[Image: Company Logo]
Response to the Audit Inquiry Letter Regarding the Application for the 2023 Issuance of A-Shares to Specific Targets by Guangdong Xianglu Tungsten Co., Ltd.
(No. 1589 Zishi Road, Xinjian District, Nanchang City, Jiangxi Province)
June 2026
Shenzhen Stock Exchange:
We have received your "Audit Inquiry Letter Regarding the Application for the Issuance of Shares to Specific Targets by Guangdong Xianglu Tungsten Co., Ltd." (Audit Letter [2025] No. 120052) (hereinafter referred to as the "Inquiry Letter") issued on November 12, 2025. Guangdong Xianglu Tungsten Co., Ltd. (hereinafter referred to as "Xianglu Tungsten," the "Issuer," or the "Company"), together with Guosheng Securities Co., Ltd. (hereinafter referred to as "Guosheng Securities" or the "Sponsor"), Guangdong Sinong Certified Public Accountants (Special General Partnership) (hereinafter referred to as the "Reporting Accountant"), and Beijing Jingtian & Gongcheng Law Firm (hereinafter referred to as the "Issuer's Counsel"), have diligently and honestly discussed, verified, and implemented the items raised in the Inquiry Letter. The response is as follows for your review.
Explanation regarding the interpretation, format, and supplementary disclosure of the response content:
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Unless otherwise specified, the abbreviations or proper nouns used in this response report have the same meanings as those in the "Guangdong Xianglu Tungsten Co., Ltd. 2023 Prospectus for the Issuance of A-Shares to Specific Targets (Declaration Draft)." In this response report, any discrepancies between the sum of individual items and the total are due to rounding.
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The fonts used in this response report have the following meanings:
| Item | Font Style |
|---|---|
| Questions listed in the Inquiry Letter | Bold (Black) |
| Responses to questions in the Inquiry Letter | Song (Not Bold) |
| Modifications and supplements to application documents | Kai (Bold) |
Table of Contents
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Question One: 3
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Question Two: 115
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Other: 159
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Question One
During the reporting period, the Issuer's operating income was 1,673.5532 million yuan, 1,798.7550 million yuan, 1,749.0182 million yuan, and 930.9751 million yuan, respectively; net profit after deducting non-recurring gains and losses was -51.3653 million yuan, -130.3595 million yuan, -120.5034 million yuan, and 9.4701 million yuan, respectively. Over the last three years, the Issuer's operating income has continued to rise, but net profit after deducting non-recurring gains and losses has remained negative. The net cash flow from operating activities was 58.8604 million yuan, 49.7708 million yuan, 40.0807 million yuan, and -49.4424 million yuan, respectively.
The company adopts a sales model primarily based on direct sales, supplemented by distribution. During the reporting period, the company's overseas sales revenue was 391.8042 million yuan, 337.2192 million yuan, 362.9266 million yuan, and 155.3007 million yuan, respectively, accounting for 23.41%, 18.75%, 20.75%, and 16.68% of operating income. Both the amount and proportion of overseas sales revenue decreased in the first half of 2025.
As of June 30, 2025, the Issuer's current liabilities were 919.3419 million yuan, non-current liabilities were 145.6346 million yuan, and the asset-liability ratio (consolidated) was 49.60%. Among the Issuer's current liabilities, short-term borrowings were 582.9542 million yuan, notes payable were 179.2083 million yuan, and long-term borrowings due within one year were 35.1600 million yuan, indicating that the Issuer faces certain short-term debt repayment pressure.
During the reporting period, the energy used by the Issuer was mainly electricity, natural gas, and steam. The company's powder series products are primarily produced on an order basis.