Regarding the Reply Report on the Audit Inquiry Letter for Wuxi DK Electronic Materials Co., Ltd.'s Application for Issuance of Shares to Specific Targets
Shenzhen Stock Exchange:
We have received your "Audit Inquiry Letter Regarding Wuxi DK Electronic Materials Co., Ltd.'s Application for Issuance of Shares to Specific Targets" (Audit Letter [2026] No. 020067) (hereinafter referred to as the "Inquiry Letter") issued on July 29, 2026. Wuxi DK Electronic Materials Co., Ltd. (hereinafter referred to as "DK Electronic Materials," the "Company," or the "Issuer"), together with Beijing Xinghua Certified Public Accountants (Special General Partnership) (hereinafter referred to as the "Reporting Accountant"), Industrial Securities Co., Ltd. (hereinafter referred to as the "Sponsor"), and Shanghai Tongli Law Firm (hereinafter referred to as the "Issuer's Counsel"), have implemented the relevant issues in the Inquiry Letter one by one. We hereby provide the following response to the Inquiry Letter for your review.
Notes:
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Unless otherwise specified, the abbreviations or definitions of terms in this reply report are the same as those in the prospectus.
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The fonts in this reply report represent the following meanings:
| Item | Font |
|---|---|
| Questions listed in the Inquiry Letter | Bold |
| Responses to questions in the Inquiry Letter | Songti |
| Modifications and supplements to the Inquiry Letter response and prospectus | KaiTi (Bold) |
- There may be minor discrepancies between the sum of individual data and the table totals in some tables of this response, which are due to rounding.
Table of Contents
Question 1: 1
Question 2: 88
Question 1
The total amount of funds raised by the Company in this issuance of shares to specific targets does not exceed 2.76 billion RMB, which is intended to be used for the project with an annual output of 2,000 tons of base metal low-silver photovoltaic paste (hereinafter referred to as Project 1), the next-generation high-efficiency photovoltaic cell metallization paste R&D project (hereinafter referred to as Project 2), the memory chip packaging and testing base project (hereinafter referred to as Project 3), the semiconductor packaging R&D center project (hereinafter referred to as Project 4), and for repaying bank loans and supplementing working capital.
Project 1 is mainly used for the production of TOPCon silver-copper paste and mixed nickel base metal paste, with a designed capacity of 1,500 tons for TOPCon silver-copper paste and 500 tons for mixed nickel base metal paste. The internal rate of return after income tax for this project is 18.03%, and the static investment payback period after tax is 10.04 years (including the construction period).
Project 2 is mainly used for the construction of an emerging photovoltaic paste R&D platform. The R&D focus is mainly on pure copper paste, perovskite/crystalline silicon tandem cell paste, low-recombination, high-efficiency, fine-line conductive silver paste applied to TBC cells, front-side conductive silver paste suitable for ultra-fine line steel plate printing, conductive silver paste suitable for TOPCon front-side transfer printing, and high-reliability space photovoltaic paste. The raised funds are mainly used for paying land transfer fees, constructing factory buildings, and purchasing R&D equipment. This project is an R&D project and does not directly generate economic benefits.
Project 3 is mainly used for the improvement of the Company's memory chip packaging and testing capacity. The raised funds are mainly used for factory building construction and equipment procurement. After the completion of this project, it will add an annual packaging capacity of 85 million units, FT testing capacity of 96 million units, and aging testing capacity of 45 million units. The internal rate of return after income tax for this project is 12.61%, and the static investment payback period after tax is 7.62 years (including the construction period).