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Special Explanation on Financial Issues Regarding the Audit Inquiry Letter for the Issuance of Convertible Corporate Bonds to Unspecified Objects by Shenzhen Qiangda Circuits Co., Ltd.
Zhonghui Audit Letter [2026] No. 2473
To: Shenzhen Stock Exchange
In accordance with the requirements of the "Audit Inquiry Letter regarding the Application of Shenzhen Qiangda Circuits Co., Ltd. for the Issuance of Convertible Corporate Bonds to Unspecified Objects" (Audit Letter [2026] No. 020019) (hereinafter referred to as the "Inquiry Letter") issued by your exchange on March 9, 2026, we, as the reporting accountants for Shenzhen Qiangda Circuits Co., Ltd. (hereinafter referred to as the "Company," "Qiangda Circuits," or the "Issuer") for the issuance of convertible corporate bonds to unspecified objects, have carefully analyzed the financial issues raised in the Inquiry Letter and have implemented supplementary verification procedures. We hereby provide our response to the financial issues in the Inquiry Letter as follows:
Unless otherwise specified, the abbreviations and terms used in this response have the same meanings as those in the prospectus.
The fonts used in this response represent the following meanings:
| Item | Font Style |
|---|---|
| Questions listed in the Audit Inquiry Letter | Bold, Black |
| Responses to the questions and accountant's verification | Regular |
| Supplements and revisions to the prospectus | Bold, KaiTi |
The financial data for the period from January to September 2025 cited in this response is unaudited. In this response, any discrepancies between the sum of individual items and the total are due to rounding.
Question 1
The total amount of funds to be raised through this issuance of convertible corporate bonds to unspecified objects shall not exceed RMB 550.00 million (inclusive). After deducting issuance expenses, the funds are intended to be invested in the Nantong Qiangda Circuits Technology Co., Ltd. project with an annual output of 960,000 square meters of multi-layer boards and HDI boards (hereinafter referred to as the "Fundraising Project"). The total investment for the project is RMB 1,000.00 million, of which RMB 363.2041 million is intended to be invested from the initial public offering (IPO) proceeds.
This fundraising project is an investment project funded by the IPO proceeds and has already commenced construction. Due to a significant funding gap between the actual net proceeds from the IPO and the total investment required for the project, the Company intends to supplement this through the current issuance of convertible corporate bonds to unspecified objects. Before the proceeds from this issuance are received, the Company will invest using its own funds or funds raised through other means based on the actual progress of the project, and will replace these funds once the proceeds are received.
The fundraising project will enhance production capacity for HDI and high-layer boards, meeting the market's demand for rapid delivery of high-layer, high-density, and high-performance products. Upon reaching full production, the project will have an annual production capacity of 720,000 square meters of multi-layer boards (primarily high-layer boards) and 240,000 square meters of HDI boards. Building on existing application areas, this project will focus more on emerging fields such as AI servers and computing power, satellite communications, industrial automation, and automotive electronics. Once fully operational, the project is expected to generate an annual operating income of RMB 1,636.1802 million, with an estimated average annual gross profit margin of 29.58% during the production period.
The project is planned to complete infrastructure construction and decoration from T+1 to June of T+3. Starting in the second half of T+2, equipment will be purchased, personnel recruited, and production will commence in batches until the overall project construction is completed in T+6. There has been an adjustment to the internal investment structure of the project, increasing the amount and duration of equipment investment.