Nanjing Panda Electronics : 2021 PRELIMINARY ANNUAL RESULTS ANNOUNCEMENT 2022-03-31

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2021 PRELIMINARY ANNUAL RESULTS ANNOUNCEMENT

I. IMPORTANT NOTICE

• 1 This summary of annual report was extracted from the Annual Report of Nanjing Panda Electronics Company Limited (the "Company") and its subsidiaries (collectively as the "Group"). To have comprehensive knowledge of the operating results, financial position and future development plan of the Company, investors are advised to carefully read the full text of the annual report on the website of the Shanghai Stock Exchange and other media designated by China Securities Regulatory Commission.

• 2 The board of directors (the "Board"), the supervisory committee and the directors, supervisors and senior management members of the Company confirm that the information contained in this summary of annual report is true, accurate, and complete without any misrepresentation, misleading statements, or material omissions, and severally and jointly accept legal responsibility for the above.

• 3 All directors of the Company attended the meeting of the Board held on 30 March 2022.

• 4 BDO China Shu Lun Pan Certified Public Accountants LLP issued an unqualified auditors' report for the Company.

• 5 Proposal of profit distribution or capitalization of capital reserves of the Company for the reporting period considered by the Board.

  To distribute a cash dividend of RMB0.14 (tax inclusive) for every ten shares to all the shareholders on the basis of a total share capital of 913,838,529 shares as at 31 December 2021, with the total cash dividend to be distributed amounting to RMB12,793,739.41, and the balance to be carried forward to next year. The Company would not make any capitalization of capital reserve.

II.

INFORMATION ABOUT THE COMPANY

1

Basic Information of the Company

Stock Profile

Listing stock exchange

Shanghai Stock

Exchange

The Stock Exchange of Hong Kong Limited

Abbreviated name

Nanjing Panda

Nanjing Panda

Stock Code

• 600775 N/A

• 00553 N/A

2. Information on principal activities during the reporting period (I) Industry development

The industry to which the Company belongs to is computer, communication and other electronic equipment manufacturing.

In 2021, the added value of electronic information manufacturing industries above statistical threshold increased by 15.7% year-on-year, and growth rate recorded a new high in the past decade, increasing 8.0 percentage points compared with last year. The growth rate was 6.1% percentage points higher than that of industrial added value above statistical threshold in the same period, and the gap was wider than that in 2020, but it was lower than the growth rate of the added value of higher-tech manufacturing by 2.5 percentage points; the two-year average growth rate was 11.6%, which was 5.5% percentage points higher than the two-year average growth rate of industrial added value, imposing significant pulling effect on industrial production. In 2021, operating revenue of electronic information manufacturing industries above statistical threshold increased by 14.7% year-on-year, representing an increase of 6.4 percentage points compared with last year, the two-year average growth rate was 11.5%. Operating cost increased by 13.7% year-on-year, representing an increase of 5.6 percentage points compared with last year.

One of the core contents of the 14th Five-Year Plan and the Long-Range Objectives Through the Year 2035 is to promote the construction of traditional infrastructure and new infrastructure as a whole, accelerate digital development, create new advantages of digital economy, jointly promote digital industrialization and industrial digital transformation, accelerate the pace of digital society construction, improve the level of digital government construction, create a good digital ecology and build digital China. Modern digital city makes full use of the new generation of information technology in all walks of life in cities, and plays an important role in intelligent transportation, intelligent governance, intelligent people's livelihood, intelligent application, safe city and other application scenarios.

Accelerating the development of intelligent manufacturing is a new kinetic energy to promote China's economic growth and a strategic choice to seize the commanding heights of future economic and technological development. It is of great strategic significance for promoting the supply-side structural reform of China's manufacturing industry, creating new competitive advantages of China's manufacturing industry and realizing the goal of becoming a manufacturing power. In order to accelerate the transformation and upgrading of China's manufacturing enterprises, in 2021, China successively issued a series of policies such as the "14th Five-Year Plan for Digital Economy Development", the "14th Five-Year Plan for In-depth Integration of Informatization and Industrialization" and the "14th Five-Year Plan for Intelligent Manufacturing Development" to deploy and promote the development of intelligent manufacturing at the national level. In December 2021, Jiangsu Province printed and issued the "Three-year Action Plan for Intelligent Transformation and Digital Transformation of Manufacturing Industry in Jiangsu Province" (2022-2024) to continuously promote the digital transformation and development of manufacturing industry. China's manufacturing industry has huge production capacity, but at the same time, there is structural overcapacity, and there is a strong demand for intelligent transformation. Intelligent manufacturing will bring opportunities to the equipment and software industries, and robots and industrial software, etc., which contain tens or even hundreds of billions of market capacity. According to the development status and trend analysis of China's intelligent manufacturing industry, it is estimated that by 2026, the market size of China's intelligent manufacturing industry will reach approximately RMB5.8 trillion. On the whole, there is huge room for growth in the industry.

With the continuous improvement of the comprehensive strength of China's electronic information manufacturing industry, under the influence of strategic objectives such as improving quality and efficiency and maintaining sustainable development, professional electronic manufacturing service enterprises continue to improve technology, efficiency, quality and supply chain services around the market demand in the field of electronic product manufacturing, which has a far-reaching impact on the adjustment of electronic information industry, supply chain layout and value chain management. With the "carbon peaking and carbon neutrality" goals put forward, green manufacturing is not only the need of ecological development, but also the inevitable choice for China's manufacturing to develop to the high end. Green manufacturing and intelligent manufacturing complement each other, promote each other and are inseparable. Facing the general trend of green and low carbon in the future, domestic manufacturing enterprises are bound to further strengthen energy control in the production process, optimize resource utilization rate, reduce energy consumption and carbon emissions through digital technology, and achieve China's "carbon peaking and carbon neutrality" goals at an early date.

(II) Significant impact of the new policies and rules on the industry

The Company's principal activities closely focus on the special national development plans for the 14th Five-Year period and the Company's development conforms to the guiding direction of national policies.

• 1. The 14th Five-Year Plan for Digital Economy Development

  The key tasks of planning and deployment include: optimizing and upgrading digital infrastructure, accelerating the construction of information network infrastructure, promoting the development of cloud network collaboration and computing network integration, and promoting the intelligent upgrading of infrastructure in an orderly manner; vigorously promoting the digital transformation of the industries, accelerating the digital transformation and upgrading of enterprises, comprehensively deepening the digital transformation of key industries, industrial parks and clusters, and cultivating the transformation support service ecology; and accelerating digital industrialization; enhancing the ability of key technological innovation, accelerating the cultivation of new business models, and creating a prosperous and orderly innovation ecology; continuously improving the digitalization level of public services, improving the efficiency of "Internet plus government service", enhancing the inclusiveness level of digitalization of social services, and promoting the integration of digital urban and rural areas.

• 2. "The 14th Five-Year Plan for the Development of Modern Comprehensive Transportation System"

  The plan proposes to speed up the in-depth popularization and application of smart technologies, promote the in-depth integration of new technologies such as the Internet, big data, artificial intelligence and blockchain with the transportation industry, promote the application of advanced technologies and equipment, and build an intelligent transportation system with ubiquitous interconnection, flexible collaboration and global competitiveness. Specific tasks include: promoting the digital sensing system of facilities; promoting the digital transformation and upgrading of existing facilities, and strengthening the synchronous planning and construction of new facilities and sensing networks; building a facility operation status sensing system, strengthening the digital sensing monitoring coverage of important channels and hubs, and enhancing the all-weather and full-cycle operation status monitoring and active early warning capabilities of key road sections and important nodes, and constructing the information interaction network of facilities and equipment; steadily promoting the coverage of network communication facilities such as 5G, and improving the coverage, real-time and reliability of information transmission in the transportation field;

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