coolpad 酷派

COOLPAD GROUP LIMITED

酷派集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 2369)

ANNUAL REPORT 2025

CORPORATE PROFILE

Coolpad Group Limited (the "Company") was incorporated in the Cayman Islands as an exempted company with limited liability on 11 June 2002. The shares of the Company (the "Shares") were listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") on 9 December 2004 (Stock Code: 2369).

The Company and its subsidiaries (collectively, the "Group") are committed to be a leading smartphone developer and manufacturer in the People's Republic of China ("PRC"). In the last decade, capitalizing on the development of wireless telecommunications technological know-how in wireless telecommunications across multiple wireless telecommunications network standards including TD-LTE, FDD-LTE, TD-SCDMA, CDMA-EVDO, WCDMA, GSM, and CDMA1X networks, the Group has developed a large number of proprietary technologies and patents in mobile operating systems, radio frequency, protocols and wireless data decomposed transmission technology, etc, and is one of the standard-setters in the communications industry. The Group never stops enhancing its research and development ("R&D") ability and is striving to be an important participant and a leader in the latest field of 5G and Artificial Intelligence. In addition, the Group is engaged in the leases of properties and cryptocurrencies business.

Contributing to advancing technological innovations and striving along those with endeavours is the vision and mission of the Group. Relying on strong independent research and development strength and innovative market layout, the Group will lead the industry innovation in the digital era and provide consumers with continuously upgraded products and ecological services.

CONTENTS

Corporate Information 2
Financial Highlights 3
Chairman of the Board's Statement 4
Management Discussion and Analysis 7
Corporate Governance Report 16
Directors and Senior Management 29
Report of the Directors 33
Independent Auditor's Report 53
Financial Statements 57
Notes to the Consolidated Financial Statements 66

COOLPAD GROUP LIMITED Annual Report 2025

CORPORATE INFORMATION

Registered Office

Cricket Square
Hutchins Drive
P.O. Box 2681
Grand Cayman
KY1-1111
Cayman Islands

Head Office and Principal Place of Business in the PRC

Coolpad Information Harbor
No. 8 of Gaoxin North 1st Road
Hi-Tech Industry Park (Northern)
Nanshan District
Shenzhen

Principal Place of Business in Hong Kong

Suits 1105, 11th Floor, Central Plaza
No.18 Harbour Road, Wanchai
Hong Kong

Company Secretary

Mr. MA Fei

Audit Committee and Remuneration Committee

Mr. CHEUK Ho Kan (Chairperson)
Ms. WANG Guan
Mr. GUO Jinghui

Nomination Committee

Mr. CHEN Jiajun (Chairperson)
Mr. CHEUK Ho Kan
Ms. WANG Guan

Authorised Representatives

Mr. MA Fei
Mr. CHEN Jiajun

Contact Information for Investor Relations

Tel: +86 755 8626 0086
Email: ir@coolpad.com

Auditor

Zhonghui Anda CPA Limited ("Zhonghui Anda")

Certified Public Accountants
Registered Public Interest Entity Auditor
23/F, Tower 2
Enterprise Square Five
38 Wang Chiu Road
Kowloon Bay, Kowloon
Hong Kong

Legal Advisers to the Company as to Hong Kong Law

Baker & McKenzie
14th Floor
One Taikoo Place
979 King's Road
Quarry Bay
Hong Kong

Legal Advisers to the Company as to Cayman Islands Law

Conyers Dill & Pearman
2901 One Exchange Square
8 Connaught Place
Central
Hong Kong

Principal Share Registrar and Transfer Office

Suntera (Cayman) Limited
Suite 3204, Unit 2A, Block 3
Building D, P.O. Box 1586, Gardenia Court
Camana Bay, Grand Cayman, KY1-1100
Cayman Islands

Hong Kong Branch Share Registrar and Transfer Office

Computershare Hong Kong Investor Services Limited
Shops 1712-16
17th Floor
Hopewell Centre
183 Queen's Road East
Hong Kong

Principal Bankers

CMB Wing Lung Bank Limited
Bank of China Limited
China Construction Bank Corporation

Company Website

www.coolpad.com.hk

Stock Code

2369

Annual Report 2025 COOLPAD GROUP LIMITED
3

FINANCIAL HIGHLIGHTS

The financial data below are extracted from the Group's audited financial statements prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs").

Results

• Included discontinued operation results, if any

Financial Position

COOLPAD GROUP LIMITED Annual Report 2025

CHAIRMAN OF THE BOARD'S STATEMENT

In 2025, the global smartphone market experienced a moderate recovery and structural divergence. According to the statistics of IDC, annual shipments increased slightly by 1.9% year-on-year, with shipments in emerging markets such as India, Southeast Asia, the Middle East, Africa, and Latin America increasing by 6.8% year-on-year, becoming the industry's core growth engines. Meanwhile, prices for key components such as memory chips have risen sharply, putting cost pressure on mid-to-low-end models, and industry competition has become increasingly fierce. Against this backdrop, the Group has remained committed to its strategic positioning of "light assets, strong cash flow." In the first half of 2025, it implemented strategic adjustments, proactively discontinuing loss-making and negative-gross-margin product lines to focus resources on high-potential smart ecosystem businesses, thereby accelerating its transformation into a provider of multi-scenario smart living solutions.

In the domestic market, the Group is deepening its AloT strategic layout and expanding its ecosystem product portfolio through an asset-light model. By the end of 2025, the portfolio will cover 25 product categories, focusing on four key areas – smart office, smart home, health, and audio-visual – to enrich the application scenarios for smart devices. By leveraging the deep integration of the DeepSeek large model into the CoolOS system, the Group has significantly enhanced the semantic understanding and intelligent interaction capabilities of end devices, thereby consolidating its technological leadership. In June of the same year, the Group entered into a strategic partnership with INMO to jointly develop AI+AR smart glasses, thereby expanding its portfolio of multimodal interaction products. In terms of distribution channels, the Group has optimized its e-commerce and social media channels, stabilized its traditional offline channels, and made phased adjustments to its partnerships with telecom operators, resulting in more efficient overall operations.

Annual Report 2025 COOLPAD GROUP LIMITED
5

CHAIRMAN OF THE BOARD'S STATEMENT

Overseas markets are advancing structural adjustments centered on “cost reduction and efficiency improvement, with a focus on high-potential markets,” by shutting down low-efficiency operations, clearing inventory, and streamlining organizational structures, while concentrating resources on high-growth regions such as the Middle East, Africa, Eastern Europe, South Asia, and Latin America. The product portfolio primarily consists of mid-to-low-end models offering excellent value for money, catering to both our own brand and customized orders. Our distribution channels are driven by a dual-track approach of “offline agents + cross-border e-commerce,” covering over 30 countries and regions, with deepened cooperation with leading platforms such as SHEIN, TikTok Shop, and AliExpress. With repeated testing of new products and optimization of the supply chain in the second half of the year, overseas operations showed significant improvement, establishing a stable market foothold in Saudi Arabia, Bangladesh, Nepal, and select Latin American countries.

In terms of R&D, the Group is focusing on two key areas: first, advancing the in-depth adaptation of the CoolOS system for overseas models to optimize multilingual and localized user experiences; second, developing smart Bluetooth audio glasses that integrate low-energy Bluetooth, audio algorithms, and the capabilities of the DeepSeek large language model to build a competitive edge in the wearable technology market.

The property segment continues to operate steadily, with its core assets being the Coolpad Information Harbor in Shenzhen and the Coolpad Technology Ecological Park* (酪派科技生態園) in Dongguan Songshan Lake. The main structures of Phase II and Phase III of Coolpad Information Port in Shenzhen have been topped out, and the projects have entered the internal installation phase; Phase I and the Ecological park in Dongguan maintain stable leasing and rental income, continuing to generate reliable cash flow despite pressures in the leasing market.

The digital currency business has completed its strategic transformation, fully transitioning to compliant computing power leasing since February 2025. It no longer engages directly in mining, but generates stable revenue by leasing computing power to partner companies, effectively mitigating asset price volatility risks. As of the end of the year, the Group held an effective computing power of 1,504,800 TH/s, and its operations remain compliant and stable.

Looking ahead to 2026, the Group will adhere to its core strategy of “light assets, strong cash flow, and robust technology,” focusing on its core business of AI-enabled devices while pursuing both globalization and refined operations to drive sustainable, high-quality development.

In terms of technology and products, we will continue to deepen the application of “AI+5G” in smart devices, strengthen cooperation with domestic carriers, and drive the integrated upgrade of “device + connectivity + services” for 5G smartphones equipped with CoolOS and the DeepSeek large language model. In the domestic market, while consolidating our core smartphone business, we will accelerate the expansion of the AIoT ecosystem to cover high-value scenarios such as smart mobility, smart home, health, office, and education. We will collaborate with ecosystem partners to launch cost-effective smart devices and steadily advance our brand licensing business.

The Group will comprehensively expand its AI infrastructure business, collaborating with leading domestic and international companies to develop AI computing equipment, intelligent storage solutions, and integrated hardware solutions. Within the year, the Group plans to establish an AI infrastructure delivery center at the Shenzhen Coolpad Industrial Park, creating an industry-oriented AI ecosystem and bringing it to market. Concurrently, the Group will launch R&D initiatives for low-node process chips and storage technologies to build foundational technological barriers.

COOLPAD GROUP LIMITED Annual Report 2025

CHAIRMAN OF THE BOARD'S STATEMENT

In overseas markets, we will capitalize on opportunities arising from the digital transformation of emerging markets. With a focus on localized operations, we will expand our product portfolio from smartphones to smart devices such as tablets, audio equipment, and personal care appliances, thereby enhancing our AloT ecosystem. We will focus on increasing investment in key markets such as Saudi Arabia, Bangladesh, and Nepal, while strengthening targeted marketing and brand building; we will continue to deepen cross-border e-commerce partnerships, implement a dual-track model of "our own brand + ODM customization", which enhances market share and supply chain resilience.

The property leasing business adheres to a refined operational approach, optimizing tenant mix, enhancing service quality, and dynamically adjusting rents, while striving to maintain high occupancy rates and rent collection levels to ensure a steady cash flow.

Our digital currency business will strictly adhere to regulatory requirements, focusing solely on providing computing power leasing services. We will closely monitor global policy and regulatory developments to ensure asset security and stable returns without directly engaging in mining, while rigorously managing operational risks.

Moving forward, the Group will adhere to the guiding principles of "technology commercialization, streamlined operation and controllable risk management," balancing short-term operational improvements with long-term technological investments. We will continue to optimize resource allocation, enhance operational efficiency, and strengthen profitability, while capitalizing on opportunities in the AI terminal industry to create long-term, sustainable value for our shareholders.

Chen Jiajun

Chairman of the Board

Hong Kong, 27 March 2026

Annual Report 2025 COOLPAD GROUP LIMITED 7

MANAGEMENT DISCUSSION AND ANALYSIS

The financial data below are extracted from the Group's financial statements prepared under HKFRSs. The following discussion and analysis should be read in conjunction with the Group's audited financial statements.

COOLPAD GROUP LIMITED Annual Report 2025

MANAGEMENT DISCUSSION AND ANALYSIS

Revenue Analysis by Product Segments

A comparative breakdown of the consolidated revenue streams attributable to the various product segments are set forth in the following table for the years indicated:

The Group recorded consolidated revenue for the year ended 31 December 2025 (the "Year") of approximately HK$273.14 million, representing a decrease of 45.30% as compared with the amount of approximately HK$499.33 million for the year ended 31 December 2024. The decrease in revenue was primarily attributable to the fact that being subject to the intense competition in the smartphone market, to enhance business efficiency, the Group implemented strategic adjustments and voluntarily ceased the operation of certain loss-making and negative gross profit products.

Gross Profit

The Group recorded a gross profit of approximately HK$58.82 million for the Year as compared with a gross profit of approximately HK$72.32 million for the previous year ended 31 December 2024. The Group's overall gross profit margin for the Year was 21.54%, as compared with 14.48% of gross profit margin for the year ended 31 December 2024. The decrease of gross profit was primarily attributable to the fact that by upholding the concept of sustainable development and strengthening relationships with tenants, the Group implemented rental concession measures for certain tenants of properties situated in Shenzhen to enhance cooperation stickiness, which is expected to lay a foundation for the stability of future income.

Annual Report 2025 COOLPAD GROUP LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

Selling and Distribution Expenses

Selling and distribution expenses of the Group during the Year decreased to approximately HK$15.35 million, representing a decrease of 49.13%, as compared with approximately HK$30.17 million for the year ended 31 December 2024. The decrease in selling and distribution expenses was primarily attributable to the decrease in marketing expense.

Administrative and Other Operating Expenses

Administrative and other operating expenses decreased by 27.25% from approximately HK$211.57 million for the year ended 31 December 2024 to approximately HK$153.91 million for the Year. The decrease in the amount of administrative and other operating expenses was primarily due to the implementation of strategic cost control measures, optimisation of resource allocation, and strengthening of budgetary control mechanisms by the Group.

Income Tax Credit/(Expense)

During the Year, the Group recorded a loss before tax of approximately HK$140.78 million, as compared with approximately HK$250.51 million for the year ended 31 December 2024, and the Group recorded an income tax credit of approximately HK$29.8 million for the Year as compared with an income tax expense approximately HK$1.64 million for the year ended 31 December 2024. The turning of income tax expense to income tax credit was primarily attributable to the deferred tax impacts resulting from fair value loss on investment properties for the Year as compared with fair value gain on investment properties in last year.

COOLPAD GROUP LIMITED Annual Report 2025

MANAGEMENT DISCUSSION AND ANALYSIS

Liquidity, Financial Resource and Capital Structure

For the Year, the Group's operating capital was mainly generated from cash from its daily operation of its businesses, equity funding, interest-bearing loan and other borrowings. The Group's cash requirements related primarily to production and operating activities, repayment of due liabilities, capital expenditure, interest and other unforeseeable cash requirements. The Group had a gearing ratio of 53% as at 31 December 2025 (2024: 54%). The gearing ratio is equal to net debt divided by the sum of capital and net debt.

Cash and cash equivalents of the Group as at 31 December 2025 amounted to approximately HK$244.39 million, while it was HK$65.15 million as at 31 December 2024.

As at 31 December 2025, the Group had total debts (i.e., total borrowings) of approximately HK$1,225.33 million, which were all denominated in RMB. HK$33.27 million of the Group's borrowings are due in 2026 with a rate of 2.70% to 5.15% per annum and HK$1,192.06 million of the Group's borrowings are due in 2038 to 2039 with a rate of 2.70% to 5.15% per annum.

As at 31 December 2025, the Company had 331,930,198 ordinary shares (the "Shares") of par value HK$0.1 each in issue.

Contingencies

Litigations with suppliers

The Group received several civil complaints in 2025 from suppliers demanding the Group to immediately repay the overdue accounts payable balance of RMB7,274,000 (equivalent to HK$8,066,000) (2024: HK$4,648,000). The arbitration procedures of the civil complaints were still in progress as at the date of approval of the consolidated financial statements.

Pledge of Assets

(a) As at 31 December 2025, the Group's time deposits of approximately HK$7.78 million were used as a performance guarantee and a letter of credit (2024: HK$53.21 million).

(b) As at 31 December 2025, the Group's bank borrowings are:

(i) secured by certain property, plant and equipment, investment properties and right-of-use assets of the Group with a carrying value of HK$157,582,000 (2024: HK$155,169,000), HK$3,151,680,000 (2024: HK$3,151,325,000) and HK$10,054,000 (2024: HK$9,194,000);

(ii) secured by 75% shareholding interests of Dongguan Yulong Telecommunication Tech Co., Ltd (2024: 75%);

(iii) secured by the rights to receive the rental income of Yulong Computer Telecommunication Scientific (Shenzhen) Co., Ltd. ("Yulong Shenzhen"). The amount of the secured receivable as at 31 December 2025 is HK$1,501,000 (2024: HK$7,587,000); and

(iv) guaranteed by Mr. CHEN Jiajun and Yulong Shenzhen jointly and severally.

Annual Report 2025 COOLPAD GROUP LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

Financial Review

For the Year, the Group recorded a turnover of approximately HK$273.14 million, representing a decrease of 45.30% as compared with approximately HK$499.33 million for the year ended 31 December 2024. The decrease in revenue was primarily attributable to the fact that being subject to the intense competition in the smartphone market, to enhance business efficiency, the Group implemented strategic adjustments and voluntarily ceased the operation of certain loss-making and negative gross profit products. The Group recorded a gross profit of approximately HK$58.82 million for the Year as compared with approximately HK$72.32 million for the previous year ended 31 December 2024. The Group's overall gross profit margin for the Year was 21.54%, as compared with 14.48% for the year ended 31 December 2024. The decrease of gross profit was primarily attributable to the fact that by upholding the concept of sustainable development and strengthening relationships with tenants, the Group implemented rental concession measures for certain tenants of properties situated in Shenzhen to enhance cooperation stickiness, which is expected to lay a foundation for the stability of future income.

The selling and distribution expenses of the Group during the Year decreased to approximately HK$15.35 million, representing a decrease of 49.13%, as compared with approximately HK$30.17 million for the year ended 31 December 2024. The decrease in selling and distribution expenses was primarily attributable to the decrease in marketing expense. The administrative and other operating expenses decreased by 27.25% from approximately HK$211.57 million for the year ended 31 December 2024 to approximately HK$153.91 million for the Year. The decrease in the amount of administrative and other operating expenses was primarily due to the implementation of strategic cost control measures, optimisation of resource allocation, and strengthening of budgetary control mechanisms by the Group.

For the Year, the Group recorded a loss before tax of approximately HK$140.78 million, as compared with approximately HK$250.51 million for the year ended 31 December 2024, and the Group recorded an income tax credit of approximately HK$29.8 million for the Year as compared with an income tax expense approximately HK$1.64 million for the year ended 31 December 2024. The turning of income tax expense to income tax credit was primarily attributable to the deferred tax impacts resulting from fair value loss on investment properties for the Year as compared with fair value gain on investment properties in last year.

Capital Support

The Company has not conducted any equity fund raising activities during the Year, and the Company has not formed any detailed plans for material investment and capital asset in the coming year.

COOLPAD GROUP LIMITED Annual Report 2025

MANAGEMENT DISCUSSION AND ANALYSIS

Business Review

In 2025, the global smartphone market continued its structural divergence amid a moderate recovery. According to IDC data, annual shipments recorded a slight year-on-year increase of approximately 1.9%, with growth momentum heavily concentrated in emerging markets. Benefiting from high populations and demand for device replacement in regions including India, Southeast Asia, the Middle East, Africa and Latin America, the shipment achieved 6.8% year-on-year growth, becoming the industry's primary growth engines.

However, the industry also faces severe challenges. Significant price upsurge for key components such as storage chips have exerted pressure on the costs of mid-to-low-end models. Manufacturers have generally resorted to reducing specifications or raising prices to maintain gross margins, resulting in intensified market competition. Against this backdrop, the Group has prudently evaluated the feasibility of further expanding its investment in the mainstream hardware market or engaging in full-scale competition. It concluded that the current market's high concentration and high entry barriers are inconsistent with the Company's strategic positioning of "asset-light and cash flow-focused". In the first half of 2025, the Group implemented strategic adjustments for the domestic market by proactively discontinuing operations for several products which were loss-making and generated negative margin. Resources were focused on smart ecosystem businesses with high potential and high synergy to accelerate its transition into a provider of multi-scenario smart living solutions.

In terms of the domestic market, the Group continues to deepen the strategic positioning of the "Coolpad" brand in the AloT sector so as to expand its high value-added product portfolio under an asset-light model. As of the end of 2025, the cumulative range of ecological products spanned 25 categories, representing a significant expansion from the previous year. Newly added categories focused on four key directions, namely smart office, smart home, personal health and audio-visual entertainment. These include smart learning terminals, home audio-visual equipment, personal care and health appliances, smart door locks, meeting collaboration devices, portable computing devices and accessories, effectively extending the brand's application boundaries within AloT scenarios.

The intelligent experience of these ecological products is powered by the deep technological capabilities of the CoolOS operating system. In 2025, the Group successfully achieved native integration of the "full-capacity" DeepSeek big model within CoolOS, which significantly enhanced the terminal devices' semantic comprehension, scenario awareness and proactive service capabilities, and substantially lowered the barrier to the AI application adoption. This capability not only solidified the Company's technological leadership in AI terminal sector, but also provided core support for the rapid popularization of the ecological products in the emerging markets.

As a key extension of our AI terminal strategic deployment, in June 2025, the Group entered into a strategic partnership with INMO, a leading enterprise of domestic AI+AR smart glasses. Both parties will commence deep collaboration across joint R&D of core technologies, coordinated expansion of sales channels and co-building of brand ecosystems, aiming at jointly developing next-generation smart wearable terminals to further enrich the Group's product portfolio and ecosystem synergy capabilities within multimodal AI interaction scenarios.

Annual Report 2025 COOLPAD GROUP LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

The Group continues to optimize its channel structure, with emphasis on strengthening its presence on emerging e-commerce platforms and social content channels. Performance across channels varied significantly throughout the year: certain major e-commerce platforms maintained steady growth by leveraging brand operation strengths; channels targeting lower-tier markets and utilizing new content marketing models achieved positive progress; newly expanded e-commerce channels based on social content completed initial capability building and began contributing incremental sales. Traditional offline public channels remained generally stable, providing fundamental business support; operator partnership channels underwent phased resource optimization based on product strategy and market environment changes.

In overseas markets, the Group's operations advanced steadily amid complex conditions in 2025 by implementing structural adjustments based on the principles of "reducing cost, enhancing efficiency, and focusing on areas with high-potentials". By shutting down inefficient production capacity, streamlining organizational structures, clearing inventory of outdated products, and concentrating resources on high-potential areas, the operational efficiency and asset turnover rates improved significantly. With product strategy focusing on emerging markets with high growth such as the Middle East, Africa, Eastern Europe, South Asia and Latin America, placing mid-to-low-end models with high cost-performance and fast turnover as its development core, and striving to develop its own brand with customized solutions, the products gained widespread consumer recognition for their reliable quality.

In terms of overseas distribution channels, the Group adheres to the dual-engine approach featuring "offline agency networks + cross-border e-commerce". As of the end of 2025, our business covered over 30 countries and regions, with stable partnerships with leading platforms such as SHEIN, TikTok Shop and AliExpress, etc. This strategy effectively enhanced our brand's international influence and contributed to incremental sales growth. Although performance faced short-term pressure in the first half of the year due to inventory clearance and operational adjustments, the product line renewal was completed successfully in the second half of the Year through new product iterations and supply chain optimization, resulting in significantly improvement in market performance. The Group has established stable "sales generating regions" in Saudi Arabia in the Middle East, Bangladesh and Nepal in South Asia, and certain countries in Latin America. With localized operations and precision marketing, our market share has been further solidified.

In terms of R&D strategy, the Group is steadily marching towards two key directions: first, comprehensively promoting the deep adaptation and experience optimization of the CoolOS UI system on overseas models. Through localized interface design, multilingual support and regional feature tuning, we ensure consistent user experiences globally. Second, accelerating the pre-research project for smart Bluetooth audio glasses. Leveraging the team's expertise in low-power Bluetooth protocol stacks, advanced audio algorithms and intelligent interaction technologies, the hardware architecture design, audio tuning and scenario validation have been systematically undergoing. This effort deeply integrates DeepSeek's big model capabilities to build differentiated advantages for next-generation wearable devices.

COOLPAD GROUP LIMITED Annual Report 2025

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of real estate properties, as of 31 December 2025, the major properties owned by the Group included Coolpad Information Harbor in Shenzhen and Coolpad Technology Ecological Park* (酪派科技生態園) in Dongguan Songshan Lake. The main structures of Phase II and Phase III of Coolpad Information Port in Shenzhen have been fully topped out and passed quality acceptance. Internal installation works, curtain wall construction and public area decoration are being steadily carried out, with the overall progress in line with expectations. Both Shenzhen Coolpad Information Harbor Phase I (Coolpad Building) and the Dongguan Songshan Lake Park have entered stable leasing operations, consistently generating robust rental income. Despite the general leasing market pressures in 2025, the Group maintained relatively stable occupancy rates and high rent collection rates through its location advantages, comprehensive supporting facilities and efficient management.

In the digital currency sector, since the second half of 2023, the Group has proactively positioned itself to capitalize on new opportunities arising from the convergence of Web3.0 and mobile internet. In 2024, based on its assessment of blockchain technology evolution and market trends, the Group procured and deployed high-performance computing server equipment, primarily focused on North America. In 2025, the Group strategically adjusted its business model to commence its full transition to compliant computing power leasing services since February and ceased its direct involvement in cryptocurrency mining. Its proprietary computing resources are now leased to third-party enterprises for their mining operations in a compliant manner, generating stable monthly rental income. This model effectively mitigates risks associated with cryptocurrency price volatility while achieving high asset-utilization efficiency. As of 31 December 2025, the Group possessed an effective computing power of 1,504,800 TH/s.

Business Outlook

For 2026, the Group will adhere to its core strategy of "asset-light, cash flow-focused and technology-strong", and focus on its principal AI terminal business in order to steadily facilitate global expansion while prudently managing non-core assets to achieve sustainable, high-quality development.

The Group will continue to facilitate the deep application of "AI+5G" technology in smart terminals. On one hand, it will strengthen strategic cooperation with the leading telecom operators in China to promote the seamless integration of 5G smartphones equipped with the CoolOS operating system and DeepSeek big models with communication services. This will create an integrated "device + connectivity + intelligent services" experience, enhancing product competitiveness and user lifetime value. On the other hand, it will actively expand into mainstream e-commerce platforms and emerging social content channels, refining an omnichannel marketing system that synergizes online and offline efforts to boost brand exposure and market penetration efficiency.

In the domestic market, the Group will consolidate its core smartphone business while accelerating the deployment of its AloT ecosystem across non-communication categories. Key focus areas include high-potential scenarios such as smart mobility, smart home, personal health care, smart office and home education. By introducing ecological partners, coupled with localized operational experience, the Group will develop AI terminal products with high cost-performance and strong experience to progressively build a multi-scenario smart living ecosystem with smartphones as its core basis. Meanwhile, under the premise of strictly maintaining quality and brand integrity, it will steadily promote brand licensing initiatives, exploring pathways to unlock IP value in education, personal care and smart hardware sectors.

For identification purposes only

Annual Report 2025 COOLPAD GROUP LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

Apart from AI terminals at consumer grade, the Group will fully expand its AI infrastructure business by 2026. It plans to facilitate strategic cooperation with several leading domestic and international enterprises, covering areas including AI computing devices, intelligent storage systems and integrated solutions. The Group strives to establish an AI infrastructure delivery center at the Shenzhen Coolpad Industrial Park within the year to strengthen its end-to-end service capabilities. Leveraging its own product system, the Group will develop AI Agents tailored for vertical industries and conduct market launch upon integration with the compliant hardware carrier. Additionally, it will initiate independent R&D of low-power chips and core storage technologies for specific scenarios, steadily carrying out the intellectual property deployment in underlying AI technologies to gradually build a differentiated, sustainable competitive moat in the AI industry.

In the overseas markets, the Group will seize opportunities from digital upgrades in emerging markets such as Southeast Asia, India, the Middle East and Latin America. With localized operations as the core, it will extend its product lines from smartphones to diverse smart terminals including tablets, audio devices and personal care appliances, thereby optimizing its overseas AIoT ecosystem layout. For key markets with established foundations like Saudi Arabia, Bangladesh and Nepal, the Group will increase investments in brand marketing. Through precise traffic operations and integrated communications, it will build a virtuous growth cycle of "awareness-conversion-repurchase." In respect of the channels, it will deepen collaborations with leading cross-border e-commerce platforms, and explore joint promotion models with regional channel partners. A dual-track strategy of "our own brand + ODM customization" will be implemented at the same time, which strengthens our own-brand development and allows flexible response to the differentiated needs of international clients so as to increase market share and supply chain resilience.

Regarding the real estate leasing business, the Group will continue to adhere to a prudent approach to focus on the refined operation and management of the Coolpad Information Harbor in Shenzhen and the Coolpad Technology Ecological Park in Dongguan Songshan Lake. By optimizing tenant structure, enhancing park service quality and implementing dynamic rent adjustment mechanism, we strive to maintain stable occupancy rates and rent collection levels amid the current challenging leasing market environment, thereby providing sustainable cash flow support to the Group.

In respect of the digital currency sector, the Group will continue to monitor global shifts in energy, policy and regulatory environments, strictly limiting related operations to compliant computing power leasing services. We will not directly engage in cryptocurrency mining activities. Our existing computing power resources will be used to provided stable leasing services to third-party enterprises on a monthly basis, ensuring asset security, predictable returns and effective mitigation of price volatility risks.

Moving forward, the Group will follow its conduct guidelines of "technology commercialization, streamlined operation and controllable risk management" to actively seize opportunities arising from the transformation of the AI terminal industry while effectively managing operational risks. We will balance short-term improvements in operational quality with long-term investments in core technologies. By optimizing resource allocation and enhancing operational efficiency, we will progressively strengthen profitability to deliver sustainable value returns for shareholders.

COOLPAD GROUP LIMITED Annual Report 2025

CORPORATE GOVERNANCE REPORT

Application of Corporate Governance Principles

The board (the “Board”) of directors (the “Directors”) of the Company is committed to enhancing the Group’s corporate governance standards by improving corporate transparency through effective channels of information disclosure.

The Board believes that good corporate governance is beneficial for maintaining close and trustful relationships with its employees, business partners, shareholders and investors.

The Company has adopted and complied with the Code Provisions under the Corporate Governance Code (the “Code”) contained in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) throughout the Year.

Save as disclosed in the section headed “Chairman and Chief Executive Officer” below, none of the Directors is aware of any information which would reasonably indicate that the Company has not met the requirements under the Code during the Year.

Board of Directors

It is the duty of the Board to create value to the Shareholders, establish the Company’s strategic direction, set the Company’s objectives and plan in accordance therewith, and provide leadership and ensure availability of resources in the attainment of such objectives. The Board endeavours to manage the Company in a responsible and effective manner, and strive to ensure that each of the Directors carries out his or her duty in good faith and in compliance with the memorandum and articles of association of the Company (the “Articles of Association”), the applicable laws and regulations, and acts in the best interests of the Company and the Shareholders at all times.

The Board and management of the Company (the “Management”) have clearly defined responsibilities under various internal control and checks-and-balances mechanism. The Board has delegated certain responsibilities to the Management, including implementation of decisions of the Board and organization and direction of the day-to-day operation and the Management in accordance with the management strategies and plans approved by the Board; preparation and monitoring of annual business plans and operating budget; and control, supervision and monitoring of capital, technical and human resources. The Board will review these arrangements on a periodic basis to ensure that they remain appropriate to the needs of the Group.

Annual Report 2025 COOLPAD GROUP LIMITED 17

CORPORATE GOVERNANCE REPORT

Board Composition

The Board currently comprises seven Directors, two of whom are executive Directors, two of whom are non-executive Directors and three of whom are independent non-executive Directors ("INEDs"). The composition of the Board is set out as follows:

Executive Directors

Mr. CHEN Jiajun
Mr. MA Fei
Ms. LIU Juan (resigned on 29 August 2025)

Non-executive Directors

Mr. LIANG Rui
Mr. NG Wai Hung (resigned on 7 June 2025)
Mr. XU Yibo

Independent Non-executive Directors

Mr. GUO Jinghui
Ms. WANG Guan
Mr. CHEUK Ho Kan

The biographies of the Directors are set out in the "Directors and Senior Management" on pages 29 to 32 of this report.

To the best knowledge of the Company, none of the Directors has any relationship (including financial, business, family or other material or relevant relationship) with any other Director or chief executive.

The Company has arranged for appropriate liability insurance to indemnify the Directors for their liabilities arising out of corporate affairs. The insurance coverage is reviewed annually.

Chairman and Chief Executive Officer

Under Code Provision C.2.1 of the Code, the roles of chairman and chief executive officer should be separated and should not be performed by the same individual. The division of responsibilities between the chairman and chief executive officer should be clearly established and set out in writing. Currently, Mr. Chen Jiajun is the chairman of the Board and the chief executive officer of the Company. The Board considers that this structure will not impair the balance of power and authority between the Board and the Management and believes that this structure enables the Group to make and implement decision promptly and efficiently.

Non-executive Directors

The non-executive Directors provide various expertise and experiences and maintain balance of interest to safeguard the interests of the Group and the Shareholders. They participate in Board meetings and committee meetings and make independent judgements on issues related to the Group's strategies, performance, interest conflicts and management process so as to ensure the interests of all Shareholders are properly considered. Currently, the non-executive Directors are appointed for a period of three years.

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Independent Non-executive Directors

The INEDs have the same duties of care, skill and fiduciary duties as the executive Directors. They are expressly identified as such in all corporate communications that disclose the names of the Directors. The INEDs have expertise in respective areas of accounting, business management and possess in-depth industry knowledge. With their professional knowledge and experience, the INEDs have advised the Company on its operation and management; participated in the meetings of the audit committee of the Company (the “Audit Committee”), the meetings of the remuneration committee of the Company (the “Remuneration Committee”) and the meetings of the nomination committee of the Company (the “Nomination Committee”). The INEDs have contributed to provide checks and balances to protect the interests of the Company and the Shareholders as a whole, and to promote the development of the Company.

The Company has received an annual confirmation of independence from each of the INEDs pursuant to Rule 3.13 of the Listing Rules and on this basis, considers that all INEDs are independent as at the date of this report.

Currently, each of the INEDs is appointed for a period of three years subject to renewal and retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles of Association.

Board Operation

During the Year, six Board meetings, one Annual General Meeting (“AGM”) and two Extraordinary General Meetings (“EGMs”) were held.

Attendance of individual Directors at the Board meetings in 2025 is as follows:

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During the Year, pursuant to Code Provision C.2.7 of the Code, the chairman held one meeting with the INEDs without the presence of other Directors.

Corporate Governance Functions

The Board also assumes the corporate governance functions and is responsible for: developing and reviewing the Company's policies and practices on corporate governance; reviewing and monitoring training and continuous professional development of Directors and senior management; reviewing and monitoring the Company's policies and practices on compliance with legal and regulatory requirements; developing, reviewing and monitoring the Company's code of conduct; and reviewing the Company's compliance with the Code and disclosure in this Corporate Governance Report. Besides, the Company has set up three committees including the Nomination Committee, the Remuneration Committee and the Audit Committee. Each committee has its specific terms of reference with reference to the Code.

Remuneration Committee

The written terms of reference of the Remuneration Committee are in compliance with the Code. The primary duties of the Remuneration Committee include (without limitation):

(a) to make recommendations to the Board on policies and structure for remuneration of Directors and senior management and on the establishment of a formal and transparent procedure for developing policy on such remuneration; and

(b) to determine with delegated responsibility, the remuneration packages for executive Directors and senior management, and to make recommendations to the Board on the remuneration of non-executive Directors.

During the Year, the Remuneration Committee is made up of all of the INEDs, namely, Mr. CHEUK Ho Kan (Chairperson), Mr. GUO Jinghui and Ms. WANG Guan.

During the Year, the Remuneration Committee assessed the performance and remuneration of Directors and senior management, approved the terms of Directors' service contracts, reviewed the share option scheme and reviewed the remuneration policy and structure of the Company. The Remuneration Committee had two meetings during the Year which were attended by all the members of the Remuneration Committee, to review the remuneration packages of Directors and senior management of the Group. The attendance record of each member of the Remuneration Committee is set out below:

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No Director took part in any discussion about his or her own remuneration.

Pursuant to Code Provision E.1.5 of the Code, the remuneration of the members of the senior management by band for the Year is set out below:

Audit Committee

The major responsibility of the Audit Committee is to conduct independent and objective audit of the truth and accuracy of the Group's economic operation and financial activities, financial policies, financial procedures, risk management, internal control, external audit, internal audit, financial information reporting and financial data and assist the Board in discharging its relevant duties.

During the Year, the Audit Committee, comprising all of the INEDs, namely, Mr. CHEUK Ho Kan (Chairperson), Mr. GUO Jinghui and Ms. WANG Guan has reviewed the accounting principles and practices adopted by the Company and has discussed risk management, the auditing, internal control systems and financial reporting matters.

During the Year, the Audit Committee held three meetings. The attendance record of each member of the Audit Committee is set out below:

The Audit Committee has carefully reviewed and discussed the Company's half-yearly and annual results for the Year and system of internal control and has made recommendations for improvement. The Audit Committee has carried out and discharged its duties set out in Code.

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Nomination Committee

The principal duties of the Nomination Committee include reviewing the Board composition, developing and formulating relevant procedures for nomination and appointment of Directors and senior management, making recommendations to the Board on the appointment and succession planning of Directors and senior management, and assessment of the independence of the INEDs.

During the Year, the Nomination Committee comprises one executive Director and two INEDs, namely Mr. CHEN Jiajun (Chairperson), Mr. CHEUK Ho Kan and Ms. WANG Guan as members.

The Nomination Committee carries out the process of selecting and recommending candidates for directorship and senior management by making reference to the skills, experience, professional knowledge, personal integrity and regulations. An external recruitment agency may be engaged to carry out the recruitment and selection process when necessary. The Nomination Committee held two meetings during the Year. The attendance record of the Nomination Committee meeting is set out below:

The Nomination Committee recommended the re-appointment of the Directors standing for re-election at the next forthcoming annual general meeting of the Company.

Provision of Information to Directors

To assist the Directors in the discharge of their respective duties, the Company will provide every Director with a comprehensive induction program on the first occasion of his or her appointment, in which the Director will be provided with information on the Company's organisation and business, including the membership, duties and responsibilities of the Board, the various Board committees and the Management; corporate governance practices and procedures; and the latest financial information of the Company. Such information shall be supplemented with visits to the Company's key plant sites and meetings with key members of the Management.

Throughout their tenure, the Directors will be provided with updates on the business of the Company, latest developments of the Listing Rules and other applicable legal and regulatory requirements, corporate social responsibility matters and other changes affecting the Company from time to time.

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Mechanisms to Ensure Independent Views

The Company ensures independent views and input are available to the Board via the below mechanisms:

(1) The Board composition and the independence of the INEDs should be reviewed by the Nomination Committee on an annual basis, in particular the portion of the INEDs and the independence of the independent non-executive director who has served for more than nine years;

(2) A written confirmation was received by the Company under Rule 3.13 of the Listing Rules from each of the INEDs in relation to his or her independence to the Company. The Company considers all its INEDs to be independent;

(3) In view of good corporate governance practices and to avoid conflict of interests, the Directors who are also directors and/or senior management of the Company's controlling shareholders and/or certain subsidiaries of the controlling shareholders, would abstain from voting in the relevant Board resolutions in relation to the transactions with the controlling shareholders and/or its associates;

(4) The chairman of the Board shall meet with the INEDs at least once annually without the presence of other Directors; and

(5) All members of the Board can seek independent professional advice, at the Company's expense, when necessary to perform their responsibilities in accordance with the Company's policy.

The Board reviews the mechanisms for ensuring independent views and input are available to the Board on an annual basis, whether in terms of proportion, recruitment and independence of the INEDs, and their contribution and access to external independent professional advice.

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Continuous Professional Development

All Directors are encouraged to participate in continuous professional development to develop and refresh their knowledge and skills. The Company has arranged in-house trainings for Directors in the form of seminar and provision of training materials. A summary of training received by Directors during the Year according to the records provided by the Directors is as follows:

Securities Transactions by Directors

The Company has adopted a code of conduct for securities transactions and dealings (the “Code of Conduct”) based on the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules (the “Model Code”). The terms of the Code of Conduct are no less exacting than the standards in the Model Code, and the Code of Conduct applies to all relevant persons as defined in the Model Code, including all the Directors, all other employees of the Company, and director and employees of a subsidiary or holding company of the Company who, because of such office or employment, are likely to be in possession of unpublished price sensitive information in relation to the Company or its securities. Specific enquiry has been made of all the Directors who have confirmed in writing their compliance with the required standards set out in the Model Code and the Code of Conduct during the Year.

To supplement the Model Code, the Company has also put in place a disclosure of information policy for the handling and disclosure of inside information. The policy sets out the procedures and internal controls for the handling and dissemination of inside information in a timely manner and provides the Directors, senior management and relevant employees a general guide in monitoring information disclosure and responding to enquiries. Further, control procedures have been implemented to ensure that the unauthorized access and use of inside information is strictly prohibited.

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Corporate Accountability and Internal Control

The Board is responsible for the Group's risk management and internal control system and has the responsibility for reviewing its effectiveness. Such system is designed to manage rather than eliminate the foreign exchange exposure of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss. The Directors are responsible for the preparation of the financial statements of the Group. In the preparation of financial statements, HKFRSs have been adopted and the appropriate accounting policies have been consistently used and applied. The Board aims to present a clear and balanced assessment of the Group's performance in the annual and interim reports to the Shareholders, and make appropriate disclosure and announcements in a timely manner. Pursuant to Code Provision D.1.1 of the Code, Management would provide sufficient explanation and information to the Board to enable the Board to make an informed assessment of the financial and other information put before the Board for approval.

Procedures have been designed for safeguarding assets against unauthorised use or disposition, the maintenance of proper accounting records for the provision of reliable financial information for internal use or for publications and the compliance of applicable laws, rules and regulations.

The Directors conducted an annual review of the overall effectiveness of the internal control system of the Group for the Year. A risk control department has been established to perform regular reviews and conduct audit of the Company and its subsidiaries and reported to the Board on any material issues and make recommendations to the Board. The work carried out by the risk control department will ensure the internal controls are in place and functioning properly as intended.

An external professional adviser was engaged by the Company to conduct an independent internal control review for the Year and to assist the management to improve the internal control system of the Group. The internal control review, which covered key entity-level controls and major business processes (including a follow-up on the key controls relating to last year's findings), was led by the Audit Committee. The Board and the Audit Committee are satisfied that the scope of the internal control review appropriately covered the Group's key risk areas and material controls.

The Board also reviews, at least annually, the adequacy of resources, staff qualifications and experience of the Group's accounting and financial reporting function, internal audit function (and external professional adviser) function, risk management functions, ESG performance and reporting, and their training programmes and budget. The Board has also received a confirmation from the Management on the effectiveness of the Company's risk management and internal control systems.

The Board and the Audit Committee have reviewed the results of the internal control review, together with management's confirmations, the Group's actual performance and the discussions held with the external auditor. Having so reviewed and considered, the Board and the Audit Committee are of the opinion that, for the purpose of managing the Group's key risks to a reasonable level, while not purporting to eliminate such risks, the Group's overall risk management and internal control systems were effective and adequate.

With respect to the control deficiencies disclosed in the Company's announcement dated 11 February 2025, and as set out in that announcement, the Board was of the view that: (a) the internal control deficiencies identified had been fully addressed with appropriate rectification measures; (b) the remedial measures implemented by the Company were adequate and sufficient; and (c) the Company had in place adequate and reliable governance, internal control and financial reporting systems and procedures to fulfil its obligations under the Listing Rules. Such systems and procedures remained in place throughout the Year and, having been refined and calibrated to reflect the Group's risk profile, continued to operate effectively. The Board's view in this regard remained consistent throughout the Year.

The Board will continue to monitor the key risks and their potential changes and the effectiveness of the Company's internal control systems and procedures so as to meet its obligations under the Listing Rules and ensure reasonable and adequate internal control policies and procedures are in place and commensurate with its business operations.

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Procedures for Identifying, Assessing and Managing Material Risks

The Company has set up procedures to identify, assess and manage material risks based on assessment basis, assessment dimension, risk rating and dispersion.

Firstly, the Company grades risks from aspects of assessment basis, assessment dimension, risk rating and dispersion:

In respect of assessment basis: risks will be graded by reference to the risks currently controlled by the Company (without taking into account the risks that may be controlled by the Company in the future).

In respect of assessment dimension: each risk will be graded according to the possibility of their occurrence and their impacts. The possibility represents the probability that a risk may occur, the impact represents the economic, operating, reputation and other losses that the risk may incur, and both adopt five-mark systems. Value at risk = probability × impacts, and as a result, value at risk ranges from 1–25 and the higher the value at risk, the greater the risks.

In respect of risk rating: risks are classified into three levels, namely high, medium and low in accordance with risk assessment standard based on the value at risk calculated.

Through identifying and assessing risks, the risks faced by the Company are categorized into 5 primary risks including strategic risk, financial risk, operational risk, legal risk and environmental, social, and governance risk and several secondary risks.

Secondly, the Company calculates the final assessment results of each risk after considering the grade of each assessment, pursuant to which the material risks faced by the Company during the Year are assessed.

Directors’ Responsibilities for Financial Reporting in Respect of Financial Statements

The Directors have acknowledged their responsibilities for preparing the financial statements of the Company for the Year. The Directors’ responsibilities for preparing the financial statements of the Company for the Year are set out in the Report of the Directors on page 50 of this report.

Board Diversity Policy

The Board has adopted a Board Diversity Policy in relation to the nomination and appointment of new Directors, which sets out: the selection of board candidates shall be based on a range of diversity perspectives with reference to the Company’s business model and specific needs, including but not limited to gender, age, race, language, cultural background, educational background, industry experience and professional experience.

Pursuant to Rule 13.92 of the Listing Rules, the Stock Exchange will not consider diversity to be achieved for a single gender board. As a transitional arrangement, issuers with a single gender board will have to appoint at least a director of a different gender on the board no later than 31 December 2024.

The above measurements were also reviewed annually by the Board when the Nomination Committee reviewed the composition of the Board. After assessing the suitability of the Directors’ gender, skills and experience to the Company’s business, the Nomination Committee confirmed that the existing Board was appropriately structured. As at 31 December 2025, the Board had six male Directors and one female Director. The gender diversity of Board was achieved.

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In order to achieve gender diversity among employees, the Group has formulated a human resources policy to encourage recruitment without considering the gender, nationality, race, religious belief and cultural background of employees, and to select the best candidates based on objective factors such as their skills and qualifications in a fair and open competition.

As at 31 December 2025, the Group had 44 male employees (including senior management), accounting for approximately 54.3% of the total number of employees (including senior management), and 37 female employees (including senior management), accounting for approximately 45.7% of the total number of employees (including senior management). Currently, the gender diversity of employees was achieved.

Company Secretary

All Directors have access to the advice and services of the company secretary. The company secretary reports to the Board, and is responsible for ensuring that Board procedures are followed and for facilitating information flows and communications among Directors as well as with Shareholders and the Management.

Mr. Ma Fei, who possesses the qualifications and experience of company secretary as required under Rule 3.28 of the Listing Rules, acts as the sole company secretary of the Company. He has complied with the 15 hours training requirements under Rule 3.29 of the Listing Rules.

External Auditor

Zhonghui Anda CPA Limited ("Zhonghui Anda") has been appointed as the external auditor of the Group for the Year under review. During the Year, HK$2.30 million and HK$0.33 million (2024: HK$2.30 million and HK$0.33 million) was incurred as remuneration to Zhonghui Anda for the provision of audit services and non-audit services to the Group. The responsibilities of the external auditor with respect to financial reporting are set out in the section headed "Independent Auditor's Report" on page 56 of this report.

Effective Communication with Shareholders and Shareholders' Rights

The Company recognizes the importance of effective communication with all Shareholders and investors. The Company's annual general meeting is a valuable forum for the Board to communicate directly with the Shareholders. The Company provides information relating to the Company and its business in its annual and interim reports and also disseminates such information electronically through its website www.coolpad.com.hk and the website of the Stock Exchange. All Shareholders are given a minimum of 21 days' notice of the date and venue of such annual general meeting. The Company supports the Code's principle to encourage Shareholders' participation and has reviewed its shareholders communication policy regularly to promote and ensure effective communication between the Company and Shareholders. The policy sets out various communication channels for the Shareholders to communicate their views on various matters affecting the Company, as well as steps taken to solicit and understand the views of the Shareholders.

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Pursuant to Article 58 of the Articles of Association, any one or more Shareholders holding at the date of deposit of the requisition not less than one tenth of the paid up capital of the Company carrying the right of voting at general meetings of the Company shall at all times have the right, by written requisition to the Board or the company secretary of the Company, to require an extraordinary general meeting to be called by the Board for the transaction of any business or resolution specified in such requisition, and such meeting shall be held within two months after the deposit of such requisition. If within 21 days of such deposit the Board fails to proceed to convene such meeting, the requisitionist(s) himself/herself (themselves) may convene a physical meeting at only one location which will be the Principal Meeting Place, and all reasonable expenses incurred by the requisitionist(s) as a result of the failure of the Board shall be reimbursed to the requisitionist(s) by the Company.

The Group values feedback from the Shareholders on its effort to promote transparency and foster investor relationships. Comments and suggestions are always welcomed. To promote effective communication, specific enquiries and suggestions by Shareholders can be sent in writing to the Board or the company secretary at the Company's registered address or by e-mail to the Company's email address at ir@coolpad.com. Shareholders may put forward proposals to be discussed at general meetings. Shareholders who wish to do so shall send a written requisition to the Board or company secretary of the Company by post to the principal place of business of the Company in Hong Kong at Suits 1105, 11th Floor, Central Plaza, No.18 Harbour Road, Wanchai, Hong Kong.

Having reviewed the implementation and effectiveness of the shareholders communication policy, including the multiple communication channels for Shareholders in place, the Company considers that the shareholders communication policy has been properly implemented and effective.

The Company is committed to maintaining a stable and sustainable dividend policy. The dividend policy is based on the principle of balancing Shareholders' expectations and maintaining the Company's sustainable development, with consideration of various factors, such as the current business position, future operations and income, and the financial position of the Company, current and future macroeconomic environment and development, capital needs and capital reserves, future major investment or acquisition plans, external financing environment, adjustment to relevant tax rates, adjustments to industry policies, all relevant legal and regulatory restrictions, continuity of past dividend policies and other factors as considered relevant by the Board. The Board will review and monitor the implementation of said policy from time to time to ensure its effectiveness and application.

Anti-corruption Policy

In line with the attitude of being responsible to Shareholders, investors and employees, the Company attaches great importance to anti-corruption and governance. The Company has a risk control department to conduct regular compliance reviews on its business and management.

The Company adopts a zero-tolerance principle in the fight against corruption and related non-compliances. Upholding business ethics, it formulated the "Employee Manual" and other relevant rules, which are revised, explained and reviewed annually by the Risk Control Department, and relevant training is arranged.

During the Year, the Company was not involved in any corruption litigation against the Company or its staff.

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Whistleblowing Policy

The Company is committed to maintaining high standards of integrity and ethical business practices and understands that a system of controls and balances requires a channel for employees, business partners, suppliers and other third parties to raise their concerns to senior management and the whistleblowing policy is therefore established. Whistleblowers and reported parties include employees at all levels and other stakeholders, including suppliers, who may be affected by employees' misconduct behaviors. Whistleblowers can report misconduct, malpractice, and violations directly to the Company via email, mail and phone. The Company guarantees that whistleblowers will not be retaliated against and that the name of the whistleblower will be kept strictly confidential. The Company's whistleblowing policy sets out clear review and processing procedures, recording requirements and corresponding follow-up actions for all reported cases. If a reported case is substantiated and is considered serious, it will be reported to the Audit Committee and, if there is reasonable suspicion that the reported case involves a criminal offense, it will be reported to the local law enforcement agency. If the reported case can avoid significant financial loss to the Company, the whistleblower will be rewarded.

Constitutional Documents

During the Year, the Company has made some changes to its Articles of Association to comply with the latest legal and regulatory requirements. The Company's amended and restated Articles of Association was approved on 6 June 2025 and is available on the websites of the Company and the Stock Exchange on 16 June 2025.

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DIRECTORS AND SENIOR MANAGEMENT

The biographical details of the Directors and the senior management of the Group as at the date of this report, are set out below:

Directors

Executive Directors

Mr. CHEN Jiajun

Mr. Chen, aged 34, is an executive Director, the chief executive officer and chairman of the board of the Group. Mr. Chen has extensive investment experience and currently has a wide variety of investments in different industry sectors. Mr. Chen holds a master's degree in Science of Finance from the University of Southern California ("USC"). Mr. Chen joined the Group in 2019. Before joining the Group, Mr. Chen served at Shenzhen Kingkey Banner Commercial Management Ltd. (深圳市京基百納商業管理有限公司) as vice-president from May 2015 to May 2018 and president from May 2018 to January 2019. Mr. Chen currently also serves as a Director of USC South China Alumni Club. Mr. Chen has been appointed as (i) a non-independent director of Shenzhen Kingkey Smart Agriculture Times Co., Ltd. (深圳市京基智農時代股份有限公司), the shares of which are listed on Shenzhen Stock Exchange (stock code: 000048.SZ), from 23 June 2020 to 27 October 2022; (ii) an executive director of Jakota Capital (Holding) Group (formerly known as Kingkey Financial International (Holdings) Limited), the shares of which are listed on the Main Board of the Stock Exchange (stock code: 1468.HK) from August 2020 to March 2024; (iii) an executive director and the chairman of the Allegro Culture Limited (formerly known as Kingkey Intelligence Culture Holdings Limited), the shares of which are listed on the Main Board of the Stock Exchange (stock code: 00550.HK) from August 2023 to May 2024; and (iv) an executive director of BitStrat Holdings Limited (formerly known as UTS Marketing Solutions Holdings Limited), the shares of which are listed on the Main Board of the Stock Exchange (stock code: 06113.HK) from June 2025 to October 2025 and served as an non-executive director of BitStrat Holdings Limited from October 2025 till now. As at the date of this report, Mr. Chen is the director of 18 subsidiaries of the Company and the general manager of 4 subsidiaries of the Company.

Mr. MA Fei

Mr. Ma, aged 43, has been the executive Director of the Group since 29 October 2019. Currently, he is the chief financial officer and company secretary of the Group. Mr. Ma obtained a bachelor's degree in accounting from Xi'an Jiaotong University. Mr. Ma is primarily responsible for the finance and investor relations of the Group. Mr. Ma has more than 15 years of experience in accounting and finance. Mr. Ma joined the Group in 2006, and has served successively as financial manager, vice director of investor relations department. From 2018 to 2019, Mr. Ma won the Shenzhen Innovation Talent Award for two consecutive years. Furthermore, he has been appointed as a non-executive director of the Allegro Culture Limited (formerly known as Kingkey Intelligence Culture Holdings Limited) (stock code: 00550.HK) from September 2023 to July 2024. As at the date of this report, Mr. Ma is the director of 17 subsidiaries of the Company, the supervisor of 2 subsidiaries of the Company and the general manager of 2 subsidiary of the Company.

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Non-executive Directors

Mr. LIANG Rui

Mr. Liang, aged 50, is a non-executive Director of the Group. He has been a Director of the Group since 19 January 2018. Mr. Liang is currently a president of Shenzhen Shuibei Jewelry Group. Mr. Liang obtained a doctoral degree of Technical Economics and Management from the School of Economics and Business Administration of Chongqing University in 2007 and a postdoctoral degree in Applied Economics from the School of Economics and Finance of Xi'an Jiaotong University in 2009. From January 2000 to October 2014, he worked in the Shenzhen Luohu District People's Government, serving as an officer in the Education Bureau, deputy director-general of the State Bureau for Letters and Calls, director-level deputy director of the district (governmental) committee office, and director of the Bureau of Civil Administration. From September 2014 to November 2017, he served as Secretary and director of the Shenzhen Nanhu Sub-district Office. Mr. Liang has been appointed as an executive director and Chief Executive Officer of Carrianna Group Holdings Company Limited* (佳寧鄉集團控股有限公司), the shares of which are listed on the Main Board of the Stock Exchange (stock code: 0126.HK) since 2 January 2021.

Mr. XU Yibo

Mr. Xu, aged 51, is a non-executive Director of the Group. He has been a Director of the Group since 29 October 2019. Mr. Xu obtained a bachelor's degree in electromagnetic field from Xidian University* (西安電子科技大學). Mr. Xu joined the Group in July 1998 and has about more than 15 years of experience in mobile communication, terminal security, cloud computing and mega data technology field, making contribution in standard work in more than 10 international and domestic standards organizations, such as 3GPP, IETF, IEEE, IMI-2020 (5G) Promotion Group, etc. Mr. Xu participated in the research and development of dual-standby technique which led to win the second prize of National Science and Technology Progress which is the highest award in the terminal field. As at the date of this report, Mr. Xu is the director of 5 subsidiaries of the Company and the general manager of 2 subsidiaries of the Company.

• For identification purposes only

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DIRECTORS AND SENIOR MANAGEMENT

Independent Non-executive Directors

Mr. GUO Jinghui

Mr. Guo, aged 54, has been an independent non-executive Director of the Group since 29 October 2019. He obtained a bachelor's degree in radio technology (無線電技術) from Taiyuan University of Technology. From November 2007 to August 2009, he served as the supervisor of Shenzhen Guangming New District Administration Human Resources Office (深圳市光明新區人力資源管理辦公室主任). From August 2009 to April 2013, he served as a member of the Party Working Committee and the head of the Organization and Personnel Bureau of Shenzhen Guangming New District (深圳市光明新區黨工委委員、組織人事局局長). From April 2013 to May 2014, he served as a standing committee member and the head of the Organization Department of the Shenzhen Nanshan District committee* (深圳市南山區委常委、組織部長). From May 2014 to February 2018, he served as the deputy secretary of the party committee (黨委副書記) of Guosen Securities Company Limited.

Ms. WANG Guan

Ms. Wang, aged 39, has been an independent non-executive Director of the Group since 11 October 2023. Currently, she is also a partner of Jingtian & Gongcheng. Ms. Wang graduated from Beijing Normal University with dual Bachelor degrees in Laws and Economics and obtained her Master of Law degree from New York University. Ms. Wang was admitted to the New York Bar Association in 2010 and was qualified to practice law in the People's Republic of China in 2013. In 2016, Ms. Wang obtained the China Securities Investment Fund Industry Practitioner Certificate. In 2022, she obtained the Qualification Certificate for Independent Directors of Listed Companies of Shenzhen Stock Exchange. Ms. Wang provides professional advice to national think tanks, including China Academy of Social Management and China Institute of Education and Social Development. Ms. Wang serves as the inaugural director of the Institute of Securities Law of Shenzhen Law Society, a member of the Securities Committee of the Shenzhen Lawyers Association, and a part-time arbitrator at the Shenzhen Labor and Personnel Dispute Arbitration Committee. Ms. Wang also teaches "Corporate Law and Commercial Law" course for postgraduates at The Chinese University of Hong Kong (Shenzhen). Ms. Wang has been serving as an independent director of Hynar Water Group Co Ltd. (stock code: 300961) and OFILM Group Co., Ltd. (stock code: 002456), both of which are listed on the Shenzhen Stock Exchange, since 14 October 2022 and 4 August 2023, respectively.

Mr. CHEUK Ho Kan

Mr. Cheuk, aged 38, has been an independent non-executive Director of the Group since 8 January 2024. He obtained a degree of Bachelor of Commerce (Honours) in Accountancy from Hong Kong Baptist University in 2010. Mr. Cheuk has more than 15 years of experience in various areas including accounting, auditing, financial management, taxation, financing and corporate management. Mr. Cheuk is a member of the Hong Kong Institute of Certified Public Accountants and he is also a practicing accountant in Hong Kong. Mr. Cheuk has previously worked at international accounting firms, multinational enterprises, and state-owned companies. Mr. Cheuk has been appointed as an independent non-executive director of BitStrat Holdings Limited, the shares of which are listed on the Main Board of the Stock Exchange (stock code: 6113.HK), since 26 June 2025.

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Senior Management

Mr. CHEN Zhihui

Mr. Chen, aged 47, joined Coolpad in 2005 and is currently the general manager of the sales and service center. He is responsible for the management and operation of the marketing, sales and service system. Mr. Chen graduated from China University of Geosciences, Wuhan with a bachelor's degree in business administration. Mr. Chen has more than 20 years of experience in sales management. Prior to joining the Group, Mr. Chen served at some well-known multinational companies such as Sony Ericsson Mobile Communications AB (索尼爱立信移動通訊公司), Beijing Putian Taili Communication Technology Co., Ltd (北京普天太力通信科技有限公司) and Procter & Gamble (China) Co., Limited* (寶潔(中國)有限公司), responsible for the sales and marketing.

Mr. LIU Chaohui

Mr. Liu, aged 51, joined Coolpad in March 2019 and is currently the group vice president. He is responsible for the design, engineering, cost, investment attraction and operation of the industrial park. In 1996, he graduated from Southeast University, majoring in building management engineering, with a bachelor's degree. Mr. Liu has obtained the title of senior engineer and the qualification of national registered cost engineer. From July 2020 to October 2013, Mr. Liu served as Shenzhen Regional Cost Control Director of Shenzhen Zhenye Group Co., Ltd. He was responsible for the cost of company's real estate project and bidding and purchasing management. From November 2013 to March 2014, Mr. Liu served as the Deputy General Manager of the Cost Management Center of Shenzhen Yitian Group Co. He was responsible for the cost of company's real estate project and bidding and purchasing management. From March 2014 to February 2019, Mr. Liu served as the general manager and vice president of Shenzhen Kingkey Real Estate Co., Ltd. He was responsible for the cost management of the company's real estate project.

Save as disclosed above, as at the date of this report, none of the above Directors or senior management of the Company has any relationship with any Directors, senior management, substantial or controlling shareholders of the Company as defined in the Listing Rules or hold any other position with the Company or any member of the Group.

• For identification purposes only

Annual Report 2025 COOLPAD GROUP LIMITED 33

REPORT OF THE DIRECTORS

The Directors are pleased to present their report and the consolidated financial statements of the Group for the Year to the Shareholders.

Principal Activities

The principal activity of the Company is investment holding. The Group is principally engaged in the production and sale of smart phones and devices, the provision of wireless application services, leasing of properties and cryptocurrencies business. Details of the principal activities of the Company’s subsidiaries are set out in note 1 to the financial statements.

Key Risks and Uncertainties

Risks and uncertainties involved in the business operations of the Group may affect the Group’s financial conditions or growth prospects. The Group has been focusing on the control of risks and uncertainties with the aim of understanding and addressing the concerns of stakeholders.

Key risk factors and uncertainties affecting the Group include profit risks, the risks of supply chain management and the risks of increased cost. The potential risks of improper marketing competition strategies arise from which the Companies may not be able to fully and correctly understand market trends and customer preferences.

These factors are not exhaustive or comprehensive, and there may be other risks in addition to those shown above which are not known to the Group or which may not be material now but could become material in the future.

Results, Dividends and Distribution

The Group’s profit for the Year and the state of affairs of the Company and the Group on that date are set out in the financial statements on pages 57 to 156.

Considering daily operation needs, the Directors do not recommend the payment of any final dividend for the Year.

Annual General Meeting

The date of annual general meeting of the Company will be stated in the notice of annual general meeting which will be dispatched in due course.

34 COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

Summary of Financial Information

The following is a published summary of the consolidated financial results and of the consolidated assets and liabilities of the Group for the last five financial years.

Results

Property, Plant and Equipment

Details of movements in the property, plant and equipment of the Group during the Year are set out in note 13 to the financial statements.

Investment Properties

Details of movements in the investment properties of the Group are set out in note 14 to the financial statements.

Annual Report 2025 COOLPAD GROUP LIMITED 35

REPORT OF THE DIRECTORS

Share Capital and Share Options

2014 Share Scheme

A share option scheme (the “2014 Share Scheme”) for a term of ten (10) years was adopted by the Company and became effective on 23 May 2014 and has expired on 22 May 2024. Upon the expiry of the 2014 Share Scheme, no further share options can be granted thereunder, but its provisions shall remain in full force and effect to the extent necessary to give effect to the exercise of any options granted thereunder prior to its expiry which remain outstanding, and the exercise of such share options shall be subject to and in accordance with the terms on which they were granted, the provisions of the 2014 Share Scheme and the Listing Rules.

2025 Share Scheme

A new share option scheme (the “2025 Share Scheme”) for a term of ten (10) years took effect on 6 June 2025 after an ordinary resolution to approve among others, the adoption of the same has been passed by the Shareholders at the annual general meeting of the Company held on the same day. The total number of Shares which may be issued upon exercise of all new share options to be granted under the 2025 Share Scheme together with all options and awards which may be granted under any other share schemes for the time being of the Company would be 1,638,100,795 Shares, representing approximately 10% of the Shares in issue as at 6 June 2025.

Following the Share Consolidation, adjustments have been made to the share options as stated in the circular of the Company dated 14 May 2025. On 10 June 2025, (i) the 553,943,382 outstanding share options under the 2014 Share Scheme entitling holders to subscribe for 553,943,382 shares (before the effective date of Share Consolidation) have been adjusted to 13,848,585 Consolidated Shares and (ii) the total number of shares which may be issued upon exercise of all new share options to be granted under the 2025 Share Scheme together with all options and awards which may be granted under any other share schemes for the time being of the Company have been adjusted from 1,638,100,795 shares (before the effective date of Share Consolidation) to 40,952,519 Consolidated Shares.

The number of options available for grant under the scheme mandate of the 2014 Share Scheme and the 2025 Share Scheme at the beginning and the end of the Reporting Period was Nil and 27,752,519, respectively. As at 31 December 2024, there were 557,888,236 share options outstanding under the 2014 Share Scheme. During the Year: (i) 13,200,000 share options were granted under the 2025 Share Scheme on 15 September 2025; (ii) no share options were expired; (iii) options underlying 3,944,854 shares were forfeited/cancelled before the effective date of Share Consolidation on 10 June 2025; and (iv) no share options were forfeited/cancelled after the effective date of Share Consolidation on 10 June 2025. At the end of the Year, the Company had 13,848,584 share options outstanding under the 2014 Share Scheme, and 13,200,000 share options outstanding under the 2025 Share Scheme. The exercise in full of the outstanding share options would result in the issue of 27,048,584 additional Shares.

As at the date of this report, the total number of shares available for issue under the 2014 Share Scheme and the 2025 Share Scheme was 13,848,584 shares and 13,200,000 shares, respectively (which represented approximately 4.17% and 3.98% of the issued share capital (excluding treasury share) of the Company as at the date of this report, respectively).

The Company confirms that, among the grantees under the 2014 Share Scheme and the 2025 Share Scheme, save as disclosed herein: (i) there are no participants with options granted in excess of the 1% individual limit; (ii) there are no employees working under employment contracts that are regarded as “continuous contracts” for the purposes of the Employment Ordinance; and (iii) there are no suppliers of goods or services.

36 COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

Share Option Scheme

Details of movements of share options granted to the Directors, senior management and employees of the Company during the Year are as follows:

Annual Report 2025 COOLPAD GROUP LIMITED 37

REPORT OF THE DIRECTORS

Notes to the reconciliation of share options outstanding during the Year:

1. The vesting period of the share options is from the date of grant until the commencement of the exercise period.
2. For options granted with exercisable date determined based on the grant date of options, the first 25% of the total options can be exercised a year after the grant date, and each 25% of the total options will become exercisable in each subsequent year.
3. For options granted with exercisable date determined based on the grant date of options, the first 25% of the total options can be exercised a year after the grant date, and each 25% of the total options will become exercisable in each six months thereafter.
4. Pursuant to an ordinary resolution of every forty (40) issued and unissued shares of HK$0.01 each in share capital of the Company be consolidated into one Consolidated Share of HK$0.4 each ("Share Consolidation") passed by the shareholders of the Company at an annual general meeting on 6 June 2025 and became effective on 10 June 2025, adjustments have been made to the share options. On 10 June 2025, the 553,943,382 outstanding share options under the 2014 Share Scheme entitling holders to subscribe for 553,943,382 Existing Shares have been adjusted to 13,848,585 Consolidated Shares and the exercise price per Consolidated Share was also adjusted due to the Share Consolidation.
5. For options granted with exercisable date determined based on the grant date of options and performance target, the first 50% of the total options can be exercised a year after the grant date upon achieving the corresponding performance targets, and the remaining 50% of the total options can be exercised one and a half years after the grant date upon achieving the corresponding performance targets.
6. The exercise price of a share option is the amount that the employee is required to pay to obtain each share under the option.
7. The adjusted exercise price of a share option is the amount that the employee is required to pay to obtain each share under the option adjusted due to the completion of the rights issue on 28 June 2021.
8. The number of shares that may be issued in respect of options and awards granted under all schemes of the issuer during the Year divided by the weighted average number of shares of in issue for the Year is 6.86%.
9. The fair value of the share options granted during the Year was HK$9,255,000 (HK$0.70 each), of which the Group recognised a share option expense of HK$209,000 during the Year.

38 COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

Details of movements in the Company’s share capital and share options during the Year are set out in notes 28 and 29 to the financial statements, respectively.

Pension Scheme

Particulars of the Group’s pension schemes are set out in note 2.3 to the financial statements.

Pre-emptive Rights

There are no provisions for pre-emptive rights under the Company’s existing Articles of Association or the laws of the Cayman Islands, being the jurisdiction in which the Company was incorporated, which would oblige the Company to offer new shares on a pro rata basis to existing Shareholders.

Permitted Indemnity Provision

The Company has arranged for appropriate insurance cover for Directors’ and officers’ liabilities in respect of legal actions against its Directors and senior management arising out of corporate activities.

Capital Reorganisation

On 23 April 2025, the Company proposed a capital reorganisation (“Capital Reorganisation”) to be implemented in the following manner:

(A) the share consolidation whereby every forty issued and unissued existing shares of par value of HK$0.01 each will be consolidated into one consolidated share (the “Consolidated Shares”) of par value of HK$0.4 each (“Share Consolidation”);

(B) immediately following the Share Consolidation becoming effective, the capital reduction whereby the par value of each issued consolidated share would be reduced from HK$0.4 to HK$0.1 by cancelling the paid-up capital to the extent of HK$0.3 on each issued consolidated share, and cancelling any fractional consolidated share in the issued share capital of the Company arising from the Share Consolidation (“Capital Reduction”); and

(C) immediately following the Share Consolidation and Capital Reduction becoming effective, the sub-division, whereby each authorised but unissued consolidated shares be subdivided into four (4) new shares of par value of HK$0.1 each (“Share Sub-division”); and

(D) the credit arising from the Capital Reduction would be applied towards offsetting the accumulated losses. The balance of the credit (if any) after offsetting the accumulated losses would be transferred to a distributable reserve account of the Company which may be applied by the Company.

The Share Consolidation was passed and approved as an ordinary resolution and the proposed Capital Reduction and Share Sub-division was passed and approved as a special resolution by the shareholders of the Company at the annual general meeting held on 6 June 2025. Accordingly, the Share Consolidation has become effective on 10 June 2025. Details are set out in the announcement of the Company dated 23 April 2025, the circular of the Company dated 14 May 2025 and the poll results announcement of the Company dated 6 June 2025.

All the conditions precedent for the implementation of the Capital Reduction and the Share Sub-division have been fulfilled and become effective on 24 September 2025. Details are set out in the announcement of the Company dated 24 September 2025.

Annual Report 2025 COOLPAD GROUP LIMITED 39

REPORT OF THE DIRECTORS

Purchase, Redemption or Sale of Listed Securities of the Company

At the annual general meeting of the Company held on 6 June 2025 (the “AGM”), the grant of the Repurchase Mandate (the “Repurchase Mandate”) was approved by the shareholders of the Company to the Directors to exercise the powers of the Company to repurchase a maximum of 10% of the number of Shares in issue as at the date of the AGM, being 40,952,519 Shares.

At the extraordinary general meeting of the Company held on 27 November 2025 (the “EGM”), the grant of the New Repurchase Mandate (the “New Repurchase Mandate”) was approved by the shareholders of the Company to the Directors to exercise the powers of the Company to repurchase a maximum of 10% of the number of Shares in issue (excluding those repurchased but not cancelled) as at the date of the EGM, being 36,863,819 Shares.

During the Year, the Company by utilising its internal financial resources, repurchased 77,595,000 Shares in total on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) for an aggregate consideration of approximately HK$99,250,000 before expenses. The Board considered that the trading price of the Shares did not reflect their intrinsic value. The Shares repurchased also reflects the confidence of the Board in the prospects of the Company. The 5,055,000 Shares purchased were cancelled on 27 June 2025, the 2,604,000 Shares purchased were cancelled on 20 August 2025, the 18,508,000 Shares purchased were cancelled on 29 September 2025, and the 51,428,000 Shares purchased were cancelled on 30 December 2025. All the Shares repurchased during the Year were cancelled and the Company did not hold any treasury shares (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”)) as at 31 December 2025. Details of the Shares repurchase during the Year are as follows:

Reserves

Details of movements in the reserves of the Company and of the Group during the Year are set out in note 28 to the financial statements and in the consolidated statement of changes inequity, respectively.

Tax Relief

The Company is not aware of any tax relief available to the Shareholders as a result of their holding of the Shares.

COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

Distributable Reserves

As at 31 December 2025, the Company's reserves available for distribution, calculated in accordance with the Companies Act (2025 Revision) of the Cayman Islands, amounted to HK$1,539,395,000. The Board do not recommend the payment of any final dividend for the Year. The distributable reserves include the Company's share premium account and contributed surplus, amounting to HK$3,428,697,000 in total as at 31 December 2025, which may be distributed provided that immediately following the date on which such reserves are proposed to be distributed, the Company will be in a position to pay off its debts as and when they fall due in the ordinary course of business.

Donations

In the Year, the Group has donated a total amount of approximately HK$1,220,000 (2024: HK$250,000).

Compliance with Laws and Regulations

The Group recognises the importance of compliance with regulatory requirements. Compliance procedures have been enhancing to ensure adherence to applicable laws, rules and regulations in particular, those have significant impact on the Group. Any changes in the applicable laws, rules and regulations are brought to the attention of relevant employees and relevant operation units from time to time.

The Group's operations are mainly carried out by the Company's subsidiaries in Mainland China, Hong Kong and United States, while the Company itself was incorporated in the Cayman Islands and listed on the Stock Exchange in Hong Kong. Our establishment and operations accordingly shall comply with relevant laws and regulations in Hong Kong, Cayman Islands and other business operating areas. The Group has established compliance procedures to ensure its compliance with applicable laws, regulations and normative legal documents that are applicable (especially to the main business). If there is any change in the applicable laws, regulations and normative legal documents of the main business, the Group will notify relevant staff and relevant operating teams from time to time.

Save as disclosed in the section headed "Application of Corporate Governance Principles", as far as the Company is aware of, the Group has complied in material respects with the relevant laws and regulations which have a significant impact on the business and operations of the Company during the Year.

Environmental Policies and Performance

The Group considers the importance of environmental affairs and believes business development and environment affairs are highly related. The Group recognizes its corporate responsibility, environmental and social sustainability and has therefore taken the initiatives with a view to reducing energy consumption, food and paper waste. The Group implements green office practices such as duplex-printing and copying, promoting using recycled paper and reducing energy consumption by switching off idle lightings and electrical appliances. Through the initiative taken to control electricity consumption by using energy-efficient retrofits and air-conditioning and lighting control measures in workplaces, we have seen continued improvement in reducing the use of electricity. The Group also emphasized the social responsibility of eco-friendly production. Going forward, the Group will continue to promote environmental and social sustainability through various initiatives consistent with its policies and relevant laws and regulations.

For details, please refer to the report of "Environmental, Social and Governance".

Annual Report 2025 COOLPAD GROUP LIMITED 41

REPORT OF THE DIRECTORS

Major Customers and Suppliers

In the Year, sales to the Group’s five largest customers accounted for approximately 32.93% of the total sales for the Year and sales to the largest customer included therein amounted to approximately 14.31%. Purchases from the Group’s five largest suppliers accounted for approximately 92.34% of the total purchases for the Year and purchases from the largest supplier included therein amounted to approximately 63.34%.

None of the Directors or any of their close associates or any Shareholders which, to the best knowledge of the Directors, own more than 5% of the Company’s issued share capital had any beneficial interest in the Group’s five largest customers and/or suppliers.

Relationships with Customers and Suppliers

The Group understands that it is important to maintain good relationship with its suppliers and customers to fulfil its long-term goals and maintain the leading position in the market. To maintain its core competitiveness and brand dominant status, the Group aims at delivering constantly high standards of quality in the service to its customers.

Management Contracts

No contract, other than employment contracts, concerning the management and administration of the whole or any substantial part of the business of the Company was entered into or subsisting during the Year.

Directors

The Directors of the Company during the Year and up to the date of this report were:

Executive Directors

Mr. CHEN Jiajun
Mr. MA Fei
Ms. LIU Juan (resigned on 29 August 2025)

Non-executive Directors

Mr. LIANG Rui
Mr. NG Wai Hung (resigned on 7 June 2025)
Mr. XU Yibo

Independent Non-executive Directors

Mr. GUO Jinghui
Ms. WANG Guan
Mr. CHEUK Ho Kan

COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

Under the provisions of the Articles of Association, one-third of the Directors are subject to retirement by rotation and re-election at each annual general meeting at least once every three years.

In accordance with the Articles of Association, certain Directors will retire and, being eligible, will offer themselves for re-election at the forthcoming annual general meeting of the Company. Save for the aforesaid, the other remaining Directors of the Company would continue in office.

The Company has received from each of the INEDs an annual confirmation pursuant to Rule 3.13 of the Listing Rules and the Board still considers each of the INEDs to be independent from the Company.

Directors' and Senior Management's Biographies

Save as disclosed in this report, there are no changes in information of Directors required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules as at the date of this report. Biographical details of the Directors and the senior management of the Group are set out on pages 29 to 32 of this report.

Directors' Service Contracts

None of the Directors has entered into a service contract with the Company which is not determinable by the Company within one year without payment of compensation, other than statutory compensation.

Directors' Remuneration

The Directors' fees are subject to Shareholders' approval at general meetings. Other emoluments are determined by the Company's Board with reference to Directors' duties, responsibilities and performance and the results of the Group.

Directors' Interests in Transaction, Arrangement or Contract of Significance

Save as disclosed in note 34 to the financial statements, neither Director nor entity connected with the Director had a material interest, either directly or indirectly, in any transaction, arrangement or contract of significance to the business of the Group subsisting at any time during the Year or at the end of the Year to which the Company or any of its subsidiaries was a party.

Controlling Shareholders' Interests in Transaction, Arrangement or Contract of Significance

Save as disclosed in note 34 to the financial statements, no controlling shareholders of the Company had a material interest, either directly or indirectly, in any transaction, arrangement or contract of significance to the business of the Group subsisting at any time during the Year or at the end of the Year to which the Company or any of its subsidiaries was a party.

Annual Report 2025 COOLPAD GROUP LIMITED 43

REPORT OF THE DIRECTORS

Continuing Connected Transactions

On 23 December 2022, Yulong Computer Telecommunication Scientific (Shenzhen) Co., Ltd. (“Yulong Shenzhen”), an indirect wholly-owned subsidiary of the Company had entered into the property management services agreement (“2022 Property Management Services Agreement”) with Shenzhen Kingkey Property Management Co., Ltd (“Shenzhen Kingkey”) in relation to the provision of property management services in respect of Coolpad Building by Shenzhen Kingkey. For details, please refer to the announcement of the Company dated 23 December 2022.

On 14 July 2023, Dongguan Yulong Telecommunication Tech Co., Ltd. (“Dongguan Yulong”), an indirect wholly-owned subsidiary of the Company, and Shenzhen Kingkey entered into the Industrial Park Management Services Agreement (“Industrial Park Management Services Agreement”) for a term commencing from the delivery of the Industrial Park, which was expected to begin on 1 October 2023, and to end on 31 December 2025 (both dates inclusive). Pursuant to the Industrial Park Management Services Agreement, Shenzhen Kingkey agreed to provide, through itself or its wholly-owned subsidiary, Dongguan Kingkey Property Management Company Limited (“Dongguan Kingkey”), to Dongguan Yulong property management services in respect of factory plants and dormitories situated at Industrial West One Road, Songshan Lake, Dongguan, PRC. For details, please refer to the announcement of the Company dated 14 July 2023 and the circular of the Company dated 15 August 2023.

As Shenzhen Kingkey is ultimately controlled by Mr. Chen Hua, who is an immediate family member of Mr. Chen Jiajun, a substantial Shareholder, an executive Director, the chief executive officer and chairman of the Company. Accordingly, Shenzhen Kingkey is an associate of Mr. Chen Jiajun and a connected person of the Company and the transactions contemplated under the 2022 Property Management Services Agreement and the Industrial Park Management Services Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. The Company has complied with the annual review and reporting requirements under Chapter 14A of the Listing Rules.

The Group seeks to engage a professional property management company to provide property management services, which typically include security, cleaning, landscaping, repair and maintenance of common area and shared facilities, in order to ensure the provision of sound property management services and the maintenance of good building conditions and environment to enhance satisfaction of property owners and tenants and enhance property value. Shenzhen Kingkey and Dongguan Kingkey are reputable in the PRC for providing reliable, efficient and satisfactory property management services to property developers in the PRC, as compared to other services providers who are independent third parties. In addition, the Company believes that Shenzhen Kingkey and Dongguan Kingkey generally maintain better and more efficient communication with the Group and have a more thorough understanding of the conditions of the Group's property projects and the requirements of the services needed. The detail information of the continuing connected transactions was as follows:

COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

2022 Property Management Services Agreement

Background:

On 25 March 2020, Yulong Shenzhen entered into a property management services agreement with Shenzhen Kingkey in relation to the provision of property management services in respect of Coolpad Building by Shenzhen Kingkey.

The property management services agreement entered into in 2020 expired on 31 December 2022 and on 23 December 2022, Yulong Shenzhen and Shenzhen Kingkey entered into the 2022 Property Management Services Agreement for a term of three years commencing from 1 January 2023 and ending on 31 December 2025 (both dates inclusive).

Particulars of the 2022 Property Management Services Agreement together with the total consideration for the Year are disclosed below pursuant to the Listing Rules.

Nature of transaction:

Purchase of property management service, including repairs and maintenance of communal areas and facilities, cleaning, traffic safety management, security and greening services, for Coolpad Building from Shenzhen Kingkey.

Terms:

The property management service fees are determined with reference to the rate of RMB25 (tax inclusive) per month per square meter and other extra service expense.

Annual cap (tax inclusive):

RMB18,000,000

Total consideration for the Year (tax inclusive):

RMB15,675,974

Annual Report 2025 COOLPAD GROUP LIMITED 45

REPORT OF THE DIRECTORS

Industrial Park Management Services Agreement

Background:
On 14 July 2023, Dongguan Yulong and Shenzhen Kingkey entered into the Industrial Park Management Services Agreement for a term commencing from the delivery of the Industrial Park, which was expected to begin on 1 October 2023, and to end on 31 December 2025 (both dates inclusive).

Particulars of the Industrial Park Management Services Agreement together with the total consideration for the Year are disclosed below pursuant to the Listing Rules.

Nature of transaction:
Purchase of property management service in respect of factory plants and dormitories situated at Industrial West One Road, Songshan Lake, Dongguan, PRC, including management, repairs and maintenance of communal areas and facilities, cleaning, parking and traffic safety management, security control and greening and landscape maintenance.

Terms:
The property management service fees are calculated based on the agreed monthly charging rates (tax inclusive) applicable to different types of properties and the gross floor area of the relevant properties to be managed as below:

| Types of property | Monthly charging rate
(RMB/square meter) |
| --- | --- |
| Phase 1 Factory Plant | 3.8 |
| Phase 1 Dormitory | 2.5 |
| Phase 2 (幸福樓) Dormitory | 3.3 |
| Phase 2 (幸福樓) Amenities | 3.8 |
| Phase 3 Factory Plant | 6.5 |

Annual cap (tax inclusive):
RMB22,000,000

Total consideration for the Year (tax inclusive):
RMB7,258,068

The Company has confirmed that the execution and enforcement of the implementation agreements under the continuing connected transactions set above for the Year has followed the pricing principles of such continuing connected transactions.

COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

The INEDs have reviewed and confirmed that the continuing connected transactions mentioned above conducted in the Year have been entered into:

(a) in the ordinary and usual course of the business of the Group;
(b) on normal commercial terms or better; and
(c) according to the relevant agreements governing these transactions on terms that are fair and reasonable and in the interests of the Shareholders as a whole.

The Company's auditor was engaged to report on the Group's continuing connected transaction in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information" and with reference to Practice Note 740 "Auditor's Letter on Continuing Connected Transactions under the Hong Kong Listing Rules" issued by the Hong Kong Institute of Certified Public Accountants. The auditors have confirmed that (1) the continuing connected transactions have been approved by the Board; (2) there is a written agreement in place governing the continuing connected transactions and the transactions have been entered into in accordance with such agreements. No side agreement has been entered into in respect of any transaction; and (3) the aggregate annual values of the continuing connected transactions have not exceeded the annual caps of relevant amount. The auditor has issued an unqualified letter containing its findings and conclusions in respect of the continuing connected transactions disclosed by the Group above in accordance with Rule 14A.56 of the Listing Rules.

The 2022 Property Management Services Agreement expired on 31 December 2025 and on 11 December 2025, Yulong Shenzhen and Shenzhen Kingkey entered into a new property management services agreement ("2025 Property Management Services Agreement") for a term of three years commencing from 1 January 2026 and ending on 31 December 2028 (both dates inclusive), to renew the transactions under the 2022 Property Management Services Agreement. The new annual caps for the transactions contemplated under the 2025 Property Management Services Agreement is RMB14,500,000 for each of the three years ending 31 December 2028.

The Industrial Park Management Services Agreement expired on 31 December 2025 and on 11 December 2025, Dongguan Yulong and Shenzhen Kingkey entered into a new industry park management services agreement ("2025 Industrial Park Management Services Agreement") for a term of three years commencing from 1 January 2026 and ending on 31 December 2028 (both dates inclusive), to renew the transactions under the Industrial Park Management Services Agreement. The new annual caps for the transactions contemplated under the 2025 Industrial Park Management Services Agreement is RMB7,500,000 for each of the three years ending 31 December 2028.

Further details of the renewal of continuing connected transactions in relation to the 2022 Property Management Services Agreement and the Industrial Park Management Services Agreement have been set out in the announcement of the Company dated 11 December 2025.

Other Connected Transactions

Save for the related parties transactions disclosed in note 34 to the consolidated financial statements, no related parties transactions disclosed in the consolidated financial statements constitutes a discloseable connected transaction as defined under the Listing Rules. The Company has complied with the disclosure requirements set out in Chapter 14A of the Listing Rules.

Annual Report 2025 COOLPAD GROUP LIMITED 47

REPORT OF THE DIRECTORS

Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures

As at 31 December 2025, the interests and short positions of the Directors, the chief executive or their respective associates in the share capital, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong (the “SFO”)), as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code, were as follows:

Long Positions in Shares of the Company

Notes:

1. As at 31 December 2025, 58,283,887 Shares were directly held by Great Shine Investment Limited (formerly known as Kingkey Financial Holdings (Asia) Limited) (“Great Shine”), which is 100% directly held by Great Splendid Holdings Limited. Mr. Chen Jiajun is the director of Great Splendid Holdings Limited and holds 100% shares thereof. In addition, 20,000,000 Shares were directly held by Elite Mobile Limited which was ultimately wholly-owned by Mr. Chen Jiajun. Therefore, Mr. Chen Jiajun was indirectly interested in the 78,283,887 Shares, of which 58,283,887 Shares were held through Great Shine and 20,000,000 Shares were held through Elite Mobile Limited.

2. The interests of these Directors are in the underlying shares of the options granted to the relevant Directors by the Company under the share option scheme adopted by the Company on 23 May 2014.

3. As at 31 December 2025, the total number of issued Shares was 331,930,198.

COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

Substantial Shareholders’ and Other Persons’ Interests and Short Positions in Shares and Underlying Shares and Debentures

As at 31 December 2025, the following interests and short positions of 5% or more in the issued share capital and share options of the Company were recorded in the register of interests required to be kept by the Company pursuant to Section 336 of the SFO:

Long Positions in Shares of the Company

Notes:

1. As at 31 December 2025, 58,283,887 Shares were directly held by Great Shine, which is 100% directly held by Great Splendid Holdings Limited. Mr. Chen Jiajun is the director of Great Splendid Holdings Limited and holds 100% shares thereof. In addition, 20,000,000 Shares were directly held by Elite Mobile Limited which was ultimately wholly-owned by Mr. Chen Jiajun. Therefore, Mr. Chen Jiajun was indirectly interested in the 78,283,887 Shares, of which 58,283,887 Shares were held through Great Shine and 20,000,000 Shares were held through Elite Mobile Limited.

2. As at 31 December 2025, (i) 23,006,500 Shares were directly held by YH Fund SPC – YH01 SP I, which was ultimately controlled by Mr. Liu Feng; and (ii) 12,500,000 Shares were directly held by Mr. Liu Feng.

Annual Report 2025 COOLPAD GROUP LIMITED 49

REPORT OF THE DIRECTORS

1. As at 31 December 2025, 20,000,000 Shares were directly held by SAI Growth Fund I, LLLP which was ultimately controlled by Mr. Jeffrey Steven Yass.

2. As at 31 December 2025, the total number of issued Shares was 331,930,198.

Save as disclosed above, as at 31 December 2025, so far as the Directors are aware, there are no other persons, other than the Directors and chief executive of the Company, who had interests or short positions in the shares, underlying shares or debentures of the Company which would be required to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO and are required to be recorded in the register required to be kept pursuant to Section 336 of the SFO.

Directors’ Rights to Acquire Shares or Debentures

Save as disclosed in the section “Directors’ and chief executive’s interests and short positions in shares, underlying shares and debentures” above, at no time during the Year were rights to acquire benefits by means of the acquisition of shares in or debentures of the Company granted to any Directors or their respective spouses or minor children, or were any such rights exercised by them; or was the Company, or any of its subsidiaries a party to any arrangement to enable the Directors to acquire such rights in any other body corporate.

Audit Committee

The Audit Committee, which currently comprises three independent non-executive Directors, has reviewed the accounting principles and practices adopted by the Company and has discussed auditing, internal control and financial reporting matters. The Audit Committee has reviewed the Group’s annual results for the Year.

Directors’ Interests in a Competing Business

As at 31 December 2025, none of the Directors or any of their respective associates had any interest in any business which competes or likely to compete, either directly or indirectly, with the businesses of the Group pursuant to Rule 8.10 of the Listing Rules.

Material Legal Proceedings

Save as disclosed in note 31 to the financial statements, the Company was not involved in any material litigation or arbitration and no material litigation or claim was pending or threatened or made against the Company during the Year as far as the Board was aware of.

Sufficiency of Public Float

Based on information that is publicly available to the Company and within the knowledge of the Directors, as at the date of this report, the percentage of shares of the Company in public hands is in compliance with the prescribed level of the minimum public float as set out in Rule 8.08 of the Listing Rules.

Foreign Exchange Exposure

The main business operations of the Group during the Year are conducted in Mainland China. Its income, cost and assets are denominated primarily in Renminbi (“RMB”), while the Group’s consolidated financial statements are expressed in HK$. The exchange rate risk of the Group arises mainly from foreign exchange exposures associated with the sales, purchases and assets settled in currencies other than HK$ and the volatility of exchange rates. The Group has not entered into any derivative contracts to hedge against the risk in the Year.

COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

Interest Rate Risk

The risk in interest rate concerning the Group primarily relates to its short-term bank loans, long-term bank loan and other borrowings. The interests are calculated at fixed and floating rates. Any rise in the current interest rate will increase the interest cost. As at the end of the Year, the Group had not executed any form of interest rate agreement or derivative to hedge against the fluctuation in interest rate.

Employees and Remuneration Policy

During the Year, the Group's staff costs (including Directors' remuneration) amounted to approximately HK$66.87 million (2024: HK$105.35 million). The remuneration of the Group's employees (including the Directors) was commensurate with their responsibilities and market rates, with discretionary bonuses and training given on a merit basis. As of 31 December 2025, the Group had 88 employees (including the Directors) (2024: 225 employees (including the Directors)).

Significant Investments

As at 31 December 2025, the Group had no significant investment with a value of 5% or more of the Group's total assets.

Material Acquisitions and Disposal

The Company and its subsidiaries had no material acquisition and disposal transactions during the Year.

Directors' Responsibilities for the Financial Statements

The Directors have acknowledged their responsibilities for preparing the financial statements of the Company for the Year. The Board is responsible for presenting a balanced, clear and understandable assessment of annual and interim reports, inside information announcements and other disclosures required under the Listing Rules and other statutory and regulatory requirements.

Events after the Year

Acquisition of Listed Securities

In middle February 2026, the Company has adopted an investment plan, under which the Group may acquire up to US$5.00 million (equivalent to approximately HK$39.05 million) of securities listed/ETF traded in the United States in relation to the crypto assets sector through on-market transactions (the "Investment Plan"). On 25 February 2026 (Hong Kong Time), Digital Tech Inc. ("Digital Tech"), a wholly-owned subsidiary of the Company, acquired a total of 39,000 shares of Strategy Inc, a company incorporated in the State of Delaware, the United States, with its Class A common stock listed on Nasdaq Global Select Market (stock symbol: MSTR) ("MSTR") at an aggregate consideration of approximately US$4.98 million (equivalent to approximately HK$38.89 million) (excluding stamp duty and related expenses), representing approximately US$127.58 (equivalent to approximately HK$996.40) per share of MSTR (the "MSTR Share(s)"). For details of the acquisition of MSTR Shares, please refer to the Company's announcement dated 25 February 2026.

Annual Report 2025 COOLPAD GROUP LIMITED 51

REPORT OF THE DIRECTORS

Sale of MSTR Call Options

On 26 February 2026 (Eastern Standard Time), Digital Tech sold a total of 390 MSTR call options underlying 39,000 MSTR Shares, with each MSTR call option corresponds to 100 MSTR Shares (the “MSTR Call Option(s)”) at the aggregate premiums of US$51,210 (equivalent to HK$399,950), which are exercisable at the discretion of the holders of the MSTR Call Options on the expiration date of 6 March 2026 to purchase the relevant MSTR Shares held by Digital Tech at the strike price of US$150.00 per MSTR Share. The MSTR Call Options sold on 26 February 2026 were not exercised by the holders thereof upon the expiration date.

On 10 March 2026 (Eastern Standard Time), Digital Tech sold a total of 390 MSTR Call Options underlying 39,000 MSTR Shares at the aggregate premiums of US$31,080 (equivalent to HK$242,735), comprising (i) 240 MSTR Call Options underlying 24,000 MSTR Shares at the aggregate premiums of US$14,180 (equivalent to HK$110,746), exercisable on 13 March 2026 at the strike price of US$152.50 per MSTR Share; and (ii) 150 MSTR Call Options underlying 15,000 MSTR Shares at the aggregate premiums of US$16,900 (equivalent to HK$131,989), exercisable on 10 April 2026 at the strike price of US$190.00 per MSTR Share. The 390 MSTR Call Options sold on 10 March 2026 were not exercised by the relevant holders thereof upon their respective expiration dates.

On 18 March 2026 (Eastern Standard Time), Digital Tech sold a total of 240 MSTR Call Options underlying 24,000 MSTR Shares at the aggregate premiums of US$34,140 (equivalent to HK$266,633), comprising (i) 140 MSTR Call Options underlying 14,000 MSTR Shares at the aggregate premiums of US$17,340 (equivalent to HK$135,425), exercisable on 20 March 2026 at the strike price of US$152.50 per MSTR Share; and (ii) 100 MSTR Call Options underlying 10,000 MSTR Shares at the aggregate premiums of US$16,800 (equivalent to HK$131,208), exercisable on 27 March 2026 at the strike price of US$160.00 per MSTR Share. The 240 MSTR Call Options sold on 18 March 2026 were not exercised by the relevant holders thereof upon their respective expiration dates.

Disposal of MSTR Shares

On 16 April 2026 (Eastern Standard Time), Digital Tech sold a total of 390 MSTR Call Options underlying 39,000 MSTR Shares at the aggregate premiums of US$32,130 (equivalent to HK$250,935), exercisable on 17 April 2026 at the strike price of US$150.00 per MSTR Share. The 390 MSTR Call Options sold on 16 April 2026 (Eastern Standard Time) have been exercised in full by the relevant holders of the 390 MSTR Call Options on 17 April 2026 (Eastern Standard Time). On 17 April 2026 (Eastern Standard Time), the Group disposed of 39,000 MSTR Shares on the open market to the relevant holders of the 390 MSTR Call Options at the price of US$150.00 (excluding transaction costs) per MSTR Share, for a total consideration of approximately US$5.85 million (equivalent to approximately HK$45.69 million). Upon the completion of the Disposals, the Group does not hold any MSTR Shares.

For further details of the sale of MSTR Call Options and disposal of MSTR Shares, please refer to the Company's announcements dated 27 February, 11 March, 19 March 2026, 17 April 2026 and 19 April 2026.

52 COOLPAD GROUP LIMITED Annual Report 2025

REPORT OF THE DIRECTORS

Investigation Against an Independent non-executive Director

On 25 March 2026, the Company was informed that Mr. Guo Jinghui, an independent non executive director of the Company, is under investigation by the Shenzhen Municipal Supervisory Commission of the People's Republic of China and has been subjected to detention measures. Mr. Guo does not participate in the Group's daily operations or management and, apart from his role as an independent non executive director, he serves only as a member of the audit committee and the remuneration committee of the Company. The Company had not received any request from the relevant authority to assist in the investigation or to provide any information. The Board is of the view that the matter has not had any material adverse impact on the Group's normal operations or business activities. Please refer to the Company's announcement dated 25 March 2026 for the aforementioned matter.

Auditor

Zhonghui Anda will retire and a resolution for their reappointment as auditor of the Company will be proposed at the forthcoming annual general meeting.

On behalf of the Board
Coolpad Group Limited

Chen Jiajun
Executive Director
Chief Executive Officer
Chairman

27 March 2026, Hong Kong

Annual Report 2025 COOLPAD GROUP LIMITED 53

INDEPENDENT AUDITOR'S REPORT

ZHONGHUI

TO THE SHAREHOLDERS OF COOLPAD GROUP LIMITED

(Incorporated in the Cayman Islands with limited liability)

Opinion

We have audited the consolidated financial statements of Coolpad Group Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") set out on pages 57 to 156, which comprise the consolidated statement of financial position as at 31 December 2025, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2025, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with HKFRS Accounting Standards issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance.

Basis for Opinion

We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAs") issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the HKICPA's Code of Ethics for Professional Accountants (the "Code"), as applicable to audits of consolidated financial statements of public interest entities. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to note 2.1 to the consolidated financial statements which mentions that the Group incurred a loss of HK$110,982,000 for the year ended 31 December 2025 and as at 31 December 2025, the Group had net current liabilities of HK$690,200,000. As stated in note 2.1, these events or conditions, along with other matters as set forth in note 2.1, indicates that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

COOLPAD GROUP LIMITED Annual Report 2025

INDEPENDENT AUDITOR'S REPORT

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section of our report, we have determined the matters described below to be the key audit matters to be communicated in our report.

Valuation of investment properties

Refer to Note 14 to the consolidated financial statements

The Group measured its investment properties at fair value with the changes in fair value recognised in the consolidated profit or loss. This fair value measurement is significant to our audit because the balance of investment properties of HK$3,151,680,000 as at 31 December 2025 is material to the consolidated financial statements. In addition, the Group's fair value measurement involves application of judgement and is based on assumptions and estimates.

Our audit procedures included, among others:

• Assessing the competence, independence and integrity of the external valuer engaged by client;
• Obtaining the external valuation reports and meeting with the external valuer to discuss and challenge the valuation process, methodologies used and market evidence to support significant judgments and assumptions applied in the valuation model;
• Checking key assumptions and input data in the valuation model to supporting evidence;
• Checking arithmetical accuracy of the valuation model; and
• Assessing the disclosure of the fair value measurement in the consolidated financial statements.

We consider that the Group's fair value measurement of the investment properties is supported by the available evidence.

Annual Report 2025 COOLPAD GROUP LIMITED 55

INDEPENDENT AUDITOR'S REPORT

Key Audit Matters (Continued)

Valuation and impairment of property, plant and equipment

Refer to Note 13 to the consolidated financial statements

As at 31 December 2025, the Group’s property, plant and equipment amounted to HK$461,086,000.

The Group applies the revaluation model for its buildings, which are carried at fair value less subsequent accumulated depreciation. The fair value of these assets amounted to HK$158,455,000.

Also, the Group applies the cost model for other property, plant and equipment amounted to HK$302,631,000, which are carried at cost less accumulated depreciation and impairment. Management measures the respective recoverable amounts which are higher of fair value less costs of disposal and their value in use.

Management engaged independent external valuers to determine the value of property, plant and equipment at the reporting date. We identified the valuation and impairment assessment of property, plant and equipment as a key audit matter due to the significance of the balances to the consolidated financial statements. In addition, the Group’s valuation and impairment test involves application of judgement and is based on assumptions and estimates.

Our audit procedures included, among others:

• Assessing the competence, independence and integrity of the external valuers engaged by client;
• Obtaining the external valuation reports and meeting with the external valuers to discuss and challenge the valuation process, methodologies used and market evidence to support significant judgments and assumptions applied in the valuation model;
• Checking key assumptions and input data in the valuation model to supporting evidence;
• Checking arithmetical accuracy of the valuation model; and
• Assessing the disclosure of the fair value measurement and impairment assessment in the consolidated financial statements.

We consider that the Group’s valuation and impairment test for property, plant and equipment is supported by the available evidence.

56 COOLPAD GROUP LIMITED Annual Report 2025

INDEPENDENT AUDITOR'S REPORT

Other Information

The directors are responsible for the other information. The other information comprises all the information in the Company's annual report, but does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Directors for the Consolidated Financial Statements

The directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with HKFRS Accounting Standards issued by the HKICPA and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. We report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financial statements is located at the HKICPA's website at: https://www.hkicpa.org.hk/en/Standards-setting/Standards/Our-views/auditre. This description forms part of our auditor's report.

ZHONGHUI ANDA CPA Limited
Certified Public Accountants
Li Shun Fai
Audit Engagement Director
Practising Certificate Number P05498
Hong Kong, 27 March 2026

Annual Report 2025 COOLPAD GROUP LIMITED 57

For the year ended 31 December 2025

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

| | Notes | 2025
HK$'000 | 2024
HK$'000
(Restated) |
| --- | --- | --- | --- |
| REVENUE | 5 | 273,136 | 499,332 |
| Cost of sales | | (214,316) | (427,013) |
| GROSS PROFIT | | 58,820 | 72,319 |
| Other income and other gains or losses, net | 5 | 15,180 | (26,868) |
| Selling and distribution expenses | | (15,346) | (30,166) |
| Administrative and other operating expenses | | (153,912) | (211,572) |
| Finance costs | 7 | (47,336) | (40,803) |
| Share of profits/(losses) of associates | | 1,812 | (13,424) |
| LOSS BEFORE TAX | 6 | (140,782) | (250,514) |
| Income tax credit/(expense) | 10 | 29,800 | (1,644) |
| LOSS FOR THE YEAR | | (110,982) | (252,158) |
| OTHER COMPREHENSIVE INCOME/(LOSS) | | | |
| Other comprehensive income/(loss) that may be reclassified to profit or loss in subsequent periods: | | | |
| Exchange differences on translation of foreign operations | | 80,657 | (46,807) |
| Release of translation reserve upon disposal and deregistration of subsidiaries | | (2,059) | - |
| Share of other comprehensive income/(loss) of associates | | 4,513 | (4,217) |
| | | 83,111 | (51,024) |
| Other comprehensive income/(loss) that will not be reclassified to profit or loss in subsequent periods: | | | |
| Gain on property revaluation | | 11,976 | 2,504 |
| Income tax effect on gain on property revaluation | 27 | (2,994) | (626) |
| | | 8,982 | 1,878 |
| OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR, NET OF TAX | | 92,093 | (49,146) |
| TOTAL COMPREHENSIVE LOSS FOR THE YEAR | | (18,889) | (301,304) |
| Loss per share | 12 | | |
| - Basic (HK cents) | | (28.15) | (61.57) |
| - Diluted (HK cents) | | (28.15) | (61.57) |

58 COOLPAD GROUP LIMITED Annual Report 2025

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2025

| | Notes | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- | --- |
| Non-current assets | | | |
| Property, plant and equipment | 13 | 461,086 | 493,611 |
| Investment properties | 14 | 3,151,680 | 3,151,325 |
| Right-of-use assets | 15(a) | 51,355 | 49,536 |
| Intangible assets | 16 | – | – |
| Investments in associates | 17 | 169,041 | 161,020 |
| Financial assets at fair value through profit or loss ("FVTPL") | 22 | 21,914 | 16,655 |
| Other non-current assets | 21 | 34,719 | 97,728 |
| Total non-current assets | | 3,889,795 | 3,969,875 |
| Current assets | | | |
| Inventories | 18 | 12,866 | 58,676 |
| Cryptocurrencies | 19 | – | 10,618 |
| Trade receivables | 20 | 7,519 | 85,219 |
| Prepayments, deposits and other receivables | 21 | 73,640 | 56,742 |
| Financial assets at FVTPL | 22 | – | 116,260 |
| Pledged deposits | 23 | 7,779 | 53,211 |
| Bank balances and cash | 23 | 244,392 | 65,145 |
| Total current assets | | 346,196 | 445,871 |
| Current liabilities | | | |
| Trade payables | 24 | 47,278 | 140,554 |
| Other payables and accruals | 25 | 782,711 | 796,865 |
| Interest-bearing bank borrowings | 26 | 33,267 | 21,284 |
| Lease liabilities | 15(b) | 749 | – |
| Amounts due to associates | 34 | 30,053 | 29,429 |
| Amounts due to related parties | 34 | 37,473 | 15,125 |
| Tax payable | | 104,865 | 100,110 |
| Total current liabilities | | 1,036,396 | 1,103,367 |
| Net current liabilities | | (690,200) | (657,496) |
| Total assets less current liabilities | | 3,199,595 | 3,312,379 |

Annual Report 2025 COOLPAD GROUP LIMITED 59

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2025

| | Notes | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- | --- |
| Non-current liabilities | | | |
| Lease liabilities | 15(b) | 647 | – |
| Interest-bearing bank borrowings | 26 | 1,192,061 | 1,175,953 |
| Deferred tax liabilities | 27 | 303,910 | 319,817 |
| Other non-current liabilities | | 16,967 | 16,676 |
| Total non-current liabilities | | 1,513,585 | 1,512,446 |
| Net assets | | 1,686,010 | 1,799,933 |
| Capital and reserves | | | |
| Share capital | 28 | 33,193 | 163,810 |
| Reserves | 28 | 1,652,817 | 1,636,123 |
| Total equity | | 1,686,010 | 1,799,933 |

Chen Jiajun
Director

Ma Fei
Director

COOLPAD GROUP LIMITED Annual Report 2025

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 December 2025

Annual Report 2025 COOLPAD GROUP LIMITED 61

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 December 2025

62 COOLPAD GROUP LIMITED Annual Report 2025

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 December 2025

• These reserve accounts comprise the consolidated reserves of HK$1,652,817,000 (2024: HK$1,636,123,000) in the consolidated statement of financial position.

Annual Report 2025 COOLPAD GROUP LIMITED 63

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 December 2025

of the Company

64 COOLPAD GROUP LIMITED Annual Report 2025

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended 31 December 2025

Annual Report 2025 COOLPAD GROUP LIMITED 65

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended 31 December 2025

| Notes | 2025
HK$’000 | 2024
HK$’000 |
| --- | --- | --- |
| CASH FLOWS FROM INVESTING ACTIVITIES | | |
| Proceeds from disposal of financial assets at FVTPL | 218,424 | 124,650 |
| Cash received from pledged bank deposits | 54,232 | 4,505 |
| Proceeds from disposal of patents | 45,011 | – |
| Proceeds from disposal of items of property, plant and equipment | 5,864 | 1,082 |
| Interest received | 1,207 | 2,134 |
| Payments for items of property, plant and equipment and investment properties | (13,787) | (405,089) |
| Net cash outflows from disposal of subsidiaries | (1,900) | – |
| Purchase of financial assets at FVTPL | (1,208) | (257,581) |
| Additional investment in an associate | (27) | (28) |
| Proceeds from disposal of an associate | – | 21,284 |
| Net cash flows generated from/(used in) investing activities | 307,816 | (509,043) |
| CASH FLOWS FROM FINANCING ACTIVITIES | | |
| Repurchase of shares | 28 | (99,250) |
| Interest paid | 30 | (47,388) |
| Repayment of bank and other borrowings | 30 | (39,945) |
| Repayment of lease liabilities (including principal portion) | 15, 30 | (132) |
| New bank and other borrowings | 30 | 31,115 |
| Net cash flows (used in)/generated from financing activities | (155,600) | 646,762 |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 175,555 | 3,624 |
| Cash and cash equivalents at beginning of year | 65,145 | 63,547 |
| Effect of foreign exchange rate changes, net | 3,692 | (2,026) |
| CASH AND CASH EQUIVALENTS AT END OF YEAR | 244,392 | 65,145 |
| ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS | | |
| Cash and bank balances | 244,392 | 65,145 |

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

1 Corporate and Group Information

Coolpad Group Limited (the "Company") is a limited liability company incorporated in the Cayman Islands. The addresses of the registered office and principal place of business of the Company are Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands and Suits 1105, 11th Floor, Central Plaza, No. 18 Harbour Road, Wanchai, Hong Kong.

The Company and its subsidiaries (collectively referred to as the "Group") was involved in the following principal activities:

• production and sale of smart phones and devices, provision of wireless application services;
• leases of properties; and
• cryptocurrencies business.

Information about subsidiaries

Particulars of the Company's principal subsidiaries are as follows:

Annual Report 2025 COOLPAD GROUP LIMITED 67

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

1 Corporate and Group Information (Continued) Information about subsidiaries (Continued)

• The subsidiaries were registered as wholly-owned foreign enterprises under PRC law.
  ** The subsidiaries were registered as co-operative joint ventures under PRC law.
  *** The subsidiaries were registered as limited liability companies under PRC law.
  ^ The entity is consolidated through certain contractual arrangements.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

1 Corporate and Group Information (Continued)

The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.

2.1 Basis of Preparation

These financial statements have been prepared in accordance with HKFRS Accounting Standards (which include all Hong Kong Financial Reporting Standards ("HKFRS"), Hong Kong Accounting Standards ("HKAS") and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"), accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention, except for investment properties, certain buildings included as property, plant and equipment and financial assets at FVTPL which have been measured at fair value. These financial statements are presented in Hong Kong dollars ("HK$") and all values are rounded to the nearest thousand except when otherwise indicated.

Going concern basis

For the year ended 31 December 2025, the Group incurred a net loss of HK$110,982,000 and the Group recorded net current liabilities of HK$690,200,000 as at 31 December 2025. The unrestricted cash and cash equivalent balance amounted to HK$244,392,000 as at 31 December 2025. These circumstances may cast significant doubt on the Group's ability to continue as a going concern.

During the year, the directors have taken various measures with the aim of improving the Group's liquidity position, including but not limited to (i) the implementation of cost saving measures to control the daily operation costs; (ii) existing bank loan facilities of around RMB1,130,000,000 (equivalent to HK$1,253,000,000) being utilized and the bank borrowings are drew down as long term borrowings as existing of 31 December 2025; and (iii) there were stable cash inflow generated from the Group's operation of their investment properties contributing to the Group's working capital. During the year ended 31 December 2025, the Group recorded a rental income of HK$62,540,000 (2024: HK$89,845,000).

The directors have prepared a cash flow forecast of the Group for the next twelve months based on the existing situation, future events and commitments of the Group. The directors considered that the Group will have adequate working capital to meet its obligations, and therefore the financial statements of the Group have been prepared on a going concern basis.

Annual Report 2025 COOLPAD GROUP LIMITED 69

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.1 Basis of Preparation (Continued)

Going concern basis (Continued)

Measures and estimations have been taken into consideration by the directors, including and not limited to:

(i) Existing unutilised loan facility of RMB500,000,000 (equivalent to HK$554,000,000) from Kingkey Group Company Limited, a related party of the Group, with expiry date of 31 December 2028.

(ii) The Group is in progress on obtaining a stand-by facility amounting to RMB420,000,000 (equivalent to HK$466,000,000) from a bank subject to the final authorization from banks.

(iii) The Group is revisiting its operating strategies taking into account the potential business opportunities expected to arise from the 5th generation wireless system market, and would continue to expand the cooperation with its business partners from various channels. Further measures would be considered by the Group to tighten cost controls over various production costs and expenses with the aim to attain profitable and positive cash flow operations, including scaling down the operation, human resources optimisation and containment of capital expenditures.

(iv) The Group is evaluating the liquidity and market value of its current financial investment portfolio on hand. In the view of the directors, redemption or sale of certain financial investments would be one of their contemplations favoring improvement of the Group’s liquidity position and supplement of working capital.

Notwithstanding the above, in consideration of uncertainty and vulnerability of mobile phone industry and the increasingly intense competition in the market, material uncertainties exist as to whether the Group will be able to achieve the targeted growth in business and revive its market presence.

Should the Group fail to realise its plans to grow its business, by adjusting the progress of the construction projects and deferring its capital expenditure, and securing sufficient financial resources to improve its financial position, adjustments may have to be made to reflect the situation that assets may need to be realised at amounts other than those currently recorded in the consolidated statement of financial position as at 31 December 2025. In addition, the Group may have to provide for further liabilities that might arise, and to reclassify non-current assets and non-current liabilities as current assets and current liabilities. The effects of these adjustments have not been reflected in these consolidated financial statements.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.1 Basis of Preparation (Continued)

Basis of consolidation

The consolidated financial statements include the financial statements of the Group for the year ended 31 December 2025. A subsidiary is an entity, directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee).

Generally, there is a presumption that a majority of voting rights results in control. When the Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• (a) the contractual arrangement with the other vote holders of the investee;
• (b) rights arising from other contractual arrangements; and
• (c) the Group's voting rights and potential voting rights.

The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Profit or loss and each component of other comprehensive income are attributed to the owners of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control described above. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises (i) the assets (including goodwill) and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognises (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The Group's share of components previously recognised in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

Annual Report 2025 COOLPAD GROUP LIMITED 71

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.2 Changes in Accounting Policies and Disclosures

The Group has adopted the following revised HKFRS Accounting Standards for the first time for the current year's financial statements.

HKAS 21
Amendments in relation to Lack of Exchangeability

The adoption of these revised HKFRS Accounting Standards did not result in significant changes to the Group's accounting policies, presentation of the Group's consolidated financial statements and amounts reported for the current year and prior years.

2.3 Issued but Not Yet Effective HKFRS Accounting Standards

The Group has not applied the following new and revised HKFRS Accounting Standards, that have been issued but are not yet effective, in these financial statements.

1. Effective for annual periods beginning on or after 1 January 2026.
2. Effective for annual periods beginning on or after 1 January 2027.
3. No mandatory effective date yet determined but available for adoption.

The Group is in the process of making an assessment of the impact of these new and revised HKFRS Accounting Standards upon initial application. So far, the Group considers that these new and revised HKFRS Accounting Standards may result in changes in accounting policies but are unlikely to have a significant impact on the Group's results of operations and financial position.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies

Investments in associates

An associate is an entity in which the Group has a long term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

The Group’s investments in associates are stated in the consolidated statement of financial position at the Group’s share of net assets under the equity method of accounting, less any impairment losses. Adjustments are made to bring into line any dissimilar accounting policies that may exist. The Group’s share of the post-acquisition results and other comprehensive income of associates is included in profit or loss and other comprehensive income, respectively. In addition, when there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when applicable, in the consolidated statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and its associates are eliminated to the extent of the Group’s investments in the associates, except where unrealised losses provide evidence of an impairment of the assets transferred. Goodwill arising from the acquisition of associates is included as part of the Group’s investments in associates.

If an investment in an associate becomes an investment in a joint venture or vice versa, the retained interest is not remeasured. Instead, the investment continues to be accounted for under the equity method. In all other cases, upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

When an investment in an associate is classified as held for sale, it is accounted for in accordance with HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Impairment of non-financial assets

Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories, cryptocurrencies, deferred tax assets, financial assets, investment properties, certain buildings included in property, plant and equipment and assets classified as held for sale), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs. In testing a cash-generating unit for impairment, a portion of the carrying amount of a corporate asset (e.g., a headquarters building) is allocated to an individual cash-generating unit if it can be allocated on a reasonable and consistent basis or, otherwise, to the smallest group of cash-generating units.

An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to profit or loss in the period in which it arises in those expense categories consistent with the function of the impaired asset, unless the asset is carried at a revalued amount, in which case the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

Annual Report 2025 COOLPAD GROUP LIMITED 73

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Impairment of non-financial assets (Continued)

An assessment is made at the end of each reporting period as to whether there is an indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment loss been recognised for the asset and other comprehensive income in prior years. A reversal of such an impairment loss is credited to profit or loss in the period in which it arises, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

Related parties

A party is considered to be related to the Group if:

(a) the party is a person or a close member of that person’s family and that person

(i) has control or joint control over the Group;

(ii) has significant influence over the Group; or

(iii) is a member of the key management personnel of the Company or of a parent of the Company;

(b) the party is an entity where any of the following conditions applies:

(i) the entity and the Company are members of the same group;

(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow subsidiary of the other entity);

(iii) the entity and the Company are joint ventures of the same third party;

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group;

(vi) the entity is controlled or jointly controlled by a person identified in (a);

(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); and

(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the parent of the Company.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Property, plant and equipment and depreciation

Property, plant and equipment, other than construction in progress, are stated at cost or valuation less accumulated depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly.

Valuations are performed frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Changes in the values of property, plant and equipment are dealt with as movements in the asset revaluation reserve. If the total of this reserve is insufficient to cover a deficit, on an individual asset basis, the excess of the deficit is charged to profit or loss. Any subsequent revaluation surplus is credited to profit or loss to the extent of the deficit previously charged. An annual transfer from the asset revaluation reserve to retained profits is made for the difference between the depreciation based on the revalued carrying amount of an asset and the depreciation based on the asset's original cost. On disposal of a revalued asset, the relevant portion of the asset revaluation reserve realised in respect of the previous valuations is transferred to retained profits as a movement in reserves.

Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows:

Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.

Annual Report 2025 COOLPAD GROUP LIMITED 75

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Property, plant and equipment and depreciation (Continued)

An item of property, plant and equipment including any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in profit or loss in the year the asset is derecognised is the difference between the net sales proceeds and the carrying amount of the relevant asset.

Construction in progress represents a building under construction, which is stated at cost less any impairment losses, and is not depreciated. Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowed funds during the period of construction. Construction in progress is reclassified to the appropriate category of property, plant and equipment when completed and ready for use.

Investment properties

Investment properties are interests in buildings, held to earn rental income and/or for capital appreciation, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the end of the reporting period.

Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the year in which they arise.

Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year of the retirement or disposal.

For a transfer from investment properties to owner-occupied properties or inventories, the deemed cost of a property for subsequent accounting is its fair value at the date of change in use. If a property occupied by the Group as an owner-occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under "Property, plant and equipment and depreciation" for owned property and/or accounts for such property in accordance with the policy stated under "Right-of-use assets" for property held as a right-of-use asset up to the date of change in use, and any difference at that date between the carrying amount and the fair value of the property is accounted for as a revaluation in accordance with the policy stated under "Property, plant and equipment and depreciation" above. For a transfer from inventories to investment properties, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the statement of profit or loss.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Intangible assets (other than goodwill)

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value at the date of acquisition. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

Research and development costs

Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally generated intangible asset arising from the Group's mobile phone business development is recognised only if all of the following conditions are met:

• An asset is created that can be identified (such as software and new processes);
• It is probable that the asset created will generate future economic benefits; and
• The development cost of the asset can be measured reliably.

Internally generated intangible assets are stated at cost less accumulated amortisation and impairment losses. Where no internally generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.

Patents and licences

Purchased patents and licences are stated at cost less impairment losses and are amortised on the straight-line basis over their estimated useful lives of 3 to 15 years.

Computer software

Purchased computer software is stated at cost less any impairment losses and is amortised on the straight-line basis over its estimated useful life of 10 years.

Annual Report 2025 COOLPAD GROUP LIMITED 77

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

(a) Right-of-use assets

Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease terms and the estimated useful lives of the assets as follows:

If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

When the right-of-use assets meet the definition of investment property, it is included in investment properties. The corresponding right-of-use asset is initially measured at cost, and subsequently measured at fair value, in accordance with the Group's policy for "investment properties".

(b) Lease liabilities

Lease liabilities are recognised at the commencement date of the lease at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for termination of a lease, if the lease term reflects the Group exercising the option to terminate the lease. The variable lease payments that do not depend on an index or a rate are recognised as an expense in the period in which the event or condition that triggers the payment occurs.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Leases (Continued)

Group as a lessee (Continued)

(b) Lease liabilities (Continued)

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in lease payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying asset.

(c) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (that is those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the recognition exemption for leases of low value assets to leases of office equipment and computers that are considered to be of low value.

Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.

Group as a lessor

When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its leases as either an operating lease or a finance lease.

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. When a contract contains lease and non-lease components, the Group allocates the consideration in the contract to each component on a relative stand-alone selling price basis. Rental income is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

Leases that transfer substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee are accounted for as finance leases.

When the Group is an intermediate lessor, a sublease is classified as a finance lease or operating lease with reference to the right-of-use asset arising from the head lease. If the head lease is a short-term lease to which the Group applies the on-balance sheet recognition exemption, the Group classifies the sublease as an operating lease.

Annual Report 2025 COOLPAD GROUP LIMITED 79

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Investments and other financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial asset at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under HKFRS 15 in accordance with the policies set out for “Revenue recognition” below.

In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair value through other comprehensive income are held within a business model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned business models are classified and measured at fair value through profit or loss.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Investments and other financial assets (Continued)

Subsequent measurement (Continued)

Financial assets at FVTPL

Financial assets at FVTPL are carried in the consolidated statement of financial position at fair value with net changes in fair value recognised in profit or loss.

This category includes equity investments which the Group had not irrevocably elected to classify at fair value through other comprehensive income. Dividends on equity investments classified as financial assets at FVTPL are also recognised as other income in profit or loss when the right of payment has been established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group's consolidated statement of financial position) when:

• the rights to receive cash flows from the asset have expired; or
• the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through" arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group's continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Annual Report 2025 COOLPAD GROUP LIMITED 81

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Investments and other financial assets (Continued)

Impairment of financial assets

The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

General approach

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking information. The Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due.

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Financial assets at amortised cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ECLs except for trade receivables which apply the simplified approach as detailed below.

• Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs
• Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs
• Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Investments and other financial assets (Continued)

Impairment of financial assets (Continued)

Simplified approach

For trade receivables that do not contain a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

For trade receivables that contain a significant financing component and lease receivables, the Group chooses as its accounting policy to adopt the simplified approach in calculating ECLs with policies as described above.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings, or payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, amounts due to associates, an amount due to a joint venture, lease liabilities, amounts due to related parties and interest-bearing bank borrowings.

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at amortised cost (loans and borrowings)

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in profit or loss.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in profit or loss.

Annual Report 2025 COOLPAD GROUP LIMITED 83

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Cryptocurrencies

Cryptocurrencies are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis and comprises direct value of the cryptocurrencies at initial recognition. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-out basis and, in the case of work in progress and finished goods, comprises direct materials, direct labour and an appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

Cash and cash equivalents

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Group's cash management.

For the purpose of the consolidated statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, which are not restricted as to use.

Provisions

A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in profit or loss.

The Group provides for warranties in relation to the sale of smart phones and devices for general repairs of defects occurring during the warranty period. Provisions for these assurance-type warranties granted by the Group are recognised based on sales volume and past experience of the level of repairs and returns, discounted to their present values as appropriate.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Income tax

Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.

Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• when the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, and the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

• when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

Annual Report 2025 COOLPAD GROUP LIMITED 85

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Income tax (Continued)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grants or subsidies will be received and all attaching conditions will be complied with. When the grant or subsidy relates to an expense item, it is recognised as income on a systematic basis over the periods that the costs, for which it is intended to compensate, are expensed.

Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to profit or loss over the expected useful life of the relevant asset by equal annual instalments.

Revenue recognition

Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

When the consideration in a contract includes a variable amount, the amount of consideration is estimated to which the Group will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.

(a) Sale of mobile phone products

Revenue from the sale of industrial products including smart phones and devices is recognised at the point in time when control of the asset is transferred to the customer, generally on delivery of the industrial products.

(b) Wireless application service income

Wireless application service income is recognised at the point in time when the specific installation and activation requirement has been met.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Other income

Rental income is recognised on a time proportion basis over the lease terms. Variable lease payments that do not depend on an index or a rate are recognised as income in the accounting period in which they are incurred.

Interest income is recognised on an accrual basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.

Income from cryptocurrencies business is recognised when the Group's rights to receive cryptocurrencies is established, it is probable that the economic benefits associated with the cryptocurrencies will flow to the Group and the amount of the cryptocurrencies can be measured reliably.

Contract liabilities

A contract liability is recognised when a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the contract. (i.e., transfers control of the related goods or services to the customer).

Refund liabilities

A refund liability is recognised for the obligation to refund some or all of the consideration received (or receivable) from a customer and is measured at the amount the Group ultimately expects it will have to return to the customer. The Group updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period.

Share-based payments

The Company operates a share option scheme and warrant scheme for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group's operations. Employees (including directors) and a business partner of the Group receive remuneration in the form of share-based payments, whereby employees and a business partner render services in exchange for equity instruments ("equity-settled transactions").

In situations where the share-based payment transactions are with employees of the Group, the cost of equity settled transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted, taking into account the terms and conditions upon which these equity instruments are granted. In situations where the share-based payment transactions are with non-employees of the Group, the cost of equity settled transactions is measured by reference to the fair value of goods or services received, unless that fair value cannot be estimated reliably. If the Group cannot estimate reliably the fair value of the goods or services received, the Group measures the goods or services received, indirectly, by reference to the fair value of the equity instruments granted.

Annual Report 2025 COOLPAD GROUP LIMITED 87

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Share-based payments (Continued)

The cost of equity-settled transactions is recognised in employee benefit expense and equity-settled expenses in connection with issue of warrants is recognised in administrative expenses, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in the cumulative expense recognised as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

For awards that do not ultimately vest because non-market performance and/or service conditions have not been met, no expense is recognised. Where awards include a market or non-vesting condition, the transactions are treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award is substituted for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Other employee benefits

Pension scheme

The employees of the Group’s subsidiaries which operate in Mainland China are required to participate in a central pension scheme operated by the local municipal government. These subsidiaries are required to contribute a certain percentage of their payroll costs to the central pension scheme. The contributions are charged to profit or loss as they become payable in accordance with the rules of the central pension scheme.

Termination benefits

Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises restructuring costs involving the payment of termination benefits.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Foreign currencies

These financial statements are presented in Hong Kong dollars, which is the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency rates of exchange ruling at the end of the reporting period. Differences arising on settlement or translation of monetary items are recognised in profit or loss.

Differences arising on settlement or translation of monetary items are recognised in the statement of profit or loss with the exception of monetary items that are designated as part of the hedge of the Group’s net investment of a foreign operation. These are recognised in other comprehensive income until the net investment is disposed of, at which time the cumulative amount is reclassified to the statement of profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation difference on the item whose fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss, respectively).

Annual Report 2025 COOLPAD GROUP LIMITED 89

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

2.4 Material Accounting Policies (Continued)

Foreign currencies (Continued)

In determining the exchange rate on initial recognition of the related asset, expense or income on the derecognition of a non-monetary asset or non-monetary liability relating to an advance consideration, the date of initial transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of the advance consideration.

The functional currencies of certain overseas subsidiaries, joint ventures and associates are currencies other than the Hong Kong dollar. As at the end of the reporting period, the assets and liabilities of these entities are translated into Hong Kong dollars at the exchange rate prevailing at the end of the reporting period and their statements of profit or loss are translated into Hong Kong dollars at the exchange rates that approximate to those prevailing at the dates of the transactions.

The resulting exchange differences are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are translated into Hong Kong dollars at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are translated into Hong Kong dollars at the weighted average exchange rates for the year.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

3 Significant Accounting Judgements and Estimates

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.

Judgements

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

Contractual arrangements

The Group exercises control over Shenzhen Helong Technology Co., Ltd (“Helong Technology”) and Zhongying Intelligent Technology and enjoys the economic benefits from their operation through a series of contractual arrangements.

The Group considers that it controls Helong Technology and Zhongying Intelligent Technology notwithstanding the fact that it does not hold direct equity interests in them, as it has power over the financial and operating policies of them and receives substantially all of the economic benefits from the business activities of them through the contractual arrangements. Accordingly, Helong Technology (before the cancellation of contractual arrangements) and Zhongying Intelligent Technology have been accounted for as subsidiaries during the year.

Going concern consideration

In the process of applying the Group’s accounting policies, apart from those involving estimations, management has prepared the consolidated financial statements on the assumption that the Group will be able to operate as a going concern in the coming year, which is a critical judgement that has the most significant effect on the amounts recognised in the consolidated financial statements. The assessment of the going concern assumption involves making a judgement by the directors, at a particular point of time, about the future outcome of events or conditions which are inherently uncertain. The directors consider that the Group has the capability to continue as a going concern and the major events or conditions, which may give rise to business risks, that may individually or collectively cast a significant doubt upon the going concern assumption are set out in note 2.1 to the consolidated financial statements.

Property lease classification – Group as lessor

The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the present value of the minimum lease payments not amounting to substantially all the fair value of the commercial property, that it retains substantially all the significant risks and rewards incidental to ownership of these properties which are leased out and accounts for the contracts as operating leases.

Annual Report 2025 COOLPAD GROUP LIMITED 91

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

3 Significant Accounting Judgements and Estimates (Continued)

Judgements (Continued)

Classification between investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately, the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:

Estimation of fair value of investment properties

In the absence of current prices in an active market for similar properties, the Group considers information from a variety of sources, including:

(a) current prices in an active market for properties of a different nature, condition or location, adjusted to reflect those differences;

(b) recent prices of similar properties on less active markets, with adjustments to reflect any changes in economic conditions since the dates of the transactions that occurred at those prices; and discounted cash flow projections based on reliable estimates of future cash flows, supported by the terms of any existing lease and other contracts and (when possible) by external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market assessments of the uncertainty in the amount and timing of the cash flows.

The carrying amount of investment properties at 31 December 2025 was HK$3,151,680,000 (2024: HK$3,151,325,000). Further details, including the key assumptions used for fair value measurement and a sensitivity analysis, are given in note 14 to the consolidated financial statements.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

3 Significant Accounting Judgements and Estimates (Continued)

Estimation uncertainty (Continued)

Impairment of non-financial assets (other than goodwill)

The Group assesses whether there are any indicators of impairment for all non-financial assets at the end of each reporting period. Non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. An impairment exists when the carrying value of an asset of a cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less cost of disposal and its value in use. The calculation of the fair value less cost of disposal is based on available data from binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental costs for disposing of the asset. If there is no binding sale agreement or active market for that asset (or asset group), management will make reference to the best information available to reflect the amount that an entity could obtain at the end of the reporting period. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

During the year ended 31 December 2025, impairment losses for property, plant and equipment of certain assets in the mobile phone segment amounting to approximately HK$1,528,000 have been recognised (2024: nil). Further details are set out in notes 13 to the consolidated financial statements.

Provision for expected credit losses on trade receivables

The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on ageing from the date of issuing invoices for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type and, customer type and rating).

The provision matrix is initially based on the Group's historical observed default rates. The Group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the manufacturing sector, the historical default rates are adjusted. At each reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation among historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and forecast economic conditions. The Group's historical credit loss experience and forecast of economic conditions may also not be representative of a customer's actual default in the future. The information about the ECLs on the Group's trade receivables is disclosed in note 20 to the consolidated financial statements.

Annual Report 2025 COOLPAD GROUP LIMITED 93

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

3 Significant Accounting Judgements and Estimates (Continued)

Estimation uncertainty (Continued)

Fair value of unlisted equity investments

The unlisted equity investments have been valued based on a market-based valuation technique as detailed in note 36 to the consolidated financial statements. The valuation requires the Group to determine the comparable public companies (peers) and select the price multiple. In addition, the Group makes estimates about the discount for illiquidity and size differences. The Group classifies the fair value of these investments as Level 3. The fair value of the unlisted equity investments at 31 December 2025 was HK$21,914,000 (2024: HK$16,655,000).

Further details are included in note 22 to the consolidated financial statements.

4 Operating Segment Information

For management purposes, the Group is organised into business units based on its products and services and has three reportable operating segments as follows:

(a) the mobile phone segment engages in the research, development, production and sale of smart phones and devices and the provision of wireless application service;

(b) the property investment segment invests in properties for their rental income potential and/or for capital appreciation;

(c) the cryptocurrencies business segment.

Management monitors the results of the Group’s operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on reportable segment profit or loss, which is a measure of adjusted loss before tax. The adjusted loss before tax is measured consistently with the Group’s loss before tax except that interest income, non-lease-related finance costs, share of profits and losses of associates are excluded from such measurement.

Segment assets exclude investments in associates, financial assets at FVTPL, deferred tax assets, amounts due from associates, pledged deposits, cash and cash equivalents and other unallocated head office and corporate assets as these assets are managed on a group basis.

Segment liabilities exclude interest-bearing bank borrowings, amounts due to associates, amounts due to related parties, tax payable, deferred tax liabilities and other unallocated head office and corporate liabilities as these liabilities are managed on a group basis.

94 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

4 Operating Segment Information (Continued)

Year ended 31 December 2025

| | Cryptocurrencies
business
HK$'000 | Mobile
phone
HK$'000 | Property
investment
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- | --- |
| Segment revenue (note 5) | | | | |
| Sales to external sources | 67,224 | 143,372 | 62,540 | 273,136 |
| Other revenue and gains | 81 | 95,045 | – | 95,126 |
| Total | 67,305 | 238,417 | 62,540 | 368,262 |
| Segment results | 2,405 | (39,714) | (151,449) | (188,758) |
| Reconciliation: | | | | |
| Interest income | | | | 1,207 |
| Finance costs (other than interest on lease liabilities) | | | | (47,331) |
| Share of profits of associates | | | | 1,812 |
| Loss on disposal of subsidiaries | | | | (13,049) |
| Gain on deregistration of subsidiaries | | | | 1,278 |
| Fair value gains on financial assets at FVTPL, net | | | | 100,772 |
| Exchange gains, net | | | | 3,287 |
| Loss before tax | | | | (140,782) |
| Segment assets | 165,020 | 395,081 | 3,151,680 | 3,711,781 |
| Reconciliation: | | | | |
| Investments in associates | | | | 169,041 |
| Corporate and other unallocated assets | | | | 355,169 |
| Total assets | | | | 4,235,991 |

Annual Report 2025 COOLPAD GROUP LIMITED 95

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

4 Operating Segment Information (Continued)

| | Cryptocurrencies
business
HK$'000 | Mobile
phone
HK$'000 | Property
investment
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- | --- |
| Segment liabilities | 293 | 831,092 | 16,967 | 848,352 |
| Reconciliation: | | | | |
| Interest-bearing bank borrowings | | | | 1,225,328 |
| Corporate and other unallocated
liabilities | | | | 476,301 |
| Total liabilities | | | | 2,549,981 |
| Other segment information: | | | | |
| Government grants and subsidies | – | (19,843) | – | (19,843) |
| Income from disposal of patents | – | (45,011) | – | (45,011) |
| Reversal of impairment of trade receivables,
net | – | (4,203) | – | (4,203) |
| Write-down of inventories to net realisable
value, net | – | 3,794 | – | 3,794 |
| Fair value loss of investment properties | – | – | 137,022 | 137,022 |
| Depreciation and amortisation | 38,916 | 19,631 | – | 58,547 |
| Capital expenditure* | 22,926 | 211 | 7,948 | 31,085 |

96 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

4 Operating Segment Information (Continued)

Year ended 31 December 2024

| | Cryptocurrencies
business
HK$'000 | Mobile
phone
HK$'000 | Property
investment
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- | --- |
| Segment revenue (note 5) | | | | |
| Sales to external sources | 97,684 | 311,803 | 89,845 | 499,332 |
| Other revenue and gains | 13,657 | 38,191 | – | 51,848 |
| Total | 111,341 | 349,994 | 89,845 | 551,180 |
| Segment results | 9,489 | (182,789) | 53,377 | (119,923) |
| Reconciliation: | | | | |
| Interest income | | | | 2,134 |
| Finance costs (other than interest on lease liabilities) | | | | (40,629) |
| Share of losses of associates | | | | (13,424) |
| Gain on written off of amount due to associates | | | | 6,418 |
| Fair value losses on financial assets at FVTPL, net | | | | (85,090) |
| Loss before tax | | | | (250,514) |
| Segment assets | 246,657 | 496,831 | 3,151,325 | 3,894,813 |
| Reconciliation: | | | | |
| Investments in associates | | | | 161,020 |
| Corporate and other unallocated assets | | | | 359,913 |
| Total assets | | | | 4,415,746 |
| Segment liabilities | 2,056 | 935,363 | 16,676 | 954,095 |
| Reconciliation: | | | | |
| Interest-bearing bank borrowings | | | | 1,197,237 |
| Corporate and other unallocated liabilities | | | | 464,481 |
| Total liabilities | | | | 2,615,813 |
| Other segment information: | | | | |
| Provision of impairment of trade receivables, net | – | 2,064 | – | 2,064 |
| Write-down of inventories to net realisable value, net | – | 2,573 | – | 2,573 |
| Fair value gain of investment properties | – | – | (672) | (672) |
| Depreciation and amortisation | 18,048 | 18,507 | – | 36,555 |
| Capital expenditure* | 125,679 | 7,210 | 3,753 | 136,642 |

• Capital expenditure consists of additions to property, plant and equipment, investment properties and intangible assets.

Annual Report 2025 COOLPAD GROUP LIMITED 97

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

4 Operating Segment Information (Continued)

Geographical information

(a) Revenue from external customers and sources

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Mainland China | 155,821 | 388,500 |
| Overseas | 117,315 | 110,832 |
| | 273,136 | 499,332 |

The revenue information above is based on the locations of the customers and sources.

(b) Non-current assets

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Mainland China | 3,533,820 | 3,555,722 |
| Overseas | 165,020 | 201,170 |
| | 3,698,840 | 3,756,892 |

The non-current asset information above is based on the locations of the assets and excludes financial instruments and investments in associates.

Information about major customers

Revenue from major customers each individually amounting to 10% or more of the Group's revenue is as follows:

| | Operating segment | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- | --- |
| Customer A | Cryptocurrencies business | 39,090 | N/A* |

• Customer A had less than 10% of the Group's revenue for the year ended 31 December 2024.

COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

5 Revenue, Other Income and Other Gains or Losses, Net

An analysis of revenue is as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Revenue from contracts with customers | | |
| Sale of smart phones and devices | 135,992 | 275,144 |
| Wireless application service income | 7,380 | 36,659 |
| | 143,372 | 311,803 |
| Revenue from other sources | | |
| Revenue from cryptocurrencies business | 67,224 | 97,684 |
| Rental income from investment properties operating leases | 62,540 | 89,845 |
| | 129,764 | 187,529 |
| Total revenue | 273,136 | 499,332 |

Revenue from contracts with customers

(i) Disaggregated revenue information

Mobile phone segment

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Timing of revenue recognition:
Goods and services transferred at a point of time | 143,372 | 311,803 |

The following table shows the amount of revenue recognised in the current year that was included in the contract liabilities at the beginning of the reporting period:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Sale of smart phones and devices | 7,725 | 9,772 |

No revenue recognised during the year related to performance obligations that were satisfied in prior years (2024: Nil).

Annual Report 2025 COOLPAD GROUP LIMITED 99

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

5 Revenue, Other Income and Other Gains or Losses, Net (Continued)

Revenue from contracts with customers (Continued)

(ii) Performance obligation

Information about the Group's performance obligations is summarised below:

Sale of smart phones and devices

The performance obligation is satisfied upon delivery of the goods and payment is generally due within 30 to 90 days from delivery, except for new customers, where payment in advance is normally required.

Wireless application service

The performance obligation is satisfied when the specific installation and activation requirement has been met and payment is generally due within 30 days from satisfaction of the performance obligation.

Other income and other gains or losses, net

| | 2025
HK$'000 | 2024
HK$'000
(Restated) |
| --- | --- | --- |
| Bank interest income | 1,207 | 2,134 |
| Government grants and subsidies* | 19,843 | 20,344 |
| Income from disposal of patents | 45,011 | – |
| | 66,061 | 22,478 |
| Gain on termination of lease | – | 881 |
| Realised gain on disposal of cryptocurrencies | 81 | 13,657 |
| Gain on written off of amount due to associates | – | 6,418 |
| Gain/(loss) on deregistration of subsidiaries | 1,278 | (786) |
| Fair value gains/(losses) on financial assets at FVTPL, net | 100,772 | (85,090) |
| Net gain on disposal of items of property, plant and equipment | 5,307 | 4 |
| Royalty and other service fee | 16,859 | 1,676 |
| Reversal/(impairment) of trade receivables, net | 4,203 | (2,064) |
| Impairment of deposits and other receivables, net | (5,812) | – |
| Impairment of property, plant and equipment | (1,528) | – |
| Loss on disposal of subsidiaries | (13,049) | – |
| Loss on lease incentives upon termination of leases contracts | (33,282) | – |
| Fair value (losses)/gains on investment properties | (137,022) | 672 |
| Exchange gains, net | 3,287 | – |
| Others | 8,025 | 15,286 |
| | 15,180 | (26,868) |

• Government grants and subsidies represented refunds of VAT received from a tax bureau and grants received from certain finance bureaus to support certain of the Group's research and development activities. There are no unfulfilled conditions or contingencies relating to these grants and subsidies.

100 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

6 Loss before Tax

The Group's loss before tax is arrived at after charging:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Cost of inventories sold | 146,375 | 337,587 |
| Depreciation of property, plant and equipment | 56,801 | 34,610 |
| Depreciation of right-of-use assets | 1,746 | 1,945 |
| Research and development costs: | | |
| Current year expenditure | 16,659 | 42,327 |
| Lease payments not included in the measurement of lease liabilities | 1,624 | 2,921 |
| Auditor's remuneration: | | |
| Audit service | 2,300 | 2,300 |
| Non-audit service | 330 | 330 |
| | 2,630 | 2,630 |
| Employee benefit expense (including directors' remuneration (note 8)): | | |
| Wages and salaries | 55,149 | 82,304 |
| Staff welfare expenses | 790 | 2,903 |
| Pension scheme contributions (defined contribution scheme) | 6,716 | 10,448 |
| Equity-settled share option expense | 4,216 | 9,690 |
| | 66,871 | 105,345 |
| Write-down of inventories to net realisable value, netb | 3,794 | 2,573 |
| Direct operating expenses arising on rental-earning investment properties | 34,302 | 24,317 |

• Included in "Administrative and other operating expenses" in profit or loss.
  b Included in "Cost of sales" in profit or loss.

Annual Report 2025 COOLPAD GROUP LIMITED 101

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

7 Finance Costs

An analysis of finance costs is as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Interest on: | | |
| Bank and other borrowings | 47,331 | 40,629 |
| Interest on lease liabilities | 5 | 174 |
| | 47,336 | 40,803 |

8 Director's Remuneration

Directors' remuneration for the year, disclosed pursuant to the Listing Rules, section 383(1)(a), (b), (c) and (f) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information about Benefits of Directors) Regulation, is as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Fees | 960 | 850 |
| Other emoluments: | | |
| Salaries, allowances and benefits in kind | 6,985 | 7,066 |
| Equity-settled share option expense | 45 | 222 |
| Pension scheme contributions | 210 | 159 |
| | 7,240 | 7,447 |
| | 8,200 | 8,297 |

• Certain executive directors of the Company are entitled to bonus payments which are determined by the performance of the Group and their departments. No such performance related bonuses are incurred and recognised during the years ended 31 December 2025 and 2024.

In prior years, certain directors were granted share options in respect of their services to the Group under the share option scheme of the Company, further details of which are set out in note 29 to the consolidated financial statements. The fair value of such options, which has been recognised in the statement of profit or loss over the vesting period, was determined as at the date of grant and the amount included in the consolidated financial statements for the current year is included in the above directors' and chief executive's remuneration disclosures.

102 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

8 Director's Remuneration (Continued)

(a) Independent non-executive directors

The fees paid to the Group's independent non-executive directors during the year were as follows:

• Resigned as an independent non-executive director on 8 January 2024.
  ** Appointed as an independent non-executive director on 8 January 2024.

There were no other emoluments payable to the independent non-executive directors during the year (2024: Nil).

Annual Report 2025 COOLPAD GROUP LIMITED 103

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

8 Director's Remuneration (Continued)

(b) Executive directors and non-executive directors

2025

104 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

8 Director's Remuneration (Continued)

(b) Executive directors and non-executive directors (Continued)

2024

• Resigned as an executive director on 29 August 2025.
  ** Resigned as an non-executive director on 7 June 2025.

There was no arrangement under which a director waived or agreed to waive any remuneration during the year (2024: Nil).

Annual Report 2025 COOLPAD GROUP LIMITED 105

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

9 Five Highest Paid Employees

The five highest paid employees during the year included two directors (2024: two director), details of whose remuneration are set out in note 8 above. Details of the remuneration for the year of the remaining three (2024: three) highest paid employees who are neither a director nor chief executive of the Company are as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Salaries, allowances and benefits in kind | 3,023 | 3,672 |
| Equity-settled share option expense | 59 | 313 |
| Pension scheme contributions | 362 | 334 |
| | 3,444 | 4,319 |

The number of non-director and non-chief executive highest paid employees whose remuneration fell within the following bands is as follows:

During the year, no share options were granted to non-director and non-chief executive highest paid employees in respect of their services to the Group, further details of which are included in the disclosures in note 29 to the consolidated financial statements.

106 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

10 Income Tax (Credit)/Expense

The Company is a tax exempted company registered in the Cayman Islands and conducts substantially all of its businesses through its subsidiaries established in Mainland China (the "PRC Subsidiaries").

No provision for Hong Kong profits tax has been made (2024: Nil) as the Group did not generate any assessable profits arising in Hong Kong during the year. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group's subsidiaries operate, based on existing legislation, interpretations and practices in respect thereof.

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Current tax | | |
| - corporate income tax | 1,887 | 6 |
| Deferred tax (note 27) | (31,687) | 1,638 |
| Total tax (credit)/expense for the year | (29,800) | 1,644 |

A reconciliation of the tax expense applicable to loss before tax at the statutory tax rate for the country in which the majority of the Company's subsidiaries are domiciled to the tax expense at the effective tax rate is as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Loss before tax | (140,782) | (250,514) |
| Tax at the statutory tax rate | (35,196) | (62,629) |
| Effect of different tax rates for certain group entities | 12,133 | 6,635 |
| Tax losses utilised from prior periods | (108) | (3,329) |
| Income not taxable and expenses not deductible for tax | (17,981) | 23,290 |
| Additional deduction of research and development expenses | (2,498) | (3,961) |
| Tax losses not recognised | 13,850 | 41,638 |
| Tax charge at the Group's effective rate | (29,800) | 1,644 |

Annual Report 2025 COOLPAD GROUP LIMITED 107

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

10 Income Tax (Credit)/Expense (Continued)

The Group’s PRC Subsidiaries are subject to corporate income tax (“CIT”) at a rate of 25%. Certain subsidiaries of the Group operating in Mainland China are eligible for certain tax concessions. Major tax concessions applicable to those entities are detailed as follows:

(a) Yulong Shenzhen, the Company’s wholly-owned subsidiary, was assessed and recognised as a high-technology enterprise in December 2024, and was subject to CIT at a rate of 15% for three years from 2024 to 2027. In this regard, Yulong Shenzhen was subject to CIT at a rate of 15% (2024: 15%) for the year ended 31 December 2025.

(b) Nanjing Coolpad Software Tech Co., Ltd., the Company’s wholly-owned subsidiary, was assessed and recognised as a high-technology enterprise in December 2023, and is subject to CIT at a rate of 15% for three years from 2023 to 2026. Therefore, Nanjing Coolpad Software Tech Co., Ltd. was subject to CIT at a rate of 15% (2024: 15%) for the year ended 31 December 2025.

11 Dividend

The directors did not recommend payment of any final dividend for the year ended 31 December 2025 (2024: Nil).

12 Loss per Share

The calculation of the basic loss per share amount is based on the loss for the year attributable to owners of the Company and the weighted average number of ordinary shares of 394,235,133 (2024: 409,525,198 (restated)) in issue during the year.

The weighted average number of ordinary shares for the purpose of basic and diluted loss per share for the year has been adjusted for the Share Consolidation (as defined in note 28) and Share Repurchase (as defined in note 28). The weighted average number of ordinary shares for the purpose of basic and diluted loss per share for the year ended 31 December 2024 has been adjusted for the Share Consolidation. The details of which are set out in note 28.

No adjustment has been made to the basic loss per share amount presented for the years ended 31 December 2025 and 2024 in respect of a dilution as the impact of the share option outstanding had no dilution effect on the basic loss per share amount presented.

108 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

13 Property, Plant and Equipment

31 December 2025

Annual Report 2025 COOLPAD GROUP LIMITED 109

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

13 Property, Plant and Equipment (Continued)

31 December 2024

| | Buildings
HK$'000 | Leasehold improvements
HK$'000 | Furniture, fixtures and equipment
HK$'000 | Motor vehicles
HK$'000 | Cryptocurrencies business related assets
HK$'000 | Construction in progress
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Cost or valuation: | | | | | | | |
| At 1 January 2024 | 174,143 | 4,009 | 175,312 | 10,057 | 27,794 | 167,693 | 559,008 |
| Additions | 722 | - | 153 | 6,335 | 71,882 | 53,797 | 132,889 |
| Surplus on revaluation | (12,794) | - | - | - | - | - | (12,794) |
| Disposal/written off | - | (945) | (4,430) | (833) | - | - | (6,208) |
| Transfer from construction in progress | - | - | - | - | 37,906 | (37,906) | - |
| Transfer from prepayment | - | - | - | - | 30,310 | - | 30,310 |
| Exchange realignment | (5,953) | (80) | (5,315) | (328) | (1,173) | (4,620) | (17,469) |
| At 31 December 2024 | 156,118 | 2,984 | 165,720 | 15,231 | 166,719 | 178,964 | 685,736 |
| Accumulated depreciation and impairment: | | | | | | | |
| At 1 January 2024 | - | 3,556 | 170,160 | 8,744 | 1,330 | - | 183,790 |
| Depreciation provided during the year | 15,298 | 73 | 64 | 1,127 | 18,048 | - | 34,610 |
| Revaluation | (15,298) | - | - | - | - | - | (15,298) |
| Disposal/written off | - | (525) | (4,430) | (175) | - | - | (5,130) |
| Exchange realignment | - | (120) | (5,435) | (260) | (32) | - | (5,847) |
| At 31 December 2024 | - | 2,984 | 160,359 | 9,436 | 19,346 | - | 192,125 |
| Net book value: | | | | | | | |
| At 31 December 2024 | 156,118 | - | 5,361 | 5,795 | 147,373 | 178,964 | 493,611 |

110 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

13 Property, Plant and Equipment (Continued)

At 31 December 2025, the Group had yet to obtain building ownership certificates for certain buildings with a net book value of approximately HK$21,987,000 (2024: HK$23,056,000).

The Group’s buildings in relation to industrial properties and commercial properties were revalued individually at the end of the reporting period by Cushman & Wakefield Limited, Jones Lang LaSalle Corporate Appraisal and Advisory Limited, independent professionally qualified valuers, at an aggregate open market value of HK$157,582,000 (2024: HK$155,169,000) as at 31 December 2025 based on their existing use. As a result, the Group recorded a surplus on revaluation of HK$11,976,000 credited to other comprehensive income for the current year (2024: revaluation surplus of HK$2,504,000 credited to other comprehensive income).

As at 31 December 2025, certain property, plant and equipment of the Group with a net carrying value of HK$157,582,000 (2024: HK$155,169,000) were pledged as security for the Group’s loan from a bank. Further details are set out in note 26 to the consolidated financial statements.

As at 31 December 2025, included in the Group’s property, plant and equipment, buildings with a carrying amount of HK$158,455,000 (2024: HK$156,118,000) were stated at fair value using revaluation model. The carrying amount that would have been recognised if the respective buildings had been carried under the cost model was HK$90,985,000 (2024: HK$94,372,000). The remaining property, plant and equipment (including construction in progress) with a carrying amount of HK$302,631,000 (2024: HK$337,493,000) were carried at historical cost.

Annual Report 2025 COOLPAD GROUP LIMITED 111

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

13 Property, Plant and Equipment (Continued)

Fair value hierarchy

The following table illustrates the fair value measurement hierarchy of the Group's buildings stated at revalued amounts:

During the year, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3.

112 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

13 Property, Plant and Equipment (Continued)

Fair value hierarchy (Continued)

Reconciliation of fair value measurements categorised within Level 3 of the fair value hierarchy:

| | Others
HK$'000 | Commercial
properties
HK$'000 | Industrial
properties
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- | --- |
| Carrying amount at 1 January 2024 | 1,098 | 70,697 | 102,348 | 174,143 |
| Depreciation provided during the year | (112) | (3,824) | (11,362) | (15,298) |
| Addition | – | 526 | 196 | 722 |
| Revaluation (deficit)/surplus recognised in
other comprehensive income | – | (1,372) | 3,876 | 2,504 |
| Exchange realignment | (37) | (2,422) | (3,494) | (5,953) |
| Carrying amount at 31 December 2024
and 1 January 2025 | 949 | 63,605 | 91,564 | 156,118 |
| Depreciation provided during the year | (112) | (3,795) | (12,234) | (16,141) |
| Addition | – | 41 | – | 41 |
| Revaluation surplus recognised in other
comprehensive income# | – | 2,453 | 9,523 | 11,976 |
| Exchange realignment | 36 | 2,641 | 3,784 | 6,461 |
| Carrying amount at 31 December 2025 | 873 | 64,945 | 92,637 | 158,455 |
| * Include gains or losses for assets held
at end of reporting period | – | 2,453 | 9,523 | 11,976 |

The total gains or losses recognised in other comprehensive income are presented in gain on property revaluation in the consolidated statement of profit or loss and other comprehensive income.

Annual Report 2025 COOLPAD GROUP LIMITED 113

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 December 2025

13 Property, Plant and Equipment (Continued)

Fair value hierarchy (Continued)

Set out below is a summary of the valuation technique used and the key inputs to the valuation of buildings:

The Group has determined that the highest and best use of the buildings at the measurement date would be to convert those properties for commercial purposes. For strategic reasons, the properties are not being used in this manner.

The DRC approach requires a valuation of the market value of the land in its existing use and an estimate of the new replacement cost of the buildings and structures from which deductions are then made to allow for the age, condition and functional obsolescence.

114 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

14 Investment Properties

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Carrying amount at 1 January | 3,151,325 | 3,263,126 |
| Addition | 7,948 | 3,753 |
| Fair value (loss)/gain recognised in profit or loss | (137,022) | 672 |
| Exchange realignment | 129,429 | (116,226) |
| Carrying amount at 31 December | 3,151,680 | 3,151,325 |

The Group's investment properties consist of one commercial property and certain industrial properties in Mainland China. The Group's investment properties were revalued on 31 December 2025 based on valuations performed by Jones Lang LaSalle Corporate Appraisal and Advisory Limited, Cushman & Wakefield Limited and BonVision International Appraisals Limited, independent professionally qualified valuers, at HK$3,180,958,000 (2024: HK$3,209,890,000). Each year, the Group's property manager and the chief financial officer decide on the appointment of external valuers for the valuations of the Group's properties. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The Group's property manager and the chief financial officer have discussions with the valuer on the valuation assumptions and valuation results once a year when the valuation is performed for annual financial reporting.

As at 31 December 2025, the market value of the Group's investment properties, as determined by the Group's external valuer, differs from the net book value presented in the consolidated statement of financial position due to the Group presenting lease incentives of HK$29,278,000 (2024: HK$58,565,000) as other non-current assets in note 21 separately.

The investment properties are leased to third parties under operating leases, further summary details of which are included in note 15 to the consolidated financial statements.

As at 31 December 2025, certain investment properties of the Group with a carrying value of HK$3,151,680,000 (2024: HK$3,151,325,000) were pledged as security for the Group's loan from a bank. Further details are set out in note 26 to the consolidated financial statements.

Annual Report 2025 COOLPAD GROUP LIMITED 115

NOTES TO FINANCIAL STATEMENTS

31 December 2025

14 Investment Properties (Continued)

Fair value hierarchy

The following table illustrates the fair value measurement hierarchy of the Group's investment properties:

During the year, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 (2024: HK$nil).

116 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

14 Investment Properties (Continued)

Fair value hierarchy (Continued)

Reconciliation of fair value measurements categorised within Level 3 of the fair value hierarchy:

| | Commercial property
HK$'000 | Industrial properties
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- |
| Carrying amount at 1 January 2024 | 1,558,893 | 1,704,233 | 3,263,126 |
| Additions | 2,865 | 888 | 3,753 |
| Fair value (loss)/gain recognised in profit or loss (note 5) | (9,650) | 10,322 | 672 |
| Exchange realignment | (55,345) | (60,881) | (116,226) |
| Carrying amount at 31 December 2024 and 1 January 2025 | 1,496,763 | 1,654,562 | 3,151,325 |
| Additions | 476 | 7,472 | 7,948 |
| Fair value loss recognised in profit or loss (note 5) | (48,711) | (88,311) | (137,022) |
| Exchange realignment | 61,766 | 67,663 | 129,429 |
| Carrying amount at 31 December 2025 | 1,510,294 | 1,641,386 | 3,151,680 |
| * Include losses for assets held at end of reporting period | (48,711) | (88,311) | (137,022) |

The total losses recognised in profit or loss including those for assets held at end of reporting period are presented in other income and other gains or losses, net in the consolidated statement of profit or loss and other comprehensive income.

Set out below is a summary of the valuation technique used and the key inputs to the valuation of investment properties:

• The investment properties as at 31 December 2025 and 2024 represented the manufacturing buildings and dormitories held for lease located in Dongguan City, the PRC and the commercial buildings held for lease located in Shenzhen City, the PRC.

Annual Report 2025 COOLPAD GROUP LIMITED 117

NOTES TO FINANCIAL STATEMENTS

31 December 2025

14 Investment Properties (Continued)

Fair value hierarchy (Continued)

The valuer adopted the investment approach to identify the property value by capitalising the rental income with due provisions for reversionary potential with a discount rate being determined by referring to sales evidence as available in the relevant market.

A significant increase/(decrease) in the market monthly rental would result in a significant increase/(decrease) in the fair value of the investment properties. A significant increase/(decrease) in the discount rate in isolation would result in a significant decrease/(increase) in the fair value of the investment properties.

15 Leases

The Group as a lessee

The Group has lease contracts for various items of machinery, equipment, office equipment and computers used in its operations. Lump sum payments were made upfront to acquire the leased land from the owners with lease periods of 30 to 50 years, and no ongoing payments will be made under the terms of these land leases. Leases of properties generally have lease terms between 1 to 5 years. Other equipment and machinery generally have lease terms of 12 months or less and/or is individually of low value.

(a) Right-of-use assets

The carrying amounts of the Group's right-of-use assets and the movements during the year are as follows:

| | Leasehold land
HK$'000 | Properties
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- |
| As at 1 January 2024 | 51,506 | 5,179 | 56,685 |
| Termination | – | (3,278) | (3,278) |
| Depreciation charge | (1,652) | (293) | (1,945) |
| Exchange realignment | (1,799) | (127) | (1,926) |
| As at 31 December 2024 and 1 January 2025 | 48,055 | 1,481 | 49,536 |
| Addition | – | 1,523 | 1,523 |
| Depreciation charge | (1,647) | (99) | (1,746) |
| Exchange realignment | 1,981 | 61 | 2,042 |
| As at 31 December 2025 | 48,389 | 2,966 | 51,355 |

As at 31 December 2025, certain of the Group's leasehold land with a net carrying value of HK$10,054,000 (2024: HK$9,194,000) was pledged as security for the Group's loan from a bank. Further details are set out in note 26 to the consolidated financial statements.

118 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

15 Leases (Continued)

The Group as a lessee (Continued)

(b) Lease liabilities

The carrying amount of lease liabilities and the movements during the year are as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Carrying amount as at 1 January | – | 5,453 |
| Addition | 1,523 | – |
| Interest | 5 | 174 |
| Termination | – | (4,159) |
| Payments | (132) | (1,380) |
| Exchange realignment | – | (88) |
| Carrying amount as at 31 December | 1,396 | – |
| Analysis into: | | |
| Current portion | 749 | – |
| Non-current portion | 647 | – |
| | 1,396 | – |

The maturity analysis of lease liabilities is disclosed in note 37 to the consolidated financial statements.

(c) The amounts recognised in profit or loss in relation to leases are as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Interest on lease liabilities | 5 | 174 |
| Depreciation charge of right-of-use assets | 1,746 | 1,945 |
| Expense relating to short-term leases (included in selling expense and administrative expenses) | 1,624 | 2,921 |
| Gain on lease termination | – | 881 |

(d) The total cash outflow for leases is disclosed in note 30(b) to the consolidated financial statements. As disclosed in note 33 to the consolidated financial statements, there were no future cash outflows relating to leases that have not yet commenced as at 31 December 2025 and 2024.

Annual Report 2025 COOLPAD GROUP LIMITED 119

NOTES TO FINANCIAL STATEMENTS

31 December 2025

15 Leases (Continued)

The Group as a lessor

The Group leases its investment properties (note 14) consisting of one commercial property and certain industrial properties in Mainland China under operating lease arrangements. The terms of the leases generally require the tenants to pay security deposits and provide for periodic rent adjustments according to the then prevailing market conditions. Rental income recognised by the Group during the year was HK$62,540,000 (2024: HK$89,845,000), details of which are included in note 5 to the consolidated financial statements.

At 31 December 2025, the undiscounted lease payments receivable by the Group in future periods under non-cancellable operating leases with its tenants are as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Within one year | 106,909 | 83,577 |
| After one year but within five years | 262,148 | 264,838 |
| After five years | 111,038 | 210,316 |
| | 480,095 | 558,731 |

16 Intangible Assets

31 December 2025 and 2024

| | Product development costs
HK$'000 | Patents and licences
HK$'000 | Computer software
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- | --- |
| Cost: | | | | |
| At 1 January 2024, 31 December 2024,
1 January 2025 and 31 December 2025 | 434,882 | 36,578 | 14,379 | 485,839 |
| Accumulated amortisation and impairment: | | | | |
| At 1 January 2024, 31 December 2024,
1 January 2025 and 31 December 2025 | 434,882 | 36,578 | 14,379 | 485,839 |
| Net carrying amount: | | | | |
| At 31 December 2025 | - | - | - | - |
| At 31 December 2024 | - | - | - | - |

120 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

17 Investments in Associates

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Share of net assets | 224,323 | 216,302 |
| Goodwill | 1,201,710 | 1,201,710 |
| Accumulated impairment | 1,426,033
(1,256,992) | 1,418,012
(1,256,992) |
| | 169,041 | 161,020 |

The Group’s balances with associates are disclosed in note 34(a) to the consolidated financial statements.

Particulars of the Group’s material associates are as follows:

Annual Report 2025 COOLPAD GROUP LIMITED 121

NOTES TO FINANCIAL STATEMENTS

31 December 2025

17 Investments in Associates (Continued)

The following table illustrates the summarised financial information in respect of Coolpad E-commerce Group adjusted for any differences in accounting policies and reconciled to the carrying amount in the consolidated financial statements:

Coolpad E-commerce Group

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Cash and cash equivalents | 265,701 | 264,379 |
| Other current assets | 666,085 | 580,948 |
| Current assets | 931,786 | 845,327 |
| Non-current assets | 31,685 | 54,279 |
| Trade payables | (37,500) | (23,275) |
| Other current liabilities | (404,205) | (386,144) |
| Total current liabilities | (441,705) | (409,419) |
| Non-current liabilities | (4,214) | (4,044) |
| Net assets | 517,552 | 486,143 |
| Non-controlling interests | (5,635) | (4,364) |
| Equity attributable to owners of Coolpad E-commerce Group | 511,917 | 481,779 |
| Reconciliation to the Group's interests in Coolpad E-commerce Group: | | |
| Proportion of the Group's ownership | 25% | 25% |
| Group's share of net assets of Coolpad E-commerce Group | 127,979 | 120,445 |
| Goodwill on acquisition (less cumulative impairment) | 166 | 166 |
| Carrying amount of the investment | 128,145 | 120,611 |
| Revenue | 66,058 | 103,759 |
| Profit/(loss) for the year | 12,088 | (47,777) |
| Other comprehensive income/(loss) for the year | 18,051 | (16,874) |
| Total comprehensive income/(loss) for the year | 30,139 | (64,651) |

122 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

17 Investments in Associates (Continued)

Other individually immaterial associates

The following table illustrates the aggregate financial information of the Group's associates that are not individually material:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Share of associates' loss for the year | (1,210) | (1,479) |
| Share of associates' total comprehensive loss for the year | (1,210) | (1,479) |
| Aggregate carrying amount of the Group's investments in associates | 40,896 | 40,409 |

18 Inventories

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Raw materials | 66 | 12,539 |
| Work in progress | - | 4,237 |
| Finished goods | 12,800 | 41,900 |
| | 12,866 | 58,676 |

19 Cryptocurrencies

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Bitcoin | - | 10,483 |
| Tether (USDT) | - | 135 |
| | - | 10,618 |

Annual Report 2025 COOLPAD GROUP LIMITED 123

NOTES TO FINANCIAL STATEMENTS

31 December 2025

20 Trade Receivables

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Trade receivables | 13,783 | 97,209 |
| Accumulated impairment | (6,264) | (11,990) |
| | 7,519 | 85,219 |

The Group's trading terms with its customers are mainly on credit, except for new customers, where payment in advance is normally required. In the case of long-standing customers and those with a good repayment history, the Group may offer these customers with a credit period of 30 to 90 days. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are non-interest bearing.

An ageing analysis of the trade receivables as at the end of the reporting period, based on the transaction date, is as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Within 3 months | 3,480 | 67,288 |
| 4 to 6 months | 2,492 | 17,978 |
| 7 to 12 months | 1,547 | 799 |
| Over 1 year | 6,264 | 11,144 |
| | 13,783 | 97,209 |

124 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

20 Trade Receivables (Continued)

The movements in the loss allowance for impairment of trade receivables are as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| At 1 January | 11,990 | 10,334 |
| (Reversal of impairment)/impairment loss, net (note 5) | (4,203) | 2,064 |
| Disposal of a subsidiary | (1,906) | – |
| Exchange realignment | 383 | (408) |
| At 31 December | 6,264 | 11,990 |

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, product type, customer type and rating, and coverage by letters of credit or other forms of credit insurance). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.

Set out below is the information about the credit risk exposure on the Group's trade receivables using a provision matrix:

As at 31 December 2025

As at 31 December 2024

Annual Report 2025 COOLPAD GROUP LIMITED 125

NOTES TO FINANCIAL STATEMENTS

31 December 2025

21 Prepayments, Deposits and Other Receivables

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Prepayments for suppliers* | 13,926 | 19,484 |
| Lease incentives (note 14) | 29,278 | 58,565 |
| Deposits and other receivables | 33,404 | 50,535 |
| Deductible input VAT | 26,310 | 22,031 |
| Prepaid expenses | 5,441 | 3,855 |
| | 108,359 | 154,470 |
| Non-current portion | (34,719) | (97,728) |
| | 73,640 | 56,742 |

• The prepayments for suppliers represent the prepayment to suppliers in mobile phone segment. The amount was utilized subsequent to the reporting period.

The movements in the loss allowance for impairment of deposits and other receivables are as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| At 1 January | – | – |
| Impairment loss, net (note 5) | 5,812 | – |
| At 31 December | 5,812 | – |

Deposits and other receivables mainly represent rental deposits and other receivables in relation to lease. The loss rate is adjusted to reflect the current conditions and forecasts of future economic conditions, as appropriate. The loss rate applied as at 31 December 2025 was 15.13%.

The non-current portion of prepayments, deposits and other receivables as at 31 December 2025 mainly represented lease incentives of HK$29,278,000 (2024: HK$58,565,000) and other receivables of HK$5,441,000 (2024: HK$4,294,000).

As at 31 December 2025, certain other receivables with a carrying value of HK$1,501,000 (2024: HK$7,587,000) were pledged as security for the Group's loan from a bank. Further details are set out in note 26 to the consolidated financial statements.

126 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

22 Financial Assets at FVTPL

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Non-current: | | |
| Other unlisted investments, at fair value | 21,914 | 16,655 |
| Current: | | |
| Listed securities in overseas, at fair value | - | 116,260 |

The above unlisted investments of HK$21,914,000 (2024: HK$16,655,000) were classified as financial assets at FVTPL as the Group has not elected to recognise the fair value gain or loss through other comprehensive income.

The fair value measurement of the financial assets at FVTPL are disclosed in note 36 of the consolidated financial statements.

23 Cash and Cash Equivalents and Pledged Deposits

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Cash and bank balances | 244,392 | 65,145 |
| Time deposits | 7,779 | 53,211 |
| | 252,171 | 118,356 |
| Less: Pledged deposits | (7,779) | (53,211) |
| Cash and cash equivalents | 244,392 | 65,145 |

At the end of the reporting period, the cash and cash equivalents of the Group denominated in RMB amounted to approximately HK$115,925,000 (2024: HK$60,271,000). The RMB is not freely convertible into other currencies, however, under Mainland China's Foreign Exchange Control Regulations and Administration of Settlement, and Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies through banks authorised to conduct foreign exchange business.

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group and earn interest at the respective short-term time deposit rates. The bank balances and pledged deposits are deposited with creditworthy banks with no recent history of default.

Annual Report 2025 COOLPAD GROUP LIMITED 127

NOTES TO FINANCIAL STATEMENTS

31 December 2025

24 Trade Payables

An ageing analysis of the trade payables as at the end of the reporting period, based on the transaction date, is as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Within 3 months | 726 | 82,640 |
| 4 to 6 months | – | 7,035 |
| 7 to 12 months | 2 | 5,671 |
| Over 1 year | 46,550 | 45,208 |
| | 47,278 | 140,554 |

The trade payables are non-interest bearing and are normally settled on terms of 30 to 60 days.

25 Other Payables and Accruals

| | Note | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- | --- |
| Accrued royalties | | 321,054 | 313,576 |
| Contract liabilities | (a) | 21,473 | 23,155 |
| Product claims provision | | 15,672 | 15,646 |
| Refund liabilities | | 28,839 | 41,272 |
| Accrued construction costs | | 38,242 | 30,923 |
| Accrued staff costs and benefits expenses | | 6,958 | 13,634 |
| Other accruals | | 17,074 | 20,684 |
| Other payables | | 333,399 | 337,975 |
| | | 782,711 | 796,865 |

Other payables and accruals are non-interest bearing and repayable on demand.

Note:

(a) Details of contract liabilities are as follows:

| | 31 December
2025
HK$'000 | 31 December
2024
HK$'000 | 1 January
2024
HK$'000 |
| --- | --- | --- | --- |
| Received in advance from customers
Sale of smart phones and devices | 21,473 | 23,155 | 15,304 |

128 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

26 Interest-bearing Bank Borrowings

Notes:

(a) At 31 December 2025, the Group's bank borrowings of HK$1,225,328,000 (2024: HK$1,197,237,000) bore interest at floating rates.

(b) At 31 December 2025 and 2024, all bank borrowings are denominated in RMB.

(c) Save as disclosed in notes 13, 14, 15 and 21 to the consolidated financial statements, the Group's bank borrowings are secured and guaranteed by the following:

(i) secured by certain property, plant and equipment, investment properties and right-of-use assets of the Group with a carrying value of HK$157,582,000 (2024: HK$155,169,000), HK$3,151,680,000 (2024: HK$3,151,325,000) and HK$10,054,000 (2024: HK$9,194,000);

(ii) secured by 75% shareholding interests of Dongguan Yulong Telecommunication Tech Co., Ltd;

(iii) secured by the rights to receive the rental income of Yulong Shenzhen. The amount of the secured receivable as at 31 December 2025 is HK$1,501,000 (2024: HK$7,587,000); and

(iv) guaranteed by Mr. CHEN Jiajun and Yulong Shenzhen jointly and severally.

Annual Report 2025 COOLPAD GROUP LIMITED 129

NOTES TO FINANCIAL STATEMENTS

31 December 2025

27 Deferred Tax

The movements in deferred tax liabilities and assets during the year are as follows:

Deferred tax liabilities

Deferred tax liabilities not recognised

Pursuant to the PRC Corporate Income Tax Law, a 10% withholding tax is levied on dividends declared to foreign investors from the foreign investment enterprises established in Mainland China. The requirement is effective from 1 January 2008 and applies to earnings after 31 December 2007. A lower withholding tax rate may be applied if there is a tax treaty between Mainland China and the jurisdiction of the foreign investors. For the Group, the applicable rate is 10%. The Group is therefore liable for withholding taxes on dividends distributed by the PRC subsidiaries in respect of their earnings generated from 1 January 2008.

At 31 December 2025, the Group has not recognised deferred tax liabilities of HK$255,965,000 (2024: HK$255,962,000) in respect of temporary differences relating to the undistributed profits of subsidiaries, amounting to HK$2,559,650,000 (2024: HK$2,559,618,000), that would be payable on the distribution of these retained profits as the Company controls the dividend policy of these subsidiaries and determines that it is not probable that these profits will be distributed in the foreseeable future.

130 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

27 Deferred Tax (Continued)

Deferred tax assets not recognised

Deferred tax assets have not been recognised in respect of the following items:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Tax losses | 2,012,923 | 1,957,092 |
| Deductible temporary differences | 446,641 | 326,761 |
| | 2,459,564 | 2,283,853 |

The Group had total accumulated tax losses arising in Mainland China, United States and Hong Kong of HK$2,012,923,000 (2024: HK$1,957,092,000) for offsetting against future taxable profits of the companies in which the losses arose.

Deferred tax assets have not been recognised in respect of the above items as it is not considered probable that sufficient taxable profits will be available against which the above items can be utilised.

28 Share Capital and Reserves

(a) Share capital

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Authorised: | | |
| 2,000,000,000 (2024: 20,000,000,000) ordinary shares of HK$0.1
(2024: HK$0.01) each | 200,000 | 200,000 |

Annual Report 2025 COOLPAD GROUP LIMITED 131

NOTES TO FINANCIAL STATEMENTS

31 December 2025

28 Share Capital and Reserves (Continued)

(a) Share capital (Continued)

A summary of the transactions with reference to the movements in the Company's authorised share capital is as follows:

A summary of the transactions during the year with reference to the movements in the Company's issued share capital is as follows:

132 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

28 Share Capital and Reserves (Continued)

(a) Share capital (Continued)

Notes:

(i) On 23 April 2025, the Company proposed a capital reorganisation ("Capital Reorganisation") to be implemented in the following manner:

(A) the share consolidation whereby every forty issued and unissued existing shares of par value of HK$0.01 each will be consolidated into one consolidated share (the "Consolidated Shares") of par value of HK$0.4 each ("Share Consolidation");

(B) immediately following the Share Consolidation becoming effective, the capital reduction whereby the par value of each issued consolidated share would be reduced from HK$0.4 to HK$0.1 by cancelling the paid-up capital to the extent of HK$0.3 on each issued consolidated share, and cancelling any fractional consolidated share in the issued share capital of the Company arising from the Share Consolidation ("Capital Reduction"); and

(C) immediately following the Share Consolidation and Capital Reduction becoming effective, the subdivision, whereby each authorised but unissued consolidated shares be subdivided into four (4) new shares of par value of HK$0.1 each ("Sub-division").

The Share Consolidation was passed and approved as an ordinary resolution and the proposed Capital Reduction and Share Sub-division was passed and approved as a special resolution by the shareholders of the Company at the annual general meeting held on 6 June 2025. Accordingly, the Share Consolidation has become effective on 10 June 2025. Details are set out in the announcement of the Company dated 23 April 2025, the circular of the Company dated 14 May 2025 and the poll results announcement of the Company dated 6 June 2025.

The completion of Capital Reduction and Sub-division is subject to compliance with relevant procedures and requirements under the applicable laws of the Cayman Islands and the Listing Rules. All the conditions precedent for the implementation of the Capital Reduction and the Share Sub-division have been fulfilled and become effective on 24 September 2025. Details are set out in the announcement of the Company dated 24 September 2025.

(ii) The Company repurchased and cancelled 77,595,000 of its shares on the Hong Kong Stock Exchange at a total consideration of HK$99,250,000 during the year ended 31 December 2025 ("Share Repurchase"). The purchased shares were cancelled during the period and the total amount paid for the repurchase of the shares has been charged to share capital and share premium account of the Company.

Annual Report 2025 COOLPAD GROUP LIMITED 133

NOTES TO FINANCIAL STATEMENTS

31 December 2025

28 Share Capital and Reserves (Continued)

(b) Reserves

(i) Share premium account

Share premium can be distributed provided that immediately following the date on which such reserves are proposed to be distributed, the Company would be in a position to pay off its debts as and when they fall due in the ordinary course of business.

(ii) Statutory reserve

Pursuant to the relevant laws and regulations in the PRC, the companies comprising the Group which are registered in the PRC shall appropriate a certain percentage of their net profit after tax (after offsetting any prior years' losses) calculated under the accounting principles generally applicable to the PRC enterprises to reserve funds. When the balance of this reserve reaches 50% of the entity's capital, any further appropriation is optional. The statutory reserve can be utilised to offset prior years' losses or to increase capital. However, the balance of the statutory surplus reserve must be maintained at a minimum of 25% of the capital after those usages.

(iii) Capital redemption reserve

Capital redemption reserve arises from repurchase of its own ordinary shares on the Stock Exchange. All the repurchased shares are cancelled by the Company upon such repurchase and accordingly the issued share capital of the Company is reduced by the nominal value of these shares. The premium paid on the repurchase is charged to the share premium account.

(iv) Other reserve

Other reserve mainly represents the difference between the cost of acquisition and the noncontrolling interests acquired in the case of acquisition of additional non-controlling interests of subsidiaries, and, the difference between the proceeds from disposal and the non-controlling interests disposed of in the case of disposal of partial equity interests in subsidiaries to noncontrolling shareholders without loss of control.

134 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

29 Share Option Scheme and Warrants

(a) Share option scheme

The Company operates a share option scheme (the "Scheme") for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group's operations. Eligible participants of the Scheme include the Company's non-executive directors, independent non-executive directors, employees, consultants, advisers, customers and any shareholder of any member of the Group. The Company's first share option scheme with a valid period of 10 years became effective on 21 November 2004 and was terminated on 23 May 2014 since this scheme expired on 21 November 2014. A new share option scheme was adopted by the Company and became effective on 23 May 2014 and expired on 22 May 2024. Up to the date of this report, the share option scheme has not been renewed.

The maximum number of shares which may be issued upon exercise of all outstanding options to be granted under the Scheme and any other share option scheme of the Group is an amount equivalent, upon their exercise, to 10% of the shares in issue at the time dealings in the shares first commence on the Stock Exchange. The maximum number of shares issuable under share options to each eligible participant in the Scheme within any 12-month period is limited to 1% of the shares of the Company in issue at any time. Any further grant of share options in excess of this limit is subject to shareholders' approval in a general meeting.

Share options granted to a director, chief executive or substantial shareholder of the Company, or to any of their associates, are subject to approval in advance by the independent non-executive directors of the Company. In addition, any share options granted to a substantial shareholder or an independent non-executive director of the Company, or to any of their associates, in excess of 0.1% of the shares of the Company in issue at any time or with an aggregate value (based on the price of the Company's shares at the date of grant) in excess of HK$5 million, within any 12-month period, are subject to shareholders' approval in advance in a general meeting.

The offer of a grant of share options may be accepted within 28 days from the date of offer, upon payment of a nominal consideration of HK$1 in total by the grantee. The exercise period of the share options granted is determinable by the directors, and commences after a vesting period of one to three years and ends on a date which is not later than five years from the date of offer of the share options or the expiry date of the Scheme, if earlier.

The exercise price of share options is determinable by the directors, but may not be less than the highest of (i) the Stock Exchange closing price of the Company's shares on the date of offer of the share options; (ii) the average Stock Exchange closing price of the Company's shares for the five trading days immediately preceding the date of offer; and (iii) the nominal value of the shares.

Share options do not confer rights on the holders to dividends or to vote at shareholders' meetings.

Annual Report 2025 COOLPAD GROUP LIMITED 135

NOTES TO FINANCIAL STATEMENTS

31 December 2025

29 Share Option Scheme and Warrants (Continued)

(a) Share option scheme (Continued)

The following share options were outstanding under the Scheme during the year:

• The adjustments in relation to the outstanding share options have been made upon the Capital Reorganisation on the exercise price and the number of outstanding share options.

No share options were exercised during the year (2024: Nil).

The following share options were outstanding under the Scheme during the year:

2025

136 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

29 Share Option Scheme and Warrants (Continued)

(a) Share option scheme (Continued)

2024

| Number of options
'000 | Exercise price
HK$ | Exercise period |
| --- | --- | --- |
| 150,775 | 0.4686 | 09-04-22 to 08-04-26 |
| 31,885 | 0.4686 | 09-04-23 to 08-04-26 |
| 28,131 | 0.4686 | 09-04-24 to 08-04-26 |
| 27,097 | 0.4686 | 09-04-25 to 08-04-26 |
| 80,000 | 0.0750 | 28-12-24 to 27-06-27 |
| 80,000 | 0.0750 | 28-06-25 to 27-06-27 |
| 80,000 | 0.0750 | 28-12-25 to 27-06-27 |
| 80,000 | 0.0750 | 28-06-26 to 27-06-27 |
| 557,888 | | |

• The number of options and exercise price were adjusted upon the completion of the Capital Reorganisation.

The fair value of the share options granted during the year was HK$9,255,000 (HK$0.70 each), of which the Group recognised a share option expense of HK$209,000 during the year ended 31 December 2025. No share options were granted during the year ended 31 December 2024.

The fair value of equity-settled share options granted during the year was estimated as at the date of grant using a binomial model, taking into account the terms and conditions upon which the options were granted. The share option granted during the year is with vesting conditions relevant to performance of Smart Devices and AI Computing Applications Division. The following table lists the inputs to the model used:

Annual Report 2025 COOLPAD GROUP LIMITED 137

NOTES TO FINANCIAL STATEMENTS

31 December 2025

29 Share Option Scheme and Warrants (Continued)

(a) Share option scheme (Continued)

The expected life of the options is based on the historical data over the past five years and is not necessarily indicative of the exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

No other feature of the options granted was incorporated into the measurement of fair value.

The Group recorded share option expense in aggregate of HK$4,216,000 (2024: expense of HK$9,690,000) due to the amortisation of certain share options granted in prior years during the year ended 31 December 2025.

Subsequent to the end of the reporting period, no share options were exercised, forfeited and no share options were expired.

At the date of approval of these financial statements, the Company had 27,048,000 share options outstanding under the Scheme, which represented approximately 7.56% of the Company's shares in issue as at that date.

(b) Warrants

On 4 October 2021, the Company entered into a warrant subscription agreement (the "Warrant Subscription Agreement") with SAI Growth Fund I, LLLP ("SAI"), pursuant to which the Company agreed to issue the unlisted warrants for the subscription of a maximum number of 800,000,000 shares of the Company to SAI at an issue price of HK$0.055 per warrant option. Further details of which are set out in the circular of the Company dated 23 November 2021.

The remaining warrants were lapsed as of 17 October 2025. There was no outstanding warrant as at 31 December 2025.

2024

| Number of warrants
'000 | Exercise price*
HK$ | Exercise period |
| --- | --- | --- |
| 266,666 | 0.80 | 17 December 2021 to
17 December 2025 |

• The exercise price of the warrants is subject to adjustment in the case of rights or bonus issues, or other similar changes in Company's share capital.

138 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

30 Notes to the Consolidated Statement of Cash Flows

(a) Changes in liabilities arising from financing activities

Annual Report 2025 COOLPAD GROUP LIMITED 139

NOTES TO FINANCIAL STATEMENTS

31 December 2025

30 Notes to the Consolidated Statement of Cash Flows (Continued)

(b) Total cash outflow for leases

Total cash outflow for leases included in the consolidated statement of cash flows is as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Within operating activities | 1,624 | 2,921 |
| Within financing activities | 132 | 1,380 |
| | 1,756 | 4,301 |

(c) Disposal of subsidiaries

Disposal of Coolbit Technologies Limited (the "Coolbit technologies")

On 20 February 2025, the Group has completed the disposal of 81.2% equity interests of Coolbit technologies with an independent third party at a consideration of USD958,800.

Upon completion of the disposal, Coolbit Technologies ceased to be subsidiary of the Group and its results, assets and liabilities and cash flows ceased to be consolidated into the Group's consolidated financial information. A loss on disposal of HK$11,583,000 was recognised upon the completion. The remaining 18.8% equity interests of Coolbit Technologies are recognised as financial assets at FVTPL.

Disposal of Helong Technology

Helong Technology was previously treated as our subsidiary through a series of contractual agreements. As all relevant parties signed termination agreements on 22 August 2025 to dissolve this contractual control relationship, the contractual arrangement was legally terminated. Consequently, Helong Technology ceased to be our subsidiary from 29 August 2025, onwards.

140 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

30 Notes to the Consolidated Statement of Cash Flows (Continued)

(c) Disposal of subsidiaries (Continued)

Net assets at the date of disposals were as follows:

| | Coolbit Technologies
HK$'000 | Helong Technology
HK$'000 | Total
HK$'000 |
| --- | --- | --- | --- |
| Property, plant and equipment | 20,306 | – | 20,306 |
| Other non-current assets | 34,901 | – | 34,901 |
| Cryptocurrencies | 35,298 | – | 35,298 |
| Trade receivables | 450 | 57,207 | 57,657 |
| Bank balances and cash | 724 | 19 | 743 |
| Pledged deposits | – | 1,157 | 1,157 |
| Other assets | 9,715 | 2,499 | 12,214 |
| Due from the Group | – | 9,328 | 9,328 |
| Trade payables | (95) | (69,343) | (69,438) |
| Other payables and accruals | (17,116) | (405) | (17,521) |
| Interest-bearing bank borrowings | (12,834) | – | (12,834) |
| Due to the Group | (45,633) | – | (45,633) |
| Other liabilities | (62) | (112) | (174) |
| Net assets disposed of | 25,654 | 350 | 26,004 |
| Release of translation reserve upon disposal of subsidiaries | (1,780) | 1,116 | (664) |
| Recognition of financial assets at FVTPL | (4,828) | – | (4,828) |
| Net loss on disposal of subsidiaries | (11,583) | (1,466) | (13,049) |
| Total consideration | 7,463 | – | 7,463 |
| Net cash outflow arising on disposal: | | | |
| Cash consideration received* | – | – | – |
| Bank balances and cash disposed of | (724) | (19) | (743) |
| Pledged deposits disposed of | – | (1,157) | (1,157) |
| | (724) | (1,176) | (1,900) |

• Net loss on disposal of subsidiaries is recognised in other income and other gains or losses, net.
  ** Subsequent to the reporting period and up to the date of this report, consideration amounting to USD958,800 (HK$7,463,000) was partially settled. The amount was included in "prepayments, deposits and other receivables" as at 31 December 2025.

Annual Report 2025 COOLPAD GROUP LIMITED 141

NOTES TO FINANCIAL STATEMENTS

31 December 2025

31 Contingencies

Litigations with suppliers

The Group received several civil complaints in 2025 from suppliers demanding the Group to immediately repay the overdue accounts payable balance of RMB7,274,000 (equivalent to HK$8,066,000) (2024: HK$4,648,000). The arbitration procedures of the civil complaints were still in progress as at the date of approval of the consolidated financial statements.

32 Pledge of Assets

Details of the Group's assets pledged for the Group's bank borrowings, and for a performance guarantee provided to a bank and issuance of a letter of credit are included in notes 13, 14, 15, 21, and 23, respectively, to the consolidated financial statements.

33 Commitments

The Group had the following capital commitments at the end of the reporting period:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Capital contributions payable to certain associates or an unlisted investment measured at fair value | 22,360 | 21,485 |

34 Related Party Transactions

(a) Balances with related parties

Notes:

(i) Amounts due to associates represented the advances payable to associates which arose in the course of the Group's operation.

(ii) The amounts due to other related parties represents the property management service payments due to Shenzhen Kingkey Property Management Co., Ltd and Dongguan Kingkey Property Management Company Limited, an indirect wholly-owned subsidiary of the Company. Both companies are ultimate controlled by Mr. Chen Hua, who is an immediate family member of a substantial shareholder of the Company.

142 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

34 Related Party Transactions (Continued)

(b) Transactions with related parties

| | Note | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- | --- |
| Other related parties: | | | |
| Management service expense | (i) | 23,467 | 26,379 |
| Sale of products | | - | 4 |
| Rental income | | 334 | 643 |
| Disposal of cryptocurrencies | | - | 2,347 |

Note:

(i) The management service expense incurred during the periods represents the property management service provided by Shenzhen Kingkey Property Management Co., Ltd and Dongguan Kingkey Property Management Company Limited, an indirect wholly-owned subsidiary of the Company. Both companies are ultimate controlled by Mr. Chen Hua, who is an immediate family member of a substantial shareholder of the Company. The management service fee were made according to the prevailing market rated charged by independent third parties offering comparable management services for properties of comparable scale and grade in the vicinity.

The above transactions with related parties were made based on mutually agreed terms.

The related party transactions in respect of note (i) above also constitute continuing connected transactions as defined in Chapter 14A of the Listing Rules.

(c) Compensation of key management personnel of the Group

In addition to the amounts paid to the Company's directors as disclosed in note 8 to the financial statements, compensation of other key management personnel of the Group is set out below:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Salaries, allowances and benefits in kind | 3,642 | 4,839 |
| Pension scheme contributions | 512 | 492 |
| Equity-settled share option expense | 90 | 480 |
| Total compensation paid to other key management personnel | 4,244 | 5,811 |

Annual Report 2025 COOLPAD GROUP LIMITED 143

NOTES TO FINANCIAL STATEMENTS

31 December 2025

35 Financial Instruments by Category

The carrying amounts of each of the categories of financial instruments as at the end of the reporting period are as follows:

Financial assets

2025

2024

144 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

35 Financial Instruments by Category (Continued)

Financial liabilities

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| Financial liabilities at amortised cost | | |
| Trade payables | 47,278 | 140,554 |
| Financial liabilities included in other payables and accruals | 687,793 | 700,983 |
| Interest-bearing bank borrowings | 1,225,328 | 1,197,237 |
| Lease liabilities | 1,396 | - |
| Amounts due to associates | 30,053 | 29,429 |
| Amounts due to related parties | 37,473 | 15,125 |
| | 2,029,321 | 2,083,328 |

36 Fair Value and Fair Value Hierarchy of Financial Instruments

Fair value measurement

The Group measures its investment properties, certain buildings included in property, plant and equipment and equity investments at fair value at the end of each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Annual Report 2025 COOLPAD GROUP LIMITED 145

NOTES TO FINANCIAL STATEMENTS

31 December 2025

36 Fair Value and Fair Value Hierarchy of Financial Instruments (Continued)

Fair value measurement (Continued)

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair value measurement is observable, either directly or indirectly
• Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Group’s finance department headed by the chief financial officer is responsible for determining the policies and procedures for the fair value measurement of financial instruments. The valuation process and results are discussed with the chief financial officer twice a year for interim and annual financial reporting.

Fair value hierarchy

The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:

Financial instruments measured at fair value

As at 31 December 2025

146 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

36 Fair Value and Fair Value Hierarchy of Financial Instruments (Continued)

Fair value hierarchy (Continued)

Financial instruments measured at fair value (Continued)

As at 31 December 2024

The movements in fair value measurements within Level 3 during the year are as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| At 1 January | 16,655 | 88,461 |
| Additions | 5,996 | 14,031 |
| Total loss recognised in the statement of profit or loss, net# | (1,400) | (1,672) |
| Disposal | – | (83,965) |
| Exchange realignment | 663 | (200) |
| At 31 December | 21,914 | 16,655 |
| * Include losses for assets held at end of reporting period | 1,400 | 1,823 |

During the year, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 for both financial assets and financial liabilities (2024: Nil).

The total gains or losses recognised in profit or loss including those for assets held at end of reporting period are presented in other income and other gains or losses, net in the statement of profit or loss and other comprehensive income.

Annual Report 2025 COOLPAD GROUP LIMITED 147

NOTES TO FINANCIAL STATEMENTS

31 December 2025

36 Fair Value and Fair Value Hierarchy of Financial Instruments (Continued)

Fair value hierarchy (Continued)

Financial instruments measured at fair value (Continued)

Set out below is a summary of significant unobservable inputs to the valuation of financial instruments together with a quantitative sensitivity analysis as at 31 December 2025 and 2024:

Note:
(a) The fair values of unlisted equity investments are determined with reference to its net asset value. Accordingly, no sensitivity analysis was prepared.

148 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

37 Financial Risk Management Objectives and Policies

The Group’s principal financial instruments are presented in note 35 to the consolidated financial statements.

The main risks arising from the Group’s financial instruments are foreign currency risk, credit risk and liquidity risk. The board of directors reviews and agrees policies for managing these risks and they are summarised below.

Foreign currency risk

The Group has transactional currency exposures. Such exposures arise from sales or purchases by operating units in currencies other than the units’ functional currencies, where the revenue and cost of sales are denominated in USD. The Group is exposed to foreign exchange risk with respect mainly to USD. The Group makes rolling forecasts on foreign currency revenue and expenses and matches the currency and the amount incurred, so as to alleviate the impact on business due to exchange rate fluctuation.

The following table demonstrates the sensitivity at the end of the reporting period to a reasonably possible change in the USD exchange rates, with all other variables held constant, of the Group’s loss before tax (arising from USD denominated financial instruments). Other components of equity would have no change.

Annual Report 2025 COOLPAD GROUP LIMITED 149

NOTES TO FINANCIAL STATEMENTS

31 December 2025

37 Financial Risk Management Objectives and Policies (Continued)

Interest rate risk

The Group’s exposure to interest-rate risk arises from its bank deposits and bank borrowings. These deposits and borrowings bear interests at variable rates varied with the then prevailing market condition.

At 31 December 2025, if interest rates at that date had been 10 basis points lower/higher with all other variables held constant, consolidated profit after tax for the year would have been HK$1,225,000 (2024: HK$1,197,000) higher/lower, arising mainly as a result of lower/higher interest expense on bank deposits and bank and other borrowings.

Credit risk

The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant.

Maximum exposure and year-end staging

The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s credit policy, which is mainly based on past due information unless other information is available without undue cost or effort, and year-end staging classification as at 31 December. The amounts presented are gross carrying amounts for financial assets.

As at 31 December 2025

150 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

37 Financial Risk Management Objectives and Policies (Continued)

Credit risk (Continued)

Maximum exposure and year-end staging (Continued)

As at 31 December 2024

• For trade receivables to which the Group applies the simplified approach for impairment, information based on the provision matrix is disclosed in note 20 to the consolidated financial statements.

** The credit quality of the financial assets included in prepayments, deposits and other receivables is considered to be "normal" when they are not past due and there is no information indicating that the financial assets had a significant increase in credit risk since initial recognition. Otherwise, the credit quality of the financial assets is considered to be "doubtful".

The credit risk for pledged deposits and cash and bank balances is considered minimal as such amounts are placed with banks with good credit standing. Further quantitative data in respect of the Group's exposure to credit risk from trade receivables are disclosed in note 20 to the consolidated financial statements.

Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral. Concentrations of credit risk are managed by counterparty, by geographical region and by industry sector. At the end of the reporting period, the Group had concentrations of credit risk as 67% (2024: 86%) of the Group's trade receivables were due from the Group's five largest customers.

Annual Report 2025 COOLPAD GROUP LIMITED 151

NOTES TO FINANCIAL STATEMENTS

31 December 2025

37 Financial Risk Management Objectives and Policies (Continued)

Liquidity risk

The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its financial instruments and financial assets (e.g., trade and bills receivables) and projected cash flows from operations.

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, lease liabilities and other interest-bearing loans.

The maturity profile of the Group's financial liabilities as at the end of the reporting period, based on the contractual undiscounted payments, was as follows:

152 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

37 Financial Risk Management Objectives and Policies (Continued)

Capital management

The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as a going concern and to maintain healthy capital ratios in order to support its business and maximise shareholders’ value.

The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2025 and 2024.

The Group monitors capital using a gearing ratio, which is net debt divided by capital plus net debt. Net debt includes trade payables, other payables and accruals, interest-bearing bank borrowings, lease liabilities, amounts due to associates, an amount due to a joint venture and amounts due to related parties, less cash and cash equivalents. Capital represents equity attributable to owners of the Company. The gearing ratios at the end of the reporting period were as follows:

Annual Report 2025 COOLPAD GROUP LIMITED 153

NOTES TO FINANCIAL STATEMENTS

31 December 2025

38 Statement of Financial Position of the Company

Information about the statement of financial position of the Company at the end of the reporting period is as follows:

| | 2025
HK$'000 | 2024
HK$'000 |
| --- | --- | --- |
| NON-CURRENT ASSETS | | |
| Investments in subsidiaries | – | – |
| Total non-current assets | – | – |
| CURRENT ASSETS | | |
| Amounts due from subsidiaries | 1,800,994 | 2,079,203 |
| Prepayments, deposits and other receivables | 7,805 | 156 |
| Cash and cash equivalents | 3,420 | 1,424 |
| Total current assets | 1,812,219 | 2,080,783 |
| CURRENT LIABILITIES | | |
| Amounts due to subsidiaries | 120,773 | 272,074 |
| Other payables and accruals | 5,436 | 8,776 |
| Total current liabilities | 126,209 | 280,850 |
| NET CURRENT ASSETS | 1,686,010 | 1,799,933 |
| TOTAL ASSETS LESS CURRENT LIABILITIES | 1,686,010 | 1,799,933 |
| Net assets | 1,686,010 | 1,799,933 |
| EQUITY | | |
| Issued capital | 33,193 | 163,810 |
| Reserves (note) | 1,652,817 | 1,636,123 |
| Total equity | 1,686,010 | 1,799,933 |

154 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

38 Statement of Financial Position of the Company (Continued)

Note:

A summary of the Company's reserves is as follows:

| | Share premium account
HK$’000 | Contributed surplus
HK$’000 | Share option reserve
HK$’000 | Share award reserve
HK$’000 | Capital redemption reserve
HK$’000 | Exchange fluctuation reserve
HK$’000 | Accumulated losses
HK$’000 | Total
HK$’000 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| At 1 January 2024 | 3,472,898 | 44,992 | 213,090 | 43,564 | 3,410 | 388 | (1,850,478) | 1,927,864 |
| Total comprehensive loss for the year | – | – | – | – | – | – | (301,431) | (301,431) |
| Equity-settled share option arrangements | – | – | 9,690 | – | – | – | – | 9,690 |
| Expiry of share options | – | – | (85,230) | – | – | – | 85,230 | – |
| Lapse of warrants | – | – | (40,194) | – | – | – | 40,194 | – |
| At 31 December 2024 and 1 January 2025 | 3,472,898 | 44,992 | 97,356 | 43,564 | 3,410 | 388 | (2,026,485) | 1,636,123 |
| Total comprehensive income for the year | – | – | – | – | – | – | 101,671 | 101,671 |
| Equity-settled share option arrangements | – | – | 4,216 | – | – | – | – | 4,216 |
| Share repurchase and cancelled | (89,193) | – | – | – | 10,057 | – | (10,057) | (89,193) |
| Lapse of warrants | – | – | (45,569) | – | – | – | 45,569 | – |
| At 31 December 2025 | 3,383,705 | 44,992 | 56,003 | 43,564 | 13,467 | 388 | (1,889,302) | 1,652,817 |

39 Event After the Reporting Period

Acquisition of Listed Securities

In middle February 2026, the Company has adopted an investment plan, under which the Group may acquire up to US$5.00 million (equivalent to approximately HK$39.05 million) of securities listed/ETF traded in the United States in relation to the crypto assets sector through on-market transactions (the “Investment Plan”). On 25 February 2026 (Hong Kong Time), Digital Tech, a wholly-owned subsidiary of the Company, acquired a total of 39,000 shares of Strategy Inc, a company incorporated in the State of Delaware, the United States, with its Class A common stock listed on Nasdaq Global Select Market (stock symbol: MSTR) (“MSTR”) at an aggregate consideration of approximately US$4.98 million (equivalent to approximately HK$38.89 million) (excluding stamp duty and related expenses), representing approximately US$127.58 (equivalent to approximately HK$996.40) per share of MSTR (the “MSTR Share(s)”). For details of the acquisition of MSTR Shares, please refer to the Company’s announcement dated 25 February 2026.

Annual Report 2025 COOLPAD GROUP LIMITED 155

NOTES TO FINANCIAL STATEMENTS

31 December 2025

39 Event After the Reporting Period (Continued)

Sale of MSTR Call Options

On 26 February 2026 (Eastern Standard Time), Digital Tech sold a total of 390 MSTR call options underlying 39,000 MSTR Shares, with each MSTR call option corresponds to 100 MSTR Shares (the “MSTR Call Option(s)”) at the aggregate premiums of US$51,210 (equivalent to HK$399,950), which are exercisable at the discretion of the holders of the MSTR Call Options on the expiration date of 6 March 2026 to purchase the relevant MSTR Shares held by Digital Tech at the strike price of US$150.00 per MSTR Share. The MSTR Call Options sold on 26 February 2026 were not exercised by the holders thereof upon the expiration date.

On 10 March 2026 (Eastern Standard Time), Digital Tech sold a total of 390 MSTR Call Options underlying 39,000 MSTR Shares at the aggregate premiums of US$31,080 (equivalent to HK$242,735), comprising (i) 240 MSTR Call Options underlying 24,000 MSTR Shares at the aggregate premiums of US$14,180 (equivalent to HK$110,746), exercisable on 13 March 2026 at the strike price of US$152.50 per MSTR Share; and (ii) 150 MSTR Call Options underlying 15,000 MSTR Shares at the aggregate premiums of US$16,900 (equivalent to HK$131,989), exercisable on 10 April 2026 at the strike price of US$190.00 per MSTR Share. The 390 MSTR Call Options sold on 10 March 2026 were not exercised by the relevant holders thereof upon their respective expiration dates.

On 18 March 2026 (Eastern Standard Time), Digital Tech sold a total of 240 MSTR Call Options underlying 24,000 MSTR Shares at the aggregate premiums of US$34,140 (equivalent to HK$266,633), comprising (i) 140 MSTR Call Options underlying 14,000 MSTR Shares at the aggregate premiums of US$17,340 (equivalent to HK$135,425), exercisable on 20 March 2026 at the strike price of US$152.50 per MSTR Share; and (ii) 100 MSTR Call Options underlying 10,000 MSTR Shares at the aggregate premiums of US$16,800 (equivalent to HK$131,208), exercisable on 27 March 2026 at the strike price of US$160.00 per MSTR Share. The 240 MSTR Call Options sold on 18 March 2026 were not exercised by the relevant holders thereof upon their respective expiration date.

Disposal of MSTR Shares

On 16 April 2026 (Eastern Standard Time), Digital Tech sold a total of 390 MSTR Call Options underlying 39,000 MSTR Shares at the aggregate premiums of US$32,130 (equivalent to HK$250,935), exercisable on 17 April 2026 at the strike price of US$150.00 per MSTR Share. The 390 MSTR Call Options sold on 16 April 2026 (Eastern Standard Time) have been exercised in full by the relevant holders of the MSTR Call Options on 17 April 2026 (Eastern Standard Time). On 17 April 2026 (Eastern Standard Time), the Group disposed of 39,000 MSTR Shares on the open market to the relevant holders of the MSTR Call Options at the price of US$150.00 (excluding transaction costs) per MSTR Share, for a total consideration of approximately US$5.85 million (equivalent to approximately HK$45.69 million). Upon the completion of the Disposals, the Group does not hold any MSTR Shares.

For further details of the sale of MSTR Call Options and disposal of MSTR Shares, please refer to the Company's announcements dated 27 February, 11 March, 19 March, 17 April and 19 April 2026.

156 COOLPAD GROUP LIMITED Annual Report 2025

NOTES TO FINANCIAL STATEMENTS

31 December 2025

40 Comparative Figures

Certain comparative figures have been reclassified to conform to the current year’s presentation. The changes included the reclassification of “loss on deregistration of subsidiaries”, “fair value losses on financial assets at FVTPL, net”, “impairment of trade receivables, net”, and “fair value losses on investment properties” classified under “administrative and other operating expenses” to “other income and other gains or losses, net”. The new classification of the accounting items was considered to provide a more appropriate presentation of the state of affairs of the Group.

41 Approval of the Financial Statements

The financial statements were approved and authorised for issue by the board of directors of the Company on 27 March 2026.