Shenzhen Stock Exchange:
Jiangsu Intco Education Technology Co., Ltd. (hereinafter referred to as "the Company," "the Listed Company," or "Intco Education") received the "Inquiry Letter on Jiangsu Intco Education Technology Co., Ltd.'s 2025 Annual Report" from your esteemed exchange on April 30, 2026. In accordance with the requirements of the inquiry letter, ChungRui World Union Appraisal Group, together with the listed company and other relevant intermediaries, has conducted a thorough analysis and verification of the asset appraisal-related issues involved in the inquiry letter. The response to the inquiry letter is as follows:
Issue 3: The annual report shows that in January 2025, your company acquired 51% of the equity of FIS Holdings Pte. Ltd. (hereinafter referred to as "Jinren Holdings") for 810.762 million yuan, forming goodwill of 511.685 million yuan; in February 2025, your company acquired 51% of the equity of Youyou Huilian for 10,640.42 million yuan, forming goodwill of 387.606 million yuan. Youyou Huilian's performance declined significantly after the acquisition, and the difference from the promised performance was significant. Your company fully provisioned for goodwill impairment of 387.606 million yuan in 2025. In addition, the company had a fair value change gain on contingent consideration of 873.75 million yuan. Please have your company: (2) Explain the specific process and key parameters for the goodwill impairment test of Youyou Huilian. Based on the changes in the market environment, operating conditions, major customer situation, and financial data before and after the acquisition of Youyou Huilian, explain the specific reasons for the significant decline in performance and losses in 2025. Explain the reasonableness of the profit forecast at the time of acquisition, whether the operating risks of the target assets were fully identified, whether the acquisition decision was prudent, and whether Youyou Huilian's performance is at risk of continued decline.
Reply
II. Explain the specific process and key parameters for the goodwill impairment test of Youyou Huilian. Based on the changes in the market environment, operating conditions, major customer situation, and financial data before and after the acquisition of Youyou Huilian, explain the specific reasons for the significant decline in performance and losses in 2025. Explain the reasonableness of the profit forecast at the time of acquisition, whether the operating risks of the target assets were fully identified, whether the acquisition decision was prudent, and whether Youyou Huilian's performance is at risk of continued decline.
(I) Specific Process and Key Parameters of Youyou Huilian Goodwill Impairment Test
Intco Education conducted a goodwill impairment test on each balance sheet date in accordance with the "Accounting Standards for Business Enterprises." Intco Education engaged ChungRui World Union Appraisal Group to assess the goodwill formed from the acquisition of Youyou Huilian. Based on the "Asset Group Impairment Test Report for Goodwill of Xiamen Youyou Huilian Information Technology Co., Ltd. Involved in Jiangsu Intco Education Technology Co., Ltd. Acquisition" (Zhongrui Ping Bao Zi [2026] No. 600935), the goodwill impairment test process is as follows:
1. Identification of the Asset Group
Intco Education identified Youyou Huilian and its subsidiaries as an asset group combination. The synergistic benefits expected from the acquisition of Youyou Huilian are spread across the entire software and hardware sales and integrated services business, and cannot be allocated to individual asset groups. Therefore, goodwill was allocated to the asset group combination.
2. Impairment Test Method
Intco Education used the present value of future cash flows method to determine the recoverable amount of the asset group and compared it with the carrying amount of the asset group including goodwill.
3. Key Parameters
Intco Education forecasted future cash flows based on historical operating data and industry trends. The main parameters and their determination basis are as follows: