Response to the Inquiry Letter on iFlytek's Application for Specific Object Stock Issuance
RSM China (Special General Partnership)
Beijing, China
Table of Contents
- Question 1 ...................................................................... 2
- Question 2 .................................................................... 118
1. Response to the Inquiry Letter
RSM China (Special General Partnership) (hereinafter referred to as "the Reporting Accountant") has received the inquiry letter issued by the Shenzhen Stock Exchange on October 24, 2025, regarding iFlytek's application for a specific object stock issuance (Inquiry Letter [2025] No. 120041) (hereinafter referred to as "the Inquiry Letter"). As the Reporting Accountant for this stock issuance, we have diligently discussed, verified, and implemented the questions raised in the Inquiry Letter, and now provide the following responses for your review. Unless otherwise specified, the abbreviations or definitions used in this response are consistent with those in the "Prospectus for iFlytek's 2025 Specific Object A-Share Stock Issuance" (hereinafter referred to as "the Prospectus").
Bold - Questions listed in the Inquiry Letter
Italic - Responses to the questions listed in the Inquiry Letter
1.1 Recent Financial Performance
In the past three years, the issuer's operating income has increased year by year, amounting to 1,877,816.79 million yuan, 1,959,723.71 million yuan, and 2,327,758.00 million yuan, respectively. The net profit attributable to the parent company, excluding non-recurring gains and losses, has fluctuated, with figures of 41,781.88 million yuan, 11,806.17 million yuan, and 18,813.73 million yuan. According to the issuer's recently disclosed third-quarter report for 2025, the operating income from January to September 2025 reached 1,698,943.48 million yuan, a year-on-year increase of 14.41%; the net profit attributable to the parent company, excluding non-recurring gains and losses, was -33,793.08 million yuan, a reduction in losses of 27.83%.
The company's consumer business, primarily based on standardized product sales, generally adopts a combination of direct sales and channel agency sales. During the reporting period, there were significant changes among the company's top five suppliers. The company's R&D expenditures were 335,514.67 million yuan, 383,682.27 million yuan, 458,011.84 million yuan, and 239,182.39 million yuan, accounting for 17.83%, 19.53%, 19.62%, and 21.92% of operating income, respectively. The book value of development expenditures increased from 71,695.98 million yuan at the end of 2022 to 218,923.81 million yuan at the end of June 2025. The book value of software in intangible assets was 207,407.53 million yuan, 245,145.29 million yuan, 221,036.69 million yuan, and 195,516.58 million yuan, respectively. R&D expenses were 311,129.71 million yuan, 348,118.53 million yuan, 389,160.14 million yuan, and 206,753.90 million yuan, mainly for employee compensation and amortization of intangible assets.
During the reporting period, the book value of accounts receivable was 986,974.17 million yuan, 1,216,510.21 million yuan, 1,466,645.30 million yuan, and 1,574,639.68 million yuan, with the proportion of accounts receivable aged within two years being 87.34%, 81.43%, 78.82%, and 77.89%, respectively, indicating an increase in long-aged accounts receivable. As of June 30, 2025, the company's prepayments amounted to 44,968.31 million yuan, mainly for prepaid advertising fees; other receivables amounted to 31,415.30 million yuan, with a provision for bad debts of 3,127.28 million yuan, including 11,874.19 million yuan for other receivables aged over five years. As of June 30, 2025, the book value of long-term equity investments was 158,643.82 million yuan, and other non-current financial assets amounted to 58,062.69 million yuan.