Audit Report
Audit Report No. [2026] ZI10108
To all shareholders of Shenzhen Shilian Group Co., Ltd.:
1. Audit Opinion
We have audited the financial statements of Shenzhen Shilian Group Co., Ltd. (hereinafter referred to as "Shilian"), including the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in equity, and related notes to the financial statements. In our opinion, the attached financial statements have been prepared in accordance with the provisions of enterprise accounting standards in all material respects and fairly present the financial position of Shilian as of December 31, 2025, as well as the operating results and cash flows for the year 2025.
2. Basis for Audit Opinion
We conducted our audit in accordance with the auditing standards for certified public accountants in China. The section "Responsibilities of Certified Public Accountants for Auditing Financial Statements" in this report further elaborates on our responsibilities under these standards. In accordance with the "Independence Standards for Certified Public Accountants No. 1 - Requirements for Independence in Auditing and Reviewing Financial Statements" and the Code of Ethics for Certified Public Accountants in China, we are independent of Shilian and have fulfilled our other ethical responsibilities. We adhered to the independence requirements for auditing public interest entities during our audit. We believe that the audit evidence we obtained is sufficient and appropriate to provide a basis for our audit opinion.
3. 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 for the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our audit opinion, and we do not express a separate opinion on these matters. The key audit matters identified in our audit are summarized as follows:
(1) Revenue Recognition for Agency and Distribution Services
Shilian's revenue primarily comes from agency and distribution services. As disclosed in the attached "Notes to Consolidated Financial Statements Item (40)", the total revenue from agency and distribution services for the year 2025 amounted to RMB 1.013 billion, accounting for 51.93% of Shilian's consolidated revenue. Due to the significant proportion of revenue from these services and the potential for cumulative minor errors in revenue recognition from individual sales projects to materially impact Shilian's overall revenue, we identified the recognition of real estate agency sales revenue as a key audit matter. Our audit procedures related to revenue recognition included:
- Understanding and assessing the design of key internal controls related to revenue recognition and testing the effectiveness of these controls.
- For agency service revenue, selecting a sample for detailed examination against contracts and settlement documents signed by developers, tracing back to Shilian's business system to verify transaction details and bank receipts.
- For distribution services, selecting a sample for detailed examination against contracts and settlement documents signed by developers, tracing back to Shilian's business system to verify transaction details and bank receipts.
- Checking supporting documents for revenue recognized before and after the balance sheet date to evaluate whether revenue has been recorded in the appropriate period.