Audit Report
To the shareholders of Gaoxin Holding Group Co., Ltd.:
I. Audit Opinion
We have audited the financial statements of Gaoxin Holding Group Co., Ltd. (hereinafter referred to as "Gaoxin"), which comprise the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements, cash flow statements, and statements of changes in owners' equity for the year ended December 31, 2025, and related notes to the financial statements.
In our opinion, the accompanying financial statements are prepared, in all material respects, in accordance with the provisions of the Accounting Standards for Business Enterprises and fairly present the consolidated and parent company financial position of Gaoxin as of December 31, 2025, and the consolidated and parent company results of operations and cash flows for the year then ended.
II. Basis for Audit Opinion
We conducted our audit in accordance with the Standards on Auditing of the Chinese Institute of Certified Public Accountants. Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We are independent of Gaoxin in accordance with the Code of Professional Ethics for Chinese Certified Public Accountants and the Independent Standards for Chinese Certified Public Accountants, and we have fulfilled our other responsibilities in accordance with the Code of Professional Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
(I) Revenue Recognition
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Matter Description As disclosed in Note V.46 to the financial statements, Gaoxin's consolidated operating revenue for 2025 was RMB 1,988,863,118.72. The accounting policy for revenue recognition is detailed in Note III.26 to the financial statements. Operating revenue is a key component of Gaoxin's consolidated income statement and a key performance indicator. Management has an inherent risk of manipulating revenue recognition to achieve specific targets or expectations. Therefore, we have identified revenue recognition as a key audit matter.
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Audit Response Our audit procedures for revenue recognition included, but were not limited to, the following: (1) Understanding and evaluating the design of internal controls related to the revenue cycle and testing the effectiveness of key internal controls. (2) Performing analytical review procedures, distinguishing between different product sales types and considering industry development and Gaoxin's actual situation, to assess the reasonableness of changes in sales revenue and gross profit margin. (3) Obtaining sales contracts signed by the company and its customers, verifying key contract terms, including checking terms related to shipment, acceptance, payment, and settlement. (4) Distinguishing between different product sales types, examining Gaoxin's contracts with customers, receiving slips, customer acceptance confirmation documents, completion certificates, and remittance advices as important evidence. (5) Sending confirmation requests to a sample of customers regarding contracts and related settlement information. (6) Performing cutoff tests on sales transactions before and after the balance sheet date to assess whether revenue was recorded in the appropriate accounting period.