Sichuan Chuanrun Co., Ltd.
2025 Annual Financial Statement Audit Report
Table of Contents
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Audit Report: Pages 1–5
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Audit Report Attachments
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Consolidated Balance Sheet: Pages 6–7
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Parent Company Balance Sheet: Pages 8–9
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Consolidated Income Statement: Page 10
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Parent Company Income Statement: Page 11
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Consolidated Cash Flow Statement: Page 12
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Parent Company Cash Flow Statement: Page 13
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Consolidated Statement of Changes in Equity: Pages 14–15
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Parent Company Statement of Changes in Equity: Pages 16–17
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Notes to Financial Statements: Pages 18–120
[Chart: Audit report QR code]
Audit Report
[2026] Jing Hui Xing Shen Zi No. 00020037
To the Shareholders of Sichuan Chuanrun Co., Ltd.:
(I) Audit Opinion
We have audited the financial statements of Sichuan Chuanrun Co., Ltd. (hereinafter "Chuanrun Co."), which comprise the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements, the consolidated and parent company cash flow statements, and the consolidated and parent company statements of changes in equity for the year 2025, as well as the related notes to the financial statements.
In our opinion, the accompanying financial statements have been prepared in all material respects in accordance with the Accounting Standards for Business Enterprises and fairly present the consolidated and parent company financial position of Chuanrun Co. as of December 31, 2025, and its consolidated and parent company operating results and cash flows for the year 2025.
(II) Basis for Audit Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilities under these standards are further described in the "Certified Public Accountant's Responsibilities for the Audit of the Financial Statements" section of the audit report. In accordance with the "Code of Ethics for Certified Public Accountants of China" and the "Independence Requirements for Financial Statement Audit and Review Engagements," we are independent of Chuanrun Co. and have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
(III) Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.
We identified the following key audit matters in our audit of the current period's financial statements:
- Provision for Bad Debts on Accounts Receivable
Please refer to Note III (14) and Note V (4) to the financial statements.
| Key Audit Matter | Audit Response |
|---|---|
| As of December 31, 2025, the book balance of Chuanrun Co.'s accounts receivable was 1,322,358,976.38 RMB, with a corresponding bad debt provision of 160,753,087.29 RMB. Management measures expected credit losses based on the credit risk characteristics of various accounts receivable, referencing historical credit loss experience and adjusting for forward-looking information to prepare an aging and expected credit loss rate table. Given that this involves significant accounting estimates and management judgment, we identified this as a key audit matter. | (1) Understand, evaluate, and test the design and operating effectiveness of internal controls related to credit policy and accounts receivable management; (2) Review the reasonableness of the expected credit loss model, evaluating the logic of migration rates, historical loss rates, and the appropriateness of forward-looking information; (3) Analyze aging structure and customer credit status, perform confirmation procedures, and check post-period collections to evaluate the sufficiency of the provision; (4) Recalculate the provision amount and analyze the difference between the provision ratio and historical actual loss rates; (5) Obtain the detailed schedule of provisions and verify the accuracy of the calculation. |