Special Explanation on Issuing a Non-Standard Audit Opinion Report for the Annual Financial Statement Audit of Zoonming Eco-Town Development Co., Ltd.
Daxin CPA [2026] No. 16-00002
To all shareholders of Zoonming Eco-Town Development Co., Ltd.:
We were engaged to audit the consolidated and parent company balance sheets as of December 31, 2025, and the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in owners' equity, and the notes to the financial statements of Zoonming Eco-Town Development Co., Ltd. (hereinafter referred to as "your company" or "Zoonming Shares") for the year 2025. On April 23, 2026, we issued a standard unqualified audit report with an emphasis-of-matter paragraph regarding significant uncertainties related to going concern, Daxin Audit [2026] No. 16-00021.
In accordance with the China Securities Regulatory Commission's "Disclosure and Reporting Rules for Publicly Issued Securities Companies No. 14 – Non-Standard Audit Opinions and Handling of Related Matters (2025 Revision)," "Regulatory Supervision Guidelines – Auditing Category No. 1," and the "Shenzhen Stock Exchange Stock Listing Rules (2025 Revision)," we hereby explain the matters that led to the non-standard opinion.
I. Content of the Non-Standard Audit Opinion in the Audit Report
(I) Significant Uncertainties Related to Going Concern
We remind financial statement users to note that, as disclosed in Note II (II) to the financial statements, your company's net profit attributable to shareholders of the parent company for 2023-2025 was RMB -93,989.49 million, RMB -157,884.14 million, and RMB -119,056.15 million, respectively. The accumulated undistributed profits were RMB -461,350.75 million. As of December 31, 2025, your company's current liabilities exceeded its current assets by RMB 538,117.79 million, its asset-liability ratio was 96.57%, and its owners' equity attributable to shareholders of the parent company was RMB 42,090.40 million. These matters or circumstances, along with other matters disclosed in Note II (II) to the financial statements, indicate a significant uncertainty that may cast substantial doubt on your company's ability to continue as a going concern. This matter does not affect the audit opinion issued.