Huaxing Certified Public Accountants LLP's Response to the Audit Inquiry Letter Regarding Guangdong Shenling Environmental Systems Co., Ltd.'s Application for Issuance of Convertible Corporate Bonds to Unspecified Targets
Huaxing Zhuanzi [2026] No. 25013720118
To the Shenzhen Stock Exchange:
We have received your "Audit Inquiry Letter Regarding Guangdong Shenling Environmental Systems Co., Ltd.'s Application for Issuance of Convertible Corporate Bonds to Unspecified Targets" (Audit Letter [2026] No. 020033, hereinafter referred to as the "Inquiry Letter") issued on April 28, 2026. Guangdong Shenling Environmental Systems Co., Ltd. (hereinafter referred to as "Shenling Environmental," "the Issuer," or "the Company") and Huaxing Certified Public Accountants (Special General Partnership) (hereinafter referred to as "the Reporting Accountant") and other relevant parties, acting in accordance with the principles of diligence, honesty, and trustworthiness, have carefully discussed, verified, and implemented the issues raised in the Inquiry Letter. The response is as follows for your review.
Question 1
The application materials show that from 2022 to the first nine months of 2025, the Issuer's operating income was 2,221.1686 million yuan, 2,511.1944 million yuan, 3,016.1843 million yuan, and 2,507.6012 million yuan, respectively. Net profit attributable to owners of the parent company was 166.2623 million yuan, 104.8965 million yuan, 115.5616 million yuan, and 150.0893 million yuan, respectively. Net cash flow from operating activities was 62.2707 million yuan, 13.8482 million yuan, 135.3194 million yuan, and -4.7733 million yuan, respectively. The gross profit margin for equipment sales was 26.59%, 25.21%, 22.93%, and 22.02%, respectively.
From the end of 2022 to the end of September 2025, the book value of the Issuer's accounts receivable was 1,062.6794 million yuan, 1,324.2684 million yuan, 1,708.1619 million yuan, and 1,856.5773 million yuan, respectively. The proportion of accounts receivable with an aging of within one year was 76.43%, 67.09%, 69.33%, and 67.23%, respectively. Bad debt losses accrued during each period were -12.5670 million yuan, -55.2937 million yuan, -48.1201 million yuan, and 6.9143 million yuan, respectively. The accounts receivable turnover rate was 2.16 times, 1.89 times, 1.78 times, and 1.28 times, respectively, showing a continuous decline and remaining below the average level of comparable companies in the industry.
From the end of 2022 to the end of September 2025, the book value of the Issuer's inventory was 585.8616 million yuan, 695.7278 million yuan, 863.4119 million yuan, and 1,065.0667 million yuan, respectively, of which the book balance of goods dispatched was 244.5679 million yuan, 329.1041 million yuan, 508.1674 million yuan, and 649.6706 million yuan, respectively. From 2022 to the first nine months of 2025, the provision ratio for inventory depreciation was 1.23%, 0.92%, 1.06%, and 0.86%, respectively, which is lower than the average provision ratio of companies in the same industry.
As of the end of September 2025, the book value of the Issuer's trading financial assets was 15.8123 million yuan, other receivables was 39.0672 million yuan, other current assets was 14.8046 million yuan, long-term equity investments was 2.9009 million yuan, and other non-current assets was 28.6097 million yuan. The Company recently signed an agreement with Shishi Private Equity Fund Management (Jiaxing) Co., Ltd. and others to jointly invest in Jiaxing Mutong Equity Investment Partnership (Limited Partnership) (hereinafter referred to as the "Industrial Investment Fund"). The Company subscribed to a capital contribution of 50 million yuan, holding a 24.99% share of the partnership. According to the application materials, the actual controller and their persons acting in concert collectively control 44.89% of the voting rights of the Issuer, and there were related party transactions during the reporting period.