Guangdong Sinnong Certified Public Accountants LLP (Special General Partnership)
Reply to the "Inquiry Letter Regarding the 2025 Annual Report of Modern Avenue Fashion Group Co., Ltd." from the Shenzhen Stock Exchange
Sinnong Zhuanzi [2026] No. 25008950075
Shenzhen Stock Exchange:
In accordance with the "Inquiry Letter Regarding the 2025 Annual Report of Modern Avenue Fashion Group Co., Ltd." (Company Department Annual Report Inquiry Letter [2026] No. 86, hereinafter referred to as the "Inquiry Letter") issued by your exchange on April 30, 2026, Guangdong Sinnong Certified Public Accountants LLP (Special General Partnership) (hereinafter referred to as the "Accountants"), in conjunction with Modern Avenue Fashion Group Co., Ltd. (hereinafter referred to as "Modern Avenue" or the "Company"), has conducted a line-by-line verification of the issues listed in the Inquiry Letter. The verification results are explained as follows for your review.
The fonts used in this reply have the following meanings:
| Font | Meaning |
|---|---|
| Songti (Bold) | Questions listed in the Inquiry Letter |
| Songti (Non-bold) | Replies to the questions listed in the Inquiry Letter |
[Question 1] The annual report shows that in 2025, your company achieved operating income of 603 million yuan, a year-on-year increase of 178.75%; net profit of -44.9113 million yuan, a year-on-year increase of 27.68%; net profit after deducting non-recurring gains and losses of -62.7421 million yuan, a year-on-year decrease of 8.19%; and net cash flow from operating activities of -83.5172 million yuan, a year-on-year decrease of 605.54%.
Regarding operating income deduction and accounting error correction, your company deducted 115 million yuan of business income unrelated to the main business in 2025, resulting in an operating income of 488 million yuan after deduction. In addition, according to the "Announcement on Correction of Prior Period Accounting Errors" disclosed by your company on the same day, due to the adjustment of some business income in the first three quarters of 2025 from the gross method to the net method, operating income for the first three quarters of 2025 was reduced by 79.4412 million RMB.
Regarding related-party transactions, the "Announcement on the Forecast of Annual Related-Party Transactions for 2025" disclosed by your company on May 10, 2025, shows that the estimated sales quota of products to related parties in 2025 was 80 million yuan. The annual report shows that your company's sales income to related parties in 2025 was 75.1246 million yuan. However, the "Announcement on the Forecast of Daily Related-Party Transactions for 2026" disclosed by your company on January 16, 2026, shows that the cumulative sales income to related parties in 2025 was 113 million yuan, indicating a contradiction between the two sets of data. Furthermore, your company expects sales to related parties in 2026 to be 160 million yuan, a significant year-on-year increase compared to 2025.