Securities code: 688114 Securities abbreviation: MGI Announcement No.: 2025-003

Shenzhen MGI Technology Co., Ltd

Announcement on the provision for asset impairment in 2024

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the content of this announcement, and assume legal responsibility for the authenticity, accuracy and completeness of its content in accordance with the law.

In accordance with the Accounting Standards for Business Enterprises and the relevant provisions of the accounting policies and accounting estimates of Shenzhen MGI Technology Co., Ltd. (hereinafter referred to as the "Company"), in order to truly and accurately reflect the Company's financial position as of December 31, 2024, and in line with the principle of prudence, the Company has conducted an impairment test on the assets of the Company and its subsidiaries as of December 31, 2024, and made impairment provisions for the relevant assets that may have asset impairment losses.

1. An overview of the provision for impairment of assets

The total asset impairment loss and credit impairment loss recognized in 2024 will be 97.7545 million yuan. The details are shown in the following table:

Unit: 10,000 yuan

Serial No. Item 2024 Accrual Remarks

1 Asset impairment loss 5,735.46 Provision for decline in value of inventory, provision for impairment of intangible assets, contract capital

Provision for impairment of property

2 Credit impairment loss 4,039.99 Impairment of accounts receivable, other receivables and long-term receivables

Get ready

Total 9,775.45

2. Specific description of the provision for impairment of assets

(1) Asset impairment losses

The Company assesses the net realizable value of inventories at the balance sheet date and makes provision for inventory decline based on the difference between the cost of inventories and the net realizable value. In assessing the net realizable value of inventory, management considers the purpose for which the inventory is held, taking into account the age of the inventory at the end of the period, the state of storage, historical consumption data, and future use or sales as the basis for the estimate. After testing, the amount of asset impairment losses to be accrued in 2024 totaled 51.7268 million yuan.

The Company evaluates the recoverable amount of intangible assets at the balance sheet date and makes provision for impairment of intangible assets based on the fact that the cost of intangible assets is higher than the recoverable amount. After testing, the amount of asset impairment losses to be accrued in 2024 is 5.4706 million yuan.

The Company has considered reasonable and evidence-based information, including forward-looking information, to test and estimate the expected credit losses of contract assets on a combined basis based on expected credit losses. After testing, the amount of asset impairment losses to be accrued in 2024 is 157,200 yuan.

(2) Credit impairment losses

The Company has considered reasonable and evidence-based information, including forward-looking information, to test and estimate the expected credit losses of accounts receivable, other receivables and long-term receivables on a single or combined basis on an ECL basis. After testing, a total of 40.3999 million yuan of credit impairment losses need to be accrued in 2024.

3. The impact of the asset impairment provision on the company

The provision for impairment is included in the asset impairment loss and credit impairment loss accounts, with a total impact of 97.7545 million yuan on the company's total consolidated profit in 2024 (the total consolidated profit does not calculate the impact of income tax). The provision for asset impairment is in line with the "Accounting Standards for Business Enterprises" and the relevant provisions of the company's relevant accounting policies and accounting estimates, which can truly and objectively reflect the company's financial position and operating results as of December 31, 2024, comply with the provisions of relevant laws and regulations and the actual situation of the company, and will not affect the normal operation of the company.

The above data has not been audited by the accounting firm, and the final actual amount is subject to the audit amount of the accounting firm.

The announcement is hereby made.

Shenzhen MGI Technology Co., Ltd

board of directors

January 17, 2025