Shenzhen Stock Exchange:
Pursuant to your "Second Round of Review Inquiry Letter on Nanjing Quanxin Transmission Technology Co., Ltd.'s Application for Issuance of Convertible Bonds to Unspecified Objects" (Review Letter [2026] No. 020066) dated July 21, 2026 (hereinafter referred to as the "Inquiry Letter"), Nanjing Quanxin Transmission Technology Co., Ltd. (hereinafter referred to as "Quanxin Shares," "the Company," or "the Issuer") has, together with Guojin Securities Co., Ltd. (hereinafter referred to as "Guojin Securities," "the Sponsor," or "the Underwriter"), the Issuer's lawyer Beijing Haotian Law Firm (hereinafter referred to as "Issuer's Lawyer" or "Haotian Law Firm"), and the Issuer's accountant Tianheng Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Issuer's Accountant" or "Tianheng Accountants"), in accordance with the principles of diligence, responsibility, honesty, and good faith, conscientiously implemented and verified each item listed in the Inquiry Letter and provided item-by-item responses. The detailed responses are attached.
Explanation of Reply Content, Format, and Supplementary Disclosure/Revision Matters:
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Unless otherwise specified, the abbreviations or terms used in this reply are consistent with the "Prospectus for Nanjing Quanxin Transmission Technology Co., Ltd.'s Application for Issuance of Convertible Bonds to Unspecified Objects" (hereinafter referred to as the "Prospectus").
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If the sum of total figures in this reply does not match the sum of individual figures, it is due to rounding.
The font specifications for this Inquiry Letter Reply are as follows:
Inquiry Letter Item | Font for Reply
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Inquiry Letter Item | Bold
Reply to Inquiry Letter Item | Songti
Supplementary Disclosure/Revision to Prospectus and Other Documents | Kaiti, Bold
Inquiry One
- According to the application materials, the company's operating revenue has been declining during the reporting period, with amounts of RMB 97,674.99 million, RMB 79,193.38 million, RMB 70,206.22 million, and RMB 15,641.22 million, respectively. The decline in military product revenue is particularly significant. The company's military product offerings primarily include high-performance cables and components, optoelectronic systems, and FC network products. The revenue decline is mainly attributed to the slowdown in the production and delivery pace of downstream related models and equipment, as well as the demand for high quality and low cost in the military industry. According to the inquiry response, the company's future performance may still be negatively impacted by related factors, and the issuer has provided a major event warning in the Prospectus regarding the risk of performance decline due to the unique characteristics of the military industry.
During the reporting period, the company's net profit was RMB 13,351.71 million, RMB 1,779.80 million, RMB 2,965.49 million, and RMB 1,166.22 million, showing significant fluctuations. Based on calculations, assuming the convertible bonds are not converted during their term and at maturity, the principal and interest of the convertible bonds total RMB 28,003.49 million. The company assumes that net profit will not grow from 2026 to 2031, remaining at the 2025 level each year. Additionally, considering the expected benefits of RMB 8,392.88 million from the proposed fundraising project, the estimated total net profit during the convertible bond term is RMB 26,185.82 million.
According to the inquiry response, the company's accounts receivable balance has consistently been higher than its operating revenue during the reporting period. This is mainly due to the complex payment approval processes of major customers and concentrated year-end settlements, resulting in longer actual collection cycles.