Audit Report
Tianheng Shen Zi (2026) No. 00933
To all shareholders of Guoguang Electric Appliances Co., Ltd.:
I. Audit Opinion
We have audited the accompanying financial statements of Guoguang Electric Appliances Co., Ltd. (hereinafter referred to as "Guoguang Electric Appliances"), which comprise the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in owners' equity for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements are prepared, in all material respects, in accordance with the Accounting Standards for Business Enterprises, and fairly present the consolidated and parent company financial position of Guoguang Electric Appliances as of December 31, 2025, and the consolidated and parent company results of operations and cash flows for the year then ended.
II. Basis for Audit Opinion
We conducted our audit in accordance with the Standards for Auditing Standards of Certified Public Accountants in China. The section "Auditor's Responsibilities for the Audit of Financial Statements" in our audit report further elaborates on our responsibilities under these standards. In accordance with the Code of Professional Ethics for Certified Public Accountants in China, we are independent of Guoguang Electric Appliances and have fulfilled our other professional ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our audit opinion thereon, and we do not provide a separate opinion on these matters.
(I) Revenue Recognition
- Description of the Matter
Guoguang Electric Appliances is primarily engaged in the research, development, production, and sales of electronic components, with main products including speakers, loudspeakers, batteries, and electronic spare parts. In 2025, Guoguang Electric Appliances recognized principal business revenue of RMB 7,750,047,320.00. As stated in Note III, 26 to the financial statements, Guoguang Electric Appliances' sales business is a performance obligation satisfied at a point in time. Revenue is recognized when products are shipped, and the consideration has been received or is receivable, and it is probable that the related economic benefits will flow to the company, and the ownership of the goods, along with the significant risks and rewards of ownership, has been transferred, and the legal ownership of the goods has been transferred.
Given that revenue is one of Guoguang Electric Appliances' key performance indicators, there is an inherent risk of management manipulating the timing of revenue recognition to achieve specific targets or expectations. Therefore, we identified Guoguang Electric Appliances' revenue recognition as a key audit matter.
- Our Response in the Audit
The main audit procedures we performed in response to Guoguang Electric Appliances' revenue recognition included: