Audit Report
Zhonghui Accounting Firm (2026) No. 04482
To all shareholders of Dongguan Zhaoke Electronic Materials Technology Co., Ltd.:
1. Audit Opinion
We have audited the attached simulated consolidated financial statements of Dongguan Zhaoke Electronic Materials Technology Co., Ltd. (hereinafter referred to as "Dongguan Zhaoke") prepared based on the compilation basis described in Note 2 of the simulated financial statements. This includes the simulated consolidated balance sheets as of December 31, 2024, and December 31, 2025, the simulated consolidated income statements for the years 2024 and 2025, and related notes to the simulated financial statements. We believe that the attached simulated financial statements fairly present, in all material respects, the simulated consolidated financial position of the assets to be sold as of December 31, 2024, and December 31, 2025, as well as the simulated consolidated operating results for the years 2024 and 2025, in accordance with the compilation basis described in Note 2.
2. Basis for Forming Audit Opinion
We conducted our audit in accordance with the auditing standards for certified public accountants in China. The section "Responsibilities of Certified Public Accountants for the Audit of Simulated Financial Statements" further elaborates on our responsibilities under these standards. In accordance with the independence standards for certified public accountants and the code of ethics for certified public accountants in China, we are independent of your company and have fulfilled our other ethical responsibilities. We believe that the audit evidence we obtained is sufficient and appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the simulated financial statements for the years 2024 and 2025. These matters were addressed in the context of our audit of the simulated financial statements as a whole and in forming our audit opinion, and we do not express a separate opinion on these matters.
Revenue Recognition
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Description of the Matter For detailed information disclosure, please refer to Note 5.28 of the financial statements. The company's operating revenues for the years 2025 and 2024 are RMB 236.27 million and RMB 196.83 million, respectively. The company provides products and services related to thermal conductive materials; as operating revenue is a significant component of the simulated consolidated income statement, there is an inherent risk that management may engage in inappropriate revenue recognition to achieve specific targets or expectations. Therefore, we have identified the recognition of operating revenue as a key audit matter.
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Audit Response
- Understand the key internal controls related to revenue recognition, evaluate the design of these controls, determine whether they are implemented, and test the operating effectiveness of the relevant internal controls;
- Examine major sales contracts to understand key terms or conditions, and evaluate whether the revenue recognition methods and timing are appropriate;
- Perform analytical procedures on operating revenue and gross margin by month, product, etc., to identify any significant or unusual fluctuations and investigate the reasons for such fluctuations;
- For sales revenue, sample test supporting documents related to revenue recognition, including examining documents during the transaction process, such as customs declarations, packing lists, bills of lading, delivery notes, customer receipts, and bank statements, to determine whether the transactions are genuine;
- Conduct cutoff testing on operating revenue recognized before and after the balance sheet date to evaluate whether the operating revenue is recognized in the appropriate period;
- Check whether the information related to operating revenue has been appropriately presented in the financial statements.