Reply to the Second Round Audit Inquiry Letter Regarding Nanjing Quanxin Transmission Technology Co., Ltd.'s Application for Issuance of Convertible Corporate Bonds to Unspecified Targets
Tianheng Special Word (2026)01422
Shenzhen Stock Exchange:
In response to the "Second Round Audit Inquiry Letter Regarding Nanjing Quanxin Transmission Technology Co., Ltd.'s Application for Issuance of Convertible Corporate Bonds to Unspecified Targets" (Inquiry Letter [2026]020066) issued by your esteemed exchange on July 21, 2026 (hereinafter referred to as the "Inquiry Letter"), Tianheng Certified Public Accountants (Special General Partnership) (hereinafter referred to as the "Reporting Accountant"), as the reporting accountant for Nanjing Quanxin Transmission Technology Co., Ltd.'s (hereinafter referred to as the "Company" or "Issuer") application for the issuance of convertible corporate bonds to unspecified targets, has diligently investigated and responded to the relevant questions in the Inquiry Letter from the Reporting Accountant, as follows:
Explanation of Reply Content, Format, and Supplementary Disclosure 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 Corporate Bonds to Unspecified Targets" (hereinafter referred to as the "Prospectus").
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If the sum of the last digits of the total count in this reply does not match the sum of the last digits of the listed values, it is due to rounding.
Question One
According to the reporting 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 for each period, respectively. The decline in military product revenue is particularly significant. The Company's military products primarily include high-performance cable and component products, optoelectronic systems, and FC network products. The revenue decline is mainly attributed to the slowdown in the production and delivery pace of downstream related equipment models and the military industry's demand for high quality and low cost. According to the inquiry response, the Company's future performance may continue to be negatively impacted by these factors. The Issuer has provided a major event warning in the Prospectus regarding the risk of performance decline caused by the unique model 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 no conversion of the convertible bonds 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; additionally, considering the expected benefits of RMB 8,392.88 million from the fundraising project, the projected 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 periods. This is mainly due to factors such as complex customer payment approval processes and year-end concentrated settlements, resulting in a longer actual collection cycle.