Lixin Certified Public Accountants (Special General Partnership) Regarding Cailun Technology Co., Ltd.'s Inquiry Letter on Issuance of Convertible Bonds to Unspecified Targets Reply to Inquiry Letter [Seal: Lixin CPAs Letterhead] [2026] ZA301 Shenzhen Stock Exchange: Regarding the issues raised in the "Inquiry Letter on the Application for Issuance of Convertible Bonds to Unspecified Targets by Cailun Technology Co., Ltd." (Audit Letter [2026] No. 020045) issued by your esteemed office on May 19, 2026 (hereinafter referred to as the "Inquiry Letter"), Lixin Certified Public Accountants (Special General Partnership) (hereinafter referred to as "we" or "the Accountants"), as the auditing firm for Cailun Technology Co., Ltd. (hereinafter referred to as the "Issuer" or "the Company" or "Cailun Shares"), have conducted thorough investigations into the matters requiring the Accountants' opinion and hereby reply as follows: Note: 1. In this reply, if there are discrepancies in the last digit between the sum of individual items and the total, it is due to rounding. 2. We were not commissioned to audit or review the financial statements of the Issuer for the period from January to March 2026, and therefore cannot express any opinions or conclusions on the Issuer's financial information for the aforementioned period. The audit procedures and the results of the audit procedures described below are solely for the purpose of assisting the Issuer in responding to the exchange's inquiry and do not constitute an audit or review. 3. The font styles in this feedback reply represent the following: Bold The questions listed in the inquiry letter Regular The replies to the questions listed in the inquiry letter Bold Italic Content involving revisions to this inquiry letter reply, the prospectus, or other application documents.
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Question 1
- According to the application materials, the Company's operating revenue for each reporting period was RMB 149,640.77 million, RMB 165,217.08 million, and RMB 182,997.21 million, respectively. Net profit was RMB 32,105.41 million, RMB 21,382.98 million, and RMB 28,461.10 million, respectively. Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was RMB 18,685.76 million, RMB 21,827.05 million, and RMB 24,969.41 million, respectively. During the reporting period, the Company's operating revenue continued to increase, while net profit fluctuated, with a significant decrease in 2024. According to the Company's recently disclosed "First Quarter Report 2026," operating revenue in the first quarter of 2026 decreased by 32.11% year-on-year, and net profit attributable to the parent company decreased by 65.56% year-on-year.
During the reporting period, the Company's comprehensive gross profit margin was 38.66%, 39.15%, and 35.16%, respectively, which is higher than the average level of comparable companies in the same industry.
For each reporting period, the proportion of sales revenue from the Company's top five customers to operating revenue was 78.88%, 79.69%, and 79.11%, respectively. Among them, the sales revenue from the largest customer accounted for over 50% of operating revenue, indicating a high degree of customer concentration.
At the end of each reporting period, the book value of the Company's accounts receivable and contract assets was RMB 64,803.18 million, RMB 93,288.16 million, and RMB 81,406.31 million, respectively, accounting for 20.07%, 27.18%, and 23.13% of total assets. The provision for bad debts for individual items during the reporting period was RMB 4.61 million. At the end of each reporting period, the Company's actual bad debt provision and contract asset impairment provision were lower than those of comparable companies in the same industry. During each reporting period, the Company's accounts receivable turnover ratio was 5.99 times, 4.58 times, and 4.61 times, showing an overall decline.
The Company's prepayments were RMB 19,246.38 million, RMB 11,713.26 million, and RMB 8,455.32 million, mainly for advance payments for goods. The book value of other receivables was RMB 1,234.84 million, RMB 2,499.20 million, and RMB 2,847.52 million, mainly for deposits, security deposits, and intercompany payments.