Huaxing Certified Public Accountants (Special General Partnership)
Verification Opinion on the Inquiry Letter Regarding the 2025 Annual Report of Anhui Dehao Runda Electric Co., Ltd.
Huaxing Special Letter [2026] No. 25009980190
To: Management Department II for Listed Companies, Shenzhen Stock Exchange:
In accordance with the requirements of the "Inquiry Letter Regarding the 2025 Annual Report of Anhui Dehao Runda Electric Co., Ltd." (hereinafter referred to as the "Annual Report Inquiry Letter") issued by your department, Huaxing Certified Public Accountants (Special General Partnership) (hereinafter referred to as the "Accountant," "we," or "this firm"), as the annual auditor for Anhui Dehao Runda Electric Co., Ltd. (hereinafter referred to as "Dehao Runda" or the "Company") for the year 2025, has prudently verified the financial matters requested in the inquiry letter. The specific situation is replied to as follows:
Question 1:
The annual report shows that during the reporting period, your company achieved an operating income of 663 million RMB, a year-on-year decrease of 10.02%; the net profit attributable to shareholders of the listed company (hereinafter referred to as "net profit") was 34 million RMB, achieving a turnaround from loss to profit; the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (hereinafter referred to as "net profit after deduction") was -118 million RMB, which has been negative for several consecutive years; the amount of non-recurring gains and losses was 152 million RMB, of which the gain from the disposal of non-current assets was 109 million RMB and the gain from debt restructuring was 53 million RMB; the net cash flow from operating activities was -69 million RMB, which has been negative for several consecutive years. At the end of the reporting period, your company's consolidated undistributed profit was -5.936 billion RMB, and the amount of unrecovered losses exceeded one-third of the total paid-in capital.
Because your company's audited net profit was negative for two consecutive fiscal years in 2017 and 2018, your company's stock trading was subject to a delisting risk warning on April 30, 2019. Because your company's audited operating income for the 2019 fiscal year was 2.98 billion RMB and the net profit was 264 million RMB, your company's stock trading had the delisting risk warning removed on November 2, 2020. However, given that your company's main business profitability is weak, your company's stock trading was simultaneously subject to other risk warnings. After the disclosure of the 2020, 2021, 2022, 2023, and 2024 annual reports, because the lower of the net profit before and after deducting non-recurring gains and losses for the most recent three fiscal years was negative, and the audit report for the most recent fiscal year showed that your company's ability to continue as a going concern was uncertain, your company's stock continued to be subject to other risk warnings. Among them, the "Material Uncertainty Related to Going Concern" paragraph in the 2024 audit report showed that your company's 2024 net profit was -198 million RMB, the net cash flow from operating activities was -81 million RMB, the cumulative undistributed profit at the end of 2024 was -5.97 billion RMB, current liabilities were 790 million RMB, and current assets were 512 million RMB. These matters or circumstances indicate the existence of material uncertainties that may cast significant doubt on your company's ability to continue as a going concern.
On August 15, 2025, your company's first extraordinary general meeting of shareholders in 2025 deliberated and passed the "Proposal on Changing the Accounting Firm," changing the accounting firm from Lixin Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Lixin") to Huaxing Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Huaxing"). In April 2026, Huaxing issued a standard unqualified audit report on your company's 2025 financial report and issued the "Special Audit Report on the Special Explanation Regarding the Elimination of the Impact of Matters Involved in the Non-Standard Audit Opinion of the 2024 Financial Statement Audit Report of Anhui Dehao Runda Electric Co., Ltd." Your company has submitted an application to our firm to revoke the other risk warnings. Please have your company: