BDO China Shu Lun Pan Certified Public Accountants LLP (Special General Partnership)
Regarding ColorfulClouds Technology Co., Ltd.
Reply to the Inquiry Letter on the Issuance of Convertible Corporate Bonds to Unspecified Targets
Letter No. [blank] [2026] No. ZA301
Shenzhen Stock Exchange:
Regarding the questions raised in the "Inquiry Letter on the Application of ColorfulClouds Technology Co., Ltd. for the Issuance of Convertible Corporate Bonds to Unspecified Targets" (Audit Letter [2026] No. 020045) (hereinafter referred to as the "Inquiry Letter") issued by your exchange on May 19, 2026, BDO China Shu Lun Pan Certified Public Accountants LLP (Special General Partnership) (hereinafter referred to as "we" or "the accountants"), as the audit institution for ColorfulClouds Technology Co., Ltd. (hereinafter referred to as "the issuer," "the company," or "ColorfulClouds"), has conducted a careful review of the relevant issues requiring our opinion. The verification results are replied to as follows:
Note: 1. In this reply, if the sum of the sub-items differs from the total due to rounding, it is caused by rounding.
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We have not been engaged to audit or review the issuer's financial statements for the period from January to May 2026, and therefore cannot express an opinion or conclusion on the issuer's financial information for that period. The verification procedures described below and the results of implementing these procedures are solely for the purpose of assisting the issuer in responding to the exchange's inquiries and do not constitute an audit or review.
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The fonts in this feedback reply have the following meanings:
Bold: Questions listed in the audit inquiry letter
Songti: Replies to the questions listed in the audit inquiry letter
Bold Kaiti: Modifications to application documents such as this inquiry reply and the prospectus
Question 1
I. According to the application materials, during the reporting period, the company's operating income was 1,496.4077 million yuan, 1,652.1708 million yuan, and 1,829.9721 million yuan, respectively. Net profit was 321.0541 million yuan, 213.8298 million yuan, and 284.6110 million yuan, respectively. Net profit after deducting non-recurring gains and losses attributable to shareholders of the listed company was 186.8576 million yuan, 218.2705 million yuan, and 249.6941 million yuan, respectively. During the reporting period, the company's operating income continued to rise, while net profit fluctuated, with a significant decline in 2024. According to the "2026 First Quarter Report" recently disclosed by the company, operating income 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 margins were 38.66%, 39.15%, and 35.16%, respectively, which were higher than the average level of comparable companies in the same industry.
During the reporting period, the sales revenue from the top five customers accounted for 78.88%, 79.69%, and 79.11% of operating income, respectively. Among them, sales to the largest customer accounted for more than 50% of operating income, indicating a high customer concentration.
At the end of each reporting period, the total book value of the company's accounts receivable and contract assets was 648.0318 million yuan, 932.8816 million yuan, and 814.0631 million yuan, respectively, accounting for 20.07%, 27.18%, and 23.13% of total assets. The amount of bad debt provision accrued on a single item during the reporting period was 0.0461 million yuan. At the end of each reporting period, the company's actual bad debt provision ratio and contract asset impairment provision ratio were lower than those of comparable companies in the same industry. During the reporting period, the company's accounts receivable turnover rates were 5.99, 4.58, and 4.61 times, respectively, showing an overall decline. The company's prepayments were 192.4638 million yuan, 117.1326 million yuan, and 84.5532 million yuan, respectively, mainly for prepaid goods. The book value of other receivables was 12.3484 million yuan, 24.9920 million yuan, and 28.4752 million yuan, respectively, mainly for deposits, security deposits, and current accounts.