Risk management provides strong support and basic guarantee for the high-quality and sustainable development of the Group. The Group has implemented all-round risk management and has established a systematic and comprehensive risk management mechanism and internal control system. Adhering to compliant operation, the Group has established a comprehensive monitoring system. Upholding the bottom lines of business ethics, it continuously optimizes risk management and internal control audit mechanisms, and fosters a corporate culture characterized by integrity, uprightness and law-abiding practices, thereby ensuring the Company’s sound operations and improvement in both quality and efficiency. Furthermore, the Group has established a comprehensive risk management structure covering the governing body, the management and internal audit, which promotes risk management responsibilities to all employees and the entire business system, thereby effectively enhancing the corporate risk prevention and control capabilities and safeguarding the corporate governance in compliance with the laws in all aspects.

The Group also has a Risk Management Committee and a Strategic and Sustainable Development Committee, which are accountable to the Board and assist the Board in providing leadership, direction and oversight with regard to the overall risk management and sustainable development strategy, risk appetite and tolerance and risk management framework of the Group, including risk policies, processes and controls. The Group also has an internal audit department in place for the execution and implementation of risk management measures.

Foreign Exchange Risks

The Group principally operates its businesses in Chinese Mainland with most of its transactions settled in RMB. Apart from certain bank borrowings, borrowings from related parties as well as cash and cash equivalents, the Group’s assets and liabilities are mainly denominated in RMB. The Group held borrowings denominated in Japanese Yen (“JPY”) and United States Dollars (“USD”) during the year. Volatility of RMB exchange rate against JPY and USD may increase the exchange risks of the Group, thus affecting its financial position and operating results. As at 31 December 2025, the Group’s borrowings denominated in foreign currencies amounted to RMB872,219,000 (31 December 2024: RMB906,805,000), which accounted for only 0.42% (31 December 2024: 0.46%) of the total debts of the Group, representing relatively low foreign exchange risk exposure.

The Group will continue to keep track of the movements of exchange rates and, if necessary, take responsive measures to avoid excessive foreign exchange risks.

Funding Risks

With the Group’s strengthened efforts in developing all kinds of new energy and innovative technology projects, funding adequacy has become an important issue for the Group. The financing market is affected by a number of factors such as the liquidity of the lending market, interest rates and the economic environment, which in turn may also affect the effectiveness and costs of the Group’s borrowing. Financing in the form of perpetual debt instruments has significantly increased the financial resources available to the Group. In addition, the Group has always leveraged its capability of accessing Chinese Mainland and overseas markets to optimize its funding sources in all aspects, increase its credit facilities and lower its financing costs. Moreover, the financial services framework agreement with SPIC Financial also facilitates the mitigation of funding risks.

While staying committed to maximizing shareholders’ interests, we continuously optimize our policies and systems for asset and fund management, strengthen financial risk controls, and ensure the security of our assets and funds. Concurrently, we strictly abide by the commercial principles of credit cooperation, and repay the principal and interest in full on time, striving to maintain a good credit record and rating in order to enhance our financing capabilities and reduce the financing costs.

As at 31 December 2025, the Group had sufficient available unutilized financing facilities amounting to RMB43,436,334,000 (31 December 2024: RMB50,774,060,000). The Group will refinance and restructure the existing loan terms when appropriate to safeguard against funding risks. As the Group will be able to meet its liabilities as and when they fall due within the next twelve months, the annual results and consolidated financial statements therefore have been prepared on a going concern basis.

Risks of Policy Changes

Since 1 June 2025, electricity trading of new energy power generation has made a full-scale entry into the spot power market. As a result, the proportion of new energy traded in the spot market has increased substantially, and electricity tariffs may become more volatile in the short term due to keen competition. The Group will strengthen the review of the market conditions and the analysis of economic activities, closely monitor key indicators such as electricity volume and tariffs, and optimize the priority and structure of power generation to strive for opportunities to generate electricity and promote electricity sales. In addition, the Group will continue to optimize various types of power sources to flexibly respond to the changing market environment, and mitigate the negative impacts through effective risk management and response measures.