Shenzhen Stock Exchange:
We have received the "Inquiry Letter on the Application of Yuhetian Environmental Development Group Co., Ltd. for Issuance of Convertible Corporate Bonds to Undetermined Objects" (Inquiry Letter [2025] No. 020058) issued by your exchange on November 6, 2025. Yuhetian Environmental Development Group Co., Ltd. (hereinafter referred to as the "Issuer," "Company," or "Yuhetian") and Guotai Haitong Securities Co., Ltd. (hereinafter referred to as "Guotai Haitong" or the "Sponsor"), along with Lixin Certified Public Accountants (Special General Partnership) (hereinafter referred to as the "Issuer's Accountants" or "Accountants"), and Shanghai Jincheng Law Firm (hereinafter referred to as the "Issuer's Lawyers" or "Lawyers"), have discussed the issues listed in the inquiry letter item by item, conducted investigations into related matters, and expressed opinions.
We hereby provide a detailed explanation for your review.
Unless otherwise specified, the abbreviations used in this reply are consistent with the definitions in the "Prospectus of Yuhetian Environmental Development Group Co., Ltd. for Issuance of Convertible Corporate Bonds to Undetermined Objects" (hereinafter referred to as the "Prospectus").
The font styles in this reply represent the following meanings: Inquiry Letter Issues Reply to Inquiry Letter Issues Revisions and Supplements to Replies and Prospectus Bold (not bolded) Simsun (not bolded) KaiTi (bolded)
The sum of some subtotals and totals in this reply report may differ slightly due to rounding.
Table of Contents
Table of Contents 2 Inquiry One 3 Inquiry Two 125 Inquiry Three 161 Other Inquiries 198
Inquiry One
During the reporting periods, the Company's operating revenue was RMB 539,350.25 million, RMB 616,057.36 million, RMB 720,325.13 million, and RMB 371,117.82 million, respectively. The net profit attributable to the parent company after deducting non-recurring gains and losses was RMB 48,516.16 million, RMB 51,040.44 million, RMB 56,453.56 million, and RMB 30,614.54 million, respectively, with a year-on-year decrease in the most recent period. The net cash flow from operating activities was RMB 37,196.09 million, RMB 32,800.87 million, RMB 36,926.35 million, and RMB 35,716.93 million, respectively, with a significant increase in the most recent period compared to the same period last year.
At the end of each reporting period, the Issuer's accounts receivable book value was RMB 227,060.80 million, RMB 326,617.92 million, RMB 421,810.42 million, and RMB 450,841.69 million, accounting for 58.22%, 64.04%, 71.88%, and 69.48% of current assets, respectively. The accounts receivable turnover ratio was 2.86 times, 2.23 times, 1.92 times, and 1.70 times, decreasing year by year. The proportion of accounts receivable within one year was 85.00%, 82.57%, 76.86%, and 73.43%, decreasing year by year, with an increase in the proportion of long-term aged accounts receivable. At the end of each reporting period, the Issuer's goodwill was RMB 15,224.79 million, RMB 22,586.97 million, RMB 22,397.97 million, and RMB 23,983.88 million, respectively. As of the end of the reporting period, the book value of the Company's other receivables was RMB 35,716.73 million, the balance of other current assets was [blank] million, and the book value of long-term equity investments was RMB 4,873.52 million.
During the reporting period, the Company and its subsidiaries received a total of 6 administrative penalties of RMB 50,000 or more. Among them, in 2023, a subsidiary of the Issuer, Binzhou Yuhetian Urban Services Co., Ltd., was fined RMB 700,000 due to a safety production accident during cleaning staff operations. In 2025, a subsidiary of the Issuer, Moyu County Gaojie Environmental Protection Engineering Co., Ltd., was fined RMB 500,000 due to a safety production accident during cleaning operations.
As of the end of the most recent period, the Company's consolidated asset-liability ratio was 51.24%, and the proportion of current liabilities to total liabilities was 82.00%.