Special Explanation Regarding Financial and Accounting Issues in the Audit Inquiry Letter for Shenzhen Yilian Technology Co., Ltd.'s Application for Issuance of Convertible Corporate Bonds to Unspecified Targets
Rongcheng Zhuanzi [2026] No. 518Z1053
Shenzhen Stock Exchange:
In accordance with the requirements of the "Audit Inquiry Letter regarding the Application of Shenzhen Yilian Technology Co., Ltd. for Issuance of Convertible Corporate Bonds to Unspecified Targets" (Audit Letter [2026] No. 020051) issued by your exchange on June 26, 2026 (hereinafter referred to as the "Audit Inquiry Letter"), Shenzhen Yilian Technology Co., Ltd. (hereinafter referred to as "Yilian Technology," the "Company," or the "Issuer") and Rongcheng Certified Public Accountants (Special General Partnership) (hereinafter referred to as the "Accountants") have implemented and verified the relevant issues in the Audit Inquiry Letter one by one. The response is as follows for your review.
Unless otherwise specified, the definitions of terms used in this response to the Audit Inquiry Letter are consistent with those in the "Prospectus (Revised Draft) for the Issuance of Convertible Corporate Bonds to Unspecified Targets by Shenzhen Yilian Technology Co., Ltd." (hereinafter referred to as the "Prospectus").
| Bold | Questions listed in the Audit Inquiry Letter |
|---|---|
| Song typeface | Responses to the questions listed in the Audit Inquiry Letter |
| Regular (Bold) | Modifications to application documents such as the Prospectus |
In this response, any discrepancies between the total and the sum of individual items are due to rounding.
Table of Contents
Question 1: 3
Question 2: 45
Question 1
The application materials show that the proposed fundraising amount does not exceed 1.2 billion RMB. After deducting issuance expenses, the funds will be used for the New Energy Intelligent Manufacturing Flexible Electrical Connection System Project (hereinafter referred to as the Electrical Connection System Project) and to supplement working capital. The total investment for the Electrical Connection System Project is 1.1842049 billion RMB, with 900 million RMB of the raised funds intended for use. The company plans to build a new production base in Liyang City, Changzhou City, Jiangsu Province. Upon completion and reaching full production, the project will form an annual production capacity of approximately 45 million units of new flexible electrical connection components (hereinafter referred to as FPC). The main purpose of the project is to replace outsourced FPC components with self-produced FPC components during the production of FPC battery cell connection components, thereby reducing the company's cost of purchasing FPC components. On the basis of meeting the company's own needs, the company will combine market demand and expansion to sell some FPC products externally.
The issuer has conducted benefit forecasts, including revenue and net profit, for this fundraising project. The issuer's previous fundraising projects, such as the "Liyang Construction Project for Electrical Connection Component Series Products," "Ningde Construction Project for Electrical Connection Component Series Products," and "New Energy Electrical Connection Component Series Production Construction Project," have experienced delays. As of the end of the reporting period, the above-mentioned previous fundraising projects have not reached the intended usable state.
In January 2026, the issuer's continuous supervision institution, China Merchants Securities Co., Ltd., discovered during an on-site inspection that there were some problems with the issuer's use of raised funds, including the investment of self-owned funds in the "Liyang Construction Project for Electrical Connection Component Series Products" exceeding the original approved amount, the delivery location of some equipment for the "Ningde Construction Project for Electrical Connection Component Series Products" not being the location of the fundraising project, and the addition of factory building leasing for the "New Energy Electrical Connection Component Series Production Construction Project."