invested by the Company declare to IPO

Shanghai Bloom Technology Co., Ltd., which is invested by the Company, was listed on the main board ofShanghai Stock Exchange on January 10

th

, 2024, with the stock abbreviation: Bloom Technology, stock code:

603325. The total share capital of Bloom Technology after the initial public offering is 66,670,000 shares.

The Company, as a non-controlling shareholder, holds 9,599,760 shares Bloom Technology, occupies14.40%of the total share capital of Bloom Technology after the initial public offering.

Harbin Sizherui Intelligent Medical Equipment Co., Ltd, which is invested by the Company, currently has aregistered capital of RMB 150 million, the Company holds 13.46% of its equity and is a non-controllingshareholder. In June 2023, the application for initial public offering of shares and listing on the science andtechnology innovation board was approved by the Listing Review Committee of the Shanghai StockExchange, and it needs to be registered with the China Securities Regulatory Commission before it can startthe follow-up work of the IPO.

7. Sale of Major Assets and Equity Interests

(1) Sale of major assets

□Applicable √Not applicable

No such cases in the reporting period.

(2) Sale of major equity interests

□Applicable √Not applicable

8. Analysis of Major Subsidiaries and Participating Company

□Applicable □√Not applicable

During the reporting period, the Company has no important holding company information that should bedisclosed.

9. Structured Bodies Controlled by the Company

□Applicable √Not applicable

10. Risks Facing by the Company and Countermeasures

(1) The risk that the R&D of intelligent manufacturing equipment and industrialization process areless than expected.

The Company has the capability to provide customers with overall solutions of intelligent manufacturing inthe main equipment application field of complete large scale intelligent equipment. “Manufacturing is themain body of the national economy, the foundation of building the country, the instrument of rejuvenatingthe country and the foundation of strengthening the country.” China is undergoing a “transformation from bigmanufacturing country to powerful manufacturing country”, and the demand for digital and intelligentworkshop is on the rise. “ Intelligent Manufacturing Development Plan of the 14th Five-year Plan” clearly

expresses “In the 14th Five-year Plan and for a long period in the future, the promotion of intelligentmanufacturing should be based on the essence of manufacturing, closely follow the characteristics ofintelligence, take process equipment as the core, take data as the basis, rely on manufacturing units,workshops, factories and supply chains and other carriers to promote the digital transformation ofmanufacturing industry, network coordination and intelligent transformation. By 2025, most manufacturingenterprises above designated size will realize digital networking, and backbone enterprises in key industrieswill initially apply intelligence; By 2035, manufacturing enterprises above designated size will fullypopularize digital networking, and backbone enterprises in key industries will basically realize intelligence.”In the face of huge industrial digitization market prospect, if the Company cannot expand the applicationfield of new technology in time, lead, guide and respond to the market demand in product development, orthe industrialization process is less than expected, the Company may miss demand bonus, which will bringan adverse impact on the medium- and long-term development of the Company and become one of the riskfactors faced by the Company.

Solutions: First of all, the initiating of R&D project, the Company should choose projects with large marketdemand, can be copied, and has technical advantages in the field, meanwhile, the R&D risk is small, after thesuccess of R&D, the market space of copy and promotion is large. Secondly, the choosing areas of R&Dproject, the Company should choose areas with industry pain points and high technical difficulty, after keytechnology breakthroughs, the technical advantage is expanded from “point” to “line” to establishfirst-mover advantage. Thirdly, in the process of forming the overall solution of intelligent manufacturing,for the non-key supporting technologies that are mature in the market, the Company makes optimal use ofsocial resources, which is conducive to the Company to concentrate resources on the R&D of coretechnologies and accelerate the launch of product solutions. At the same time, the Company’s productsolutions for intelligent manufacturing and factory digitization and the establishment of standardizedmodules are conducive to the replication and promotion of product technology in different customers anddifferent industries, accelerate the industrialization process, and effectively deal with related risk factors.

(2) The risk that 5G-based industrial internet and artificial intelligence technology cannot be deeplyapplied in the Company’s overall solution of intelligent manufacturing.

Industrial Internet technology and the digital infrastructure built by 5G etc., in the field of intelligentmanufacturing provide technical convenience for the digitization and intelligence of factories; Theapplication level of artificial intelligence technology determines the ability of intelligent manufacturing inthe future. At present, the Company has outstanding competitive advantages in the field of productapplication, but if the artificial intelligence technology based on 5G and industrial Internet cannot be deeplyintegrated and applied in intelligent manufacturing product technology solutions in the future, it will restrictthe speed and quality of the Company’s medium and long-term development, constituting one of the riskfactors.

Solutions: Enterprises above the designated size of China’s manufacturing industry generally have automatedproduction lines, but low level in the proportion of digitalization, little factory data sharing, and few use ofintelligent technology. The development of intelligent manufacturing in China still has a big gap comparedwith the United States, Japan and Germany, and the overall development space of the industry is broad.Based on years of technical accumulation and rich product line application advantages, in the main productapplication practices, the Company will integrate the application, accumulation and iteration of artificial

intelligence technology based on 5G and industrial Internet in the overall solution of intelligentmanufacturing. At the level of product R&D, the Company focuses on accelerating the application depth ofartificial intelligence technology in the digitalization and intelligence of manufacturing industry, accumulatesproject experience, establishes technical reserves, accumulates competitive advantages, and copes with riskfactors.

(3) The risk that “robot plus” and China intelligent equipment demand is less than expected.

In recent years, the State has intensively issued the 2025 and 2035 China intelligent manufacturing industrydevelopment planning goals and robot plus application action implementation plan. As the dominantenterprise, the Company represents the domestic leading level in the field of product application, and someproduct application abilities are leading in the world. The relevant national intelligent manufacturing industryplanning will take the lead in the implementation of advantageous enterprises in various industries. TheCompany’s products cover the top customers in the application field. The Company will face manydevelopment opportunities in the future. However, in the face of the receding of globalization, the rise oftrade protection, the lack of momentum for the growth of the world economy and trade, the geopolitical andgeo-economic crisis occurs from time to time in the world, domestic demand needs to be boosted urgently.These factors or other unforeseen factors are not excluded, which will affect China’s future demand forhigh-end intelligent manufacturing equipment and constitute one of the risk factors restricting the Company’smedium and long-term performance.

Solutions: As a leading enterprise in the field of domestic product application, the Company has long beendeeply engaged in the product direction of intelligent manufacturing equipment, has continued to lead thepopularity, reputation and customer loyalty, and has built a stable, cooperative and win-win cooperatenetwork with customers for a long time. With continuous digital and intelligent upgrade needs, TheCompany’s main customers are leading enterprises in the industry, which can provide sufficient space for thefuture development of the Company. The Company is actively implementing intelligent workshop, intelligentfactory overall solution application, which can open product application space, and provide a broad space forthe Company. The Company increases investment in R&D, guides customer demand with continuoustechnological innovation, transforms traditional industries with vibrant products, opens up new opportunities,and deals with risk factors.

(4) The risk that “industrial services plus” expand less than expected.

Industrial service is the buffer and booster of the Company’s revenue and profit sustainable growth. Over theyears, the Company’s industrial service business has continued to grow steadily, in 2024 H1, the revenue hasexceeded RMB 359 million, with a year-on-year growth of 9.97%. In terms of the number of potential targetcustomers and room for growth in the industrial services production operation and maintenance business, itis still at a low penetration level compared with the Company’s target customer service base, and has gooddevelopment expectations in the future. However, if the Company cannot continue to develop this businessdirection, “industrial service plus” expansion is less than expected, which will form one of the risk factorsrestricting the Company’s medium and long-term development.Solutions: The Company has implemented the service integration strategy for a long time, this coincides withthe direction of the national service-oriented manufacturing industry. The Company has established industrialservice team covering all provinces, regions and municipalities in the country except Hong Kong, Macao,

Taiwan and Xizang over the years, forms timely response and national industrial service capacity, andcontribute to profit. Industrial services are rooted in intelligent manufacturing equipment, industrial serviceand intelligent manufacturing equipment benign interacted and common developed. With the expansion ofthe Company’s intelligent manufacturing equipment application stock, the demand for the Company’sindustrial services continues to grow, effectively promoting the development of industrial service business.In the face of the industrial opportunities of the integration of national advanced manufacturing industry andmodern service industry, the Company has enough market opportunities and motivation to acceleratedevelopment and actively cope with risk factors.

(5) In the face of the new opportunities of “robots plus”, there may be risks in developing newindustrial directions.

As early as 2005, the Company’s independent intellectual property rights of industrial robots on the customersite successfully applied, the Company continues to industrial robot perception technology, controltechnology, decision-making technology applied to the Company’s large-scale intelligent equipment, in thefield of engagement, is in long-term technology leading advantage. In recent years, the Company’s hasachieved good results in first high temperature special operation robot in the field of calcium carbide furnaceR&D, application and industrialization, the Company is actively implementing the demonstration project ofthe overall solution of smart factory in this field. At the same time, the Company actively develops specialoperation robots for high temperature environment such as ferrosilicon, silicon manganese and industrialsilicon sub-merged arc furnace, and has successively succeeded in pilot tests and obtained small batch orders.However, with the rapid development of artificial intelligence technology at present, represented byhumanoid robots, which are intelligent, quick, skillful and multi-scenario applied, explain the morefar-reaching connotation and development space of robots plus. “Robot is the pearl at the top of the crown ofthe manufacturing industry”, if the Company cannot continue to make progress in the field of robot plus andaccelerate the promotion of technical achievements in new areas to expand the market, it is one of riskfactors affecting the medium to long-term competitiveness of the Company.

Solutions: During the reporting period, the Company’s calcium carbide production smart factory in thedirection of “robot plus” was implemented smoothly, and a demonstration project was delivered andaccepted and its operating income was confirmed, marking a major breakthrough in this field. With thesuccessful application of demonstration projects, the Company focuses on expanding new market sales andaccelerating industrialization promotion, and expects to form future increments. At the same time, theCompany is optimistic about the strategic development opportunity of humanoid robots, and actively layoutthe future industry, taking humanoid robots as one of the Company’s important strategic R&D directions.The Company and Harbin Institute of Technology jointly set up a humanoid robot key technology andprinciple prototype industrialization R&D project, and plan to jointly promote the industrialization of relatedtechnological achievements and products in the future. The Company actively grasps the above opportunitiesand deals with risk factors.

(6) The risk that the R&D of humanoid robots less than expected.

In the new round of scientific and technological revolution and industrial change to accelerate the evolutionof major cutting-edge technologies, disruptive technologies continue to emerge, in order to accelerate thedevelopment of new quality productivity, combined with the Company’s advantages in intelligent

manufacturing equipment, high temperature special operation robots and smart factories and other productapplications, the Company is optimistic about the field of humanoid robots major development opportunities,humanoid robots as one of the Company’s important strategic R&D directions. On August 18

th, 2023, theCompany signed a Strategic Cooperation Framework Agreement with HIT to jointly establish a humanoidrobot key technology and principle prototype industrialization R&D project, and jointly promote the relevanttechnological achievements and future industrialization work.

The future industry of humanoid robots is driven by cutting-edge technologies, and the relevant R&Dindustrialization investment is inevitably accompanied by greater risks. The field of humanoid robots,different from the Company’s intelligent manufacturing equipment, high-temperature furnace operationrobots and other industrial fields, is a new, cutting-edge, highly challenging field of technological innovation,therefore, so there is uncertainty risk factor;

In cooperation with HIT, the Company has complementary advantages, multi-disciplinary crossover andmulti-department participation, which is systematic, complex, phased and long-term. Whether and when theexpected results can be achieved in R&D is highly uncertain, which constitutes one of the risk factors;

In the implementation process, whether the phased results can meet the expectations, whether it has theadvanced level, and whether there is market demand, there is a great uncertainty, which constitutes one ofthe risk factors;

Even if there are expected R&D results, there is great uncertainty about whether industrialization can besmoothly carried out in the future, whether industrialization has comprehensive advantages, and whether itcan quickly obtain market share, which constitutes one of the risk factors.

The implementation of the project has long-term characteristics and cannot have a positive impact on theCompany’s financial data in the short term. In the specific process of promotion, there are unforeseen factorsthat will affect the progress of R&D and the transformation of future results and constitute one of the riskfactors;

Due to the pioneering nature of the project, it will be subject to the limitations of the industry and thescientific and technological level of the industry. If there are key technologies yet to be improved in theindustry as a whole, it will affect the R&D progress or industrialization process and constitute one of the riskfactors.

Considering the above risks, it is inevitable that in the implementation process of humanoid robot projects,there are still other unforeseen risk factors, which constitute one of the risk factors that the company needs toface.

Solutions: Over the years, the Company is one of the early industrial robot engineering applications in China,has formed a prominent competitiveness in the field of intelligent manufacturing equipment, hightemperature special operation robots, and formed a good industrial foundation in “robot plus”. For thecooperation with HIT in the direction of humanoid robots, the Company actively creates a good atmosphereof cooperation. Both parties have the same goal, and the personnel of both parties form a joint force toovercome difficulties; The Company fully evaluates the difficulties of R&D and future industrialization

according to the progress of the project and phased results, and controls the investment of funds in stage andreduce R&D risk. At the same time, the Company strengthens the development of the main business, strivesto improve performance and returns, promotes related work in a positive and orderly manner, and deals withrisk factors.

(7) The risk of technology confidentiality and unfair competition.

Technology leading is one of the important competitive strategies and competitive advantages of theCompany. The technology leading advantage of the products directly affects whether the Company’sproducts can maintain a high level of sustainable profitability and the effective implementation of theCompany’s differentiated competitive strategy. The Company attaches great importance to technologyconfidentiality by applying for intellectual property protection, strengthening legal rights protection, andprotecting the technology security of enterprises and preventing related risks through technical means.Nevertheless, there are still intellectual property rights owned by the Company illegally stolen, and otherrisks of unfair competition, which may cause potential economic losses to the Company.

Solutions: The Company’s technology is divided into patented technology and proprietary technology, fromthe characteristics of technical confidentiality, each has its own applicable environment. In addition to thetraditional technology confidentiality and anti-improper competition means, the Company, by means oftechnology R&D and innovation, continues to enhance technology reserve to keep one generation of R&D,one generation of reserve and one generation of sales, to maintain the absolute competitive advantage in thedomestic main product application field. Therefore, through continuous technological innovation, continuingto consolidate and establishing technical advantages are the primary strategy for the company to deal withtechnology confidentiality and face unfair competition.

The risk factors above are the Company concerned, the Company actively takes measures in order to avoidand control relevant risks effectively.

V. Financial statements

(1) Consolidated Balance Sheet

Prepared by HARBIN BOSHI AUTOMATION CO., LTD. Unit: RMB

Legal representative: Deng Xijun; Director of Finance: Sun ZhiqiangPerson in Charge of the Accounting Department: Wang Peihua

(2) Balance Sheet of Parent Company

Unit: RMB

(3) Consolidated Income Statement

Unit: RMB

Legal representative: Deng Xijun; Director of Finance: Sun ZhiqiangPerson in Charge of the Accounting Department: Wang Peihua

(4) Income Statement of Parent Company

Unit: RMB

(5) Consolidated Cash Flow Statement

Unit: RMB

Legal representative: Deng Xijun; Director of Finance: Sun ZhiqiangPerson in Charge of the Accounting Department: Wang Peihua

(6) Cash Flow Statement of Parent Company

Unit: RMB

Board of Directors of HARBIN BOSHI AUTOMATION CO.,LTD.

August 28

th, 2024