Audit Report
Audit Report No. (2026) 000043
To all shareholders of Meirui New Materials Co., Ltd.:
1. Audit Opinion
We have audited the financial statements of Meirui New Materials Co., Ltd. (hereinafter referred to as "the Company"), including the consolidated and company balance sheets as of December 31, 2025, the consolidated and company income statements, consolidated and company cash flow statements, consolidated and company statements of changes in equity, and the related notes to the financial statements. In our opinion, the attached financial statements have been prepared in accordance with the provisions of the Accounting Standards for Business Enterprises in all material respects and fairly present the financial position of the Company as of December 31, 2025, as well as the operating results and cash flows for the year 2025.
2. Basis for Audit Opinion
We conducted our audit in accordance with the auditing standards for certified public accountants in China. The section of the audit report titled "Responsibilities of Certified Public Accountants for the Audit of Financial Statements" further elaborates on our responsibilities under these standards. In accordance with the Code of Ethics for Certified Public Accountants in China, we are independent of the Company and have fulfilled our other ethical responsibilities. We believe that the audit evidence we have 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 financial statements for the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We determined the following matters to be key audit matters that need to be communicated in the audit report:
(1) Impairment of Accounts Receivable
- Description of the Matter As described in Note 5, 4 of the consolidated financial statements, as of December 31, 2025, the carrying amount of accounts receivable was RMB 128,538,100, with a provision for bad debts of RMB 7,440,200, resulting in a high carrying value. If accounts receivable are not collected on time or become uncollectible, it could significantly impact the financial statements, and the estimation of the provision for bad debts involves significant judgment by management. Therefore, we identified the impairment of accounts receivable as a key audit matter.
- Audit Response The audit procedures we performed included: (1) understanding the Company's internal controls related to the management and recoverability of receivables and evaluating the effectiveness of the design and operation of those controls; (2) analyzing and checking whether the policies for recognizing the provision for bad debts comply with the requirements of accounting standards, and recalculating the accuracy of the provision amount; (3) evaluating customer credit risk based on the aging of accounts receivable and customer creditworthiness, considering customer operating conditions, market environment, historical repayment patterns, and combining confirmation procedures and post-period collection situations to assess the reasonableness of the provision for bad debts; (4) evaluating whether the accounting treatment of the provision for bad debts by management and the related disclosures in the financial statements are appropriate.