Statement Regarding the Pro Forma Profit Forecast Report
Weichai Power Co., Ltd. (hereinafter referred to as "the Company") has correctly determined the basis for the profit forecast, reasonably proposed the basic assumptions for the profit forecast, and scientifically applied the methods for profit forecasting. There are no intentionally unreasonable assumptions, misleading statements, or significant omissions. The preparation of this pro forma profit forecast report follows the principle of prudence; however, the various assumptions underlying the profit forecast carry uncertainties, and investors should not overly rely on this information when making investment decisions.
Part One: Basis for Preparing the Pro Forma Profit Forecast
The purpose of this pro forma consolidated profit forecast is to serve as a reference for the transaction application materials related to the Company's planned merger with Xianghuojun Automotive Group Co., Ltd. (hereinafter referred to as "Xianghuojun") through a share exchange, and it is not applicable for other purposes. The nature of the planned merger transaction is an absorption merger, whereby the Company will absorb Xianghuojun, and upon completion of the merger, the Company will become the surviving entity, incorporating all of Xianghuojun's assets, liabilities, and equity, with its existing legal status being canceled. The basis for preparing the pro forma profit forecast is as follows:
The profit forecast for 2007 is based on the audited financial statements of the Company for the years 2003, 2004, 2005, and the first nine months of 2006, audited by Shandong Zhengyuan and Xin Certified Public Accountants, as well as the audited financial statements of Xianghuojun for the same periods, and the unaudited actual figures for the last quarter of 2006. This preparation fully considers the actual production and operational capabilities and market demand of both the Company and Xianghuojun, combined with the production, marketing, and investment plans during the forecast period. The selected accounting policies and calculation methods are consistent with those actually adopted by the Company in all significant aspects.