BDO China Shu Lun Pan CPA LLP (Special General Partnership)
Reply to the Audit Inquiry Letter Regarding the Application for Issuance of Shares to Specific Targets by Touchdynamic (Xiamen) Co., Ltd.
Ref: Xin Hui Shi Han Zi [2026] No. ZB177
Shenzhen Stock Exchange:
In accordance with the requirements of the Audit Inquiry Letter [2026] No. 120037 issued by your exchange on July 1, 2026, regarding the application for issuance of shares to specific targets by Touchdynamic (Xiamen) Co., Ltd. (hereinafter referred to as "Touchdynamic", the "Company", or the "Issuer"), BDO China Shu Lun Pan CPA LLP (hereinafter referred to as the "CPA" or "we") has implemented the inquiries related to the CPA one by one. The verification results are explained as follows:
Note: The CPA has not performed an audit or review of the financial statements for the period of January to March 2026.
Question 1: According to the application documents, the total amount of funds raised in this issuance shall not exceed 925 million RMB (inclusive). After deducting issuance expenses, the net proceeds will be used for the overseas smart manufacturing base project and to supplement working capital. This fundraising project is an expansion of the company's existing smart interactive display equipment business, mainly used for the production of smart interactive displays, smart interactive all-in-one machines, smart vehicle-mounted displays, and other products. The company intends to use this project to continue optimizing its global production capacity, further amplify its competitive advantages, disperse geopolitical risks, and better meet the personalized needs of global customers. The implementation entity of this project is the company's wholly-owned subsidiary, TES Technology (Thailand) Co., Ltd., and the implementation location is the WHA Rayong Industrial Estate, Rayong, Thailand. The construction period of this project is 3 years. After reaching full production, the expected annual operating income is 1.5028 billion RMB, with an average net profit of 163.1253 million RMB. The internal rate of return (after income tax) of the project is 17.08%, and the investment payback period (after income tax) is 7.46 years. The issuer's previous fundraising was an initial public offering in 2020, and there were instances of changes to the fundraising projects and the use of surplus funds to supplement working capital. Among them, the issuer transferred 180.102 million RMB from the original fundraising project "Smart Interactive Display Equipment Automated Production Base Construction Project" to acquire 60% equity of Hongtong Technology (Xiamen) Co., Ltd. held by Xiangda Optics (Xiamen) Co., Ltd.; transferred 154.945 million RMB to increase capital for the holding subsidiary Hongtong Technology for the capacity improvement plan of Hongtong Technology's Thailand factory. Later, the fundraising project "Smart Interactive Display Equipment Automated Production Base Construction Project" was terminated, and the remaining funds were permanently used to supplement working capital.