Canwin Appraisal Co., Ltd.
Address: 13th Floor, Tower B, Huarun Building, 1366 Qianjiang Road, Hangzhou
Postal Code: 310020
Tel: (0571) 81726488 81726388
Reply to Inquiries Regarding Valuation Matters in the Application for Issuance of Shares by Yingfang Microelectronics Co., Ltd. to Purchase Assets and Raise Supporting Funds
Shenzhen Stock Exchange:
We acknowledge receipt of the "Inquiry Letter Regarding the Application for Issuance of Shares by Yingfang Microelectronics Co., Ltd. to Purchase Assets and Raise Supporting Funds" (Inquiry Letter [2026] 130015) (hereinafter referred to as the "Inquiry Letter") forwarded by Yingfang Microelectronics Co., Ltd. (hereinafter referred to as the "Company" or "Yingfang Micro"). We have prudently reviewed the valuation matters requiring clarification in the Inquiry Letter and hereby report on the verification of issues related to asset valuation as follows:
Inquiry Letter Question No. 3: Regarding Valuation Forecasts
The application documents show: (1) The valuation result using the income approach is used as the basis for pricing in this transaction. In the income approach valuation process, the annual revenue levels for each year are determined after forecasting the revenue growth rate for each year from 2026 to 2030, with terminal value entering in 2030. The operating revenue of the target asset is forecasted to grow from RMB 178,572.12 million in 2026 to RMB 212,701.70 million in 2030, with revenue growth rates from 2026 to 2030 of 9.56%, 8.22%, 5.02%, 2.90%, and 1.85% respectively. (2) This valuation is based on the gross profit margin forecast for each business of the target asset during the forecast period to derive the cost of goods sold. During the reporting period, the gross profit margin of the target asset's main business was 12.36% and 11.60% respectively. (3) During the forecast period, the ratio of period expenses is lower than the level during the reporting period. (4) During the forecast period, the change in working capital of the target asset is RMB 5,055.63 million, RMB 4,061.46 million, RMB 2,682.94 million, RMB 1,610.99 million, and RMB 1,052.44 million respectively. (5) In December 2024, Suzhou Mingcheng Venture Capital Co., Ltd. (hereinafter referred to as Suzhou Mingcheng Venture Capital) and 15 other shareholders of the target asset transferred a combined 29.4151% of their holdings in the target asset for RMB 20,513.72305 million to Zhang Yan. In March 2025, Zhang Yan transferred 34.97% of his holdings in the target asset for RMB 21,855.6108 million to Jiangsu New Era Semiconductor Co., Ltd. (hereinafter referred to as Jiangsu New Era).