How to Read a Chinese Listed Company's Annual Report

Short answer. A Chinese mainland listed company must publish its annual report within four months after the fiscal year ends, and the financial statements in it must be audited. Find the filed version on the stock exchange's website, read the auditor's opinion first, then test whether profit turns into cash, which business segments earn it, and how much depends on receivables, a few customers or related parties. This guide explains the legal frame and a reading order built for energy-sector companies.

Key terms

• Periodic reports (定期报告) — the annual report and the interim (half-year) report required by Article 79 of the Securities Law.
• Ad hoc / interim announcement (临时报告) — an immediate report on a major event that could significantly affect the share price.
• ASBE (企业会计准则) — Chinese Accounting Standards for Business Enterprises. The IFRS Foundation describes the ASBEs issued in February 2006 as substantially converged with IFRS.

The legal frame in four points

Table note: Securities Law of the PRC as revised on 28 December 2019. Content and format are set by the CSRC and the exchanges. The CSRC's current annual-report format rule (Format Rule No. 2) was published by CSRC Announcement [2025] No. 3 on 21 March 2025 and took effect on 1 July 2025.

Accounting standards: the IFRS Foundation's China profile (last updated January 2018) names the Ministry of Finance's Accounting Regulatory Department as the relevant authority, and notes that Hong Kong and Macao have their own financial reporting standards. For a company listed in Hong Kong, check which framework its statements use before comparing it with an A-share peer.

Step 1 — Get the filed document

Use the exchange's disclosure pages — for example, the Shanghai Stock Exchange's periodic-reports page — rather than a reposted PDF. Note the filing date, the reporting period and whether you have the full report or the summary. If you use an English version, note that the format rule requires a company that prepares a foreign-language translation to keep it consistent with the Chinese text and to state that the Chinese text prevails if the two are interpreted differently. Use the Chinese text for any number you rely on.

Also collect ad hoc announcements issued after year-end. Major events must be reported immediately, so the annual report may already be out of date on some points.

Step 2 — Read the auditor's report first

The annual financial report must be audited. Before reading any numbers, find the auditor's report and note:

• the auditor's name and the type of opinion;
• any emphasis-of-matter paragraph, going-concern uncertainty paragraph or other added paragraphs;
• whether the opinion covers both consolidated and parent-company statements.

The format rule requires a warning in the report's "Important Notice" (重要提示) if the auditor issued a non-standard audit report. The rule lists these as an unmodified opinion with an emphasis-of-matter paragraph, a material-uncertainty-related-to-going-concern paragraph, or an other-information paragraph describing an uncorrected material misstatement, and qualified, adverse or disclaimer-of-opinion reports. If you see such a notice, read the auditor's reasons and the board's explanation in full before using any number. (The advice is editorial method.)

Step 3 — Check the CSRC governance statements

Under the current format rule, the annual report must be approved by the board, and its financial information must first be reviewed by the audit committee and approved by more than half of all its members. Directors and senior managers sign written confirmations; anyone who cannot vouch for the report's truthfulness, accuracy and completeness, or who objects, must state the opinion and reasons in that confirmation, and the company must disclose it. The Important Notice must name any director or senior manager who cannot vouch for the report and give the reason, and list directors who did not attend the board meeting that approved it. Look for these statements first, and read the reasons. (What to look for is editorial method.)

Step 4 — A reading order for energy companies

The following order is CNWattHub editorial method. It is designed for solar, storage, grid and power-equipment companies, where revenue can be large but cash conversion weak.

Table note: no figures shown; apply each row to the specific report and record the page or note number for every number you extract.

Step 5 — Record your evidence

For every number you take from the report, record: company, report year, statement or note, page, unit, and whether it is consolidated or parent-only. Under the format rule, money amounts are in RMB unless stated otherwise and may be expressed in yuan, thousand, ten-thousand (万元), million or hundred-million (亿元) yuan, so check the unit line above every table. (The recording checklist is editorial method.)

Common mistakes

• Comparing a consolidated figure from one company with a parent-only figure from another.
• Treating revenue as a proxy for cash generation.
• Using a summary or a reposted file instead of the filed report.
• Ignoring ad hoc announcements made after year-end.