Core Viewpoint - The company, Jiaze New Energy Co., Ltd., is responding to the Shanghai Stock Exchange regarding the issuance of shares to specific targets and addressing issues related to the recognition and impairment of receivables from line subsidies, particularly in light of recent policy changes affecting the renewable energy sector [1][2][20]. Group 1: Line Subsidy Policy and Accounting Treatment - Line subsidies are specifically for renewable energy projects to cover the costs of connecting to the grid, with compensation based on the amount of electricity fed into the grid [2][9]. - The company has confirmed receivables from line subsidies amounting to 39.2069 million yuan, all of which are due from State Grid Ningxia Electric Power Co., Ltd., and has fully provided for bad debts [4][20]. - Since January 1, 2019, the company has adopted a new financial instrument standard, shifting from an incurred loss model to an expected loss model for assessing credit losses on financial assets [4][10]. Group 2: Expected Credit Loss Assessment - The company evaluates expected credit losses based on the aging of receivables, credit risk characteristics, and historical collection data, using a simplified approach for receivables without significant financing components [5][10]. - The expected credit loss calculation incorporates macroeconomic indicators, including GDP forecasts and external market conditions, to adjust historical data for future predictions [10][11]. - The company has established a weighted expected credit loss rate based on three macroeconomic scenarios: optimistic, baseline, and pessimistic, with the baseline scenario typically weighted between 50%-70% [13][20]. Group 3: Reasonableness of Bad Debt Provisioning - The company has determined that the full provision for bad debts on line subsidies at the end of 2024 is reasonable due to significant uncertainties regarding the payment of these subsidies following policy changes [20]. - Comparisons with industry peers indicate that similar companies have also made provisions for bad debts related to receivables from grid companies, supporting the company's approach [18][20]. - The company has provided necessary documentation to the State Grid for the acquisition of grid connection projects, which further justifies the need for timely and accurate provisioning for bad debts [16][20].