BDO China Shu Lun Pan Certified Public Accountants LLP (Special General Partnership) Reply to the Restructuring Inquiry Letter Regarding Jiangsu Dongxing Smart Medical Technology Co., Ltd.
BDO Audit Letter [2026] No. ZA288
Shenzhen Stock Exchange:
In accordance with the requirements of the "Restructuring Inquiry Letter Regarding Jiangsu Dongxing Smart Medical Technology Co., Ltd." (Growth Enterprise Market M&A Restructuring Inquiry Letter [2026] No. 5) issued by your exchange on May 26, 2026, BDO China Shu Lun Pan Certified Public Accountants LLP (hereinafter referred to as "the Accountant"), as the reporting accountant for the restructuring of Jiangsu Dongxing Smart Medical Technology Co., Ltd. (hereinafter referred to as "the Listed Company" or "the Company"), has acted in accordance with the principles of diligence, duty, and honesty. We have carefully discussed, verified, and implemented the requirements for the Accountant to express opinions on the questions raised in the inquiry letter. The verification results and opinions regarding the relevant issues are replied to as follows:
Note: The financial data in this inquiry reply are rounded to two decimal places. If there is a difference in the last digit between the sum and the sum of individual items, it is due to rounding.
Question 3
The report shows that in 2024 and 2025, the target company achieved operating income of 216.6978 million yuan and 278.6270 million yuan, respectively, with net profits attributable to the parent company of 61.0431 million yuan and 73.3439 million yuan, and gross profit margins of 62.82% and 65.27%. At the same time, the report shows that the target company's main products, such as orthopedic implant materials, have been included in the scope of the "centralized procurement with volume" (hereinafter referred to as "centralized procurement") policy. The report also warns that after the target company's products win the bid, although product sales volume will increase, it faces the risk of a decline in sales prices, which will adversely affect the target company's operating performance. Please:
(1) List the revenue amount and proportion, sales volume, average price, and gross profit margin of the target company achieved through centralized procurement and non-centralized procurement during the reporting period, as well as the specific situation of major products included in centralized procurement, including the start time of centralized procurement, procurement cycle, number of rounds of centralized procurement participated in, procurement quantity and proportion, procurement cycle, winning enterprises, price changes before and after winning the bid, medical institution appointment procurement volume, actual procurement volume, and settlement mechanism.
(2) Combine the changes in sales volume, unit price, market share, revenue, gross profit, and accounts receivable before and after each round of centralized procurement to quantitatively analyze the specific impact of centralized procurement on the target company's operating performance. Explain the reasons and rationality for the target company's products maintaining a high gross profit margin and the increase in gross profit margin during the reporting period under the condition of being included in centralized procurement.
(3) Combine the target company's performance and profit expectations, market share and market competitiveness, and synergy with the listed company to explain whether this transaction is conducive to improving the asset quality of the listed company and enhancing its sustainable operating capability.
Please have the financial advisor and the accountant verify and express a clear opinion.
[Company Reply]
I. List the revenue amount and proportion, sales volume, average price, and gross profit margin of the target company achieved through centralized procurement and non-centralized procurement during the reporting period, as well as the specific situation of major products included in centralized procurement, including the start time of centralized procurement, procurement cycle, number of rounds of centralized procurement participated in, procurement quantity and proportion, procurement cycle, winning enterprises, price changes before and after winning the bid, medical institution appointment procurement volume, actual procurement volume, and settlement mechanism.