“Jiangsu ZHIYUN Education Technology Co., Ltd. Response to the Shenzhen Stock Exchange's 2025 Annual Report Inquiry Letter” Special Explanation
Shenzhen Stock Exchange Listed Company Management Department Two:
We have received your "Inquiry Letter Regarding Jiangsu ZHIYUN Education Technology Co., Ltd.'s 2025 Annual Report" (Company Department Annual Report Inquiry Letter [2026] No. 85). As the appraisal institution appointed by Jiangsu ZHIYUN Education Technology Co., Ltd. (hereinafter referred to as "ZHIYUN Education"), we have, in accordance with your requirements, investigated the "Specific process and key parameters for the goodwill impairment test of Renmin Holdings, and the reasons and reasonableness for not recognizing goodwill impairment, considering factors such as the Singapore education market environment, exchange rate fluctuations, policy risks, operating performance, financial status, and future profitability forecasts, and whether there is insufficient goodwill impairment recognition." We now provide the following response regarding the impairment test results and the reasonableness of related parameters for the Renmin Holdings goodwill impairment test project:
I. Listed Company Explanation
(1) Explanation of the specific process and key parameters for the goodwill impairment test of Renmin Holdings
The Company conducts goodwill impairment tests on each balance sheet date in accordance with the "Accounting Standards for Business Enterprises." The Company appointed Beijing Guofeng Xinghua Asset Appraisal Co., Ltd. to appraise the goodwill formed from the acquisition of Renmin Holdings. Based on the "Asset Appraisal Report on the Recoverable Amount of the Asset Group Including Goodwill of FIS Holdings Pte. Ltd. (Renmin Holdings) for Jiangsu ZHIYUN Education Technology Co., Ltd.'s Proposed Goodwill Impairment Test" (Guofeng Xinghua Appraisal Report [2026] No. 080035), the goodwill impairment test process is as follows:
- Identification of the asset group
The Company identified Renmin Holdings and its subsidiaries as a single asset group portfolio for the purpose of impairment testing. The synergistic effect beneficiaries of the acquisition of Renmin Holdings are the entire overseas higher education business, which cannot be allocated to individual asset groups, so goodwill is allocated to the asset group portfolio.
- Impairment testing method
The Company uses the present value of future cash flow method to determine the recoverable amount of the asset group and compares it with the carrying amount of the asset group including goodwill.
- Key parameters
The Company forecasts future cash flows based on historical operating data and industry trends. The main parameters and their determination basis are as follows:
| Company Name | Forecast Period | Average Annual Growth Rate | Stable Period Growth Rate | Average Profit Margin | Stable Period Profit Margin | Pre-tax Discount Rate |
|---|---|---|---|---|---|---|
| Renmin Holdings | 2026-2030, subsequent stable period | 5.41% | 0% | 15.25% | 14.57% | 12.10% |
- Calculation of recoverable amount
Based on the above parameters, the present value of the asset group's expected future cash flows is calculated using the discounted cash flow model. The recoverable amount of the asset group after discounting is RMB 26,747.14 million.
- Impairment test results
The test shows that the carrying amount of the Renmin Holdings asset group, including goodwill, is RMB 25,053.19 million (SGD 4,589.67 million), and the recoverable amount is RMB 26,747.14 million (SGD 4,900.00 million). The recoverable amount is greater than the carrying amount, and no goodwill impairment has occurred.