7-2 Accountant's Reply to Audit Inquiry Letter (Exemption Version)
To: Shenzhen Stock Exchange
Pursuant to the requirements of the "Audit Inquiry Letter on Financial and Accounting Issues Regarding Guoke Tiancheng Technology Co., Ltd.'s Application to Issue Convertible Bonds to Unspecified Targets" (Audit Letter [2025] 020041) issued by your exchange on August 11, 2025 (hereinafter referred to as the "Audit Inquiry Letter"), Grand Thornton Certified Public Accountants (Special General Partnership) (hereinafter referred to as the "Reporting Accountant") has conducted a thorough review of the issues that require the Reporting Accountant's explanation or opinion as mentioned in the Audit Inquiry Letter, and hereby provides a special explanation as follows:
(Unless otherwise specified, the abbreviations used in this special explanation have the same meaning as in the "Prospectus for Guoke Tiancheng Technology Co., Ltd.'s Application to Issue Convertible Bonds to Unspecified Targets" (hereinafter referred to as the "Prospectus").
Unless otherwise specified, all numerical values in this special explanation are rounded to two decimal places. If the sum of the sub-items does not match the total due to rounding, it is due to rounding.)
Question 1
According to the reporting materials, during the reporting period, the company's operating revenue continued to increase, reaching RMB 52,955.53 million, RMB 70,158.45 million, RMB 96,064.50 million, and RMB 11,969.47 million, respectively. Revenue from businesses such as refrigerated infrared products, non-refrigerated infrared products, and precision optical circuit modules and others all showed an upward trend. During the reporting period, the gross profit margin of the company's optoelectronic business was 34.80%, 38.69%, 31.77%, and 33.69%, respectively. There was a significant decline in 2024. Among them, the gross profit margin of the company's refrigerated infrared products was 35.62%, 38.46%, 32.44%, and 32.19%, respectively. The gross profit margin of the company's non-refrigerated infrared products was 6.32%, 5.80%, 28.17%, and 31.09%, respectively. The gross profit margin of the company's precision optical products was 31.11%, 42.29%, 34.45%, and 39.71%, respectively. The gross profit margins of each major product showed some fluctuations.
7-2-1
To: Grand Thornton
During the reporting period, the company's net profit attributable to the parent after deducting non-recurring items was RMB 9,519.51 million, RMB 12,869.77 million, RMB 16,029.79 million, and RMB 1,214.23 million, respectively. However, the net cash flow from operating activities was RMB -20,343.55 million, RMB -9,611.36 million, RMB -2,931.46 million, and RMB -4,271.97 million, respectively, remaining negative. This is mainly because the company primarily procures raw materials through advance payments, and downstream customers require a certain credit period. However, there are certain differences in cash flow compared to comparable companies in the same industry.
At the end of each reporting period, the book value of the company's accounts receivable was RMB 27,189.66 million, RMB 51,573.58 million, RMB 69,893.20 million, and RMB 68,584.16 million, accounting for 25.74%, 42.19%, 37.00%, and 36.26% of the current assets at the end of the respective periods. The proportion of accounts receivable within one year at the end of each reporting period was 92.28%, 85.04%, 83.19%, and 81.07%, respectively, showing a downward trend. This is mainly due to the overall slowdown in customer payment cycles in the industry. However, the aging structure of accounts receivable is better than that of comparable companies in the same industry. As of May 31, 2025, the proportion of accounts receivable overdue by more than one period at the end of each reporting period was 84.64%, 78.89%, 35.74%, and 20.30%, respectively, showing a downward trend. During the reporting period, the company's accounts receivable turnover ratio was 2.37, 1.66, 1.44, and 0.63, respectively, showing a downward trend, mainly due to the overall slowdown in customer payment cycles in the industry.