China Merchants Securities Co., Ltd. Audit Opinion on Shenzhen Strongda Circuit Co., Ltd.'s Capital Increase to Wholly-Owned Subsidiary
China Merchants Securities Co., Ltd. (hereinafter referred to as "China Merchants Securities" or "Sponsor") is the sponsor of Shenzhen Strongda Circuit Co., Ltd. (hereinafter referred to as "Strongda Circuit" or "the Company") during the continuous supervision period of its initial public offering of shares and listing on the ChiNext market. In accordance with the "Administrative Measures for the Sponsorship Business of Securities Issuance and Listing," "Supervision Regulations for the Management of Raised Funds of Listed Companies," "ChiNext Stock Listing Rules of the Shenzhen Stock Exchange," and "ChiNext Listed Company Self-Regulatory Management Guidelines No. 2 — Standardized Operation of ChiNext Listed Companies," and other relevant laws, regulations, and normative documents, we have audited the matter of Strongda Circuit using raised funds and its own funds to increase capital for its wholly-owned subsidiary. The audit findings are as follows:
I. Basic Situation of Raised Funds
According to the "Approval for the Registration of the Initial Public Offering of Shares of Shenzhen Strongda Circuit Co., Ltd. on the ChiNext Market" (Securities Regulatory Permit (2024) No. 1140) issued by the China Securities Regulatory Commission, the Company issued 18.844 million ordinary shares (A shares) at a par value of RMB 1.00 per share. The offering price was RMB 28.18 per share, with a total raised capital of RMB 531.0239 million. After deducting issuance expenses of RMB 77.8198 million (excluding value-added tax), the net amount of raised capital was RMB 453.2041 million.
The above raised funds were transferred to the Company's designated account on October 25, 2024. Zhonghui Certified Public Accountants (Special General Partnership) audited the arrival of the raised funds for this issuance on October 25, 2024, and issued the "Capital Verification Report" (Zhonghui Hui Yan [2024] No. 10208). The Company has managed the above raised funds in a special account in accordance with relevant regulations, and has signed a supervision agreement for raised funds with the sponsor and the commercial bank where the raised funds are deposited.
II. Basic Situation of Raised Funds Investment Projects
According to the plan for the use of raised funds disclosed in the "Prospectus for the Initial Public Offering of Shares of Shenzhen Strongda Circuit Co., Ltd. on the ChiNext Market" (hereinafter referred to as the "Prospectus"), and the resolutions of the Company's Second Board of Directors' Fifth Meeting and the Second Supervisory Board's Fifth Meeting held on November 22, 2024, the situation of the Company's investment projects and the plan for the use of raised funds are as follows:
| Project Name | Total Investment (RMB million) | Amount of Raised Funds Before Adjustment (RMB million) | Amount of Raised Funds After Adjustment (RMB million) |
|---|---|---|---|
| Nantong Strongda Circuit Technology Co., Ltd. Annual Production of 960,000 sqm Multilayer Boards and HDI Boards Project | 100,000.00 | 48,000.00 | 36,320.41 |
| Supplementary Working Capital Project | 12,000.00 | 12,000.00 | 9,000.00 |
| Total | 112,000.00 | 60,000.00 | 45,320.41 |