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Response to the Audit Inquiry Letter Regarding the Application of Shandong Longhua New Material Co., Ltd. for Issuance of Convertible Corporate Bonds to Unspecified Targets
Sponsor (Lead Underwriter): Soochow Securities Co., Ltd.
(Registered Address: No. 5 Xingyang Street, Suzhou Industrial Park)
Shenzhen Stock Exchange:
We have received the "Audit Inquiry Letter Regarding the Application of Shandong Longhua New Material Co., Ltd. for Issuance of Convertible Corporate Bonds to Unspecified Targets" (Audit Letter [2026] No. 020029) (hereinafter referred to as the "Inquiry Letter") issued by your exchange on April 13, 2026. Shandong Longhua New Material Co., Ltd. (hereinafter referred to as "Longhua New Material," the "Issuer," or the "Company"), together with Soochow Securities Co., Ltd. (hereinafter referred to as "Soochow Securities," the "Sponsor," or the "Sponsoring Institution"), Shandong Wenkang Law Firm (hereinafter referred to as "Wenkang Lawyers" or "Issuer's Counsel"), and Rongcheng Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Rongcheng Accountants" or "Issuer's Accountants") and other relevant parties, have, in the spirit of diligence, responsibility, honesty, and trustworthiness, discussed, verified, and implemented the items listed in the "Inquiry Letter" one by one. The response is as follows, please review.
Inquiry Letter Question: Bold
Inquiry Letter Response Content: Regular
Modifications and Supplements to the Prospectus: Bold
Unless otherwise specified, the definitions of terms in this response are the same as those in the "Prospectus."
Table of Contents
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Question 1: 4
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Question 2: 37
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Question 3: 100
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Other Questions: 108
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Question 1
During the reporting period, the company's operating income was 3,167.8411 million yuan, 5,021.0123 million yuan, 5,623.9620 million yuan, and 4,455.0872 million yuan, respectively; net profit was 126.9756 million yuan, 248.0295 million yuan, 171.3801 million yuan, and 100.3846 million yuan, respectively, showing a downward trend since 2023; the gross profit margin of the main business was 6.55%, 7.38%, 3.84%, and 4.01%, respectively, with a relatively low gross profit margin in the last year and one period. During the reporting period, the company's raw material procurement accounted for a high proportion, and the upstream raw material suppliers were all large petrochemical groups, with the procurement proportion of the top five suppliers exceeding 50% during the reporting period.
At the end of each period of the reporting period, the book value of the company's accounts receivable was 35.0525 million yuan, 58.1216 million yuan, 76.7928 million yuan, and 163.1690 million yuan, respectively. The balance in the most recent period increased, mainly due to the increase in sales of newly developed terminal amino polyether products; the company's prepayments were 12.7928 million yuan, 62.7688 million yuan, 85.7180 million yuan, and 183.6348 million yuan, respectively; the book value of the company's inventory was 195.4208 million yuan, 251.6284 million yuan, 357.2910 million yuan, and 415.9937 million yuan, respectively, accounting for 18.15%, 18.00%, 21.25%, and 21.95% of current assets.