Audit Report
To the Shareholders of Beijing Guanghuan Xinwang Technology Co., Ltd.:
I. Audit Opinion
We have audited the financial statements of Beijing Guanghuan Xinwang Technology Co., Ltd. (hereinafter referred to as "Guanghuan Xinwang Company"), which comprise the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in owners' equity for the year then ended, and related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and parent company financial position of Guanghuan Xinwang Company as of December 31, 2025, and its consolidated and parent company financial performance and cash flows for the year then ended in accordance with the provisions of the Accounting Standards for Business Enterprises.
II. Basis for Audit Opinion
We conducted our audit in accordance with the Chinese Standards on Auditing. 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 Guanghuan Xinwang Company in accordance with the Chinese Code of Professional Ethics for Certified Public Accountants and the independence requirements of the Chinese Code of Professional Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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. We have determined the following matters to be key audit matters to be communicated in our audit report.
(I) Revenue Recognition
1. Description of the Matter
The accounting policies for revenue recognition and the carrying amounts of related items for Guanghuan Xinwang Company and its subsidiaries are disclosed in Note III.32 and Note V.43 of the financial statements.
Guanghuan Xinwang Company and its subsidiaries are primarily engaged in cloud computing, IDC, and related value-added services, with revenue mainly derived from domestic sources. In 2025, Guanghuan Xinwang Company achieved operating revenue of RMB 7,177,650,000, a decrease of 1.42% compared to RMB 7,281,210,300 in 2024. Among these, cloud computing and related services revenue amounted to RMB 4,836,282,200, and IDC and related value-added services revenue amounted to RMB 2,231,394,000, accounting for 67.38% and 31.09% of the total operating revenue, respectively.
Operating revenue is a significant item in the income statement of Guanghuan Xinwang Company and a major source of profit. It is a key performance indicator for Guanghuan Xinwang Company, and the accuracy and completeness of revenue recognition have a significant impact on profit. Therefore, we have identified revenue recognition as a key audit matter.
2. Audit Response
Our principal audit procedures for revenue recognition were as follows:
(1) We gained an understanding of and tested the internal controls related to revenue recognition by management, identified key controls for revenue recognition, and performed sample testing of the reasonableness and effectiveness of the design and operation of related internal controls.
(2) We interviewed management and selected sample sales contracts for examination. We reviewed the relevant business processes and contract terms regarding billing methods, service content, and other aspects to assess whether the revenue recognition policies complied with the relevant provisions of the Accounting Standards for Business Enterprises and whether they were consistent between periods.