Core Viewpoint - The recent response from Lixin Accounting Firm regarding the inquiry from the Shanghai Stock Exchange highlights the significant growth and sustainability of revenue for Xinxing Jingke, driven by various factors including increased production capacity and market demand for semiconductor silicon wafers [2][7]. Revenue Growth and Sustainability - Xinxing Jingke's main business revenue saw substantial growth, reaching 221.64 million in 2023 and projected to reach 1,135.18 million in 2024, supported by increased production capacity, higher utilization rates, and optimized product structure [2]. - The demand for 300mm semiconductor silicon wafers is expected to improve due to the explosive growth in end-user markets such as AI, consumer electronics, and automotive electronics, alongside domestic manufacturers actively expanding capacity [2]. Procurement and Supplier Situation - The procurement amounts for key raw materials in 2023 and 2024 were 266.58 million and 639.32 million respectively, with no significant anomalies in procurement prices compared to comparable listed companies [3]. - The pricing for related transactions with suppliers is fair and aligns with the business model, with no restrictions on overseas procurement [3]. Cost and Gross Margin Analysis - In 2024, direct materials accounted for 41.89% and manufacturing expenses for 54.18% of the main business costs, with the unit selling price of 300mm silicon wafers increasing while unit costs decreased [4]. - The differences in unit selling prices, costs, and gross margins compared to peers are justified by product structure and production line development [4]. Long-term Asset Situation - As of the end of 2024, Xinxing Jingke's fixed assets were valued at 2,499.73 million, with construction in progress valued at 1,285.39 million, indicating a reasonable match between asset structure and production capacity [5]. - The completion and capitalization of construction projects are timely, with no impairment issues noted for fixed assets and construction in progress [5]. Prepayments and Inventory Situation - The increase in prepayments at the end of 2024 is attributed to expanded procurement needs due to capacity ramp-up, with inventory primarily aged within one year and adequate provisions for inventory write-downs [6]. - The policies for inventory write-downs are consistent with industry peers, ensuring proper management of inventory levels [6]. Conclusion - Lixin Accounting Firm concludes that Xinxing Jingke's practices in revenue recognition, procurement pricing, cost accounting, long-term asset management, and inventory management are in compliance with relevant regulations and industry norms, demonstrating both reasonableness and sustainability [7].