Special Explanation on Matters Related to the Inability to Express an Opinion
Beijing Dehao International Certified Public Accountants (Limited Liability Partnership)
Report No. Dehao [2025] 00000939
To all shareholders of Jiyou Holding Group Co., Ltd.:
I have been entrusted to complete the audit of the financial statements of Jiyou Holding Group Co., Ltd. (hereinafter referred to as "Jiyou Holding") for the year 2024, and on April 28, 2025, I issued the audit report Dehao [2025] 00001452, which expresses an inability to provide an opinion. According to the regulations of the China Securities Regulatory Commission regarding the disclosure of information for publicly issued securities, I hereby provide the following explanation regarding the matters related to the non-standard audit opinion:
I. Matters Related to the Inability to Express an Opinion
(1) Significant Uncertainty Regarding Continuation as a Going Concern
- As noted in the financial statement notes, as of December 31, 2024, the equity attributable to shareholders of Jiyou Holding was -CNY 776.5195 million, with a debt-to-equity ratio of 204.08%. The net profit attributable to shareholders of the parent company for 2024 was -CNY 439.4339 million. Jiyou Holding has incurred operating losses for several consecutive years, and its financial condition continues to deteriorate, making it unable to repay due debts on time. In March 2025, the Intermediate People's Court of Tonghua City, Jilin Province, concluded the pre-restructuring process of Jiyou Holding.
- As stated in financial statement notes, due to overdue debts and guarantee issues, multiple lawsuits have arisen, resulting in the freezing of several bank accounts, the seizure of multiple assets, and the freezing of equity in several subsidiaries, posing a risk of judicial auction. These matters indicate significant uncertainty regarding Jiyou Holding's ability to continue as a going concern. Although Jiyou Holding has disclosed proposed improvement measures, the feasibility of these measures lacks strong supporting evidence. As of the audit report date, we were unable to obtain sufficient and appropriate audit evidence regarding the measures related to improving the ability to continue as a going concern; therefore, we cannot determine whether it is appropriate for Jiyou Holding to prepare its financial statements on a going concern basis.