Zhongde Securities Co., Ltd.
Audit Opinion on the Special Report of Wenzhou Hongfeng Electric Alloy Co., Ltd. on the Use and Storage of Raised Funds in 2025
Zhongde Securities Co., Ltd. (hereinafter referred to as "Zhongde Securities" or the "Sponsor") is the sponsor of Wenzhou Hongfeng Electric Alloy Co., Ltd. (hereinafter referred to as "Wenzhou Hongfeng" or the "Company") for its issuance of convertible corporate bonds to unspecified objects in 2022. In accordance with the "Administrative Measures for Securities Issuance and Listing Sponsorship Business," "Supervision Rules for the Management of Raised Funds by Listed Companies," "Shenzhen Stock Exchange GEM Stock Listing Rules," "Shenzhen Stock Exchange Listed Company Self-Regulatory Guidelines No. 13 — Sponsorship Business," and "Shenzhen Stock Exchange Listed Company Self-Regulatory Guidelines No. 2 — Standardized Operation of GEM Listed Companies," etc., Zhongde Securities has audited the situation of Wenzhou Hongfeng's raised funds storage and use in 2025. The audit opinion is as follows:
I. Basic Situation of Raised Funds
(I) Actual Raised Funds from Issuance of A Shares to Specific Objects
- Amount of Raised Funds and Fund Arrival Situation
With the approval of the China Securities Regulatory Commission's "Approval on Agreeing to Wenzhou Hongfeng Electric Alloy Co., Ltd. Issuing Shares to Specific Objects" (Securities Regulatory Permit (2020) No. 3212), the Company issued 22,723,880 ordinary shares (A shares) to specific objects, with a face value of RMB 1 per share and an issue price of RMB 5.36 per share. The total raised funds were RMB 121,799,996.80. After deducting issuance expenses of RMB 3,463,549.01, the net raised funds were RMB 118,336,447.79. The above raised funds have been audited by Lixin Certified Public Accountants (Special General Partnership), which issued the "Capital Verification Report" (Xin Hui Shi Bao Zi [2020] No. ZF11000).
- Use of Raised Funds
In 2025, the Company used RMB 131.06 million of raised funds. As of December 31, 2025, the Company had cumulatively used RMB 11,325.20 million of raised funds, and the raised funds in the special account have been fully utilized.
(II) Actual Raised Funds from Issuance of Convertible Corporate Bonds to Unspecified Objects
With the approval of the China Securities Regulatory Commission's "Approval on Agreeing to Wenzhou Hongfeng Electric Alloy Co., Ltd. Issuing Convertible Corporate Bonds to Unspecified Objects" (Securities Regulatory Permit [2021] No. 4152), the Company issued 3,212,600 convertible corporate bonds to unspecified objects, with a face value of RMB 100 per bond and a term of 6 years. The total raised funds were RMB 32,126 million. After deducting relevant issuance expenses, the net raised funds were RMB 315,055,410.56. The arrival of the above raised funds has been audited by Lixin Certified Public Accountants (Special General Partnership), which issued the "Capital Verification Report" (Xin Hui Shi Bao Zi [2022] No. ZF10152).
In 2025, the Company used RMB 2,909.71 million of raised funds. As of December 31, 2025, the Company had cumulatively used RMB 28,713.40 million of raised funds. The raised funds temporarily used to supplement working capital were RMB 1,670.00 million, and the balance of raised funds in the special account was RMB 115.46 million.
II. Storage and Management of Raised Funds
To standardize the management and use of raised funds and protect the interests of investors, in accordance with the relevant rules of the China Securities Regulatory Commission and the Shenzhen Stock Exchange's GEM, and the Company's "Management Measures for Raised Funds," the Company has established special accounts for raised funds to store the raised funds, strictly follow approval procedures, supervise the management and use of raised funds, and ensure that funds are used for their intended purpose.