Verification Opinion from Huatai United Securities on the Inquiry Letter Regarding Shanghai Weitai Industrial Automation Co., Ltd.'s Cash Major Asset Purchase

Verification Opinion from Huatai United Securities on the Inquiry Letter Regarding Shanghai Weitai Industrial Automation Co., Ltd.'s Cash Major Asset Purchase

Shanghai Weitai Industrial Automation Co., Ltd. (hereinafter referred to as "Weitai," "the listed company," or "the company") recently received an inquiry letter from the Shenzhen Stock Exchange regarding its cash major asset purchase (Inquiry Letter [2025] No. 13, hereinafter referred to as "the inquiry letter"). Huatai United Securities Co., Ltd. (hereinafter referred to as "the independent financial advisor" or "Huatai United Securities"), as the independent financial advisor for this transaction, has conducted a thorough analysis and verification of the relevant issues in conjunction with the listed company and other related intermediary institutions. We hereby present our verification opinion on the relevant matters. Unless otherwise specified, the abbreviations used in this verification opinion are consistent with the definitions in the "Report on Major Asset Purchase and Related Transactions of Shanghai Weitai Industrial Automation Co., Ltd. (Draft)." If there are discrepancies between the total figures and the sum of individual items in this verification opinion, they are due to rounding.

Question 1

The report shows that Zijiang New Materials primarily engages in the research, production, and sales of aluminum-plastic composite films for soft-pack lithium batteries, with a declining trend in revenue scale and profitability in recent years. The operating revenues for 2023, 2024, and the first quarter of 2025 were 711 million yuan, 623 million yuan, and 155 million yuan, respectively, with net profits of 90.2365 million yuan, 53.5151 million yuan, and 10.1226 million yuan, and gross profit margins of 25.89%, 22.15%, and 21.40%. In 2024, Zijiang New Materials experienced year-on-year declines in operating revenue, net profit, and gross profit margin of 12.37%, 40.69%, and 14.45%, respectively. The decline in profitability is mainly attributed to the decrease in profit levels of the aluminum-plastic film business for power storage soft-pack lithium batteries, primarily due to downstream key customers reducing sales prices due to cost control needs and introducing other suppliers for competition, resulting in a decline in sales volume and market share for the target company.

1. Please explain the core competitiveness of the target products in relation to the patent technology, product upgrade pace, competitors' R&D capabilities, and product quality; and please outline the measures to be taken in terms of technology reserves, product characteristics, sales and service, and cost control to address operational risks such as industry technological iterations and market competition, as well as the single product structure and declining market share of major customers.
2. Please explain whether the downward trend in the target company's performance will continue, considering the industry development situation, competitive landscape, and order status; and clarify whether the aluminum-plastic film business has synergies with your company's existing main business, whether the core technical personnel and management team of the target company are stable, whether customer resources are sustainable, and whether your company possesses the operational management capabilities, technology, and business reserves in the industry to which the target company belongs.
3. Please further explain whether the acquisition decision is prudent and whether this transaction is beneficial for enhancing your company's sustainable operating capacity and core competitiveness. Please provide verification opinions from the independent financial advisor.

Response:

1. Please explain the core competitiveness of the target products in relation to the patent technology, product upgrade pace, competitors' R&D capabilities, and product quality.
2. The target assets possess internationally advanced independent R&D core technologies. Zijiang New Materials has been deeply engaged in the aluminum-plastic film industry for many years, owning internationally advanced and domestically leading independent R&D core technologies. As of the date of this response, Zijiang New Materials and its subsidiaries have obtained a total of 68 domestic patents, including 18 invention patents and 50 utility model patents. The status of the invention patents is shown in the following table: