Zhonghua Certified Public Accountants (Special General Partnership)
Special Explanation on Relevant Issues in the "Inquiry Letter on the 2025 Annual Report of Zhejiang Dongjing Electronics Co., Ltd."
Zhonghui Zi (2026) No. 10225/11528
Shenzhen Stock Exchange:
We were engaged to audit the 2025 annual financial statements of Zhejiang Dongjing Electronics Co., Ltd. (hereinafter referred to as "Dongjing Electronics" or the "Company"), including the consolidated and company balance sheets as of December 31, 2025, the 2025 consolidated and company income statements, consolidated and company cash flow statements, consolidated and company statements of changes in owners' equity, and the notes to the financial statements, and issued the audit report Zhonghui Zi (2026) No. 04420.
Your exchange issued the "Inquiry Letter on the 2025 Annual Report of Zhejiang Dongjing Electronics Co., Ltd." (hereinafter referred to as the "Inquiry Letter"). We have verified the financial and accounting issues raised in the Inquiry Letter and respond as follows:
Note: If the sum of the mantissas in this response does not match the sum of the listed values, it is due to rounding.
I. Question 1 of the Inquiry Letter
During the reporting period, your company achieved operating income of 355 million yuan and operating income after deductions of 343 million yuan, representing year-on-year increases of 63.57% and 59.04%, respectively. Total profit was -48 million yuan, net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") was -50 million yuan, and net profit after deducting non-recurring gains and losses (hereinafter referred to as "net profit after non-recurring gains and losses") was -57 million yuan, representing year-on-year increases of 34.00%, 31.90%, and 28.32%, respectively, but all have been negative for four consecutive years.
Your company's operating income deduction items for this year amounted to 12.2242 million yuan, involving business income unrelated to the main business, mainly consisting of housing rental income, material sales, and scrap sales income. The operating income deduction items for this year directly affect whether your company's operating income after deductions for this year meets the 300 million yuan standard, which has a significant impact on whether your company's stock triggers delisting conditions.
(1) Please compare with the relevant provisions and standards in Section 2, Part 4 of our "Guidelines for Self-Regulation of Listed Companies No. 1 — Business Handling (2026 Revision)" and explain in detail the specific composition of and basis for the operating income deduction items for this year, and whether there is any income that should have been deducted but was not, or income that is unrelated to the main business or lacks commercial substance.
(2) Please combine the main business situation, relevant industry and market conditions, income and cost composition, Q1 2026 operating data, and the company's capital liquidity to explain in detail the reasons for your company's four consecutive years of losses, whether there are significant differences compared with companies in the same industry, and whether there is uncertainty regarding your company's ability to continue as a going concern.
(3) Your company's non-recurring gains and losses for this year were 6.6786 million yuan. Please explain in detail the specific composition of non-recurring gains and losses and whether the relevant accounting treatment complies with the relevant provisions of the "Accounting Standards for Business Enterprises."
Please have the annual audit accountant verify questions (1), (2), and (3), explain the audit procedures implemented, the verification ratio, the audit evidence obtained, and the audit conclusions, and express a clear opinion.
Company Response:
(I) In accordance with the relevant provisions and standards in Section 2, Part 4 of our "Guidelines for Self-Regulation of Listed Companies No. 1 — Business Handling (2026 Revision)," explain in detail the specific composition of and basis for the operating income deduction items for this year, and whether there is any income that should have been deducted but was not, or income that is unrelated to the main business or lacks commercial substance.