Response to the Inquiry Letter Regarding the Application for Issuance of Shares by China National Materials Technology Co., Ltd.
Zhongshen Zhonghuan Accounting Firm (Special General Partnership) (hereinafter referred to as "our firm" or "we") is the auditing institution for the financial statements of China National Materials Technology Co., Ltd. (hereinafter referred to as "China National Materials" or "the company") for the years 2025, 2024, and 2023. We issued standard unqualified audit reports numbered Zhonghuan Audit [2026] No. 0202060, Zhonghuan Audit [2025] No. 0201793, and Zhonghuan Audit [2024] No. 0200769.
On December 2, 2025, the company received the "Inquiry Letter Regarding the Application for Issuance of Shares by China National Materials Technology Co., Ltd." (Inquiry Letter [2025] No. 120057) issued by the Shenzhen Stock Exchange (hereinafter referred to as "the Inquiry Letter"). Based on our audit work on the relevant financial statements of China National Materials, we have conducted verification procedures on the questions requiring our response in the Inquiry Letter. The verification results are as follows:
Question 1
According to the application materials, there is a competitive relationship in the fiberglass and products business between the controlling shareholder, China Jushi, and China National Materials. During the reporting period, the company engaged in related transactions such as purchasing goods and receiving services from related parties, as well as selling goods and providing services. The fundraising project for this issuance involves the expansion and upgrading of existing specialty fiber cloth products. The company's net profit attributable to the parent company, excluding non-recurring gains and losses, was 216,805.16 million yuan, 196,608.39 million yuan, 38,355.03 million yuan, and 119,726.38 million yuan for the respective reporting periods; the overall gross profit margins were 23.57%, 23.98%, 17.02%, and 19.68%, showing a fluctuating trend. At the end of each reporting period, the book value of the company's construction in progress was 409,001.46 million yuan, 605,385.90 million yuan, 1,065,904.03 million yuan, and 808,606.87 million yuan, respectively.