Reply of the issuer and the recommendation institution on the implementation letter of the opinions of the Audit Center (hongrida Technology Co., Ltd.)

On the initial public offering of shares and listing on the gem of hongrida Technology Co., Ltd

Reply to the opinion implementation letter of the Audit Center

Sponsor (lead underwriter)

Address: No. 5, Xingyang street, Suzhou Industrial Park

Shenzhen Stock Exchange:

The letter of implementation of the opinions of the audit center on hongrida Technology Co., Ltd. applying for initial public offering and listing on the gem (audit letter [2022] No. 010272) (hereinafter referred to as the "implementation letter") issued by your exchange on March 13, 2022 has been received. Hongrida Technology Co., Ltd., together with Soochow Securities Co.Ltd(601555) , Guohao (Beijing) law firm, Rongcheng Certified Public Accountants (special general partnership) and other relevant parties, checked and explained the problems listed in the implementation letter item by item, and made necessary modifications, supplementary explanations or updates to the relevant contents of the application documents of hongrida Technology Co., Ltd. now, the reply is as follows, please review.

Unless otherwise specified, the abbreviation used in this reply is consistent with the prospectus of hongrida Technology Co., Ltd. for initial public offering and listing on the gem. If the total value is inconsistent with the mantissa of the sum of the itemized values, it is caused by rounding.

Issues listed in the letter of implementation in bold (BOLD)

Reply to the questions listed in the implementation letter

Changes to the prospectus and other application documents (in BOLD)

catalogue

catalogue 31. About going concern ability 42. With regard to the decline in gross profit margin 213. About the semi-finished products of electroplating gold of the subsidiary twenty-six

1. About going concern ability

The application documents and the reply to the audit inquiry show that:

(1) The iteration of products in the consumer electronics industry is fast. During the reporting period, the issuer's sales revenue to Xiaomi, Flextronics, Shenzhen Transsion Holdings Co.Ltd(688036) and other customers declined due to the product iteration of downstream customers.

(2) The products sold by the issuer to Lianchuang Hongsheng and Quancheng electronics are mainly used in Huawei headphones and headphone socket converters. Affected by the decline of Huawei's mobile terminal business, the issuer's related revenue fell to 17.272 million yuan in 2021 from 678191 million yuan in the previous year.

(3) In 2021, affected by the global chip supply shortage, the delivery volume of Wingtech Technology Co.Ltd(600745) connector products to the issuer decreased, and the amount of the issuer's realized sales revenue decreased by 11.34% compared with the previous year.

Please the issuer:

(1) Explain the technical iterations of each main product, the relevant technical reserves and R & D of the issuer, the projects under research between the issuer and each main customer, analyze the continuity and stability of cooperation with main customers, further analyze the impact of product iterations of downstream customers on the sustainability of income growth of the issuer, and whether the issuer has the risk of losing important customers.

(2) Quantitatively analyze the impact of Huawei mobile terminal business decline, chip shortage and other factors on the issuer's income stability and sustainable operation ability, explain whether there is a significant decline risk in future performance, and supplement relevant risk tips.

The sponsor and the reporting accountant are requested to express clear opinions.

reply:

1、 Explain the technical iterations of each main product, the relevant technical reserves and R & D of the issuer, the projects under research between the issuer and each main customer, analyze the continuity and stability of cooperation with main customers, further analyze the impact of product iterations of downstream customers on the sustainability of income growth of the issuer, and whether the issuer has the risk of losing important customers.

(I) explain the technical iteration of each main product, the relevant technical reserves and R & D of the issuer, and the projects under research between the issuer and each main customer

1. Technical iteration of main products

The company is mainly engaged in the R & D, production and sales of precision connectors. Its products are mainly used in 3C fields such as mobile phones and their peripheral products, intelligent wearable devices and computers, forming a product system dominated by connectors and supplemented by precision mechanism parts. The company's connector products are composed of card connectors, I / O connectors, headphone connectors, battery connectors and other connectors, among which card connectors, I / O connectors and headphone connectors are the company's main connector products.

In recent years, with the increasing demand for intelligent, lightweight and high-speed consumer terminal products, the official commercial use of 5g and the rapid development of technology, the corresponding connector products are also constantly updated and iterated. Among them, the combination of "three out of three" card holder products and "two out of three" card holder products plus single card holder forms an iteration, and the type-C product forms an iteration for micro USB products and headphone connector products.

In order to meet the demand of "single seat and dual seat" card in the industry, it is more difficult to realize the combination of "single seat and dual seat" card in 2017. In comparison, the production process of "three out of three" split card holder is more concise and competitive, thus gradually forming a technical iteration of "two out of three" card holder products plus single card holder combination. With the popularization of 5g communication technology, in order to further reduce the area occupied by card connectors on the main board, laminated card connectors and other products in card connectors will become a new direction of card connectors. During the reporting period, through continuous R & D investment, the company developed a number of "three out of three" card holder and laminated card connector products and achieved mass production.

In terms of I / O connectors, the traditional I / O connectors include USB type A, B, micro USB, HDMI, etc. in recent years, with the advantages of strong scalability, bidirectional power supply, fast transmission rate and high transmission power, support for positive and negative plug-in on both sides, lighter interface and so on, the type-C connector is gradually becoming the mainstream interface of consumer electronics, and is expected to fully replace the traditional I / O connector. With the popularity of type-C interface of consumer electronic products, the market demand for type-C connector has increased significantly.

In terms of headphone connectors, with the popularity of type-C interface, headphone connectors have been gradually replaced by type-C connectors in the high-end smartphone market.

The company keeps up with the development trend of the industry and the needs of customers, maintains the continuous renewal and iteration of products, and has formed a diversified product series and a complete product specification structure, which meets the diversified needs of customers and enhances customer stickiness.

2. Relevant technical reserves and R & D of the issuer

As a comprehensive solution supplier for the R & D, production and sales of connector products, the company has been deeply engaged in the connector field for more than ten years. After the process of technical iteration in the industry, the company has established a R & D mechanism to deal with technical iteration, and has the technical reserves and technical strength to meet the needs of iterative products in the market. The details are as follows:

(1) The company has the R & D mechanism to deal with technology iteration

Since its establishment, the company has closely followed the development trend of downstream industries, continued R & D investment and continuously promoted the development of the company

Connector product innovation and technological progress.

The downstream industry of the company has the characteristics of rapid technology update and rapid product iteration

To this end, the company continues to conduct cutting-edge research and customer demand driven around the application market and customer demand

development. On the one hand, based on the analysis and judgment of the development trend and cutting-edge technology of the connector industry, the company

Understand the changes of customers and market demand, lay out new R & D directions or upgrade the original technology, and constantly

Improve the technology and process level; On the other hand, the company delves into the needs of customers in various fields, and according to customers' special requirements for functions

Different requirements in terms of points, technical parameters and application scenarios, and integrate the product technical progress with the current needs and requirements of customers

Closely connect the potential demand in the future, and continuously provide customers with new product development and production solutions to cope with the demand

Industrial change and upgrading demand of end consumption. Although the company faces the risk of technology upgrading iteration, the company closely follows the industry

With the development of technology, the update of corresponding products should match with the technical iteration.

(2) The company has technical reserves and technical strength to meet the needs of iterative products in the market

The company has accurately grasped the development trend of industrial products and mastered the development technology of multi-in-one card holder through years of research and development

Technology, waterproof type-C development technology, deep drawing and drawing shell development technology, automatic connection and dispensing technology, etc

To the core technology of the product. During the reporting period, the company's technical reserves and R & D related to major iterative products

The details are as follows:

Product iteration, technical reserve, patent name and related product R & D during the reporting period

A laminated triad with small space occupation

"Three out of three" split one card holder connector 1. Hot plug pin-push ultra-thin three card holder is the research and development of a high-strength compact laminated three out of three laminated card holder;

Card type "two connected" card holder product addition development technology two card holder connector 2, hot plug pin-push tiled area connector single card holder combination technology a tray shaped laminated double nano SIM card small laminated two out of three mobile phone holder product iterative seat research and development

A miniaturized laminated card seat

A waterproof USB type-C connector 1. The side vertical high current type-C female end I / O is connected to the research and development of a waterproof 24pin type C female base connector;

Waterproof device 2. The type-C connector of ultra short high-strength return shaft lead-in shell type-C open 16pin waterproof type-C mother seat is developed into a high-precision high-speed transmission waterproof USB project of USB type A and hair technology;

B. Micro USB, type-C female connector (under application) 3. Research and development of integrated plastic shell welded wire type-C HDMI iterative waterproof female connector;

At the same time, it is a kind of traditional deep drawing shell, which optimizes the terminal stress distribution. 4. High current of seamless tube shell

Overlapping development technology of earphone to earphone connector type-C connector male

Research and development of connector substitute product type-C male connector; Fully automatic connection of a high strength and high waterproof grade 5. High speed and high sealing USB type-C line dispensing technology type-C connector 3.1 research and development of mother base connector;

A connector material belt type in-line baking free 6. Type-C mother seat 24P waterproof project

Research and development of dip dispensing process and dispensing equipment (Shen);

7. Research and development of type-C male connector, an electronic product accessory with high precision and stable contact and high current, which is easy to operate; Dispensing equipment (under application) 8. High precision anti-interference waterproof

Research and development of type-C female connector; 9. Research and development of 24pin type-C mother seat with double forming dislocation structure design; 10. Based on anti short circuit drawing type

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