Yantai (Group) Certified Public Accountants (Special General Partnership) Special Explanation Regarding the Inquiry Letter from Shenzhen Stock Exchange to KaiRuiDe Holdings Co., Ltd.
Shenzhen Stock Exchange:
We acknowledge receipt of the "Inquiry Letter Regarding KaiRuiDe Holdings Co., Ltd." (Company Department Inquiry Letter [2022] No. 82) (hereinafter referred to as the "Inquiry Letter") forwarded by KaiRuiDe Holdings Co., Ltd. (hereinafter referred to as the "Company"). We have prudently audited the financial matters requiring our explanation in the Inquiry Letter and now provide the following responses to the issues involved:
- Your company disclosed in its third-quarter report for 2021 that operating revenue for the first three quarters of 2021 was RMB 19.1079 million, net profit attributable to the parent company was RMB -580.01 million, net profit after deducting non-recurring items was RMB -434.92 million, and net assets were RMB -18,470.21 million. Please explain in detail the reasons for the change in financial indicators in the fourth quarter compared to the same period last year, with a focus on the significant change in operating revenue. Based on this, please explain whether your company has engaged in year-end "rush transactions" or similar activities to avoid the risk of delisting.
Company Reply: "The operating revenue, net profit before and after deducting non-recurring items, and net assets of the Company in the fourth quarter of 2021 changed significantly compared to the same period in 2020. This is mainly due to the debt restructuring gains generated by the Company's implementation of debt restructuring in the fourth quarter of 2021, as well as an increase in working capital, recovery of commercial reputation, and increased operating profit and revenue from expanded trade business. The Company has not engaged in year-end 'rush transactions' or similar activities to avoid the risk of delisting. The specific analysis is as follows: