Special Explanation from Grant Thornton on Jinlei Technology's Stock Issuance Application Review Inquiry Letter
- We have received the Shenzhen Stock Exchange's document review letter [2026]020038 dated May 12, 2026, regarding Jinlei Technology's application for stock issuance to specific targets (hereinafter referred to as the "Review Inquiry Letter"). In response to the financial accounting issues raised in the feedback, Grant Thornton (Special General Partnership) (hereinafter referred to as "we") has conducted a review of the relevant materials from Jinlei Technology Co., Ltd. (hereinafter referred to as "Jinlei" or "the Company") and provides the following special explanation:
Question 1
From 2023 to 2025, the Company's operating revenues were 194,584.78 million RMB, 196,736.91 million RMB, and 248,947.29 million RMB, with comprehensive gross profit margins of 33.04%, 21.33%, and 27.75%, and net profits of 41,179.68 million RMB, 17,272.93 million RMB, and 31,490.11 million RMB, respectively. The Company's overseas sales were 58,245.03 million RMB, 62,810.80 million RMB, and 64,104.12 million RMB, accounting for 29.93%, 31.93%, and 25.75% of total sales, respectively. The net cash flow from operating activities was 39,252.59 million RMB, 32,805.62 million RMB, and -18,959.85 million RMB for the years 2023 to 2025. As of the end of each year from 2023 to 2025, the accounts receivable were 29,137.81 million RMB, 25,207.90 million RMB, and 35,750.32 million RMB, and the financing receivables were 21,240.67 million RMB, 22,997.86 million RMB, and 48,445.56 million RMB. The Company has instances of receiving payments through bank acceptance bills, commercial acceptance bills, and digital accounts receivable certificates such as "Yunxin" and "Rongxin."
- According to the application materials, the book value of the Company's inventory increased overall with the expansion of its business scale, with inventory values at the end of each period being 69,219.69 million RMB, 87,036.53 million RMB, and 85,529.07 million RMB, accounting for 17.68%, 25.02%, and 22.73% of current assets, respectively. The inventory turnover rates were 2.06, 1.98, and 2.08, which are lower than the average level of comparable listed companies in the industry. The gross profit margins for the Company's casting spindle products were 17.07%, -25.02%, and 23.56% from 2023 to 2025. According to the application materials, the Company launched an assembly business in 2025 and adopted net reporting for accounting, generating revenue of 1,481.84 million RMB during that period. The Company only provided procurement and assembly services in the assembly business, which does not meet the criteria for recognizing primary responsibility, and thus revenue was recognized according to the net method. By the end of 2025, the balance of other current assets was 44,653.16 million RMB, of which the procurement materials for the assembly business amounted to 35,290.26 million RMB. The Company has some buildings for which property ownership certificates have not been obtained. Among the properties involved in leasing, there are instances where leasing registration procedures have not been completed. As of December 31, 2025, the book value of other receivables was 1,645.42 million RMB, other current assets were 44,653.16 million RMB, long-term equity investments were 493.89 million RMB, other non-current financial assets were 10,212.97 million RMB, and other non-current assets were 10,456.09 million RMB.