2024 Annual Report

Annual Report

Wison Engineering Services Co. Ltd.

(Incorporated in the Cayman Islands with limited liability Stock Code: 2236)

CHINA'S LEADING ENERGY AND CHEMICAL ENGINEERING EPC SERVICE AND TECHNOLOGY INTEGRATION SOLUTION PROVIDER

Contents

3 Corporate Information

6 Financial Summary

9 Business Overview

20 Management Discussion and Analysis

31 Directors and Senior Management

37 Report of the Directors

55 Corporate Governance Report

71 Independent Auditor's Report

1. Consolidated Statement of Profit or Loss

2. Consolidated Statement of Comprehensive Income

3. Consolidated Statement of Financial Position

1. Consolidated Statement of Changes in Equity

2. Consolidated Statement of Cash Flows

87

Notes to Financial Statements

Corporate Information

Wison Engineering Services Co. Ltd. Annual Report 2024

BOARD OF DIRECTORS

Executive Directors

Mr. Zhou Hongliang

(Chairman & Chief Executive Officer)(1)

Mr. Zheng Shifeng

Mr. Li Dun (Chief Financial Officer)

Non-executive Director

Mr. Liu Hongjun(1)

Independent Non-executive Directors

Mr. Lawrence Lee Mr. Tang Shisheng Mr. Feng Guohua Ms. Guo Ruqian

(1)Mr. Zhou Hongliang has been appointed as the Chairman of the Board to succeed Mr. Liu Hongjun with effect from 27 March 2025.

(2)Ms. Guo Ruqian has been appointed as a member of each of the audit committee, the nomination committee and the remuneration committee of the Company respectively with effect from 27 March 2025.

AUDIT COMMITTEE

Mr. Lawrence Lee (Chairman)

Mr. Feng Guohua Mr. Tang Shisheng Ms. Guo Ruqian(2)

NOMINATION COMMITTEE

Mr. Tang Shisheng (Chairman)

Mr. Feng Guohua Mr. Lawrence Lee Ms. Guo Ruqian(2)

REMUNERATION COMMITTEE

Mr. Feng Guohua (Chairman)

Mr. Lawrence Lee Mr. Tang Shisheng Ms. Guo Ruqian(2)

GLOBAL HEADQUARTERS, PRINCIPAL PLACE OF BUSINESS AND HEAD OFFICE IN THE PRC

633 Zhongke Road Zhangjiang Hi-Tech Park Pudong New Area Shanghai 201210

PRC

Corporate Information

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Conyers Trust Company (Cayman) Limited Cricket Square

Hutchins Drive

P.O. Box 2681

Grand Cayman, KY1-1111 Cayman Islands

HONG KONG SHARE REGISTRAR

Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17/F, Hopewell Centre

183 Queen's Road East Wan Chai

Hong Kong

COMPANY SECRETARY

Ms. Tsang Chi Ka

AUTHORISED REPRESENTATIVES

Mr. Zhou Hongliang Ms. Tsang Chi Ka

AUDITORS

Ernst & Young

Certified Public Accountants

Registered Public Interest Entity Auditor

27/F, One Taikoo Place 979 King's Road

Quarry Bay, Hong Kong

PRINCIPAL BANKS

China CITIC Bank Corporation Limited Shanghai Pudong Development Bank Co., Ltd. Bank of China Limited

China Merchants Bank Co., Ltd.

Industrial and Commercial Bank of China Limited East West Bancorp, Inc

REGISTERED OFFICE

Cricket Square Hutchins Drive

P.O. Box 2681

Grand Cayman, KY1-1111 Cayman Islands

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

Room 2507 25th Floor Central Plaza

18 Harbour Road Wan Chai

Hong Kong

COMPANY'S WEBSITE

https://www.wison-engineering.com

STOCK CODE

2236

Financial Summary

Financial Summary

Business Overview

REVIEW OF 2024 ANNUAL RESULTS AND OUTLOOK

MARKET AND RESULTS OVERVIEW

In 2024, Wison Engineering Services Co. Ltd. ("Wison Engineering", "Wison" or the "Company") remained committed to its mission of "Technology Innovation for a Better Future" and strove to become a world-leading provider of environmentally friendly services. Upholding the values of integrity, innovation, entrepreneurship, responsibility, respect, and win-win, the Company continued to drive both its own growth and that of society. During the year ended 31 December 2024 (the "Year" or the "Reporting Period "), the Company kept expediting its internationalisation drive, strengthened delicacy management, tightened risk control, enhanced its digital and modular capabilities, and consolidated its core competitiveness. Meanwhile, the Company has deepened its presence in the field of energy and chemical engineering to secure a leading position in the market, and has increased its continued investment in the fields of new energy and new materials. In the Year, it set up the Green Hydrogen Products Technology Centre to accelerate the green transformation across the Company. Wison Engineering constantly enhanced its operational and management benefits and created value for customers.

During the Reporting Period, the global economy experienced a sluggish recovery, marked by an uneven pace and significant challenges. Weak growth momentum, the restructuring of global supply chains, and escalating geopolitical tensions created substantial headwinds for global economic recovery. Meanwhile, China's economy remained stable despite a complex and volatile domestic and international landscape, exhibiting both signs of recovery and ongoing challenges. The Chinese government effectively bolstered social confidence and supported steady economic growth through a series of policy measures. According to the National Bureau of Statistics (NBS) of China, China's gross domestic product expanded by 5.0% year on year, reaching RMB134.9 trillion.

In 2024, the petrochemical industry faced significant challenges amid a complex and volatile global economic landscape. The uneven pace of global economic recovery led to frequent market fluctuations, while factors such as volatile international crude oil prices and weaker-than-expected new capacity further impacted industry performance. Amid the global shift towards greener energy, the petrochemical industry is navigating both unprecedented challenges and emerging opportunities. Refining capacity in the Asia-Pacific

region is steadily expanding, with a clear shift from fuel-based to feedstock-based refining. China's petrochemical industry is also accelerating its green transition, driving progress towards low-carbon development with a strong focus on new energy and new materials. In particular, hydrogen energy, as a key component of the future energy mix, is rapidly advancing in both adoption and industrialisation. Leading Chinese petrochemical enterprises are actively planning their hydrogen energy supply chains, driving breakthroughs in hydrogen production, storage, transportation, and application technologies.

During the Reporting Period, the Company and its subsidiaries (the "Group") recorded a revenue of approximately RMB5,647.3 million (for the year ended 31 December 2023: approximately RMB3,842.7 million), representing a year-on-year increase of 47.0%. Its gross profit amounted to approximately RMB445.2 million (for the year ended 31 December 2023: approximately RMB227.2 million), representing a year-on-year increase of 96.0%. Its profit attributable to owners of the parent company totalled approximately RMB141.6 million (for the year ended 31 December 2023: loss attributable to owners of the parent company of approximately RMB196.1 million). In 2024, the total value of new contracts secured by the Group amounted to approximately RMB10,865.1 million (net of estimated VAT), representing a year-on-year increase of 2,563.6%. As at 31 December 2024, the total value of the Company's outstanding contracts was approximately RMB25,719.3 million (net of estimated VAT), representing an increase of 10.6% as compared to the total value of outstanding contracts as at 31 December 2023.

BUSINESS AND OPERATIONS REVIEW

Consolidating Core Businesses and Venturing into Emerging Areas

During the Reporting Period, the Company remained committed to its core businesses and key areas of expertise, further strengthening its leading market position. As a result, its key product lines - including e thy l en e an d cr a c ki n g fu rn a c e s, pr o p an e dehydrogenation ("PDH"), methanol-to-olefins ("MTO"), and synthetic ammonia - continued to develop steadily and smoothly. This sustained growth provided a strong foundation for the Company's solid business performance.

The Company achieved multiple breakthroughs in the new energy sector, driven by a forward-looking strategic vision. It increased investment in research and development ("R&D") for new energy and new materials while making concerted efforts to accelerate market expansion. As a result, significant progress was made in emerging technologies and products, including biodegradable plastics ("PGA"), methyl methacrylate ("MMA"), carbon emission reduction, green alcohol and green ammonia, butadiene production technology, and catalysts. The Company's commitment to its ambitious strategic goals of "international expansion and shift to new quality businesses" will serve as a strong impetus for its long-term growth.

The Company adopted a comprehensive, precise, and well-controlled strategy for both domestic and international projects, striving to achieve their objectives efficiently. The progress of key projects is outlined as follows.

Syngas retrofitting project of Yangmei Group Zibo Qilu First Fertiliser Co., Ltd.: The design phase was fully completed, procurement was 92% finished, and construction reached 87% completion. The project is on track for completion and delivery in 2025, enhancing the client's production capacity.

Panjin Sanli's MMA project: The mid-term delivery was successfully completed on 28 August 2024. Following this, the Company worked closely with the client to facilitate commissioning and start-up. On

28 December 2024, the production of propionaldehyde and propanol met quality standards, enabling the client to achieve full capacity and enhance operational efficiency now.

Turnkey project for cracking furnaces of Wanhua Chemical's 1.2 million-tonne-per-year ethylene plant: Mid-term delivery conditions were met in December 2024, with the key process of cracking furnace baking successfully completed. The plant succeeded in commissioning and start-up in line with the owner's schedule, marking the commercial launch of the group's large-scale ethylene plant equipped with proprietary technology.

Guangxi Huayi's MTO project: The design phase was fully completed, procurement reached 67%, and construction was 50% finished. In December 2024, the successful lifting of the project's largest piece of equipment, the propylene tower, marked a key milestone. Installation of other equipment, process pipelines, and electrical instrumentation was proceeding as planned. The mid-term delivery is scheduled for 31 December 2025.

Shanghai Waigaoqiao No.3 Power Generation Co., Ltd.'s flue gas-CO2-to-methanol pilot demonstration project: The project was completed in November 2024, with commissioning starting on 5 December 2024. As planned, it has completed the performance assessment in January 2025, setting a benchmark for the development of the green chemical sector.

Saudi Aramco's DPCU project: The design phase was fully completed, with procurement reaching 97%. Construction progress stood at 53%, while equipment installation was 80% completed. The project is scheduled for completion and delivery in October 2025, aiming to enhance efficiency in Saudi Aramco's oil and gas industry.

Qatar's EPC4 sulphur-handling project: The project reached 57% overall completion, with the design phase 96% finished, procurement at 69%, and construction progress at 36%. The erection of the steel structure commenced, alongside the fabrication of non-standard equipment and the prefabrication of pipelines.

FARABI's Lab4 Project in Saudi Arabia: The project was 81% completed, with 97% of the design phase finished, procurement at 93%, and construction at 66%. Despite delays caused by the Red Sea incident, the project has made significant progress. The focus is now on the arrival and delivery of equipment and materials, as well as coordinating construction progress. The mid-term delivery is scheduled for May 2025.

Enhancement in Project Management Competence

During the Reporting Period, Wison Engineering closely aligned with its strategic objectives of innovation, transformation, high efficiency, and global business development. The Company adhered to principles of standardisation, internationalisation, digitisation, and delicacy management throughout all stages of the project execution process. By utilising an integrated project management platform, Wison Engineering strengthened project management system training, optimised corporate management procedures, and continuously enhanced its core competitiveness. This approach laid a solid foundation for long-term sustainable development, ensured customer satisfaction, and generated greater value for shareholders.

Remarkable Achievement in QHSE Management In 2024, Wison Engineering continued to strengthen its Quality, Health, Safety, and Environment ("QHSE") management, optimising the relevant systems and enhancing overall management standards. Adhering to the principle of "pursue the whole life cycle management of projects", the Company delivered higher-quality products and services to customers. At the same time, Wison Engineering prioritised the safety and occupational health of its employees while implementing environmental protection measures, making QHSE management more standardised, modularised in design, and digitalised. Additionally, the Company consistently promoted the "1+3 co-construction for win-win outcomes" approach in QHSE management, collaborating with project builders, suppliers, and construction contractors.

During the Reporting Period, the key health, safety, and environment (" HSE ") indicators for the Company's contracted projects remained within the targets set at the beginning of the year. A total of 11,368,692 safe man-hours were completed across domestic and overseas projects in 2024, with no lost-time accidents, environmental pollution incidents, or occupational health issues reported. The safety training rate for the Company's under-construction projects was 100%, and the rectification rate for identified hazards was also 100%. Additionally, 100% of the safety expenses for both domestic and international projects met the requirements of the contracts and relevant laws and regulations. These HSE achievements fully demonstrate Wison Engineering's management competence, positioning it on par with international first-class engineering firms.

Wison Engineering has always considered QHSE management to be fundamental to its operations, prioritising it throughout the entire project lifecycle. Guided by the Ten Safety Concepts and the Workplace Safety Responsibility System, the Company has focused on enhancing employee involvement in HSE management. By implementing a dual prevention mechanism of risk control and hazard detection, it has successfully achieved both horizontal and vertical safety management. During the Reporting Period, the following achievements were made: the hydrogen project in Thailand passed the plant's acceptance; Henan Shenma's project won the Excellent EPC Award; various management measures adopted in Wanhua Chemical's 1.2 million-tonne-per-year ethylene cracking furnace project in Yantai were recognised by the owner as a model for project construction quality and safety management, with the successful furnace ignition completed at

the end of the year; Qatar's EPC4 project was honoured with the HSES Quarterly Management Champion award by the owner; and Guangxi Huayi's

1.0 million tonnes/year MTO project in Qinzhou was recognised as the 2024 Outstanding Contractor by the owner. These accomplishments highlight the Company's strong QHSE management capabilities in EPC project execution.

Expanding Global Cooperation and Breaking New Ground in Green Energy Revolution

In 2024, Wison Engineering capitalised on the opportunities arising from the global energy structure transformation and the upgrading of the chemical industry chain. Powered by cutting-edge technology and its global presence, the total value of newly signed contracts for the year exceeded RMB10.87 billion, with overseas business accounting for more than 70%. The Company successfully signed the EPC contract for a methanol synthesis project using hydrogen and carbon dioxide ("CO2") in

the new energy sector, which was also

commissioned within the same year. This marked a significant step in the Company's transformation from a traditional chemical engineering contractor to a comprehensive green energy service provider. The internationalisation strategy and green transformation progressed in tandem, propelling continued momentum for high-quality development.

Globalisation: Expanding Overseas Projects in Multiple Regions

Leveraging its expertise in modular construction technology and comprehensive industrial chain service capabilities, Wison Engineering made significant strides in both traditional energy sectors and emerging markets. The value of overseas projects contracted throughout the year saw a substantial increase, with a focus on core regions including the Middle East and Africa.

In the Middle East market, Wison Engineering strengthened its strategic partnerships with Saudi Arabian Oil Company ("Saudi Aramco") and Abu Dhabi National Oil Company (" ADNOC "). By capitalising on its expertise in modular design and manufacturing, the Company successfully participated in bids for Aramco's modular construction and supply projects, as well as the EPC bidding for several oil and gas field expansion projects of ADNOC, all of which are expected to transition into EPC contracts in 2025. Wison Engineering also expanded into the green hydrogen and green ammonia sectors, engaging in multiple rounds of discussions with both domestic and international companies for potential cooperation. The Company got actively involved in front-end engineering design ("FEED") bids for green hydrogen and green ammonia projects using electrolysis technology in various locations worldwide. These efforts have laid a solid foundation for securing future EPC contracts in the sector.

In Africa, Wison Engineering secured the FEED contract for the PDH+PP project in Nigeria, which was delivered with high quality during the Reporting Period and is expected to transit into a turnkey contract in 2025. Simultaneously, the Company pursued FEED opportunities for several liquefied natural gas (LNG) projects in Nigeria, laying a solid foundation for future turnkey contracts and further expanding its presence in the African market. In Southeast Asia, Wison Engineering concentrated on new energy-related project opportunities, particularly in Indonesia, where i t provided competitive green hydrogen technology solutions. These efforts are projected to accelerate the Company's expansion in the emerging market.

Green Transition: Accelerating Expansion in the N e w E n er g y S e c t o r a n d P r o m o ti n g Collaborative Innovation Across the Industrial Chain

Focusing on the dual-carbon goals, Wison Engineering accelerated its expansion into the fields of new energy and new materials. The Company developed a technology pathway for new energy transformation, providing comprehensive, full-chain technical services that could span R&D, engineering transformation, and industrial application.

During the Reporting Period, Wison Engineering signed a strategic cooperation agreement with a leading Chinese proton exchange membrane ("PEM") hydrogen production technology company, to jointly develop modular hydrogen generation equipment solutions. The Company also secured several green hydrogen-to-green ammonia technology feasibility study projects, providing solutions for green hydrogen-to-green ammonia projects in Egypt, as well as electrolysed water-to-green hydrogen solutions using green electricity in Indonesia. In the biomass sector, Wison Engineering signed a technical service contract for a biomass-to-methanol project in Turkey, delivering an integrated solution in collaboration with Chinese steam methane reforming (SMR) and methanol synthesis licensors. All of these projects are expected to transit into EPC contracts in 2025. Additionally, the Company has been actively pursuing biomass-to-sustainable aviation fuel ("SAF") projects in China and Southeast Asia, and signed a technical service contract for the SAF project with Goldwind Green Energy.

Wison Engineering participated in the EPC turnkey contract of Shanghai Waigaoqiao No.3 Power Generation Co., Ltd.'s flue gas-CO2-to-methanol pilot demonstration project. The project was successfully completed by the end of 2024, passing commissioning and start-up on the first attempt.

In advancing its proprietary technologies, Wison Engineering signed several significant contracts, including a turnkey contract for MTO and downstream deep-processing integrated project of Guangxi Huayi Energy and Chemical Co., Ltd., a technical service contract and design contract for technical licensing and process package preparation related to feedstock adaptation at Wanhua Chemical's 1# Ethylene Plant, a technical consulting contract for the feasibility report on the high-end polyolefin localisation project of a limited company in Fujian, a technical consulting contract for a 50,000-tonne-per-year oxidative dehydrogenation of ethane ("ODHE") to ethylene project for a technology limited company in Shaanxi, and several preliminary consultancy contracts for MMA-related new materials projects. At the same time, Wison Engineering continued to pursue various ethylene and MTO technical service and EPC projects. With the successful start-up of PGA and MMA pilot projects, the Company is poised to explore additional project opportunities in the near future.

In 2024, Wison Engineering gained significant momentum through its well-established market strategy, shifting from single-point breakthroughs to regional collaboration in overseas markets and from pilot runs to scaled operations in the new energy sector. As the Company continues to advance its international transformation, it aims to accelerate progress in the low-carbon transition of traditional energy projects and the standardisation of new energy projects.

Remarkable Achievements in the R&D of New Materials and New Processes

It is a prevailing trend in the industry to develop and apply new technologies, such as new materials and degradable plastics, and it is also the key development direction for Wison Engineering. Following long-term investments in R&D, as well as the accumulation of technological expertise, the Company has made significant progress in several key technologies within relevant fields during the Reporting Period.

Wison Engineering participated in the development of and secured the EPC contract for Panjin Sanli's 50,000-tonne-per-year MMA project, marking the first industrialised application of new green ethylene-based MMA technology. The project was completed and mid-term delivered in August 2024 and is currently undergoing commissioning and start-up. Being the first industrialised ethylene-based MMA production plants in China, the project adopts the leading ethylene hydroformylation technology and the new technology of one-step oxidation and esterification of methacrolein with complete domestic intellectual property rights. Through innovative, green and sustainable technical solutions, the project effectively solves the problems of high pollution and energy consumption arising from the common processes of MMA production via acetone cyanohydrin in China. With the demonstration plants coming online, many domestic investors are actively exploring technology licensing opportunities.

In terms of the innovative technology development and industrialisation of degradable plastics, during the Reporting Period, the 1,000-tonne pilot plant of PGA, built in collaboration with Inner Mongolia Rongxin Chemical Co., Ltd., successfully passed government-initiated acceptance and approval. The plant also completed its second stage of trials. The project is on track to finalise all research and move towards commercialisation in 2025.

During the Reporting Period, the 1.2 million-tonne-per-year ethylene plant of Wanhua Chemical, designed and constructed by Wison Engineering with its intellectual property rights ("IPRs"), was completed and is scheduled to come into operation in April 2025. Wison Engineering is one of the few companies in China that owns a complete set of large-scale ethylene technologies. After upgrading and optimisation, the Company's ethylene production technology demonstrates significant advantages, including improved olefin yield, reduced investment, lower energy consumption and emissions, and longer-cycle operation.

The catalytic ODHE to ethylene technology, developed by Wison Engineering in collaboration with the Dalian Institute of Chemical Physics of the Chinese Academy of Sciences, is being actively promoted, with numerous investors expressing strong interest in the technology. The technology is applicable for ethylene production via various ethane materials with significantly lower investment costs, energy consumption, and carbon emissions than those of traditional processes. It is of ground-breaking significance to ethylene production, aligned with the global trend of using light olefin raw materials, and holds broad application prospects.

Wison Engineering is committed to promoting the leading domestic and international catalysts and process technologies for the oxidative dehydrogenation of butene to butadiene. During the Reporting Period, Wison Engineering was dedicated to the optimisation and upgrading of butadiene technology. Wison Engineering has developed a new generation of energy-saving butadiene oxo-dehydrogenation catalysts and reaction-separation technologies. Compared to existing butadiene oxo-dehydrogenation processes, this new technology significantly reduces steam consumption, energy

consumption by 30%, and wastewater consumption by 40%. Several companies are eager to implement this technology in the construction of new plants. The successful development of this technology further strengthens Wison Engineering's leadership and competitiveness in the global butadiene technology market.

Wison Engineering's butadiene division has been actively innovating in C4 separation processes by introducing a new solvent-based separation technology. Compared to traditional methods, this advanced process reduces energy consumption by over 40% and wastewater generation by more than 90%. As a result, the Company has established technical cooperation intentions with multiple enterprises, with one already adopting the energy-saving C4 separation process for plant retrofitting. The successful implementation of this technology is expected to become another major highlight of Wison Engineering.

During the Reporting Period, Wison Engineering secured 13 new authorised patents and submitted 15 new patent applications, further strengthening its IPR portfolio and technological reserves.

Continuously Advancing Energy Transformation with Carbon Reduction as the Core

In response to the global challenge of climate change, Wison Engineering remains dedicated to advancing the transition towards low-carbon and green energy solutions. During the Reporting Period, the Company established the Green Hydrogen Products Technology Centre, which focuses on integrating the Balance of Plant ("BOP") system for PEM electrolysers as well as developing and promoting standardised and modular hydrogen products.

Wison Engineering signed a strategic cooperation agreement with a leading supplier of key materials and solutions for hydrogen production via PEM electrolysis. Under this partnership, both parties will collaborate in the field of PEM-based hydrogen production, aiming to promote highly efficient solutions in domestic and international markets. Wison Engineering will focus on developing the BOP system for PEM electrolysers, leading to a comprehensive suite of PEM electrolysis hydrogen production solutions and standardised products. Additionally, Wison Engineering entered into a strategic cooperation agreement with a leading green hydrogen solution provider in China, to jointly develop and market BOP systems for alkaline hydrogen production technology.

Additionally, Wison Engineering Ltd. and Schneider Electric signed a strategic cooperation agreement during the China International Import Expo (CIIE) in Shanghai. This partnership will further deepen collaboration in new energy and energy-chemical fields, focusing on areas such as innovation in green hydrogen integration, digital transformation of EPC, carbon reduction in the supply chain, internationalisation of EPC projects, and electrical solutions for offshore floating projects. Through this cooperation, both parties aim to drive the joint development and application of intelligent solutions, facilitating a comprehensive upgrade of their energy transition strategies.

Fully Promoting the Application of the Integration Platform to Comprehensively Improve Digital Capabilities and Delicacy Control across the Company's Projects

During the Reporting Period, Wison Engineering successfully implemented digital management of the reporting process by developing a project management dashboard that integrates data

visualisation and intelligent analysis. This platform supports automated data collection and visual presentation. Additionally, by developing the project consulting business platform, Wison Engineering digitalised databases, enabling efficient search and extraction of various data types, which has significantly improved work efficiency. The Company also transformed its business processes through intelligent technologies.

Wison Engineering has actively promoted the use of the integration platform across all projects, leveraging digital tools to support project execution and enhance the precision of project management and control. During the Reporting Period, the procurement supply chain system of the integration platform, IIP-SCM, was officially launched on 22 November 2024. Additionally, IIP-DC, the document control system of the integration platform, became fully operational on 25 December 2024.

Pursuing a Three-pronged Talent Strategy to Build Organisational Capability Faster

In 2024, in response to the international growth of its business and the rising prominence of new energy and new material technologies, Wison Engineering introduced a three-pronged talent strategy:

1. strengthen business delivery capabilities through organisational and talent development;

2. enhance organisational vitality through cultural initiatives and policy optimisation; and

3. boost employee engagement through longterm incentives and compensation plans.

During the Reporting Period, Wison Engineering focused on rapidly enhancing its design organisation capabilities. To achieve this, the Company actively recruited professionals in process, stress, electrical, and instrumentation engineering, as well as experienced design managers with international backgrounds, significantly strengthening the overall design team in a short period. Aligned with its global business strategy, Wison Engineering also expanded its marketing network and localisation efforts in the Middle East, Africa, and other key regions. In line with business growth, the Company brought in highly skilled experts across various design disciplines and project executives with overseas experience. Throughout the year, Wison Engineering onboarded more than 30 key professionals and over 100 senior specialists. In preparation for future growth, the Company also hosted its first Open Day for International Students, attracting students from more than 20 countries currently studying in China.

Based on strategic analysis, Wison Engineering reflected on its vision, mission, values, and cultural elements during the Reporting Period through a series of cross-level cultural workshops. These workshops helped reinforce the Company's values through a sound corporate culture. Additionally, the Company established a team of cultural ambassadors who, through various methods, effectively integrated the corporate culture into every aspect of daily management.

In addition, Wison Engineering refined its salary system based on a prior demand survey and its current business situation, ensuring that employee remuneration would be aligned with actual performance through a project-oriented approach.

The Company also introduced a job sequence and ranking project, in which it completed key tasks such as organising departments and positions, updating professional qualifications, designing career pathways, and defining staffing levels. This initiative created more opportunities for employee career development.

OUTLOOK

Looking ahead to 2025, the global economy is expected to experience moderate recovery, although significant growth divergence remains, and numerous uncertainties persist, including geopolitical conflicts, supply chain restructuring, inflationary pressures, energy transition, and climate change. As the final year of China's 14th Five-Year Plan, 2025 will be a critical year for the country's push towards high-quality development. Despite external uncertainties, the Chinese government is expected to continue implementing a proactive fiscal policy and a prudent monetary policy to support stable economic growth.

It is expected that the global economy will recover gradually in 2025, with international crude oil prices remaining weak. This could lead to a gradual easing of cost pressures in the chemicals sector, while the refining and downstream segments are anticipated to see better performance. Stimulated by domestic economic policies, the petrochemical industry is likely to continue its steady growth. As oil refining conversion accelerates, the industry's capacity structure will continue to optimise, and the expansion of downstream capacities will gather pace. Meanwhile, the global green transition is advancing, prompting the petrochemical industry to intensify its planning and transformation efforts towards new energy sectors. Hydrogen energy, a key focus of global energy technology reform, will be a

primary area of development, with China set to vigorously promote the industrialisation of hydrogen energy in the future.

Wison Engineering is currently at a pivotal stage of business transformation and internationalisation. We are capitalising on global opportunities in the new energy sector, increasing our focus on research and development of green and low-carbon technologies, and continuing to deepen our expertise in four core products: green hydrogen, green ammonia, green alcohols, and sustainable aviation fuels. To effectively drive the growth of our new energy business, Wison Engineering must transcend traditional market boundaries and actively integrate into the broader clean energy market. This approach involves not only seeking new customers and partners but also building new skills and talent reserves to meet the demands of the evolving energy landscape. The Company will adopt proactive measures, adjust flexibly, and embrace change in order to navigate the challenges and seize the opportunities of the rapidly evolving new energy market, ensuring sustainable and healthy development.

In 2025, Wison Engineering will remain committed to advancing its new energy strategy, continuing to play a vital role in the global green energy transition, and striving to become a key driving force in the energy transition both domestically and internationally. By fostering technological innovation, deepening international collaboration, and building a new ecosystem, the Company is making steady strides towards achieving a greener and low-carbon future.

Management Discussion and Analysis

FINANCIAL REVIEW FOR 2024

Revenue and Gross Profit

The comprehensive revenue of the Group increased by 47.0% from RMB3,842.7 million for the year ended 31 December 2023 to RMB5,647.3 million for the Year.

The gross profit of the Group amounted to RMB445.2 million for the Year, as compared to RMB227.2 million for the year ended 31 December 2023, representing an increase of 96.0%.

The gross profit margins of the Group for the year ended 31 December 2024 and 2023 were 7.9% and

5.9%, respectively.

Details of comprehensive revenue and gross profit breakdown by business segments are set out below:

EPC

EPC

6%

94%

Engineering, consulting and technical services

Engineering, consulting and technical services

8%

92%

The revenue of EPC of the Group increased by 51.2% from RMB3,528.5 million for the year ended 31 December 2023 to RMB5,333.7 million for the Year. The EPC segment recorded a gross profit margin of 7.1% in the Year, as compared to 3.4% recorded in 2023. The increase in revenue of EPC for the Year was mainly because certain projects involved heavy equipment manufacturing, and these heavy equipment have been gradually delivered to project sites during the second half of the Year. In addition, other projects of the Group located in the Middle East and domestic regions have also entered into principal construction phase during the Year, further contributing to the revenue for the Year. The increase in the gross profit margin of EPC projects for the Year is primarily attributed to the higher gross profit margins of the current ongoing EPC projects.

The revenue of engineering, consulting and technical services of the Group decreased by 0.2% from RMB314.2 million for the year ended 31 December 2023 to RMB313.6 million for the Year. The gross profit margin of engineering, consulting and technical services of the Group decreased from 34.3% for the year ended 31 December 2023 to 20.8% for the Year. The decrease in gross profit and gross profit margin of engineering, consulting and technical services was mainly because of the increase in cost for certain engineering projects due to the extension of project schedule as well as increase in headcount input. However, by the end of the Year, no agreement has been reached with the project owners and clients regarding the variation orders.

Details of comprehensive revenue breakdown by industries in which our clients operate are set out below:

1%

2%

15%

82%

6%

16%

78%

Petrochemicals Petrochemicals

Coal-to-chemicals

Coal-to-chemicals

Oil refineries,

public infrastructure and other products and services

New energies

Oil refineries,

public infrastructure and other products and services

The revenue of petrochemical business segment increased by 54.7%. This was mainly due to the fact that the heavy equipment for those petrochemical projects involving the manufacturing of heavy equipment have been gradually delivered to project sites. Also, the progress of the Group's other EPC projects is satisfactory, driving to the increase in revenue of this segment.

The revenue of coal-to-chemicals business segment increased by 33.8%. This was mainly due to the satisfactory progress of the Group's domestic coal-to-chemicals projects. The coal-to-chemicals project located in Shandong, China, which was previously

suspended, had gradually resumed to construction during the second half of 2024.

The revenue of oil refineries, public infrastructure as well as other products and services business segment decreased by 37.4%. This was mainly because the Group's new materials project located in Xinjiang, China, has entered its final phase, resulting in a further reduction in its revenue contribution.

For the Year, the Group has also actively expanded its new energy business, which has begun to contribute to the Group's revenue.

Details of comprehensive revenue breakdown by geographic locations of our projects are set out below:

28%

72%

China

Overseas

China

39%

61%

Overseas

The revenue from overseas projects of the Group accounted for approximately 71.7% and 39.2% of the total revenue for the Year and for the year ended 31 December 2023, respectively. The increase in percentage weighting of revenue from overseas projects for the Year aligns with the Group's consistent implementation of internationalization strategy.

Other Income and Gains

Other income and gains increased by 1.8% from RMB201.8 million for the year ended 31 December 2023 to RMB205.5 million for the Year. For details, please refer to note 4 to the consolidated financial statements of the Group.

Other Expenses

Details of other expenses breakdown are set out below:

Selling and Distribution Expenses

Selling and distribution expenses increased by 37.2% from RMB28.2 million for the year ended 31 December 2023 to RMB38.7 million for the Year, which was mainly due to the increase in the overseas marketing activities of the Group as well as the accruals of bonus for marketing staff.

Administrative Expenses

Administrative expenses decreased by 28.0% from RMB309.8 million for the year ended 31 December 2023 to RMB223.0 million for the Year, which is mainly due to the decrease in depreciation and amortization expenses of the Group's office building and land located in Shanghai, China.

Other expenses increased by 12.7% from RMB170.5 million for the year ended 31 December 2023 to RMB192.1 million for the Year.

Finance Costs

Finance costs decreased by 14.1% from RMB95.0 million for the year ended 31 December 2023 to RMB81.6 million for the Year. For details, please refer to note 5 to the consolidated financial statements of the Group.

Income Tax

The Group's income tax expense for the Year amounted to RMB11.3 million, while the Group's income tax credit amounted to RMB4.0 million for the year ended 31 December 2023. This was mainly due to the increase in assessable profits of overseas branch offices during the Year.

Profit for the Year

Based on the reasons above, as well as the significant decrease in impairment losses on financial and contract assets, the Group has turned to profit for the Year, as compared to the loss for the year ended 31 December 2023. The Group's profit for the Year amounted to RMB134.7 million, while the Group's loss for the year ended 31 December 2023

amounted to RMB198.4 million. The net profit rate for the Year was 2.4%, while the net profit rate for the year ended 31 December 2023 was -5.2%.

Trade and Bills Receivables

The Group's trading terms with its customers are mainly on credit where payment in advance is normally required. Trade receivables are non-interest-bearing and on credit terms of a period of 30 days to 90 days or the respective contracts' retention period. The Group's total trade and bills receivables amounted to RMB546.7 million as at 31 December 2024, representing a decrease of approximately 3.8% as compared with RMB568.1 million as at the year ended 31 December 2023.

Financial Resources, Liquidity and Capital Structure

As at 31 December 2024, the Group's cash and bank balances amounted to RMB3,802.5 million, representing approximately 46.0% of the Group's current assets (31 December 2023: RMB901.8 million, representing approximately 16.5% of the Group's current assets).

The major items of Consolidated Statement of Cash Flows of the Group are set out below:

As at 31 December 2024 and 2023, the Group's pledged and unpledged cash and bank balances included the following amounts:

RussianRuble 0.8 1.2

The asset-liability ratio of the Group, which was derived by dividing average total liabilities by average total assets, is set out below.

76.5%

72.7%

67.2%

61.6% 60.8%

2020

2021

2022

2023 2024

Interest-bearing bank and other borrowings of the Group as at 31 December 2024 and 31 December 2023 were set out in the table below. The short-term bank and other borrowings of the Group accounted for 54.2% of the total bank and other borrowings as at 31 December 2024 (31 December 2023: 48.5%).

Bank and other borrowings were denominated in Renminbi at 31 December 2024, while bank borrowings were denominated in Renminbi, US Dollar and Singapore Dollar at 31 December 2023. As at 31 December 2024, bank and other borrowings amounting to RMB475.7 million (31 December 2023: RMB397.3 million) bore interest at fixed rates.

The effective interest rates of the Group's bank and other borrowings ranged as follows:

Year ended 31 December 2024 3.45% to 4.82%

Year ended 31 December 2023 3.45% to 8.65%

The maturity profile of interest-bearing bank and other borrowings as at 31 December 2024 and 31 December 2023, based on contractual undiscounted payments, is as follows:

31 December 2023

Interest-bearing bank and other

borrowings - 71.4 502.4 698.7 1,272.5

The Group meets its working capital and other capital requirements principally with cash generated from its operations and borrowings.

Material Acquisitions and Disposals

On 11 September 2024, Wison Engineering Ltd. (an indirect wholly-owned subsidiary of the Company) (the "Purchaser") and Wison (China) Holding Company (an indirect wholly-owned subsidiary of Wison Group Holding Limited, a controlling shareholder of the Company) (the "Vendor") entered into an equity transfer agreement, pursuant to which the Vendor has conditionally agreed to sell, and the Purchaser has conditionally agreed to acquire, 35% equity interests in Levima Wison (Jiangsu) Advanced Materials Co. Ltd. at the consideration of RMB255,000,000 in cash.

The acquisition was approved by the shareholders of the Company at an extraordinary general meeting of the Company held on 12 November 2024. During the Year, a total of RMB135,000,000 had been paid and the acquisition is targeted to complete by 30 September 2025.

Further information can be found in the Company's announcement and circular dated 11 September 2024 and 18 October 2024, respectively.

Save as disclosed above, during the Year, the Group had no material acquisitions and disposals.

Capital Expenditure

The capital expenditure of the Group amounted to RMB22.7 million for the Year (2023: RMB22.7 million).