Zhonghua Certified Public Accountants (Special General Partnership)
Special Explanation on Matters Related to the Inquiry Letter Regarding Zhongying Electronics Co., Ltd.'s Application for Issuance of Shares to Specific Objects
August 2026
Shenzhen Stock Exchange:
In accordance with the requirements of the "Inquiry Letter Regarding Zhongying Electronics Co., Ltd.'s Application for Issuance of Shares to Specific Objects" (Shenzhen Stock Exchange Inquiry Letter [2026] No. 020056) issued by your exchange on July 6, 2026 (hereinafter referred to as the "Inquiry Letter"), Zhonghua Certified Public Accountants (Special General Partnership) (hereinafter referred to as "we" or "the accountants"), as the reporting accountants for Zhongying Electronics Co., Ltd.'s (hereinafter referred to as the "Company," "Issuer," or "Zhongying Electronics") application for issuance of shares to specific objects, have conducted a prudent review of the issues requested by your exchange for accountants to verify, and the relevant situation is hereby reported as follows:
The data cited in this Inquiry Letter reply, if the sum of the subtotals differs from the total, or if the decimal places differ from the original data, may be due to different precision or rounding.
I. Inquiry Letter Question 1
The proposed issuance of shares to the controlling shareholder, Shanghai Zhineng Industrial Electronics Co., Ltd. (hereinafter referred to as Zhineng Industrial Electronics), aims to raise no more than RMB 1,000,000,000. After deducting issuance expenses, the funds will be used for the "R&D and Industrialization Project for High-End Industrial Grade (including Automotive Grade) Analog and Mixed-Signal Chips" (hereinafter referred to as Project 1), the "R&D and Industrialization Project for High-End Industrial Grade (including Automotive Grade) Main Control SoC (including Intelligent Control)" (hereinafter referred to as Project 2), and to supplement working capital.
Project 1's main products are analog front-end for batteries, bridge chips, protection chips, and related analog and mixed-signal chips. The project's after-tax financial internal rate of return is 23.47%, and the after-tax static investment payback period is 7.92 years (including construction period). Project 2's main products are microcontrollers (MCUs) and related main control SoCs. The project's after-tax financial internal rate of return is 16.72%, and the after-tax static investment payback period is 8.64 years (including construction period).
At the end of each reporting period, the issuer's asset-liability ratio was 18.66%, 21.05%, 16.22%, and 15.23%, respectively, which is lower than the average of comparable companies in the same industry. As of the end of March 2026, the issuer's financial assets held for trading had a book value of RMB 150,604,200.