Xinwu Optoelectronics receives the second round of inquiries from the Beijing Stock Exchange, focusing on the authenticity of construction projects, overseas sales, and the sustainability of performance.

Recently, Suzhou New Wu Optoelectronics Co., Ltd. received a second round of review inquiry letter issued by the Beijing Stock Exchange. The inquiry letter focuses on key matters such as the authenticity of the company’s newly added large-scale construction in progress, the authenticity of overseas sales, the sustainability of operating performance, and issues including the existence of a common de facto controller and industry competition.

I. Attention is being paid to the authenticity of newly added large-scale construction in progress. The inquiry letter states that during each period covered by the report, the balance of construction in progress has been increasing substantially, rising from 11.15% to 47.63% as a proportion of total assets. This was mainly attributable to the 12 million units/year intelligent display cover plate project—construction works. Of note, some construction equipment suppliers are also the issuer’s important customers or customer-related parties. For example, the first-largest equipment supplier, GalaxyOptoelectronics, also serves as an important customer, and in 2025 the de facto controller transferred 2% of the shares of Hunan Sanxing Precision Industry Co., Ltd., the equipment supplier. The inquiry letter requires the issuer to explain the specific procurement model, pricing basis, and fairness in relation to the equipment purchased from suppliers such as GalaxyOptoelectronics and AUO Zhihui, and to analyze based on sales before and after the purchases whether there is any off-balance-sheet circulation of funds. It also requires an explanation of the background for the de facto controller’s share transfer in the supplier and the fairness of the pricing, as well as the specific background and pricing model for purchases from related suppliers such as Yancheng Mudong Optoelectronics Co., Ltd.

II. The authenticity of overseas sales needs further substantiation. The filing materials show that during the reporting period, the issuer’s overseas sales revenue accounted for a relatively high proportion of its主营业务收入 (main business revenue). The sales regions include Hong Kong, China; China’s bonded zones; and the Philippines, among other areas. The inquiry letter requires the issuer to explain by region the basic situation of overseas customers, the cooperation model, and the subsequent turnover method of the products after procurement. Based on the specific overseas sales models, it also asks whether the timing and basis for revenue recognition comply with the “Accounting Standards for Enterprises” and industry practices. In cases where there are significant differences in gross profit margins for the same type of products within the same group between domestic and overseas markets, the inquiry letter is concerned about the commercial rationale. Meanwhile, the inquiry letter requires the intermediary agencies to explain the coverage of their verification procedures for overseas sales businesses, including walkthrough testing, control testing, and detail testing, as well as the specific execution of customer confirmations and site visits for overseas customers. This includes the reasons for non-conforming replies and instances where no reply was received, the alternative verification procedures, and their effectiveness.

III. The sustainability of operating performance is a key focus. The inquiry letter states that the issuer’s performance fluctuated during the reporting period. In 2023, operating revenue and the net profit attributable to the parent company after excluding non-recurring items fell year over year by 11.14% and 18.24%, respectively. In 2025, operating revenue increased year over year by 1.77%, while the net profit attributable to the parent company after excluding non-recurring items fell year over year by 12.02%. It is also expected that in the first quarter of 2026, performance will show a downward trend. The inquiry letter requires the issuer to quantitatively analyze the reasons for the changes in revenue and the net profit attributable to the parent company after excluding non-recurring items, and to explain the specific reasons for the expected decline in performance and the latest changes after the reporting period. For the cover plate glass business, the inquiry letter focuses on the reasons for the sharp decline in the sales unit price of the entrusted processing business, as well as the reasonableness of the year-by-year decline in gross profit margin for self-produced cover plate glass. For the precision components business, the inquiry letter asks about the reasons for the continued decline in gross profit margins for products such as fuses and whether there is a risk of continued downward trend. At the same time, the inquiry letter requires an explanation of whether, under the self-produced cover plate glass model, the customers directly designate upstream raw material suppliers, and whether, when accounting using the gross amount method, it complies with the relevant provisions of the “Accounting Standards for Enterprises.”

Through Wallbi Finance, it learned that New Wu Optoelectronics is a high-tech enterprise specialized in the R&D, production, and sales of display glass cover plates and precision electronic components. The company has been recognized by the Ministry of Industry and Information Technology as the fourth batch of “national-level specialized, refined, distinctive, and innovative little giants.”