Explanation Regarding Jiangsu Xinhan New Materials Co., Ltd.'s Application for Issuing Shares to Specific Objects - Second Round Inquiry Letter
Tianjian Letter [2026] No. 15-35
To Shenzhen Stock Exchange:
We acknowledge receipt of the "Second Round Inquiry Letter Regarding Jiangsu Xinhan New Materials Co., Ltd.'s Application for Issuing Shares to Specific Objects" (Inquiry Letter [2026] No. 020065) forwarded by CITIC Securities Company Limited. We have prudently reviewed the financial matters of Jiangsu Xinhan New Materials Co., Ltd. (hereinafter referred to as Xinhan New Materials or the Company) as mentioned in the Inquiry Letter and hereby report as follows.
(For calculations involving percentages in this financial matters explanation, all figures are uniformly expressed in ten thousand yuan, rounded to two decimal places; minor discrepancies between subtotals and the sum of individual items are due to rounding.)
Question One
According to the issuer's response materials from the first round of inquiries, the proposed fundraising project aims to increase the production capacity of PAEK resin by 3,000 tons, thermoplastic composite materials by 5,100 tons, and DFBP monomer by 5,000 tons. Currently, the issuer has on-hand orders for approximately 6.90 tons of PAEK resin and thermoplastic composite materials, and 523.34 tons of DFBP products. The estimated new depreciation and amortization expense in the project's first year of operation (i.e., Year T4) is 10,113.68 ten thousand yuan.
Please ask the issuer to: (1) Based on the current market development, combined with cooperation intentions and on-hand orders signed with relevant customers, the announced mass production plans and actual demand changes of major downstream manufacturers, market competition, current capacity utilization rate, production and sales rate, and the investment and realized benefits of previous fundraising projects, analyze and explain the core competitiveness of the issuer in implementing this fundraising project, and quantitatively analyze whether the new production capacity, output, and business scale after the project reaches its planned production capacity have sufficient market absorption capacity, and estimate the future obtainable orders.
Please prudently discuss the alignment and reasonableness of the fundraising scale with market demand, the feasibility of future large-scale order acquisition plans, and whether the benefit calculations are prudent. (2) Based on the break-even point of this fundraising project, the ratio of future new depreciation and amortization expenses to the company's net profit, downstream customer and industry market demand, competitive landscape, and development trends, quantitatively analyze whether the future new depreciation and amortization expenses will have a significant adverse impact on the company's operating performance. Explain the specific adverse impacts on the company's future operating performance if the industry development speed slows down or if the company's product development, operational management, and customer expansion fall short of expectations, along with corresponding countermeasures, whether it affects the company's ability to continue operating, and fully disclose related risks.
Please request the sponsor institution to conduct verification and provide a clear opinion, and request the reporting accountant to conduct verification and provide a clear opinion. (Inquiry Letter Question Two)
I. Based on the break-even point of this fundraising project, the ratio of future new depreciation and amortization expenses to the company's net profit, downstream customer and industry market demand, competitive landscape, and development trends, quantitatively analyze whether the future new depreciation and amortization expenses will have a significant adverse impact on the company's operating performance.
(1) Break-even point of this fundraising project, ratio of future new depreciation and amortization expenses to the company's net profit, and quantitative analysis of whether the future new depreciation and amortization expenses will have a significant adverse impact on the company's operating performance.
According to calculations, the overall break-even situation and depreciation and amortization situation after the project is put into operation are as follows: