Zhonghua Certified Public Accountants (Special General Partnership)
Reply to the Audit Inquiry Letter Regarding the Application for Issuance of Shares to Specific Targets by Shanghai Xiangfenghua Technology Co., Ltd. (Exemption Version)
Zhong Hui Zi (2026) No. 12105
Shenzhen Stock Exchange:
We were engaged to audit the 2025 financial statements of Shanghai Xiangfenghua Technology Co., Ltd. (hereinafter referred to as the "Company", "Xiangfenghua", or the "Issuer"), including the consolidated and company balance sheets as of December 31, 2025, the 2025 consolidated and company income statements, consolidated and company cash flow statements, consolidated and company statements of changes in owners' equity, and notes to the financial statements, and issued the audit report Zhong Hui Zi (2026) No. 05507.
Your exchange issued the "Audit Inquiry Letter Regarding the Application for Issuance of Shares to Specific Targets by Shanghai Xiangfenghua Technology Co., Ltd." (Audit Letter [2026] No. 020064) (hereinafter referred to as the "Inquiry Letter") on July 20, 2026.
Any discrepancies between the totals and the sums of the listed figures in this reply are due to rounding.
The financial data of the Company as of March 31, 2026, in this reply is unaudited.
We have verified the questions in the Inquiry Letter according to its requirements and reply as follows:
Question 1. According to the application materials, the Issuer intends to raise 600 million yuan for the "Annual Output of 93,000 Tons of New Energy Battery Anode Material Project". After the construction of the project is completed and reaches production, it will add 80,000 tons/year of integrated artificial graphite anode material production capacity, 10,000 tons/year of silicon-carbon composite anode material production capacity, 2,700 tons/year of hard carbon anode material production capacity, and 300 tons/year of porous carbon material production capacity. According to the application materials, silicon-carbon composite material is a new product, and the Issuer has not achieved large-scale sales during the reporting period. It is estimated that the average gross profit margin after the project reaches production will be 17.82%, and the internal rate of return after tax will be 12.42%. During the reporting period, the Company's gross profit margins for artificial graphite anode materials were 11.52%, 16.10%, 12.61%, and 11.43%, respectively. During the reporting period, the Issuer's main raw materials were primary graphite, petroleum coke, needle coke, and other coke raw materials, the prices of which are affected by commodity prices in the petrochemical industry, market supply and demand, and other factors. The previous fundraising project, the 30,000-ton high-end graphite anode material production base construction project, failed to reach expected returns after completion and commissioning; the previous fundraising project, the 60,000-ton artificial graphite anode material integrated production base construction project and R&D center construction project, experienced delays. As of March 31, 2026, the book value of the Issuer's construction in progress was 1.0498015 billion yuan. After the current fundraising project is completed, the Issuer will add approximately 88.9229 million yuan in annual depreciation and amortization.
As of March 31, 2026, Zhou Pengwei held 13,433,514 shares of the Company, accounting for 11.27% of the total share capital; assuming the calculation is based on the upper limit of the issuance quantity, after this issuance, the proportion of shares held by Zhou Pengwei will change to 8.67%.