Special Response Opinion from Lixin Certified Public Accountants (Special General Partnership) Regarding the Shenzhen Stock Exchange's Inquiry Letter on Hunan Friendship Apollo Commercial Co., Ltd.
To: Listing Review Center of Shenzhen Stock Exchange
We acknowledge receipt of your inquiry letter (Inquiry Letter [2025] No. 130012) regarding Hunan Friendship Apollo Commercial Co., Ltd. (hereinafter referred to as "the listed company" or "Friendship Apollo") concerning its application for issuing shares to purchase assets and raise supporting funds. As the financial statement auditing institution for this application, Lixin Certified Public Accountants (Special General Partnership) (hereinafter referred to as "our firm" or "the accountants") has conducted a thorough review of the issues raised in the inquiry letter. We hereby respond as follows:
- Sales Model and Operating Performance of Target Assets The application documents and public disclosure materials indicate: (1) Shenzhen Shangyangtong Technology Co., Ltd. (hereinafter referred to as "Shangyangtong" or "the target assets") primarily engages in the research, design, and sales of high-performance semiconductor power devices. During the reporting period, sales to the top five customers accounted for 72.89% and 65.23%, respectively. The sales model of the target assets combines distribution and direct sales, with distribution revenue accounting for 73.84% and 75.59%, respectively. The target assets' development largely depends on identifying and quickly responding to changes in customer demand due to the rapid iteration of technology and application fields in the industry. (2) From 2020 to 2024, the main business revenue of the target assets was 127 million yuan, 391 million yuan, 736 million yuan, 673 million yuan, and 605 million yuan, with net profits of -13 million yuan, 49 million yuan, 139 million yuan, 83 million yuan, and 46 million yuan, respectively, indicating significant performance volatility. (3) During the reporting period, revenue from the high-voltage product line was 567 million yuan and 478 million yuan, while revenue from the medium and low-voltage product lines was 105 million yuan and 114 million yuan, and revenue from the module product line was 1.04 million yuan and 14.06 million yuan. (4) The average selling prices of the high-voltage product line were 9.24 yuan/unit and 7.21 yuan/unit, while the average selling prices of the medium and low-voltage product line were 1.10 yuan/unit and 0.83 yuan/unit, both showing a downward trend. (5) The gross profit margins for the main business of the target assets were 27.61% and 24.19%, also showing a downward trend. (6) The net cash flow from operating activities for the target assets was -221 million yuan and 184 million yuan, indicating significant fluctuations.