Core Viewpoint - Honghe Technology is responding to the Shanghai Stock Exchange's inquiry regarding its application for a specific stock issuance, providing detailed explanations on fundraising projects, operational conditions, and financial investments [1] Fundraising and Investment Projects - Honghe Technology plans to raise a total of no more than 999.46 million yuan, which will be allocated to three major projects: "High-Performance Glass Fiber Yarn Production Line Construction Project," "High-Performance Special Glass Fiber R&D Center Construction Project," and "Supplementing Working Capital and Repaying Loans" [2] - The investment breakdown includes 720 million yuan for the glass fiber yarn production line, with 632.63 million yuan from the raised funds; 92 million yuan for the R&D center, with 81.98 million yuan from the raised funds; and 280 million yuan for working capital and loan repayment [2] - The projected average gross profit margin for the glass fiber yarn production line is 53.25%, with a post-tax internal rate of return of 14.40% and a static investment payback period of 8.26 years [2] Operational Analysis - The company's revenue for the reporting periods was 612.10 million yuan, 661.15 million yuan, 834.63 million yuan, and 245.99 million yuan, with gross profit margins of 28.82%, 8.84%, 17.38%, and 28.06% respectively [3] - The net profit attributable to the parent company showed significant fluctuations, primarily influenced by gross profit changes, with a notable decline in 2023 due to reduced product prices [3] - Accounts receivable increased with revenue growth, with a low bad debt provision ratio compared to industry peers, indicating a good customer credit status [3] Other Matters - The company has not engaged in any financial investments in the past six months and does not hold significant long-term financial investments [4] - The sales model for a specific client has been adjusted to a consignment basis, aligning with industry practices, and the revenue recognition policy has been updated accordingly [4]