Response to the Restructuring Inquiry Letter Regarding Beifang Changlong New Material Technology Co., Ltd.
Zhongxinghua Zhuanzi (2026) No. 0800072
Shenzhen Stock Exchange:
We have received the "Inquiry Letter Regarding the Restructuring of Beifang Changlong New Material Technology Co., Ltd." (ChiNext M&A Inquiry Letter [2026] No. 4, hereinafter referred to as the "Inquiry Letter") issued by your exchange on May 12, 2026. Zhongxinghua Certified Public Accountants (LLP) (hereinafter referred to as the "Pro Forma Review Accountant" or "Accountant"), acting as the pro forma review institution for the major asset purchase by Beifang Changlong New Material Technology Co., Ltd. (hereinafter referred to as the "Listed Company," "Beifang Changlong," or the "Company"), hereby provides the following responses to the accounting-related questions in the Inquiry Letter:
Unless otherwise specified, the abbreviations used in this response report are the same as those defined in the "Report (Draft)." The figures in this document are rounded to two decimal places; the sum of the figures may differ slightly from the total due to rounding during calculation.
The fonts in this response represent the following meanings:
| Font | Meaning |
|---|---|
| Bold | Questions listed in the Inquiry Letter |
| Songti | Responses to the questions listed in the Inquiry Letter |
| Bold Italics | Revisions and supplements to documents such as the "Report (Draft)" |
Question 7
The report shows that the transaction counterparties Li Yingshun, Zhao Jianzhe, Wang Debiao, and Hangzhou Yaqige have committed that the net profit of the target company for 2026, 2027, and 2028 shall not be less than 56 million yuan, 64 million yuan, and 72 million yuan, respectively. Performance compensation shall be made primarily in cash, with any shortfall covered by the target company shares held by them, and further shortfalls covered by their other property or assets. If the cumulative net profit realized by the end of the current period is less than 80% of the cumulative committed net profit, the current performance compensation is triggered. If the total cumulative net profit realized over three years is lower than the total cumulative committed net profit, cumulative performance compensation is triggered. The performance commitment parties promise that if the impairment amount at the end of the third fiscal year after the expiration of the performance commitment period is greater than the compensation already paid, additional compensation will be provided. The total compensation amount to be borne by each performance commitment party is capped at 80% of the transaction consideration received by each party through this transaction. Upon expiration of the performance commitment period, if the cumulative net profit realized by the target company during the period exceeds the cumulative forecasted net profit, 50% of the excess amount shall be awarded as an excess performance bonus to the performance commitment parties and the core backbone of the target company. This excess performance bonus shall not exceed 20% of the transaction consideration received by the performance commitment parties. Please explain:
(1) Whether the committed performance, the income approach forecast results, and the calculation base for excess performance bonuses are matched; the reasons and rationality for any mismatch; the reasons and rationality for setting the 80% current performance compensation trigger condition; whether it matches the income approach forecast results; whether the aforementioned arrangements comply with the "Regulatory Rules Application Guidelines - Listing Category No. 1" and other relevant regulations; and whether they are conducive to protecting the interests of the listed company.
(2) The basis and rationality for determining the performance commitment subjects and the compensation cap; combined with the matching of the performance compensation amount and the transaction consideration, explain whether the relevant arrangements can effectively cover the operating risks of the target company; whether the aforementioned arrangements comply with the "Regulatory Rules Application Guidelines - Listing Category No. 1" and other relevant regulations; and whether they are conducive to protecting the interests of the listed company.