Shenzhen Stock Exchange:
In accordance with the "Special Inquiry Letter on TianShui HuaTian Technology Co., Ltd.'s Application for Issuing Shares and Paying Cash to Purchase Assets and Raising Supporting Funds" (Special Inquiry Letter [2026] No. 130008) issued by your exchange (hereinafter referred to as the "Special Inquiry Letter"), our company has conducted thorough discussions and analysis on the issues raised in the Special Inquiry Letter and hereby provides the following relevant reply and explanation.
Unless otherwise specified, the terms or abbreviations used in this Special Inquiry Letter Reply (hereinafter referred to as "this Reply") have the same meanings as defined in the "Glossary" in the Restructuring Report. In this Reply, any difference in the last digit between the sum of individual items and the total sum is due to rounding. Unless otherwise specified, the financial data and financial indicators cited in this Reply refer to the financial data and financial indicators calculated based on the consolidated financial statements.
Inquiry Letter Issues
Reply to Inquiry Letter Issues
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Songti
Question:
You, as the independent financial advisor to TianShui HuaTian Technology Co., Ltd. (hereinafter referred to as HuaTian Technology or the Company), are aware that the Company's application for issuing shares and paying cash to purchase assets and raise supporting funds has recently been subject to media scrutiny, including but not limited to articles such as "HuaTian Technology Acquires Huayi Microelectronics for 2.9 Billion Yuan, 166% Premium: Gamble or Rebirth" and "Capital Route Change: Huayi Microelectronics Terminates Independent IPO, Merges into HuaTian Technology." The main concerns are concentrated on: (1) the feasibility of the performance commitment of the target asset and the fairness of the transaction premium, given the long customer verification cycle and intense market competition in the power semiconductor sector; and (2) the fundamental differences in business models between the Company and the target asset, Huayi Microelectronics, and the feasibility of integrating the target asset after the transaction.
Please organize relevant intermediaries to investigate the issues raised in the reports, provide detailed explanations of the investigation process, methods, standards, scope, relevant evidence, investigation results, and conclusions. Furthermore, please confirm whether the matters mentioned in the reports are true, whether they constitute an obstacle to this restructuring, whether the transaction complies with the restructuring conditions stipulated in the "Administrative Measures for Major Asset Restructuring of Listed Companies," and whether the information disclosed in the application documents is true, accurate, and complete.
Reply:
I. Feasibility of the Target Asset's Performance Commitment and Fairness of the Transaction Premium, considering the Long Customer Verification Cycle and Intense Market Competition in the Power Semiconductor Sector
(I) The Target Company's Performance Commitment is Highly Achievable
1. Performance Commitment and First Half of 2026 Net Profit of the Target Company
To fully protect the interests of the listed company and its minority shareholders, the transaction plan includes performance compensation and impairment compensation clauses. The performance commitment parties have signed the "Performance Compensation and Impairment Compensation Agreement" with the listed company. According to the "Performance Compensation and Impairment Compensation Agreement," the net profit target for the design business segment during each accounting year from 2026 to 2028 shall not be less than RMB 13,922.87 million, RMB 16,626.87 million, and RMB 18,938.26 million, respectively, with corresponding net profit growth rates of 19.48%, 19.42%, and 13.90%. For the packaging and testing business segment of the target company, the cumulative net profit during the performance commitment period shall be a positive target.
According to the unaudited financial data of the target company, in the first half of 2026, the design business segment achieved a net profit of RMB 9,901.81 million, representing 71.12% of the full-year performance commitment for 2026. The packaging and testing business segment achieved a net profit of RMB 549.21 million, which is positive. The specific situation is as follows: