Shenzhen Stock Exchange:
Pursuant to your "Inquiry Letter on the Application for Issuance of Shares by Sihui Fushi Electronic Technology Co., Ltd." (Shenzhen Stock Exchange Inquiry Letter [2026] No. 020052) dated July 1, 2026 (hereinafter referred to as the "Inquiry Letter"), Lixin Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Lixin" or "Reporting Accountant"), as the reporting accountant for Sihui Fushi Electronic Technology Co., Ltd. (hereinafter referred to as the "Company" or "Sihui Fushi"), has worked with the Company to address the matters raised in the "Inquiry Letter" item by item. The replies to the financial-related questions are as follows:
According to the reporting materials, the Company plans to raise no more than RMB 950 million (including principal) through this targeted issuance of shares. After deducting issuance expenses, the funds will be used for the construction of a new project with an annual output of 5.58 million square meters of high-reliability circuit boards—the first phase of the 600,000 square meter high-density, HDI circuit board project. This project will produce high-density, HDI circuit boards for applications in servers, optical modules, industrial control, and automotive electronics. The project's static payback period after tax is 7.49 years (including the construction period), and the internal rate of return after tax is 13.65%. Fixed asset investment accounts for 90.04% of the total investment. During the reporting period, the Company's gross profit margin for its main business has been gradually declining, standing at 24.55%, 19.03%, and 16.45% respectively.
The Company's previous fundraising project was the issuance of convertible bonds to unspecified targets in 2023, with a net fundraising amount of RMB 562 million. These funds were used for the first phase of the expansion project for high-reliability circuit boards with an annual output of 1.5 million square meters (first phase of 800,000 square meters of circuit boards) and to supplement working capital. As of March 31, 2026, RMB 433 million of the previous fundraising proceeds had been used, accounting for 76.97% of the net fundraising amount. The Company has extended the completion date for equipment investment for the previous fundraising project from December 2025 to December 2026, and the production ramp-up date from December 2026 to December 2027.
During the six months prior to the board resolution for this issuance, the Company's financial investments consisted of wealth management products with an R3 risk level purchased with its own funds, totaling RMB 20 million.