Huaxing Certified Public Accountants LLP Address: 6-9/F Block B, 152 Hudong Road, Fuzhou, Fujian, China Tel: 0591-87852574 Fax: 0591-87840354 Postcode: 350003
Reply to Jinfa Raby Baby and Maternity Products Co., Ltd.'s 2025 Annual Report Inquiry Letter Huaxing Letter No. [2026]25015490056
Shenzhen Stock Exchange Listed Company Management Department:
We acknowledge receipt of your "Inquiry Letter regarding Jinfa Raby Baby and Maternity Products Co., Ltd.'s 2025 Annual Report." As the auditor for Jinfa Raby's 2025 financial statements, we provide our opinions on the issues raised in the inquiry letter as follows:
Question 1: Regarding Operating Revenue
The annual report shows that in 2025, your company achieved operating revenue of 386 million yuan, a year-on-year increase of 71.86%, and a net profit of -187 million yuan, a year-on-year decrease of 458.50%, with a non-recurring net profit of -193.61%. On a quarterly basis, your company's revenue in the third and fourth quarters was 105 million yuan and 122 million yuan, respectively, significantly higher than the first two quarters. Concurrently, the losses in the third and fourth quarters were 61.0459 million yuan and 108 million yuan, respectively, with losses also significantly higher than the first two quarters. In 2025, the income from non-primary business activities, which should be deducted, was 4.0825 million yuan. We request your company to: (1) provide detailed information on the operating revenue for the year, including its breakdown by business category, revenue recognition methods, top ten customers and their sales amounts, historical business relationships with relevant customers (including but not limited to revenue, gross profit margin, contract payment terms, etc.), accounts receivable formed, and repayment progress to date. (2) Based on the response to question (1) and considering the breakdown of losses for the year, provide a detailed explanation of the reasons and reasonableness for the significant divergence in the direction of change between operating revenue and net profit for the year. Confirm whether operating revenue recognition is true and accurate, whether the recognition policy has changed year-on-year, and whether there are any instances of early revenue recognition. Also, assess whether there is any uncertainty regarding the company's going concern ability (especially the continuous growth of operating revenue). (3) Quantitatively analyze and explain the reasons and reasonableness for the significant sequential increase in operating revenue and losses in the third and fourth quarters compared to the previous two quarters. Determine if this is consistent with comparable companies in the same industry and industry trends, and whether there are any "window dressing" activities at year-end. (4) Based on the responses to questions (1) and (2), and in conjunction with the "Revenue Deduction Matters" in the Shenzhen Stock Exchange Listed Company Self-Regulatory Management Guide No. 1 (2025 Revision), analyze point by point whether the operating revenue that should be deducted in the first three quarters exists and whether the existing revenue deductions are complete and accurate. (5) Simultaneously with the annual report disclosure, your company disclosed the "Announcement on Applying for the Withdrawal of the Delisting Risk Warning," stating that your company meets the conditions for applying for the withdrawal of the delisting risk warning. In conjunction with Rules 9.3.8 and 9.3.12 of the "Stock Listing Rules (2025 Revision)," explain point by point whether all conditions for withdrawing the delisting risk warning are met and whether the relevant supporting documents are complete. We request the annual audit accountant to review the aforementioned issues and provide a clear opinion.
[Reply]
(1) Provide detailed information on the operating revenue for the year, including its breakdown by business category, revenue recognition methods, top ten customers and their sales amounts, historical business relationships with relevant customers (including but not limited to revenue, gross profit margin, contract payment terms, etc.), accounts receivable formed, and repayment progress to date.