--- page 1 ---
Sole Sponsor, Sponsor-Overall Coordinator, Overall Coordinator,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
GLOBAL
OFFERING
(Incorporated in the Cayman Islands with limited liability)
Stock code : 0805
New Gonow Recreational Vehicles Inc.
ʮ̡
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers (in alphabetical order)
New Gonow Recreational Vehicles Inc.
ʮ̡
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers (in alphabetical order)
New Gonow Recreational Vehicles Inc.
ʮ̡


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If you are in any doubt about any of the contents of this Prospectus, you should obtain independent professional advice.
New Gonow Recreational Vehicles Inc.
新 吉 奥 房 车 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the Global
Offering
: 240,000,000 Shares (subject to the Over-allotment
Option)
Number of Hong Kong Offer Shares : 24,000,000 Shares (subject to reallocation)
Number of International Offer Shares : 216,000,000 Shares (subject to reallocation and
the Over-allotment Option)
Maximum Offer Price : HK$1.64 per Offer Share, plus brokerage of
1.0%, SFC transaction levy of 0.0027%, AFRC
transaction levy of 0.00015% and Stock
Exchange trading fee of 0.00565% (payable in
full on application in Hong Kong dollars and
subject to refund)
Nominal value : US$0.0001 per Share
Stock code : 0805
Sole Sponsor, Sponsor-Overall C oordinator, Overall Coordinator,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Li mited and Hong Kong Securities Clearing Company Limited take no responsib ility
for the contents of this Prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for an y loss howsoever
arising from or in reliance upon the whole or any part of the contents of this Prospectus. A copy of this Prospectus, having attached thereto the documen ts specified in
‘‘Appendix V — Documents Delivered to the Registrar of Companies and Available on Display’’ has been registered by the Registrar of Companies in Hong K ong as
required by Section 342C of the Companies (Winding Up and Miscellaneous Prov isions) Ordinance (Chapter 32 of th e Laws of Hong Kong). The Securities an dF u t u r e s
Commission and the Registrar of Companies in Hong Kong take no responsibility for the contents of this Prospectus or any other documents referred to ab ove.
The Offer Price is expected to be fixed by agreement between the Overall Coor dinators (for themselves and on behalf of the Underwriters) and our Compan yo nt h eP r i c e
Determination Date or such later date as may be agreed by the Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and our C ompany
but in any event no later than 12 : 00 noon on Thursday, January 9, 2025. The Off er Price will be not more than HK$1.64 per Offer Share and is currently expec t e dt ob e
not less than HK$1.24 per Offer Share. Applicants for Hong Kong Offer Shares may be required to pay, on application (subject to application channels), the Maximum
Offer Price of HK$1.64 per Offer Share together with brokerage of 1%, SFC tran saction levy of 0.0027%, the Stock Exchange trading fee of 0.00565% and AF RC
transaction levy of 0.00015%, subject to refund if the Offer Price should be less than HK$1.64 per Offer Share. If, for any reason, the Offer Price is not agreed between
the Overall Coordinators (for themselves and on be half of the Underwriters) and our Company on or before 12 : 00 noon on Thursday, January 9, 2025, the Gl obal
Offering (including the Hong Kong Public Offering) will not proceed and will lapse.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, with our consent, reduce the number of Offer Shares being offered und er the Global
Offering and/or the indicative Offer Price range below as stated in this Prospectus at any time on or prior to the morning of the last day for lodging appl ications under
the Hong Kong Public Offering. In such a case, an announcement will be published on the websites of our Company at http://www.newgonowrv.hk and the Stock
Exchange at www.hkexnews.hk not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offering. Details of the
arrangement will then be announced by us as soon as practicable. For further information, please refer to the sections headed ‘‘Structure of the Globa l Offering’’ and
‘‘How to Apply for the Hong Kong Offer Shares’’ in this Prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall Coordinators (for themselves
and on behalf of the Hong Kong Underwriters) if certain grounds arise prior to 8 : 00 a.m. on the Listing Date. Further details of such circumstances are s et out in
‘‘Underwriting — Underwriting arrangements and expenses — Grounds for Termination’’.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States, and may not be of fered, sold,
pledged or transferred within the United States or to, or for the account or benefit of U.S. persons (as defined in Regulation S), except pursuant to an e xemption from,
or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. The Offer Shar es are being offered
and sold to outside the United States in offshore transactions in accordance with Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this Prospectus to the p ublic in
relation to the Hong Kong Public Offering. This Prospectus is available at the websites of our Company at www.newgonowrv.hk and the Stock Exchange at
www.hkexnews.hk . If you require a printed copy of this Prospectus, you may download and print from the website addresses above.
December 31, 2024
IMPORTANT


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering. We will not provide printed copies of this Prospectus in relation to the Hong Kong
Public Offering.
This Prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the ‘‘HKEXnews > New Listings > New Listing Information ’’
section, and our website at www.newgonowrv.hk . You may download and print from these
website addresses if you want a printed copy of this Prospectus.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online through the HK eIPO White Form service at www.hkeipo.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who
is a HKSCC Participant to give electronic application instructions via HKSCC’s
FINI system to apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channel s to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this Prospectus
are identical to the printed prospectus as registered with the Registrar of Companies in
Hong Kong pursuant to Section 342C of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this Prospectu s is available online at the website addresses
stated above.
Please refer to the section headed ‘‘How to Apply for the Hong Kong Offer Shares’’
in this Prospectus for further details on the procedures through which you can apply for
the Hong Kong Offer Shares electronically.
IMPORTANT
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Your application through the HK eIPO White Form service or the HKSCC EIPO
channel must be made for a minimum of 2,000 Hong Kong Offer Shares and in one of the
numbers set out in the table below.
If you are applying through the HK eIPO White Form service, you may refer to the
table below for the amount payable for the number of Shares you have selected. You must
pay the respective maximum amount payable on application in full upon application for
Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, you are required to pre-fund
your application based on the amount specified by your broker or custodian, as determined
based on the applicable laws an d regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
H K $H K $H K $H K $
2,000 3,313.08 40,000 66,261.58 200,000 331,307.88 4,000,000 6,626,157.60
4,000 6,626.16 50,000 82,826.96 300,000 496,961.82 5,000,000 8,282,697.00
6,000 9,939.24 60,000 99,392.37 400,000 662,615.75 6,000,000 9,939,236.40
8,000 13,252.31 70,000 115,957.76 500,000 828,269.70 7,000,000 11,595,775.80
10,000 16,565.39 80,000 132,523.15 600,000 993,923.65 8,000,000 13,252,315.20
12,000 19,878.47 90,000 149,088.55 700,000 1,159,577.58 9,000,000 14,908,854.60
14,000 23,191.55 100,000 165,653.95 800,000 1,325,231.52 10,000,000 16,565,394.00
16,000 26,504.63 120,000 198,784.73 900,000 1,490,885.45 12,000,000
(1) 19,878,472.80
18,000 29,817.71 140,000 231,915.51 1,000,000 1,656,539.40
20,000 33,130.79 160,000 265,046.30 2,000,000 3,313,078.80
30,000 49,696.18 180,000 298,177.09 3,000,000 4,969,618.20
Note:
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer
Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and
AFRC transaction levy. If your application is su ccessful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for
applications made through the application channel of the HK eIPO White Form Service Provider) and the
SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy are paid to the Stock
Exchange (in the case of the SFC transaction levy, collected by the Stock Exchange on behalf of the SFC;
and in the case of the AFRC transaction levy, collected by the Stock Exchange on behalf of the AFRC).
No application for any other number of Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable of the Global Offering, we
will issue an announcement on the respective websites of our Company at
www.newgonowrv.hk and the Stock Exchange at www.hkexnews.com.hk .
H o n gK o n gP u b l i cO f f e r i n gc o m m e n c e s .......................... 9 : 0 0a . m .o n
Tuesday, December 31, 2024
Latest time for completing electronic applications
under the HK eIPO White Form service through the
designated website at www.hkeipo.hk (2) ........................ 1 1 : 3 0a . m .o n
Wednesday, January 8, 2025
Application lists of the Hong Kong Public Offering
open (3) ............................................... 1 1 : 4 5a . m .o n
Wednesday, January 8, 2025
Latest time for giving electronic application instructions
to HKSCC (4) ..........................................1 2 : 0 0n o o no n
Wednesday, January 8, 2025
Latest time to complete payment of HK eIPO White
Form applications by effecting internet banking
t r a n s f e r ( s )o rP P Sp a y m e n tt r a n s f e r ( s ) ........................1 2 : 0 0n o o no n
Wednesday, January 8, 2025
If you are instructing your broker or custodian who is a HKSCC Participant to give
electronic application instructions v i aH K S C C ’ sF I N Is y s t e mt oa p p l yf o rt h eH o n gK o n g
Public Offer Shares on your behalf, you are advised to contact your broker or custodian for
the latest time for giving such instructions which may be different from the latest time as
stated above.
Application lists of the Hong Kong Public Offering
close
(3) ..............................................1 2 : 0 0n o o no n
Wednesday, January 8, 2025
Expected Price Determination Date (5) ...................o no rb e f o r e1 2 : 0 0n o o n
Thursday, January 9, 2025
EXPECTED TIMETABLE (1)
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Announcement of the final Offer Price, the indications
of the level of interest in the International Offering,
the level of applications in respect of the Hong Kong
Public Offering and the basis of allocation of the
Hong Kong Offer Shares under the Hong Kong
Public Offering to be published at the websites of the
Stock Exchange at
www.hkexnews.hk and our
Company at www.newgonowrv.hk on or before (6) .................. 1 1 : 0 0p . m .o n
Friday, January 10, 2025
Results of allocations in the Hong Kong Public
offering will be available f rom ‘‘Allotment Results’’
page at designated results of allocations website at
www.tricor.com.hk/ipo/result (alternatively:
www.hkeipo.hk/IPOResult ) with a ‘‘search by ID’’
f u n c t i o no na2 4 - h o u rb a s i s ...........................F r o m1 1 : 0 0p . m .o n
Friday, January 10, 2025
to 12 : 00 midnight on
Thursday, January 16, 2025
Despatch of Share certificates/Deposit of Shares
certificate into CCASS in respect of wholly or
partially successful applications pursuant to the
Hong Kong Public Offering on or before
(7)(8) ............F r i d a y ,J a n u a r y1 0 , 2025
Despatch of HK eIPO White Form e-Auto Refund
payment instructions/refund checks in respect of
wholly successful (if applicable) or wholly or
partially unsuccessful app lications pursuant to the
Hong Kong Public Offering on or before
(9)(10) .......... M o n d a y ,J a n u a r y1 3 , 2025
Dealings in Shares on the Stock Exchange to
c o m m e n c ea t ........................9 : 0 0a . m .o nM o n d a y ,J a n u a r y1 3 , 2025
The application for the Hong Kong Offer Sh ares will commence on Tuesday, December
31, 2024 through Wednesday, January 8, 2025, being longer than normal market practice
of three and a half days. Investors should be aware that the dealings in the Shares on the
Stock Exchange are expected to commence on Monday, January 13, 2025.
Notes:
(1) All times refer to Hong Kong local time. Details o f the structure and conditions of the Global Offering,
including its conditions, are set out in the section h eaded ‘‘Structure and Conditions of the Global
Offering’’ in this Prospectus. If there is any chang e in this expected timetable, an announcement will be
published on the website of our Company at www.newgonowrv.hk and the website of the Stock Exchange
at www.hkexnews.hk .
EXPECTED TIMETABLE (1)
–i v–


--- page 7 ---
(2) You will not be permitted to submit your application through the designated website at www.hkeipo.hk
after 11 : 30 a.m. on the last day for submitting a pplications. If you have already submitted your
application and obtained an application reference number from the designated website prior to 11 : 30
a.m., you will be permitted to cont inue the application process (by co mpleting payment of application
monies) until 12 : 00 noon on the last day for submitting applications, when the application lists close.
(3) If there is a ‘‘black’’ rainstorm warning or a tropi cal cyclone warning signal number 8 or above or Extreme
Conditions in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Wednesday, January
8, 2025, the application lists will not open and close on that day. Further information is set out in the
paragraph headed ‘‘How to Apply for the Hong Kong Offer Shares — E. Bad Weather Arrangements’’ in
this Prospectus. If the application lists do not open and close on Wednesday, January 8, 2025, the dates
mentioned in this section of the Prospectus may b e affected. A press announcement will be made by us in
such event.
(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC
via HKSCC’s FINI system should refer to the paragrap h headed ‘‘How to Apply for the Hong Kong Offer
Shares — A. Application for the Hong Kong Offer Share s — 2. Application Channels’’ in this Prospectus
for details.
(5) The Price Determination Date, being the date on whi ch the Offer Price is to be determined, is expected to
be on or before Thursday, January 9, 2025. If, for any reason, the Offer Price is not agreed between the
Sole Global Coordinator (for itself and on behalf of the Underwriters) and our Company by 12 : 00 noon
on Thursday, January 9, 2025, the Global Offering will not proceed and will lapse immediately.
(6) None of the website or any information containe d on that website forms part of this Prospectus.
(7) Applicants who apply through the HK eIPO White Form service for 1,000,000 or more Hong Kong Offer
Shares and have provided all information require d in their application that they may collect Share
certificates (if applicable) in person may do so fr om our Hong Kong Share Registrar, Tricor Investor
Services Limited at 17/F, Far East Finance Cent er, 16 Harcourt Road, Hong Kong from 9 : 00 a.m. to
1 : 00 p.m. on Monday, January 13, 2025 or any other date notified by us as the date of despatch of Share
certificates/e-Auto Refund payment instructions /refund checks. Applicants being individuals who are
eligible for personal collection must not authoriz e any other person to make their collection on their
behalf. Applicants being corporations who are eligible for personal collection must attend by sending their
authorized representatives each b earing a letter of authorisation fr om his/her corporation stamped with
the corporation’s chop. Both individuals and authorized representatives (if applicable) must produce, at
the time of collection, evidence of identity accepta ble to our Hong Kong Share Registrar, Tricor Investor
Services Limited. Applicants who have applied through the HKSCC EIPO channel may not collect their
Share certificates, which will be deposited into CCASS for the credit of their designated HKSCC
Participant’s stock accounts, as appropriate. Uncoll ected Share certificates will be despatched by ordinary
post at the applicant’s own risk to the address spe cified in the relevant application. For further
information, applicants should refer to the parag raph headed ‘‘How to Apply for the Hong Kong Offer
Shares — D. Despatch/Collection of Share certif icates and refund of application monies’’ in this
Prospectus.
(8) Share certificates for the Hong Kong Offer Share s will become valid evidence of title at 8 : 00 a.m. on
Monday, January 13, 2025, provided that (i) the Hong Kong Public Offering has become unconditional in
all respects; and (ii) neither of the Underwriting Ag reements has been terminated in accordance with its
terms. Investors who trade Shares on the basis of publ icly available allocation details before the receipt of
Share certificates or before the Share certificates becoming valid d o so entirely at their own risk.
EXPECTED TIMETABLE (1)
–v–


--- page 8 ---
(9) e-Auto Refund payment instructions/refund check s will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering and also in respect of wholly or
partially successful applications in the event that th e final Offer Price is less than the price payable per
Offer Share on application. Part of the applicant’s ide ntification document number, or, if the application
is made by joint applicants, part of the identifica tion document number of the first-named applicant,
provided by the applicant(s) may be printed on the refund check, if any. Such data would also be
transferred to a third party for refund purposes. Ba nks may require verification of an applicant’s
identification document number before cashing the r efund check. Inaccurate completion of an applicant’s
identification document number may lead to delay in e ncashment of, or may invalidate, the refund check.
Applicants who apply through the HK eIPO White Form service and paid their applications monies
through single bank account may have refund monies (i f any) despatched to their application payment
bank account, in the form of e-Auto Refund paymen t instructions. Applicants who apply through the HK
eIPO White Form service and paid their application monies through multiple bank accounts may have
refund monies (if any) despatched to the address as s pecified in their application instructions to the HK
eIPO White Form Service Provider, in the form of refund checks in favor of the applicant (or, in the case
of joint applications, the first-named appl icant), by ordinary post at their own risk.
(10) Applicants who apply for Hong Kong Public Offer Shares via the HK eIPO White Form service should
refer to the paragraph headed ‘‘How to Appl y for the Hong Kong Public Offer Shares — D.
Despatch/Collection of Share certificates and Re fund of Application Monies’’ in this Prospectus.
Particulars of the structure and conditio ns of the Global Offering, including the
conditions thereto, are set out in the section headed ‘‘Structure and Conditions of the
Global Offering’’ in this Prospectus. Details relating to how to apply for the Hong Kong
Offer Shares are set out in the section headed ‘‘How to Apply for the Hong Kong Offer
Shares’’ in this Prospectus.
EXPECTED TIMETABLE (1)
–v i–


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This Prospectus is issued by our Company solely in connection with the Hong Kong
Public Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered
by this Prospectus pursuant to the Hong Kong Public Offering. This Prospectus may not be
used for the purpose of marketing, and does not constitute, an offer or invitation in any other
jurisdiction or in any other circumstances. No action has been taken to permit a public
offering of the Offer Shares in any jurisdiction other than Hong Kong and no action has been
taken to permit the distribution of this Prospectus in any jurisdiction other than Hong Kong.
The distribution of this Prospectus and the offering and sale of the Offer Shares in other
jurisdictions are subject to restrictions an d may not be made except as permitted under the
applicable securities laws of such jurisdictions pursuant to registration with or authorization
by the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this Prospectus to make your
investment decision. We have not authorized anyone to provide you with information that is
different from what is contained in this Prospectus. Any information or representation not
made in this Prospectus must not be relied on by you as having been authorized by us, the
Sole Sponsor, Sponsor-Overall Coordinator, Overall Coordinators, Joint Global
Coordinators, Joint Bookrunners, Joint Lead Managers, the Underwriters, any of their
respective directors or any other person or party involved in the Global Offering.
Page
Expected Timetable ............................................................. i i i
Contents ........................................................................ v i i
Summary ....................................................................... 1
Definitions ..................................................................... 3 0
Glossary of Technical Terms .................................................... 4 3
Forward-looking Statements .................................................... 4 4
Risk Factors .................................................................... 4 6
Waivers from Strict Compliance with the Listing Rules .......................... 9 4
Information about this Prospectus and the Global Offering ...................... 9 8
Directors and Parties Involved in the Global Offering ........................... 1 0 2
Corporate Information .......................................................... 1 0 9
Industry Overview .............................................................. 1 1 1
Regulatory Overview ............................................................ 1 3 0
CONTENTS
–v i i–


--- page 10 ---
Page
History, Reorganization and Corporate Structure ............................... 1 6 6
Business ........................................................................ 1 7 8
Relationship with Our C ontrolling Shareholders ................................. 2 6 7
Connected Transactions ......................................................... 2 7 7
Directors and Senior Management .............................................. 2 8 7
Substantial Shareholders ........................................................ 3 0 0
Share Capital ................................................................... 3 0 2
Financial Information ........................................................... 3 0 6
Future Plans and Use of Proceeds ............................................... 3 6 3
Underwriting ................................................................... 3 7 1
Structure of the Global Offering ................................................ 3 8 5
How to Apply for the Hong Kong Offer Shares ................................. 3 9 7
Appendix I — Accountants’ Report ........................................... I - 1
Appendix II — Unaudited Pro Forma Financial Information ................... I I - 1
Appendix III — Summary of the Constitution of the Company and
Cayman Islands Company Law .............................. III-1
Appendix IV — Statutory and General Information ............................ I V - 1
Appendix V — Documents Delivered to the Registrar of Companies and
Available on Display ........................................ V - 1
CONTENTS
– viii –


--- page 11 ---
This summary aims to give you an overview of the information contained in this
Prospectus and should be read in conjunction with the full text of this Prospectus. As this is
only a summary, it does not contain all the information that may be important to you. You
should read this Prospectus in its entirety before you decide to invest in the Offer Shares.
There are risks associated with any investment. Some of the particular risks in investing in
the Offer Shares are set out in ‘‘Risk Factors.’’ You should read that section carefully before
you decide to invest in the Offer Shares. Various expressions used in this section are defined
or explained in ‘‘Definitions’’ and ‘‘Glossary of Technical Terms’’ in this Prospectus.
OVERVIEW
We are a recreational vehicle (RV) enterprise with an extensive presence in Australasia
that designs, develops, manufactures and sells bespoke towable RVs, commanding the
second-largest market share in Australasia’s RV industry in terms of both revenue and sales
volume in 2023, according to Frost & Sullivan . With our capabilities in product research
and development, manufacturing and sales and distribution, we design every aspect of our
RV owners’ user experience from conceptualization to ownership. We design and
manufacture our RVs with emphasis on comfort ability, safety and functionality, creating
mobile homes that can address RV owners’ needs for both extra physical and mental space.
Our capabilities span the entire RV industry value chain, encompassing visionary design,
refined manufacturing, localized sales and dist ribution, and auxiliary after-sales services.
We pride ourselves on our commitment to customization, offering a made-to-order service
for our owners to personalize various aspects of their RV, from exterior esthetics to interior
layout and features. This enables us to creat e RVs that reflect individualized demands of
different RV owners and deliver superior end-to-end owner experiences from
conceptualization, design selection, customiz ation, delivery to various after-sales services.
According to Frost & Sullivan, the Austra lasia RV market exhibits a relatively
concentrated structure. According to the 2023 sales volume data, the top five participants in
Australasia RV market collectively hold appr oximately 55.4% of the market share, with our
Group capturing about 6.8% of the market share. In addition, in terms of revenue in 2023,
the top five participants in Australasia RV mar ket collectively hold approximately 52.0% of
the market share, with our Group capturing about 7.8% of the market share.
We have expertise spanning the entire RV industry value chain, empowering our
growth trajectory:
. Brand management and RV collection rejuvenation . Since our acquisition in 2014 of
Regent, a renowned Australian RV brand with a long heritage of over 30 years, we
have become a notable company in the RV industry in Australasia, operating
three distinctive brands, namely the mi d-end and top-selling brand, Snowy River,
the luxury brand, Regent, and the semi -off-road brand, NEWGEN. Envisioning
our RV owners who seek to live, holiday or travel in the RVs, we offer towable
RVs ranging from family-friendly models for family’s recreational use, compact
models for adventurers, slide-out models for those who crave additional space in
SUMMARY
–1–


--- page 12 ---
their RVs, to multi-terrain models for the ultimate semi-off-road adventure. From
value-conscious newcomers to seasoned e nthusiasts craving upscale luxury and
personalized RVs, we cater to every type of RV owners.
. Product research and development . We have been continuously rejuvenizing and
broadening our collection of RVs to fulfill customers’ demands and drive sales.
We periodically launch new models and continuously incorporate upgrades to our
existing RV collection, to attract new cu stomers with different needs, generate
repurchase from existing customers and expand our product collection. During
the Track Record Period, we developed and launched nine new models under
Regent, six new models under Snowy River, upgraded 21 models under Snowy
River, and developed and launched five new models under NEWGEN. In
addition, we aspire to creating a sustainab le and eco-friendly path for our owners
to embrace RV electrification and are currently developing a trailblazing model of
towable ERV (electric recreational vehicle). We are among the first batch of RV
experts that bring ERV options to comm ercialization, according to Frost &
Sullivan.
. Manufacturing. We optimize our manufacturing workflows through strategic
rationalization and continual upgrades of our production processes. Our
production facilities in Zhejiang , China cover a sprawling area of
approximately 47,567 square meters, consisting of five specialized workshops:
welding, painting, lamination, tailoring and furniture, alongside two cutting-edge
assembly lines. Furthermore, our tw o final assembly lines in Australia
complement our primary manufacturing capabilities in China by undertaking
final assembly of our RVs. Their proximity to end customers in the local market
also enables us to swiftly address their needs for finishing touches and
customization requests. From the integration of the latest machinery sourced
from the United States and Australia to the development of a comprehensive
technology system to execute and harmonize with high degrees of customization
of our RVs, every element of our production process is engineered to uphold
rigorous standards of quality and meet customer expectations. Wedding our
proprietary knowledge with our refined techniques in production from all aspects,
our manufacturing excelle nce allows us to craft RVs with strong flexibility,
advanced automation, and superior operating efficiency.
. Sales and distribution . We market our RVs and interact with customers through a
dynamic, multifaceted sales and distribution network and a myriad of marketing
initiatives across Australasia. As of June 30, 2024, we had built a robust sales and
distribution network consisting of 13 third-party dealer stores, two self-owned
stores alongside online official websites, and four JV stores with our JV partners
in Australasia. Our geographic footprint spans across major cities in Australasia,
including Melbourne, Sydney, Brisbane, A d e l a i d e ,P e r t h ,C a n b e r r a ,A u c k l a n d
and Christchurch, with a strategic presence of one to three dealer stores, JV
stores, and/or self-owned stores covering each location. Notably, our market
share in Queensland’s vibrant RV market surpassed our performance in the
broader Australian RV market in terms of sales volumes in 2023, according to
SUMMARY
–2–


--- page 13 ---
Frost & Sullivan. Additionally, we activel y engage in targeted marketing through
online promotions and offline events to further enhance our brand recognition
and acquire customers.
Owing to our end-to-end management capa bilities from RV conceptualization to
manufacturing and eventual sales and distribution, we have become a RV precursor,
ranking second among Australasia’s standard caravans in terms of sales volumes in 2023.
Leveraging our demonstrated proficiency in the RV industry value chain and our solid and
growing customer base in Australasia, we have achieved robust sales growth over the Track
Record Period. In 2021, 2022 and 2023 and for the six months ended June 30, 2024, we
delivered an aggregate of 1,330, 2,127, 2,694 and 1,427 RVs to our customers, respectively,
representing an increase of 59.9% from 2021 to 2022 and 26.7% from 2022 to 2023.
Our revenues continued to soar during the Track Record Period. We achieved revenues
of RMB299.7 million in 2021, RMB498.8 milli on in 2022, and RMB720.3 million in 2023,
with corresponding gross profit margins of 16.7%, 16.5% and 25.1% for those years. Our
revenues were RMB422.0 million for th e six months ended June 30, 2024, with
corresponding gross profit margin of 32.0% for the same period. Our net profit grew
significantly from RMB25.1 million in 2021 to RMB33.0 million in 2022, and further to
RMB78.8 million in 2023. Our net profit was RMB40.4 million for the six months ended
June 30, 2024. Our adjusted net profit (non-HKFRS measure) was RMB25.1 million,
RMB33.0 million, RMB78.8 million and RMB5 5.7 million in 2021, 2022 and 2023 and for
the six months ended June 30, 2024, respectively.
OUR BUSINESS MODEL
Our product offering is showcased under three distinctive brands, namely the mid-end
and top-selling brand, Snowy River, the luxury b rand, Regent, and the semi-off-road brand,
NEWGEN. Envisioning our RV owners who seek to live, holiday or travel in the RVs, we
offer towable RVs ranging from family-frie ndly models for family’s recreational use,
compact models for adventurers, slide-out models for those who crave additional space in
their RVs, to multi-terrain models for the ul timate semi-off-road adventure. Driven by our
relentless dedication to customer satisfacti on, we offer a high degree of customization for
all our RV models. See ‘‘Business — Our Product and Brand.’’ We design and manufacture
our RVs with emphasis on comfortability, safe ty and functionality. According to Frost &
Sullivan, we achieved the second-largest market share in Australasia’s RV industry in terms
of sales volume in 2023. In addition, as of th e Latest Practicable Date, steering the
evolution of the RV industry, we were in the final stage of developing new towable ERV
models, which are lighter in weight and featured with automotive design and constructions,
and were among the first batch of RV experts that bring towable ERV options to
commercialization. See ‘‘Business — Product Development and Innovation — Our Towable
ERV Model in the Pipeline.’’ Furthermore, we expect to launch hybrid off-road towable
RVs and motorized RVs first in Australasia b y the end of 2024 and eventually roll out our
RV collections in the European and Canadian markets. As confirmed by Frost & Sullivan,
no import duty was applicable to RVs of a Chinese origin exported into Europe or Canada
as of the Latest Practicable Date. For our potential tariff exposure in light of our expansion
SUMMARY
–3–


--- page 14 ---
plan in Europe and Canada, see ‘‘Risk Factors — Risks relating to our Business and our
Industry — We may be subject to tariffs in countries where we operate or plan to expand
our business.’’
Built upon a vertically integrated business model, we combine our in-house product
design and manufacturing expertise in China wi th our local sales capabilities in Australasia,
effectuating superior end-to-end owner exper iences for RV owners from conceptualization,
design selection, customization, delivery to va rious after-sales services. Our manufacturing
team in China works closely with our marketing and distribution team in Australasia to
deliver end-to-end services to our customers . To capture the benefit of our integrated
manufacturing capabilities in the PRC and our l ocal decade-long presence, extensive sales
and distribution network and rich marketing experience in the RV industry in Australasia,
we produce our frame and chassis in China utiliz ing the latest vacuum press technology and
a d v a n c e dc r a f t s m a n s h i p ,a n dt h e ns h i pt h e mt oo u ra s s e m b l yl i n e si nM e l b o u r n et ob e
assembled according to Australian federal st andards that can be marketed in both Australia
and New Zealand.
Our RVs are available for sale and delivery in Australia and New Zealand and have a
pre-tax base price ranging from A$50,900 (equivalent to RMB230,093) to A$84,990
(equivalent to RMB384,197), depending on the brands and models. As of June 30, 2024, we
had built a dynamic, multifaceted sales and dis tribution network, leveraging a combination
of three distinct channels: (i) a robust and extensive network of 13 third-party dealer stores
in Australasia, enhancing our sales coverag e and market penetration; (ii) two self-owned
stores in Australia alongside online official we bsites, ensuring direct local presence,
fostering connection with our clientele, and a cquire invaluable market insights firsthand;
and (iii) four JV stores with our JV partne rs, allowing us to expand our sales and
distribution network while mitigating substantial overhead costs. Our geographic footprint
spans across major cities in Australasia, including Melbourne, Sydney, Brisbane, Adelaide,
Perth, Canberra, Auckland and Christchurch , with a strategic presence of one to three
dealer stores, JV stores, and/or self-owned stores covering each location. See ‘‘Business —
Sales and Distribution.’’
We also offer auxiliary services that suppor t and synergize with our core business. As
of June 30, 2024, we had a network of 54 recommended RV workshops (including our
self-owned stores and JV stores) offering various after-sales services, including RV
maintenance, repairs, and sales and upgrade of a wide selection of RV parts and
accessories, ensuring that our customers have access to everything they need to keep their
vehicles running smoothly and efficiently. By integrating these additional offerings into our
business model, we strive to foster lasting relationships with our RV owners that goes
beyond mere transactions, ensuring satisfaction, long-term customer loyalty, and an
exceptional ownership experien ce. Additionally, starting from 2023, we provide an option
for customers to trade in their eligible pre-owned RV for purchase of a new RV that we
offer at all of our self-owned stores and JV stores, and resell these pre-owned RVs typically
at the same stores.
SUMMARY
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--- page 15 ---
The following table sets forth our revenue breakdown by products, both in absolute
amount and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Sale of RVs 298,586 99.6% 498,116 99.9% 710,747 98.7% 309,526 100.0% 396,894 94.1%
— Snowy River 233,273 77.8% 402,690 80.7% 550,175 76.4% 235,517 76.1% 335,096 79.4%
— Regent 35,098 11.7% 49,347 9.9% 84,338 11.7% 35,514 11.5% 26,514 6.3%
— NEWGEN 30,215 10.1% 46,079 9.2% 76,234 10.6% 38,495 12.4% 35,284 8.4%
Sale of pre-owned RVs — — — — 8,691 1.2% — — 23,396 5.5%
Others
(1) 1,086 0.4% 664 0.1% 865 0.1% — — 1,683 0.4%
Total 299,672 100.0% 498,780 100.0% 720,303 100. 0% 309,526 100.0% 421,973 100.0%
Note:
(1) Others include revenue generated from sales of RV parts during our provisio n of after-sales services
which are auxiliary to our core business of sales of our RVs.
The following table sets forth a breakdown of our gross profit and gross profit margin
by products for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
(Unaudited)
(RMB in thousands, except for percentages)
Sales of RVs 49,755 16.7% 82,172 16.5% 179,521 25.3% 71,381 23.1% 127,662 32.2%
— Snowy River 39,455 16.9% 63,590 15.8% 140,804 25.6% 55,844 23.7% 105,169 31.4%
— Regent 6,938 19.8% 7,535 15.3% 15,572 18.5% 6,517 18.4% 8,207 31.0%
— NEWGEN 3,362 11.1% 11,047 24.0% 23,145 30.4% 9,020 23.4% 14,286 40.5%
Sales of pre-owned RVs — — — — 1,415 16.3% — — 6,777 29.0%
Others 348 32.1% 72 10.9% 115 13.3% — — 464 27.6%
Total 50,103 16.7% 82,244 16.5% 181,051 25.1% 71,381 23.1% 134,903 32.0%
Overall, the fluctuations in our gross profit margin for sales of RVs were primarily
affected by the following factors: (i) high degree of customization of our RV owners which
typically yields higher gross profit margin , (ii) the proportion of our retail sales of RVs
through self-owned stores and JV stores attribut able to the relatively higher retail prices
compared to the wholesale prices for dealers, an d (iii) fluctuations in shipping and handling
expenses.
SUMMARY
–5–


--- page 16 ---
More specifically, our gross profit margi n for the Snowy River RVs decreased from
16.9% in 2021 to 15.8% in 2022, primarily due to an increase in shipping and handling
expenses amid COVID-19. Our gross profit margin for the Snowy River RVs increased to
25.6% in 2023, primarily due to (i) a highe r degree of customization, (ii) a higher
proportion of retail sales, and (iii) the higher shipping and handling expenses in 2022 amid
COVID-19. Our gross profit margin for the Snowy River RVs increased from 23.7% for the
six months ended June 30, 2023 to 31.4% for the six months ended June 30, 2024, primarily
due to a higher proportion of our retail sales of RVs through self-owned stores and JV
stores than sales to dealers at wholesale prices which are generally lower than retail prices.
Our gross profit margin for the Regent RVs during the Track Record Period was
primarily affected by fluctuations in shippi ng and handling expenses. The gross profit
margin decreased from 19.8% in 2021 to 15.3% in 2022 and then increased to 18.5% in
2023, primarily due to (i) higher shipping an d handling expenses on a per-unit basis as a
result of higher levels of shipping prices due to the disruption to global supply chains caused
by COVID-19, and (ii) the relatively larger revenue contribution of RV models which have
higher gross profit margin in 2021. Our gross profit margin for the Regent RVs increased
from 18.4% for the six months ended June 30, 2023 to 31.0% for the six months ended June
30, 2024, primarily due to a higher proportion of our retail sales of RVs through self-owned
stores and JV stores than sales to dealers at who lesale prices which are generally lower than
retail prices.
Our gross profit margin for the NEWGEN RVs increased from 11.1% in 2021 to
24.0% in 2022, primarily due to (i) a higher deg ree of customization, and (ii) a reduction in
procurement costs as a result of our collaboration with more cost-effective suppliers for
certain components of the NEWGEN models. Our gross profit margin for the NEWGEN
RVs increased to 30.4% in 2023, primarily due to (i) the higher shipping and handling
expenses in 2022 amid COVID-19, and (ii) a higher proportion of retail sales. Our gross
profit margin for the NEWGEN RVs increased from 23.4% for the six months ended June
30, 2023 to 40.5% for the six months ended June 30, 2024, primarily due to a higher
proportion of our retail sales of RVs through self-owned stores and JV stores than sales to
dealers at wholesale prices which are generally lower than retail prices.
The following table sets forth a breakdown of our revenues from sales of RVs by
distribution channels for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Sales to dealers 298,586 100.0% 472,834 94. 9% 581,632 81.8% 268,175 86.6% 252,513 63.6%
Direct sales
— Via self-owned
stores — — 25,282 5.1% 100,769 14.2% 41,351 13.4% 76,302 19.2%
—V i aJ Vs t o r e s (1) — — — — 28,346 4.0% — — 68,079 17.2%
Total 298,586 100.0% 498,116 100.0% 710,747 100. 0% 309,526 100.0% 396,893 100.0%
SUMMARY
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Note:
(1) We have conducted sales of RVs through JV stores since we opened our first JV store operated by
Leisure Lion in Queensland, Australia in 2020. As of June 30, 2024, we had a total of four JV stores:
three were operated by Leisure Lion, compri sing one opened in 2020 and two in 2023; and one
opened in 2023 and operated by United RV. See ‘‘B usiness — Sales and Distribution — Self-owned
Stores and JV Stores’’ for more details. Leisure L ion, initially an equally-owned joint venture,
subsequently became our 51%-owned subsidiary in September 2023. United RV has been our
subsidiary since its incorporation. Accordingl y, with respect to the JV stores operated by Leisure
Lion, we recognized revenue from sales of RVs as revenue generated from sales to dealers for 2021,
2022, and the period in 2023 when Leisure Lion remained as our equally-owned joint venture. After
Leisure Lion became our subsidiary in September 2023, revenue was recorded as revenue generated
from direct sales via JV stores. As a result, no rev enue was recorded from direct sales via JV stores in
2021 and 2022 despite our first JV store being established in May 2020. With respect to the JV store
operated by United RV, which was opened in 2023, revenue was recorded as revenue generated from
direct sales via JV stores.
Our revenue generated from s ales to dealers increased from RMB298.6 million in 2021
to RMB472.8 million in 2022 and further to RMB581.6 million in 2023, primarily due to the
expansion in the number of our dealer stores and the increase in sales volume of RVs. Our
revenue generated from sales to dealers decreased from RMB268.2 million for the six
months ended June 30, 2023 to R MB252.5 million for the six months ended June 30, 2024,
primarily because the revenue from the JV stores operated by Leisure Lion was recorded as
revenue generated from direct sales via JV stores after Leisure Lion became our subsidiary
in September 2023.
Our revenue generated from direct sales vi a self-owned stores increased from RMB25.3
million in 2022 to RMB100.8 million in 2023, primarily due to the addition of a new
self-owned store in 2023 and the increase in sales volume of our RVs. Our revenue generated
from direct sales via self-owned stores incr eased from RMB41.4 million for the six months
ended June 30, 2023 to RMB76.3 million for the six months ended June 30, 2024, primarily
due to the increase in sales volume of our RVs.
The following table sets forth a breakdown of our gross profit and gross profit margin
from sales of RVs by distribution channels for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
(Unaudited)
(RMB in thousands, except for percentages)
Sales to dealers 49,755 16.7% 73,235 15. 5% 127,451 21.9% 55,133 20.6% 63,659 25.2%
Direct sales
— Via self-owned
stores — — 8,937 35.3% 40,820 40.5% 16,248 39.3% 34,196 44.8%
— Via JV stores — — — — 11,250 39.7% — — 29,807 43.8%
Total 49,755 16.7% 82,172 16.5% 179,521 25.3% 71,381 23.1% 127,662 32.2%
SUMMARY
–7–


--- page 18 ---
The trend in our gross profit margin for sales of RVs through the respective
distribution channels was generally consistent with that in our overall gross profit margin
for sales of RVs for the same periods. This trend was primarily affected by the following
factors that also drive our overall gross profit margin: (i) a higher degree of customization
which typically yields higher gross profit margin, (ii) increases in list prices of our RVs as a
result of interior and exterior upgrades and rejuvenation to our RV models, and (iii) the
impact of the higher shipping and handling expenses in 2022 as a result of the COVID-19
pandemic.
Moreover, we conduct retail sales of RVs through self-owned stores and JV stores at
relatively higher retail prices compared to the wholesale prices for dealers, because as a
natural practice for dealership operations, the wholesale prices for dealers factor in a
discount to the retail prices, allowing dealers to sell the RVs at a profit. As a result, both the
direct sales via self-owned stores and JV sto res achieved higher gross profit margins
compared to the sales to dealers.
SUMMARY
–8–


--- page 19 ---
OUR PRODUCT AND BRAND
We design, develop, manufacture and sell a wide array of bespoke towable RVs,
offering a full spectrum of functionalities a nd an expansive range of auxiliary services,
catering to the personalized tastes and requirements of our proud RV owners. As of June
30, 2024, we had successfully mass-produced a comprehensive lineup of 49 RV models,
which were all standard caravans, spanning eig ht distinct series under three characteristic
brands, namely Snowy River, Regent and NEWGEN, as described below:
SRC Series (13 models)
RDC Series (5 models)
NG Series (17 models)
RCC Series (4 models)
SRT Series (6 models) SRP Series (4 models)
ERV
COMING SOON
MORE TO COME
ERV
SUMMARY
–9–


--- page 20 ---
Our Products
We design, produce and sell a wide range of towable RVs. Each of our RV is designed
and produced with focus on comfortability, safety and functiona lity. Our RVs boast
innovative designs and a suite of advanced technologies, setting them apart from our
competitors’ offerings. Our RVs disp lay the following common features.
. Exterior. We employ sandwich panels for the construction of our RVs’ floor, walls
and roof, ensuring they are sturdy, lightweight, and water-resistant. Beneath the
floor lies an organic zinc-rich silver metallic chassis with a 50mm ball coupling
and torsion suspension, enhancing safety and delivering a smoother driving
experience. Moreover, our anti-sway cont rol system enhances vehicle stability,
further improving driving safety and comfort.
. Interiors. We meticulously design and manufacture interior fittings and
customized furnishings for our RVs in-house, aligning with our commitment to
fulfilling the high degree of high-end cus tomization of our RV owners, enhancing
the competitiveness of our products in the market. To keep abreast of market
trends, we also collaborate with third-pa rty interior design consultants to select
interior themes and colors through significant market research and study on focus
groups. Every element inside our RVs is carefully curated by our team of skilled
professionals, ensuring exceptional quality and customization to meet diverse
tastes and preferences of our owners.
We pride ourselves on our commitment to customization. With our superior
manufacturing capabilities and skilled crafts manship, we offer a made-to-offer service
that fosters a high level of personalization and ensures every RV reflects the unique
preferences and needs of its owner. From exterior esthetics to interior layout and feature,
and whether it is incorporating unique desig n elements, adding special amenities, or
fine-tuning every detail, our team is dedicat ed to creating RVs that reflect individualized
demands of different RV owners.
We maintain a high degree of customization for all our RV models, ranging from
interior layouts, appliances, external deigns to furnishings and fittings, which can be almost
completely adapted to match customer requ irements, while still maintaining cost
advantages associated with our production cycle. For the owners to visualize their dream
RVs, we offer virtual selection interface online with estimated pricing under different
options.
SUMMARY
–1 0–


--- page 21 ---
Our Brands
Our collection of bespoke RVs is curated und er three characteristic brands, namely
Snowy River, Regent and NEWGEN, which we regard as emblems of quality,
craftsmanship, innovation and performance. Each of our brands stands out in style and
technical performance characteristics with d istinctive features and precise identities:
. Snowy River is our top-selling brand that perfectly combines contemporary and
modern design elements with attention to details and functionalities, targeting
mid-end customers.
. Regent is our luxury, high-end brand with more than three decades of history,
characterized by luxurious cabins with sp acious and elegantly designed interior
layouts.
. NEWGEN is a semi-off-road brand, designed to appeal to the younger generation
of customers.
Our Production Process and Facilities
Our production philosophy centers around product quality, continuous improvement,
flexibility, advanced automation and high ope rating efficiency. We possess proprietary
knowledge to produce RVs, from the productio n of frames and chassis to the final assembly
and testing. Moreover, we are continuously optimizing our production techniques. Wedding
our proprietary knowledge with our techniques in production from all aspects supports our
control over the components and quality of our RVs throughout the production process.
Our production cycle for each of our RV bra nds starts in our production facilities in
Zhejiang, China and finishes in our final assem bly lines in Melbourne, Australia. The entire
production process requires approximately 12 weeks, excluding the delivery time
transporting the close-to-final towable RV s to the final assembly lines in Australia.
We build our RVs completely in-house. Our production facilities in Zhejiang, China
cover a sprawling area of approximately 47,567 square meters, consisting of five specialized
workshops: welding, painting, laminatio n, tailoring and furniture, alongside two
cutting-edge assembly lines. Furthermore, o ur two final assembly lines in Australia play
a crucial role in the final assembly of our RVs. The process starts with cutting, welding and
assembling steel metals to form the ‘‘skeleton,’’ or frame and chassis, of our RVs. This work
takes place at a single workstation, after which all material is transported to the painting
workstation for spraying and painting.
Concurrently, our staff proceeds to build the interior floors, ceilings, walls and wooden
fixtures at our furniture workstation and production of upholstery at our tailoring
workstation. Our staff also proceeds with the production of sandwich panels to be welded
with the frame to form the exterior of our RVs. Once we finish building the exteriors, highly
skilled artisans install all furniture and decor ations, which are then delivered to our site in
Australia for final assembly.
SUMMARY
–1 1–


--- page 22 ---
BACKLOG
Backlog refers to our estimate of the contract value of work that remains to be
completed as of a certain date. The contract value represents the amount that we expect to
receive under the terms of the contract, assumi ng the contract is performed in accordance
with its terms. Backlog is not a measure defin ed by generally accepted accounting policies.
The following table sets forth the outstanding contract value of projects in our backlog
by brands as of the dates indicated:
As of December 31, As of June 30,
As of the Latest Practicable Date2021 2022 2023 2024
RV Unit
A$ in
thousands
Equivalent
to RMB
in
thousands % RV Unit
A$ in
thousands
Equivalent
to RMB
in
thousands % RV Unit
A$ in
thousands
Equivalent
to RMB
in
thousands % RV Unit
A$ in
thousands
Equivalent
to RMB
in
thousands % RV Unit
A$ in
thousands
Equivalent
to RMB
in
thousands %
Snowy River 955 48,028 217,111 76.3 1,337 73,004 330,015 80.7 1,240 68 ,457 309,460 83.9 1,236 66,806 301, 997 82.8 1,267 70,629 319,278 92.3
Regent 144 8,692 39,292 13.8 173 11,354 51,326 12.6 72 4,631 20,934 5.7 77 4,924 22,259 6.1 13 868 3,926 1.1
NEWGEN 116 6,194 28,000 9.8 94 6,023 27,227 6.7 144 8,465 38,266 10.4 158 8,973 40,562 11.1 90 5,053 22,841 6.6
Total 1,255 62,914 284,403 100.0 1,604 90,381 408,567 100.0 1,456 81,553 368,660 100.0 1,471 80,703 364,818 100.0 1,370 76,550 346,045 100.0
See ‘‘Business — Backlog’’ for further details.
OUR STRENGTHS
We believe that the following competitive strengths are critical to our current success
and crucial to our future growth:
. Widely recognized brands and invigorating RV collection;
. Robust product development capabilities;
. Manufacturing excellence with precision and cost efficiency;
. Effective and diversified distribution channels;
. Full supply chain management and timely delivery; and
. Visionary management team with extensive interdisciplinary expertise.
OUR STRATEGIES
To achieve our mission and further strengthen our market leadership, we intend to
pursue the following strategies:
. Strengthen Australasian leadership and expand into the European and Canadian
markets;
. Maintain and elevate our brand image in the towable RV market;
. Continue to rejuvenate and broaden our RV collection; and
. Upgrade and automate our production facilities.
SUMMARY
–1 2–


--- page 23 ---
TOP CUSTOMERS AND SUPPLIERS
Top Customers
Our customers primarily consist of our dealers through which we sell our RVs to end
customers. In each year/period of the Track Record Period, sales to our five largest
customers in the aggregate accounted for 80.5%, 74.4%, 55.2% and 46.2% of our total
revenues, respectively. In each year/period o f the Track Record Period, sales to our largest
customer accounted for 26.2%, 27.3%, 25.1% and 23.8% of our total revenues,
respectively. None of our five largest customers in each year/period of the Track Record
Period was also our supplier.
Green RV held 49% equity interest in our s ubsidiary, Leisure Lion, and was also a
dealer operating two of our dealer stores as of June 30, 2024. Green RV was our largest
customer in each year/period of the Track Rec ord Period. See ‘‘Connected Transactions —
Partially-Exempt Continuing Connected Tran saction — Green RV Dealership Agreement’’
for more details.
Leisure Lion was initially a joint venture established by Regent Company, together
with Green RV, in Australia in July 2019, with each of Green RV and us holding 50%
interest, respectively. Subsequently, Leisure Lion became one of our subsidiaries in
September 2023 when the shareholding interest of Regent Company in it increased to 51%.
Leisure Lion was one of our five largest customers in 2021, 2022 and 2023, respectively.
To the best of our knowledge, all of our five largest customers in each year/period of
the Track Record Period, except for Green R V as our JV partner, and Leisure Lion as our
JV dealer, were independent third parties, and none of our Directors, their respective
associates or any shareholder who, to the knowledge of our Directors, owned more than 5%
of our issued share capital, had any interest in any of our five largest customers in each
year/period of the Track Record Period. For details, see ‘‘Business — Top Customers and
Suppliers — Top Customers.’’
Top Suppliers
Our suppliers mainly include suppliers of our p roduction inputs. In each year/period of
the Track Record Period, purchases from our five largest suppliers in the aggregate
accounted for 38.7%, 30.1%, 22.8% and 22.9% of our total purchases, respectively. In each
year/period of the Track Record Period, the purchases from our largest suppliers accounted
for approximately 20.6%, 11.1%, 8.8% and 7.8% of our total purchases, respectively. None
of our five largest suppliers in each year/period of the Track Record Period was also our
customer.
T ot h eb e s to fo u rk n o w l e d g e ,a l lo fo u rf i v elargest suppliers in each year/period of the
Track Record Period were independent third parties, except for Daide Power Machinery
and Shangqiu Jishun, each of which was a company controlled by Mr. Miao, one of our
Controlling Shareholders, and none of our Dir ectors, their respective associates or any
shareholder who, to the knowledge of our Directors, owned more than 5% of our issued
share capital, had any interest in any of our five largest suppliers in each year/period of the
SUMMARY
–1 3–


--- page 24 ---
Track Record Period. Daide Power Machinery, one of our five largest suppliers in both
2021 and 2022, is an affiliate of Daide Longtree, mainly engaging in trading business. Daide
Power Machinery is a limited liability compa ny established under the laws of the PRC in
2010 and is controlled by Mr. Miao, one of our Co ntrolling Shareholders. Shangqiu Jishun,
one of our five largest suppliers for the six months ended June 30, 2024, is an indirect
subsidiary of Daide Longtree and a connected person of our Company, mainly engaging in
RV parts manufacturing. Shangqiu Jishun is a limited liability compa ny established under
the laws of the PRC in 2021 and is contro lled by Mr. Miao, one of our Controlling
Shareholders. For details, see ‘‘Business — Top Customers and Suppliers — Top Suppliers’’
and for details of our transactions with Shangqiu Jishun, see ‘‘Connected Transaction —
Partially exempt continuing connected tran sactions — RV Parts Purchase Framework
Agreement.’’
OUR INDUSTRY AND COMPETITIVE LANDSCAPE
Our Industry
The global camping market has seen substantial growth recently, fueled by increased
interest in outdoor activities, rising dispos able incomes, and a greater focus on health and
wellness. According to Frost & Sullivan , the global number of campers reached
approximately 279.3 million in 2023, and is ex pected to grow further to 439.0 million by
2028, representing a CAGR of 8.5% from 2024 to 2028. In regions like North America,
Europe, and Australasia, camping has become a staple of recreational tourism. Campers
have the flexibility to set up in various locations such as national parks, professional
campgrounds, or smaller sites, making it a n appealing tourism option. They can choose
from different types of accommodations, including RVs, tents, or cabins that can be easily
relocated to different settings. Among which, RVs offer a unique advantage as an
accommodation option for camping, merging t he convenience of mobility with the comfort
of a home, making them an ideal choice for trav elers seeking both adventure and comfort.
RVs are designed with fully equipped living spaces that include sleeping areas, kitchens,
bathrooms. Additionally, RVs come with essential amenities such as power and water
systems, air conditioning, and storage solutions, making them suitable for both short
excursions and extended travels. This self-contained setup ensures that campers can enjoy a
high level of autonomy and flexibility during the ir journeys, enhancing their overall travel
experience.
Our Competitive Landscape
The Australasia RV market exhibits a relatively concentrated structure and is
primarily dominated by mid-end towable RVs. According to the 2023 sales data, the top
five participants collectively hold approximately 55.4% of the market share. In the same
year, our Group ranked as the second-largest RV company in Australasia, selling 2.7
thousand units and capturing about 6.8% of the market share.
In addition, measured by revenue, the Aust ralasia RV market reached RMB9.2 billion
in 2023, representing a CAGR of 9.9% since 2019. According to Frost & Sullivan, our
Group ranked as the second-largest RV compan y in terms of revenue in 2023 in Australasia,
capturing about 7.8% of the market share.
SUMMARY
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We are a notable standard caravan player in Australasia. Based on 2023 sales volume,
we are the second-largest standard caravan player in Australasia, holding a market share of
9.7%, according to Frost & Sullivan. See ‘‘I ndustry Overview’’ for more details of the
competitive landscape of relevant market regarding our products.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables present our summary of consolidated financial information as of
and for the three years ended December 31, 2023, and for the six months ended June 30,
2023 and 2024. We have derived this summary from our historical financial information set
forth in the Accountants’ Report set out in Appendix I to this Prospectus. The summary
financial data set forth below should be read together with our consolidated financial
statements and the related notes, as well as the section headed ‘‘Finan cial Information.’’
Consolidated Statements of Profit or Loss
The following table sets forth a summary of our consolidated statement of profit or
loss with line items in actual terms and as a percentage of our total revenue for the periods
indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Revenue 299,672 100.0% 498,780 100.0% 720,303 100. 0% 309,526 100.0% 421,973 100.0%
Cost of sales (249,568) (83.3%) (416,536) (83.5%) ( 539,252) (74.9%) (238,145) (76.9%) (287,070) (68.0%)
Gross profit 50,104 16.7% 82,244 16.5% 181,051 25.1% 71,381 23.1% 134,903 32.0%
Other income/(loss) 8,107 2.7% 9,115 1. 8% 14,517 2.0% 7,667 2.5% (2,667) (0.6%)
Selling and distribution
expenses (6,479) (2.2%) (19,316) (3.9%) (41, 547) (5.8%) (17,255) (5.6%) (32,184) (7.6%)
Administrative expenses (12,385 ) (4.1%) (21,155) (4.2%) (36,209) (5. 0%) (14,078) (4.5%) (35,605) (8.4%)
Research and development
expenses (2,835) (0.9%) (5,112) (1.0%) (7, 968) (1.1%) (4,010) (1.3%) (5,625) (1.3%)
(Provision)/reversal of
impairment loss on
trade receivables (9) (0.0%) (65) (0.0%) 34 0.0% 7 0.0% (21) (0.0%)
Share of profit/(loss) of a
joint venture 912 0.3% 1,083 0.2% 113 0.0% (283) (0.1%) — —
Profit from operations 37,415 12.5% 46,794 9.4% 109,991 15.3% 43,429 14.0% 58,801 13.9%
Finance costs (3,090) (1.0%) (2,533) (0.5%) ( 2,315) (0.3%) (1,079) (0.3%) (4,796) (1.1%)
Profit before taxation 34,325 11.5% 44,261 8.9% 107,676 14.9% 42,350 13.7% 54,005 12.8%
Income tax (9,245) (3.1%) (11,305) (2.3%) (28, 908) (4.0%) (10,702) (3.5%) (13,575) (3.2%)
Profit for the year/period 25,080 8.4% 32,956 6.6% 78,768 10.9% 31,648 10.2% 40,430 9.6%
Attributable to:
Equity shareholders of the
Company 25,080 8.4% 32,956 6.6% 79,973 11.1% 31,648 10.2% 39,532 9.4%
Non-controlling interests — — — — (1,205) (0.2%) — — 898 0.2%
Profit for the year/period 25,080 8.4% 32,956 6.6% 78,768 10.9% 31,648 10.2% 40,430 9.6%
SUMMARY
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NON-HKFRS MEASURES
To supplement our consolidated financial statements which are presented in
accordance with HKFRS, we also use adju sted net profit (non-HKFRS measure) as
additional financial measure, which is not r equired by, or presented in accordance with,
HKFRS. We believe that such non-HKFRS measu re facilitates compar isons of operating
performance from period to period and company to company by eliminating potential
impact of certain items.
We believe that adjusted net profit (non-HKFRS measure) provides useful information
to investors and others in understanding and evaluating our consolidated statements of
profit or loss and other comprehensive income in the same manner as they help our
management. However, our presentation of adjusted net profit (non-HKFRS measure) may
not be comparable to similarly titled measure s presented by other companies. The use of
adjusted net profit (non-HKFRS measure) has limitations as an analytical tool, and you
should not consider it in isolation from, or as a substitute of, our consolidated statements of
profit or loss and other comprehensive income or financial performance as reported under
HKFRS.
We define adjusted net profit for the year/period (non-HKFRS measure) as profit for
the year/period adjusted by adding listing expenses.
The following table reconciles our adjusted net profit for the year/period (non-HKFRS
measure) and our profit for the year/period presented in accordance with HKFRS for the
periods indicated:
For the year ended December 31,
For the six months ended
June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands)
Profit for the year/period 25,080 32,956 78,768 31,648 40,430
Add:
Listing expenses
(1) — — — — 15,305
Adjusted net profit for the
year/period (non-HKFRS
measure) 25,080 32,956 78,768 31,648 55,735
Note:
(1) Listing expenses relate to this Global Offering of the Company.
Our total revenue increased by RMB199.1 million, or 66.4%, from RMB299.7 million
in 2021 to RMB498.8 million in 2022, and further by RMB221.5 million, or 44.4%, to
RMB720.3 million in 2023, primarily driven by revenue generated from sales of RVs. Our
revenue generated from sales of RVs incr eased by RMB199.5 million, or 66.8%, from
RMB298.6 million in 2021 to RMB498.1 million i n 2022, due to the increase in sales of RVs
mainly driven by increased demand for our products as we have been continuously
SUMMARY
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expanding our sales and distribution network and renewing and broadening our collection
of RVs. Our revenue generated from sale of R Vs increased by RMB212.6 million, or 42.7%,
from RMB498.1 million in 2022 to RMB710.7 m illion in 2023, primarily due to the increase
in sales volume of RVs from 2,127 unit in 2022 to 2,694 unit in 2023, in line with our
business growth.
Our total revenue increased by RMB112.5 million, or 36.3%, from RMB309.5 million
for the six months ended June 30, 2023 to RM B422.0 million for the six months ended June
30, 2024, primarily driven by revenue generated from sales of RVs. Our revenue from RV
sales increased by RMB87.4 million, or 28.2 %, from RMB309.5 million for the six months
ended June 30, 2023 to RMB396.9 million for the six months ended June 30, 2024. This
growth was driven by the strong sales of our RVs and an increase in the average selling
price. See ‘‘Business — Our Product and Brand — Our Brands’’ for a breakdown of our
sales volume and average selling price by bra nds. In particular, we achieved a substantial
increase in the sales volume of RVs sold throug h direct sales via self-owned stores and JV
stores in the six months ended June 30, 2024, which resulted in a corresponding rise in
revenue during the same period. The sales volume of RVs via direct sales increased from 127
units for the six months ended June 30, 2023 to 438 units for the six months ended June 30,
2024. Consequently, revenue from direct sale s via self-owned stores and JV stores grew
from RMB41.4 million for the six months ended June 30, 2023 to RMB144.4 million for the
six months ended June 30, 2024. At the same time, the sales volume of RVs through sales to
dealers decreased from 1,063 units for the six months ended June 30, 2023 to 989 units for
the six months ended June 30, 2024. Accordingl y, revenue generated from sales to dealers
decreased from RMB268.2 million for the s ix months ended June 30, 2023 to RMB252.5
million for the six months ended June 30, 2024.
Additionally, we recorded revenue from sales of pre-owned RVs of RMB23.4 million
for the six months ended June 30, 2024, see ‘‘Business — Sales and Distribution —
Self-owned Stores and JV Stores’’ for more details of our trade-in option.
Our gross profit increased by RMB32.1 million, or 64.1%, from RMB50.1 million in
2021 to RMB82.2 million in 2022. Our gross profit margin decreased from 16.7% in 2021 to
16.5% in 2022, primarily because cost of sales grew at a faster pace than revenue, driven by
an increase in shipping and handling expense s amid COVID-19. Our gross profit increased
by RMB98.8 million from RMB82.2 million in 2022 to RMB181.1 million in 2023. Our
gross profit margin increased from 16.5% in 2022 to 25.1% in 2023, primarily due to (i) the
higher shipping and handling expenses in 202 2 as a result of the COVID-19 pandemic, and
(ii) the increase in the revenue contribution of RV models which incorporate enhanced
customized options and have relatively higher gross profit margin. Our gross profit
increased by RMB63.5 million, or 88.9%, from RMB71.4 million for the six months ended
June 30, 2023 to RMB134.9 million for the six m onths ended June 30, 2024. Our gross profit
margin increased from 23.1% for the six months ended June 30, 2023 to 32.0% for the six
months ended June 30, 2024, primarily because of the higher proportion of our retail sales
of RVs through self-owned stores and JV stores during the same period, attributable to the
relatively higher retail prices compared to the wholesale prices for dealers.
SUMMARY
–1 7–


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Our profit for the year increased by RMB7.9 million, or 31.4%, from RMB25.1 million
in 2021 to RMB33.0 million in 2022, and further by RMB45.8 million, or 138.8%, to
RMB78.8 million in 2023, primarily due to the in creased revenue and gross profit, which is
partially offset by the increase in selling and dist ribution expenses, administrative expenses
and income tax. Our profit for the period increased by RMB8.8 million, or 27.8%, from
RMB31.6 million for the six months ended June 30, 2023 to RMB40.4 million for the six
months ended June 30, 2024, primarily due to the increased revenue and gross profit, which
is partially offset by the increase in selling a nd distribution expenses, administrative
expenses and income tax.
Consolidated Statements of Financial Position
The following table sets forth our financial position as of the dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
ASSETS
Non-current assets
Plant and equipment 13,029 15,134 19,189 19,690
Right-of-use assets 53,666 42,559 50,848 82,531
Intangible assets 21 — — 107
Investment in a joint venture 724 900 — —
Deferred tax assets 10,646 11,811 14,541 19,289
Total non-current assets 78,086 70,404 84,578 121,617
Current assets
Inventories 112,443 155,636 242,827 272,374
Trade and other receivables 19,710 45,275 46,138 60,939
Prepayments 2,934 2,689 6,021 11,554
Restricted cash 2,350 4,753 4,889 14,738
Cash and cash equivalents 8,797 21,466 14,345 43,882
Total current assets 146,234 229,819 314,220 403,487
SUMMARY
–1 8–


--- page 29 ---
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
LIABILITIES
Current liabilities
Trade and other payables 101,589 161,656 240,666 274,399
Contract liabilities 4,843 7,596 12,803 7,103
Loans and borrowings 26,686 9,117 31,208 104,588
Lease liabilities 14,469 23,726 29,016 10,646
Current taxation — 1,251 7,418 10,037
Provisions 914 1,896 2,970 3,079
Total current liabilities 148,501 205,242 324,081 409,852
Net current (liabilities)/assets (2,267) 24,577 (9,861) (6,365)
Total assets less current liabilities 75,819 94,981 74,717 115,252
Non-current liabilities
Loans and borrowings — — 408 345
Lease liabilities 46,862 34,995 43,362 75,826
Provisions 1,987 3,032 3,761 3,798
Total non-current liabilities 48,849 38,027 47,531 79,969
NET ASSETS 26,970 56,954 27,186 35,283
CAPITAL AND RESERVES
Share capital — — — —
Reserves 26,970 56,954 25,282 32,500
Total equity attributable to equity
shareholders of the Company 26,970 56,954 25,282 32,500
Non-controlling interests — — 1,904 2,783
TOTAL EQUITY 26,970 56,954 27,186 35,283
As of June 30, 2024, we had net current liabilit ies of RMB6.4 million, primarily due to
(i) trade and other payables of RMB274.4 m illion, representing an increase of RMB33.7
million compared to RMB240.7 million as o f December 31, 2023, and (ii) loans and
borrowings of RMB104.6 million, representi ng an increase of RMB73.4 million compared
to RMB31.2 million as of December 31, 2023, p artially offset by (iii) inventories of
RMB272.4 million, representing an increase of RMB29.6 million compared to RMB242.8
million as of December 31, 2023, (iv) trade and other receivables of RMB60.9 million,
SUMMARY
–1 9–


--- page 30 ---
representing an increase of RMB14.8 million compared to RMB46.1 million as of December
31, 2023, and (v) cash and cash equivalents of R MB43.9 million, representing an increase of
RMB29.6 million compared to RMB14.3 million as of December 31, 2023.
As of December 31, 2023, we had net current liabilities of RMB9.9 million, primarily
due to (i) trade and other payables of RMB2 40.7 million, representing an increase of
RMB79.0 million compared to RMB161.7 millio n as of December 31, 2022, (ii) loans and
borrowings of RMB31.2 million, representing an increase of RMB22.1 million compared to
RMB9.1 million as of December 31, 2022 and (iii) lease liabilities of RMB29.0 million,
representing an increase of RMB5.3 millio n compared to RMB23.7 million as of December
31, 2022; partially offset by (iv) inventorie s of RMB242.8 million, representing an increase
of RMB87.2 million compared to RMB155.6 milli on as of December 31, 2022 and (v) trade
and other receivables of RMB46.1 million, re presenting an increase of RMB0.8 million
compared to RMB45.3 millio n as of December 31, 2022.
As of December 31, 2022, we had net current assets of RMB24.6 million, primarily due
to (i) inventories of RMB155.6 million, re presenting an increase of RMB43.2 million
compared to RMB112.4 million as of December 31, 2021, (ii) trade and other receivables of
RMB45.3 million, representing an increase of RMB25.6 million compared to RMB19.7
million as of December 31, 2021, and (iii) cash and cash equivalents of RMB21.5 million,
representing an increase of RMB12.7 millio n compared to RMB8.8 million as of December
31, 2021; partially offset by (iv) trad e and other payables of RMB161.7 million,
representing an increase of RMB60.1 million compared to RMB101.6 million as of
December 31, 2021, and (v) leas e liabilities of RMB23.7 million, representing an increase of
RMB9.2 million compared to RMB14 .5 million as of December 31, 2021.
As of December 31, 2021, we had net current liabilities of RMB2.3 million, primarily
due to (i) trade and other payables of RMB 101.6 million, (ii) loans and borrowings of
RMB26.7 million and (iii) lease liabilities of R MB14.5 million; partially offset by (iv)
inventories of RMB112.4 million and (v) trad e and other receivables of RMB19.7 million.
Our net assets increased from RMB27.0 m illion as of December 31, 2021 to RMB57.0
million as of December 31, 2022, primarily due to profit for the year of RMB33.0 million
and capital contribution c onverted from debts of RMB44.2 million, partially offset by
deemed distribution of RMB46.4 million. Ou r net assets decreased from RMB57.0 million
as of December 31, 2022 to RMB27.2 million a s of December 31, 2023, primarily due to
deemed distribution of RMB 112.8 million, partially offset by profit for the year of
RMB78.8 million. Our net assets increased from RMB27.2 million as of June 30, 2023 to
RMB35.3 million as of June 30, 2024, primarily due to profit for the period of RMB40.4
million and deemed contributi on of RMB21.1 million, partially offset by payment arising
from the Reorganization of RMB52.8 million.
Selected Items from the Consolidated Statements of Cash Flows
During the Track Record Period and up to the Latest Practicable Date, we have funded
our cash requirements principally from cash generated from our sales of RVs. As of
December 31, 2021, 2022 and 202 3 and June 30, 2024, we had cash and cash equivalents of
RMB8.8 million, RMB21.5 million, RMB14.3 m illion and RMB43.9 million, respectively.
SUMMARY
–2 0–


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The following table sets forth a summary of our cash flows for the periods indicated:
For the year ended December 31,
For the six months ended
June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands)
Net cash generated from
operating activities 19,409 57,784 119,770 108,160 35,554
N e tc a s hu s e di ni n v e s t i n g
activities (4,499) (5,409) (2,703) (1,974) (3,141)
N e tc a s hu s e di nf i n a n c i n g
activities (8,970) (39,881) (124,801) (114,550) (2,545)
Net increase/(decrease) in
cash and cash equivalents 5,940 12,494 (7,734) (8,364) 29,868
Cash and cash equivalents as
of January 1 3,101 8,797 21,466 21,466 14,345
Effect of foreign exchange
rate changes (244) 175 613 325 (331)
Cash and cash equivalents at
end of the year/period 8,797 21,466 14,345 13,427 43,882
Key Financial Ratios
T h ef o l l o w i n gt a b l es e t sf o r t ho u rk e yf i n a n c i a lr a t i o sa so ft h ed a t e so rf o rt h ep e r i o d s
indicated:
As of/For the year ended December 31
As of/ For the six months
ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
Gross profit margin (1) 16.7% 16.5% 25.1% 23.1% 32.0%
Net profit margin (2) 8.4% 6.6% 10.9% 10.2% 9.6%
Return on equity (3) 93.0% 78.5% 187.2% N/A 258.9%
Return on total assets (4) 11.2% 12.6% 22.5% N/A 17.5%
Adjusted net profit margin
(non-HKFRS measure) (5) 8.4% 6.6% 10.9% 10.2% 13.2%
Current ratio (6) 1.0 1.1 1.0 N/A 1.0
Quick ratio (7) 0.2 0.4 0.2 N/A 0.3
Debt-to-equity ratio (8) 1.0 0.2 1.2 N/A 3.0
Notes:
(1) Gross profit margin is calculated using gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin is calculated using profit for th e year/period divided by revenue and multiplied by
100%.
SUMMARY
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(3) Return on equity ratio is calculated using profit for the year as a percentage of the average balance
of total equity at the beginning and the end of the ye ar and multiplied by 100%. The ratio for the six
months ended June 30, 2024 is annualized by dividi ng the profit for the period by the number of
days in the period, multiplying by 365, and then dividing by the average balance of total equity at
the beginning and the end of the period, with the r esult expressed as a percentage. The annualized
ratio is solely for the purpose of being compar able to prior years, and m ay not be indicative of
actual results.
(4) Return on total assets ratio is calculated using profit for the year as a percentage of the average
balance of total assets at the beginning and the en d of the year and multiplied by 100%.The ratio for
the six months ended June 30, 2024 is annualized by di viding the profit for the period by the number
of days in the period, multiplying by 365, and then dividing by the average balance of total assets at
the beginning and the end of the period, with the r esult expressed as a percentage. The annualized
ratio is solely for the purpose of being compar able to prior years, and m ay not be indicative of
actual results.
(5) Adjusted net profit margin (non-HKFRS measur e) is calculated using adjusted profit for the
year/period (non-HKFRS measure) divided by reve nue and multiplied by 100%. For details of the
adjusted profit for the year/period (non-HKFR S measure), see ‘‘Financial Information —
Non-HKFRS Measures.’’
(6) Current ratio is calculated using total curre nt assets divided by total current liabilities.
(7) Quick ratio is calculated using total current assets less inventories divided by total current liabilities.
(8) Debt-to-equity ratio is calculated using to tal debt (being the carrying balance of loans and
borrowings) divided by total equity.
Our return on equity was 78.5% in 2022, compared to 93.0% in 2021, primarily due to
the net increase in average balance of total equity. In 2022, all the remaining unsecured
related party loans were converted into capital to Regent Company, resulting in a
substantial increase in our total equity. Our return on equity increased to 187.2% in 2023,
primarily due to the significant increase in ou r profit and a net decrease in average balance
of total equity as a result of larger amount of deemed distribution for the year. Our
annualized return on equity increased to 258.9% for the six months ended June 30, 2024,
primarily due to a larger increase in our annu alized profit compared to total equity.
Our return on total assets remained relati vely stable at 11.2% in 2021 and 12.6% in
2022. Our return on total assets increased to 22.5% in 2023, primarily attributable to the
significant increase in our profit for the year. Our annualized return on total assets
decreased to 17.5% for the six months ended June 30, 2024, primarily due to a larger
increase in our total assets compared to profit.
Our debt-to-equity ratio decreased from 1.0 as of December 31, 2021 to 0.2 as of
December 31, 2022, primarily because all the remaining unsecured related party loans were
converted into capital to Regent Company in 2 022. Our debt-to-equity ratio increased from
0.2 as of December 31, 2022 to 1.2 as of Decembe r 31, 2023, primarily due to (i) increase in
total debt, driven by an increase in secure d short-term loans and borrowings, and (ii)
decrease in total equity as a result of deemed distribution. Our debt-to-equity ratio
increased to 3.0 as of June 30, 2024, primarily due to an increase in total debt, driven by an
SUMMARY
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increase in unsecured short-term related par ty loans and by dividing the profit for the
period by the number of days in the same period and then multiplying by 365, an increase in
secured short-term loans and borrowings, part ially offset by an increase in total equity.
OFFERING STATISTICS
The numbers in the following table are based on the assumptions that (i) the Global
Offering has been completed and 240,000,000 Shares are issued and sold in the Global
Offering, (ii) no exercise of the Over-allotm ent Option and the options granted under the
Pre-IPO Share Option Scheme , and (iii) 960,000,000 Share s are issued following the
completion of the Global Offering.
B a s e do na n
Offer Price of
HK$1.24 per
Share
B a s e do na n
Offer Price of
HK$1.64 per
Share
Market capitalization after completion of the
Global Offering
(1)
HK$1,190.4
million
HK$1,574.4
million
Unaudited pro forma adjusted net tangible
assets per Share (2) HK$0.31 HK$0.41
Notes:
(1) The calculation of market capitalization i s based on 960,000,000 Shares expected to be in issue
following the completion of the Global Offering.
(2) The unaudited pro forma adjusted net tangible as sets attributable to equity shareholders of our
Company per Share is on the basis that 954,049,200 Shares were in issue immediately following the
Capitalization Issue and Global Offering (excl uding 5,950,800 shares, representing 826,500 shares
adjusted by the Capitalization Issue, held by empl oyee shareholding platform for the Pre-IPO Share
Option Scheme) assuming the Global Offer ing had completed on June 30, 2024 and the
Over-allotment Option and the options grante d under the Pre-IPO Share Option Scheme are not
exercised.
OUR GROUP OF CONTROLLING SHAREHOLDERS
Our Group was founded by Mr. Miao, who is an executive Director, the chairman of
the Board and the chief executive officer of our Group. As of the Latest Practicable Date,
the group of Controlling Shareholders led by Mr. Miao comprises Mr. Miao himself, Ms.
Wang (spouse of Mr. Miao), Ms. Miao (daughter of Mr. Miao and Ms. Wang), Snowy
Limited, M.X.Z Holdings, Miao Wanyi Holdings, Miao Wanyi Trust, WDH Holdings and
MWY Holdings. Our group of Controlling Share holders, through Snowy Limited as the
direct shareholder of our Company, held approximately 99.17% of the total issued share
capital of our Company. Snowy Limited is owned as to (i) 1% by M.X.Z Holdings (a
company wholly-owned by Mr. Miao) and (ii) 99% by Miao Wanyi Holdings (a company
wholly-owned by the Miao Wanyi Trust, whic h was established by Mr. Miao as the settlor
of the trust, with WDH Holdings, a company wholly-owned by Ms. Wang, and MWY
Holdings, a company wholly-owned by Ms. Miao, as the beneficiaries of the trust).
SUMMARY
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Immediately following the completion o f the Capitalization Issue and the Global
Offering (assuming the Over-allotment Optio n is not exercised), our group of Controlling
Shareholders will, collectively, continue to c ontrol in aggregate approximately 74.4% of our
voting power and hence will remain as our Co ntrolling Shareholders upon Listing.
For further details of our Controlling Share holders, see ‘‘Relationship with Our
Controlling Shareholders — Our Gro up of Controlling Shareholders.’’
Our Controlling Shareholders have confirme d that as of the Latest Practicable Date,
none of them was interested in any business, other than our business, which competes or is
likely to compete, either directly or indirectly , with our business, which requires disclosure
pursuant to Rule 8.10 of the Listing Rules.
CONNECTED TRANSACTIONS
We have entered into an one-off connected transaction, and expect to continue, certain
transactions that will constitute partially ex empt continuing connected transactions of our
Company under the Listing Rules upon Listing as described in the section headed
‘‘Connected Transactions’’ of this Prospectus. O ur Directors consider that strict compliance
with the applicable requirement under the Listing Rules would be impracticable and may
lead to unnecessary administrative costs on o ur Company. Accordingly, we have applied
for, and the Stock Exchange has granted to us, a waiver from strict compliance with the
applicable requirements unde r Chapter 14A of the Listing Rules once the Shares are listed
on the Stock Exchange in respect of such partially-exempt continuing connected
transactions. For further details, see ‘‘Connected Transactions.’’
DIVIDEND
During the Track Record Period, no dividend has been paid or declared by our
Company.
Our Company currently does not have any dividend policy. Our Board of Directors
may declare dividends in the future after taking into account our results of operations,
financial condition, cash requirements an d availability and other factors as it may deem
relevant at such time. Any declaration and payment of dividends will be subject to our
constitutional documents and applicable laws. Our shareholders at a general meeting must
approve any declaration of dividends, which must not exceed the amount recommended by
our Board of Directors. In addition, our Directors may from time to time pay such interim
dividends as our Board of Directors considers to be justified by our profits and overall
financial requirements, or special dividends of such amounts and on such dates as they
think appropriate. No dividend shall be declared or payable except out of our profits and
reserves lawfully available for distribution. Our future declaration of dividends may or may
not reflect our historical declarations of dividends and will be at the absolute discretion of
our Board of Directors.
SUMMARY
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RISK FACTORS
Our business and the Global Offering invol ved certain risks, which are set out in the
s e c t i o nh e a d e d‘ ‘ R i s kF a c t o r s ’ ’i nt h i sP r ospectus. You should read that section in its
entirety before you decide to invest in the O ffer Shares. Some of the major risks we face
include:
. O u rb u s i n e s si ss u b j e c tt or i s k sa s s o c i a t e dw i t hc h a n g e si nt h eg e n e r a l
macroeconomic, political, social and regu latory conditions in the jurisdictions
w h e r ew eo p e r a t e .
. Changes in customer demand and preferences may affect our financial results.
. Our RVs may not perform in line with cus tomers’ expectations and may contain
defects. We could also suffer losses and adverse publicity stemming from any
accident involving our RVs.
. Our business and growth strategies are subject to uncertainties and risks,
including those relating to customer acceptance and commercial success of our
strategies, and significant capital expenditure and investments for new product
and service offerings, which may materially and adversely affect our business,
financial condition, results of operations and prospects.
. Our business depends on the performance of independent third-party authorized
dealers. The loss of our third-party dealers or an increase in third-party dealer
consolidations and/or concentration could have a material negative effect on our
business.
. If we suffer substantial interruptions to ou r production activities to the extent that
we are not able to compensate such interruptions by increasing the production
capacity of our remaining production facilit ies, our business, financial condition,
results of operations and prospects could be materially and adversely affected.
. We face risks associated with our supply chain. If we experience any delay or
interrupted supply, or if the quality of the supplies does not meet the required
standards, our business, financial condition, results of operations and prospects
could be materially and adversely affected.
. As a player in the RV industry in Australasia, we are subject to significant
competition.
. We are subject to significant laws, regula tions and directives in countries where we
operate. Increasing compliance risks and changes in government regulations
imposing additional requirements and restrictions on our operations could
increase our operating costs, result in service delays and disruptions, and
adversely affect our business, financial conditions, results of operation and
prospects.
SUMMARY
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. Failure to comply with relevan t laws, regulations and rules on occupational health
and safety could subject us to investigations and administrative penalties, which
may adversely affect our business, result s of operations and financial condition.
. Our services, including those provided through third parties, may not be generally
accepted by our customers. If we are unable to provide or arrange adequate
services for our customers, our business and reputation may be materially and
adversely affected.
. We may not succeed in preserving and enhancing the value of our brand which we
depend on to drive demand and revenues, and in remaining competitive against
other premium lifestyle alternatives.
LISTING EXPENSES
Listing expenses primarily include profe ssional fees, underwriting commission, and
other fees incurred in connection with the Global Offering. We estimate that our listing
expenses will be approximately HK$53.0 millio n, representing approximately 15.3% of the
gross proceeds from the Global Offering (assuming an Offer Price of HK$1.44 per Share
(being the mid-point of the indicative Offer Price range)), which consist of (i)
underwriting-related expenses (including but not limited to commissions and fees) of
approximately HK$13.8 million, and (ii) no n-underwriting-related expenses of
approximately HK$39.2 million, including ( a) fees and expenses of legal advisors and
accountants of approximately HK$23.5 m illion, and (b) other fees and expenses of
approximately HK$15.7 million. Approximately HK$22.2 million of the listing expenses is
directly attributable to the issue of our Shares to the public and is expected to be recognized
directly as a deduction from equity upon th e Listing, approximately HK$16.8 million has
been expensed during the Track Record Period, and the remaining amount of
approximately HK$14.0 million of the listing expenses is expected to be expensed prior
to the Listing.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of
approximately HK$292.6 millio n, after deducting underwri ting commissions, fees and
estimated expenses borne by us in connection with the Global Offering, assuming the
Over-allotment Option is not exercised and based on the Offer Price of HK$1.44 per Share
(being the mid-point of the indicative O ffer Price range of HK$1.24 and HK$1.64).
We currently intend to apply these net proceeds for the following purposes:
. Approximately 63.3%, or HK$185.3 milli on, will be allocated to construct a new
production base and upgrade our e xisting production facilities;
. Approximately 16.7%, or HK$48.7 million, will be used to scale up our business
operations through strengthening our sales and distribution network, in order to
further expand our customer base and enhance our customer stickiness, and
further amplify our market share in the RV industry in Australasia;
SUMMARY
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. Approximately 10.0%, or HK$29.3 millio n, will be used for our continued
product research and development efforts; and
. Approximately 10.0%, or HK$29.3 millio n, will be allocated to our working
capital and general corporate purposes.
For details, see ‘‘Future Plans and Use of Proceeds.’’
HISTORICAL IMPACT OF THE COVID-19 PANDEMIC
Since the end of December 2019, the outbreak of a novel strain of coronavirus, or
COVID-19, has affected the global economy. In response to the COVID-19 pandemic,
including the recurrence of the Omicron variant of COVID-19 since the end of 2021 across
the world, governments had implemented numerous measures to contain the spread of the
virus, including mandatory quarantine, closu re of workplaces and facilities, travel bans and
restrictions and stay-at-home orders.
We encountered various challenges due to the impact of the COVID-19. For instance,
certain of our employees were subject to quaran tine requirements imposed on particular
areas and were not allowed to work onsite due to pandemic prevention and control policies
during the Track Record Period. In addition, the global shipping and logistics systems have
been negatively affected resulting from the special or temporary restrictions or closings of
facilities or transportation networks by gove rnments in response to the pandemic, which
resulted in the increases in our s hipping and handling expenses.
Despite the impact mentioned above, neither our operations nor our financial
performance was materially and adversely affected by the COVID-19 pandemic during
the Track Record Period. Moreover, as th e global economy recovers post-pandemic,
consumers are expected to have more disposable income for leisure and travel expenditures,
and are motivated to subscribe to premium product and service offerings and an enhanced
traveling experience in exchange for enhan ced travel experiences, expanded space and
additional privacy and comfor t. According to Frost & Sullivan, the Australian RV market
saw significant growth between 2021 and 2023, particularly notable in 2022, driven by a
remarkable 9.2% increase for imported RVs. I n addition, our revenues increased by 66.4%
from RMB299.7 million in 2021 to RMB498.8 mi llion in 2022, and further increased by
44.4% to RMB720.3 million in 2023, with corre sponding gross profit margins of 16.7%,
16.5% and 25.1% for those years, respectively. Our revenues increased from RMB309.5
million for the six months ended June 30, 2 023 to RMB422.0 million for the six months
ended June 30, 2024, with corresponding gross profit margins of 23.1% and 32.0% for those
periods. In 2021, 2022 and 2023 and for the six months ended June 30, 2024, we delivered an
aggregate of 1,330, 2,127, 2,694 and 1,427 RVs to our customers, respectively, representing
an increase of 59.9% from 2021 to 2022 and 26.7% from 2022 to 2023.
SUMMARY
–2 7–


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RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
For the ten months ended October 31, 2024, we delivered an aggregate of 2,508 RVs to
our customers.
As of the Latest Practicable Date, the aggregate value of contracts in our backlog was
approximately A$76.6 million (equivalent to R MB346.3 million). The following table sets
forth the outstanding contract value of projects in our backlog by brands as of the Latest
Practicable Date.
As of the Latest Practicable Date
RV Unit
A$
in thousands
Equivalent
to RMB
in thousands %
Snowy River 1,267 70,629 319,278 92.3
Regent 13 868 3,926 1.1
NEWGEN 90 5,053 22,841 6.6
Total 1,370 76,550 346,045 100.0
In addition, we estimate that our revenue from sales of Regent RVs will decrease
significantly in 2024, primarily because we plan to gradually phase down the Discoverer
series under Regent, and that our revenue from sales of NEWGEN RVs will decrease in
2024, primarily due to a planned price reductions to attract younger and more
cost-conscious consumers. Furthermore, we estimate that our revenue from sales of
Snowy River RVs will increase in 2024, fueled b y strong market demand, particularly due to
the increasing popularity of our SRC and SRT series, as well as significant revenue
contributions from the newly launched models under the SRP series.
As part of our strategy of developing new towable ERV models, in December 2024, we
have entered into a strategic collaboration agreement with Tianjin Guoxuan New Energy
Technology Co., Ltd* ( 天津國軒新能源科技有限公司)( ‘ ‘Guoxuan ’’), a wholly-owned
subsidiary of Guoxuan High Tech Co., Ltd.* ( 國軒高科股份有限公司), a company listed
on the Shenzhen Stock Exchange (stock code: 002074), pursuant to which Guoxuan will
provide customized power battery solutions for our new towable ERV models, and the
research and development of which is expect ed to commence in 2025. With such strategic
collaboration, we will be able to leverage Guoxuan’s expertise and marketing resources to
promote our new towable ERV models in the future.
We expect that our profit for the year will decrease in 2024, primarily due to the listing
expenses relating to this Global Offering of the Company.
SUMMARY
–2 8–


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Recent Regulatory Development
On February 17, 2023, the China Securities Regulatory Commission, or the CSRC
released several regulations regarding the management of filings for overseas offerings and
listings by domestic companies, including the Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies ( 《境內企業境外發行證券和上市管
理試行辦法》)( ‘ ‘Trial Measures ’’) together with 5 supporting guidelines (together with the
Trial Measures, collectively referred to as the ‘‘ New Regulations on Filing ’’), which was
implemented on March 31, 2023. Under Ne w Regulations on Filing, PRC domestic
companies that seek to offer and list securiti es in overseas markets, either in direct or
indirect means, are required to file the required documents with the CSRC within three
working days after its application for overse as listing is submitted. We have submitted the
filing to the CSRC on May 30, 2024, which w as accepted by the CSRC on June 12, 2024. We
completed the filing procedure with, and obta ined approval from, the CSRC on September
6, 2024. For details, see ‘‘Regulatory Overview — Laws and Regulations Relating to
Overseas Securities Offering and Listings.’’
No Material Adverse Change
After performing suffici ent due diligence work whic h our Directors consider
appropriate and after due and careful consideration, our Directors confirm that, up to
the date of this Prospectus, there had been no material adverse change in our financial or
operating position or prospects since June 30, 2024, which is the end date of the periods
reported on in the Accountants’ Report set out in Appendix I to this Prospectus, and there
had been no event since June 30, 2024 and up to the date of this Prospectus that would
materially affect the information as set out in the Accountants’ Report included in
Appendix I to this Prospectus.
SUMMARY
–2 9–


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In this Prospectus, unless the context otherwise requires, the following terms shall have
the following meanings. Certain technical terms are explained in the section headed
‘‘Glossary of Technical Terms’’ in this Prospectus.
‘‘30%-controlled
company’’
has the meaning ascribed thereto under the Listing Rules
‘‘Accountants’ Report’’ the Accountants’ Re port for the three years ended December 31,
2023, the text of which is set out in Appendix I to this Prospectus
‘‘affiliate’’ with respect to any specifi ed person, any other person, directly or
indirectly, controlling or controlled by or under direct or indirect
common control with such specified person
‘‘AFRC’’ the Accounting and Financial Reporting Council of Hong Kong
‘‘Articles’’ or ‘‘Articles
of Association’’
the amended and restated articles of association of our
Company, conditionally ad opted on November 22, 2024 with
effect from the Listing Date, and as amended from time to time,
a summary of which is set out in the section headed ‘‘Summary of
the Constitution of the Company and Cayman Islands Company
Law’’ in Appendix III to this Prospectus
‘‘associate(s)’’ has the meaning ascribed thereto under the Listing Rules
‘‘Audit Committee’’ the audit committee of the Board
‘‘Australian dollars’’ or
‘‘A$’’ or ‘‘AUD’’
Australian dollars, the lawful currency of Australia
‘‘Australian Legal
Advisor’’
Hogan Lovells, our legal advisor as to Australian laws
‘‘Board’’ or ‘‘Board of
Directors’’
the board of directors of our Company
‘‘business day’’ any day (other than a Saturday, Sunday or public holiday in
Hong Kong) on which banks in Hong Kong are generally open
for normal banking business
‘‘Capital Market
Intermediaries’’
the capital market intermediari es participating in the Global
Offering and has the meaning ascribed thereto under the Listing
Rules
DEFINITIONS
–3 0–


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‘‘Capitalization Issue’’ the allotment and i s s u eo f6 2 0 , 0 0 0 , 0 0 0S h a r e st ob em a d eu p o n
the capitalization of certain sums standing to the credit of the
share premium account of our Company as further described in
‘‘Statutory and General Information — A. Further Information
about our Group — 4. Resolutions of Our Shareholders in
Relation to the Global Offering’’ in Appendix IV to this
Prospectus
‘‘Captivating Caravans’’ Captivating Caravans Pty Ltd, a proprietary company limited by
shares registered in Australia on September 6, 2018, and an
indirect wholly-owned subsidiary of our Company
‘‘Cayman Companies
Act’’ or ‘‘Companies
Act’’
the Companies Act (As Revised) of the Cayman Islands, as
amended or supplemented or otherwise modified from time to
time
‘‘Cayman Islands Legal
Advisor’’
Harney Westwood & Riegels, our legal advisor as to Cayman
Islands laws
‘‘CCASS’’ the Central Clearing and Settlement System established and
operated by HKSCC
‘‘China’’ or ‘‘PRC’’ the People’s Republic of China and for the purposes of this
Prospectus only, except where the context requires otherwise,
excluding Hong Kong, Macau Special Administrative Region of
the PRC and Taiwan
‘‘Companies
Ordinance’’
the Companies Ordinance (Chapter 622 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified from
time to time
‘‘Companies (Winding
Up and
Miscellaneous
Provisions)
Ordinance’’ or
‘‘Companies
(WUMP) Ordinance’’
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong), as amended,
supplemented or otherwise modified from time to time
‘‘Company’’, or ‘‘our
Company’’
New Gonow Recreational Vehicles Inc. ( 新吉奧房車有限公司),
an exempted company incorpora t e di nt h eC a y m a nI s l a n d sw i t h
limited liability on May 17, 2022
‘‘Company Law’’ the Company Law of the PRC ( 中華人民共和國公司法), as
amended, supplemented or otherwise modified from time to time
‘‘connected person(s)’’ has the meaning ascribed to it under the Listing Rules
DEFINITIONS
–3 1–


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‘‘connected
transaction(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘Controlling
Shareholders’’
has the meaning ascribed to it under the Listing Rules and unless
the context otherwise requires, refers to Mr. Miao, Ms. Wang,
Ms. Miao, Snowy Limited, M.X.Z Holdings, Miao Wanyi
Holdings, Miao Wanyi Trust, WDH Holdings and MWY
Holdings. For further details, see ‘‘Relationship with Our
Controlling Shareholders’’
‘‘COVID-19’’ coronavirus disease 2019, a coronavirus known to cause
contagious respiratory illness
‘‘CSRC’’ China Securities Regulatory Commission ( 中國證券監督管理委
員會)
‘‘Daide Longtree’’ Zhejiang Daid e Longtree Automobile Co., Ltd. ( 浙江戴德隆翠汽
車有限公司), a limited liability company established under the
laws of the PRC on February 19, 2014. Daide Longtree was one
of the major operating entities of our Group’s business during
the Track Record Period and prior to the Reorganization. For
further details, see ‘‘History, Reorganization and Corporate
Structure — Corporate Development — Historical operation
under Daide Longtree’’ and ‘‘History, Reorganization and
Corporate Structure — Reorgan ization — Business acquisition
from Daide Longtree’’
‘‘Daide Power
Machinery’’
Zhejiang Daide Power Machinery Co., Ltd. ( 浙江戴德隆翠房車
科技有限公司), a limited liability company established under the
laws of the PRC on December 17, 2010. Daide Power Machinery
is an affiliate of Daide Longtr ee, mainly engaging in trading
business
‘‘Director(s)’’ the director(s) of our Company
‘‘EIT Law’’ Enterprise Income Tax Law of the PRC
‘‘Extreme Conditions’’ the occurrence of ‘‘extreme conditions’’ as announced by any
government authority of Hong Kong due to serious disruption of
public transport services, extens ive flooding, major landslides,
large-scale power outage or any other adverse conditions before
Typhoon Signal No. 8 or above is replaced with Typhoon Signal
No. 3 or below
‘‘FIL’’ Foreign Investment Law ( 中華人民共和國外商投資法)o ft h e
PRC
DEFINITIONS
–3 2–


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‘‘Financing Partner’’ De Lage Landen Pty Limited, an independent third-party
financial institution incorpor ated in Australia that provides
financing programs in Australia
‘‘FINI’’ or ‘‘Fast
Interface for New
Issuance’’
an online platform operated by HKSCC that is mandatory for
admission to trading and, where applicable, the collection and
processing of specified information on subscription in and
settlement for all new listings
‘‘Flourishing’’ Flourishing Emerald In ternational Limited, a limited company
incorporated in Hong Kong on December 2, 2011 and is a
company indirectly wholly owned by Mr. Miao
‘‘Frost & Sullivan’’ Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an
independent global market research and consulting company
‘‘Frost & Sullivan
Report’’
the independent industry repor t prepared by Frost & Sullivan as
commissioned by us
‘‘Global Offering’’ the Hong Kong Public Offering and the International Offering
‘‘GONOW Group’’ Zhejiang Gonow and its subsidiaries, which refer to entities
previously being its subsidiaries, excluding our Group
‘‘Green RV’’ Green RV Pty Ltd, a proprietary company limited by shares
registered in Australia on June 13, 2018 and the JV partner of
our subsidiary, Leisure Lion
‘‘Group’’, ‘‘our Group’’,
‘‘we’’, or ‘‘us’’
our Company and its subsidiaries including where the context
otherwise requires, any companies and businesses transferred to
our Group as part of the Reorganization (as the case may be)
‘‘HK eIPO White Form ’’ the application of Hong Kong Offer Shares for issue in the
applicant’s own name by submitting applications online through
the designated website at
www.hkeipo.hk
‘‘HK eIPO White Form
Service Provider’’
the HK eIPO White Form service provider designated by the
Company, as specified on the designated website at
www.hkeipo.hk
‘‘HKAS’’ Hong Kong Accounting Standards issued by the Hong Kong
Institute of Certified Public Accountants
‘‘HKFRS’’ Hong Kong Financial Reporting Standards issued by the Hong
Kong Institute of Certified Public Accountants
‘‘HKICPA’’ Hong Kong Institute of Certified Public Accountants
DEFINITIONS
–3 3–


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‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a
wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
‘‘HKSCC EIPO’’ the application for the Hong Kong Offer Shares to be issued in
the name of HKSCC Nominees and deposited directly into
C C A S St ob ec r e d i t e dt oy o u rd e s i g n a t e dH K S C CP a r t i c i p a n t ’ s
stock account through causing HKSCC Nominees to apply on
your behalf, including by instructing your broker or custodian
who is a HKSCC Participant to give electronic application
instructions via HKSCC’s FINI system to apply for the Hong
Kong Offer Shares on your behalf
‘‘HKSCC Nominees’’ HKSCC Nominees Lim ited, a wholly-owned subsidiary of
HKSCC
‘‘HKSCC Operation
Procedures’’
the operational procedures of HKSCC in relation to CCASS,
containing the practices, procedures and administrative
requirements relating to the operation and functions of
CCASS, as from time to time in force
‘‘HKSCC Participant’’ a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a custodian
participant
‘‘Hong Kong’’ or ‘‘HK’’ the Hong Kong Special Administrative Region of the People’s
Republic of China
‘‘Hong Kong dollars’’
or ‘‘HK dollars’’ or
‘‘HK$’’
Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong Offer
Shares’’
the 24,000,000 Shares initially being offered by our Company for
subscription at the Offer Price pursuant to the Hong Kong
Public Offering (subject to reallocation as described in the
section headed ‘‘Structure of the Global Offering’’ in this
Prospectus)
‘‘Hong Kong Public
Offering’’
the offer of the Hong Kong Offer Shares for subscription by the
public in Hong Kong at the Offer Price (plus brokerage of 1%,
SFC transaction levy of 0.0027%, AFRC transaction levy of
0.00015% and Stock Exchange trading fee of 0.00565%) on the
terms and subject to the conditions described in this Prospectus,
as further described in the section headed ‘‘Structure of the
Global Offering — The Hong Kong Public Offering’’ in this
Prospectus
DEFINITIONS
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‘‘Hong Kong Share
Registrar’’
Tricor Investor Services Limited
‘‘Hong Kong
Underwriters’’
the underwriters of the Hong Kong Public Offering as listed in
the section headed ‘‘Underwrit ing — Hong Kong Underwriters’’
in this Prospectus
‘‘Hong Kong
Underwriting
Agreement’’
the underwriting agreement, da ted December 30, 2024, relating
to the Hong Kong Public Offering, entered into among our
Company, the Sponsor-Overall Coordinator, Mr. Miao, Snowy
Limited, M.X.Z Holdings, and the Hong Kong Underwriters, as
further described in the section headed ‘‘Underwriting —
Underwriting Arrangements and Expenses — The Hong Kong
Public Offering’’ in this Prospectus
‘‘independent third
party(ies)’’
any entity or person who is not a connected person of our
Company within the meaning ascribed thereto under the Listing
Rules
‘‘International Offer
Shares’’
the 216,000,000 Shares being ini tially offered by the Company
for subscription at the Offer Price under the International
Offering together, where relevant, with any additional Shares
that may be issued pursuant to any exercise of the
Over-allotment Option, subject to reallocation as described
under the section headed ‘‘Structure of the Global Offering’’ in
this Prospectus
‘‘International
Offering’’
the offer of the International Offer Shares at the Offer Price
outside the United States in offshore transactions in accordance
with Regulation S or any other available exemption from
registration under the U.S. Securities Act, as further described
in the section head headed ‘‘Structure of the Global Offering’’ in
this Prospectus
‘‘International
Underwriters’’
the underwriters of the International Offering listed in the
International Underwriting Agreement
‘‘International
Underwriting
Agreement’’
the international underwriting agreement relating to the
International Offering and e xpected to be entered into by, inter
alia , our Company, the Sponsor-Overall Coordinator, Mr. Miao,
Snowy Limited, M.X.Z Holdings and the International
Underwriters on or about the Price Determination Date, as
further described in the section headed ‘‘Underwriting —
Underwriting Arrangements and Expenses — The International
Offering’’
DEFINITIONS
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--- page 46 ---
‘‘investment payback
period’’
the amount of time it takes for a store to reach profit break-even
point, i.e., when its total revenue equal or exceeds total costs
‘‘Joint Bookrunners’’ the joint bookrunners as named in ‘‘Directors and Parties
Involved in the Global Off ering’’ in this prospectus
‘‘Joint Global
Coordinators’’
the joint global coordinators as named in ‘‘Directors and Parties
Involved in the Global Off ering’’ in this prospectus
‘‘Joint Lead Managers’’ the joint lead managers as named in ‘‘Directors and Parties
Involved in the Global Off ering’’ in this prospectus
‘‘JV dealers’’ Leisure Lion and United RV, each of them a ‘‘JV dealer’’, a
subsidiary of our Company since September 13, 2023 and June 6,
2023, respectively
‘‘JV partners’’ entities that we partner with for establishing the JV stores which,
as of the Latest Practicable Date, referred to Green RV and/or
BUYIT RV PTY LTD in the capacity of their joint investment
with our Company in Leisure Lion and United RV, respectively
‘‘JV stores’’ stores operated by the JV dealers from time to time
‘‘Latest Practicable
Date’’
December 23, 2024, being the latest practicable date for
ascertaining certain information in this Prospectus before its
publication
‘‘Leisure Lion’’ Leisure Lion Pty Ltd, a proprietary company limited by shares
registered in Australia on July 11, 2019, initially a joint venture
with equal ownership between our Company and Green RV, and
then a 51%-owned subsidiary of our Company since September
13, 2023
‘‘Listing’’ the listing of the Shares on the Main Board
‘‘Listing Committee’’ the listing committee of the Stock Exchange
‘‘Listing Date’’ the date, expected to be on or about January 13, 2025, on which
the Shares are listed and dealings in the Shares are permitted to
commence on the Main Board
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended, supplemented or
otherwise modified from time to time
‘‘LONGTREE RV’’ LONGTREE Recreational Vehicles Holdings Limited, a
company incorporated under the laws of the BVI on November
13, 2023 and a direct wholly-owned subsidiary of our Company
DEFINITIONS
–3 6–


--- page 47 ---
‘‘Longtree Zhejiang’’ Longtree (Zhejiang) Automotive Co., Ltd. ( 隆翠（浙江）汽車有限
公司), a limited liability company established under the laws of
the PRC on September 3, 2013 and a subsidiary of the GONOW
Group
‘‘M.X.Z Holdings’’ M.X.Z Holdings Limited, a company incorporated under the
laws of the BVI on May 12, 2022 and one of our Controlling
Shareholders
‘‘Main Board’’ the stock exchange (excluding the option market) operated by the
Stock Exchange which is independent from and operates in
parallel with the GEM of the Stock Exchange
‘‘Miao Wanyi
Holdings’’
MIAO Wanyi Holdings Limited, a BVI business company
incorporated under the laws of the BVI on May 6, 2024, and
one of our Controlling Shareholders
‘‘Miao Wanyi Trust’’ a discretionary trust named the MIAO Wanyi Trust established
by Mr. Miao (as the settlor) and Dedao Trust Limited (as the
trustee), for the benefit of WDH Holdings and MWY Holdings,
each of which is a company indirectly wholly-owned by Ms.
Wang and Ms. Miao, respectively. Miao Wanyi Trust is one of
our Controlling Shareholders
‘‘MOFCOM’’ or
‘‘Ministry of
Commerce’’
the Ministry of Commerce of the PRC ( 中華人民共和國商務部)
‘‘Mr. Miao’’ Mr. Miao Xuezhong ( 繆雪中), our founder, chairman of the
Board, executive Director, chief executive officer and one of our
Controlling Shareholders
‘‘Ms. Miao’’ Ms. Miao Wanyi ( 繆婉漪), Mr. Miao’s and Ms. Wang’s
daughter, and one of our Co ntrolling Shareholders
‘‘Ms. Wang’’ Ms. Wang Danhong ( 王丹紅), Mr. Miao’s spouse and one of our
Controlling Shareholders
‘‘MWY Holdings’’ MWY Holdings Limited, a company incorporated under the laws
of the BVI on June 20, 2023, and is a company directly
wholly-owned by Ms. Miao. MWY Holdings is one of our
Controlling Shareholders
‘‘NDRC’’ the National Development and Reform Commission of the PRC
(中華人民共和國國家發展和改革委員會)
DEFINITIONS
–3 7–


--- page 48 ---
‘‘New Gonow BVI’’ New Gonow Recreational Vehicles Holdings Limited, a company
incorporated under the laws of the BVI on May 24, 2022 and a
direct wholly-owned subsidiary of our Company
‘‘New Gonow HK’’ New Gonow Recreational Vehicles Limited, a limited company
incorporated in Hong Kong on November 23, 2023, and an
indirect wholly-owned subsidiary of our Company
‘‘Offer Price’’ the final offer price per Share (exclusive of any brokerage fee,
SFC transaction levy, AFRC transaction levy and the Stock
Exchange trading fee) of not more than HK$1.64 and expected to
be not less than HK$1.24 at which the Offer Shares are to be
subscribed for and issued pursuant to the Global Offering, to be
determined as described in section headed ‘‘Structure of the
Global Offering’’ in this Prospectus
‘‘Offer Share(s)’’ the Hong Kong Offer S hare(s) and the International Offer
Share(s)
‘‘Over-allotment
Option’’
the option we expect to grant to the International Underwriters,
exercisable by the Overall Coordinators (for themselves and on
behalf of the International Underwriters), pursuant to which our
Company may be required to a llot and issue up to 36,000,000
additional Shares (representing in aggregate 15% of the initial
Offer Shares) to, among other things, cover over-allocations in
the International Offering, if any, details of which are described
in the section headed ‘‘Structure of the Global Offering — The
International Offering — Over-allotment Option’’ in this
Prospectus
‘‘Overall Coordinators’’ Huatai Financial Holdings (Hong Kong) Limited, CLSA Limited
and CMB International Cap ital Corporation Limited
‘‘PBOC’’ People’s Bank of China ( 中國人民銀行), the central bank of the
PRC
‘‘PRC Legal Advisor’’ Hylands Law Firm, our legal advisor as to PRC laws
‘‘Pre-IPO Share Option
Scheme’’
the employee stock option scheme adopted on May 24, 2024
‘‘Price Determination
Agreement’’
the agreement to be entered into by our Company and the
Overall Coordinators (for themselves and on behalf of the
Underwriters) on or about the Price Determination Date to
record and fix the Offer Price
DEFINITIONS
–3 8–


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‘‘Price Determination
Date’’
the date, expected to be on or about January 9, 2025 (Hong Kong
time), on which the Offer Price is to be fixed by an agreement
between the Overall Coordinators (for themselves and on behalf
of the Underwriters) and our Company
‘‘Projecta’’ a renowned brand name of battery and battery power products
owned by Brown & Watson International Pty. Ltd.
‘‘Prospectus’’ this Prospectus being issued in connection with the Hong Kong
Public Offering
‘‘R&D’’ research and development
‘‘Regent Company’’ Regent RV Pty Ltd, a proprietary company limited by shares
registered in Australia on September 2, 2014, and a direct
wholly-owned subsidiary of our Company
‘‘Regulation S’’ Regulation S under the U.S. Securities Act
‘‘Reorganization’’ the reorganization arrangement undertaken by our Group, which
is described in details in ‘‘History, Reorganization and Corporate
Structure’’
‘‘RMB’’ or ‘‘Renminbi’’ Renminbi, the lawful currency of the PRC
‘‘SAFE’’ the State Administration of Foreign Exchange of the PRC ( 中華
人民共和國國家外匯管理局)
‘‘SAMR’’ the State Administration for Market Regulation of the PRC ( 中
華人民共和國國家市場監督管理總局)
‘‘SAT’’ the State Taxation Administration of the PRC ( 中華人民共和國
國家稅務總局)
‘‘SFC’’ the Securities and Futures Commission of Hong Kong
‘‘SFO’’ or ‘‘Securities
and Futures
Ordinance’’
the Securities and Futures Ord inance (Chapter 571 of the Laws
of Hong Kong), as amended, supplemented, or otherwise
modified from time to time
‘‘Shanghai Hongwan
Technology’’
Shanghai Hongwan Technology L.P.* ( 上海紅婉科技合夥企業
（有限合夥）), a limited liability partnership established in the
PRC on June 7, 2023, which is held by Ms. Wang (as a general
partner) and Ms. Miao (as a limited partner) as to 55% and 45%,
respectively
DEFINITIONS
–3 9–


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‘‘Shangqiu Jishun’’ Shangqiu Jishun Auto Parts Co., Ltd.* ( 商丘吉順汽車零部件有
限公司), a limited liability company established in the PRC on
March 19, 2021. Shangqiu Jishun is an indirect wholly-owned
subsidiary of Daide Longtr ee, mainly engaging in RV parts
manufacturing
‘‘Share(s)’’ ordinary share(s) in the share capital of our Company with a par
value of US$0.0001 each
‘‘Shareholder(s)’’ holder(s) of our Share(s)
‘‘Snowy Limited’’ Snowy.M Holdings Limited, a company incorporated under the
laws of the BVI on May 13, 2022
‘‘Snowy River RV
Company’’
Snowy River RV Pty Ltd, a propr ietary company limited by
shares registered in Australia on December 23, 2015, and an
indirect wholly-owned subsidiary of our Company
‘‘Sole Sponsor’’ or
‘‘Sponsor’’
Huatai Financial Holdings (Hong Kong) Limited
‘‘Sponsor-Overall
Coordinator’’
Huatai Financial Holdings (Hong Kong) Limited
‘‘Stabilizing Manager’’ Huatai Fin ancial Holdings (Hong Kong) Limited
‘‘State Council’’ State Council of the PRC ( 中華人民共和國國務院)
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘subsidiary(ies)’’ has the meaning ascr ibed thereto in section 15 of the Companies
Ordinance
‘‘substantial
shareholders’’
has the meaning ascribed to it in the Listing Rules
‘‘Takeovers Code’’ The Code on Takeovers and Mergers issued by the SFC, as
amended, supplemented or otherwise modified from time to time
‘‘Track Record Period’’ the three years ended December 31, 2023 and the six months
ended June 30, 2024
‘‘Transfer Pricing
Advisor’’
Shanghai Jianjie Management Consulting Co., Ltd* ( 上海筧傑管
理顧問有限公司), the independent tax advisor to our Company
with respect to transfer pricing arrangement of our Group
‘‘U.S. dollars’’ or ‘‘US$’’
or ‘‘USD’’
United States dollars, the lawful currency of the United States
DEFINITIONS
–4 0–


--- page 51 ---
‘‘U.S. Securities Act’’ United States Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder
‘‘Underwriters’’ the Hong Kong Underwriters and the International Underwriters
‘‘Underwriting
Agreements’’
the Hong Kong Underwriting Agreement and the International
Underwriting Agreement
‘‘United RV’’ United RV Pty Ltd, a proprietary company limited by shares
registered in Australia on June 6, 2023, and a subsidiary of our
Company
‘‘United States’’ or the
‘‘U.S.’’
the United States of America, its territories, its possessions and
all areas subject to its jurisdiction
‘‘VAT’’ value-added tax
‘‘WDH Holdings’’ WDH Holdings Limited, an exempted company incorporated
under the laws of the BVI on June 20, 2023, and is directly
wholly-owned by Ms. Wang. WDH Holdings is one of our
Controlling Shareholders
‘‘Xing Longtree’’ Xing Longtree Automotive Technology (Zhejiang) Co., Ltd. ( 興
隆翠汽車科技（浙江）有限公司), a limited liability company
established under the laws of the PRC on January 15, 2024,
and an indirect wholly-owned subsidiary of our Company
‘‘XPS’’ X-ray photoelectron spectroscopy, also known as electron
spectroscopy for chemical analysis, is a highly surface-sensitive,
quantitative, chemical analysis technique that can be used to
solve a wide range of materials problems. XPS is the
measurement of photoelectrons ejected from the surface of a
material that has been irradiated with X-rays
‘‘Zhejiang Gonow’’ Zhejiang Gonow Investment Co., Ltd. ( 浙江新吉奧控股集團有限
公司), a limited liability company established under the law of
the PRC on November 6, 2009
‘‘%’’ percent
In this Prospectus, the terms ‘‘associate,’’ ‘‘close associate,’’ ‘‘connected person,’’ ‘‘core
connected person,’’ ‘‘connected transaction,’’ ‘ ‘controlling shareholder’’ and ‘‘substantial
shareholder’’ shall have the meanings given to such terms in the Listing Rules, unless the
context otherwise requires.
DEFINITIONS
–4 1–


--- page 52 ---
Certain amounts and percentage figures included in this Prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them. Any discrepancies in any table or chart between the
total shown and the sum of the amounts listed are due to rounding.
For ease of reference, the names of the PRC established companies or entities, laws or
regulations have been included in this Prospectus in both the Chinese and English languages
and in the event of any inconsistency, the Chinese versions shall prevail.
In this Prospectus, ‘‘*’’ denotes translation of certain natural persons, legal persons,
enterprises, governmental authorities, institu tions, entities, organizations, departments,
facilities, laws and regulat ions into Chinese or English (as the case maybe), etc., or
another language included in this Prospectus for identification purposes only. In the event of
any inconsistency, the Chinese names or the names in their original languages prevail.
DEFINITIONS
–4 2–


--- page 53 ---
This glossary contains definitions of certain terms used in this Prospectus in connection
with our Company and our business. Some of these may not correspond to standard industry
definitions or usage of these terms.
‘‘Australasia’’ for the purposes of thi s Prospectus only, comprising Australia
and New Zealand
‘‘camper trailer’’ a type of towable RV that is more compact and designed to be
lightweight and versatile, with foldable parts and expandable
sections to maximize space when parked
‘‘camping’’ an outdoor recreational activity that involves staying overnight
in a shelter, such as a tent, a recreational vehicle, or a cabin,
away from urban areas, which typically includes activities like
hiking, fishing, and enjoying nature
‘‘ERV’’ an electric RV, a recreational vehicle powered by electricity,
encompassing both towable and motorized variants
‘‘motorized RV’’ a type of recreational vehicle that is self-propelled, featuring its
own engine and driving capabilit ies, eliminating the need for a
separate towing vehicle
‘‘pop-tops’’ a type of towable RV characterized by a roof that can be raised
during use to increase headroom and lowered during travel to
reduce wind resistance and improve mobility
‘‘recreational vehicle’’
or ‘‘RV’’
a motor vehicle or a towable RV equipped with living quarters
and amenities found in a home, designed for travel, camping, and
leisure activities
‘‘standard caravan’’ a type of towable RV that offers a rigid, enclosed structure,
which is designed to provide ample living space and amenities,
such as sleeping areas, a kitchen, and often a bathroom
‘‘total cost of
ownership’’ or ‘‘TCO’’
comprehensive assessment of the complete cost of RV over its
lifespan, including the purchase price, maintenance and repair
costs, insurance, fuel expenses, depreciation, and any other costs
associated with owning and operating the RV throughout its life
‘‘towable ERV’’ a type of towable RV equipped with power battery, enabling
self-propelled towing synchronized with the towing vehicle via
sensors
‘‘towable RV’’ a type of recreational vehicle that lacks its own engine or method
of propulsion and must therefore be towed by a separate vehicle,
such as a truck or SUV
GLOSSARY OF TECHNICAL TERMS
–4 3–


--- page 54 ---
Certain statements in this Prospectus are forward-looking statements that are, by their
nature, subject to significant risks and unc ertainties. Any statements that express, or
involve discussions as to, expectations, belie fs, plans, objectives, assumptions or future
events or performance (often, but not always, through the use of words or phrases such as
‘‘will,’’ ‘‘expect,’’ ‘‘anticipate,’’ ‘‘estimate,’’ ‘‘believe,’’ ‘‘going forward,’’ ‘‘ought to,’’ ‘‘may,’’
‘‘seek,’’ ‘‘should,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘projection,’’ ‘‘could,’’ ‘‘vision,’’ ‘‘goals,’’ ‘‘objective,’’
‘‘target,’’ ‘‘schedule,’’ ‘‘predict,’’ ‘‘aim,’’ ‘‘intend,’’ ‘‘consider,’’ ‘‘would,’’ ‘‘continue’’ and
‘‘outlook’’) are not historical facts, but are forward-looking and may involve estimates and
assumptions and are subject to risks (including the risk factors detailed in this Prospectus),
uncertainties and other factors some of which are beyond our control and which are
difficult to predict. Accordingly, these facto rs could cause actual results or outcomes to
differ materially from those expressed in the forward-looking statements.
Our forward-looking statements have been based on assumptions and factors
concerning future events that may prove to be inaccurate. Those assumptions and factors
are based on information currently available to us about the businesses that we operate. The
risks, uncertainties and other factors, many of which are beyond our control, that could
influence actual results include, but are not limited to:
. general political, market and economic conditions, including those related to the
PRC and Australasia;
. any changes in the laws, rules and regulations of the central and local
governments in the PRC, Australasia and other relevant jurisdictions and the
rules, regulations and policies of the relevant governmental authorities relating to
all aspects of our business;
. our planned projects and goals;
. our ability to control or reduce costs;
. our ability to control our risks;
. our ability to maintain good relationships with business partners;
. our business prospects and expansion plans;
. our ability to successfully implement o ur business plans and strategies;
. our financial condition and performance, debt levels and capital needs;
. our dividend policy;
. our capital expenditure plans;
. various business opportunities that we may pursue;
. the actions and developments of our competitors;
FORWARD-LOOKING STATEMENTS
–4 4–


--- page 55 ---
. changes or volatility in interest rates, foreign exchange rates, equity prices or
other rates or prices, including those pertaining to the PRC, Australia and the
industry and markets in which we operate; and
. all other risks and uncertainties described in the section headed ‘‘Risk Factors’’ in
this Prospectus.
Since actual results or outcomes could di ffer materially from those expressed in any
forward-looking statements, we strongly caution investors against placing undue reliance
on any such forward-looking statement. Any forward-looking statement speaks only as of
the date on which such statement is made, and, except as required by the Listing Rules, we
undertake no obligation to update any forward-looking statement or statements to reflect
events or circumstances after the date on wh ich such statement is made or to reflect the
occurrence of unanticipated events. Statements of or references to our intentions or those of
any of our Directors are made as of the date of this Prospectus. Any such intentions may
change in light of futu re developments.
All forward-looking statements in this Prosp ectus are expressly qualified by reference
to this cautionary statement.
FORWARD-LOOKING STATEMENTS
–4 5–


--- page 56 ---
You should carefully consider all of the information in this Prospectus, including the
risks and uncertainties described below before making an investment in our Shares. You
should pay particular attention to the fact that we conduct significant operations in China,
the legal and regulatory environment of which differs in certain respects from that which
prevails in other countries. Our business, financial condition, results of operations or
prospects may be materially and adversely affected by any of these risks and the trading
price of our Shares may decline as a result. You may lose all or part of your investment.
These factors are contingencies that may or may not occur, and we are not in a position
to express a view on the likelihood of any such contingency occurring. The information given
is as of the Latest Practicable Date, unless otherwise stated, will not be updated after the
date hereof, and is subject to the cautionary statements in ‘‘Forward-looking Statements’’ in
this Prospectus.
We believe there are certain risks and uncertainties involved in our operations, some of
which are beyond our control. We have categor ized these risks and uncertainties into: (i)
risks relating to our business and our industry and (ii) risks relating to the Global Offering.
There may be additional risks and uncertainties presently not known to us or not expressed
or implied below or those we currently deem immaterial could also harm our business,
financial condition and results of operations. You should consider our business and
prospects in light of the challenges we face, including the ones discussed in this section.
RISKS RELATING TO OUR BUSINESS AND OUR INDUSTRY
O u rb u s i n e s si ss u b j e c tt or i s k sa s s o c i a t e dwith changes in the general macroeconomic,
political, social and regulatory conditions in the jurisdictions where we operate.
Substantially all of our business, assets and operations are located in the PRC and
Australia. We produce RV parts in the PRC and assemble these parts in Australia. Our RVs
are primarily sold to customers in Australia a nd, to a smaller extent, New Zealand, through
a robust and extensive network of third-party dealers, together with self-owned stores
directly operated by us and JV stores with our JV partners. In 2021, 2022 and 2023 and for
the six months ended June 30, 2024, our revenues generated from Australia were RMB280.3
million, RMB471.0 million, RMB676.0 m illion and RMB400.3 million, respectively,
representing 93.5%, 94.4%, 93.8% and 94.9% of our total revenues during the respective
periods, while our revenues generated from New Zealand were RMB19.3 million, RMB27.7
million, RMB44.3 million and RMB21.6 million, respectively, representing 6.5%, 5.6%,
6.2% and 5.1% of our total revenues during the respective periods. As such, our operations
are subject to risks associated with changes in the general macroeconomic, political, social
and regulatory conditions in the PRC, Australia and New Zealand, which are beyond our
control. In particular, we face a number of challenges as a result of our international
business and expansion strategy, including ou r ability to effectively recruit, manage and
coordinate our employees across different geographic regions, and the changes in customs
regulations regarding the import and export of products. If we fail to effectively manage
these risks, our business, financial condition, results of operations and prospects could be
materially and adversely affected.
RISK FACTORS
–4 6–


--- page 57 ---
The economic, political, social and regulato ry conditions in the jurisdictions where we
operate have been influenced by the global eco nomy. In recent years, it remains uncertain
whether, and for how long, the global econom ic downturn will persist. Recent geopolitical
tensions increased such uncertainty. For example, there are considerable uncertainties over
the long-term effects of the monetary and fiscal policies adopted by the central banks and
financial authorities of some of the world’s leading economies. There have been concerns
over geopolitical events, including unrest and terrorist threats in certain countries and
regions, which have resulted in volatility in o il and other markets. Such tensions and any
escalation thereof, may have a negative impact on the general, economic, political, and
social conditions in jurisd ictions where we operate.
Furthermore, changes in policies and regula tions in the jurisdictions where we operate
may have a material impact on our business and operation. In the past years, the PRC
government mainly regulated the economy and th e industries by imposing industrial, fiscal
and monetary policies. Although the PRC gove rnment has, in recent years, taken various
actions to introduce market forces for economic reform, it continues to play a significant
role in regulating the economy and the industries.
In addition, the Australian economy rebounded robustly in the wake of the pandemic.
However, inflation has risen and fiscal pressures are on the horizon due to population aging
and climate change. Monetary policy remains restrictive until underlying inflation is on
track to meet the central bank target, while fiscal buffers need to be rebuilt through
reducing tax exemptions and improving public spending efficiency in areas such as health.
In the medium-term, achieving inclusive and sustainable economic growth requires an
ongoing focus on key social objectives such as reducing gender inequality and achieving the
climate transition.
There is no assurance that the aforementioned factors in the future will not create
instability in macroeconomic and social con ditions, which could further have a material
adverse effect on our business, financial condition, results of operations and prospects. The
demand of our potential customers may fall due to the above factors, which may also
damage our ability to obtain a nd/or increase customer orders, which could have a material
adverse effect on our business, financial condition, results of operations and prospects.
Changes in customer demand and preferences may affect our financial results.
The demand for our RVs may be adversely impacted by unexpected events in the
future. Our orders, sales volumes and revenues may be affected by general economic
conditions of the countries in which our potential or existing customers reside, the changing
preferences of our customers and market trends. We need to continuously invest significant
resources, including financial resources in building our product development and
technology team and improving our information technology system, to keep pace with
technological advances in our industry, to make our products competitive and to
adequately and timely respond to changes in c ustomer preferences. However, we cannot
assure you that we will succeed in anticipating or reacting to changes in customer
preferences, maintaining pace with advances in design and production technologies or
expanding our product lines and continuing to innovate in the future. In addition, our
RISK FACTORS
–4 7–


--- page 58 ---
efforts and investments in product development and innovation may not generate the
expected outcomes. If we misjudge the market for our products or are late in identifying
changing trends and customer preferences, we could experience poor returns on investment
or even damage to our reputation.
Similarly, there is uncertainty as to when or whether our existing backlog for RVs will
convert to revenues as the conversion depends on, among others, production capacity,
customer needs and credit availa bility and affordability. Ch anges in economic conditions
have in the past caused, and in the future may c ause, customers to request the confirmed
orders to be rescheduled, deferred or canceled. Any failure by us to anticipate or react to
such changes may also reduce demand for our RVs. Reduced demand for our RVs or delays
or cancellation of orders in the future could have a material adverse effect on our business,
financial condition, results of operations or cash flows.
Our RVs may not perform in line with customers’ expectations and may contain defects. We
could also suffer losses and adverse publicity stemming from any accident involving our RVs.
Our RVs may not perform in line with customers’ expectations. Any product defects or
any other failure of our RVs to perform or operate as expected could harm our reputation
and result in negative publicity, lost revenu e, delivery delays, product recalls, product
liability claims, harm to our brand, and signif icant expenses including warranty and other
items that could materially and adversely affect our business, financial condition, results of
operations, and prospects.
Our RVs may contain design and production defects. The design and production of our
RVs are complex and could contain latent defects and errors, which may cause our RVs not
to perform or operate as expected or even result in property damage, personal injuries or
other types of accidents. As part of our quality control system, we are required to perform
internal testing and quality control procedures on our RVs before delivery.
Notwithstanding that, we cannot assure you that we will be able to detect and fix any
defects in the RVs on a timely basis, or at all. In addition, although we have established
rigorous protocols in each process of testing, delivering, and servicing of our RVs, there
could be maloperation, negligence, or failure to follow protocols by our employees or
third-party service providers. Such human error could result in failure of our RVs to
perform or operate as expected. We cannot assure you that we will be able to completely
prevent human errors. Furthermore, any defec ts in or significant malfunctioning of our
RVs may weaken customers’ confidence in us. If any of our RVs fails to perform or operate
as expected, whether as a result of human error or otherwise, we may need to delay
deliveries, initiate product recalls, provi de servicing or updates under warranty at our
expense, and face potential lawsuits, which could adversely affect our brand reputation,
business, financial condition, and results of operations.
Our RVs may also experience accidents while being operated by owners. As a result,
from time to time in the ordinary course of our business, we may be subject to claims or
disputes by such owners. Such claims or disputes can either be based on a product liability
claim or a breach of warranty. If our owners experience accidents with our RVs obligating
us to take such RVs out of service until the cause of the accident is determined and rectified,
RISK FACTORS
–4 8–


--- page 59 ---
our reputation may be affected, and we may lose customers. Any RV accident or incident,
even if fully insured, could create a public perception that our RVs are less safe or reliable
than other means of transportation, which could cause our customers to lose confidence in
us and switch to the products of our competitors or other means of transportation. In
addition, any RV accident or incident could also affect the public’s view of industry safety,
which may reduce the amount of trust our customers have in RVs, and hence may have
negative financial impact on us. There is no assurance that our customers would not
perceive such directives adversely. If this were to occur, our reputation and business
operations could be adversely affected. In addition, safety issues experienced by a particular
model of RVs could result in customers refusing to use that particular RV model or a
regulatory body grounding that particular RV model.
In the future, we may, voluntarily or involu ntarily, undertake remedial actions in
connection with service bulletins, if any of our RVs, including any systems or components
sourced from our suppliers, prove to be defective or noncompliant with applicable laws and
regulations. Such remedial actions, whether voluntary or involuntary and whether caused
by systems or components engineered or produced by us or our suppliers, could incur
significant expenses and adversely affect our brand image in our target markets. The value
of the RV model might also be permanently reduced in the secondary market if the model
were to be considered less desirable. Such accidents or safety issues related to RV models
that we operate could have a material adverse effect on our business, financial condition,
results of operations and prospects.
Our business and growth strategies are subject to uncertainties and risks, including those
relating to customer acceptance and commercial success of our strategies, and significant
capital expenditure and investments for new product and service offerings, which may
materially and adversely affect our business, financial condition, results of operations and
prospects.
Our business and growth strategies primar ily include strengthening our leadership in
Australasia and expanding our markets globally, enhancing our brand image and
reputation, continuously rejuvenating and broadening our RV collection, and upgrading
and automating our production facilities. There can be no assurance that any customer
demand in response to such strategies and relat ed initiatives will exist or be sustained at the
levels that we anticipate, or that any of these s trategies will generate sufficient revenue to
offset any new expenses or liabilities associated with any new investments.
We devote significant financial and other resources to the expansion of our products
and service offerings, including increasing o ur capability to produce RVs, and these efforts
may not be commercially successful or achieve the desired results. We may increase our
production capacity through organic expa nsion of our own production facilities or
acquisitions in order to support the growth of our business in the future. However, there is
no assurance that we will be able to identify or successfully pursue such opportunities. See
‘‘— We may be unable to identify or successfully pursue acquisition opportunities as
planned.’’ Our ability to maintain or improve our competitiveness depends on our ability to
effectively gauge the direction of our target markets, to successfully expand our sales
coverage and to provide extraordinary products and services in these markets.
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Furthermore, any such efforts could distract management from current operations, and
would divert capital and other resources from our more established offerings. Even if we
were successful in developing our strategies, regulatory authorities may subject us to new
r u l e so rr e s t r i c t i o n si nr e s p o n s et oo u rs t r a t e g i e st h a tm a yi n c r e a s eo u re x p e n s e so rp r e v e n t
us from successfully commercializing new prod uct and service offerings or technologies. If
we are not able to identify, capture or execute o n these strategies successfully, our business,
financial condition, results of operations and prospects could be materially and adversely
affected, and any assumptions underlying estimates of expected revenues or cost savings
may be inaccurate. Furthermore, delays or cos t overruns in the development and acceptance
of new products or certification of new RVs occur from time to time and could adversely
affect our business, financial condition, results of operations and prospects. These delays or
cost overruns could be caused by unanticipated technological hurdles, production changes
to meet customers’ demands, unanticipated difficulties in obtaining required regulatory
certifications of new RV models, or failu re on the part of our suppliers to deliver
components as agreed. We could also be adversely affected if our product development
efforts are less successful than expected or if these efforts require more funding to achieve
our goals than anticipated. In addition, new products, services and technologies could
generate unanticipate d safety or other concerns resultin g in an increase in product liability
risks, potential product recalls and other re gulatory issues that could have an adverse
impact on us. Additionally, because of the lengthy product development cycle involved in
bringing certain of our products to market, we cannot predict the economic conditions that
will exist when any new product is complete, and the market for our product offerings does
not always develop or continue to expand as we anticipate.
Our historical rate of growth may not be sus tainable or indicative of our future rate of
growth. We believe that our continued growth in revenue, as well as our ability to improve
or maintain margins and profitability, will de pend upon, among other factors, our ability to
address the challenges, risks and difficulties described elsewhere in this section and the
extent to which our various offerings grow and contribute to our results of operations. We
cannot provide assurance that we will be able to manage any such challenges or risks to our
future growth successfully.
Our business depends on the performance of independent third-party authorized dealers. The
loss of our third-party dealers or an increase in third-party dealer consolidations and/or
concentration could have a material negative effect on our business.
We distribute a majority of our products through a robust dealership network. As of
June 30, 2024, we distributed our products throu gh 11 third-party dealers in Australasia.
We depend on the capability of these third-part y dealers to develop and implement effective
retail sales plans to create demand among customers for the products that the dealers
purchase from us. If our third-party dealers are not successful in these endeavors, we may
be unable to maintain or grow our revenues and meet our financial expectations. The
geographic coverage of our third-party dealers and their individual business conditions can
affect the ability of our third-party deale rs to sell our products to customers. If our
third-party dealers are unsuccessful, they may exit or be forced to exit the business or, in
some cases, we may seek to terminate relations hips with such dealers. As a result, we could
face adverse consequences related to the termin ation of our existing third-party dealers.
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Although we had established two self-owned stores and four JV stores in Australasia as of
the Latest Practicable Date to strengthen our s ales and distribution network, ensure direct
local presence, and foster connection with our clientele, any potential consolidation among
third-party dealers, as well as the growth of large, multi-location dealers, in the future may
also result in the increased bargaining power of these third-party dealers.
F u r t h e r m o r e ,i ne a c hy e a r / p e r i o do ft h eT r a c kR e c o r dP e r i o d ,s a l e st oo u rf i v el a r g e s t
customers, which primarily consist of third-p arty dealers, in the aggregate accounted for
80.5%, 74.4%, 55.2% and 46.2% of our total revenues, respectively. See ‘‘Business — Top
Customers and Suppliers — Top Customers’’ for further details. We cannot assure you that
there will not be any dispute between our major customers and us, or that we will be able to
continue to generated substantial amount of r evenues from them in each financial year,
which may adversely affect our business and profitability. Additionally, if any of such
customers default or delay on their payment or settlement of our trade and other
receivables, our liquidity, financial condition and results of operations may be adversely
affected.
In addition, if our products are not perceived by the third-party dealers as being
desirable and profitable for them to distribute, the dealers may terminate their relationship
with us or may drop certain of our brands or product offerings, which could in turn
adversely affect our sales and profit margins if we are unable to replace such dealers on a
timely basis or at all.
If we suffer substantial interruptions to our pro duction activities to the extent that we are not
able to compensate such interruptions by increasing the production capacity of our remaining
production facilities, our business, financial condition, results of operations and prospects
could be materially and adversely affected.
We operated one production site in Zhejia ng, China and two final assembly lines in
Melbourne, Australia as of June 30, 2024. Work slowdowns and other forms of industrial
action, or any deterioration in our relationships with employees, as well as shortages of
skilled workers, could cause interruptions to our production cycle. The aggregate value of
contracts in our backlog (representing our estimate of the contract value of orders that
remain to be completed as of a certain date) was approximately A$80.7 million (equivalent
to RMB364.8 million) as of June 30, 2024. Any prolonged interruptions could cause us to
fail to meet our contractual obligations to cu stomers in relation to delivery of RVs and may
cause customers to terminate their orders. Th e impact of any such delays or interruptions to
our production cycle could cause a material adverse effect on our business, financial
condition, results of operations and prospects.
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We face risks associated with our supply chain. If we experience any delay or interrupted
supply, or if the quality of the supplies does not meet the required standards, our business,
financial condition, results of operations and prospects could be materially and adversely
affected.
We rely on our suppliers to provide us with a wide range of raw materials. For the
three years ended December 31, 2023 and for the six months ended June 30, 2024, we
recorded cost of raw materials of RMB168.1 million, RMB292.3 million, RMB419.6 million
and RMB221.4 million, respectively, accoun ting for 67.3%, 70.2%, 77.8% and 77.1% of
our total cost of sales for the same periods.
We face various risks associated with our suppliers. Due to the limited volumes, high
switching costs, and challenges in developing multiple supplier relationships, we depend on
relationship development, market analysis , and supply agreements to maintain a healthy
supply base. While the raw materials and components that we purchase for our RVs are
generally commercially available, lead times for our various parts and components fluctuate
and are dependent on multiple factors, including contract terms, demand and the particular
suppliers involved. If our suppliers fail to perform their obligations or our contractual
arrangements with them are terminated due to their breach and we are not able to replace
them on a timely, effective and commercia lly acceptable basis, we may incur delays
potentially affecting the agreed timetables or product specifications. In addition, we require
our suppliers to be punctual in their deliveries and to give particular care to the quality of
their supplies. Furthermore, we rely on a limited number of suppliers and, in some cases, on
single-source suppliers for several raw materials and components of our products, in part,
due to the customized nature of many of our parts and the requirement for certification. If
any of our suppliers fail to adequately fulfill th eir obligations or experience disruptions in
production or provision of products due to, for example, bankruptcy, natural disasters,
labor strikes or disruption of its supply chain, or decide to unilaterally terminate their
contractual arrangements with us, we may exper ience a significant delay in the delivery of
or fail to receive previously ordered raw materials and components, which would adversely
affect our revenue and profitability and cou ld jeopardize our ability to meet the demands of
our customers.
If we are unable to obtain required components from our existing suppliers, we may
need to obtain these raw materials and components through secondary sources or markets,
which could result in higher costs, delays, and/or components that do not meet our quality
requirements or technical specifications. While we actively monitor and manage our supply
chain, we cannot anticipate the potential im pact that a variety of factors may have on the
production and shipment of our products. This reliance on a limited number of suppliers
and the lack of any guaranteed sources of supply exposes us to several risks, including:
. The inability to obtain an adequate supply of raw materials and components;
. Delay of RV deliveries due to design ing and certifying new supplier of raw
materials and components;
. Price volatility and production cost s for raw materials and components;
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. Failure of a supplier of raw materials and components to meet our quality or
production requirements;
. Failure of a supplier of raw materials and components to remain in business or
adjust to market conditions; and
. Consolidation among suppliers, resulting i n some suppliers exiting the industry,
discontinuing the production of raw mat erials and components or increasing the
cost of raw materials and components.
Based on the above risks, we cannot guarantee that we will be able to obtain a
sufficient supply of raw materials and components in the future or that the cost of these raw
materials and components will not increase. If our supply of raw materials and components
is disrupted or delayed, or if we need to replace our existing suppliers, there can be no
assurance that additional raw materials and components will be available when required or
that raw materials and components will be available on terms that are favorable to us,
which could extend our lead times, increase the costs of our components and harm our
business, financial condition, results of operations and prospects. We may not be able to
continue to procure components at reasonable prices, which may impact our business
negatively or require us to enter into longer-term contracts to obtain raw materials and
components. Any of the foregoing disruptions could exacerbate other risk factors and
increase our costs and decrease our gross margins, harming our business, financial
condition, results of operations and prospects.
As a player in the RV industry in Australasia, we are subject to significant competition.
We face strong competition in the product categories and markets in which we operate.
We compete with other RV producers who own brands and products in competition with
ours. According to Frost & Sullivan, the Aust ralasia RV market exhibits a relatively
competitive landscape. In terms of sales volume of RVs in 2023, the top five participants
collectively held approximately 55.4% of the market share. During the same year, we were
ranked as the second-largest RV company in Australasia, capturing approximately 6.8% of
the market share, while the largest RV company in Australasia captured approximately
31.5% of the market share. In particular, our competitors could adopt commercial policies
aimed at increasing their market share and/o r limiting our ability to obtain new orders.
Such policies could include, inter alia , more aggressive discount policies.
We believe that we compete primarily base d on our capability to rejuvenate our RV
collection and customize our RVs, the quality performance and design of our RVs, our
brand image and the user experience that we provide to our customers. If we fail to satisfy
our customers in any regard, our business, results of operations, financial condition,
prospects and the price of the Shares could be materially and adversely affected.
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We are subject to significant laws, regulations and directives in countries where we operate.
Increasing compliance risks and changes in government regulations imposing additional
requirements and restrictions on our operations could increase our operating costs, result in
service delays and disruptions, and adversely affect our business, financial conditions, results
of operation and prospects.
As an international RV business operato r, we are subject to significant laws,
regulations and directives in countries where we operate. An international customer base
and service offering requires importing and exporting goods, software and technology,
which may be subject to more stringent import-export controls across international borders.
For example, changes to import barriers by the Australian government could increase our
raw material and component part costs as we rely on our international suppliers. Restrictive
trade policies may increase the price of raw materials and component parts, and we may
need to use different and potentially more expensive suppliers. Generally, the
implementation of restrictive trade policies c ould lead to increased market uncertainties,
volatilities and adverse economic conditions . We may be subject to other cross-border risks,
including impacts on our suppliers and customers due to acts of war occurring
internationally; restrictions on technology tra nsfer; difficulties in protecting intellectual
property; increasing complexity of employment and environmental, health and safety
regulations; challenges associated with moni toring foreign suppliers to ensure compliance
with applicable laws and regulations; foreign investment laws; exchange controls;
repatriation of earnings or cash settlement challenges; compliance with increasingly
rigorous data privacy and protection laws; competition from foreign and multinational
firms with home country ad vantages; economic and gove rnment instability; acts of
industrial espionage, acts of war and terrorism and related safety concerns. New or
changing laws and regulations or related interpretation and policies could increase our costs
of doing business, affect how we conduct our operations, adversely impact demand for our
RVs and/or limit our ability to sell our RVs and services.
We have implemented and maintained polic ies and procedures that are designed to
monitor and ensure compliance by us and our Directors, officers and employees with
applicable laws, regulations and directiv es. Compliance with laws and regulations of
increasing scope and complexity is even more challenging in our business environment in
which reducing our operating costs is often n ecessary to remain competitive. In addition,
regulators and enforcement agencies continue to devote greater resources to the
enforcement of anti-money laundering laws and anti-corruption laws, and foreign
jurisdictions have significantly expanded the reach of their anti-bribery laws. While we
have developed and implemented policies and procedures designed to ensure strict
compliance with anti-bribery, anti-money la undering, anti-corruption and other laws,
such policies and procedures may not be effective in all instances to prevent violations.
Any determination that any of our employees have violated these laws, regulations or
directives in jurisdictions where we do business, could subject us to, among other things,
civil and criminal penalties, material monetary fines, profit disgorgement, injunction on
future conduct, securities litigation, reputa tional damage, or other adverse actions, which
could adversely affect our business, financial condition, results of operations or prospects.
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We may be subject to tariffs in countries where we operate or plan to expand our business.
Our RVs are primarily sold to customers in Australia and, to a smaller extent, New
Zealand, through a robust and extensive network of third-party dealers, together with
self-owned stores directly operated by us and JV stores with our JV partners. As such, we
may be subject to potential direct and/or indirect tax that we are required to collect and
remit in countries where we operate. As advised by our PRC Legal Advisor and our
Australian Legal Advisor, we currently bear no Chinese export duty nor Australian import
duty by taking advantage of the Chinese-Australia Free Trade Agreement for Chinese
manufactured goods. We also intend to expand our business in the European and Canadian
markets. For details, see ‘‘Future Plan and Use of Proceeds.’’ As confirmed by Frost &
Sullivan, no import duty was applicable to RVs o f a Chinese origin exported into Europe or
Canada as of the Latest Practicable Date. However, there is no assurance that we will not be
subject to additional tax exposure imposed by the relevant government authorities in the
regions where we operate or plan to expand our business in the future. Particularly, the
United States government has made significant changes in its trade policy in recent years
and has taken certain actions that may materia lly impact trade relations between China and
the United States. Additional tariffs, or other new laws and regulations impacting trade
relations between the United States and China may have significant impact on our
expansion plan if we decide to expand into the United States market in the future. In
addition, failure to fully comply with tax a nd customs policies in countries where we
operate or plan to expand our business would subject us to certain tax exposure and
penalties or liabilities which may have a material adverse effect on our business,
performance and financial condition.
We recorded negative cash flows from investing activities and financing activities during the
Track Record Period, which may have an adverse effect on our business, financial condition,
results of operations and prospects.
We recorded net cash used in investing ac tivities of RMB4.5 million, RMB5.4 million,
RMB2.7 million and RMB3.1 million for the three years ended December 31, 2023 and for
the six months ended June 30, 2024, respectivel y, primarily attributable to payment for the
purchase of items of plant and equipment. We recorded net cash used in financing activities
of RMB9.0 million, RMB39.9 million, RMB124 .8 million and RMB2.5 million for the three
years ended December 31, 2023 and for the six mo nths ended June 30, 2024, respectively,
primarily due to (i) proceeds from and prepaym ent of loans and borrowings, (ii) deemed
distribution, (iii) capital element of leas e rentals, and (iv) payment arising from
reorganization. For further details, see ‘‘Financial Information — Liquidity and Capital
Resources — Cash Flows.’’
Net investing and financing cash outflow s could impair our ability to make necessary
capital expenditures and constrain our flexib ility as well as adversely affect our ability to
meet our liquidity requirements. We may also experience net cash outflows from our
operating activities in the future. If we are un able to maintain adequate working capital, we
may default in our payment obligations and may not be able to meet our capital expenditure
requirements or pursue our growth strategies, which may have a material adverse effect on
our business, financial condition, results of operations and prospects.
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Environmental regulation and liabilities, includ ing new or developing laws and regulations, in
the PRC and Australia, or our initiatives in response to pressure from our stakeholders may
increase our costs of operations and adversely affect us.
In recent years, governments, custome rs, suppliers, employees and our other
stakeholders have increasingly focused on c limate change, carbon emissions, and energy
use. We are subject to certain environmental r egulations and requirements, and we also
need to maintain applicable en vironmental permits and contr ols related to our operations.
For example, our production of RVs produces waste gas and water, and our RVs are
generally powered by gasoline and diesel engines or are required to be towed by gasoline or
diesel-powered vehicles. We cannot guarantee that we will be able to maintain such permits
and controls, nor can we guarantee that our cost of compliance with certain environmental
regulations and requirements will not increase in the future. Laws and regulations that curb
the use of conventional energy or require the use of renewable fuels or renewable sources of
energy, such as wind or solar power, could result in a reduction in demand for RVs that
require hydrocarbon-based fuels such as oil and natural gas. In addition, governments
could pass laws, regulations or taxes that increase the cost of such fuels, thereby decreasing
demand for our RVs and also increasing costs for customers.
There have been growing concerns from the PRC government on environmental issues,
and our production processes are subject to various environmental protection laws and
regulations, such as the Law of the PRC on Prevention and Control of Atmospheric
Pollution ( 《中華人民共和國大氣污染防治法》), the Law of the PRC on Prevention and
Control of Water Pollution ( 《中華人民共和國水污染防治法》) and the Law of the PRC on
Prevention and Control of Noise Pollution ( 《中華人民共和國噪聲污染防治法》)w h i c h
govern the emission, discharge, release and disposal of environmental wastes and other
pollutants during our production process. In the event that we fail to comply with
applicable laws and regulations or fail to main tain, renew or obtain the necessary licenses or
certificates, our qualification to conduct our v arious businesses may be adversely affected,
and we may be subject to regulatory notices, inv estigations, inquiries, administrative
penalties or prosecutions, which may adversely affect our business, financial condition and
results of operations.
In addition, we are subject to significant Australian environmental regulations through
federal and state legislation. These regulati o n si m p a c tu sa ta no p e r a t i o n a ll e v e l ,s u c ha st h e
obligation to minimize and prevent environmental harms (including minimizing the risk of
hazardous materials and contamination, dus t or other environmental impacts). The RV
industry has potential environmental impacts because of the raw materials and chemicals
they use and the waste they generate. A spill, hi gh solvent emissions or other environmental
incidents could harm the local environment. The current and historical uses of the
properties at which we conduct our business expose us to the presence of contamination at
the sites, and the Environment Protection Authority (the ‘‘ EPA’’) in each state has powers
to require the assessment and remediation of s ites where the contamination is significant
enough to warrant regulations. The statutory position in Australia is that a person running
a business is not authorized to carry it out in a way that causes pollution unless the
pollution was authorized by an environment pro tection license. Failure to obtain a license
where it is required, or not complying with conditions of a license, is an offense which can
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attract substantial fines and regulatory acti on by the EPA. Businesses that do not require a
license are still required to comply with the en vironmental laws. Australia also has laws and
regulations in relation to using, storing, trans porting and disposing of hazardous materials
(e.g. dangerous goods and chemicals). Failing t o comply with these laws and regulations is
an offense for which regulatory action may be commenced. The costs of a fine for an
environmental offense and/or the costs a ssociated with any remediation required by a
regulatory authority could be substantia l and could adversely impact our financial
performance.
Other laws or pressure from our stakeholders may adversely affect our business,
financial condition, results of operation and prospects by requiring, or otherwise causing,
us to reduce the emissions of our RVs. Such activity may also impact us indirectly by
increasing our operating costs. We expect that compliance with such laws and regulations or
accommodation of such stakeholder pressure will require additional internal resources and
may necessitate larger investment in product development, research personnel and
production equipment and/or facilities, as well as sourcing from new suppliers and/or
higher costs from existing suppliers, all of which would increase our direct and indirect
costs and negatively impact our business, financial condition, results of operations and
prospects.
Failure to comply with relevant laws, regulations and rules on occupational health and safety
could subject us to investigations and administrative penalties, which may adversely affect our
business, results of operations and financial condition.
We are exposed to occupational health and safety risks which arise from the various
hazards in the workplace, such as manual hand ling, slips and trips, machinery, flammable
materials, harmful chemicals and noise.
According to the Production Safety Law of the PRC ( 《中華人民共和國安全生產法》)
promulgated on June 29, 2002 and last amended on June 10, 2021, enterprises shall meet
with the conditions for work safety as required by relevant laws and regulations.
Enterprises having more than 100 employees shall establish a department to carry out
work safety management or have personnel sole ly responsible for work safety management.
Enterprises shall provide their employees with education and training on work safety to
ensure that the employees have the necessary kn owledge regarding work safety, are familiar
with the relevant work safety rules and operating procedures, and acquire safe operation
skills required for their respective positions. T he employees performing special functions as
defined by the work safety supervision depar tment of the State Council must receive special
training on work safety and hold the qualificat ion certificate for performing such special
functions.
Australian State and Territory laws impo se strict obligations on the operator of a
business to ensure the health, safety and welfare of employees and other people in the
workplace, such as volunteers, customers and vi sitors. This includes ensuring safe systems
of work, safe use and handling of goods and substances, provision of appropriate
information, instruction, training and supervision and reporting obligations. All businesses
must have a work health and safety risk assess ment that meets legal requirements. The risk
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management plan should identify the risks an d describe ways to eliminate, and otherwise,
minimize the likelihood of an incident by includ ing ‘controls’ (measures to either prevent or
manage hazards). The risks need to be monitored and the plan needs to be reviewed and
updated regularly. In the event that an employee is injured in the course of his/her
employment, we may be liable for penalties or damages. This has the potential to impact
productivity and harm both the reputation and financial performance of us. There are
positive duties of due diligence on officers, di rectors and senior managers for compliance
with work health and safety obligations in most Australian jurisdictions. Officers should be
familiar with work health and safety obligatio ns, company safety systems and processes and
site risks. There should be a comprehensive sa fety management system complying with the
industry standards and the legal requirements. A breach of these obligations could mean
that we and the managers and directors of our subsidiaries could be exposed to regulatory
notices, prosecutions and significant monetary p enalties, as well as investigations, inquiries
and civil litigations.
See ‘‘Business — Environmental, Social and Corporate Governance’’ for the internal
policies we adopted to comply with the laws, regulations and rules in connection with
occupational health and safety. We cannot assure you that we or our employees will fully
comply with relevant laws and regulations on oc cupational health and safety in the future.
If we cannot comply with the evolving requirements or interpretations of such laws and
regulations, we could be subject to regula tory notices, investigations, inquiries,
administrative penalties or prosecuti ons, which may in turn adversely affect our
reputation, our business, financial condition and results of operations.
We may be unable to identify or successfully pursue acquisition opportunities as planned.
We will, in the future, organically and inorganically through acquisitions, strengthen
our sales and distribution network in order to support the growth of our business. See
‘‘Future Plans and Use of Proceeds.’’ Howeve r, there is no assurance that we will be able to
identify suitable targets to expand our busi ness. Even if we are able to identify suitable
targets, such expansion can be difficult, time consuming and costly to execute. We may also
have to engage in intense compe tition for attractive targets, which may make it difficult to
consummate any acquisitions on commercia lly acceptable terms or at all. Unsuccessful
expansion plan in whole or in part may have a material and adverse effect on our growth
plan in relation to acquisitions.
We have entered into and may in the future enter into strategic alliances or
acquisitions, with various third parties to further our business purpose from time to
time. These alliances could subject us to a number of risks, including risks associated with
sharing proprietary information, non-perf ormance by third parties, and increases in
expenses in establishing new strategic allian ces, any of which may materially and adversely
affect our business. We may hav e limited ability to monitor or control the actions of these
third parties and, to the extent any of these thi rd parties suffers negative publicity or harm
to their reputation from events relating to their businesses, we may also suffer negative
publicity or harm to our reputation by virtue of our association with any such third party.
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In addition, if appropriate opportunities arise, we may acquire additional assets,
products, technologies, or businesses that are complementary to our existing business. In
addition to possible shareholder approval, we may have to obtain approvals and licenses
from relevant government authorities for the acquisitions and to comply with any
applicable laws and regulations, which could result in increasing delay and costs, and
may derail our business strategy if we fail to do so. Moreover, the costs of identifying and
consummating acquisitions may be significant . Furthermore, past and future acquisitions
and the subsequent integration of new assets and businesses into our own require significant
attention from our management and could re sult in a diversion of resources from our
existing business, which in turn could have an adverse effect on our operations. Acquired
assets or businesses may not generate the financial results we expect. Acquisitions could
result in the use of substantial amount of cas h, potentially dilutive issuances of equity
securities, the occurrence of significant goodwill impairment charges, amortization expenses
for other intangible assets, and exposure to potential unknown liabilities of the acquired
business, which could adversely affect our business, financial condition, and results of
operations.
Furthermore, any acquired business may be in volved in legal proc eedings originating
from historical periods prior to the acquisition, and we may not be fully indemnified, or at
all, for any damage to us resulting from such legal proceedings, which could materially and
adversely affect our financial posi tion and results of operations.
Our services, including those provided through third parties, may not be generally accepted by
our customers. If we are unable to provide or arrange adequate services for our customers, our
business and reputation may be materially and adversely affected.
We cannot assure you that our auxiliary se rvices or our efforts to engage with our
customers using both our online and offline channels, will be successful, which could affect
our revenues as well as our customer satisfac tion and marketing. Moreover, we are unable
to ensure the availability or quality of services provided by those third-party suppliers that
we partner with, such as logistics service providers, recommended RV workshops and
financing institutions. If any of the services provided by third parties becomes unavailable
or inadequate, our customers’ experience ma y be adversely affected, which in turn may
materially and adversely affect our business and reputation.
Our RVs can be serviced at our recommended RV workshops, including our self-owned
stores and JV stores. We cannot assure you that our service arrangements will adequately
address the requirements or expectations of our customers to their satisfaction, or that we
and our recommended RV workshops will have sufficient resources to meet these service
requirements in a timely manner as the volume of RVs we deliver increases.
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Failure to fulfill our obligations in respect of con tract liabilities could materially and adversely
affect our results of operation, liquidity and financial position.
Our contract liabilities represent advances received from customers purchasing RVs
through our self-owned stores. As of Decem ber 31, 2021, 2022 and 20 23 and June 30, 2024,
our contract liabilities were RMB4.8 million, RMB7.6 million, RMB12.8 million and
RMB7.1 million, respectively. For further det ails, see ‘‘Financial Information — Selected
Items from the Consolidated Statements of Fi nancial Position — Contract liabilities.’’
There is no assurance that we will be able to fu lfill our obligations in respect of contract
liabilities. If we are not able to fulfill our oblig ations with respect to our contract liabilities,
the amount of contract liabilities will not b e recognized as revenue, and we may have to
reimburse or compensate our customers for failu re to fulfill our obligations. As a result, our
results of operations, liquidity and financi al position may be materially and adversely
affected.
We are exposed to risks of obsolete inventory which may adversely impact our cash flow and
liquidity.
We are exposed to risk of inventory obsolescence. Our inventory primarily consists of
raw materials, work in process and finished g oods. We had inventories of raw materials of
RMB36.0 million, RMB43.4 million, RMB88.4 million and RMB42.8 million as of
December 31, 2021, 2022 and 2023 and June 30, 2 024, respectively. We had inventories of
work in process of RMB79.6 million, RMB92.8 million, RMB72.7 million and RMB109.8
million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively. Our
average inventory turnover days were recorded at approximately 174 days, 122 days, 138
days and 166 days for the three years ende d December 31, 2023 and for the six months
ended June 30, 2024, respectively. As of December 31, 2021, 2022 and 2023 and June 30,
2024, we had provision for impairment of inv entories of RMB6.3 million, RMB4.6 million,
RMB5.3 million and RMB7.6 mi llion, respectively.
Our business is subject to customers’ preferences and behavior, which are beyond our
control. Any increase in inventory may adver sely affect our working capital. If we cannot
manage our inventory level efficiently in the future, our liquidity and cash flow may be
adversely affected. As our business expand s, our inventory level increases, and our
inventory obsolescence risk may also increase along with the increased purchase of
inventories. Furthermore, any unexpected and adverse changes to the optimal storage
conditions at our warehouse may expedite the deterioration of our inventories which may in
turn increase our inventory obsolescence risk. Therefore, any unexpected change in the
economic condition or degree of economic activities of our customers may render our
inventory obsolete. Such unexpected change in the demand for our products may result in
over-stocked inventories which may lead to d ecline in inventory values, and significant
write-offs. All these factors may in turn adversely affect our business, financial condition,
and results of operations.
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We may be subject to credit risk arising from some of our customers and other parties. Failure
to collect on trade and other receivables may have a material adverse effect on our business
operations and financial condition.
We typically grant our sales channel operators a credit term of 21 days or 90 days. As
of December 31, 2021, 2022 and 2023 and June 30, 2024, we had t rade and other receivables
of RMB19.7 million, RMB45.3 million, RMB46.1 million and RMB60.9 million,
respectively. As a result, we may be expose d to credit risk. We recorded a provision of
impairment loss on trade receivables of RMB9,000 and RMB65,000 in 2021 and 2022,
respectively, and a reversal of impairment l oss on trade receivables of RMB34,000 in 2023.
We recorded a provision of impairment loss on trade receivables of RMB21,000 for the six
months ended June 30, 2024. Our customers may e xperience financial difficulties, which
could negatively impact our ability to collect the amount due to us. Such adverse financial
condition may negatively affect the length of time that it will take us to collect the
associated trade receivables or impact the likelihood of ultimate collection, which could
result in an adverse effect on our business, fi nancial condition and results of operations.
We may be subject to additional liabilities in the event of defaults by our sales channel
operators under the floor-plan finance arrangement.
We have collaborated with our Financing Partner to provide financing options to our
sales channel operators, namely, Snowy River RV Company, which operate our self-owned
s t o r e s ,t h i r d - p a r t yd e a l e r s ,a n dJ Vd e a l e r s .I nc o n n e c t i o nw i t hs u c hf l o o r - p l a nf i n a n c e
arrangement, we have separate ly entered into an agreement with our Financing Partner to
provide a guarantee to the Financing Partner that in the event of default by the sales
channel operators, we are required to repurchase the RV from the Financing Partner. We
began providing such guarantee in 2022. The maximum amounts of the guarantee issued
were RMB8.2 million, RMB27.5 million and RM B20.6 million as of December 31, 2022 and
2023 and June 30, 2024, respectively. During the Track Record Period and up to the Latest
Practicable Date, there was no default by the sales channel operators. Therefore, this
repurchasing obligation has never been invoked. However, we cannot assure you that our
sales channel operators will not default or delay on their payments to the Financing Partner
in the future. The occurrence of any of these events could materially increase our costs and
expenses and have a material adverse effect on our business, financial condition, results of
operations and prospects.
We are dependent upon our senior management team and qualified personnel with specialized
skills, and our business, financia l condition, results of operati ons and prospects may suffer if
we lose their services.
We have been, and will continue to be, heavily dependent on the continued services of
our senior management team, who have extensi ve experience and specialized expertise in
our business. Certain members of our senior management team have long-standing
experience in automobile industry, and we believe that their depth of experience is
instrumental to our continued success. If we lose the services of any member of our senior
management team, we may not be able to find suitable replacements in a timely manner, at
acceptable cost or at all, and our business, execu tion of strategic priorities, financial
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condition, results of operations and prospects could be materially and adversely affected.
Non-compete and confidentiality obligations on our senior management team may not be
effective or enforceable if any member of our senior management team joins a competitor or
forms a competing business and there is a risk we may lose know-how, trade secrets,
customers and key employees.
Our success is highly dependent upon our ab ility to hire and retain workforce with the
skills necessary for our businesses to develop, pr oduce and maintain the products desired by
our customers. The products and services desired by our customers require highly skilled
personnel in multiple direct and indirect are as. These areas include product research and
development, production, sales and marketing, information technology and business
administration and development. In addition, from time to time we face challenges that may
impact employee retention. To the extent that we lose experienced personnel through
retirement or otherwise, especially those who possess specific skills and/or critical
know-how/trade secrets, it is critical for us to develop other employees, hire new
qualified employees and successfully manage the transfer of critical knowledge. Although
(i) our employees are subject to confidentialit y obligations and (ii) we require certain of our
full-time employees to enter into non-compete agreements, if any of these employees joins a
competitor or forms a competing business, we may need to litigate to enforce our rights
under these agreements, which could be time-consuming, expensive, and ineffective, given
the patchwork of different state laws regarding enforceability of non-compete obligations.
Enforceability of the non-compete agreement s that we have in place is not guaranteed, and
contractual restrictions could be breached without discovery or adequate remedies. As a
result, there is a risk we may lose know-how, trade secrets, customers and other key
employees.
Competition for skilled employees is intens e, and we may incur higher labor, recruiting
and/or training costs in order to attract and re tain employees with the requisite skills. Job
candidates and existing employees consider the value of the compensation, including
benefits and equity awards, which they re ceive in connection with their employment.
Therefore, in the meantime, if the perceived value of our compensation is unattractive, it
may adversely affect our ability to hire or retain highly skilled employees. We may not be
successful in hiring or retaining such employees , which could adversely impact our business,
financial condition, results of operations and prospects.
We may not succeed in preserving and enhancing the value of our brand which we depend on to
drive demand and revenues, and in remaining competitive against other premium lifestyle
alternatives.
Since our inception, we design and manufacture our RVs with emphasis on
comfortability, safety and functionality. Our f inancial performanc e is influenced by the
perception and recognition of our brand, which in turn depends on many factors such as the
design, performance, quality and image of our RVs, the success of our promotional
activities, including public relations and marketing, and our general profile, including our
brand’s image of safety and quality. Maintaining the value of our brand will depend
significantly on our ability to continue to pr oduce high performance RVs of the highest
quality and to deliver a premium experience supported by our ecosystem. To promote our
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brand, we may be required to adjust our selling and marketing practices, which could
substantially increase our expenses. Furtherm ore, we cannot assure you that these activities
will be successful or that we will be able to achieve the desired promotional effect. If we fail
to develop and maintain a strong brand, our business, financial condition, results of
operations and prospects could be ma terially and adversely impacted.
The market for premium and lifestyle RVs generally is intensely competitive, and we
may not be successful in maintaining and strengthening the appeal of our RVs over other
premium lifestyle alternatives. Customer pre ferences, particularly among premium goods,
can vary and change over time, sometimes rapidly. We are therefore exposed to changing
perceptions of our brand image and the image of RVs more generally, as we seek to attract
new generations of customers. Any failure to preserve and enhance the value of our brand
may materially and adversely affect our abilit y to sell our RVs, to maintain our pricing and
to extend the value of our brand into other activities profitably.
If we fail to manage our growth effectively, we may not be able to market and sell our RVs
successfully.
We have expanded our operations, and as we ramp up our production, significant
expansion will be required, especially in conn ection with potential increases in sales,
providing our customers with high-quality servicing, expansion of our retail, delivery, and
servicing center network, and managing diff erent models of RVs. Our future operating
results depend to a large extent on our ab ility to manage this expansion and growth
successfully. Risks that we face in undertak ing this expansion include, among others:
. managing our supply chain to support fast business growth;
. managing a larger organization with a gr eater number of employees in different
divisions;
. controlling expenses and investments in a nticipation of expanded operations;
. establishing or expanding design, produ ction, sales, and service facilities;
. implementing and enhancing administrative infrastructure, systems, and
processes; and
. addressing new markets and potentially unforeseen challenges as they arise.
Any failure to manage our growth effectively c ould materially and adversely affect our
business, financial condition, results of operations, and prospects.
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The plan for construction of a new production base and the expansion of our existing
production facilities in China may be subject to d elays, disruptions, cost overruns, or may not
produce expected benefits. Additionally, depreciation of our expanded existing and new
property, plant and equipment may have an adverse impact on our operating results.
We plan to conduct a new production base for our future growth in the long run. The
expansion could experience delays or other diffi culties, and will require significant capital
expenditure. We may encounter quality, process, or other issues when optimizing our
production arrangement. Our current lease for the production facilities in Zhejiang, China
will expire in April 2029. Any failure to comp lete the construction on schedule and within
budget could adversely affect our financial condition, production capacity, and results of
operations.
We have invested and expect to continue to in vest significantly in machinery and other
production equipment for the product lines where new models are produced, and we
depreciate the cost of such equipment over their expected useful lives. However, production
technology may evolve rapidly, and we may dec ide to update our production process with
advanced equipment more quickly than exp ected. Moreover, as our engineering and
production expertise and efficiency increase, we may be able to produce our products using
less of our installed equipment. The useful life of any equipment that would be retired early
as a result would be shortened, causing the depreciation on such equipment to be
accelerated, and to the extent we own such equipment, our results of operations could be
negatively impacted. Additionally, the estab lishment of new production facilities and the
expansion of existing ones require significant investments in construction, decoration
and/or renovation. During this initial phase, when revenue generation may not yet be
stable, depreciation of property, plant and equipment begins to accrue, which may have an
adverse impact on our operating results.
Under the PRC laws, construction projects are subject to broad and strict government
supervision and approval procedures, including but not limited to project approvals or
filings, environment protection approvals, th e pollution discharge permits, work safety
approvals, fire protection approvals, and the completion of inspection and acceptance by
competent authorities. If we plan to carry out any construction project in the future, we
may need to undergo necessary approval procedures as required by law. There is no
assurance that we will not encounter problem s in fulfilling any or all of the conditions
imposed in respect of the inspection and acceptance by competent authorities. As a result,
our entities operating such construction projects may be subject to fines, or the suspension
of use of such projects, if they are found to be in violation of any applicable regulations or
requirements. Any of the foregoing could materially and adversely affect our business
operations.
The modification, renewal and revocation of permits, approvals, authorizations and licenses
may impose limitations that increase the cos ts or limit the availability of our products.
Our business requires a variety of government permits, approvals, authorizations and
licenses and the maintenance of such permits, ap provals, authorizations and licenses. Our
business is subject to regulations and requirements and may be adversely affected if we are
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unable to comply with existing regulations or requirements or if changes in applicable
regulations or requirements occur. In addition, our business could be restricted by
modification or revocation of these approvals upon which we depend and could have a
material adverse impact on our business, financial condition, results of operations and
prospects. See ‘‘Business — License s, Certificates and Permits.’’
Backlog is subject to unexpected adjustments and cancellations and, therefore, may not be
indicative of our future results of operations.
Our backlog represents our estimate of the contract value of orders that remains to be
completed as of a certain date. The contract value of an order represents the amount that we
expect to receive under the terms of the contract, assuming the contract is performed in
accordance with its terms. Backlog may not be indicative of future results of operations.
Many events can cause a delivery to be delaye d or not completed at all, some of which may
be out of our control, including delays in supply of raw materials or components by our
suppliers. If we experience delay in fulfilling R V orders or if customers reconsider their
orders or reservations, those customers may seek to cancel or modify their orders or
reservations. Customers may otherwise seek to cancel or delay their orders or reservations
even if we are prepared to fulfill them. If our ba cklog does not result in sales, our results of
operation may suffer.
As of December 31, 2021, 2022 and 2023 and June 30, 2024, the aggregate value of
contracts in our backlog was approximately A$62.9 million (equivalent to RMB284.3
million), A$90.4 million (equivalent to RMB4 08.7 million), A$81.6 million (equivalent to
RMB368.9 million) and A$80.7 million (equi valent to RMB364.8 million), respectively.
However, this figure is based on the assump tion that our relevant contracts will be
performed in full in accordance with their terms. The termination or modification of any
one or more major contracts may have a substantial and immediate effect on our backlog.
Also, we cannot guarantee that the amount est imated in our backlog will be realized in full,
in a timely manner, or at all, or even if it is realized, such backlog will result in profits as
expected. As a result, you should not rely on our backlog information as an indicator of our
future earnings.
Our warranty provisions may be insufficient t o cover future warranty claims, which could
adversely affect our financial condition and results of operations.
We provide warranties covering the key components of the RVs. A provision for
warranties is recognized when the underlying products are sold, and is made for the best
estimate of the expected settlement under sale s agreements. The amount of provision for
warranties takes into account the Company’s rec ent claim experience, historical warranty
data and a weighting of all possible outcomes of their respective probabilities. As of
December 31, 2021, 2022 and 2023 and June 30, 2024, the Company’s product warranty
provision amounted to RMB2.9 million, RM B4.9 million, RMB6.7 million and RMB6.9
million, respectively. An increase in actu al warranty claim costs as compared to our
estimates could result in increased warrant y liabilities and expense which could have an
adverse impact on our earnings.
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We plan to record and adjust warranty provi sions based on changes in estimated costs
and actual warranty costs. We cannot assure you that our warranty provisions will be
sufficient to cover future warranty claims. We could, in the future, become subject to a
significant and unexpected warranty claim, res ulting in significant expenses, which would in
turn materially and adversely affect our fina ncial condition, results of operations, and
prospects.
We may be subject to additional contributions of employee benefit plans and late payments and
fines imposed by relevant governmental authorities.
PRC laws and regulations require us to participate in various government sponsored
employee benefit plans. These benefit plans include social insurance, housing provident
fund and other welfare-oriented payment ob ligations. According to applicable PRC laws
and regulations, employers must open social insurance registration accounts and housing
provident fund accounts and pay social insurance premiums and housing provident fund
contributions for employees. PRC laws require that we contribute to the plans in amounts
equal to certain percentages of salaries, incl uding bonus and allowances, of our employees
up to the maximum amounts specified by the local government at locations where we
operate our business. Local governments across China do not have consistent requirements
regarding the implementation of employee benefit plans. In addition, according to the
Urgent Notice of the General Office of the Ministry of Human Resources and Social
Security on Implementing the Spirit of the Executive Meeting of the State Council in
Stabilizing the Collection of Social Security Contributions ( 人力資源社會保障部辦公廳關於
貫徹落實國務院常務會議精神切實做好穩定社保費徵收工作的緊急通知)p r o m u l g a t e do n
September 21, 2018, all local authorities responsible for the collection of social insurance
are strictly forbidden to conduct self-collection of historical unpaid social insurance
contributions from enterprises.
During the Track Record Period, we did no t make adequate social insurance and
housing provident fund contributions for employees with the relevant social insurance and
housing provident fund authorities. We made provisions of approximately RMB0.7 million,
RMB1.7 million, RMB2.1 million and RMB0.5 million with respect to the potential
liabilities arising from shor tfalls in social insurance and/ or housing provident fund
contributions in 2021, 2022 and 2023 and for the six months ended June 30, 2024,
respectively. As advised by our PRC Legal Advisor, pursuant to the Regulations on
Administration of Housing Provident Fund ( 《住房公積金管理條例》), if we fail to pay
housing provident fund contributions within a prescribed period, we may be subject to an
order by the relevant PRC court to settle such payments. As advised by our PRC Legal
Advisor, pursuant to the Social Insurance Law of the PRC ( 《中華人民共和國社會保險法》
),
we may be required by relevant regulatory authorities to make up the outstanding social
insurance contributions amount prior to a stipulated deadline and we may be liable for the
additional late payment penalty at the daily rate of 0.05% of the shortfalls. Moreover, we
may be liable to a fine of one to three times of the outstanding contribution amount in the
event that we fail to make such payments in time. As advised by our PRC Legal Advisor,
the risk of us being penalized for such shortfall is remote, provided that we rectify such
shortfall in a timely manner after receiving notices from the relevant PRC authorities.
Please refer to the section headed ‘‘Business — Employees’’ in this Prospectus.
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In Australia, we are required to contribu te 11% of our employees’ ordinary time
earnings to a certain cap into superannuation funds in accordance with superannuation
legislation. This rate will incrementally incr ease to 12% by July 1, 2025. Such contributions
are fully and immediately vested in employees once made.
As of the Latest Practicable Date, no administrative action or penalty had been
imposed by the relevant regulatory authorities with respect to our social insurance and
housing provident fund contributions, nor had we received any order to settle the deficit
amount. We were also not aware of any materi al employee’s complaints or demands for
payment of social insurance or housing provident fund contributions, nor had we received
any material legal documentation from the labor arbitration tribunals or the PRC courts
regarding disputes in this regard. Also, in Australia, we had not been subject to any
administrative penalties in connection with our contribution of the above employee benefit
plans during the Track Record Period. However, there is no assurance that our historical
and current practice with respect to the contribution will at all times be deemed in full
compliance with relevant laws and regulations by government authorities mainly due to the
evolving interpretation and implementation o f these laws and regulations. In the event of
any such non-compliance, we may be required to pay any shortfall in social insurance and
housing provident fund contributions within a prescribed time period and to pay penalties if
we fail to do so. However, if we are still required to make additional payments in relation to
such contributions, our operating expens es will increase, which could consequently
adversely affect our financial condition and results of operations.
Our operational and financial results are subject to seasonal fluctuations.
Our business has experienced, and expects to continue to experience, seasonal
fluctuations, typically with relatively we aker performance during long public holidays in
Australasia, such as the Christmas and New Year holidays in late December and early
January of each year. As a result, we experie nced a decrease in the orders we received from
December to January the following year duri ng the Track Record Period. Other seasonal
trends that affect our industry may develop, and current seasonal trends may become more
extreme, all of which would contribute to fluctuations in our results of operations. As a
result, historical patterns of our results of operations may not be indicative of our future
performance, and period-to-period comparisons of our results of operations may not be
meaningful. Our results of operations in future quarters or years may fluctuate and deviate
from the expectations of securities analysts and investors, and any occurrence that disrupts
our business during any particular quarters could have a material adverse effect on our
liquidity and results of operations.
We may be unable to adequately control the costs associated with our operations.
We devote a significant amount of capital to develop and grow our business, including
developing and producing our RVs, procuring raw materials, components and equipment,
and constructing our pr oduction facilities.
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In particular, our business operations are affected by the prices of raw materials and
components for our RVs. Our business operati ons depend on our ability to consistently
obtain sufficient quantities of raw materials and components at acceptable prices and
quality levels from our suppliers in a timely manner. In 2021, 2022 and 2023 and for the six
months ended June 30, 2024, cost of raw materials associated with our business represented
approximately 67.3%, 70.2%, 77.8% and 77.1%, respectively, of our total cost of sales of
our business for the same periods. Raw material and component prices have fluctuated in
the past and may continue to fluctuate considerably in the future. As the purchase of raw
materials and components comprises a substantial portion of our total purchase for our
business, any increase in the cost of raw materials and components may have a negative
impact on our results of operations and prospects. In addition, the prices of these raw
materials and components are affected from ti me to time by a number of factors, including
general economic conditions, market demand and supply situation, and may fluctuate
beyond our expectation and control from time to time. We may not be able to pass on any
increase in raw material and component costs to our customers immediately or at all. If we
fail to pass on such increase in raw material and component costs to our customers, our
profitability may be affected. F urthermore, we do not deploy any financial instrument to
hedge the price risks of raw materials and components. As such, there is no guarantee that
we are able to procure sufficient raw material s and components at competitive price. In the
event that the prices of these raw material s and components fluctuate under abnormal
conditions and/or there is a shortage in supply, it may result in disruption to our production
schedule and could have a negative impact on o ur profitability. Currency fluctuations,
tariffs or shortages in petroleum and other economic or political conditions may result in
significant increases in freight charges and raw material costs.
In addition, we may lose control over the increase of costs in connection with our
services including after-sale services. Our ab ility to become profitable in the future will not
only depend on our ability to successfully mark et our RVs and services but also to control
our costs. If we are unable to design, develop , produce, market, sell, and service our RVs in
a cost-efficient manner, our margins, profita bility, and prospects would be materially and
adversely affected.
Furthermore, staff costs have been a major component of our cost of sales and overall
expenses. Although staff costs as a percen tage of our cost of sales and expenses have
remained generally stable, the absolute amounts have increased consistently during the
Track Record Period as we expanded our operations primarily due to higher headcounts.
We anticipate this trend to continue as we further grow our business. In addition, we intend
to invest a certain portion of our net proceeds from the Global Offering in our continued
product research and development efforts. As part of the efforts, we plan to recruit more
research and development professionals with appropriate qualifications, who have
experience in RV research and development , to facilitate the construction, design and
upgrading of our RV and towable ERV models. See ‘‘Future Plans and Use of Proceeds —
Use of Proceeds’’ for more details. Recruitment of additional research and development
personnel is expected to lead to increased staff costs. If we are unable to grow revenues at a
pace sufficient to offset these increased costs, our business, financial condition, and results
of operations could be adversely affected.
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Fluctuations in shipping prices and disruptions to our logistics processes could disrupt our
product deliveries and adversely affect our business, financial condition and results of
operations.
We generally use third-party logistics service providers to transport (i) our
semi-finished RVs from our warehouses in China to our warehouses in Australia for final
assembly, and (ii) our finished RVs from our A u s t r a l i a nw a r e h o u s e st oo u re n dc u s t o m e r s .
The shipping costs from China to Australia are recorded as shipping and handling expenses
included in our costs of sales. We recorded sh ipping and handling expenses of RMB27.7
million, RMB55.3 million, RMB20.3 million and RMB18.9 million for the three years
ended December 31, 2023 and for the six months ended June 30, 2024, respectively,
representing 11.1%, 13.3%, 3.8% and 6.6% of our total cost of sales during the same
periods.
Global and local dynamics within the logisti cs landscape, including fluctuations in
freight capacities and prices, regional differe nces in infrastructure and labor availability,
and other broader industry challenges or specific issues affecting our third-party logistics
service providers can influence our logistics processes and associated costs, which could
adversely affect our business, financial condition and results of operations.
We had net current liabilities during the Trac k Record Period. We cannot assure you that we
will not experience net current liabilities or net liabilities in the future, which could expose us
to liquidity risks.
We had net current liabilities during the Track Record Period. We had net current
liabilities of RMB6.4 million as of June 30, 2 024, primarily due to (i) trade and other
payables of RMB274.4 million and (ii) lo ans and borrowings of RMB104.6 million;
partially offset by (iii) inventories of RMB272.4 million, (iv) trade and other receivables of
RMB60.9 million, and (v) cash and cash equivalents of RMB43.9 million. We had net
current liabilities of RMB9.9 million as of Decemb er 31, 2023, primarily due to (i) trade and
other payables of RMB240.7 million, representing an increase of RMB79.0 million
compared to RMB161.7 million as of Decem ber 31, 2022, (ii) loans and borrowings of
RMB31.2 million, representing an increase of RMB22.1 million compared to RMB9.1
million as of December 31, 2022 and (iii) lease liabilities of RMB29.0 million, representing
an increase of RMB5.3 million compared t o RMB23.7 million as of December 31, 2022;
partially offset by (iv) inventories of RMB 242.8 million, representing an increase of
RMB87.2million compared to RMB155.6 millio n as of December 31, 2022 and (v) trade and
other receivables of RMB46.1 million, repres enting an increase of RMB0.8 million
compared to RMB45.3 millio n as of December 31, 2022.
In addition, we had net current liabilities of RMB2.3 million as of December 31, 2021,
primarily due to (i) trade and other pa yables of RMB101.6 million, (ii) loans and
borrowings of RMB26.7 million and (iii) leas e liabilities of RMB14.5 million; partially
offset by (iv) inventories of RMB112.4 million and (v) trade and other receivables of
RMB19.7 million.
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We cannot assure you that we will not experience liquidity problems in the future. If we
fail to maintain sufficient cash and financing, we may not have sufficient cash flows to fund
our business operations and capital expenditure and our business and financial position will
be adversely affected.
If we are unable to obtain adequate or timely fi nancing on commercially acceptable terms, our
ability to grow our business may be limited.
We may require additional capital beyond those generated by the Global Offering from
time to time to grow our business, to better serve our customers, to develop and enhance
our products, and to improve our operating infrastructure. Accordingly, we may need to
sell additional equity or debt securities or obta in a credit facility. Future issuances of equity
or equity-linked securities cou ld significantly dilute our exist ing shareholders. In addition,
any new equity securities we issue could have ri ghts, preferences and privileges superior to
those of holders of our ordinary shares. The incurrence of debt financing would result in
increased debt service obligations and could result in operating and financing covenants
that would restrict our operations or our ability to pay dividends to our shareholders.
Our ability to obtain additional capital is subject to a variety o f uncertainties,
including:
. our market position and competitiveness in the RV industry;
. our future profitability, overall financial condition, results of operations;
. general market conditions for capital raising activities by companies in RV
industry, which in turn depends on the prospect of this industry; and
. economic, political and other conditions in China, Australasia and globally.
We may be unable to obtain additional capital in a timely manner, on acceptable
terms, or at all. If we are unable to obtain adequate financing on terms satisfactory to us
when we require it, our ability to continue to support our business growth could be
significantly impaired, and our business and prospects could be adversely affected.
Our ability to maintain sufficient liquidity goin g forward is subject to the general liquidity of
and ongoing changes in the credit markets in addition to other factors.
Our liquidity is a function of our cash on-h and, our ability to successfully generate
cash flows from a combination of efficient operations and continuing operating
improvements, access to capital markets and funding from third parties. We believe our
liquidity should be sufficient to meet our operating requirements as they occur; however,
our ability to maintain sufficient liquidity going forward is subject to the general liquidity
of and ongoing changes in the credit markets as well as general economic, financial,
competitive, legislative, regulatory, and ot her market factors that are beyond our control.
The potential future disruptions in access t o bank deposits or lending commitments due to
bank failures in the PRC and Australia could affect our liquidity. If we are not able to
RISK FACTORS
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maintain adequate liquidity, we may not be able to meet our operating cash flow
requirement, debt service cost, future required contributions to our employee benefit plan,
and other financial obligations.
A failure or breaches of the security of our information technology infrastructure may
adversely affect our business, financial condition, results of operations and prospects.
The performance and reliabi lity of the technology that we use is critical to our ability
to compete effectively. A significant internal technological error or failure or large-scale
external interruption in the technological infrastructures on which we depend, such as
power, telecommunications or the Internet, may disrupt our internal network. Any
substantial, sustained or repeated failure of the technology that we use could impact our
ability to conduct our business, lower the utilizat ion of our production facilities, and result
in increased costs. Our technological systems and related data may be vulnerable to a
variety of sources of interruption due to events beyond our control, including natural
disasters, terrorist attacks, telecommunicati ons failures, computer viruses, hackers and
other security issues.
We are subject to complex and frequently changing privacy and data protection laws, rules and
regulations in the jurisdictions where we operate, regarding the collection, use, storage,
transfer and other processing of personal information.
We collect certain information of our customers for product registration and warranty
claims, including their names, addresses, telephone numbers and emails, and store the
information in our internal computer syst em. We process such information to generate
customer profiles, which enables us to provide superior after-sales services to serve our
customers’ needs and optimize their purchasing experiences.
Cybersecurity risks and the failure to main tain the confidentiality, integrity and
availability of our computer hardware, softwar e and Internet applications and related tools
and functions could result in damage to our reputation, data integrity and/or subject to
costs, fines or lawsuits under data privacy laws or other contractual requirements. The
integrity and protection of the data we hold is relevant to our business. The regulatory
environment governing information, security and privacy laws is increasingly demanding
and continues to evolve. We could be subject to risks caused by misappropriation, misuse,
leakage, falsification, system malfunction o r intentional or accidental release or loss of
information maintained in our information systems and networks and those of our
third-party service providers.
If we are unable to maintain reliable information technology systems and appropriate
controls with respect to global data privacy and security requirements and prevent data
breaches, we may suffer regulatory consequences in addition to business consequences. We
are subject to complex and frequently changing privacy and data protection laws, rules and
regulations in the jurisdictions where we operate, regarding the collection, use, storage,
transfer and other processing of personal information. These privacy, security and data
protection laws and regulations could impose significant limitations, require changes to our
policies, practices and processes and in some cases impose restrictions on our use or storage
of personal information. As regulations continue to evolve, we may be potentially subject in
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the future to additional data protection oblig ations to those that we are already subject to
and for which we are fully compliant, which may result in additional costs, including for the
purpose of monitoring rapidly evolving privacy laws, rules and regulations.
Government enforcement actions can be costly and may interrupt the regular
operation of our business, and data breaches or violations of data privacy laws can result
in significant fines, reputational damage a nd civil lawsuits, any of which may adversely
affect our business, financial condition, results of operations and prospects.
If we are unable to maintain sufficient insurance coverage, it may materially and adversely
impact our business, financial condition and results of operations.
Hazards are inherent in the RV industry and may result in loss of life and property,
potentially exposing us to substantial liabilit y claims arising from, or in connection with,
the operation of RVs. We maintain property in surance, machinery breakdown insurance,
general and product liability ins urance, employer’s liability insurance and driver’s liability
insurance, which we believe is in line with t he commercial practices in our industry.
Insurance underwriters are required by vari ous laws and regulations to maintain minimum
levels of reserves for known and expected claims. However, there can be no assurance that
underwriters have established adequate reserves to fund existing and future claims. The
number of accidents, as well as the number of insured losses within the automobile industry,
and the impact of general economic conditions on underwriters may result in increases in
premiums above the rate of inflation. To the ext ent that our existing insurance carriers are
unable or unwilling to provide us with sufficie nt insurance coverage, and if insurance
coverage is not available from another sour ce, our insurance costs and/or exposure may
increase and may result in our being in breach of regulatory requirements or contractual
arrangements requiring that specific insurance be maintained, which may have a material
adverse effect on our business, financial condition and results of operations.
If we fail to implement and maintain an effective system of internal control over financial
reporting, we may be unable to accurately report our results of operations, meet our reporting
obligations, or prevent fraud.
Our success depends on our abilit y to effectively utilize our standardized management
system, information systems, resources and i nternal controls. As we continue to expand, we
will need to modify and improve our financial and managerial controls, reporting systems
and procedures and other internal controls an d compliance procedures to meet our evolving
business needs. If we are unable to improve our internal controls, systems and procedures,
they may become ineffective and adversely af fect our ability to manage our business and
cause errors or information lapses that affect our business. Our efforts in improving our
internal control system may not result in eliminating all risks. If we are not successful in
discovering and eliminating weaknesses in our in ternal controls, our ability to effectively
manage our business may be affected.
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We may not be able to detect and prevent fraud or other misconduct committed by our
employees, dealers or any other third parties.
Fraud or other misconduct by employees, such as unauthorized business transactions
and breaches of our internal policies and procedures, or our independent dealers or any
other third parties, such as breaches of laws and contracts, may be difficult to detect and
prevent and could subject us to financial loss, sanctions imposed by governmental
authorities and seriously harm our reputation. Our risk management systems, information
technology systems, and internal control procedures are designed to monitor our operations
and overall compliance. See ‘‘Business — Risk Management and Internal Control.’’
However, we may not be able to identify non- compliance matters in a timely manner or at
all. Furthermore, it is not always possible to detect and prevent fraud or other misconduct
and the precautions we take to prevent and detect such activities may not be effective.
Consequently, risk of fraud or other misconduct may have previously occurred but was
undetected, or may occur in the future. This could materially adversely affect our business,
financial condition, results of operations an d prospects and our ability to meet our financial
obligations.
If we are unable to adequately protect our intellectual property interests or are found to be
infringing on intellectual property interests of others, we may incur significant expense and our
business may be adversely affected.
Our intellectual property includes our tr ademarks, goodwill, domain names, website,
mobile and web applications, software (including our proprietary algorithms and data
analytics engines), copyrights, trade secrets and inventions (whether or not patentable). We
believe that our intellectual property plays an important role in protecting our brand and
the competitiveness of our business. If we do not adequately protect our intellectual
property, our brand and reputation may be adversely affected and our ability to compete
effectively may be impaired.
We protect our intellectual property through a combination of patent, trademark,
copyright, and trade secret laws, contracts and policies. We have registered or been
authorized to use the patents, trademarks and domain names that we use in the PRC,
Australia and New Zealand in which we do significant business, but we may not have such
registrations or authorizations for other te rritories in which we have fewer operations. We
may be unable to prevent competitors from acquiring trademarks or domain names that are
similar to or diminish the value of our intellectual property or in any way are misleading or
deceptive to our existing or potential customers, and will have to seek legal action to oppose
or invalidate such registrations. In addition, it may be possible for other parties to copy or
reverse engineer our applications or other technology offerings. Moreover, our proprietary
algorithms, data analytics engines, or other software or trade secrets may be compromised
by third parties or our employees or agents, which could negatively impact any competitive
advantage that we may have from them.
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Our business is subject to the risk of third pa rties infringing our intellectual property.
Violations of intellectual property laws (in cluding trade secret laws) can lead to legal
actions against infringing parties. If our inte llectual property (including trade secrets) is
infringed, misappropriated or disclosed without authorization, we may seek legal remedies
to protect our interests. Litigation, settlements, or damages awarded can impact both our
financial resources and reputation. Considering the varying enforceability of intellectual
property laws (including trade secret laws) across jurisdictions, we actively keep abreast of
the legal frameworks and regulations of differe nt countries to protect intellectual property
(including trade secrets) during global operations. We may not always be successful in
securing protection for, or identifying or stopping infringements of, our intellectual
property, and we may need to resort to litigation, arbitration or other dispute resolution
mechanisms in the future to enforce our intellectual property rights. Any such litigation
could result in significant costs and a diversion of our management’s time and resources.
Further, such enforcement efforts may result i n a ruling that our intellectual property rights
are unenforceable.
Companies in the RV industry may be fre quently subject to litigation based on
allegations of intellectual property infringement, misappropriation or other violations. We
may acquire or introduce new technology offerings, which may increase our exposure to
patent and other intellectual property claims. Any intellectual property claims asserted
against us, whether or not having any merit, could be time-consuming and expensive to
settle or litigate. If we are unsuccessful in defending such a claim, we may be required to pay
substantial damages, we could be subject to an injunction or we could agree to a settlement
that may prevent us from using our intellectua l property or making our offerings available
to customers.
Some intellectual property claims may re quire us to seek a license to continue our
operations, and those licenses may not be ava ilable on commercially reasonable terms or
may significantly increase our operating expen ses. If we are unable to procure a license, we
may be required to develop or acquire non-infringing technological alternatives, which
could require significant time and expense. Further, if international regulatory risks relating
to intellectual property were to materialize, it could lead to legal consequences, reputational
damage, business disruptions, and loss of intellectual property. Violations of international
laws and regulations relating to intellectua l property can result in legal actions, fines,
penalties, and potential criminal liability. Regulatory risks can harm our reputation, erode
customer trust, and negatively affect public perception. Compliance issues relating to
intellectual property may disrupt operations, supply chains, and business relationships,
resulting in financial losses. Failure to protec t trade secrets and intellectual property can
lead to misappropriation, loss of competitive advantage, and decreased market share. Any
of these events could adversely affect our business, financial condition, results of operations
and prospects.
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As our patents may expire and may not be extended and our patent rights may be contested,
circumvented, invalidated, or limited in scope, our patent rights may not protect us effectively.
In particular, we may not be able to prevent others from developing or exploiting competing
technologies, which could materially and adversely affect our business, financial condition, and
results of operations.
As of June 30, 2024, we held two patents which were registered in China. We cannot
assure you that all such registered patents will not be contested, circumvented, or
invalidated in the future. In addition, the rights granted under any registered patents may
not provide us with meaningful protection or competitive advantages. The claims under any
patents may not be broad enough to prevent others from developing technologies that are
similar or that achieve results similar to our s. It is also possible that the intellectual
property rights of others could bar us from licensing and exploiting our patents. Numerous
patents owned by others exist in the fields where we have developed and are developing our
technology. These patents might have priority over our patents and could subject our patent
to invalidation. Finally, in addition to those who may claim priority, any of our existing
patents may also be challenged by others on the basis that they are otherwise invalid or
unenforceable.
Interest rate fluctuations may adversely affect our business.
Interest rate fluctuations may adversely aff ect our financial performance. Our interest
rate risk arises primarily from cash at bank, restricted cash, lease liabilities and loans and
borrowings. Our interest-bearing financial in struments at variable rates as of December 31,
2021, 2022 and 2023 and June 30, 2024 were primarily the cash at banks, loans and
borrowings and the cash flow interest rate risk arising from the change of market interest
rate on these balances is not considered sign ificant. For our interest rate profile and a
sensitivity analysis, see Note 25(c) to th e Accountants’ Report in Appendix I to this
Prospectus. Any changes in interest rates will impact our borrowing costs. We currently
have exposure to floating rate debt. While th e exposure to interest rate volatility may be
hedged through the use of interest rate swaps and interest rate caps, the magnitude of the
final exposure depends on the effectiveness of the hedge. We do not currently have any
interest rate hedging in place. Any or all of t hese factors could materially and adversely
affect our business, financial condition and r esults of operations and our ability to meet our
financial obligations.
Exchange rate fluctuations may adversely affect our business.
Since we operate as a multinational corporation that sells our products to customers in
Australia and, to a smaller extent, New Zeala nd, changes in exchange rates could in the
future, adversely affect our cash flows and res ults of operations. In each year/period during
the Track Record Period, we had foreign e xchange gain of RMB98,000, RMB7.5 million,
RMB14.0 million for the year ended December 31, 2021, 2022 and 2023 and foreign
exchange loss of RMB2.5 million for the six months ended June 30, 2024, respectively.
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We currently operate primarily in Renminbi while receiving Australian dollars and, to
a small extent, New Zealand dollars throug h selling our products in Australia and New
Zealand. We do not engage in hedging transact ions to protect against uncertainty in future
exchange rates between Renminbi and Austr alian dollars or New Zealand dollars. An
increase in the value of the Renminbi against Australian dollars or New Zealand dollars
could have a negative impact on the demand for our RVs. We cannot predict the impact of
currency fluctuations, and currency fluctua tions in the future may adversely affect our
financial condition, results of operations and cash flows.
We face risks associated with malicious third- party activities and negative publicity which
could damage our reputation and cause our customers to lose faith in our brand.
Our brand reputation is vulnerable to many threats that can be difficult or impossible
to predict, control, and costly or impossi ble to remediate. We may become subject to
malicious third-party activities including anti-competition conduct, harassing, or other
harmful behaviors, especially customers uns atisfied with our products and services or
third-party competitors. Such conduct includes complaints, anonymous or otherwise, to
regulatory agencies. Our brand reputation may be harmed by aggressive marketing and
communications strategies of our competito rs. Third parties may also maliciously copy or
adopt our key business strategies to gain an un fair competitive advan tage in the market. We
cannot guarantee that we will not be exposed to such unfair business competition or
dominant market position abuse imposed by third parties in the future. In addition, we may
become the target of government or regulatory investigation as a result of or in connection
with such third-party conduct and may be required to expend significant time and incur
substantial costs to address such third-party conduct, and there is no assurance that we will
be able to conclusively refute each of the alle gations within a reasonable period of time, or
at all.
Our brand reputation may also be harmed by negative publicity, which is posted on the
Internet or pages embedded in various social media mobile apps related to us, our
Directors, officers, employees, shareholde rs, peers, business partners, or our industry in
general. Any negative reviews or reviews that compare us unfavorably to competitors could
adversely affect customers’ perception about our RVs. Customers may value readily
available information concerning retailers, producers, and their goods and services and
often act on such information without further in vestigation or authentication and without
regard to its accuracy. Social media platforms may immediately publish the content posted
by their subscribers and members, often wit hout filters or due diligence checks on the
accuracy of such content posted. Therefor e, information on social media platforms
g e n e r a t e si m p a c ta l m o s ti m mediately as it is disseminate d. Information posted may be
inaccurate and adverse to us, and it may harm our business, financial condition, results of
operations and prospects. Negative publicity about us, such as alleged misconduct,
unethical business practices, or other improper activities, or rumors relating to our
business, directors, officers, employees, or sha reholders, or negative publicity about other
companies that use the same or similar bra nd name as ours, can harm our reputation,
business, and results of operations, even if the y are baseless, irrelevant, or satisfactorily
addressed. These allegations, even if unproven or meritless, may lead to inquiries,
investigations, or other legal actions against us by regulatory or government authorities
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as well as private parties. Any regulatory inquiries or investigations and lawsuits against us,
perceptions of inappropriate business conduct by us or perceived wrongdoing by any
member of our management team, among other things, could substantially damage our
reputation, and cause us to incur significant costs to defend ourselves. Any negative market
perception or publicity regarding our suppliers or other business partners that we closely
cooperate with, or any regulatory inquiries or investigations and lawsuits initiated against
them, may also have an impact on our brand and reputation, or subject us to regulatory
inquiries or investigations or lawsuits. Moreo ver, any negative media publicity about the
RV industry, or product or service quality problems of other producers in the industry in
which we operate, including our competitors, may also negatively impact our reputation
and brand.
The harm may be immediate without affording us an opportunity for redress or
correction, which, a result of the public dissemination of anonymous allegations or
malicious statements about us, may in turn cause us to lose market share, customers and
revenue-generating capabilities and advers ely affect our business, financial condition,
results of operations and prospects.
We are subject to anti-corruption, anti-bribery, and similar laws, and non-compliance with
such laws can subject us to criminal penalties or significant fines and harm our business and
reputation.
We may be subject to anti-corruption, anti-bribery, anti-money laundering, financial
and economic sanctions, and similar laws and regulations in jurisdictions where we conduct
activities. Anti-corruption and anti-briber y laws, which have been enforced aggressively
and are interpreted broadly, prohibit companies and their employees and agents from
promising, authorizing, making, or offering improper payments or other benefits to
government officials and others in the public sector. Anti-money laundering laws prohibit
disguising financial assets so they can be used without detection of the illegal activity that
produced them.
We have business operations in the PRC and Australasia. We primarily leverage our
dealers to sell our RVs in Australasia. We and our dealers may have direct or indirect
interactions with officials and employees of government agencies or state-owned or
affiliated entities and we may be held liable for the corrupt or other illegal activities of our
business partners and intermediaries, our employees, representatives, contractors, channel
partners and agents, even if we do not explicitly authorize such activities. Our subsidiaries
may be subject to additional foreign or local sanctions requirements in relevant
jurisdictions.
We cannot assure you that all of our employees and agents have complied with, or in
the future will comply with, our policies and appl icable laws. The investigation of possible
violations of these laws, including internal in vestigations and compliance reviews that we
may conduct from time to time, could have a material adverse effect on our business.
Non-compliance with these laws could subject us to investigations, severe criminal or civil
sanctions, settlements, prosecution, loss of exp ort privileges, suspension or debarment from
government contracts and other contracts, other enforcement actions, the appointment of a
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monitor, disgorgement of profits, signific ant fines, damages, other civil and criminal
penalties or injunctions, whistleblower complaints, adverse media coverage and other
consequences. Other internal and government investigations, regulatory proceedings, or
litigation, including private litigation f iled by our shareholders, may also follow as a
consequence. Any investigations, actions, or sanctions could materially harm our
reputation, business, financial condition, results of operations and prospects. Further,
the promulgation of new laws, rules or regulations or new interpretations of current laws,
r u l e so rr e g u l a t i o n sc o u l di m p a c tt h ew a yw edo business in other countries, including
requiring us to change certain aspects of our business to ensure compliance, which could
reduce revenues, increase costs, or s ubject us to additional liabilities.
We are potentially subject to legal proceedings and other claims.
We are potentially subject to legal proceedings and other claims arising from or in
connection with the conduct of our business, in cluding proceedings and claims relating to
commercial and financial transactions; allege d lack of compliance with applicable laws and
regulations; disputes with suppliers, production partners or other third parties; product
liability; patent and trademark infringement; employment dis putes; and environmental,
safety and health matters. In the case of litig ation matters for which reserves have not been
established because the loss is not deemed pr obable, it is reasonably possible that such
claims could be decided against us and cou ld require us to pay damages or make other
expenditures in amounts that are not presently estimable.
Due to the nature of our busin ess, we are subject to liability claims arising from or in
connection with accidents involving our products. The RV industry experiences product
liability claims and we face inherent risk of exposure to claims in the event our RVs do not
perform as expected or malfunction resulting in property damage, personal injury, or death.
Potential flaws and defects in our design and production processes, or in those of our
suppliers, as well as unsatisfactory performance of our products, could give rise to product
liability and product recall exposures.
A successful product liability claim agai nst us could require us to pay substantial
monetary compensation. Moreo ver, a product liability claim could generate substantial
negative publicity about our RVs and business and inhibit or prevent commercialization of
our future RVs, which would materially and adversely affect our brand, business, prospects,
and results of operations. Any insurance coverage might not be sufficient to cover all
potential product liability claims. Any lawsu it seeking significant monetary damages may
materially and adversely affect our reputation, business, financial condition, and results of
operations. The occurrence of any of these risks could have a material adverse effect on our
business, financial condition, results of operations and prospects. In addition to product
liability claims, we may be subject to adverse p ublicity, damage to our brand, and costs for
recalls of our RVs. Government safety standards require producers to remedy issues related
to vehicle safety through safety recall campaigns, and we may regularly engage in voluntary
recalls when we determine our products may ha ve a safety issue. Issues subject to recall
include both materials and workmanship from our companies as well as component parts
supplied by our suppliers.
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In addition, we cannot be certain that our product warranty provisions are adequate
and that our insurance coverage will be sufficient to cover one or more substantial claims.
Furthermore, we may not be able to obtain insurance coverage at acceptable levels and
costs in the future. We cannot predict the levels of the premiums that we may be required to
pay for subsequent insurance coverage, the lev el of any retention applicable thereto, the
level of aggregate coverage available or the availability of coverage for specific risks.
Litigation is inherently unpredictable, and we could incur judgments, receive adverse
arbitration awards or enter into settlements for current or future claims that could
adversely affect our results of operations.
There are legal defects regarding some of our leased properties.
We lease properties in the PRC and Australia for various purposes.
During the Track Record Period and up to the Latest Practicable Date, one lease
agreement of our leased properties had not b een registered and filed with the competent
PRC government authorities as required by applicable PRC laws and regulations. Such
leased property is primarily used as our office, with an aggregate GFA of approximately 20
sq.m. We cannot assure you that the lessor will cooperate and complete the registration in a
timely manner. Although the failure to do so does not in itself invalidate the leases, we may
be ordered by the relevant PRC government authorities to rectify such non-compliance and
we may be subject to fines imposed by PRC government authorities. According to the
Administrative Measures for Commercial Housing Leases ( 《商品房屋租賃管理辦法》),
failure to complete the relevant lease registration may subject the parties to the lease
agreement a fine between RMB1,000 to RMB10,000. As a result, if we fail to complete or
timely complete such lease registration upon t he housing authorities’ request, we may face a
total maximum fine up to RMB10,000. For details of our leased properties, see ‘‘Business —
Properties.’’ Having considered the foregoing, we were advised by our PRC Legal Advisor
that failure of registration does not in it self invalidate the leases and the risk of
governmental authorities imposing penalties on us with respect to these leased properties is
relatively low if we timely complete such lea se registration upon the relevant housing
authorities’ request. In addition, no penalty had been imposed on us for our failure to
register and file the relevant lease agreemen ts during the Track Record Period and up to the
Latest Practicable Date.
With respect to the leases in Australia, during the Track Record Period and up to the
Latest Practicable Date, seven of our leases in relation to certain premises in Queensland,
Western Australia, Tasmania and New South Wa les are not registered. Such premises are
used for our self-owned stores, JV stores and office space. While such failure in registration
of leases does not affect the enforceability or the binding nature of any of these leases, it will
invoke the issue of indefeasible title, which means that a third party can challenge our claim
over the leased properties since such properties are not registered. If any owners and/or new
purchasers of such premises do not honor our leases, we may be forced to vacate from such
premises. If we are unable to find suitable alternative premises or obtain new leases at
desirable locations or on favorable terms in the event that we are required to vacate from
such premises, our business operations may be disrupted, which will further have an adverse
effect on our business, financial conditions and results of operations.
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Unanticipated changes in our tax rates or trade policies that we are subject to, or exposure to
additional income tax liabilities or reg ulations could affect our profitability.
We are subject to income taxes, capital gains taxes, value-added taxes and/or other
taxes in the PRC and Australia. Our effective tax rate could be adversely affected by
changes in the mix of earnings in countries with differing statutory tax rates, changes in the
valuation of deferred tax a ssets and liabilities, changes in the amount of earnings
indefinitely reinvested offshore, changes to unrecognized tax benefits or changes in tax
laws, which could affect our profitability. In pa rticular, the carrying value of deferred tax
assets is dependent on our ability to generate f uture taxable income, as well as changes to
applicable statutory tax rates. In addition, the amount of income taxes that we pay is
subject to audits in various jurisdictions, and a material assessment by a tax authority could
affect our profitability.
Our tax filings are subject to audits by tax authorities in the various jurisdictions in
which we do business. These audits may result in assessments of additional taxes that are
subsequently resolved with the taxing authorities or through the courts. As the Latest
Practicable Date, we believe there are no outstanding assessments whose resolution would
result in a material adverse financial resul t. However, there can be no assurances that
unasserted or potential future assessments would not have a material effect on our business,
financial condition, or results of operations.
In addition, we are subject to a wide variety of complex domestic and international
laws, rules and regulations, including trade p olicies and tax regimes. We are affected by new
laws and regulations and changes to existing laws and regulations, including interpretations
by the courts and regulators, whether prompt ed by changes in government administrations
or otherwise. These laws, regulations and policies, and changes thereto, may result in
restrictions or limitations to our current operational practices and processes and
product/service offerings which could negatively impact our current cost structure,
revenue streams, future tax obligations, the value of our deferred income tax assets, cash
flows and overall financial position.
We may be subject to risks associated with our transfer pricing arrangement.
During the Track Record Period, our sales and exporting activities involved the
intra-Group transactions. See ‘‘Financial In formation — Transfer Pricing Arrangement.’’
Our Transfer Pricing Advisor conducted independent analysis and confirmed that, during
the Track Record Period, the weighted average price and profit levels of the intra-Group
transactions were fair and fell within or above their respective profit range of arm’s length
transactions, which complied with the principl e of independent transactions. Therefore, the
Transfer Pricing Advisor is of the view t hat our pricing arrangements have been in
compliance with the applicable laws, regulat ions and guidelines, including the transfer
pricing guidelines for multinational enterprises and tax administrations promulgated by
Organization for Economic Co-operation and Development (the ‘‘ OECD ’’) (the ‘‘OECD
Transfer Pricing Guidelines ’’), and the risk of incurring material transfer pricing income tax
is remote. However, there were uncertainties associated with the profit allocation and the
tax position in respect of the intra-Group transactions. The tax treatments of these
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transaction arrangements may be subject to inte rpretation by the respective tax authorities
in the PRC and Australia. There is no assurance that the tax authorities will not
subsequently challenge the appropriateness of our transfer pricing arrangements or that the
relevant regulations or standards governing such arrangement will not be subject to future
changes. If any competent tax authority in the PRC or Australia later considers that our
transfer pricing arrangements do not comply with the relevant transfer pricing laws and
regulations, we may face adverse tax consequen ces including additional taxes, interests or
penalties, which may result in a higher overa ll tax liability for us and may adversely affect
our business, financial condition and operating results.
Our product research and development efforts may not yield the results as expected.
As a RV enterprise that designs, develops, manufactures and sells bespoke towable
RVs, we invest in product research and develo pment to establish and strengthen our market
position. In 2021, 2022, and 2023 and for the six months ended June 30, 2024, our research
and development expenses amounted to RM B2.8 million, RMB5.1 million, RMB8.0 million
and RMB5.6 million, respectively.
As technologies evolve, we plan to upgrade or adapt our RVs and introduce new
models with latest technologies, which will require us to invest resources in product research
and development. Therefore, we expect that our research and development expenses may be
significant. As product research and developm ent activities are inhe rently uncertain, we
cannot assure you that we will continue to achieve desirable developments from our product
research and development activities and successfully commercialize such developments.
Consequently, our significant product research and development efforts may not yield the
results as expected. If our product research a n dd e v e l o p m e n te f f o r t sf a i lt ok e e pu pw i t ht h e
latest technological developments, we could suffer a decline in our competitive position,
which may materially and adversely affect our business, financial condition, and results of
operations.
Natural disasters or other events outside of our control may disrupt our operations, adversely
affect our business, financial condition, results of operations and prospects, and may not be
fully covered by insurance.
Natural disasters, including hurricanes, fires, tornados, floods and other forms of
severe weather, the intensity and frequency of which are being exacerbated by climate
change, along with other impacts of climate change, such as rising sea waters, as well as
other events outside of our control including public health crises, pandemics, power outages
and industrial accidents, could in the future disrupt our operations and adversely affect our
business.
Any of these events could result in physical damage to and/or complete or partial
closure of one or more of our facilities and temporary or long-term disruption of our
operations or the operations of our suppliers by causing business interruptions or by
impacting the availability and cost of mate rials needed for production or otherwise
impacting our ability to deliver products and s ervices to our customers. Existing insurance
arrangements may not provide full protection for the costs that may arise from such events.
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The occurrence of any of these events could materially increase our costs and expenses and
have a material adverse effect on our business, financial condition, results of operations and
prospects.
Any failure to comply with PRC regulations regarding our employee equity incentive plans
may subject the PRC plan participants or us to fines and other legal or administrative
sanctions.
In February 2012, SAFE promulgated the Cir cular on Relevant Issues Concerning the
Foreign Exchange Administration for Dome stic Individuals Participating in Stock
Incentive Plans of Overseas Publicly Listed Companies ( 關於境內個人參與境外上市公司
股權激勵計劃外匯管理有關問題的通知)( ‘ ‘SAFE Circular 7 ’’). Under the SAFE Circular 7
and other relevant rules and regulations, PRC residents who participate in an equity
incentive plan in an overseas publicly-listed c ompany are required to register with SAFE or
its local branches and complete certain other procedures. Participants of an equity incentive
plan who are PRC residents must retain a qualified PRC agent, which could be a PRC
subsidiary of the overseas publicly listed company or another qualified institution selected
by the PRC subsidiary, to conduct the SAFE registration and other procedures with respect
to the equity incentive plan on behalf of its participants. The participants must also retain
an overseas entrusted institution to handle ma tters in connection with their exercise of stock
options, the purchase and sale of corresponding stocks or interests and fund transfers. In
addition, the PRC agent is required to amend the SAFE registration with respect to the
equity incentive plan if there is any material change to the equity incentive plan, the PRC
agent or the overseas entrusted institution or other material changes. We and our PRC
employees who have been granted share options will be subject to these regulations upon
the completion of this Global Offering. Failure of our PRC share option holders to
complete their SAFE registrations may subj ect us or them to fines and legal sanctions and
could restrict our ability to adopt additional incentive plans for our employees under the
PRC laws.
The SAT has also issued relevant rules and regulations concerning employee share
incentives. Under these rules and regulations, our employees working in the PRC will be
subject to PRC individual income tax upon exercise of the share options. Our PRC
subsidiary has obligations to file documents with respect to the granted share options or
restricted shares with relevant tax authoriti es and to withhold individual income taxes for
their employees upon exercise of the share opt ions or grant of the restricted shares. If our
employees fail to pay or we fail to withhold their individual income taxes according to
relevant rules and regulations, we may face sanctions imposed by the competent
governmental authorities.
Any uncertainties embedded in the legal systems of the principal places of our business could
adversely affect our business, financial condition and results of operations and our investors
could be affected as a result.
The legal systems of the jurisdictions where we operate vary significantly. China has a
civil law system based on written statutes a nd Australia is based on common law. Unlike
common law systems where the case laws have binding effects, prior court decisions under
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civil law systems may be cited for reference but have limited precedential value. We are
based in China and our business in China are governed by PRC laws and regulations. The
PRC legal system is a civil law system based on written statutes. Since the late 1970s, the
PRC government has promulgated laws and regulations dealing with economic matters,
such as foreign investment, corporate organ ization and governance, commerce, taxation
and trade, with a view towards developing a c omprehensive system of commercial law.
However, as the legal system in China continues to develop, and many of these laws and
regulations are relatively new and continue to evolve, these laws and regulations may be
subject to interpretation. As other civil law countries, there is a limited volume of published
court decisions, which may be cited for reference but are not binding on subsequent cases
and have limited precedential value unless the Supreme People’s Court otherwise provides.
While in Australia, where a common law syst em is adopted, we may also be exposed to
changes in the regulatory conditions under w hich we operate. Such regulatory changes can
include, for instance, changes in foreign in vestment laws, taxation laws and policies,
accounting policies, regulation laws and polic ies, standards and practices that may impact
our operations and processes, and employment laws and regulations, including
occupational health and safety regulations. Any changes required to be made to our
business model as a result of any legislative or regulatory changes (including licensing
requirements) may result in a material loss o f our revenue for and to the extent that fixed
costs cannot be reduced and/or costs cannot be passed onto customers, which could
adversely impact our financial performance.
As these laws and regulations are continually evolving in response to changing
economic and other conditions, we cannot foresee how these laws, rules and regulations will
be interpreted and enforced, which may adversely affect the legal protections and remedies
that are available to investors and us.
We hold majority interest in two JV dealers and our operational and financial results will be
affected by how these arrangements are managed.
We hold majority interest in two JV dealers in Australia. We established in Australia
two JV dealers, namely Leisur e Lion together with Green RV in July 2019 and United RV
together with BUYIT RV PTY LTD in June 2023, under the respective JV agreements, with
an aim to operating JV stores locally and pro moting better market engagement and sales of
RVs in Australia.
The success of our JV dealers depends on a number of factors, including the financial
resources of the JV partners, their willingness and ability to honor their commitments under
the JV agreements, the manner in which they exercise control, veto or other governance
rights in respect of the JV dealers, the extent to which they cooperate in operational and
strategic decisions with respect to the relevant mine, and the business growth of the JV
dealers itself. If we become engaged in mater ial disagreements with our JV partners, the
operational and financial results of the JV dealers may be adversely affected.
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It may be difficult to effect service of process, enforce foreign judgments and arbitral awards
against us or our Directors and senior management.
We are incorporated in the Cayman Islands. Certain of our operating subsidiaries are
incorporated in China and Australia. In add ition, most of our Directors and senior
management reside in China and Australia. A su bstantial amount of our assets and some of
the assets of our management are located in China and Australia. As a result, it may be
difficult or impracticable for you to effect service of process within Hong Kong upon us or
these persons, to bring an action in Hong Kong against us or these individuals. Moreover,
China does not have treaties with most of the other jurisdictions that provide for the
reciprocal recognition and enforcem ent of judicial rulings and awards.
On July 14, 2006, the Supreme People’s Court of China and Hong Kong entered into
the Arrangement on Reciprocal Recognitio n and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region Pursuant to Choic e of Court Agreements between Parties
Concerned ( 關於內地與香港特別行政區法院相互認可和執行當事人協議管轄的民商事案件
判決的安排)( ‘ ‘2006 Arrangement ’’), which became effective o n August 1, 2008. Pursuant
to such arrangement, a party with a final judgment rendered by a Hong Kong court
requiring payment of money in a civil and com mercial case according to a choice of court
agreement in writing may apply for recognition and enforcement of the judgment in China,
and vice versa. However, it is subject to the p arties in the dispute agreeing to enter into a
choice of court agreement in writing under the 2006 Arrangement.
On January 18, 2019, the Supreme People’s Court of China and Hong Kong entered
into the Arrangement on Reciprocal Recognit i o na n dE n f o r c e m e n to fJ u d g m e n t si nC i v i l
and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region ( 關於內地與香港特別行政區法院相互認可和執行民商事案件判決的
安排)( ‘ ‘2019 Arrangement ’’). The 2019 Arrangement became effective on January 29, 2024
after the Supreme People’s Court promulgated judicial interpretations and relevant
procedures were completed in Hong Kong. The 2019 Arrangement supersedes the 2006
Arrangement and afford greater clarity and c ertainty for reciprocal recognition and
enforcement of judgments in civil and commercial matters. The 2006 Arrangement shall
remain applicable to a ‘‘choice of court agreement in writing’’ entered into before the 2019
Arrangement taking effect. However, outcomes of any applications to recognize and
enforce such judgments and arbitral awards in China will be subject to the PRC courts
further adjudication in accordance with PRC l aws, including the PRC civil procedure law.
Furthermore, an original action may only be brought in China against us or our
Directors and senior management if the actio ns are not required to be arbitrated by PRC
law and upon satisfaction of the conditions for commencing a cause of action pursuant to
the PRC civil procedure law. As a result of the conditions set forth in the PRC civil
procedure law, we cannot assure you whether investors will be able to bring an original
action in China in this manner.
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In addition, there may be practical difficu lties for you to effect service of process in
Australia regarding the proceedings agai nst us brought in Hong Kong, as the legal
procedures are complex and time-consuming. According to the applicable rules and
regulations, any service of process from Hong Kong may be proceeded by delivering
relevant documents to the Central Authority in A ustralia, which is the P rivate International
and Commercial Law Section of the Commonwealth Attorney-General’s Department, and
will then be forwarded to the relevant registrar for approval. Such service of process
procedure generally takes three to six months.
Laws and regulations over currency conversion and future fluctuation of Renminbi exchange
rates could adversely affect our results of operations and financial condition, and may reduce
the value of, and dividends payable on, our Shares in foreign currency terms.
The PRC government imposes laws and regulations on the convertibility of the
Renminbi into foreign currencies and, in cer tain cases, the remittance of currency out of
China. Under our current corporate structure, our Company in the Cayman Islands relies
on dividend payments from our PRC subsidiary to fund any cash and financing
requirements we may have. Under existing PRC foreign exchange regulations, payments
of current account items, such as profit distributions and trade and service-related foreign
exchange transactions, can be made in foreign currencies without the prior approval of
SAFE, by complying with certain procedural requirements. Therefore, our PRC subsidiary
is able to pay dividends in foreign currenc ies to us without prior approval from SAFE,
subject to the condition that the remittance of such dividends outside of the PRC complies
with certain procedures under PRC foreign exchange regulations, such as the overseas
investment registration by the beneficial o wners of our Company who are PRC residents.
However, approval from or registration with appropriate governmental authorities is
required where Renminbi is to be converted into foreign currency and remitted out of China
to pay capital expenses, such as the repayment of loans denominated in foreign currencies.
The PRC government may further regulate access to foreign currencies for current
account transactions in the future. If the foreign exchange regulation system makes it
difficult for us to obtain sufficient foreign currencies to satisfy our foreign currency
demands, we may not be able to pay dividends in foreign currencies to our shareholders.
Further, there is no assurance that new regulations will not be promulgated in the future
that would have the effect of further regulating the remittance of Renminbi into or out of
China.
The value of Renminbi against the Hong Kong d ollar, the Australian dollar, the U.S.
dollar and other currencies fluctuates, is subject to change resulting from the PRC
government’s policies, and depends to a large extent on domestic and international
economic and global political developments as well as supply and demand in the local
market. It is difficult to predict how market forces or government policies may impact the
exchange rate between the Renminbi and the Hon g Kong dollar, the Australian dollar, the
U . S .d o l l a ro ro t h e rc u r r e n c i e si nt h ef u t u r e .
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The proceeds from the Global Offering will be received in Hong Kong dollars. As a
result, any appreciation of the Renminbi against the Hong Kong dollar may result in a
decrease in the value of our proceeds fro m the Global Offering. Conversely, any
depreciation of the Renminbi may affect the value of, and any dividends payable on, the
Shares in foreign currency terms. Further, we may not be able to find suitable instruments
to reduce our foreign currency risk exposure at reasonable costs. All of these factors could
adversely affect our business, results of operations and financial condition, and could
reduce the value of, and dividends payable on, the Shares in foreign currency terms.
We may be classified as a PRC resident enterprise for PRC enterprise income tax purposes
under the EIT Law, and our income may be subject to PRC withholding tax under the EIT
Law.
Under the Enterprise Income Tax Law of the PRC ( 中華人民共和國企業所得稅法)
(‘‘EIT Law ’’), an enterprise established outside of the PRC with a ‘‘de facto management
body’’ within China is considered a resident enterprise and will be subject to the enterprise
income tax on its global income at the rat e of 25%. The implementation rules (‘‘ EIT Rules ’’)
define the term ‘‘de facto management body’’ as the body that exercises full and substantial
control over, and overall management of, the business, production, personnel, accounts and
properties of an enterprise. On April 22, 2009, the State Administration of Taxation ( 國家稅
務總局)( ‘ ‘SAT’’) issued a circular, known as Circular 82, which was last amended on
December 29, 2017. Circular 82 provides certain specific criteria for determining whether
the ‘‘de facto management body’’ of a PRC-controlled enterprise that is incorporated
offshore is located in China. Although this circular only applies to offshore enterprises
controlled by PRC enterprises or PRC enterprise groups, not those with no single individual
controller like us, the criteria set forth in the ci rcular may reflect the SAT’s general position
on how the ‘‘de facto management body’’ test should be applied in determining the tax
resident status of all offshore enterprises. According to Circular 82, an offshore
incorporated enterprise controlled by a PRC e nterprise or a PRC enterprise group will be
regarded as a PRC tax resident by virtue of having its ‘‘de facto management body’’ in
China and will be subject to PRC enterprise income tax on its global income only if all of
the following conditions are met: (1) the primary location of the day-to-day operational
management is in China; (2) decisions relating to the enterprise’s financial and human
resource matters are made or are subject to approval by organizations or personnel; (3) the
enterprise’s primary assets, accounting book s and records, company seal, and board and
shareholder resolutions, are located or maintained in China; and (4) at least 50% of voting
board members or senior executives habitually reside in China.
We believe none of our entities outside of China is a PRC resident enterprise for PRC
tax purposes. However, the tax resident status of an enterprise is subject to determination
by the PRC tax authorities and we cannot be certain on how the tax authorities will
interpret the term ‘‘de facto management body’’. As most of our management members are
based in China, it remains unclear how the tax residency rule will apply to our case. If the
PRC tax authorities determine that our Company or any of our subsidiaries outside of the
PRC is a PRC resident enterprise for PRC enterprise income tax purposes, our Company or
such subsidiary could be subject to PRC tax at a rate of 25% on its worldwide income,
which could materially reduce our net profit . In addition, we will also be subject to PRC
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enterprise income tax reporting obligations .F u r t h e r m o r e ,i ft h eP R Ct a xa u t h o r i t i e s
determine that we are a PRC resident enterprise for enterprise income tax purposes, gains
realized on the sale or other disposition of our ordinary shares may be subject to PRC tax,
a tar a t eo f1 0 %i nt h ec a s eo fn o n - P R Ce n t e r p r i s e so r2 0 %i nt h ec a s eo fn o n - P R C
individuals (in each case, subject to the provisions of any applicable tax treaty), if such
gains are deemed to be from PRC sources. The re is possibility that non-PRC shareholders
of our Company would not be able to claim the benefits of any tax treaties between their
country of tax residence and the PRC in the ev ent that we are treated as a PRC resident
enterprise. Any such tax may reduce the returns on your investment in our Shares.
PRC regulation of loans to and direct investments in PRC entities by offshore holding
companies may make cause delay in our use of the proceeds of the Global Offering to make
loan or additional capital contributions to our PRC subsidiary, which could materially and
adversely affect our liquidity and our ability to fund and expand our business.
We are an offshore holding company conducting our operations in China through our
PRC subsidiary. We may make loans to our PRC subsidiary, subject to the administrative
procedures and limitation of amount, or we ma y make additional capital contributions to
our PRC subsidiary in China.
According to the relevant PRC regulations o n foreign-invested enterprises in China,
capital contributions to our PRC subsidiary are subject to the requirement of making
necessary filings or reports in the Foreig n Investment Comprehensive Management
I n f o r m a t i o nS y s t e m ,a n dr e g i s t r a t i o nw i t hal o c a lb a n ka u t h o r i z e db yS A F E .I na d d i t i o n ,
any foreign loan procured by our PRC subsidiary is required to be registered with SAFE or
its local branches. Also, any medium- or long-term loan exceeding one year to be provided
by us must be recorded and registered by the National Development and Reform
Committee. Our PRC subsidiary which is a foreig n-invested enterprise cannot procure loans
exceeding the statutory limits, which is either in the difference between the registered capital
and the total investment amount of such foreign -invested enterprise or a multiple of the net
assets of such foreign-invested enterprise in the previous year. Our PRC subsidiary which is
a domestic enterprise cannot procure loans exceeding the multiples of the net assets of such
enterprises in the previous year. We may not be able to complete such recording, filing or
registrations on a timely basis, if at all, wi th respect to future capital contributions or
foreign loans by us directly to our PRC subsidiary. If we fail to complete such recording,
filing or registrations, our ability to use t he proceeds of the Global Offering and to
capitalize our PRC operations may be negativel y affected, which could adversely affect our
liquidity and our ability to fund and expand our business.
SAFE issued the Circular on the Reform of the Management Method for the
Settlement of Foreign Exchange Capita l of Foreign-invested Enterprises ( 國家外匯管理局關
於改革外商投資企業外匯資本金結匯管理方式的通知)( ‘ ‘Circular 19 ’’) which took effect on
June 1, 2015 and amended on December 30, 2019 and March 23, 2023. SAFE further issued
the Circular of the State Administrat ion of Foreign Exchange on Reform and
Standardization of the Management Policy of the Settlement of Capital Projects ( 國家外
匯管理局關於改革和規範資本項目結匯管理政策的通知)( ‘ ‘Circular 16
’’), effective on June 9,
2016, which, among other things, amend certain provisions of Circular 19. The Circular 19
RISK FACTORS
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and the Circular 16 allow for the use of Renminbi converted from the foreign
currency-denominated capital for equity investments in the PRC, provided that such
usage shall fall into the scope of business of the foreign invested enterprise, which will be
regarded as the reinvestment of foreign-inves ted enterprise. In addition, SAFE promulgated
the Circular on Further Facilitating the Conv enience of Cross-border Trade and Investment
(國家外匯管理局關於進一步促進跨境貿易投資便利化的通知)( ‘ ‘SAFE Circular 28 ’’) on
October 23, 2019, which took effect on the same day. SAFE Circular 28, subject to
certain conditions, allows foreign-invest ed enterprises whose business scope does not
include investment, or non-investment foreign-invested enterprises, to use their capital
funds to make equity investments in China. As of the Latest Practicable Date, its
interpretation and implementation in pra ctice continued to evolve. Whether SAFE will
permit such capital funds to be used for equity investments in the PRC is subject to SAFE’s
case-by-case determination in practice. The C ircular 19, the Circular 16 and SAFE Circular
28 may affect our ability to transfer to and use in China the net proceeds from the Global
Offering, which may adversely affect our business, results of operations and financial
condition.
Dividends payable by us to our foreign investors and gains on the sale of our Shares may
become subject to withholding taxes under PRC tax laws.
Under the PRC EIT Law and the EIT Rules, its implementation regulations, subject to
any applicable tax treaty or similar arrangemen t between the PRC and your jurisdiction of
residence that provides otherwise, we may be deemed as a PRC resident enterprise by the
PRC tax authorities for tax purpose. PRC in come tax at the rate of 10% is applicable to
dividends payable by a PRC ‘‘resident enterprise’’ to investors that are ‘‘non-resident
enterprises’’ (i.e., those enterprises that do not have an establishment or place of business in
China, or those that have such an establishment or place of business but the relevant income
of which is not effectively connected with the establishment or place of business) to the
extent such dividends have their source within China. Similarly, any gain realized on the
transfer of shares by such enterprises is also subject to 10% PRC income tax if such gain is
regarded as income derived from sources wi thin China. If the dividends we pay to our
shareholders are regarded as income derived from sources within China, we may be required
to withhold a 10% PRC withholding tax for the dividends we pay to our investors who are
non-PRC enterprise shareholders.
Under PRC Individual Income Tax Law ( 中華人民共和國個人所得稅法)a n di t s
implementation rules, dividends from sources within China paid to foreign individual
investors who are not PRC residents and gains from PRC sources realized by such investors
on the transfer of share are generally subject to PRC income tax at a rate of 20% for
individuals. Any PRC tax may be reduced or exempted under applicable tax treaties or
similar arrangements.
If we are treated as a PRC resident enterpri se, dividends we pay with respect to our
Shares, or the gain realized from the transfer of our Shares, may be treated as income
derived from sources within China and as a r esult be subject to the PRC income taxes
described above. See ‘‘— We may be classified as a PRC resident enterprise for PRC
enterprise income tax purposes under the E IT Law, and our income may be subject to PRC
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withholding tax under the EIT Law.’’ However, shareholders who are not PRC tax residents
and seek to enjoy preferential tax rates under r elevant tax treaties may apply to the PRC tax
authorities to be recognized as eligible for such benefits in accordance with the
Announcement of State Taxation Administration on Promulgation of the Administrative
Measures on Non-resident Taxpayers Enjoying Treaty Benefits ( 國家稅務總局關於發佈《非
居民納稅人享受協定待遇管理辦法》的公告), which was issued on October 14, 2019 and took
effect on January 1, 2020. If determined to be ineligible for the applicable tax treaty
benefits, gains obtained from sales of our Shares and dividends on our Shares paid to such
Shareholders would subject to higher PRC tax rates. In such cases, the value of your
investment in our Shares may be materially af fected by the unfavorable tax treatment.
The regulations over indirect transfers of PRC assets by the PRC tax authorities may have a
negative impact on our business operations, our acquisition or restructuring strategy or the
value of your investment in us.
On February 3 2015, the SAT promulgated the Announcement of SAT on Several
Issues Concerning Enterprise Income Tax on Income from Indirect Transfer of Assets by
Non-Resident Enterprises ( 關於非居民企業間接轉讓財產企業所得稅若干問題的公告)
(‘‘SAT Public 7 ’’), which provides comprehensive guidelines relating to, and heightened
the PRC tax authorities’ scrutiny on indirect transfers, by a non-resident enterprise, of
assets (including equity interest s) of a PRC resident enterprise.
There is uncertainty as to the applicat ion of SAT Public 7. We and our existing
non-resident investors may become at risk of being taxed under SAT Public Notice 7 and
m a yb er e q u i r e dt oe x p e n dv a l u a b l er e s o u r ces to comply with SAT Public Notice 7 or to
establish that we should not be taxed under SAT Public Notice 7, which may adversely
affect our results of operations and financial condition or such non-resident investors’
investments in us. We cannot assure you that the PRC tax authorities will not, adjust any
capital gains and impose tax return filing obligations on us or require us to provide
assistance for the investigation of PRC tax authorities with respect thereto. Any PRC tax
imposed on a transfer of our Shares or any adjustment of such gains would cause us to incur
additional costs and may affect the value of your investment in us.
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior market for our Shares, and their liquidity and market price following
the Global Offering may be volatile.
There was no public market for our Shares prior to the Global Offering. There can be
no guarantee that a public market for our Shares with adequate liquidity and trading
volume will develop and be sustained following the completion of the Global Offering. In
addition, the Offer Price of our Shares is expected to be fixed by agreement between the
Overall Coordinators (for themselves and on behalf of the Underwriters) and us, which may
not be indicative of the market price of our Shares following the completion of the Global
Offering. If an active public market for our Shares does not develop following the
completion of the Global Offering, the market price and liquidity of our Shares may be
materially and adversely affected.
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Potential investors will experience immediate and substantial dilution as a result of the Global
Offering and could face dilution as a result of future equity financings.
As the Offer Price of our Shares is higher than the net tangible assets per Share
immediately prior to the Global Offering, pur chasers of our Shares in the Global Offering
will experience an immediate dilution in pro forma adjusted net tangible assets. Our existing
Shareholders will receive an increase in the pro forma adjusted net tangible asset value per
Share of their shares. In addition, holders of our Shares may experience further dilution of
their interest if the Underwriters exerci se the Over-allotment Option or if we issue
additional shares in the future to raise additional capital.
Future or perceived sales of substantial amounts of our Shares could affect their market price.
Future sales of substantial amounts of our Shares or other securities relating to our
Shares in the public market, or the issuance of ne w Shares or other securities relating to our
Shares, or the perception that such sales or issuances may occur could all cause a decline in
the market price of our Shares. Future sales, or perceived sales, of substantial amounts of
our securities or other securities relating to our Shares, including part of any future
offerings, could also materially and adverse ly affect the prevailing market price of our
Shares and our ability to raise capital in the future at a time and at a price which we deem
appropriate.
Our Controlling Shareholders have substantial influen ce over the Company, and our
Controlling Shareholders’ interests may not always be aligned with the interests of our
other Shareholders.
Our Controlling Shareholders collectively hav e significant influence in determining the
outcome of any corporate transaction or other matter submitted to the Shareholders for
approval, including but not limited to mergers, privatizations, consolidations and the sale
of all, or substantially all, of our assets, election of directors, and other significant
corporate actions. Immediately following the c ompletion of the Capitalization Issue and the
Global Offering, the group of our Controlling S hareholders will be to gether entitled to
control in aggregate approximately 74.4% of our total issued share capital and thus remain
as a group of Controlling Share holders upon Listing. The interests of the group of our
Controlling Shareholders might differ from the interests of our other Shareholders. In the
event that the group of our Controlling Shareho lders cause us to pursue strategic objectives
that conflict with the interests of our other Shareholders, our other Shareholders could be
disadvantaged and their interests could be damaged. Any conflict of interest between the
group of our Controlling Shareho lders and our other Shareholders may also materially and
adversely affect the aspects such as the decision and implementation of our business plans,
which may in turn affect our operations and prospects.
We may not pay any dividends in the future.
Our ability to pay dividends will depend on wh ether we are able to generate sufficient
earnings. Distributions of dividends shall be decided by our Board of Directors at their
discretion and will be subject to the approval of the general meeting. A decision to declare
or to pay dividends and the amount thereof depend on various factors, including but not
RISK FACTORS
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limited to our results of operations, cash flows and financial position, operating and capital
expenditure requirements, distributable profits as determined under PRC GAAP or
HKFRSs (whichever is lower), our Articles of Association and other constitutional
documents, the PRC Company Law, the Australian Corporations Act 2001 and any other
applicable laws and regulations in China and Au stralia, market conditions, our strategy and
projection for our business, contractual restrictions and obligations, taxation, regulatory
restrictions and any other factors from time to time deemed by our Board of Directors as
relevant to the declaration or suspension of dividends. As a result, there can be no
assurance whether, when and in what form we will pay dividends in the future. Subject to
any of the above constraints, we may not be able to pay dividends in accordance with our
dividend policy.
We are a Cayman Islands company and you may face difficulties in protecting your interests
under the laws of the Cayman Islands.
Our corporate affairs are governed by our Memorandum of Association, Articles of
Association, the Cayman Companies Act, and the common law of the Cayman Islands.
Your rights, as a Shareholder, to take action against the Directors, the rights of minority
Shareholders to institute actions and the fiduc iary responsibilities of our Directors to us
under Cayman Islands law are to a large extent governed by the common law of the Cayman
Islands. The common law of the Cayman Islands is derived in part from comparatively
limited judicial precedent in the Cayman Isl ands as well as from English common law,
which has persuasive, but not binding, authority on a court in the Cayman Islands. There
may be difficulty in protecting your inte rest under the law of Cayman Islands.
We have significant discretion as to how we will use the net proceeds of the Global Offering,
and you may not necessarily agree with how we use them.
Our Directors and management will have cons iderable discretion in the application of
the net proceeds received by us from the Global Offering. The net proceeds may be used for
corporate purposes that do not improve our e fforts to achieve or maintain profitability or
increase the price of Shares. The net proceed s from the Global Offering may be placed in
investments that do not produce income or that lose value. You will not have the
opportunity, as part of your investment decision, to assess whether proceeds are being used
appropriately.
Y o us h o u l do n l yr e l yo nt h ei n f o r m a t i o ni n c l u d e di nt h i sP r o s p e c t u st om a k ey o u ri n v e s t m e n t
decision, and we strongly caution you not to rely on any information contained in press articles
or other media coverage relating to us, our Shares or the Global Offering.
We strongly caution you not to rely on any information contained in press articles or
other media regarding us and the Global Offering. Prior to the publication of this
Prospectus, there has been press and media coverage regarding us and the Global Offering.
Such press and media coverage may include ref erences to certain information that does not
appear in this Prospectus, including certain operating and financial information and
projections, valuations and other information. We have not authorized the disclosure of any
such information in the press or media and d o not accept any responsibility for any such
press or media coverage or the accuracy or completeness of any such information or
RISK FACTORS
–9 1–


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publication. We make no representation as to the appropriateness, accuracy, completeness
or reliability of any such information or p ublication. To the extent that any such
information is inconsistent or conflicts with the information contained in this Prospectus,
we disclaim responsibility for it and you should not rely on such information.
Forward-looking statements contained in this Prospectus are subject to risks and
uncertainties.
This Prospectus contains forward-looking statements with respect to our business
strategies, operating efficiencies, competi tive positions, and growth opportunities for
existing operations, plans and objectives of management, certain pro forma information
and other matters. The words ‘‘will,’’ ‘‘expect,’’ ‘‘anticipate,’’ ‘‘estimate,’’ ‘‘believe,’’ ‘‘going
forward,’’ ‘‘ought to,’’ ‘‘may,’’ ‘‘seek,’’ ‘‘should,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘projection,’’ ‘‘could,’’
‘‘vision,’’ ‘‘goals,’’ ‘‘objective,’’ ‘‘target,’’ ‘‘schedule,’’ ‘‘predict,’’ ‘‘aim,’’ ‘‘intend,’’ ‘‘consider,’’
‘‘would,’’ ‘‘continue’’ and ‘‘outlook’’ and the negative of these terms and other similar
expressions identify a number of these forward-looking statements. These forward-looking
statements, including, among others, those relating to our future business prospects, capital
expenditure, cash flows, working capital, liquidity and capital resources are necessary
estimates reflecting the best judgment of our Directors and management and involve a
number of risks and uncertainties that could cause actual results to differ materially from
those suggested by the forward-looking stat ements. As a result, these forward-looking
statements should be considered in light of vari ous important factors, including those set
out in ‘‘Risk Factors’’ in this Prospectus. Accordingly, such statements are not a guarantee
of future performance and you should not place undue reliance on any forward-looking
information. All forward-looking statements in this Prospectus are qualified by reference to
this cautionary statement.
Certain facts, forecasts and statistics contained in this Prospectus are derived from various
official or third-party sources and may not be accurate, reliable, complete or up to date.
Facts, forecasts and statistics in this Prospectus relating to the RV market are obtained
from third-party reports, either commissioned by us or publicly accessible, and other
publicly available sources . We engaged Frost & Sullivan to prepare the Frost & Sullivan
Report, an independent industry report, in con nection with the Global Offering. We believe
that the sources of this information are approp riate sources for such information and have
taken reasonable care in extracting and reproducing such information. We have no reason
to believe that such information is false or misl eading or that any fact has been omitted that
would render such information false or misleading. The information from official
government sources has not been independently verified by us, the Sole Sponsor, the
Bookrunner, the Lead Manager, the Underwri ters, any of their respective directors and
advisers, or any other party involved in the Global Offering and no representation is given
as to its accuracy. In any event, you should consider carefully th e importance placed on
such information or statistics.
RISK FACTORS
–9 2–


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If securities or industry analysts do not publish research reports about our business, or if they
adversely change their recommendations regarding our Shares, the market price and trading
volume of our Shares may decline.
The trading market for our Shares will be influenced by the research and reports that
industry or securities analysts publish about us or our business. If one or more of the
analysts who cover us downgrade our Shares, the price of our Shares would likely decline. If
one or more of these analysts cease coverage of our Company or fail to regularly publish
reports on us, we could lose visibility in the fina ncial markets, which in turn could cause our
stock price or trading volume to decline.
We have no experience of operating as a public company.
We have no experience conducting our operations as a public company. After we
become a public company, we may face enh anced administrative and compliance
requirements, which may result in substantial costs.
In addition, since we are becoming a public company, our management team will need
to develop the expertise necessary to comply with the numerous regulatory and other
requirements applicable to public companies, including requirements relating to corporate
governance, listing standards and securities an d investor relationships issues. As a public
company, our management will have to evaluate our internal controls system with new
thresholds of materiality, and to implement necessary changes to our internal controls
system. We cannot guarantee that we will be ab le to do so in a timely and effective manner.
Failure to effectively manage these new demands could adversely impact our operational
efficiency and financial health, affect ing our business and market perception.
RISK FACTORS
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In preparation for the Global Offering, our Company has sought the following waivers
from strict compliance with the relevant provisions of the Listing Rules.
WAIVER IN PRESENCE OF MANAGEMENT IN HONG KONG
P u r s u a n tt oR u l e8 . 1 2o ft h eL i s t i n gR u l e s ,w em u s th a v es u f f i c i e n tm a n a g e m e n t
presence in Hong Kong. This normally means that at least two of our executive Directors
must be ordinarily resident in Hong Kong.
Since most of the business operations of our Group are managed and conducted
outside of Hong Kong, and all of the executive Directors of our Company ordinarily reside
outside Hong Kong, our Company considers that it would be practically difficult and
commercially unreasonable and undesirable for our Company to arrange for two executive
Directors to be ordinarily resident in Hong Kon g, either by means of relocation of existing
executive Directors or appointment of additional executive Directors. Therefore, our
Company does not have, and does not contemplate in the foreseeable future that we will
have sufficient management presence in Hong Kong for the purpose of satisfying the
requirements under Rule 8.12 of the Listing Rules.
Accordingly, we have applied for, and the S tock Exchange has granted, a waiver from
strict compliance with the requirements under Rule 8.12 of the Listing Rules, subject to the
following conditions. We will ensure that there is an effective channel of communication
between us and the Stock Exchange by way of the following arrangements:
(i) Authorized representatives: we have appointed Mr. Miao, our executive Director,
chairman and chief executive officer, and Ms. JIAN Xuegen ( 簡雪艮)( ‘ ‘Ms.
Jian ’’), one of our joint company secretaries, as the authorized representatives
(‘‘Authorized Representatives ’’) for the purpose of Rule 3.05 of the Listing Rules
who will act at all times as our principal channel of communication with the Stock
Exchange. The Authorized Representatives will be available to meet with the
Stock Exchange upon reasonable notice and will be readily contactable by phone,
facsimile and email to deal promptly with enquiries from the Stock Exchange. The
Authorized Representatives are duly authorized to communicate on behalf of the
Company with the Stock Exchange and will have all necessary means to contact
all Directors (including the independent non-executive Directors) promptly at all
times as and when the Stock Exchange wishes to contact them on any matter. In
the event that a Director expects to travel, he or she will provide (i) his/her mobile
phone number, office number, email address and facsimile number (if any) to the
Authorized Representatives; and (ii) phone number of the place of his/her
accommodation to the Authorized Representatives or maintain an open line of
communication via his/her mobile phone. See ‘‘Directors and Senior
Management’’ for more information about our Authorized Representatives;
(ii) Joint company secretaries: the Company has appointed Mr. CHANG Ke ( 常可)
(‘‘Mr. Chang ’’), and Ms. Jian, as our joint company secretaries. Mr. Chang and
Ms. Jian will, among other things, act as our additional channel of
communication with the Stock Exchange and be able to answer enquiries from
WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
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the Stock Exchange. Mr. Chang and Ms. Jia n will maintain constant contact with
the Directors and senior management team members through various means,
including regular meetings and telep hone discussions whenever necessary;
(iii) Directors: to the best of our knowledge and information, all the Directors who are
not ordinarily resident in Hong Kong have or can apply for valid travel
documents to visit Hong Kong for business purposes and would be able to meet
with the Stock Exchange upon reasonable notice. Any meeting between the Stock
Exchange and the Directors can be arranged through our Authorized
Representatives or compliance advisor, or directly with the Directors within a
reasonable timeframe;
(iv) Compliance advisor: we have appointed Caitong International Capital Co.,
Limited as our compliance advisor (the ‘‘ Compliance Advisor ’’) upon Listing
pursuant to Rule 3A.19 of the Listing Rules for a period commencing on the
Listing Date and ending on the date on which we comply with Rule 13.46 of the
Listing Rules in respect of our financial re sults for the first full financial year
commencing after the Listing Date. Th e Compliance Advisor will act as the
additional channel of communication with the Stock Exchange and answer
enquiries from the Stock Exchange. The Compliance Advisor will also provide us
with professional advice on continuing obligations under the Listing Rules. The
contact details of the Compliance Advisor have been provided to the Stock
Exchange. We will also inform the Stock Exchange promptly in respect of any
change in the Compliance Advisor; and
(v) Hong Kong legal advisors: in addition to the Compliance Advisor’s role and
responsibilities after the proposed Listin g of the Company, which includes, among
other things, to inform us on a timely basis of any amendment or supplement to
the Listing Rules and any new or amended law, regulation or code in Hong Kong
applicable to us and to provide advice to us on the continuing requirements under
the Listing Rules and applicable laws an d regulations, our Company expects to
retain Hong Kong legal advisors to advis e on matters relating to the application
of the Listing Rules including but not limited to, the on-going compliance
requirements, any amendment or supplement to and other issues arising under the
Listing Rules and other applicable Hong Ko ng laws and regulations after Listing.
WAIVER IN RESPECT OF JOINT COMPANY SECRETARIES
Pursuant to Rule 8.17 of the Listing Rules, we must appoint a company secretary who
satisfies the requirements under Rule 3.28 of the Listing Rules. According to Rule 3.28 of
the Listing Rules, we must appoint as our company secretary an individual, who, by virtue
of his or her academic or professional qualif ications or relevant experience, is, in the
opinion of the Stock Exchange, capable of discharging the functions of company secretary.
Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock Exchange considers the
following academic or professional qualifications to be acceptable:
(i) a Member of The Hong Kong Char tered Governance Institute;
WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
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(ii) a solicitor or barrister (as defined in the Legal Practitioners Ordinance); and
(iii) a certified public accountant (as de fined in the Professional Accountants
Ordinance).
In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules provides that, in
assessing ‘‘relevant experience’’, the Stock Exchange will consider the individual’s:
(i) length of employment with the issuer and other issuers and the roles he/she
played;
(ii) familiarity with the Listing Rules a nd other relevant laws and regulations
including the SFO, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance and the Takeovers Code and Mergers and Share Buy-backs;
(iii) relevant training taken and/or to be taken in addition to be the minimum
requirement under Rule 3.29 of the Listing Rules; and
(iv) professional qualifications in other jurisdictions.
The Company appreciates that the company secretary will play an important role in its
corporate governance following the Company’s proposed Listing, particularly in assisting
the Company and its Directors in complying with the Listing Rules and other applicable
company and securities laws and regulations . The Company also understands that since its
principal business activities are primar ily outside Hong Kong and its Directors and
members of the senior management do not reside in Hong Kong, it is particularly important
that its company secretary has experience relevant to the Company’s operations in
discharging his/her function as a joint company secretary.
We have appointed Mr. Chang and Ms. Jian of SWCS Corporate Services Group
(Hong Kong) Limited as our joint company secretaries. Since Mr. Chang does not possess
any of the qualification required under Rules 3.28 and 8.17 of the Listing Rules, he is not
able to solely fulfill the requirements of a comp any secretary of a listed issuer as stipulated
under Rules 3.28 and 8.17 of the Listing Rules. Ms. Jian is a member of the Hong Kong
Institute of Certified Public Accountants and a member of the Chinese Institute of Certified
Public Accountants, and therefore meets the qualification requirements under Note 1 to
Rule 3.28 of the Listing Rules and is in compliance with Rule 8.17 of the Listing Rules. For
details of biographical information of Mr. Ch ang and Ms. Jian, see ‘‘Directors and Senior
Management — Joint Company Secretaries.’’
The joint company secretaries will be jointl y discharging the duties and responsibilities
of a company secretary. Ms. Jian will be assisting Mr. Chang in gaining the relevant
experience required under Rules 3.28 and 8.17 of the Listing Rules. Also, Mr. Chang will be
assisted by (a) the Compliance Advisor of our Company for the first full financial year
starting from the Listing Date, particularly i n relation to Hong Kong corporate governance
practice and compliance matters; and (b) the Hong Kong legal advisor of our Company,
and other professional advisors on matters re garding our Company’s ongoing compliance
with the Listing Rules and the applicable Hong Kong laws and regulations. In addition, Mr.
WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
–9 6–


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Chang will endeavor to atte nd relevant trainings and familiarize himself with the Listing
Rules and duties required of a company secretary of an issuer listed on the Stock Exchange.
We have applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver
from strict compliance with the requirements under Rules 3.28 and 8.17 of the Listing Rules
such that Mr. Chang may be appointed as a joint company secretary of our Company.
Pursuant to Chapter 3.10 of the Guide for N ew Listing Applicants issued by the Stock
Exchange, the waiver will be for a fixed per iod of time not exceeding three years (the
‘‘Waiver Period ’’) and on the following conditions: (1) Mr. Chang must be assisted by Ms.
Jian who possesses the specific qualification a nd relevant experience under Rule 3.28 of the
Listing Rules throughout the Waiver Period so as to enable Mr. Chang to acquire the
relevant experience (as required under Note 2 to Rule 3.28 of the Listing Rules) to duly
discharge his duties; and (2) the waiver can be revoked if there are material breaches of the
Listing Rules by the issuer. The waiver is valid for an initial period of a three-year period on
the condition that Mr. Jian, as a joint company secretary of our Company, will work closely
with, and provide assistance to, Mr. Chang in the discharge of his duties as a joint company
secretary and in gaining the relevant experience as required under Rule 3.28 of the Listing
Rules and to become familiar with the requirements of the Listing Rules and other
applicable Hong Kong laws and regulations. T he waiver will be revoked immediately if Ms.
Jian ceases to provide assistance to Mr. Chang as the joint company secretary for the
three-year period after Listing.
Our Company will further ensure that Mr. Chang has access to the relevant training
and support that would enhance his understanding of the Listing Rules and the duties of a
company secretary of an issuer listed on the Stock Exchange, and to receive updates on the
latest changes to the applicable Hong Kong laws, regulations and the Listing Rules. Prior to
the end of the three-year period, the qualific ations and experience of Mr. Chang and the
need for on-going assistance of Ms. Jian will be further evaluated by our Company. Before
the end of the three-year period, we will demonstrate and seek the Stock Exchange’s
confirmation that, Mr. Chang, having benefited from the assistance of Ms. Jian for the
preceding three years, will have acquired the skills necessary to carry out the duties of
company secretary and the ‘‘relevant experience’’ within the meaning of Rule 3.28 Note 2 of
the Listing Rules and is capable of discharging the functions of company secretary so that a
f u r t h e rw a i v e rw i l ln o tb en e c e s s a r y .
CONNECTED TRANSACTIONS
We have entered into an one-off connected transaction, and expect to continue, certain
transactions that will constitute partially-exempt continuing connected transactions of our
Company under the Listing Rules upon Listing as described in the section headed
‘‘Connected Transactions’’ of this Prospectus. O ur Directors consider that strict compliance
with the applicable requirement under the Listing Rules would be impracticable and may
lead to unnecessary administrative costs on o ur Company. Accordingly, we have applied
for, and the Stock Exchange has granted to us, a waiver from strict compliance with the
applicable requirements unde r Chapter 14A of the Listing Rules once the Shares are listed
on the Stock Exchange in respect of such partially-exempt continuing connected
transactions. For further details, see ‘‘Connected Transactions.’’
WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
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DIRECTORS’ RESPONSIBILITY STATEMENT
This Prospectus, for which our Directors (including any proposed director who is
named as such in this Prospectus) collectivel y and individually accept full responsibility,
includes particulars given in complia nce with the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market Listing)
Rules (Chapter 571V of the Laws of Hong Kong) and the Listing Rules for the purpose of
giving information to the public with regard to our Group. Our Directors, having made all
reasonable enquiries, confirm that to the best of their knowledge and belief, the information
contained in this Prospectus is accurate and complete in all material respects and not
misleading or deceptive, and there are no other matters the omission of which would make
any statement herein or this Prospectus misleading.
CSRC FILING
We have obtained a filing notice dated September 6, 2024 from the CSRC for the
Global Offering and the Listing. In granti ng such filing notice, the CSRC accepts no
responsibility for the financial soundness of us or for the accuracy of any of the statements
made or opinions expressed in this Prospectus. No other approvals under the PRC laws and
regulations are required to be obtained for the Global Offering or the Listing.
INFORMATION ON THE GLOBAL OFFERING
This Prospectus is published solely in connection with the Hong Kong Public Offering,
which forms part of the Global Offering. For applicants under the Hong Kong Public
Offering, this Prospectus sets out the terms and conditions of the Hong Kong Public
Offering.
The Hong Kong Offer Shares are offered solely on the basis of the information
contained and representations made in this Prospectus and on the terms and subject to the
c o n d i t i o n ss e to u th e r e i na n dt h e r e i n .N op e r s o ni sa u t h o r i z e dt og i v ea n yi n f o r m a t i o ni n
connection with the Global Offering or to make any representation not contained in this
Prospectus, and any information or represen tation not contained herein must not be relied
upon as having been authorized by our Company, the Sole Sponsor, the Sponsor-Overall
Coordinator, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers and any of the Underwriters, any of their
respective directors, agents, employees or advisors or any other party involved in the Global
Offering.
The Listing is sponsored by the Sole Sponsor and the Global Offering is managed by
the Overall Coordinators. The Hong Kong P ublic Offering is fully underwritten by the
Hong Kong Underwriters under the terms and conditions of the Hong Kong Underwriting
Agreement and is subject to us and the Overall Coordinators (for itself and on behalf of the
Hong Kong Underwriters) agreeing on the Offer Price. The International Offering is
expected to be fully underwritten by the Internat ional Underwriters subject to the terms and
conditions of the International Underwriting Agreement, which is expected to be entered
into on or around the Price Determination Date.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 8–


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The Offer Price is expected to be determined between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company on the Price
Determination Date. The Price Determin ation Date is expected to be on or around
Thursday, January 9, 2025 and, in any event not later 12 : 00 noon on Thursday, January 9,
2025. If, for any reason, the Offer Price is not agreed among us and the Overall
Coordinators (for itself and on behalf of the Underwriters), the Global Offering will not
proceed and will lapse. For full information about the Underwriters and the underwriting
arrangements, please see the section headed ‘‘Underwriting’’ in this Prospectus.
Neither the delivery of this Prospectus nor any offering, sale or delivery made in
connection with the Shares should, under any circumstances, constitute a representation
that there has been no change or development reasonably likely to involve a change in our
affairs since the date of this Prospectus or imply that the information contained in this
Prospectus is correct as of any date subsequent to the date of this Prospectus.
PROCEDURES FOR APPLICATION FO R THE HONG KONG OFFER SHARES
The procedures for applying for the Hong Kong Offer Shares are set forth in the
section headed ‘‘How to Apply for the Hong Kong Offer Shares’’ in this Prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering, including its conditions, are set out in
the section headed ‘‘Structure of the G lobal Offering’’ in this Prospectus.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public
Offering will be required to, or be deemed by his acquisition of Offer Shares to, confirm
that he is aware of the restrictions on offers and sales of the Offer Shares described in this
Prospectus.
No action has been taken to permit a public offering of the Offer Shares or the general
distribution of this Prospectus in any jurisdiction other than in Hong Kong. Accordingly,
this Prospectus may not be used for the purposes of, and does not constitute, an offer or
invitation in any jurisdiction or in any circumstances in which such an offer or invitation is
not authorized or to any person to whom it is unlawful to make such an offer or invitation.
The distribution of this Prospectus and the offering of the Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisd ictions and pursuant to registration with or
authorization by the relevant securities regula tory authorities or an exemption therefrom.
APPLICATION FOR LISTIN G ON THE STOCK EXCHANGE
We have applied to the Stock Exchange for the granting of the approval for the listing
of, and permission to deal in, the Shares in issue and to be issued pursuant to the
Capitalization Issue and the Global Offering (including the Shares which may be issued
pursuant to the exercise of the Over-allotment Option).
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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No part of our share or loan capital is listed on or dealt in on any other stock exchange
and no such listing or permission to list is being or proposed to be sought in the near future.
COMMENCEMENT OF DEALINGS IN THE SHARES
Dealings in the Shares on the Stock Exchange are expected to commence at 9 : 00 a.m.
on Monday, January 13, 2025. The Shares will be traded in board lots of 2,000 Shares each.
The stock code of the Shares will be 0805.
T H ES H A R E SW I L LB EE L I G I B L EF O RA D M I S S I O NI N T OC C A S S
If the Stock Exchange grants the approval for the listing of, and permission to deal in,
the Shares and we comply with the stock admission requirements of HKSCC, the Shares
will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in
CCASS with effect from the Listing Date or any other date as determined by HKSCC.
Settlement of transactions between particip ants of the Stock Exchange is required to take
place in CCASS on the second settlement day after any trading day. All activities under
CCASS are subject to the General Rules of HKSCC and HKSCC Operational Procedures in
effect from time to time. Investors should seek the advice of their stockbroker or other
professional advisor for details of the settlement arrangement as such arrangements may
affect their rights and interests. All necessa ry arrangements have been made to enable the
Shares to be admitted into CCASS.
PROFESSIONAL TAX ADVICE RECOMMENDED
You should consult your professional advisors if you are in any doubt as to the
taxation implications of subscribing for, pur chasing, holding or disposing of, or dealing in,
the Shares or exercising any rights attaching to the Shares. We emphasize that none of us,
Sole Sponsor, the Sponsor-Overall Coordinator, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Underwriters, any of our or their respective
directors, officers or representatives or any other person involved in the Global Offering
accepts responsibility for any tax effects or lia bilities resulting from your subscription,
purchase, holding or disposing of, or dealing in, the Shares or your exercise of any rights
attaching to the Shares.
REGISTER OF MEMBERS AND STAMP DUTY
Our principal register of members will be main tained by our principal share registrar,
Harneys Fiduciary (Cayman) Limited in the Cayman Islands and our Hong Kong register
of members will be maintained by our Hong Kong Share Registrar, Tricor Investor Services
L i m i t e di nH o n gK o n g .
All Offer Shares issued pursuant to applications made in the Hong Kong Public
Offering and the International Offering w ill be registered on our Hong Kong register of
members. Dealings in the Shares registere d on our Hong Kong register of members will be
subject to Hong Kong stamp duty. For further details of Hong Kong stamp duty, please
seek professional tax advice.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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EXCHANGE RATE CONVERSION
Solely for your convenience, this Prospectus contains translations among certain
amounts denominated in Renminbi, Hong Kong dollars, U.S. dollars and Australia dollars.
Unless otherwise specified, amounts denominated in Hong Kong dollars and Renminbi
have been translated, for the purpose of illust ration only, into U.S. dollars and Australia
dollars in this Prospectus at the following exchange rates:
HK$1.00 : RMB0.92468
US$1.00 : RMB7.1870
US$1.00 : HK$7.7724
A$1.00 : RMB4.5205
The above exchange rates were quoted by the People’s Bank of China for foreign
exchange transactions pr evailing on December 23, 2024.
No representation is made that any amounts in Renminbi, Hong Kong dollars, U.S.
dollars or Australia dollars can be or could have been at the relevant dates converted at the
above rates or any other rates or at all.
ROUNDING
Certain amounts and percentage figures included in this Prospectus have been subject
to rounding adjustments, or have been rounded to a set number of decimal places.
Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation
of the figures preceding them. Any discrepancies in any table or chart in this Prospectus
between totals and sums of amounts listed therein are due to rounding.
LANGUAGE
If there is any inconsistency between the E nglish version of this Prospectus and the
Chinese translation of this Prospectus, the En glish version of this Prospectus shall prevail
unless otherwise stated. However, if there is any inconsistency between the names of any of
the entities mentioned in the English version of this Prospectus which are not in the English
language and their English trans lations, the names in their respective original language shall
prevail.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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DIRECTORS
Name Address Nationality
Executive Directors
Mr. MIAO Xuezhong ( 繆雪中) Room 703, Building 8
Lane 199, Zixia Road
Huangpu District
Shanghai
PRC
Chinese
Mr. LIU Tao ( 劉濤) Room 102, No.1, Sub-lane 56
Lane 8889, Zhongchun Road
Minhang District
Shanghai
PRC
Chinese
Ms. LIU Qin ( 劉芹) Room 2603, Building 24
Fusheng Mingdi, Dongshan Street
Nanhu District, Jiaxing City
Zhejiang Province
PRC
Chinese
Mr. Andrew Robert CRANK 11 Warringine
Creek Lane
Bittern, 3918
Victoria
Australia
Australian
Independent Non-executive Directors
Ms. HE Jie ( 何潔) Room 1802, No. 1
Lane 2125, Hongmei Road
Xuhui District
Shanghai
PRC
Chinese
Mr. YU Mingyang ( 余明陽) Room 2002, Building 16
N o .7 2 6 ,X i n h u aR o a d
Changning District
Shanghai
PRC
Chinese
Ms. NG Weng Sin ( 吳永蒨) 5/F, 267 Castle Peak Road
Cheung Sha Wan, Kowloon
Hong Kong
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Further information is set out in the section headed ‘‘Directors and Senior
Management’’ in this Prospectus.
PARTIES INVOLVED IN T HE GLOBAL OFFERING
Sole Sponsor, Sponsor-Overall
Coordinator and Overall Coordinator
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
Overall Coordinators (in alphabetical
order)
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3G a r d e nR o a d
Central
Hong Kong
Joint Global Coordinators Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3G a r d e nR o a d
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1G a r d e nR o a d
Central
Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 3–


--- page 114 ---
Joint Bookrunners and Joint Lead
Managers
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3G a r d e nR o a d
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1G a r d e nR o a d
Central
Hong Kong
Shenwan Hongyuan Securities (H.K.) Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
First Shanghai Securities Limited
19/F, Rm 2402–04 & 2505–10 Wing On House
71 Des Voeux Road Central
Hong Kong
Fosun International Securities Limited
Suite 2101–2105, 21/F, Champion Tower
3G a r d e nR o a d
Central
Hong Kong
I Win Securities Limited
Room 3001–3002, 30/F
China Insurance Group Building
141 Des Voeux Road Central
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 4–


--- page 115 ---
Livermore Holdings Limited
Unit 1214A, 12/F,
Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
TradeGo Markets Limited
Room 3405, West Tower
Shun Tak Centre
168–200 Connaught Road Central
Hong Kong
Wanhai Securities (HK) Limited
Room 4037, Sun Hung Kai Center
30 Harbout Road
Wan Chai
Hong Kong
Winbull Securities International (Hong Kong)
Limited
Unit A, 26/F, United Centre
95 Queensway, Admiralty
Hong Kong
Capital Market Intermediaries Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3G a r d e nR o a d
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1G a r d e nR o a d
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 5–


--- page 116 ---
Shenwan Hongyuan Securities (H.K.) Limited
Level 6, Three Pacific Place
1 Queen’s Road East
Hong Kong
First Shanghai Securities Limited
19/F, Rm 2402–04 & 2505–10 Wing On House
71 Des Voeux Road Central
Hong Kong
Fosun International Securities Limited
Suite 2101–2105, 21/F, Champion Tower
3G a r d e nR o a d
Central
Hong Kong
I Win Securities Limited
Room 3001–3002, 30/F
China Insurance Group Building
141 Des Voeux Road Central
Central
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F,
Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
TradeGo Markets Limited
Room 3405, West Tower
Shun Tak Centre
168–200 Connaught Road Central
Hong Kong
Wanhai Securities (HK) Limited
Room 4037, Sun Hung Kai Center
30 Harbout Road
Wan Chai
Hong Kong
Winbull Securities International (Hong Kong)
Limited
Unit A, 26/F, United Centre
95 Queensway, Admiralty
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 6–


--- page 117 ---
Legal Advisors to the Company As to Hong Kong law:
Jia Yuan Law Office
7/F and 17/F
238 Des Voeux Road Central
Sheung Wan
Hong Kong SAR
As to Cayman Islands law:
Harney Westwood & Riegels
3501 The Center
99 Queen’s Road Central
Hong Kong
As to PRC law:
Hylands Law Firm
3/11/12F Fortune Financial Center
No.5 Dongsanhuan Zhong Road
Chaoyang District
Beijing
PRC
As to Australian law:
Hogan Lovells
Level 17
20 Martin Place
Sydney NSW 2000
Australia
Legal Advisors to the Sole Sponsor and
the Underwriters
As to Hong Kong law:
Jingtian & Gongcheng LLP
Suites 3203–3207
32/F, Edinburgh Tower
15 Queen’s Road Central
Hong Kong
As to PRC law:
Jingtian & Gongcheng
34/F, Tower 3, China Central Place
77 Jianguo Road
Chaoyang District
Beijing
PRC
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 7–


--- page 118 ---
Auditor and Reporting Accountants KPMG
Certified Public Accountants
Public Interest Entity Auditor registered in
accordance with the Accounting and Financial
Reporting Council Ordinance
8th Floor, Prince’s Building
10 Chater Road
Central
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch
Co.
Room 2504, Wheelock Square
1 7 1 7N a n j i n gW e s tR o a d
Shanghai
PRC
Receiving Banks CMB Wing Lung Bank Limited
45 Des Voeux Road Central
Hong Kong
China CITIC Bank International Limited
61–65 Des Voeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 0 8–


--- page 119 ---
Registered Office in Cayman Islands 4th Floor
Harbour Place
103 South Church Street
PO Box 10240
Grand Cayman
KY1–1002
Cayman Islands
Address of Headquarters in the PRC Building 333
Tongren Road
Tongxiang, Jiaxing City
Zhejiang Province
PRC
Principal Place of Business in
Hong Kong
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wanchai
Hong Kong
Company’s Website www.newgonowrv.hk
(the information contained on the website does not
form part of this Prospectus)
Joint Company Secretaries Mr. CHANG Ke ( 常可)
No. 1201, 11th Floor, Block A
Building 6, Courtyard South
No. 32 Baiziwan Road
Chaoyang District
Beijing
PRC
Ms. JIAN Xuegen ( 簡雪艮)
(HKICPA, CICPA)
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wanchai
Hong Kong
Authorized Representatives Mr. MIAO Xuezhong ( 繆雪中)
Room 703, Building 8
Lane 199, Zixia Road
Huangpu District
Shanghai
PRC
Ms. JIAN Xuegen ( 簡雪艮)
40/F, Dah Sing Financial Centre
248 Queen’s Road East
Wanchai
Hong Kong
CORPORATE INFORMATION
–1 0 9–


--- page 120 ---
Audit Committee Ms. NG Weng Sin ( Chairperson )
Mr. YU Mingyang
Ms. HE Jie
Remuneration Committee Ms. HE Jie ( Chairperson )
Mr. YU Mingyang
Ms. NG Weng Sin
Nomination Committee Mr. MIAO Xuezhong ( Chairperson )
Ms. NG Weng Sin
Mr. YU Mingyang
Compliance Advisor Caitong International Capital Co., Limited
Unit 2401–05, 24/F
Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
Cayman Islands Principal Share
Registrar and Transfer Agent
Harneys Fiduciary (Cayman) Limited
4th Floor
Harbour Place
103 South Church Street
PO Box 10240
Grand Cayman
KY1–1002
Cayman Islands
Hong Kong Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Banks Industrial and Commercial Bank of China Tongxiang
Branch
N o .3 ,Z h e n x i n gW e s tR o a d ,
Wutong Street
Tongxiang
Zhejiang Province
PRC
China Zheshang Bank Jiaxing Tongxiang Branch
No.58, Zhenxing East Road
Wutong Street
Tongxiang
Zhejiang Province
PRC
CORPORATE INFORMATION
–1 1 0–


--- page 121 ---
The information and statistics set out in this section and other sections of this
Prospectus were extracted from an independent industry report prepared by Frost &
Sullivan (the ‘‘ F&S Report ’’), which was commissioned by us, and from various official
government publications and publicly availa ble resources. We engaged Frost & Sullivan to
prepare the F&S Report in connection with the Global Offering. The information from
official sources has not been independently verified by us, the Sole Sponsor, the
Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global Coordinators,
the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their respective
directors and advisers, or any other persons or parties involved in the Global Offering (other
than Frost & Sullivan), and no representation is given as to its accuracy. For discussion of
risks related to our industry, please see ‘‘Risk Factors — Risks Relating to Our Business and
Our Industry’’ in this Prospectus.
SOURCE OF INFORMATION
This section contains information extrac ted from the F&S Report prepared by Frost &
Sullivan independently, which is commissi oned by us in connection with the Global
Offering. We expect to pay Frost & Sullivan a total of RMB400,000 for the F&S Report and
our use of the report. Frost & Sullivan is a con sulting company which provides industry
consulting services, commercial due diligence and strategic consulting services for a variety
of industries. We are of the view that the payment of such fee does not impair the fairness of
the conclusions drawn in the F&S Report. We h ave extracted certain information from the
F&S Report in this section, as well as in the sections headed ‘‘Summary’’, ‘‘Risk Factors’’,
‘‘Business’’, ‘‘Financial Information’’ and elsewhere in this Prospectus to provide our
potential investors with a more comprehensive presentation of the industry in which we
operate.
During the preparation of the F&S Report, Frost & Sullivan performed both primary
and secondary research, and obtained knowled ge, statistics, information on and industry
insights into the RV markets in Australasi a and globally. Primary research involved
interviewing key industry experts and leading industry participants. Secondary research
involved analyzing data from various publicly available data sources. The F&S Report was
compiled based on the following assumptions: (1) the overall social, economic, and political
environment in China, Australasia, and globally is expected to remain stable during the
forecast period; (2) relevant key drivers are likely to drive the continued growth of the RV
markets in Australasia and globally throughout the forecast period; and (3) there is no
extreme force majeure or unforeseen industry regulations in which the industry may be
affected in either a dramatic or fundamental way. Our Directors have confirmed, after
making reasonable inquiries and exercising re asonable care, that there is no adverse change
in the market information since the date of the F&S Report which may qualify, contradict
or impact the information disclosed in this section.
INDUSTRY OVERVIEW
–1 1 1–


--- page 122 ---
The global camping market has seen substantial growth recently, fueled by increased
interest in outdoor activities, rising dispos able incomes, and a greater focus on health and
wellness. According to Frost & Sullivan , the global number of campers reached
approximately 279.3 million in 2023, and is ex pected to grow further to 439.0 million by
2028, representing a CAGR of 8.5% from 2024 to 2028. In regions like North America,
Europe, and Australasia, camping has become a staple of recreational tourism. Campers
have the flexibility to set up in various locations such as national parks, professional
campgrounds, or smaller sites, making it a n appealing tourism option. They can choose
from different types of accommodations, including RVs, tents, or cabins that can be easily
relocated to different settings. Among which, RVs offer a unique advantage as an
accommodation option for camping, merging t he convenience of mobility with the comfort
of a home, making them an ideal choice for trav elers seeking both adventure and comfort.
RVs are designed with fully equipped living spaces that include sleeping areas, kitchens,
bathrooms. Additionally, RVs come with essential amenities such as power and water
systems, air conditioning, and storage solutions, making them suitable for both short
excursions and extended travels. This self-contained setup ensures that campers can enjoy a
high level of autonomy and flexibility during the ir journeys, enhancing their overall travel
experience.
RV INDUSTRY SEGMENTATION AND VALUE CHAIN ANALYSIS
RVs can be categorized into towable RVs and motorized RVs. Towable RVs, including
standard caravans, pop-tops, and camper trailers, require an external motor vehicle for
towing. The towable RVs range from fully-equipped, stationary living spaces to more
simplistic, collapsible setups for easy trans portation. While motorized RVs integrate the
living quarters and driving area into a self-sufficient unit, categorized into Class A, B, and
C, with each class offering a different balance o f size, luxury, and functionality to cater to
various consumer preferences and needs.
INDUSTRY OVERVIEW
–1 1 2–


--- page 123 ---
The table below sets forth the characteristic comparison between towable RVs and
motorized RVs:
Towable RVs Motorized RVs
Body Design
Flexibility
Model Diversity
TCO
The detachable living units and trailer combination offer
flexible configuration options meeting diverse consumer
demands while offering cost-effective options.
Higher TCO, including higher pu rchase prices, insurance
costs, maintenance and repair expenses, as well as fuel con-
sumption.
The model variety spans from the luxurious Class A to the
compact Class B and C. The price range and size variations
are more limited compared to towable RVs.
While offering immediate living convenience, the lack of
flexibility in exploring surroundings may diminish their
attractiveness in the adventure travel market.
Integrated body designs optimi ze interior space utilization,
enhancing living and storage convenience. This approach
caters to market demands for a premium living experience,
reflected in higher manufacturing and market prices.
The relatively lower initial investment and maintenance
costs make it a cost-effective op tion, particularly suitable
for consumers with limited budgets.
Offers a broad range of choices from standard caravans,
pop-tops, camper trailers, etc., catering to users with vary-
ing needs and budgets.
Leveraging the detachable features of towable RVs, the
towing vehicle can explore the su rroundings while leaving
the trailers at the campsite, of fering significant flexibility
for those seeking
diverse travel experiences.
Source: Frost & Sullivan analysis
The RV industry’s value chain is intricately structured across upstream, midstream,
and downstream segments. The upstream segment revolves around procuring essential raw
materials and components, such as metals, plastics, and electronics, which are fundamental
to RV construction. The midstream segment fo cuses on the assembly and manufacturing of
RVs, incorporating both standard production and bespoke modifications to meet specific
customer preferences. The downstream segment encompasses the sales and provision of RV
sales and after-sales services, where both manufacturers and dealers play pivotal roles. They
offer comprehensive maintenance, repair services, and replacement parts, ensuring a
seamless ownership experience for RV users.
The following diagram illustrates the value chain of RV industry:
Raw materials and components
 RV design, manufacturing and
modification
Commercialization &
distribution
Raw materials supplier
Metals
(Steel, aluminum alloys, etc.)
Composites
(Commodity plastics, engineering plastics, etc.)
Components supplier
Spare parts supply Repair and maintenance
Others
Operation and services providers
Insurance and financing Rental service
Chassis and body frame
Others
Powertrain system
(Engine and Transmission)
R&D
Customized modification
Manufacturing and assembly
Aftermarket services and support
Dealers
Upstream Midstream Downstream
Other services
RV manufacturers
End
customers
Direct salesforce
Interior decorations and furniture
(Seating, table, bed, home appliances, etc.)
Motorized RVs
Towable RVs
Specialized RV modification factories
RV rental companies
RV campground operation
Source: Frost & Sullivan analysis
INDUSTRY OVERVIEW
–1 1 3–


--- page 124 ---
GLOBAL AND AUSTRALASIA RV MARKET OVERVIEW
From 2019 to 2023, global RV sales volumes experienced fluctuations, peaking in 2021
with sales volume reaching 992.6 thousand units during the COVID-19 pandemic as more
individuals opted for RVs for tourism and mob ility due to social distancing measures. This
surge led to a market overextension, resulting in a notable decline in sales volumes in 2022
and 2023 for two consecutive years, reaching 616.9 thousand units in 2023, representing a
CAGR of a negative 3.5% from 2019 to 2023.
From 2021 to 2023, the stability in the sa les of motorized RVs compared to the
significant drop in towable RVs can be largel y attributed to regional market dynamics,
particularly in North America. In 2021, Nor th America, the largest towable RV market
globally, was significantly impacted by COVID-19. With international travel restrictions in
place, domestic travel and outdoor activities surged, leading to a sharp increase in demand
for towable RVs, which accounted for 79% of t he incremental RV sales volume globally.
However, as the pandemic eased in 2022, the hei ghtened demand diminished, resulting in a
notable decline in global towable RV sales. In contrast, motorized RVs, which typically
have higher price points and are seen as more versatile and self-contained units, maintained
relatively stable sales.
Looking ahead to 2024 through 2028, with th e continued recovery of global tourism
and the booming camping economy in the post-pandemic era, RV travel is expected to drive
an increase in consumer demand for RVs. Total sales volume is expected to reach 863.6
thousand units, surpassing pre-pandemic level in 2028, representing a CAGR of 6.6% from
2024 to 2028. Among which, towable RVs are anticipated to recover faster than motorized
RVs, which can be attributed to several advantages that appeal to a broad consumer base.
Towable RVs generally offer greater affo rdability and lower TCO compared to their
motorized counterparts, making them a more a ccessible option for individuals and families
looking to purchase their first RV or those with budget constraints. Additionally, towable
RVs offer enhanced flexibility in usage, the y can be detached from the towing vehicle,
allowing for easier local exploration and the u se of the vehicle separately from the living
quarters. This dual functionality enhances practicality and convenience, aligning with
consumer preferences for versatile and econo mical travel solutions in the post-pandemic
era.
Measured by revenue, the global RV market was RMB260.0 billion in 2023,
representing a CAGR of 4.9% since 2019. It i s expected that the total market size will
reach RMB320.6 billion in 2028, representi ng a CAGR of 3.9% from 2024 to 2028. When
measured by revenue, motorized RVs are the dominant segment. This is due to the fact that
the sales price of motorized RVs is typically 3–4 times higher than that of towable RVs.
Consequently, despite the higher sales volume of towable RVs, motorized RVs contribute a
larger share to the global market revenue.
INDUSTRY OVERVIEW
–1 1 4–


--- page 125 ---
Global RV Market Size, by Sales Volume, 2019–2028E
CAGR 2019-2023 2024E-2028E
--5.7% 6.9%
1.2% 5.9%
Total --3.5% 6.6%
207.4 224.0
268.9 234.5 217.8 233.3 248.1 263.2 278.2
503.7 534.4
723.7
594.7
399.1
436.3
470.7 504.8
539.1
2020 2028E2027E2026E2025E2024E202320222021
711.1
758.4
992.6
829.2
616.9
669.6
718.8
768.0
817.3
2019
Towables
MotorizedThousand Units
293.5
570.1
863.6
Source: Caravan Industry Association of Australasia (‘‘ CIAA ’’), European Caravan Federation (‘‘ECF’’),
RV Industry Association (‘‘ RVIA ’’), Frost & Sullivan Analysis
Global RV Market Size, by Revenue, 2019–2028E
CAGR 2019-2023 2024E-2028E
0.9% 4.8%
7.0% 3.5%
Total 4.9% 3.9%
135.3
155.0
228.3
195.2
177.6 186.7 192.4 200.1 207.2
79.6
86.7
160.0
129.0
82.4 88.1
93.0 97.9 102.2
2020 2028E2027E2026E2025E2024E202320222021
214.9
241.7
388.3
324.2
260.0
274.8 285.4 298.0 309.4
2019
Towables
MotorizedRMB in billions
214.2
106.4
320.6
Source: CIAA, ECF, RVIA, Frost & Sullivan Analysis
RVs are categorized into luxury, mid-end, and semi-off-road brands. Luxury RVs offer
premium interiors and comprehensive amenities, akin to high-end residences. Mid-end RVs,
accounting for 77.3% of the market in 2023, provide practical and cost-effective travel
options for families and long-term travelers. Semi-off-road RVs are designed for exploring
remote areas with sturdy designs and essen tial living facilities for extended outdoor
adventures.
INDUSTRY OVERVIEW
–1 1 5–


--- page 126 ---
Definition 2023 Market share by units in Australasia (%)
Luxury Brands
Mid-end Brands
Semi-off-road
Brands
• Luxury RV brands are renowned for their premium interiors and
comfortable living experiences. They are typically equipped with modern
technology and comprehensive amenities, offering a lifestyle akin to
high-end residences or five-star hotels.
• The price of the luxury brands’ RV usually over 70 thousand AUD by list
price.
Type • Mid-end RV brands offer practical and comfortable travel experiences,
focusing on cost-effectiveness, making them suitable for families and
long-term travelers. They use durable materials and designs, providing
essential entertainment and living facilities, ensuring a comfortable and
reliable choice.
• The price of the mid-end brands’ RV usually between 25 thousand AUD
to 70 thousand AUD by list price.
• Semi-off-road RV brands are designed for travelers looking to explore
remote areas and rough terrains, offering some off-road capabilities. They
feature sturdy chassis and body designs, equipped with necessary living
facilities, making them ideal for extended outdoor living.
Luxury Brands
10.8%
Mid-end Brands
77.3%
Semi-off-road Brands
11.9%
Source: Literature research, Frost & Sullivan Analysis
The growth of the global RV market is influenced by several key factors:
. Increased Income Levels. As global economies grow, people’s disposable incomes
rise, enhancing their ability to invest in leisure and travel activities. RVs, offering
a unique blend of convenience and comfort and spurring interest in high-quality
lifestyle pursuits including exploration, nature experiences, and family time, have
become a major choice for leisure.
. Growing Interest in Tourism and Outdoor Activities. The rising trend towards
outdoor activities and adventure tourism has notably propelled the growth of the
global RV market. RVs enable travelers t o flexibly explore remote regions and
natural landscapes, appealing to enthusiasts of self-driving tours, camping, and
outdoor adventures. The widespread sharing of travel experiences on social media
further amplifies the desire for free, fl exible, and personalized travel options,
promoting the popularity of RV travel.
. Technological Innovations and Enhanced Product Features. Technological
advancements significantly enhance the global RV market, incorporating
eco-friendly power systems, lightweight materials, and intelligent living
solutions to improve RV performance a nd sustainability. Innovations such as
electric and hybrid RVs, including electric towable RVs not only reduce reliance
on fossil fuels but also integrate smart home systems for added convenience and
security. Electric towable RVs feature la rge batteries, enabling self-propelled
towing synchronized with the towing vehicle via sensors, substantially reducing
the energy consumption of the towing vehicle and appealing to a broader audience
with their diverse designs.
INDUSTRY OVERVIEW
–1 1 6–


--- page 127 ---
Australasia is the Third-largest and One of the Fastest-growing RV Markets Globally
North America, Europe, and Australasia are the top three RV markets globally, RV in
use in the three markets collectively account for approximately 97% of the global total
volume in 2023. Australasia, the third larges t behind North America and Europe, had 895.4
thousand RVs in use in 2023, representing a CAGR of 3.9% from 2019 to 2023.
Driven by a booming tourism industry and a high number of international visitors,
road trips through RVs have become a mature travel method in Australasia. Measured by
RV household penetration, Australasia had a remarkable ownership rate of 78.8 RVs per
thousand households in 2023, significantly surpassing Europe’s rate of 21.7 and ranking
second globally, just behind North America’s leading figure of 107.7 RVs per thousand
households.
The economic vitality injected by tourists traveling in RVs has l ed to development of
RV-related infrastructure by Australasian governments, including free overnight RV
camping sites, parking facilities in central bus iness districts, and well-developed campsite
infrastructure. It is expected that the total RV in use in Australasia will reach 1,120.1
thousand units in 2028, representing a CAGR of 4.6% from 2024, outpacing the growth in
North America and Europe.
Global RV Market Size, by Total Number of RV in Use and by Regions, 2019–2028E
2020 2028E2027E2026E2025E2024E2023202220212019
164.4 175.8 192.0 207.4 223.5 243.5 268.1 297.6 332.3 372.8
12,481.9 12,912.3 13,512.5 14,005.8 14,319.0 14,669.1 15,051.8 15,465.9 15,911.1 16,384.3
5,756.6 5,898.2 6,061.3 6,179.2 6,284.4 6,394.8 6,510.2 6,630.0 6,753.9 6,881.5
430.4 439.5 453.2 463.4
855.4
477.7 485.5 494.3 504.0 514.4469.4
801.0768.3
25,273.124,570.523,909.323,292.422,719.922,191.721,711.221,053.420,226.819,601.6 834.4
1,069.21,021.5976.8934.8895.4
1,120.1
CAGR 2019-2023 2024E-2028E
3.9% 4.6%
2.2% 1.9%
3.5% 2.8%
8.0% 11.2%
2.2% 1.9%
Total 3.2% 2.7%
Australasia
Europe
North America
China
Rest of the WorldThousand Units
Source: CIAA, ECF, RVIA, Frost & Sullivan Analysis
INDUSTRY OVERVIEW
–1 1 7–


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Towable RVs Dominate the Australasian RV Market
Regional preferences for RV types vary sign ificantly across the global market. In
Australasia, towable RVs are especially popul ar due to their suitability for the region’s
diverse and vast landscapes. This preferen ce is driven by the availability of wide-open
spaces and well-developed camping infrastr ucture, ideal for long-distance travel and
outdoor activities. Towable RVs appeal to adventurers eager to explore remote natural
areas, supporting a dynamic market rich in caravan models and customization options to
meet varied travel needs and preferences.
In Australasia, over 90% of newly sold RVs each year are towable RVs, with this
proportion increasing from 93% in 2019 to 96% in 2023. This trend is expected to continue,
with projections showing towable RVs reachin g 48.9 thousand units by 2028, accounting for
96.1% of total new RV sales volume, a growth reflected by a CAGR of 6.6% from 2024 to
2028. The rising preference for towable RVs is largely due to their affordability, including
lower acquisition costs and TCO, couple d with greater flexibility, making them an
increasingly popular choice among consumers seeking economical and versatile travel
solutions.
While the global RV market experienced a s ignificant decline in sales volume from
2021 to 2023 due to economic uncertainties, supply chain disruptions, and rising material
costs, the Australasia market remained relati vely stable. This stability can be attributed to
several factors: government support and incen tives promoting domestic travel, a cultural
preference for outdoor and adventure activi ties, and a more resilient supply chain that
ensured the availability of RVs. Many companies in the RV industry adopted strategies
such as increasing inventory levels and establishing dual sourcing to ensure a steady supply
of essential materials. By holding higher inventories and diversifying their supplier base,
they were able to mitigate the risks associat ed with supply chain interruptions. These
elements collectively helped maintain the demand for RVs in Australasia despite global
market challenges. The Australasia RV marke t is expected to experience fluctuations in
2024, followed by a moderate recovery from 2024 to 2028, gradually returning to a more
stable growth trajectory.
Measured by revenue, the Australasia R V market reached RMB9.2 billion in 2023,
representing a CAGR of 9.9% since 2019. The market is expected to continue its growth,
with total revenue projected to reach RMB 10.6 billion by 2028, reflecting a CAGR of 4.5%
from 2024 to 2028.
From 2020 to 2021, Australasia’s RV sales volume and revenue experienced significant
year-over-year growth, primarily driven by the COVID-19 pandemic, as more individuals
opted for RVs for tourism and mobility due to so cial distancing measures. However, this
surge led to market overextension, resulting in a decline in both sales volume and revenue
for two consecutive years, 2022 and 2023, as the impact of the pandemic eased in
Australasia.
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Australasia RV Market Size, by Sales Volume, 2019–2028E
2020 2028E2027E2026E2025E2024E2023202220212019
30.4
25.8
41.0 40.4 38.4 37.8 40.3 42.9 45.8 48.9
2.3 1.6 2.2 1.91.8 2.01.71.61.6
32.7
27.4
43.2 42.1
1.7
39.4 42.0 44.7 47.7 50.9
40.0
CAGR 2019-2023 2024E-2028E
6.0% 6.6%
5.7%
Total 5.2% 6.6%
Towables
MotorizedThousand Units -8.7%
Source: CIAA, Frost & Sullivan Analysis
Australasia RV Market Size, by Revenue, 2019–2028E
2020 2028E2027E2026E2025E2024E2023202220212019
4.8
4.2
9.1
8.8
7.9 7.6 8.0 8.3 8.7
9.16.3
5.3
11.0
10.2
8.9 9.3 9.7 10.1
10.6
9.2
CAGR 2019-2023 2024E-2028E
13.3% 4.6%
--3.5% 3.6%
Total 9.9% 4.5 %
Towables
MotorizedRMB in billions
1.1 1.9 1.41.4 1.51.31.31.31.41.5
Source: CIAA, Frost & Sullivan Analysis
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Standard Caravan is a Premium Towable RVs and Drives the Majority of Towable RVs Sales
in Australasia
Based on different structures and features, towable RVs can be mainly segmented into
standard caravans, pop-tops, and camper trailers. (i) Standard caravans offer a solid
structure with complete living facilities inc luding a fixed roof. They typically provide
amenities like beds, a kitchen , and a bathroom, and are suitable for longer stays and varied
weather conditions, reflecting a higher level of comfort and convenience that usually comes
at a higher price point. (ii) Pop-tops are similar to standard caravans but feature a roof that
can be raised when parked to provide additional headroom and compactness while
traveling. This makes them easier to tow and m ore fuel-efficient due to the reduced height
during transit. (iii) Camper trailers are mor e basic than caravans and usually lighter. They
often come with a fold-out tent section, which is stored in a compact trailer when not in use.
The table below sets forth the feature and ave rage retail price comparison of different
types of towable RVs:
Solid structure with a fixed roof,
complete living facilities including
beds, kitchen, bathroom, etc.
Simpler construction comparing to standard
caravans with a roof that can be raised when
parked to provide additional headroom,
generally less costly to produce than the fully
integrated, rigid structures of standard caravans
Come with a fold-out tent section, which is
stored in a compact trailer when not in use,
more basic and minimalistic living facilities
Around 78.0 thousand Around 57.0 thousand Around 42.0 thousand
Premium Medium
Camper TrailersStandard Caravans
Body Design
Average Selling Price
(AUD)
Market Positioning
Illustrative Models
Entry
Pop-tops
Source: Literature research, Frost & Sullivan Analysis
In 2023, the standard caravan was the major segment in the Australasian market,
capturing a substantial 72.1% share, up from 67.1% in 2019. This growth can be attributed
to several factors including an increasing preference among consumers for more spacious
and comfortable RV options, the rise in domestic travel that favors the amenities offered by
standard caravans, and technological advancements that have enhanced the appeal of these
models. Looking forward, the standard caravan segment is poised for significant growth,
projected to reach 38.4 thousand units by 2028, accounting for 78.5% of total new towable
RVs sales volume, with a CAGR of 9.1% from 2 024 to 2028. This growth rate outpaces the
overall expansion of both the towable RVs a nd the broader RV market in Australasia,
highlighting the segment’s increasing dominance and appeal.
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Measured by revenue, the Australasia standard caravan market reached RMB7.3
billion in 2023, representing a CAGR of 16.2% since 2019. This market captured a 92.4%
share, higher than the 72.1% share when measured by sales volume, indicating the higher
average price of standard caravans compar ed to other towable RVs. The standard caravan
market is expected to continue its growth, with total revenue projected to reach RMB8.5
billion by 2028, reflecting a CAGR of 5.0% from 2024 to 2028.
Market Size and Share of Standard Caravans in the Australasian Towable RVs Segment,
By Sales Volume, 2019–2028E
CAGR 2019-2023 2024E-2028E
7.9% 9.1%
20.4
17.8
28.7 28.8 27.7 27.1
29.4
31.9
35.0
38.4
67.1%
2019
69.0%
2020
70.0%
2021
71.3%
2022
72.1%
2023
71.7%
2024E
73.0%
2025E
74.4%
2026E
76.4%
2027E
78.5%
2028E
Standard caravan sales volume
Share of standard caravans in the Australasian towable RVs segmentThousand Units
%
Source: CIAA, Frost & Sullivan Analysis
Market Size and Share of Standard Caravans in the Australasian Towable RVs Segment,
By Revenue, 2019–2028E
CAGR 2019-2023 2024E-2028E
16.2% 5.0%
4.0
3.6
7.9 7.8
7.3
7.0
7.4 7.7
8.1
8.583.3%
2019
85.7%
2020
86.8%
2021 2022
92.4%
2023
92.1%
2024E
92.5% 92.8%
2025E 2026E
93.1%
2027E
93.4%
2028E
Standard caravan sales revenue
Share of standard caravans in the Australasian towable RVs segment
RMB in billions
%
88.6%
Source: CIAA, Frost & Sullivan Analysis
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Overseas Imports Have Become a Significant Source of RVs in Australasia
Overseas imports have become a significant source of RVs in Australasia, with annual
imports exceeding 14.0 thousand units since 2019 and reaching about 23.6 thousand units in
2023, nearly 60% of the year’s new RV sales. China is Australasia’s leading source of RV
imports, a status underpinned by its manufacturing efficiency, cost-effectiveness, and
product variety. RV manufacturers in China posse ss large-scale manufacturing capabilities
and technological prowess which enables the production of high-quality yet affordable RVs
and accessories, aligning with Australasia’s diverse product needs. The robust trade
relationship and logistical synergy between China and Australasia bolster the appeal of
Chinese RVs in the Australasian market. In 2023, the imported volume of RVs from China
reached 18.6 thousand units, constituting 78.6% of the total import volume and 46.5% of
new RV sales in Australasia, underscoring C hina’s significant impact. This dynamic,
coupled with Australasia’s growing affinity fo r RV travel, has swiftly cemented China’s role
as a principal import source.
Australasia RV Imported Volume and Penetration Rate to New RV Sales, 2019–2028E
CAGR 2019-2023 2024E-2028E
12.9% 3.3%
14.5 14.0
23.9
26.1
23.6 24.2 25.1 26.0 26.8 27.6
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
44.3%
51.1%
55.3%
62.0% 59.0% 58.6% 57.4% 56.4% 55.1% 53.9%
Imported volume
Penetration rate to annual new RV sales volumeThousand Units
%
Source: World Bank, International Trade Center, Frost & Sullivan Analysis
The driving factors and development trends of the Australasian RV market include:
. Distinctive tourism culture and outdoor lifestyle preferences in Australasia .T h e
evolution of travel culture and lifestyle significantly contributes to the growth of
the RV market in Australasia. In 2023, the total contribution of travel and
tourism to GDP in Australasia was 8.4%, exceeding the global average of
approximately 6%. This region’s distinct ive tourism culture and outdoor lifestyle
preferences offer extensive opportunities for RV travel, drawing enthusiasts to
explore its diverse landscapes — from beaches to forests and deserts. The allure of
escaping fast-paced modern life throu gh RV travel, which allows immersive
experiences in nature and quality family time, is increasingly recognized as
essential.
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Furthermore, Australasia’s median household income increased from US$52.9
thousand in 2019 to US$58.2 thousand in 2023 and is expected to grow further to
US$66.7 thousand by 2028, representing a CAGR of 2.8% from 2024 to 2028.
This steady rise in disposable income is likely to boost demand for RV travel as
households gain more spending power for leisure activities. Additionally, trip
expenditure by domestic overnight visitor s in Australasia saw significant growth,
rising from US$108.5 billion in 2019 to US$ 151.6 billion in 2023. This figure is
projected to reach US$184 billion by 2028, with a CAGR of 4.0%. This increasing
expenditure highlights a growing domestic tourism market, reinforcing the appeal
and potential for the RV industry as more tr avelers seek flexible, nature-centric
travel experiences.
. Policy support and development of infrastructure for RV travel . Policy support and
relatively developed infrastructure have positioned Australasia’s RV market for
success. Favorable government polic ies have spurred the development of
high-quality campsites and RV parks nation wide. These facilities offer essential
services like electricity, water, and sanitation, and often include additional
amenities such as Wi-Fi, la undry facilities, and recreat ional areas, significantly
enhancing the convenience and comfort of RV travel. Furthermore, policy
initiatives and tourism promotion efforts encourage both domestic and
international visitors to explore Austra lasia via RVs, further stimulating market
growth.
. Growing demand for sustainable travel options . Electrification and energy
conservation are becoming increasingly prominent in Australasia’s RV market.
This trend is evident in the growing interest in ERVs and the broader
implementation of energy-saving technologies, such as solar panels and LED
lighting, in towable RVs designs. With heightened consumer awareness of
environmental protection and government support for eco-friendly policies,
Australasia’s RVs are expected to focus more on energy efficiency and reducing
carbon emissions, meeting the market demand for sustainable travel options.
. Increasing need for personalization and customization . Increasingly personalized
and diversified demands are driving a mov e towards more specialized services.
The RV market is undergoing a transformation characterized by increasingly
personalized demand and diversified services, alongside a surge in the need for
niche markets such as eco-friendly RVs, luxury and technology-enhanced models,
and compact designs suitable for urban environments. Customization of
appliances and both interior and exterior designs are becoming more prevalent,
reflecting the demand for unique and tailored RV experiences. The need for
corresponding RV-related solutions and professional services, such as RV rental,
travel planning, and maintenance services, is expected to surge. This dynamic shift
not only satisfies a range of consumer needs but also opens new avenues for
growth and differentiation for RV businesses.
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. Technology-driven transformation in the Australasia RV industry . Technological
innovation is key to enhancing user experience and product strength. In line with
the trend globally, the Australasia RV industry is undergoing a technology-driven
transformation aimed at boosting user experience and production efficiency
through the integration of advanced technologies and innovative solutions. Smart
RVs, equipped with autonomous driving t echnology, efficient energy management
systems, and internet-connected home devices, are becoming increasingly popular
in the market. These advancements not only improve the safety, convenience, and
comfort of living in RVs but also cater to modern consumers’ desire for a smart,
connected lifestyle. Innovations like the use of lightweight materials to reduce
vehicle weight and increase fuel efficiency, along with the development of more
flexible space configurations, further enhance the market appeal of RVs.
COMPETITIVE LANDSCAPE OF AUSTRALASIA RV MARKET
The Australasia RV market exhibits a relatively concentrated structure. According to
the 2023 sales volume data, the top five participants collectively hold approximately 55.4%
of the market share. In the same year, our Group ranked as the second-largest RV company
in Australasia, selling 2.7 thousand units an d capturing about 6.8% of the market share.
Competitive Landscape of the Entire Australasia RV Market in 2023,
Including Both Motorized and Towable RVs
Ranking Company
Sales
Volume of
RVs in 2023
Market
Share
Revenue of
RVs in 2023
Market
Share Major Product Offerings
(thousand units) (%) (RMB in millions) (%)
1 A 12.6 31.5% 2,683.8 29.2% St andard Caravans, Camper
Trailers, Pop-tops
2 Our Group 2.7 6.8% 720.3 7.8% Standard Caravans
3 B 2.4 6.0% 492 5.3% Standard Caravans, Camper
Trailers, Pop-tops
4 C 2.3 5.8% 471.5 5.1% Standard Caravans, Camper
Trailers, Pop-tops
5 D 2.1 5.3% 424.2 4.6% Standard Caravans, Camper
Trailers, Pop-tops
Sources: CIAA, Frost & Sullivan Analysis
Note: The market participant data is derived from publicly available information and expert
interviews. Due to confidentiality regul ations of the participants, there might be
discrepancies between this data and the partic ipants’ internal financial records. The major
RV companies in Australasia mainly consists of the Company, Austrack, Essential, MDC
and Jayco.
Company A: Founded in 1975, this company is a privately held RV manufacturer headquartered in
Dandenong South, Victoria, Australia. It offers a variety of products including towable RVs
and motorized RVs.
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Company B: Founded in 2005, this company is a privately held firm headquartered in Buena Park,
California, USA. It offers trave l trailers and other products.
Company C: Established in 2009, this company is a privately held firm headquartered in Caboolture,
Queensland, Australia. It provides t ravel trailers and other products.
Company D: Established in 2004, this company is a privatel y held firm headquartered in Campbellfield,
Victoria, Australia. It provide s various products such as trave l trailers, camping equipment,
and apparel.
As the premium segment of the towable RVs market, standard caravans exemplify how
leading players leverage distinct competitiv e advantages to dominate. Companies excelling
in this sector often possess robust manufactur ing capabilities, allowing them to innovate
and produce high-quality, durable caravans equipped with advanced features and
technologies. Moreover, these leading players capitalize on the ability to command
higher prices for their premium products. This price premium not only reflects the superior
quality and enhanced features of the caravans bu t also boosts profitability, providing these
companies with significant financial resources to reinvest in further innovation and market
expansion.
We are a notable standard caravan player in Australasia, according to Frost &
Sullivan.
Competitive Landscape of Australasia Standard Caravan Market in 2023
Ranking Company
Sales
Volume of
Standard
Caravans in 2023 Market Share
Revenue of
Standard
Caravans in 2023 Market Share Major Product Offerings
(thousand units) (%) (RMB in millions) (%)
1 A 6.7 24.2% 1,701.8 23.3% Standard Caravans, Camper
Trailers, Pop-tops
2 Our Group 2.7 9.7% 720.3 9.9% Standard Caravans
3 D 1.6 5.8% 379.2 5.2% Standard Caravans, Camper
Trailers, Pop-tops
4 B 1.2 4.3% 284.4 3.9% Standard Caravans, Camper
Trailers, Pop-tops
5 C 1.0 3.6% 237 3.2% Standard Caravans, Camper
Trailers, Pop-tops
Sources: CIAA, Frost & Sullivan Analysis
The RV industry in Australasia is characterized by high barriers to entry, primarily due
to the need for continuous and large-scale capital investments to support research and
development, production, and brand marketing; compliance with diverse regional
regulations and product safety standards; effi cient supply chain management capabilities;
and after-sales service and customer relationship maintenance.
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. Continuous and large-scale capital investment . Entry into the RV market requires
significant initial investment, coverin g costs related to production facilities,
research and develop ment, and marketing.
. Brand and market recognition . Establishing a strong brand and gaining market
recognition are critical for successfully entering the RV market. Newcomers need
to build trust and brand loyalty through high-quality products and effective
marketing strategies.
. Compliance with diverse global market regulations and safety standards .A d h e r i n g
to regulations and safety standards is crucial in the RV market, especially given
the varied legal environments across global markets. Businesses must understand
and adapt to complex regulatory systems at international, national, and local
levels, covering vehicle safety, environmental emissions, and road usage.
. Supply chain management . Effective supply chain management is vital for success
in the RV market. A network that ensures the stable supply of raw materials and
components, cost control, and rapid market response provides a competitive
advantage.
. After-sales service and customer . Providing high-quality after-sales service and
maintaining good customer relationships are key to staying competitive. As
high-value products, RVs demand not only quality but also comprehensive
after-sales support and services.
The RV industry in Australasia has strong market opportunities due to a prevalent
camping culture, advanced infrastructure, eco-friendly innovations, and diverse natural
landscapes. Active RV clubs, comprehensive parks, and continuous route development
make it an ideal RV destination, offering unique experiences and a competitive edge.
. Prevalence of camping culture. Australasia have a strong camping culture,
providing a solid foundation for the RV i ndustry. Families, young people, and
retirees enjoy RV holidays, embracing outdoor life. Numerous active RV clubs
and communities regularly organize trips and activities, enhancing the appeal and
social opportunities of RV tourism. This widespread cultural acceptance and
community support give RV tourism a unique market advantage in Australasia.
. Advanced infrastructure. Australasia offer a comprehensive network of RV parks
and campsites, equipped with facilities such as electricity, water supply, and
sanitation, greatly facilitating RV trave l. Government and tourism departments
continually develop and promote new RV routes and destinations, attracting more
tourists. These advanced infrastructures and resources position Australasia as
ideal RV destinations, driving market growth.
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. Technological innovation and environmental Awareness. With increasing
environmental awareness, manufacturers have introduced more eco-friendly
RVs, such as electric and solar- powered models, catering to sustainable travel
demands. Modern RVs are also equipped with advanced technologies like smart
home systems, navigation, and safety devices, enhancing the travel experience and
attracting high-end customers. Technological innovation and environmental focus
make RV tourism convenient and sustainable, providing a competitive edge.
. Diverse travel experiences. Australasia offer rich natural landscapes, such as
remote national parks, wildlife reserves, and indigenous cultural areas. RV travel
allows tourists to access these uniqu e destinations, often unreachable by
traditional means. Depending on interests, tourists can enjoy diverse
experiences through RV travel, including culinary, wine, and adventure tours.
This diversity, combined with rich natural and cultural resources, gives the
Australasian market a significant advantage in the RV tourism market.
The RV industry in Australasia faces threa ts from environmental impacts, stricter
regulations, supply chain dependencies, and economic uncertainties. High fuel
consumption, waste disposal, market fluctua tions, and currency volatility can increase
costs and reduce demand.
. Environmental impact. RVs typically exhibit higher fuel consumption, leading to
increased carbon emissions. This is partic ularly scrutinized in environmentally
conscious Australasia, potentially tr iggering criticism from environmental
organizations and stricter regulatory me asures. Improper disposal of wastewater
and garbage can also pollute local env ironments. Given the pristine natural
landscapes of Australasia, stringent waste management regulations may be
enforced, thereby increasing operationa l costs for RV users and service providers.
. Dependency on supply chains. Australia’s RV industry heavily relies on overseas
supply chains, primarily due to its weak industrial base and lack of a robust
automotive sector. This reliance exposes the Australian RV manufacturing sector
to fluctuations in international markets, logistics disruptions, and supply chain
issues, consequently increasing operation al risks and costs. During times of global
supply chain instability, this dependence c an significantly impact the RV industry.
. Economic uncertainty. Economic downturns can reduce consumer expenditure on
travel and leisure activities, affectin g the demand for RV rentals and sales. The
Australasian markets, reliant on touris m, are susceptible to fluctuations in the
global economy. Currency fluctuations can also impact the import costs of RVs
and their components, influencing overall pricing and market demand. These
economic uncertainties compound the operational challenges faced by the RV
industry.
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COST ANALYSIS
The main raw materials for RVs include aluminum and plastic. The prices of primary
aluminum and plastic experienced significant growth during 2020 and 2021 due to the
impact of COVID-19 on the global manufacturing supply chain, rising energy prices, and
increased shipping costs. Since 2022, as the e ffects of COVID-19 have gradually diminished
and shipping prices have started to normalize, the global supply chain has been showing
signs of recovery, leading to a slow decrease in the prices of these commodities. However,
the overall price levels of primary aluminum remain higher than those in 2019.
As important industrial materials, aluminum and plastic are typically stockpiled in
advance by downstream RV parts suppliers or RV manufacturers to mitigate the impact of
potential raw material price fluctuations on costs or the final product prices. Consequently,
the price fluctuations of aluminum and pla stic in recent years have had a very limited
impact on the prices of our RV products.
There was a significant disparity in labor costs between China and Australasia from
2019 to 2023. In 2023, the average wage in Australasia was US$60.2 thousand,
approximately 3.4 times higher than China’s average of US$17.5 thousand. Both regions
have seen gradual wage increases during this pe riod, but Australasia’s labor costs remain
consistently higher.
The charts below set forth the price trend of major raw materials and the trend of labor
cost during the past several years:
Price Index of Major Raw Materials, Jan. 2019 — Mar. 2024 (2019.1.1=100)
60
70
80
90
100
110
120
130
140
150
160
170
180
01/21
04/21
07/21
10/21
01/22
04/22
10/22
01/19
01/23
04/19
04/23
07/19
07/22
10/19
01/20
01/24
Primary aluminium (A00 Grade)
Plastic
04/20
04/24
07/23
10/20
07/20
10/23
Source: LME, National Bureau of Statistics of China, Australian Bureau of Statistics, Stats NZ, Frost &
Sullivan analysis
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Average Annual Wage of Urban Employees in China and Australasia, 2019 to 2023
0
2019 2020
13.1 14.1 15.5 16.5 17.5
58.6 60.4 60.7 59.4 60.2
2021 2022 2023
10
20
30
40
50
60
70
80 China
Australasia
US$ in Thousand
Source: Australian Bureau of Statisti cs, Stats NZ, Frost & Sullivan analysis
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LAWS AND REGULATIONS IN THE PRC
We are subject to a variety of PRC laws, rule s and regulations affecting many aspects
of our business. This section summarizes the principal PRC laws, rules and regulations that
we believe are relevant to our business and operations.
Laws and Regulations Relating to Safe Production
According to the Production Safety Law of the PRC (《中華人民共和國安全生產法》)
promulgated on June 29, 2002 and last amended on June 10, 2021, enterprises shall meet
with the conditions for work safety as required by relevant laws and regulations.
Enterprises having more than 100 employees shall establish a department to carry out
work safety management or have personnel sole ly responsible for work safety management.
Enterprises shall provide their employees with education and training on work safety to
ensure that the employees have the necessary kn owledge regarding work safety, are familiar
with the relevant work safety rules and operating procedures, and acquire safe operation
skills required for their respective positions. T he employees performing special functions as
defined by the work safety supervision depar tment of the State Council must receive special
training on work safety and hold the qualificat ion certificate for performing such special
functions.
Laws and Regulations Relating to Product Quality and Recall of Defective Automobile
Products
Pursuant to the Product Quality Law of the PRC (《中華人民共和國產品質量法》),
promulgated on February 22, 1993 and last amended on December 29, 2018, a
manufacturer is prohibited from produ cing or selling products that do not meet
applicable standards and requirements fo r safeguarding human health and ensuring
human and property safety. Products must be free from unreasonable dangers threatening
human and property safety. Where a defective product causes physical injury to a person or
property damage, the aggrieved party may make a claim for compensation from the
producer or the seller of the product. Producers and sellers of non-compliant products may
be ordered to cease the production or sale of the products and could be subject to
confiscation of the products and/or fines. Ea rnings from sales in contravention of such
standards or requirements may also be confiscated, and in severe cases, an offender’s
business license may be revoked.
Laws and Regulations Relating to Import and Export Trade
According to the Customs Law of the People’s Republic of China (《中華人民共和國海關
法》) (the ‘‘ Customs Law ’’) which was promulgated by the Standing Committee of the
National People’s Congress (the SCNPC) on January 22, 1987, implemented on July 1, 1987
and last amended on April 29, 2021, where a consignee or consignor of import or export
goods or a Customs clearing enterprise go through Customs declaration procedures, they
shall file for record with the Customs in accordance with law. Import and export of goods,
unless otherwise specified, the consignee or consignor can self-handling or be entrusted by
the customs clearance enterprises allowed to register for customs clearance and taxation
procedures. According to the Announcement of General Administration of Customs on
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Matters Related to the Merger of Enterpri se Customs Declaration and Inspection
Qualification (《海關總署關於企業報關報檢資質合併有關事項的公告》)w h i c hw a s
promulgated by General Administration of Customs on April 16, 2018, implemented on
April 20, 2018, the filing of inspection and qu arantine self-management inspection
enterprises and the filing of consignees and consignors of import and export goods of
customs are merged into the record of consignors and consignors of import and export
goods of customs. After filing, the enterprise obtains customs declaration and inspection
qualifications at the same time.
The Foreign Trade Law of the People’s Republic of China (《中華人民共和國對外貿易
法》) (the ‘‘Foreign Trade Law ’’) was promulgated by SCNPC on May 12, 1994. The Foreign
Trade Law shall apply to foreign trade and to the protection of intellectual property rights
associated with foreign trade. The term ‘‘foreign trade’’ shall refer to the import and export
of goods and technologies and international trade in services. The Foreign Trade Law
stipulates that foreign trade operators engaging in import or export of goods or
technologies shall file records with the foreign trade department of the State Council or
its authorized agency, but the latest amendments on December 30, 2022 has removed the
requirements of filling records for foreign trade operators.
Laws and Regulations Relating to Information Security and Privacy Protection
Internet Information Security
On June 10, 2021, the SCNPC promulgated the Data Security Law of PRC (《中華人民
共和國數據安全法》) (the ‘‘Data Security Law ’’), which became effective on September 1,
2021. The Data Security Law mainly sets forth specific provisions regarding establishing
basic systems for data security management, including hierarchical data classification
management system, risk assessment system, monitoring and early warning system, and
emergency disposal system. In addition, it clari fies the data security protection obligations
of organizations and individuals carrying out data activities and implementing data security
protection responsibility.
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC (《中
華人民共和國網絡安全法》) (the ‘‘
Cybersecurity Law ’’), effective as of June 1, 2017, which
applies to the construction, operation, maintenance and use of networks as well as the
supervision and administration of cybersecu rity in the PRC. According to the Cybersecurity
Law, network operators are broadly defined as owners and administrators of networks and
network service provider and subject to variou s security protection-related obligations,
including but not limited to (1) complying with security protection obligations under graded
system for cybersecurity protection requirements, which include formulating internal
security management rules and operating instruct ions, appointing cybersecurity responsible
personnel and their duties, adopting techni cal measures to prevent computer viruses,
cyber-attack, cyber-intrusion and other acti vities endangering cybersecurity, adopting
technical measures to monitor and record n etwork operation status and cybersecurity
incidents; (2) formulating a emergency pl an and promptly responding to and handling
security risks, initiating the emergency plan s, taking appropriate remedial measures and
reporting to regulatory authorities in the event comprising cybersecurity threats; and (3)
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providing technical assistance and support to public security and national security
authorities for protection of national security and criminal investigations in accordance
with the law.
On December 28, 2021, the Cyberspace Administration of China (the CAC) and other
twelve PRC regulatory authorities jointly revised and promulgated the Measures for
Cybersecurity Review (《網絡安全審查辦法》) (the ‘‘Cybersecurity Review Measures ’’), which
became effective on February 15, 2022. The Cybersecurity Review Measures provide that,
among others, (1) critical information infras tructure operators that the purchase of cyber
products and services or network platform operators that engage in data processing
activities that affects or may affect national security shall be subject to the cybersecurity
review by the Cybersecurity Review Office, the department which is responsible for the
implementation of cybersecurity review under the CAC; and (2) network platform operators
with personal information data of more than one million users that seek for listing in a
foreign country are obliged to apply for a cybersecurity review by the Cybersecurity Review
Office.
On July 7, 2022, the CAC has promulgated the Measures for the Security Assessment of
Cross-border Data Transfer (《數據出境安全評估辦法》), which takes effect on September 1,
2022, and requires that any data processor providing important data collected and
generated during operations within the territory of the PRC or personal information that
should be subject to security assessment a ccording to the relevant law to an overseas
recipient shall conduct security assessment. The Measures for the Security Assessment of
Cross-border Data Transfer provides four circumstances, under any of which data
processors shall, through the local cybersp ace administration at the provincial level,
apply to the national cyberspace administration for security assessment of cross-border
data transfer. These circumstances include: (1) where the important data are transferred to
an overseas recipient; (2) where the persona l information is transferred to an overseas
recipient by an operator of critical information infrastructure or a data processor that has
processed personal information of more than one million people; (3) where a data processor
provides personal information to an overseas recipient if such data processor has already
provided overseas the personal information of 100,000 people or sensitive personal
information of 10,000 people since Janua ry 1 of the preceding year; or (4) other
circumstances under which security assessm ent of outbound data transfer is required as
prescribed by the national cyberspace administration.
On March 22, 2024, the CAC has promulgated the Provisions on Promoting and
Regulating Cross-Border Date Flows ( 《促進和規範數據跨境流動規定》), which became
effective on the same day. To provide the data collected and generated in such activities as
international trade, cross-border transpo rt, academic cooperation, transnational
manufacturing and marketing, which do not contain personal information or important
data, to overseas parties, it is exempted from declaring security assessment for data to be
provided abroad, concluding a standard contract for personal information to be provided
abroad or passing authentication for protection of personal information.
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Laws and Regulations Relating to the Fire Protection and Environmental Protection
Fire Protection
Pursuant to the Fire Safety Law of the PRC (《中華人民共和國消防法》)p r o m u l g a t e db y
the SCNPC on April 29, 1998 and last amended on April 29, 2021, for special construction
projects stipulated by the housing and urban-rural development authority of the State
Council, the developer shall submit the fire safety design documents to the housing and
urban-rural development authority for examination, while for construction projects other
than those stipulated as special development p rojects, the developer shall, at the time of
applying for the construction permit or approval for work commencement report, provide
the fire safety design drawings and technical m aterials which satisfy the construction needs.
According to the Interim Regulations on Administr ation of Examination and Acceptance of
Fire Control Design of Construction Projects (《建設工程消防設計審查驗收管理暫行規定》)
promulgated on April 1, 2020 and amended on August 21, 2023, an examination system for
fire prevention design and acceptance only applies to special construction projects, and for
other projects, a record-filing and sp ot check system would be applied.
Enterprises in the PRC must comply with the Law of the PRC on the Prevention and
Control of Water Pollution (《中華人民共和國水污染防治法》), which was promulgated by
the SCNPC on May 11, 1984 and amended on June 27, 2017, the Law of the PRC on the
Prevention and Control of Atmospheric Pollution (《中華人民共和國大氣污染防治法》)
amended on October 26, 2018 and the Law of the PRC on the Prevention and Control of
Pollution from Noise (《中華人民共和國噪
聲污染防治法》), which was amended on December
24, 2021 and became effective on June 5, 2022. These laws regulate extensive issues in
relation to the environment protection including waste water discharge, air pollution
control and noise emission. Pursuant to these laws, all the enterprises that may cause
environmental pollution in the course of their production and business operation shall
introduce environmental protection measures i n their plants and establish a reliable system
for environmental protection. Enterprises a re required to adopt effective measures to
prevent and control the level of environmental pollution and hazards produced during the
process of production, construction or other activities.
According to the Prevention and Control of Environmental Pollution by Solid Waste
Law of the PRC (《中華人民共和國固體廢物污染環境防治法》), which was adopted on
October 30, 1995, subsequently amended on December 29, 2004, June 29, 2013, November
7, 2016 and April 29, 2020, all Enterprises and individuals shall take measures to reduce the
generation of solid wastes, promote the comprehensive utilization of solid wastes and
reduce the harmfulness of solid wastes. Enterpr ises generating hazardous wastes shall store,
utilize and dispose of haz ardous wastes pursuant to the rele vant provisions of the State and
the requirements of environmental protection standards, and shall not arbitrarily dump or
pile up the hazardous wastes.
Pursuant to the Administrative Regulation for Pollutant Discharge Licensing (《排污許可
管理條例》), which became effective on March 1, 2021, enterprises, public institutions and
other producers and business operators that are subject to the administration of pollutant
discharge permits in accordance with the provisions of the law shall apply for pollutant
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discharge permit in accordance with the provi sions of these Regulations. Based on factors
such as the amount of pollutants produced, the amount of pollutants discharged and the
impact on the environment, pollutant discharge units are subject to two different level of
pollutant discharge permit administration, na mely priority administration and simplified
administration.
Environmental Impact Assessment
According to the Environmental Impact Assessment of the PRC (《中華人民共和國環境
影響評價法》) promulgated by the SCNPC on October 28, 2002 and last amended on
December 29, 2018, and the Regulations on the Administration of Environmental Protection
for Construction Project (《建設項目環境保護管理條例》) promulgated by the State Council
on November 29, 1998 and became effective o n November 29, 1998, amended on July 16,
2017 by the State Council and took effect on October 1, 2017, an environmental impact
assessment is required to be completed prior to the construction of a project and a three-tier
system for the environmental impact assessments shall be established. In the case of a
construction project that may cause significant environmental impacts, a report of
environmental impacts shall be completed b y a qualified institution and includes a full
assessment of environmental impacts. In the case of a construction project that may cause
mild environmental impacts, a report form sha ll be completed by a qualified institution and
includes an analysis or special assessment of environmental impacts. In the case of a
construction project that may cause minimal environmental impact, an environmental
impact assessment is unnecessary and a regist ration form shall be completed. The catalog
for the classified management of environm ental impact assessments for construction
projects is formulated and issued by the en vironmental protection administration
department of the State Council. The environmental impact report and the
environmental impact report form shall be submitted to the competent administrative
department responsible for environmental p rotection for review and approval, and in the
absence of such approval, the permission for construction of the project will not be granted
and the construction is not allowed to be commenced.
According to the Interim Measures for the Acceptance Inspections of Environment
Protection Facilities of Construction Project (《建設項目竣工環境保護驗收暫行辦法》)
promulgated by the Ministry of Environmental Protection of the PRC on November 20,
2017, unless otherwise stipulated by laws and regulations, entities which are required to
provide assessment reports an d statements shall undertake t he responsibility of acceptance
inspections of the environmental protectio n facilities by itself upon the completion of the
construction project. A construction project may be formally put into production or use
only if the corresponding environmental prot ection facilities have passed the acceptance
examination.
Laws and Regulations Relating to Intellectual Property
Trademarks
Trademarks are protected by the Trademark Law of the PRC (《中華人民
共和國商標
法》), or the PRC Trademark Law which was promulgated by SCNPC on August 23, 1982
and last amended on April 23, 2019, and came into force on November 1, 2019, as well as
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the Implementation Regulation of the Trademark Law of the PRC (《中華人民共和國商標法實
施條例》) adopted by the State Council on August 3, 2002, subsequently amended on April
29, 2014, and became effective on May 1, 2014. In China, registered trademarks include
commodity trademarks, servic e trademarks, collective mar ks and certification marks.
The Trademark Office ( 商標局) under the National Intellectual Property
Administration ( 國家知識產權局) handles trademark registrations and grants a term of
ten-year from the date of registration to regis tered trademarks. Trademarks are renewable
every ten years where a registered trademark needs to be used after the expiration of its
validity term. A registration renewal applicat ion shall be filed within twelve months prior to
the expiration of the term. A trademark regis trant may license its registered trademark to
another party by entering into a trademark license contract. Trademark license agreements
must be filed with the Trademark Office for reco rd. The licensor shall supervise the quality
of the commodities on which the trademark is used and the licensee shall guarantee the
quality of such commodities, the licensee shall display the name of the licensor and the place
of origin on the commodities that bear the licensed registered trademark. As to trademarks,
the PRC Trademark Law has adopted a ‘‘first co me, first file’’ principle with respect to
trademark registration. Where trademark fo r which a registration application has been
made is identical or similar to another trademark which has already been registered or been
subject to a preliminary examination and approval for use on the same kind of or similar
commodities or services, the application for re gistration of such trademark may be rejected.
Any person applying for the registration of a tr ademark may not prejudice the existing right
first obtained by others, nor may any person register in advance a trademark that has
already been used by another party and has already gained a ‘‘sufficient degree of
reputation’’ through such party’s use.
Patents
According to the Patent Law of the PRC (《中華人民共和國專利法》), or the Patent
Law, promulgated by the SCNPC on March 12, 1984, and latest revised on October 17,
2020 and came into effect on June 1, 2021, and the Rules for the Implementation of the
Patent Law of the PRC (《中華人民共和國專利法實施細則》) promulgated by the State
Council on June 15, 2001, last amended on D ecember 11, 2023 and became effective on
January 20, 2024, the patent administrativ e department under the State Council is
responsible for administration of patent-related work nationwide. The patent
administration departments of province or autonomous regions or municipal
governments are responsible for administ ering patents within their respective
jurisdictions. The Patent Law and its implem entation rules divide patents into three
types, ‘‘invention’’, ‘‘utility model’’ and ‘‘design’’. Invention patents are valid for twenty
years, while design patents are valid for fift een years and utility model patents are valid for
ten years, from the date of application. The patentee shall pay an annual fee commencing
from the year in which the patent right is gran ted. The PRC patent system adopts a ‘‘first
come, first file’’ principle, which means that where more than one person files a patent
application for the same invention, a paten t will be granted to the person who files the
application first. A third-party player mus t obtain consent or a proper license from the
patent owner to use the patent. Otherwise, the use constitutes an infringement of the patent
rights.
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Copyright
The Copyright Law of the PRC (《中華人民共和國著作權法》) (the ‘‘Copyright Law ’’)
which was promulgated by the SCNPC on September 7, 1990, and last amended on
November 11, 2020, and came into effect on June 1, 2021, provides that Chinese citizens,
legal persons, or other organizations shall, whether published or not, enjoy copyright in
their works, which include, among others, works of literature, art, natural science, social
science, engineering technology and compute r software. The purpose of the PRC Copyright
Law is to encourage the creation and dissem ination of works which is beneficial to the
construction of socialist spiritual civilizat ion and material civilization and promote the
development and prosperity of Chinese culture. According to the Copyright Law, copyright
shall belong to the author, unless otherwise stipulated in the Copyright Law. The period of
protection of right of authorship, right of revision, right to preserve the integrity of work of
an author shall not be subject to restriction. In any of the following circumstances, the
author shall enjoy the right of authorship, and other rights of copyright shall be enjoyed by
legal persons or unincorporated organizations, and legal persons or unincorporated
organizations may give rewards to the authors: (1) works created in the course of
employment such as engineering design plan, product design plan, map, schematic diagram,
computer software, etc. which are created pri marily with the use of material and technical
conditions of the legal persons or unincorporated organizations, and for which legal
persons or unincorporated organizations bear responsibility; (2) works created in the course
of employment by personnel of newspaper offices, periodical offices, news agencies, radio
stations and television stations; or (3) works created in the course of employment whose
copyright belongs to the legal persons or unincorporated organizations pursuant to the
provisions of laws, and administrative regulations or contractual agreement. The period of
protection of the right of publication for works of a legal person or unincorporated
organization, and works created in the course of employment in which the copyright (except
for right of authorship) belongs to the legal person or unincorporated organization, shall be
50 years, and shall expire on 31 December of t he 50th year after completion of the works;
the period of protection of the rental right, reproduction right etc. shall be 50 years, and
shall expire on 31 December of the 50th year a fter the first publication of the works, but
where such works are not published within 50 years from completion of creation, they shall
no longer be protected by the Copyright Law.
According to the Regulation on Computer Software Protection (《計算機軟件保護條
例》), which took effect on October 1, 1991 and was last amended on January 30, 2013 and
subsequently enforced on March 1, 2013, the software copyright shall exist from the date on
which its development has been completed, and software copyright owner may register with
the software registration institution recogniz ed by the copyright administration department
of the State Council. Software copyright commences from the date on which the
development of the software is completed. The protection period for software copyright
of a legal person or other organization shall be 50 years, concluding on 31 December of the
50th year after the software’s initial release. But if the software has not been released within
50 years from the date on which the software development is completed, it shall no longer
receive the protection of these Regulations. On February 20, 2002, the National Copyright
Administration of the PRC promulgated the Measures on Computer Software Copyright
Registration (《計算機軟件著作權登記辦法》), which outlines the operational procedures for
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registration of software copyright, as well as registration of the license for the software
copyright and software copyright transfer contracts. The Copyright Protection Center of
the PRC ( 中國版權保護中心) is mandated as the software reg istration agency under the
regulations.
Laws and Regulations Relating to Employment and Social Welfare
Employment
The major PRC laws and regulations that govern employment relationship are the
PRC Labor Law (《中華人民共和國勞動法》) which was promulgated by the SCNPC on July
5, 1994 and latest amended on December 29, 2018, the PRC Labor Contract Law (《中華人民
共和國勞動合同法》) which was promulgated by the SCNPC on June 29, 2007 and latest
amended on December 28, 2012. The PRC Labor Law and the PRC Labor Contract Law
impose stringent requirements on the employers in relation to entering into fixed-term
employment contracts, hiring of temporary employees and dismissal of employees.
Labor Dispatch
According to the Interim Provisions on Labor Dispatch ( 《勞務派遣暫行規定》)w h i c h
was promulgated by Ministry of Human Resou rces and Social Security on January 12, 2014
and become effective on March 1 2014, an emp loyer may employ dispatched workers in
temporary, auxiliary or substitute job positi ons only. The employer shall strictly control the
number of dispatched workers it employed, which shall not exceed 10% of the total number
of employees meanwhile. For the purpose of the preceding paragraph, the total number of
employees refers to the sum of the number of employees with a labor contract with the
employer and the number of dispatched workers the employer employed. To employ
dispatched workers, the employer shall sign a labor dispatch agreement with a qualified
labor dispatch company.
Social Insurance
The PRC Social Insurance Law (《中華人民共和國社會保險法》), or the Social Insurance
Law, promulgated by the SCNPC on October 28, 2010 and last amended on December 29,
2018, has established social insurance systems of basic pension insurance, basic medical
insurance, work-related injury insurance, un employment insurance and maternity insurance
and has elaborated in detail the legal obligat ions and liabilities of employers who fail to
comply with relevant laws and regulatio ns on social insurance. According to
the Social
Insurance Law and the Provisional Regulations on Collection and Payment of Social
Insurance Premiums (《社會保險費徵繳暫行條例》) promulgated by the State Council on
January 22, 1999 and most recently amended on March 24, 2019 and effective from the
same date, enterprises shall register social insurance with local social insurance and pay or
withhold relevant social insurance for or on behalf of its employees. Any employer that fails
to make social insurance contributions may be ordered to rectify the non-compliance and
pay the required contributions within a prescribed time limit and be subject to a late fee. If
the employer still fails to rect ify the failure to make the relevant contributions within the
prescribed time, it may be subject to a fine r anging from one to three times the amount
overdue.
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Apart from the general provisions about social insurance, specific provisions on
various types of insurance are set out in the Regulation on Work-Related Injury Insurance
(《工傷保險條例》) which was issued by the State Council on April 27, 2003, came into effect
on January 1, 2004 and revised on December 20, 2010, the Regulations on Unemployment
Insurance (《失業保險條例》) which was issued by the State Council on January 22, 1999 and
came into effect on the same day, the Trial Measures on Employee Maternity Insurance of
Enterprises (《企業職工生育保險試行辦法》), which was issued by the Ministry of Labor on
December 14, 1994 and came into effect on January 1, 1995. Enterprises subject to these
regulations shall provide their employees with the corresponding insurance.
Housing Provident Fund
According to the Regulation on the Administration of Housing Provident Fund (《住房公
積金管理條例》), which was implemented on April 3, 1999 and latest amended on March 24,
2019, any newly established entity shall make deposit registration at the housing
accumulation fund management center within 30 days as of its establishment. After that,
the entity shall open a housing accumulation fu nd account for its employees in an entrusted
bank. Within 30 days as of the date an employee is recruited, the entity shall make deposit
registration at the housing accumulation fund management center and seal up the
employee’s housing accumulation fund account in the bank mentioned above within 30
days from termination of the employment re lationship. Any entity that fails to make
deposit registration of the housing accumulation fund or fails to open a housing
accumulation fund account for its employees shall be ordered to complete the relevant
procedures within a prescribed time limit . Any entity failing to complete the relevant
procedure within the time limit will be fined RMB10,000 to RMB50,000. Any entity that
fails to make payment of housing provident fund within the time limit or has a shortfall in
payment of housing provident fund will be ordered to make the payment or make up the
shortfall within the prescribed time limit, o therwise, the housing provident management
center is entitled to apply for compulso ry enforcement with the People’s Court.
Laws and Regulations Relating to Employee Stock Ownership Plan
According to the Notice of the State Administration of Foreign Exchange on the
Relevant Issues Concerning the Administration o f Foreign Exchange for Domestic Individuals’
Participation in Equity Incentive Programs of Overseas Listed Companies (《國家外匯管理局
關於境內個人參與境外上
市公司股權激勵計劃外匯管理有關問題的通知》), which was
implemented on February 15, 2012, all indiv iduals who participate in the same equity
incentive program of an overseas listed compa ny shall, through their domestic company,
collectively entrust one domestic agency to solely handle the relevant matters for them
including registration of foreign exchange, opening of the account and transfer and
conversion of funds, and one overseas shall solely handle such matters including
individuals’ exercise of rights, the purchase and sale of relevant stocks or equities and
transfer of relevant funds. The domestic age ncy shall solely handle the registration of
foreign exchange for the individuals’ participation in an equity incentive program with the
local branch or foreign exchange administrative department of the State Administration of
Foreign Exchange. The local administration of foreign exchange shall, after verifying the
above materials, issue to the domestic agency the relevant foreign exchange registration
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certificate for equity incentive programs con taining the corresponding quota of foreign
exchange payment, and the banks shall handle the relevant procedures for the purchase and
payment of foreign exchange within such quota for the domestic agency.
Laws and Regulations Relating to Foreign Exchange
Pursuant to the Regulations on the Administration of Foreign Exchange of the PRC (《中
華人民共和國外匯管理條例》) promulgated by the State Council on January 29, 1996 and
last amended and implemented on August 5, 2008, RMB can be converted into other
currencies for current accounts such as trade- related income and expenses and payments of
interest and dividends. While for capital item s such as direct equity investment, loan and
divestment, the conversion of RMB into other currencies and the remittance of the
converted foreign currencies outside China shall be subject to prior approval of the SAFE
or its local branches.
The Circular of the State Administration of Foreign Exchange on Further Improving and
Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment (《國家外
匯管理局關於進一步改進和調整直接投資外匯管理政策的通知》)( ‘ ‘Circular 59 ’’), which was
promulgated by SAFE on November 19, 2012 and last amended on October 10, 2018, part
of which was abolished on December 30, 2019, substantially amends and simplifies the
foreign exchange procedure. Pursuant to Circular 59, the opening of various special purpose
of foreign exchange accounts, such as pre-establishment expenses accounts, foreign
exchange capital accounts and deposits acco unts, the reinvestment of RMB proceeds
derived by foreign investors within the PRC, and remittance of foreign exchange profits and
dividends by a foreign-invested enterprise to its foreign shareholders no longer require the
approval or verification of SAFE, and multip le capital accounts for the same entity may be
opened in different provinces. In February 2015, SAFE promulgated the Notice on Further
Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct
Investment (《關於進一步簡化和改進直接投資外匯管理政策的通知
》), part of which was
abolished on December 30, 2019. It stipula tes that banks shall, on behalf of SAFE,
directly examine and handle foreign exchange registration under domestic direct investment
and overseas direct investment, and SAFE a nd its branches shall exercise indirect
supervision over foreign exchange registra tion of direct investment through banks.
On May 11, 2013, SAFE promulgated the Provisions on Foreign Exchange
Administration over Domestic Investment by Foreign Investors (《外國投資者境內直接投資
外匯管理規定》)( ‘ ‘Circular 21 ’’), which was effective on May 13, 2013, amended on October
10, 2018 and partially abolished on December 30, 2019. Circular 21 stipulates that SAFE
and its branches shall manage foreign inve stors’ indirect investment within the PRC
through registration, and banks shall handle the foreign exchange business of direct
investment within the PRC according to the registration information provided by SAFE or
its branches.
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Laws and Regulations Relating to Offshore Investment
According to the Notice of the State Administration of Foreign Exchange on Issues
Relating to Foreign Exchange Control for Overseas Investment and Financing and
Round-tripping by Chinese Residents through Special Purpose Vehicles (《國家外匯
管理局關於境內居民通過特殊目的公司境外投融資及返程投資外匯管理有關問題的通知》), a
mainland Chinese resident must register with the local SAFE counterpart before
contributing assets or equity interests in a n offshore special purpose vehicle, that is
directly established or indirectly controlled by such mainland Chinese resident for the
purpose of conducting investment or financing. In addition, following the initial
registration, in the event of any major change in respect of the offshore special purpose
vehicle, including, among other things, changes in mainland Chinese resident
shareholder(s), the name of the offshore speci al purpose vehicle, terms of operation, or
any increase or reduction in capital, share t r a n s f e ro rs w a p ,a n dm e r g e ro rd i v i s i o n ,t h e
mainland Chinese resident shall complete th e change of foreign exchange registration
procedures for offshore investment with the local SAFE counterpart. According to the
procedural guideline as attached to SAFE Circular 37, the principle of review has been
revised, specifying that the domestic individ ual resident shall only register the offshore
special purpose vehicle directly established o r controlled (first level). At the same time, the
SAFE has issued the Operation Guidance for the Issues Concerning Foreign Exchange
Administration over Round-trip Investment (《返程投資外匯管理所涉業務操作指引》)w i t h
respect to the procedures for SAFE registration under SAFE Circular 37, which became
effective on July 4, 2014, as an attachment to SAFE Circular 37. Under the relevant rules,
failure to comply with the registration procedures set out in SAFE Circular 37 may result in
restrictions on the foreign exchange activiti es of the relevant onshore company, including
the payment of dividends and other distributi ons to its offshore parent or affiliate, and may
also subject relevant mainland Chinese resi dents to penalties under foreign exchange
administration regulations in mainland China. Mainland Chinese residents who hold any
shares in the company from time to time are required to register with the SAFE in
connection with their investments in the company.
Laws and Regulations Relating to Taxation
Enterprise Income and Dividends Withholding Tax
According to the Enterprise Income Tax Law of the PRC (《中華人
民共和國企業所得稅
法》), which was promulgated by the Standing Committee of the National People’s Congress
(the SCNPC) and was latest ame nded on December 29, 2018, and the Implementation
Regulations for the Enterprise Income Tax Law of the PRC (《中華人民共和國企業所得稅法
實施條例》), which was promulgated by the State Council and was last amended on April 23,
2019, collectively referred to as the Enterprise Income Tax Law, a uniform 25% enterprise
income tax (‘‘ EIT’’) rate is imposed to both foreign invested enterprises and domestic
enterprises.
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According to the Arrangement Between the Mainland Of China And the Hong Kong
Special Administrative Region for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income (《內地和香港特別行政區關於對所得避免雙
重徵稅和防止偷漏稅的安排》), dividends paid by a company which is a resident of One Side
to a resident of the Other Side, may be taxed in that Other Side
1. Such dividends may also
be taxed in the Side of which the company paying the dividends is a resident, and according
to the laws of that Side, but if the beneficial owner of the dividends is a resident of the Other
Side, where the beneficial owner is a company directly owning at least 25% of the capital of
the company which pays the dividends, the tax so charged shall not exceed 5% of the gross
amount of the dividends. And in any other case, the tax so charged shall not exceed 10% of
the gross amount of the dividends. Pursuant to the Notice of the State Administration of
Taxation on Issues Relating to the Implement ation of Dividend Clauses in Tax Treaties (《國
家稅務總局關於執行稅收協定股息條款有關問題的通知》), a tax resident of the other
contracting party intending to enjoy the tax treatment prescribed in a tax treaty shall
satisfy the condition: The proportion of the capitals of the Chinese resident company
directly owned by the tax resident of the othe r contracting party shall, at any time within
the consecutive 12 months before obtaining dividends, satisfy the provisions on the
proportion prescribed in the tax treaty.
Value-added Tax
Pursuant to the Provisional Regulations of the PRC on Value-added Tax (《中華人民共
和國增值稅暫行條例》), which was promulgated by the State Council and was last amended
on November 19, 2017, and the Implementation Rules for the Provisional Regulations the
PRC on Value-added Tax (《中華人民共和國增值稅暫行條例實施細則》), which was
promulgated by the Ministry of Finance and was latest amended on October 28, 2011
and effective from November 1, 2011, entities a nd individuals engaging in selling goods,
providing processing, repairing or replacement services or importing goods within the
territory of the PRC are taxpayers of the value-added tax.
According to the Notice of the Ministry of Finance and the State Taxation
Administration on the Adjusting Value-added Tax Rates (《財政部、國家稅
務總局關於調整
增值稅稅率的通知》) effective on May 1, 2018, the value-added tax rates of 17% and 11% on
sales, imported goods shall be adjusted to 16% and 10%, respectively. For the export goods
to which a tax rate of 17% was originally app licable and the export rebate rate was 17%,
the export rebate rate is adjusted to 16%. For the export goods and cross-border taxable
activities to which a tax rate of 11% was originally applicable and the export rebate rate
was 11%, the export rebate rate is adjusted to 10%.
According to the Announcement of the Ministry of Finance, the State Taxation
Administration and the General Administration of Customs on Relevant Policies for
Deepening the Value-Added Tax Reform (《關於深化增值稅改革有關政策的公告》)
promulgated on March 20, 2019 and effective from April 1, 2019, the value-added tax
rates of 16% and 10% on sales, imported goods shall be adjusted to 13% and 9%,
respectively.
1 The terms ‘‘One Side’’ and ‘‘the Other Side’’ mean the Mainland of China or the Hong Kong Special
Administrative Region, as the context requires.
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Transfer Pricing
According to the Corporate Income Tax Law a nd its Implementation Regulations, as
well as the Tax Collection and Administration Law of the People’s Republic of China (《中華
人民共和國稅收徵收管理法》) that was revised by the SCNPC on April 24, 2015 and became
effective on the same day, and the Implementing Regulations of the Tax Collection and
Administration Law of the People’s Republic of China (《中華人民共和國稅收徵收管理法實施
細則》) that was revised by the State Council on February 6, 2016 and became effective on
the same day, for business transactions between affiliated enterprises, the receipt or
payment of prices and fees shall follow the arm’s length principle. Where the receipt or
payment of prices and fees does not follow t he arm’s length principle and results in a
reduction of taxable income, the tax authorities shall have the right to make reasonable
adjustments.
B a s e do nt h eAnnouncement of the State Taxation Administration on Matters Relating
to the Improvement of the Administration of Related Party Transaction Reporting and
Contemporaneous Documentation (《國家稅務總局關於完善關聯申報和同期資料管理有關事
項的公告》) promulgated and became effective on June 29, 2016, enterprises which have
related-party transactions and meet corresponding conditions shall prepare their
contemporaneous documentation ( 同期資料) per tax year and submit to the tax authority
if required by the same. Contemporaneous documentation includes master file ( 主體文檔),
local file ( 本地文
檔) and special issue file ( 特殊事項文檔).
According to the Announcement of the State Taxation Administration on Issuing the
Administrative Measures for Special Tax Adjustment and Investigation and Mutual
Agreement Procedures (《國家稅務總局關於發佈特別納稅調查調整及相互協商程序管理辦法
的公告》) which was issued on March 17, 2017 and became effective on May 1, 2017 and was
amended on June 15, 2018, an enterprise may adjust and pay taxes at its own discretion
when it receives a special tax adjustment risk warning or identifies its own special tax
adjustment risks, while the tax authorities may also carry out special tax investigation and
adjustment in accordance with the relevant pro visions in regard to enterprises that adjust
and pay taxes at their own discretion.
Laws and Regulations Relating to Foreign Investment in the PRC
Foreign Investment
Investment activities in the PRC by foreig n investors were principally governed by the
Special Administrative Measures (Negativ e List) for Access of Foreign Investment (2024
version) (《外商投資准入特別管理措施（負面清單）》（2024 年版）) (the ‘‘ Negative List ’’), and
the Catalogue of Industries for Encouraging Foreign Investment (2022 version) (《鼓勵外商投
資產業目錄》（
2022 年版）)( t h e‘ ‘Encouraging List ’’). The Negative List, which came into
effect on November 1, 2024, sets out special administrative measures (restricted or
prohibited) in respect of the access of foreign investments in a centralized manner, and the
Encouraging List which came into effect on January 1, 2023, sets out the encouraged
industries for foreign investment. The group business is not on the Negative List.
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Foreign-Invested Enterprises
The Company Law (《中華人民共和國公司法》) regulates the establishment, operation
and management of corporate entities in Chi na and classifies companies into limited
liability companies and limited companies by shares. According to the Foreign Investment
Law of the PRC (《中華人民共和國外商投資法》)p r o m u l g a t e db yt h eS C N P Co nM a r c h1 5 ,
2019, and came into effect on January 1, 2020, the state shall implement the management
systems of pre-establishment national treatm ent and negative list for foreign investment,
and shall give national treatment to foreign investment beyond the negative list.
Simultaneously, the Law of the People’s Republic of China on Sino-foreign Equity Joint
Ventures (《中華人民共和國中外合資經營企業法》), the Wholly Foreign-owned Enterprises
Law of the PRC (《中華人民共和國外資企業法》)a n d the Law of the People’s Republic of
China on Sino-foreign Contractual Joint Ventures (《中華人民共和國中外合作經營企業法》
)
have been repealed since January 1, 2020.
On December 26, 2019, the State Council promulgated the Regulations on Implementing
the Foreign Investment Law of the PRC (《中華人民共和國外商投資法實施條例》), which
came into effect on January 1, 2020. Simultaneously, the Regulations on Implementing the
Sino-Foreign Equity Joint Venture of the PRC (《中華人民共和國中外合資經營企業法實施條
例》), the Provisional Regulations on the Duration of Sino-Foreign Equity Joint Venture (《中
外合資經營企業合營期限暫行規定》), the Regulations on Implementing the Wholly
Foreign-owned Enterprise Law of the PRC (《中華人民共和國外資企業法實施細則》)a n d
the Regulations on Implementing the Sino-foreign Cooperative Joint Venture of the PRC (《中
華人民共和國中外合作經營企業法實施細則》) have been repealed since January 1, 2020.
According to the Measures for the Reporting of Foreign Investment Information (《外商
投資信息報告辦法》), which was promulgated by the Ministry of Commerce of the PRC (the
‘‘MOFCOM ’’) and the SAMR on December 30, 2019 and came into effect on January 1,
2020 and simultaneously replaced the Interim Measures for the Recordation Administration
of the Incorporation and Change of Foreign-Invested Enterprises (《外商投資企業設立及變更
備案管理暫行辦法》), for carrying out investment activiti es directly or indirectly in PRC, the
foreign investors or foreign-invested enterpri ses shall submit investment information to the
commerce authorities pursuant to these measures. Foreign investors or foreign investment
enterprises shall promptly su bmit investment information, comply with the principles of
veracity, accuracy and integrity, shall not mak e false or misleading reporting, and shall not
contain serious omission.
Laws and Regulations Relating to Overseas Securities Offering and Listings
Overseas Securities Offering and Listings
On February 17, 2023, the China Securities Regulatory Commission, or the CSRC
released several regulations regarding the management of filings for overseas offerings and
listings by domestic companies, including the Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Companies (《境內企業境外發行證券和上市管理
試行
辦法》)( ‘ ‘Trial Measures ’’) together with 5 supporting guidelines (together with the
Trial Measures, collectively referred to as the ‘‘ New Regulations on Filing ’’), which was
implemented on March 31, 2023. Under Ne w Regulations on Filing, PRC domestic
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companies that seek to offer and list securiti es in overseas markets, either in direct or
indirect means, are required to file the required documents with the CSRC within three
working days after its application f or overseas listing is submitted.
The New Regulations on Filing provides that n o overseas offering and listing shall be
made under any of the following circumstances: (i) such securities offering and listing is
explicitly prohibited by provisions in laws, a dministrative regulations and relevant state
rules; (ii) the intended securities offering and listing may endanger national security as
reviewed and determined by competent authorities under the State Council in accordance
with law; (iii) the domestic company intending to make the securities offering and listing, or
its controlling shareholders and the actual controller, have committed crimes such as
corruption, bribery, embezzlement, misappropriation of property or undermining the order
of the socialist market economy during the latest three years; (iv) the domestic company
intending to make the securities offering an d listing is suspected of committing crimes or
major violations of laws and regulations, and i s under investigation according to law and no
conclusion has yet been made thereof; or (v) t here are material ownership disputes over
equity held by the domestic company’s contro lling shareholder or by other shareholders
that are controlled by the controlling share holder and/or actual controller. Overseas
offering and listing by domestic companies sha ll be made in strict compliance with relevant
laws, administrative regulations and rules con cerning national security in spheres of foreign
investment, cybersecurity, data security and etc., and duly fulfill their obligations to protect
national security.
Any overseas offering and listing made by an issuer that meets both the following
conditions will be determined as indirect: (1) 50% or more of the issuer’s operating revenue,
total profit, total assets or net assets as docum e n t e di ni t sa u d i t e dc o n s o l i d a t e df i n a n c i a l
statements for the most recent accounting year i s accounted for by domestic companies; and
(2) the main parts of the issuer’s business activ ities are conducted in the Chinese Mainland,
or its main places of business are located in t he Chinese Mainland, or the senior managers
in charge of its business operation and man agement are mostly Chinese citizens or
domiciled in the Chinese Mainland. The determination as to whether or not an overseas
offering and listing by domestic companies is indirect, shall be made on a substance over
form basis.
Confidentiality and Archives Administration
On February 24, 2023, the CSRC and other three relevant government authorities
jointly promulgated the Provisions on Strengthening the Confidentiality and Archives
Administration of Overseas Securities Issuance and Listing by Domestic Enterprises (《關於加
強境內企業境外發行證券和上市相關保密和檔案管理工作的規定》), or the Provision on
Confidentiality, which was implemented o n March 31, 2023. Pursuant to the Provision
on Confidentiality, where a domestic enterprise provides or publicly discloses any document
or material that involves state secrets and wor king secrets of state agencies to the relevant
securities companies, securities service insti tutions, overseas regulatory authorities and
other entities and individuals, it shall r eport to the competent department with the
examination and approval authority for appr oval in accordance with the law, and submit to
the secrecy administration department of t he same level for filing. The working papers
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formed within the territory of the PRC by the s ecurities companies and securities service
agencies that provide corresponding servi ces for the overseas issuance and listing of
domestic enterprises shall be kept within the t erritory of the PRC, and cross-border transfer
shall go through the examination and approval formalities in accordance with the relevant
provisions of the State.
LAWS AND REGULATIONS RELATING TO LEASED PROPERTIES
According to the Administrative Measures for Commercial Housing Leases (《商品房屋
租賃管理辦法》), which was promulgated by the Ministry of Housing and Urban-Rural
Development on December 1, 2010 and became e ffective on February 1, 2011, the lessor and
the lessee shall complete propert y leasing registration and fil ing formalities within 30 days
from execution of the property lease contract wi th the development (real estate) department
of the People’s Government of the centrally-administered municipality, municipality or
county where the leased property is located. Failure to complete the relevant lease
registration may subject the parties to the lease agreement a fine between RMB1,000 to
RMB10,000.
LAWS AND REGULATIONS IN AUSTRALIA
The following sets out an overview of the ke y Australian laws and regulations that we
believe are relevant to our business and operations.
Corporations Law
Australian companies are subject to the Corporations Act 2001 (Cth) (the ‘‘Act’’). The
Act sets out the requirements that all companies must comply including those relating to
corporate governance, financial reporting, duties owed by directors and procedures for
issuing shares. The obligations of companies under the Act is administered by the national
regulator, the Australian Securities and Investment Commission (‘‘ ASIC ’’).
Company officeholders
A company must ensure that each of its secretaries and directors provide a signed
consent to act before appointing such persons. Companies are further required to hold
records of these consents. Individuals are a dditionally required to apply for a director
identification number before they are appointed to become directors of a company.
Notifications of key changes
Companies are required to update ASIC in respect of key changes such as changes to
share structure, officeholders, registered address/principal place of business on an ongoing
basis. For example, changes to a company’s share structure must be notified to ASIC within
28 days of the change occurring.
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Import
Road vehicle type approvals
In Australia, the importation and supply of caravans is regulated under the Road
Vehicle Standards Act 2018 (Cth) (‘‘ RVS Act ’’). Under the RVS Act, a person must obtain
an approval in order to lawfully import a road ve hicle into Australia from the Department
of Infrastructure, Transport, Regional Development, Communications and Arts
(‘‘Department of Infrastructure ’’). A ‘road vehicle’ is defined as (amongst other things), a
trailer or other vehicle (including equipment or machinery equipped with wheels) designed
to be towed on a public road by a motor vehicle (RVS Act, section 6). A motor vehicle
means a vehicle that uses, or is designed to use: (a) volatile spirit, gas, oil, electricity or any
other power (other than human or animal power) as the principal means of propulsion; or
(b) more than one of the powers mentioned in (a) (other than human or animal power) as a
means of propulsion, but does not include a v ehicle used exclusively on a railway or a
tramway (RVS Act, section 6). The definition of ‘road vehicle’ therefore captures caravans.
Road vehicles cannot be imported into Australia by a person unless the person holds a
road vehicle type approval that is in force at the time of importation for that particular
vehicle (RVS Act, section 22). ROVER is an administration system for the RVS Act.
Penalties apply.
Synthetic greenhouse gas (SGG) equipment
Additionally, import restrictions apply to vehicles that contained controlled
refrigerant gas (i.e. certain types of gas co mmonly used in fridges and air conditioning,
which may be incorporated in to caravan vehicles). The Ozone Protection and Synthetic
Greenhouse Gas Management Act 1989 (Cth) (‘‘Ozone Protection Act ’’) provides for controls
on activities involving certain ozone depleti ng substances and synthetic greenhouse gases
(‘‘SGG’’). A person may apply to the Minister for a number of licenses, including a licence
to import specified SGG equipment (Ozone Protection Act, section 14).
Conditions may be imposed on licenses (Ozone Protection Act, section 18). Relevant
conditions applicable to the Australian companies include (amongst others):
. a requirement that the licensee must notify the Department of Climate Change,
Energy, the Environment and Water (‘‘ DCCEEW ’’) of a change of address or any
other contact details, within 30 days of the change occurring;
. a requirement that the licensee must notify the DCCEEW, within 30 days of the
event occurring, if:
o being an individual, the licensee becomes bankrupt or enters into a scheme of
arrangement with creditors, or is convicted of an offence that is punishable
by 6 months imprisonment or more;
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o being a corporation, the licensee comes under one of the forms of external
administration referred to in chapter 5 of the Corporations Act 2001, or an
order has been made for the purpose of placing the corporation under
external administration, or is convicted of an offence that is punishable by a
p e n a l t yo f3 0p e n a l t yu n i t so rm o r e ;
. a requirement that the licensee must not permit the licence number to be used by
another person or business;
. a requirement that the licensee must not import equipment charged with an Ozone
Depleting Substance (‘‘ ODS’’) unless the equipment is specifically exempted in the
Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995
(the ‘‘Regulations ’’); and
. a requirement that for the duration of the licence, the licensee must hold
membership, and act in accordanc e with the membership rules, of:
o if importing refrigeration or air-c onditioning equipment — Refrigerant
Reclaim Australia or another approved Product Stewardship Scheme; or
o if importing another type of equipment — an appropriate approved Product
Stewardship Scheme (if one exists).
Product stewardship is an approach to managing the impacts of different products and
materials on the environment and human health and safety. Product stewardship schemes
help to manage these impacts over a product’s life-cycle. These schemes can be:
. industry-led voluntary schemes;
. co-regulatory arrangements between industry and government; or
. mandatory schemes under law.
Export
The Australian companies export caravan s from Australia to New Zealand. A review
of applicable controls on caravan exports from Australia has been conducted, and no
additional restrictions and/or licenses are required to be obtained from an Australian
authority to export caravans from Australia to New Zealand.
Licenses and Permits
Approvals under national vehicle standards laws
A road vehicle cannot be provided to a perso n for the first time in Australia unless the
vehicle is entered onto the Register of Approved Vehicles (‘‘ RAV’’) (RVS Act, section 24).
All road vehicles (including caravans) must be entered on the RAV before they can be
provided to the market for the first ti me in Australia (RVS Act, section 24).
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Further, generally a road vehicle cannot be entered onto the RAV unless an approval
has been obtained from the Department of Infrastructure (RVS Act, section 15).
Motor dealer licences
The Australian companies wholesale sells caravans to dealers in Victoria, and sells
both new and used caravans direct to the public in New South Wales, Queensland, Western
Australia and Victoria. The sale of caravans require licensing in certain states/territories,
including New South Wales, Western Australia and Queensland.
The Australian companies also have arrangements with dealerships across Australia
and New Zealand. In such cases, the require ment to hold and obtain licences lies with the
dealer.
New South Wales
In New South Wales, a motor dealers licence is required under the Motor Dealers and
Repairers Act 2013 (NSW) (‘‘NSW Act ’’) to retail and wholesale sell caravans. ‘Retail’ and
‘wholesale’ are not defined.
Under the NSW Act, a person must not carry on, or advertise that the person carries
on or is willing to carry on, the business of a mo tor dealer unless the person is the holder of
a motor dealer’s licence and the business is carried on or proposed to be carried on at a
place for which the licence is granted and the business is carried on or proposed to be
carried on in accordance with the licence (NSW Act, section 11).
Relevantly:
. a ‘motor dealer’ means a person who carries on the business of dealing in motor
vehicles as a retailer or on a wholesale basis (NSW Act, section 5);
. a ‘motor vehicle’ is defined in sectio n4o ft h eN S WA c tt om e a nav e h i c l eo ft h e
following kind that is built to be propelled by a motor that forms part of the
vehicle, and includes a trailer — any description of vehicle on wheels, other than a
vehicle used on a trailway or tramway or an aircraft. We note that vehicle is not
defined; and
. a ‘trailer’ is defined in section 4 of the NSW Act as a vehicle that is built to be
towed, or is towed by a motor vehicle, and is not capable of being propelled in the
course of normal use on roads without being towed by a motor vehicle, whether or
not its movement is aided by some other power source, but does not include a
motor vehicle being towed or a trailer having a tare weight of 250 kilograms or
less. Caravans generally fall under the def inition of a ‘trailer’ and therefore is a
‘motor vehicle’.
The holder of a motor dealer’s licence must not offer or display a motor vehicle for sale
at a place other than notified premises (NSW Act, section 48).
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Western Australia
A motor vehicle dealers licence is required in Western Australia to sell caravans under
the Motor Vehicle Dealers Act 1973 (WA) (‘‘WA Act ’’).
A body corporate that applies to the Commissioner in the approved form for a vehicle
dealer’s licence of a particular category and pays to the Commissioner the prescribed fee
therefore shall be granted a licence upon satisfying the Commissioner of certain matters
(WA Act, section 15(3)). Conditions made be imposed on a licence (WA Act, section 18A).
Every dealer shall keep or cause to be kept a register in the prescribed form at any
authorized premises in respect of which the li cence is issued and shall record or cause to be
recorded in that register the prescribed particular of very transaction entered into, in the
course of dealing at those premises (WA Act, section 25).
Under the WA Act, it is an offence to engage in unlicensed dealing, which includes
carrying on a description of business as a dealer otherwise than under and in accordance
with a dealer’s licence (WA Act, section 30).
Relevantly:
. a ‘dealer’ generally means a person who carries on any class or description of
business of: buying or selling vehicles, or acting as agent for other persons in
relation to the buying or selling of vehicle s (including a business of selling vehicles
by auction), a financier, or a car hire operator; and
. a ‘vehicle’ means, amongst other things, a vehicle that is prescribed (WA Act,
section 5(3)). Caravans are presc ribed under regulation 3 of the Motor Vehicle
Dealers (Prescribed Vehicles) Regulations 1974 (WA).
An application for a dealer’s licences must specify each of the premises at which the
applicant proposes to carry on business under the authority of the licence (WA Act, section
20E(1)).
Queensland
In Queensland, a motor dealers licence is required under the Motor Dealers and Chattel
Auctioneers Act 2014 (‘‘QLD Act ’’) to sell used caravans. Under the QLD Act, a person
must not carry on the business of a motor dealer unless the person holds a motor dealer
licence and the activities performed in the carrying on of business as a motor dealer are
authorized under the person’s licence (QLD Act, section 119). Relevantly:
. a motor deal licence authorizes the holder of the licence (motor dealer) to perform
a number of activities, which include, amongst other things, to acquire, primarily
for resale, used motor vehicles, and to sell used motor vehicles (QLD Act, section
76);
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. ‘Sell’ includes agree to sell, advertise or d isplay for sale, attempt to sell, have for
sale, negotiate for a sale, and in any way be concerned in selling (QLD Act,
schedule 3);
. ‘motor vehicle’ means, amongst other things, a caravan (QLD Act, section 12);
and
. ‘used motor vehicle’ generally means a mo tor vehicle that has, at any time, been
licensed or registered, whether under a law of Queensland or another State, or a
motor vehicle that, had it not been registered for use for demonstration or sales
promotion, would have been a new motor vehicle, or a used imported vehicle
(QLD Act, schedule 3).
Other states/territories
There is no requirement for the Australian companies to hold a motor vehicle licence
to sell caravans in Victoria, Tasmania and South Australia. The reason being:
. in Victoria, licences are required to de al in ‘motor cars’ under section 7 of the
Motor Car Traders Act 1986 (Vic) (‘‘VIC Act ’’). However, the definition of ‘motor
car’ is the same as the definition of ‘motor vehicle’ in the Road Safety Act 1986
(Vic), which means a vehicle that: (a) uses , or is designed to use, volatile spirit, gas
oil, electricity or any other power (other than human or animal power) as the
principal means of propulsion, or (b) more than one of the powers mentioned
(other than human or animal power) as a means of propulsion, but does not
include a vehicle used exclusively on a railway or tramway. This definition does
not include caravans;
. in Tasmania, motor vehicle trading licences are required to deal in ‘motor
vehicles’ under section 6 of the Motor Vehicle Traders Act 2011 (TAS) (‘‘TAS
Act’’). However, the definition of a ‘motor ve hicle’ only includes vehicles that are
built to be propelled by a motor that forms part of the vehicle (TAS Act, section 3,
and Vehicle and Traffic Act 1999 (TAS), section 3). This definition does not
include caravans; and
. in South Australia, licences are only re quired to deal in second-hand vehicles
under the Second-hand Vehicle Dealers Act 1995 (‘‘SA Act ’’), but no requirements
exist in relation to new vehicles. The Australian companies do not sell caravans
directly to the public in South Australia — that is, caravans are sold through
authorized dealers. Additionally, and of relevance, the definition of ‘vehicle’ in
section 3 of the SA Act applies to vehicle s that are designed to be wholly or partly
propelled by an engine (which does not include a caravan). Accordingly, the sale
of caravans do not require a motor vehicle licence in SA Act and even if a licence
was required, the obligation to obtain such a licence falls on the dealer rather than
the Australian companies.
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Manufacturing and assembly
The Australian companies h ave manufacturing facilities in two Australian locations in
Victoria, which engage in ‘pre-assembly ’ and ‘final assembly’ of the caravans.
The Australian Design Rules for vehicles mandate certain requirements for
motorhomes and caravans, including requirements in relation to doors, gas installations
and fire extinguishers (see Vehicle Standard (Australian Design Rule 44/02 — Specific
Purpose Vehicle Requirements ) 2006 (Cth)). Additionally, t he Australian Design Rules also
mandate that all manufacturers of Australian vehicles must hold a World Manufacturer ID
issued by the National Exchange of Vehicle and Driver Information System (‘‘ NEVDIS ’’)
and all vehicles manufactured in Australia must have a vehicle identification number
(‘‘VIN’’) (see Vehicle Standard (Australian Design Rule 61/03 — Vehicle Marking) 2020
(Cth)).
Further, as noted above, all vehicles must be registered on the Register of Approved
vehicles. To obtain entry on the register, supp liers must meet the requirements of an ‘entry
pathway’, one of which is the obtaining of a road vehicle type approval. Generally, road
vehicle type approval may be granted where the Secretary of the Department of
Infrastructure is satisfied that (amongst other things):
. the type of vehicle complies with the applic able national road vehicle standards,
as in force at the time the Secretary decide application;
. the person seeking the approval has control over all stages of the design,
componentry and manufacturing process for the type of vehicle, or is able to
access information, including information about any changes relating to the
design, componentry and manufacturing process for the type of vehicle that may
affect that type of vehicle’s compliance with applicable national road vehicle
standards;
. the person is able to ensure that the design, componentry and manufacturing
process will consistently product the type of vehicle; and
. the person is able to arrange for the Secretary or an inspector to inspect premises
used, or to be used, in the manufacturing process for the purposes of assessing
compliance with the applicable national road vehicle standards and any other
requirements of the RVS Act, Road Vehicle Standard Rules 2019 (‘‘RVS Rules ’’),
or an instrument made under the RVS Act or the RVS Rules that apply in relation
to the person or the type of vehicle.
(RVS Rules, rule 19).
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Foreign Investment Regulation
Foreign Acquisitions and Takeovers Act 1975 (Cth)
The foreign investment regime in Australia is primarily governed by the Foreign
Acquisitions and Takeovers Act 1975 (Cth) (referred to as the ‘‘ FATA ’’) and the Foreign
Acquisitions and Takeovers Regulation 2015 (‘‘FATR ’’). The Treasurer of Australia
(‘‘Treasurer ’’) is responsible for the administration of the FATA, with the assistance and
advice of the Foreign Investment Review Board (‘‘ FIRB ’’). Australia has a foreign
investment approval regime that regulates certa in types of acquisitions by ‘foreign persons’,
which in general applies to the acquisition o f shares and voting power in a company of 20%
or more by a single foreign individual and their associates (‘‘ Substantial Interest ’’), or 40%
or more by two or more foreign individuals who are not related and their associates
(‘‘Aggregate Substantial Interest ’’).
Whether FIRB approval is required for an investment depends on the characteristics of
the investor (particularly whether the investor is a foreign government investor), the value
of the asset of the business and the type of the underlying business (whether they are
national security business or not).
Investment in the Australian Companies
Whether FIRB approval is required for a foreign investor to acquire an interest in the
Australian companies (directly or indirectly) de pends on the characteristics of the investor.
It is the responsibility of the investor to de termine if they may require FIRB approval
before subscribing to Shares under the Global Offering and to satisfy themselves that their
investment in the Australian companies complies with the Australian FIRB regime,
including obtaining any government consents and approvals from FIRB. An independent
legal opinion should be sought by the investor.
For the Australian companies, a ‘foreign person’ should not be required to obtain a
mandatory FIRB approval to subscribe to Shares as part of the Global Offering unless they
are a ‘foreign government investor’ (defined below), who must obtain prior FIRB approval
before acquiring the ‘Substantial Interest’ (for a foreign government entity, alone or
together with one or more assoc iates) or the ‘Aggregate Substantial Interest’ (for foreign
governments entities of more than one foreign country, together with any one or more
associates). To avoid doubt, when calculating the percentages for the ‘foreign government
investor’, the interests of their associates wo uld need to be aggregated. Under section 6(1)(I)
of FATA, the ‘associates’ for a foreign governme nt investor specifically include any other
foreign government investor from the same country (of any part of that country). This
means to the extent that there is more than one ‘foreign government investor’ from the same
country and if their aggregated interests ex ceed 20%, this will trigger a FIRB approval.
Section 17 of FATR defines ‘foreign government investor’ to include:
. a foreign government or separate government entity; or
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. a corporation, the trustee of a trust in which, or the general partner of a limited
partnership in which:
— a foreign government or separate government entity holds a substantial
interest (owns 20% or more); or
— foreign governments or separate government entities of more than one
foreign country in aggregate own aggregate substantial interests (more than
40% or more).
Under Section 4 of FATA,
. a ‘foreign government’ means an entity that is
— a body politic of a foreign country;
— a body politic of part of a foreign country; or
— a part of a body politic of a foreign country or a part of a body politic of part
of a foreign country;
. a ‘separate government entity’ means an individual, corporation or corporation
sole that is an agency or instrumentalit y of a foreign country or a part of a foreign
country, but not part of the body politic of a foreign country or of a part of a
foreign country.
To the extent that a FIRB approval is required, the Treasurer must be notified and the
FIRB approval must be obtained before the rel evant action can be completed. Offences and
civil penalties may apply if the investment s ubject to the FIRB approval is taken without
notice, including the Treasurer declaring the transaction void.
Product Regulation
At a Commonwealth level, the main regulators overseeing the product regulation of
vehicles/vehicle related components are the:
. Department of Infrastructure which adm inisters the RVS Act and the RVS Rules
(together, the ‘‘RVS legislation ’’); and
. Australian Competition and Consumer Commission (‘‘ ACCC ’’): the ACCC
regulates the Competition a nd Consumer Act 2010 (Cth) (‘‘ CCA’’), including
the Australian Consumer Law (‘‘ ACL’’) (contained in Schedule 2 of the CCA).
There is a Memorandum of Understanding between Department of Transport and
ACCC dated 17 March 2023 (‘‘ MOU’’) which outlines the relationship between the
Department of Transport and ACCC. The MOU establishes a framework for cooperation
and coordination between the Department of Infrastructure and the ACCC (the
‘‘Agencies ’ ’ )i nr e l a t i o nt ot h eR V Sl e g i s l a t i o na n dc o n s u m e rp r o d u c ts a f e t yu n d e rP a r t
3–3 ‘Safety of consumer goods and product related services’ of the ACL.
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A key purpose of the MOU is to designate which Agency will take the lead in relation
to vehicle-related recalls and other safety issues (the ‘‘ Lead Agency ’’).
The Lead Agency for recalls and other safety issues will be:
. Department of Infrastructure in relation to:
— road vehicles (e.g. cars, caravans, commercial vehicles, campers, trailers)
where the safety issue arises from:
o a part in the road vehicle as firs t supplied e.g. engine, ignition &
transmission system, battery, bra king system, lighting & signaling;
o an accessory supplied with the road vehicle at first supply e.g. floor
mats, jacks supplied with new cars; or
o a like-for-like after-market replacement of that part or accessory in the
road vehicle; and
— approved road vehicle components e.g. approved reverse lamp, bus seat or
braking system;
. t h eA C C Ci nr e l a t i o nt o :
— vehicles that are not road vehicles but are consumer products e.g. golf carts,
miniature motor bikes, motorized mobility devices, quad bikes;
— new and second-hand after-market vehicle parts and accessories that are
consumer products (unless a like-for-like replacement in a road vehicle) e.g.
generic battery or tires, child car restraint, portable ramp, recovery strap,
bike carrier; and
— caravans and campers where the part or accessory relates to human
occupation, not the vehicle e.g. fridge, stove in caravan.
The Lead Agency’s functions include ris k identification, risk assessment, risk
management including risk communication, voluntary and compulsory recalls and injury
reports received.
Product regulation under RVS legislation
Section 37 of the RVS Act requires the Department of Infrastructure to make rules in
relation to the recall of approved road vehicle components for safety purposes or for
non-compliance with national road vehicle standards.
Broadly speaking, Part 8 of the RVS Rules ‘ Recalls of road vehicles or approved road
vehicle components’ set out the circumstances in which ‘road vehicles’ or ‘approved road
vehicle components’ may be compulsorily recalled (such as in circumstances where the
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Minister considers non-compliance to be of a substantive nature) and the notification
requirements for a voluntary recall of ‘r oad vehicles’ or ‘approved road vehicle
components’.
Pursuant to section 211 of the RVS Rules, a person can voluntarily take action to
recall road vehicles or approved road vehicle components of a particular kind in the
following circumstances:
. the person takes action on the basis that such (vehicle or) components will or may
cause injury to any person or a reasonably foreseeable use (including a misuse) of
such vehicles or components will or may cause injury to any person;
. the person takes action on the basis that such vehicles do not, or it is likely that
they do not, comply with:
o the applicable national road vehicle standards,
o applicable standards determined by the Minister under subsection 89(2)
‘Determination — compliance with standards’ ;o r
o applicable standards made under section 7 ‘ Meaning a road vehicle
component’ of the Motor Vehicle Standards Act 1989; or
. the person takes action on the basis that such components do not, or it is likely
that they do not, or it is likely they do not, comply with the applicable national
road vehicle standards.
A person must, within 2 days of taking the recall action, give the Minister a written
notice that complies with the requirements of section 212(7) of the rules (which sets out the
i n f o r m a t i o nt ob ei n c l u d e di nt h ew r i tten notice) (RVS Rules, section 212).
Additionally, a person who has ‘supplied’ or ‘supplies’ an approved road vehicle
component subject to a recall to another person outside of Australia must provide that
person with a written notice that complies wit h the requirements of section 212(7) of the
rules to the person outside Australia, and pro vide the Minister with a copy of that notice
within 10 days after giving the notice (RVS Rules, section 212(6)). ‘Supply’ is defined in the
RVS Act as: (a) when used as a verb, includes supply (including re-supply) by way of sale,
exchange, lease, hire or hire-purchase; and (b) when used as a noun, has a corresponding
meaning; and ‘supplied’ and ‘supplier’ have corresponding meanings (RVS Act, section 5).
Notably, if a person has already given notice of voluntary recall under section 128(2)
of the ACL in relation to such vehicle or approved road vehicle components, then they are
taken to have given notice under the RVS Rules as well (RVS Rules, section 212(8) and
212(9)). However, as a matter of practicality, we note the ACCC’s website directs suppliers
to the ROVER system if a recall is to be initia ted for road vehicles and approved road
vehicle components.
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The Minister may also issue a compulsory re call notice where it appears that, amongst
other things:
. the vehicle, or reasonably foreseeable us e (including misuse) of the vehicle, will or
may cause injury to any person, and the supplier has not taken satisfactory action
to prevent the vehicle from causing injury to any person; or
. the vehicle does not comply with the applicable national road vehicle standards,
the non-compliance is of a substantive nature, and the supplier has not taken
satisfactory action to rectify he non-compliance.
(RVS Rules, rule 206).
Product regulation under consumer laws
As noted above, the ACL is relevant to certain vehicles and vehicle components.
A person acquires ‘goods’ as a ‘consumer’ if and only if:
. the amount paid or payable for the ‘goods’ did not exceed $100,000;
. the goods were of a kind ordinarily acquired for personal, domestic or household
use or consumption; or
. the goods consisted of a vehicle or trailer acquired for use principally in the
transport of goods on public roads.
(ACL, section 3(1)).
However, a person is not a ‘consumer’ if the person acquired the goods, or held himself
or herself out as acquiring the goods for the purpose of resupply, or for the purpose of using
them up or transforming them, in ‘trade or commerce’ in the course of a process of
production or manufacture (ACL, section 3(2)). ‘Trade or commerce’ means trade or
commerce within Australia or between Aus tralia and places outside Australia.
It should be noted that ‘goods’ is to be distinguished from ‘consumer goods’. Not all
‘goods’ are ‘consumer goods’. ‘Goods’ includes a broad range of goods, including other
vehicles and any component part of, or accesso ry to, goods (ACL, section 2). In contrast,
‘consumer goods’ are defined as goods that are intended to be used, or are of a kind likely to
be used, for personal, domestic or household use or consumption, and includes any such
goods that have become fixtures since the time they were supplied if a recall notice for the
goods has been issued, or a person has voluntarily taken action to recall the goods (ACL,
section 2). Caravans are ordin arily intended to be used, or are of a kind likely to be used,
for person, domestic or household use or consumption. In such cases, caravans are
consumer goods, as well as goods.
Under the ACL, manufacturers and suppliers must comply with a number of statutory
warranties (known as ‘consumer guarantees’). These include (amongst others) guarantees
that the caravans are of acceptable quality (i.e. safe, durable and free from defects,
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acceptable in appearance and finish, and fit for all purposes for which they are commonly
used for), match the description provided, and that repairs and spare parts will be made
available for a reasonable time after purchase (see ACL, sections 54 to 59). If a person fails
to comply with a consumer guarantee, the consumer is entitled to a remedy — either a
repair, replacement or refund and compensation to individuals (depending on the
circumstances). Additionally, defectiv e good actions may be commenced against a
manufacturer.
A ‘manufacturer’ of ‘goods’ is liable to compensate an individual if the manufacturer
supplies the goods in trade or commerce and the goods have a ‘safety defect’ and the
individual suffers injuries because of the safe ty defect (ACL, section 138(1)). The individual
may recover, by action against the manufacturer, the amount of the loss or damage suffered
by the individual (ACL, section 138(2)).
Under the ACL, a ‘manufacturer’ includes persons who (amongst other things):
. a person who grows, extracts, produces, processes or assembles goods;
. a person who holds himself or herself out to the public as the manufacturer of
goods;
. a person who imports goods into Australi a if the person is not the manufacturer
of the goods and at the time of the importation, the manufacturer of the goods
does not have a place of business in Australia.
(ACL, section 7(1)).
Goods have a ‘safety defect’ if their safety is not such as persons generally are entitled
to expect (ACL, section 9(1)). The standar di sa no b j e c t i v es t a n d a r db a s e do nw h a tt h e
relevant section of the public, rather than a pa rticular individual, is entitled to expect.
Although the test to be applied is objective, it is not the common law ‘reasonable person’
test. The test is what ‘persons generally are entitled to expect’. The test requires the court to
look to the class of persons to whom the product is directed or marketed. In determining the
extent of the safety of goods, regard is to be given to all relevant circumstances, including:
. the manner in which, and the purposes for which, they have been marketed;
. their packaging;
. t h eu s eo fa n ym a r ki nr e l a t i o nt ot h e m ;
. any instructions for, or warnings with respect to, doing, or refraining from doing,
anything with or in relation to them;
. w h a tm i g h tr e a s o n a b l yb ee x p e c t e dt ob ed o n ew i t ho ri nr e l a t i o nt ot h e m ;a n d
. the time when they were supplied by their manufacturer.
(ACL, section 9(2)).
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A manufacturer is liable to indemnify a supplier who supplies goods to a consumer if
the supplier is liable to pay damages under section 259(4) ‘Action against suppliers of goods’
to the consumer for loss or damage suffered by the consumer and the manufacturer is or
would be liable under section 271 ‘ Action for damages against manufacturers of goods’ to pay
damages to the consumer for the same loss or damage (ACL, section 274(1)).
Additionally, manufacturers and suppliers have obligations under the ACL with
product safety reporting obligations. Under the ACL, manufacturers and suppliers must
report to the ACCC within 2 days of becoming aware of a death, serious injury, or illness of
any person that was caused or may have been caused by the use or foreseeable misuse of the
product (ACL, section 131). Where goods have safety defects, the ACCC may require the
supplier or manufacturer to conduct a mandatory recall of the product under certain
circumstances (ACL, section 122 ). Alternatively, the supplier or manufacturer may choose
to voluntarily recall a consumer good if:
. the consumer goods will or may cause injury to any other person;
. a reasonably foreseeable use (including a misuse) of the consumer goods will or
may cause injury to any other person;
. a safety standard for the consumer goods is in force and they do not, or it is likely
that they do not, comply with the standard (please see below safety standards); or
. an interim ban, or a permanent ban, on the consumer goods is in force (we have
not identified any relevant bans).
(ACL, section 128(1)).
Employment laws
Employment law in Australia is governed primarily by the Fair Work Act 2009 (Cth)
(‘‘FW Act ’’) in conjunction with various State based laws which deal with matters such as
work health and safety, workers compensation, long service leave, workplace surveillance
and discrimination. The FW Act sets out min imum employment standards which are known
as the National Employment Standards (‘‘ NES’’). Failure to pay or provide the NES is a
contravention of the FW Act which can attract orders for compensation and penalties. The
FW Act also governs matters such as workplace bullying, sexual harassment, unfair
dismissal, unlawful dismissal and general protection applications.
Many employees in Australia will also be covered under a modern award (award) and
some may be covered by an enterprise (or collective) agreement. An award is a document
created by the Fair Work Commission (Australia’s Federal employment tribunal) which
sets out various minimum employment terms that apply as a matter of law. Whether or not
an award covers an employee will depend on their position and/or the industry the employer
operates in. Enterprise agreements set out the agreed terms and conditions of employment
as a result of bargaining between an employer and its employees. They must be approved by
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the Fair Work Commission. Most employees will also be party to an employment contract.
An employment contract must not provide for terms that are less generous than the
minimum NES entitlements or an applicable award or enterprise agreement.
Employers must make superannuation contributions (similar to a pension
contribution) on behalf of all employees subject to limited exceptions. Superannuation is
paid to a complying superannuation fund nominated by the employee or, failing
nomination, to the employee’s stapled fund. Superannuation is currently calculated at
11% of the employee’s ordinary time earnings up to a certain cap and will incrementally
increase to 12% by 1 July 2025.
Various regulatory authorities are able to enforce the legislation described above and
material penalties can apply for non-compliance.
Workplace health and safety laws
T h eA u s t r a l i a nw o r kh e a l t ha n ds a f e t y( ‘ ‘WHS’’) law is regulated on a state, territory
and Commonwealth level. There are model WHS laws comprised of a model WHS Act,
model WHS Regulations and model WHS Codes of Practice, which have been implemented
in all Australian states and territories, except for Victoria. However, Victoria has similar
duties and responsibilities under its Occupational Health and Safety Act 2004 (Vic). The
main objective of the WHS legislation is to pr ovide a framework to secure the health and
safety of workers and workpla ces, and to define the legal duties and responsibilities of all
parties involved.
Key duties relating to health and safety require that a duty holder must be proactive in
identifying, eliminating and minimizing risk st oh e a l t ha n ds a f e t ya n dt a k ea l lr e a s o n a b l e
steps to ensure the health and safety of workers and others in the workplace. There are also
other specific laws dealing with particular safety issues, such as record keeping, incident
notification, training workers, consulting with workers and other duty holders, hazardous
materials, electrical safety and transport safety.
Duty holders are required to meet specific hazard and risk standards outlined in
regulations supplementing the WHS legislation. These regulations cover areas such as noise,
machinery, and manual handling. They also specify the licenses needed for certain activities,
the records companies must keep, and the repor ts they must submit. F or instance, certain
high-risk work requires licensing, and certain duty holders must maintain records and
information regarding their WHS management and control. There are codes of practice that
provide practical guidance for achieving the standards of health and safety required by law.
National-level model WHS codes of practice are typically adopted by the various state and
territory authorities. In each jurisdictio n, there is a WHS or OHS regulator (generally
known as WorkCover or WorkSafe). They inspect workplaces, provide advice and help, as
well as enforce the law through its inspect orate. Material penalties, including
imprisonment, can apply for non -compliance with WHS laws.
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Intellectual property
The Australian intellectual property protection landscape consists of both legislation
and common law protection. Commonwealth legislation provides for the registration and
protection of intellectual property such as trade marks, patents and industrial designs, as
well as for the protection of copyright.
Trade marks
S i g n su s e do ri n t e n d e dt ob eu s e di nr e l a t i o nt op a r t i c u l a rg o o d sa n d / o rs e r v i c e sa r e
protectable under the Trade Marks Act 1995 (Cth). Trade marks can be obtained for
names, logos, aspects of packaging, shapes, colors, sounds and scents. The Competition and
Consumer Act 2010 (Cth) also provide protection to trade marks, names, and brands,
prohibiting corporations from engaging in misleading or deceptive conduct in trade or
commerce.
Patents
Australia’s Patents Act 1990 (Cth) (‘‘Patents Act ’’) confers upon patent owners the
exclusive right to make, use, sell, hire and oth erwise exploit a patented invention. In order
to qualify for standard patent protection, an invention must be novel, inventive and useful.
The Patents Act also recognizes innovation patents, which are intended for less important
inventions and have a lower inventive threshold. The innovation patent has a term of eight
years and cannot be extended.
Copyright
Copyright is a bundle of rights conferred by the Copyright Act 1968 (Cth) on authors
and other creators in relation to creative works such as books, computer programs,
paintings, photographs, sound recordings, tel evision broadcasts and films. These rights are
exclusive to the copyright owner and conferred for a limited time. Copyright protects the
expression of ideas and not the ideas themsel ves or information. Unlike patents, trade
marks and designs, there is no need (or capabilit y) to register copyright in Australia as in
some overseas jurisdictions. Copyright protection is automatically afforded to a work once
it is put into material form (such as by putting it in writing or recording it on video). There
is also no requirement to publish the work or place a copyright notice on it.
Designs
Registration of designs under the Designs Act 2003 (Cth ) can provide protection against
imitation of product design features including shape, configuration, pattern. To register a
design in Australia, it must be visually distin ctive in its appearance, including shape,
configuration, pattern and ornamentation. This means that the design should not have been
used or published in Australia or elsewhere before the application date. Once approved, the
d e s i g nc a nb er e g i s t e r e df o rap e r i o do ff i v ey e ars, which is extendable for an additional five
years. Designers who apply for international registration six months before their Australian
application date are eligible for convention priority.
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Data Protection
The Privacy Act 1988 (Cth) (‘‘Privacy Act ’’) and Australian Privacy Principles
(‘‘APPs ’’) apply to APP entities. An APP entity includes ‘organizations’, which means
businesses that have an annual turnover for the previous financial year AU$3 million or
more.
The Privacy Act is the principal piece of Aust ralian legislation protecting the handling
of personal information about individuals. This includes the collection, use, storage and
disclosure of personal information of Australian individuals.
There are 13 APPs and they govern standards, rights and obligations around :
. the collection, use and disclosure of personal information;
. an organization or agency’s governance and accountability;
. integrity and correction of personal information;
. the rights of individuals to access their personal information.
It is a requirement for an APP entity to have a privacy policy. APP 1.4 contains a
non-exhaustive list of information that an APP entity must include in its APP Privacy
Policy:
. the kinds of personal information collected and held by the entity (APP 1.4(a));
. how personal information is collected and held (APP 1.4(b));
. the purposes for which personal information is collected, held, used and disclosed
(APP 1.4(c));
. how an individual may access their personal information and seek its correction
(APP 1.4(d));
. how an individual may complain if the entity breaches the APPs or any registered
binding APP code, and how the complaint will be handled (APP 1.4(e)); and
. whether the entity is likely to disclose personal information to overseas recipients
(APP 1.4(f)), and if so, the countries in which such recipients are likely to be
located if it is practicable to specify t hose countries in the policy (APP 1.4(g)).
Each state and territory have its own separate privacy legislation which is largely
consistent with the Privacy Act requirements.
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Leases and Tenancies in Australia
Lease terms and conditions in Australia are s ubject to market standards and practice,
and there are also terms implied by legislati o na n dc o m m o nl a w .I np a r t i c u l a r ,t h e r ei sa
large body of retail tenancy legislation that h as been developed to protect retail tenants,
especially smaller specialty tenants. Generally, the parties cannot contract out these
provisions.
The leasing practice differs in the vario us States and Territories in relation to
registration. Generally speaking, short-term leases to tenants in possession do not need to
be registered to grant an indefeasible leasehold t itle. In all jurisdictions except Victoria and
South Australia (where it is one year or less), a short-term lease means a lease of three years
or less.
In all jurisdictions (except Victoria), reg istration of a lease (other than a short-term
lease) is required to obtain indefeasible lease hold title and to preserve certain contractual
provisions such as rights to renew (and to ensure they are enforceable against successors in
title). The exception is Victoria where a lease to a tenant who is in possession grants an
indefeasible leasehold title regardless of the term. As a result, leases are rarely registered in
Victoria.
Generally, leases are not subject to stamp duty in New South Wales, Victoria,
Queensland and Western Australia.
Transfer Pricing
According to (i) the Australian Income Tax Assessment Act, (ii) the related enterprise
clause in the Comprehensive Avoidance of Double Taxation Agreement, and (iii) the
transfer pricing regulations and rules issued by the Australian Taxation Office (ATO), for
business transactions between affiliated enterprises, the receipt or payment of prices and
fees arising from such transactions shall adhere to the arm’s length principle. Where the
receipt or payment of prices and fees deviate from the arm’s length principle leading to a
decrease in taxable income, the tax authorities reserve the right to make reasonable
adjustments.
Under the Australian Income Tax Act, en terprises engaging in related-party
transactions and meeting corresponding conditions shall prepare their contemporaneous
documentation for each tax year and make submission to the tax authority if requested.
Contemporaneous documentation includes country reports, master files, local files and
contemporaneous material reports.
The ATO has the authority to initiate investigations related to diverted profits tax
within seven years of evaluating the income tax declaration of Australian enterprises.
Australian enterprises are ob ligated to pay the full amount of diverted profits tax before
making relevant defenses or reaching a settlement with the ATO.
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The ATO may impose penalties on taxpayers in accordance with transfer pricing
penalty clauses and general tax penalty clauses, with the penalty amount determined by the
ATO as the underpaid tax.
Taxation
The following categories of tax are app licable to the Austr alian companies:
Corporate income tax
The Australian income tax is a ssessed in accordance with the Income Tax Assessment
Act 1936 (Cth) ,t h e Income Tax Assessment Act 1997 (Cth) and the Taxation
Administration Act 1953 (Cth) (together the ‘‘ Tax Acts ’’). An Australian tax-resident
company is liable to pay Australian tax on income and capital gains derived from all
sources, either within or outside Australia. A foreign tax resident company is subject to
Australian income tax only on Australian sourced income. However, where a company is
resident in a country with which Australia has concluded a double taxation agreement
(DTA), Australia’s right to tax business profit s is generally limited to profits attributable to
a permanent establishment (PE) in Australia.
T h eA u s t r a l i a nC o m p a n yT a xR a t e( t h e‘ ‘CTR’’) is currently 30% (2022–2023) on their
taxable income for the current financial year, except for ‘small or medium business’
companies, which are subject to a reduced tax rate of 25%. In the 2023–24 Budget, the
Australian Government announced it would introduce a 15 per cent global minimum tax
and domestic minimum tax for multinational companies with annual global revenue of at
least EUR750 million (approximately A$1.2 billion). The core rules commence from
January 1, 2024. The proposed changes have not been legislated by the Commonwealth
Parliament and therefore not yet law. Income of non-resident companies from Australian
sources is similarly taxable at the company tax rate if it is not subject to any withholding tax
or treaty protection. However, a company that is tax resident of a country that has a double
tax agreement with Australia, not operat ing in Australia through a permanent
establishment is generally subject to tax only on Australian sourced passive income, such
as rent, interest, royalties and dividends.
Companies incorporated in Aus tralia are generally reside nts of Australia for income
tax purposes. If a company is carrying on business in Australia with either their central
management and control in Australia or their voting power controlled by Australian
residents, the company can be considered as Australian resident for tax purposes.
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Capital gains tax
Australian tax law distinguishes income (r evenue) gains and losses from capital gains
and losses, using principles from case law. Bro adly, items which are solely capital gains and
losses are not assessable or deductible under the ordinary income tax rules. However, the
capital gains tax (the ‘‘ CGT’’) provisions in the tax law may apply. For companies, capital
gains are taxed at the relevant CTR. The CGT p rovisions apply to gains and losses from
designated CGT events. The list of designa ted CGT events includes disposal of assets,
grants of options and leases, and events arising from the tax consolidation rules. Capital
gains are calculated by identifying the capita l proceeds (money received or receivable or the
market value of property received or receivable) with respect to the CGT event and
deducting the cost base. CGT gains are reduced by amounts that are otherwise assessable.
Capital losses are deductible only from taxable capital gains. Capital losses are not
deductible from ordinary income. However, ordinary or trading losses are deductible from
net taxable capital gains.
Goods and services tax
GST is a broad-based tax of 10% on most goods, services and other items sold or
consumed in Australia. Certain goods and serv ices are not subject to GST, being either GST
free or input taxed. Generally, businesses and other organizations registered for GST will:
. include GST in the price they charge for their goods and services; and
. generally, claim credits for the GST incl uded in the price of goods and services
they acquire for their business, except to the extent that the acquisitions relate to
the making of input taxed supplies.
Stamp duty
Stamp duty is a tax on written documents and o n certain transactions. It is imposed by
Australian state and territory governments and the rates vary depending on the state or
territory. The main transaction that may be subject to stamp duty is the transfer of property
(such as real estate and business assets). The rate of stamp duty varies according to the type
and value of the transaction involved. Depending on the nature of the transaction, certain
concessions and exemptions may be available.
Fringe benefits tax
Fringe benefits tax (the ‘‘ FBT’’) is a tax paid on certain benefits provided by employers
to their employees or employees’ associates in addition to, or in place of, salary and wages.
Benefits can be provided by an employer, associate of the employer, or by third party under
an arrangement with the employer. An employee can be a current, future or former
employee. Fringe benefits include rights, privileges or services. Some benefits, such as
computers and mobile phones that are primarily used for work, are exempt from FBT.
REGULATORY OVERVIEW
–1 6 4–


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Payroll tax
Payroll tax is levied on a state basis. However, the total wages paid Australia-wide is
included when calculating the payroll tax threshold. Each Australian State and Territory
has its own payroll tax rate and threshold. Payroll tax is imposed on an employer’s taxable
wages to the extent that the wages makin g up that payroll are paid or payable:
. for or in relation to services performed by an employee in the respective state or
territory,
. f o ro ri nr e l a t i o nt os e r v i c e sb ya ne m p l o y e ei nt w oo rm o r eA u s t r a l i a ns t a t eo r
territory, or
. by an employer for or in relation to services performed by an employee and are
paid or payable in the respective state or territory.
REGULATORY OVERVIEW
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OVERVIEW
We are a recreational vehicle enterprise with an extensive presence in Australasia that
designs, develops, manufactures and sells bespoke towable RVs, commanding the
second-largest market share in Australasia’s RV industry in terms of both revenue and
sales volume in 2023, according to Frost & S ullivan. With a product line that caters to a
variety of customer needs, we operate under three characteristic brands, namely: (1) our
mid-end brand, Snowy River, (2) our luxury brand, Regent, and (3) our semi-off-road
brand, NEWGEN. According to Frost & Sullivan , in 2023, we achieved the second-largest
market share in Australasia’s RV in dustry in terms of sales volume.
Since our inception, we envisioned entering the Australasian market, which was the
third largest market for RV products in 2014 a ccording to Frost & Sullivan. Australasia’s
RV market is dominated by towable RVs, where in 2023, more than 90% of newly
registered RVs in the region were towable RVs. Also, it is in closer proximity to China to
leverage our production capabilities (in comparison to the other two largest RV markets
being North America and Europe). In 2014, we identified and through the establishment of
Regent Company, acquired Regent, a well-established RV brand with over 30 years of
heritage, to officially tap into the Australian market. Around the same time, we started the
manufacturing and assembly of towable RVs through Daide Longtree for eventual sales to
our dealers in Australia. In May 2020, we commen ced dealership arrangement with our first
third-party dealer store in New Zealand, expanding our distribution network in the
jurisdiction. Over the years and with the growth of our operation, as of June 30, 2024, we
had built a dynamic sales and distribution network consisting of 13 third-party dealer
stores, two self-owned stores alongside online official websites, and four JV stores with our
JV partners in Australasia. For further details of our sales and distribution strategies, see
‘‘Business — Sales and Distribution.’’
In 2022 and in preparation for the Listing, our Company was incorporated as the
holding company of our Group. To normalize our Group structure to reflect the business
that we had been focused on since our inception, we underwent the Reorganization which
was completed in May 2024. See ‘‘— Reorganization’’ for further details of the steps
involved in the Reorganization.
KEY MILESTONES
The following table sets forth the major corp orate milestones and achievements in the
business development of our Group:
Year Milestones
2014 We established Regent Company and acquired the brand, Regent, in
September, and began to export our towable RVs to Australia in the
same month.
Daide Longtree commenced the bus iness of manufacturing and
assembly of towable RVs.
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Year Milestones
2015 We launched Snowy River, an RV brand, in Australia in November.
2019 Together with our JV partner, Green RV, we launched NEWGEN, our
semi-off-road caravan brand.
Our SRC21 model won Caravan World’s Best Aussie Van Award in
November.
2020 We established our first JV store under our then joint venture, Leisure
Lion, in Australia to expand our sales and distribution network in May.
We expanded our dealership network to New Zealand and established
our first third-party dealer store in New Zealand in May.
2021 The number of RVs we delivered during the year exceeded 1,000.
2022 Our Company was incorporated in May.
We commenced operations of our first self-owned store in Australia.
The number of RVs we delivered during the year exceeded 2,000.
2023 We achieved the second-largest market share in Australasia’s RV
industry in terms of sales volume in that year.
2024 We completed the Reorganization in May.
OUR KEY OPERATING ENTITIES
During the Track Record Period, the following entities made a material contribution
to our results of operation and financial position:
Name of entity
Place of
establishment
Date of
establishment Shareholding
Principal business
activities of our Group
under such entity
Regent Company Australia September 2, 2014 100% Sales of towable RVs
Snowy River RV
Company
Australia December 23, 2015 100% Sales of towable RVs
Leisure Lion
(1) Australia July 11, 2019 51% Sales of towable RVs
Daide Longtree (2) PRC February 19, 2014 N/A (3) Manufacturing,
assembly and
exporting of
towable RVs
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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Notes:
(1) Leisure Lion has become our subsidiary after Reg ent Company’s shareholding interest in Leisure
Lion increased to 51% on September 13, 2023. For d etails of the acquisiti on, see ‘‘— Corporate
Development — Subsidiaries of Regent Company.’’
(2) During the Track Record Period, Daide Longt ree was one of the major operating entities of our
Group’s business. As part of the Reorganization, al l assets and properties in respect of the business
of manufacturing, assembly and export of towab le RVs of Daide Longtree have been acquired by
Xing Longtree to centralize and integrate the man agement for such business. After such transfer,
Daide Longtree continued to serve as the holdi ng company for a number of entities within the
GONOW Group. See ‘‘— Reorganization — Business acquisition from Daide Longtree’’ for further
details.
(3) During the Track Record Period and as of the La test Practicable Date, Daide Longtree had been a
wholly-owned subsidiary of Zhejiang Gonow.
CORPORATE DEVELOPMENT
The following sets forth the major corporate history and shareholding changes of our
Group:
Historical operation under Daide Longtree
Historically, our business in the PRC was primarily operated under Daide Longtree.
Daide Longtree was established on Februar y 19, 2014 as a limited liability company in
the PRC. Daide Longtree had been a subsidiary of Zhejiang Gonow, the holding company
of the GONOW Group since its incorporation. For details of the GONOW Group, see
‘‘Relationship with our Controlling Shareholders — Our Relationship with the GONOW
Group.’’
Establishment of Regent Company
To realize our vision to expand into the Australasian market, and having considered
the Regent brand’s renowned reputation and it s established footprint in the Australian RV
market, we have incorporated Regent Company on September 2, 2014 for the purpose of
acquiring the assets and business associated with the Regent brand. On September 22, 2014,
Regent Company entered into a deed for sale of business (the ‘‘ Deed ’’) with Caravans
Australia Pty Ltd (‘‘ Caravans Australia ’’), an independent third party, to acquire Caravans
Australia’s business in design and manufacturing of luxury RVs which were carried under
the Regent brand.
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Pursuant to the Deed, Regent Company purchased from Caravans Australia, among
others, (i) all assets, benefits of all business contracts, and also a RV brand, Regent, (ii) the
remaining reserves (such as raw materials, semi-finished products and RVs) and (iii) the
assignment rights of Caravan Australia’s trademarks, including trademarks relating to
Regent. The consideration of the transaction was in aggregate A$375,000 (equivalent to
RMB1,695,188), which was determined based on arm’s length negotiations between the
parties. The acquisition was completed on September 22, 2014.
Since its establishment and prior to the Reorganization, Regent Company had been a
wholly-owned subsidiary of Flourishing. During the Track Record Period, Regent
Company primarily engaged in the sales of towable RVs.
Subsidiaries of Regent Company
Over the years since 2018, Regent Company has established four entities in Australia,
namely Snowy River RV Company, Leisure L ion, United RV and Captivating Caravans.
Among such entities and during the Track Record Period, Snowy River RV Company,
Leisure Lion and United RV primarily engag ed in the sales of our RV brands. As of the
Latest Practicable Date, Captivating Caravans has not engaged in operational business
activities yet.
Leisure Lion was established on July 11, 2019 , with its shareholding interests held as to
50% by Regent Company and 50% by Green RV, an established RV dealer based in
Australia, respectively. In 2023, pursuant to an agreement dated September 13, 2023
entered into between Regent Company and Green RV, the shareholding interest of Regent
Company in Leisure Lion increased to 51% after a capital injection of A$15,000 (equivalent
to RMB67,807.5), which was determined based on arm’s length negotiations between the
parties. As a result, Leisure Lion became a di rect subsidiary of Regent Company. United
RV was established on June 6, 2023, with its shareholding interests held as to 51% by
Regent Company and 49% by BUYIT RV PTY LTD, a holding company established by
two independent third parties who decided to tap into the RV industry in Australasia as one
of their business ventures at that time. Save for their capacities as our JV partners, each of
Green RV and BUYIT RV PTY LTD is an independent third party of our Group. Save for
Leisure Lion, each of Snowy River RV Company, United RV and Captivating Caravans has
been a subsidiary of Regent Company since its incorporation.
None of the applicable percentage ratios as defined under the Listing Rules in respect
of the acquisition of 1% shareholding inte rest in Leisure Lion by Regent Company exceed
25%. Accordingly, the relevant pre-acquisition financial information of Leisure Lion is not
required to be disclosed pursuant to Rule 4.05A of the Listing Rules.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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The following chart sets forth the simp lified shareholding structure and key
subsidiaries of our Group immediately prior to the Reorganization:
SIMPLIFIED SHAREHOLDING STRUCTURE OF THE GONOW GROUP AND
SUBSIDIARIES OF OUR GROUP IMMEDIATELY
PRIOR TO THE REORGANIZATION
Mr. Miao
Flourishing
(Hong Kong)
Snowy River
(Australia)
Captivating
Caravans
(Australia)
Leisure Lion(2)
(Australia)
Ms. Wang (GP)(1) Ms. Miao (LP)(1)
Shanghai Hongwan
Technology(1)

Zhejiang Gonow
Daide Longtree
100%
100%
100%
100%
50%100%
55% 45%
35%
65%
100%
100%
offshore
onshore
DDT International
Investment Limited
(Hong Kong)
Witty Hero Group
Limited
(BVI)
Denotes entities that had business operations relating to the design, development,
manufacturing and sales of our Group’s towable RVs during the Track Record Period
Regent Company
(Australia)
Notes:
(1) Ms. Wang is the spouse of Mr. Miao and Ms. Miao is the daughter of Mr. Miao and Ms. Wang, and
they are our group of Controlling Shareholders. As of the Latest Practic able Date, Shanghai
Hongwan Technology is owned by Ms. Wang and Ms. Miao as to 55% and 45%, respectively,
through their interests held in Shanghai Hongwan Technology. Ms. Wang is the general partner of
Shanghai Hongwan Technology whereas Ms. Miao is a limited partner.
(2) Prior to the Reorganization which commenced in May 2022, Leisure Lion was held as to 50% by
Regent Company and 50% by Green RV, which is in turn held by Mr. Carl Green and Mr. Jack
Green, as to 50% and 50%, respectively. Mr. Carl G reen is also a director of Leisure Lion and Mr.
Jack Green is Mr. Carl Green’s son. Leisure Lion s ubsequently became our subsidiary after Regent
Company’s shareholding interest in Leisure L ion increased to 51% on September 13, 2023. For
details of Leisure Lion and the acquisition, se e ‘‘— Corporate Development — Subsidiaries of
Regent Company.’’
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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REORGANIZATION
In anticipation of our Listing, we underwent the Reorganization as described below
pursuant to which our Company became the holding company and the listing vehicle of our
business.
The Reorganization involved the following steps:
S e t t i n gu po fo f f s h o r es t r u c t u r e
Establishment of our Company
Our Company was incorporated as an exempted company with limited liability in
the Cayman Islands on May 17, 2022, to bec ome the holding company of our Group.
The authorized share capital of our Company was US$50,000.00, which was initially
divided into 500,000,000 Shares with a par value of US$0.0001 each on the date of
incorporation.
Establishment of BVI shareholding enti ties of our Controlling Shareholders
Snowy Limited was incorporated in the BVI on May 13, 2022 as a wholly owned
subsidiary of M.X.Z Holdings. M.X.Z Holdings was incorporated in the BVI on May
12, 2022, by our founder, Mr. Miao.
Establishment of intermediate shareholding entities
New Gonow BVI was incorporated in the BVI on May 24, 2022 as a wholly-owned
subsidiary of our Company. New Gonow HK was incorporated in Hong Kong as a
limited liability company on November 23, 2023 with an issued share capital of
HK$10,000 and is wholly owned by New Gonow BVI. New Gonow HK was
established as an intermediate holding company for our operations in the PRC.
L O N G T R E ER Vw a si n c o r p o r a t e di nt h eB V Io nN o v e m b e r1 3 ,2 0 2 3a sa
wholly-owned subsidiary of our Company. LONGTREE RV was established as an
intermediate holding company for our operating entities in Australia.
Acquisition of Regent Company and its subsidiaries
LONGTREE RV acquired the entire shareholding interests in Regent Company
from Flourishing, a company indirectly wholly-owned by Mr. Miao, pursuant to an
equity transfer agreement entered into between LONGTREE RV and Flourishing on
May 7, 2024 at a consideration of A$1 million (equivalent to RMB4.5 million). The
consideration was determined based on arm’s length negotiation between the parties at
the time of the transfer. The consideration of the acquisition was fully settled by a
promissory note issued by Flourishing, granting an advance amount equivalent to the
consideration of the acquisition in f avor of LONGTREE RV on the same day. Such
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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advance amount was subsequently fully waived by Flourishing on May 27, 2024. Upon
completion of the acquisition, Regent Company became a direct wholly-owned
subsidiary of LONGTREE RV.
Setting up our onshore structure
Establishment of Xing Longtree
To normalize our listing structure in order to reflect and focus on the operation of
the business of our Group, Xing Longtree was established in the PRC as a
wholly-foreign owned enterprise on Janu ary 15, 2024 with a registered capital of
RMB100 million, which was entirely su bscribed by New Gonow HK. Upon its
incorporation, Xing Longtree became a wholly-owned subsidiary of New Gonow HK.
Business acquisition from Daide Longtree
On March 13, 2024, to centralize and integrate the management for our business
of designing, developing, manufacturing and exportation of bespoke towable RVs,
Xing Longtree and Daide Longtree entered into an asset purchase agreement, whereby
Xing Longtree acquired from Daide Longtree all of its assets and properties in respect
of the business of manufacturing, assembly and export of towable RVs, and assumed
all of the liabilities and obligations therein. After the completion of the acquisition on
April 30, 2024, Daide Longtree continued to serve as the holding company for a
number of entities within the GONOW Group. The consideration of the acquisition
amounted to RMB52,829,000, which was determined with reference to the valuation of
net assets held by Daide Longtree as of November 30, 2023, according to a valuation
report prepared by a professional valuer. Daide Longtree had not received
administrative penalties due to any violation of PRC laws or regulations, nor had it
been involved in any litigation, arbitrat ion or other legal proceedings that had a
material adverse effect duri ng the Track Record Period.
As confirmed by our PRC Legal Advisor and Australian Legal Advisor, each of the
foregoing acquisitions were properl y and legally completed and settled.
COMPLIANCE WITH PRC AND AUSTRALIAN LAWS AND REGULATIONS
Our PRC Legal Advisor and Australian Legal Advisor confirmed that all necessary
filings and regulatory approvals in respect o f the Reorganization had been obtained and
were valid as of the Latest Practicable Date or made in accordance with relevant PRC and
Australian laws and regulations in all material aspects regarding our Reorganization steps
conducted in the PRC and Australia.
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PRE-IPO SHARE OPTION SCHEME
On May 14, 2024, our Company resolved to issue and allot 826,500 Shares,
representing 0.83% of the issued share capital to the Company as of the Latest
Practicable Date, to NRV Benefit Limited, which held Shares underlying the options
g r a n t e dt ot h eq u a l i f i e dp e r s o n n e lp u r s uant to the Pre-IPO Share Option Scheme.
The Pre-IPO Share Option Scheme was adopted by our Company by way of
resolutions of the Board on May 24, 2024, for the purpose of attracting and retaining
highly qualified personnel who will contribut e to the Company’s success, and providing
incentives to such personnel that are linked directly to increase in shareholder value.
As of the Latest Practicable date, all 826,500 options associated with 826,500 Shares
were granted to eight Directors, senior management and other employees of the Group
under the Pre-IPO Share Option Scheme. No further options may be granted under the
Pre-IPO Share Option Scheme after the Listing. While the NRV Benefit Limited is the legal
registered holder of the relevant Shares, it sh all abstain from exercising the voting rights
attached to such Shares pursuant to the rele vant trust deed. Hence, the voting rights
attached to the Shares held by NRV Benefit Limited will not be exercised until the relevant
options associated with such Shares are vested and exercised by the relevant grantees. As of
the Latest Practicable Date, no option had been vested. See ‘‘Appendix IV — Statutory and
General Information — D. Pre-IPO Share Option Scheme’’ in this Prospectus for further
details.
THE CAPITALIZATION ISSUE
Subject to the share premium account of our Company being credited as a result of the
issue of the Offer Shares pursuant to the Glob al Offering, our Company will, on the Listing
Date, allot and issue a total of 620,000,000 Shares credited as fully paid at par to the
holders of Shares whose names appear on the register of members of our Company on the
day preceding the Listing Date in proportion to their then existing shareholdings in our
Company by capitalizing the relevant s um from the share premium account of our
Company. The Shares allotted and issued pu rsuant to the Capitalization Issue will rank pari
passu in all respects with the existing issued Shares.
PUBLIC FLOAT
Upon completion of the Capitalization Issu e and the Global Offering (assuming the
Over-allotment Option is not exercised), the Shares held by Snowy Limited and NRV
Benefit Limited will not be counted towards the public float of our Company. Save as
disclosed above, to the best of our Directors’ knowledge, information and belief, all other
Shareholders of our Company are not core connected persons of our Company. Therefore,
25% of our issued Shares (upon completion of the Global Offering and assuming the
Over-allotment Option is not exercised) will be counted towards the public float of our
Company according to Rule 8.08(1) of the Listing Rules.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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PRC REGULATORY REQUIREMENTS
M&A Rules
According to the Regulations on Merger wit h and Acquisition of Domestic Enterprises
by Foreign Investors ( 《關於外國投資者併購境內企業的規定》)( t h e‘ ‘M&A Rules’’) jointly
promulgated by the MOFCOM, the State-owned Assets Supervision and Administration
Commission of the State Council, the SAT, the CSRC, the SAIC and the SAFE on August
8, 2006, effective as of September 8, 2006 and amended on June 22, 2009, a foreign investor
is required to obtain necessary approvals when it (1) acquires the equity of a domestic
enterprise so as to convert the domestic enterpr ise into a foreign-invested enterprise; (2)
subscribes the increased capital of a domest ic enterprise so as to convert the domestic
enterprise into a foreign-invested enterprise; (3) establishes a foreign-invested enterprise
through which it purchases the assets of a domes tic enterprise and operates these assets; or
(4) purchases the assets of a domestic enterprise, and then invests such assets to establish a
foreign- invested enterprise. The M&A Rules stipulate that an offshore special vehicle, or a
special purpose vehicle, formed for listing purp oses and controlled directly or indirectly by
PRC companies or individuals, shall obtain the approval of the CSRC prior to the listing
and trading of such special purpose vehicle’s securities on an overseas stock exchange,
especially in the event that the special purpos e vehicle acquires shares or equity interest in
the PRC companies in exchange for the shares of offshore companies.
Our PRC Legal Advisor is of the opinion that prior CSRC approval for this offering
and Reorganization is not required under the M&A Rules because our wholly
foreign-owned PRC subsidiary was not established through a merger or acquisition of
equity interest or assets of a PRC domestic company owned by PRC companies or
individuals as defined under the M&A Rules that are the beneficial owners of our
Company. However, our PRC Legal Advisor further advises that there is uncertainty as to
how the M&A Rules will be interpreted or implemented.
SAFE Circular 37
Pursuant to the Circular of the SAFE on Con cerning Relevant Issues on the Foreign
Exchange Administration of Offshore Investing and Financing and Round-Trip Investing
by Domestic Residents through Special Purpose Vehicles ( 《國家外匯管理局關於境內居民通
過特殊目的公司境外投融資及返程投資外匯管理有關問題的通知》) (the ‘‘SAFE Circular No.
37’’), promulgated by SAFE and which became effective on July 4, 2014, and which replaced
the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic
Residents’ Corporate Financing and Round-trip Investment Through Offshore Special
Purpose Vehicles ( 《關於境內居民通過
境外特殊目的公司融資及返程投資外匯管理有關問題
的通知》) ,( a )aP R Cr e s i d e n tm u s tr e g i s t e rw i tht h el o c a lS A F Eb r a n c hb e f o r eh eo rs h e
contributes assets or equity interests to an overseas special purpose vehicle (the ‘‘ Overseas
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
–1 7 4–


--- page 185 ---
SPV’’)that is directly established or indirectly controlled by the PRC resident for the
purpose of conducting investment or financing, and (b) following the initial registration, the
PRC resident is also required to register with the local SAFE branch for any major change,
in respect of the Overseas SPV, including, among other things, a change of Overseas SPV’s
PRC resident shareholder(s), the name of the Overseas SPV, terms of operation, or any
increase or reduction of the Overseas SPV’s c apital, share transfer or swap, and merger or
division. In the event that a PRC shareholder holding interests in a special purpose vehicle
fails to fulfill the required SAFE registratio n, the PRC subsidiary of that special purpose
vehicle may be restricted from making profit distributions to the offshore parent and from
carrying out subsequent cross-border foreign exchange activities, and the special purpose
vehicle may be restricted in its ability to contribute additional capital into its PRC
subsidiary. Furthermore, failure to co mply with the various SAFE registration
requirements described above could resul t in liability under PRC law for evasion of
foreign exchange controls.
Pursuant to the Notice of the SAFE on Simplifying and Improving the Foreign
Currency Management Policy on Direct Investment ( 《國家外匯管理局關於進一步簡化和改
進直接投資外匯管理政策的通知》)( t h e‘ ‘SAFE Circular No. 13 ’’), promulgated by SAFE
and which became effective on June 1, 2015, the power to accept SAFE registration was
delegated from local SAFE branch to local banks where the assets or interests in the
domestic entity are located.
As of the Latest Practicable Date and as advised by our PRC Legal Advisor, Mr. Miao,
Ms. Wang and Ms. Miao, each being a PRC resident, had respectively completed their
initial foreign exchange registration of overseas investments as required under the SAFE
Circular No. 13 and the SAFE Circular No. 37.
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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OUR STRUCTURE UPON COMPLETI ON OF THE REORGANIZATION AND
IMMEDIATELY PRIOR TO THE CAPITALIZATION ISSUE AND THE GLOBAL
OFFERING
The following chart sets forth the simplified corporate and shareholding structure of
our Group as of the Latest Practicable Date:
Mr. Miao
MWY Holdings
(Beneficiary)
WDH Holdings
(Beneficiary)
Ms. MiaoMs. Wang
M.X.Z Holdings
(BVI)
Xing Longtree
LONGTREE RV
(BVI)
Regent Company
(Australia)
Captivating
Caravans
(Australia)
Snowy River
(Australia)
Leisure Lion(3)
(Australia)
United RV(4)
(Australia)
offshore
onshore
100%100%
100%100%
99.17%
100%
100%
100%
100%
100%
100% 100% 51% 51%
Denotes the group of our Controlling Shareholders
0.83%
NRV Benefit
Limited
(BVI)
99% 1%
(1)
(2)
Miao Wanyi
Holdings
(BVI)


New Gonow HK
(Hong Kong)
Our Company
(Cayman)
New Gonow BVI
(BVI)
Snowy Limited
(BVI)
Miao Wanyi
Trust
Notes:
(1) Miao Wanyi Holdings is a company incorporated in the BVI and is held as to 100% by Miao Wanyi
Trust, which was established by Mr. Miao as the settl or, who is entitled to exercise the voting rights
attached to the Shares held by Miao Wanyi Holdings pursuant to the relevant trust deed. Dedao
Trust Limited is the trustee of the Miao Wanyi Trust, and WDH Holdings and MWY Holdings are
the beneficiaries of the Miao Wanyi Trust.
(2) NRV Benefit Limited is our employee sharehol ding platform. For details of our Pre-IPO Share
Option Plan, see ‘‘Appendix IV — Statutory and Ge neral Information — D. Pre-IPO Share Option
Scheme.’’
(3) See note (2) of ‘‘— Simplified Shareholding St ructure of the GONOW Group and Subsidiaries of
our Group immediately prior to the Reorganization.’’
(4) See ‘‘— Corporate Development — Subsidiaries of Regent Company.’’
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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OUR STRUCTURE IMMEDIATELY FOLLO WING THE CAPITALIZATION ISSUE
AND THE GLOBAL OFFERING (ASSUMIN G OVER-ALLOTMENT OPTION IS NOT
EXERCISED)
The following chart sets forth the simplified corporate and shareholding structure of
our Group immediately following the complet ion of the Capitalization Issue and the Global
Offering, assuming the Over-allotment Option is not exercised.
51%100% 51%
100%
100%
100%
100%
100%
100%
99%
74.38%25% 0.62%
1%
100%100%
Snowy Limited
(BVI)
Our Company
(Cayman)
New Gonow BVI
(BVI)
New Gonow HK
(Hong Kong)
Xing Longtree
LONGTREE RV
(BVI)
Regent Company
(Australia)
Snowy River
(Australia)
offshore
onshore
Public
Shareholders
Mr. Miao
M.X.Z Holdings
(BVI)
Denotes our group of Controlling Shareholders
100%
MWY Holdings
(Beneficiary)
WDH Holdings
(Beneficiary)
Ms. MiaoMs. Wang
100%

Miao Wanyi
Holdings
(BVI)
(1)
NRV
Benefit
Limited
(2)
Captivating
Caravans
(Australia)
Leisure Lion
(Australia)
(3)
United RV
(Australia)
(4)
Miao Wanyi
Trust
Note: See ‘‘— Our Structure upon Completion of the Reorganization and Immediately Prior to the
Capitalization Issue and the Global Offering’’ for notes (1) to (4).
HISTORY, REORGANIZATION AND CORPORATE STRUCTURE
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OVERVIEW
We are a recreational vehicle enterprise with an extensive presence in Australasia that
designs, develops, manufactures and sells bespoke towable RVs, commanding the
second-largest market share in Australasia’s RV industry in terms of both revenue and
sales volume in 2023, according to Frost & S ullivan. With our capabilities in product
research and development, manufacturing and sales and distribution, we design every
aspect of our RV owners’ user experience from conceptualization to ownership. We design
and manufacture our RVs with emphasis on c omfortability, safety and functionality,
creating mobile homes that can address RV owners’ needs for both extra physical and
mental space. Our capabilities span the enti re RV industry value chain, encompassing
visionary design, refined manufacturing, lo calized sales and distribution, and auxiliary
after-sales services. We pride ourselves on our commitment to customization, offering a
made-to-order service for our owners to perso nalize various aspects of their RV, from
exterior esthetics to interior layout and features. This enables us to create RVs that reflect
individualized demands of different RV owners and deliver superior end-to-end owner
experiences from conceptualiz ation, design selection, customization, delivery to various
after-sales services.
We have expertise spanning the entire RV industry value chain, empowering our
growth trajectory:
. Brand management and RV collection rejuvenation . Since our acquisition in 2014 of
Regent, a renowned Australian RV brand with a long heritage of over 30 years, we
have become a notable company in the RV industry in Australasia, operating
three distinctive brands, namely the mi d-end and top-selling brand, Snowy River,
the luxury brand, Regent, and the semi -off-road brand, NEWGEN. Envisioning
our RV owners who seek to live, holiday or travel in the RVs, we offer towable
RVs ranging from family-friendly models for family’s recreational use, compact
models for adventurers, slide-out models for those who crave additional space in
their RVs, to multi-terrain models for the ultimate semi-off-road adventure. From
value-conscious newcomers to seasoned e nthusiasts craving upscale luxury and
personalized RVs, we cater to every type of RV owners.
. Product research and development . We have been continuously rejuvenizing and
broadening our collection of RVs to fulfill customers’ demands and drive sales.
We periodically launch new models and continuously incorporate upgrades to our
existing RV collection, to attract new cu stomers with different needs, generate
repurchase from existing customers and expand our product collection. During
the Track Record Period, we developed and launched nine new models under
Regent, six new models under Snowy River, upgraded 21 models under Snowy
River, and developed and launched five new models under NEWGEN. In
addition, we aspire to creating a sustainab le and eco-friendly path for our owners
to embrace RV electrification and are currently developing a trailblazing model of
towable ERV. We are among the first batch of RV experts that bring ERV options
to commercialization, according to Frost & Sullivan.
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. Manufacturing. We optimize our manufacturing workflows through strategic
rationalization and continual upgrades of our production processes. Our
production facilities in Zhejiang , China cover a sprawling area of
approximately 47,567 square meters, consisting of five specialized workshops:
welding, painting, lamination, tailoring and furniture, alongside two cutting-edge
assembly lines. Furthermore, our tw o final assembly lines in Australia
complement our primary manufacturing capabilities in China by undertaking
final assembly of our RVs. Their proximity to end customers in the local market
also enables us to swiftly address their needs for finishing touches and
customization requests. From the integration of the latest machinery sourced
from the United States and Australia to the development of a comprehensive
technology system to execute and harmonize with high degrees of customization
of our RVs, every element of our production process is engineered to uphold
rigorous standards of quality and meet customer expectations. Wedding our
proprietary knowledge with our refined techniques in production from all aspects,
our manufacturing excelle nce allows us to craft RVs with strong flexibility,
advanced automation, and superior operating efficiency.
. Sales and distribution . We market our RVs and interact with customers through a
dynamic, multifaceted sales and distribution network and a myriad of marketing
initiatives across Australasia. As of June 30, 2024, we had built a robust sales and
distribution network consisting of 13 third-party dealer stores, two self-owned
stores alongside online official websites, and four JV stores with our JV partners
in Australasia. Our geographic footprint spans across major cities in Australasia,
including Melbourne, Sydney, Brisbane, A d e l a i d e ,P e r t h ,C a n b e r r a ,A u c k l a n d
and Christchurch, with a strategic presence of one to three dealer stores, JV
stores, and/or self-owned stores covering each location. Notably, our market
share in Queensland’s vibrant RV market surpassed our performance in the
broader Australian RV market in terms of sales volumes in 2023, according to
Frost & Sullivan. Additionally, we activel y engage in targeted marketing through
online promotions and offline events to further enhance our brand recognition
and acquire customers.
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Owing to our end-to-end management capa bilities from RV conceptualization to
manufacturing and eventual sales and distribution, we have become a RV precursor,
ranking second among Australasia’s standard caravans in terms of sales volumes in 2023.
Leveraging our demonstrated proficiency in the RV industry value chain and our solid and
growing customer base in Australasia, we have achieved robust sales growth over the Track
Record Period. In 2021, 2022 and 2023 and for the six months ended June 30, 2024, we
delivered an aggregate of 1,330, 2,127, 2,694 and 1,427 RVs to our customers, respectively,
representing an increase of 59.9% from 2021 to 2022 and 26.7% from 2022 to 2023.
Our revenues continued to soar during the Track Record Period. We achieved revenues
of RMB299.7 million in 2021, RMB498.8 milli on in 2022, and RMB720.3 million in 2023,
with corresponding gross profit margins of 16.7%, 16.5% and 25.1% for those years. Our
revenues were RMB422.0 million for th e six months ended June 30, 2024, with
corresponding gross profit margin of 32.0% for the same period. Our net profit grew
significantly from RMB25.1 million in 2021 to RMB33.0 million in 2022, and further to
RMB78.8 million in 2023. Our net profit was RMB40.4 million for the six months ended
June 30, 2024. Our adjusted net profit (non-HKFRS measure) was RMB25.1 million,
RMB33.0 million, RMB78.8 million and RMB5 5.7 million in 2021, 2022 and 2023 and for
the six months ended June 30, 2024, respectively.
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Our Products
We design, develop, manufacture and sell a wide array of bespoke towable RVs,
offering a full spectrum of functionalities a nd an expansive range of auxiliary services,
catering to the personalized tastes and requirements of our proud RV owners. As of June
30, 2024, we had successfully mass-produced a comprehensive lineup of 49 RV models,
which were all standard caravans, spanning eig ht distinct series under three characteristic
brands, namely Snowy River, Regent and NEWGEN, as described below:
SRC Series (13 models)
RDC Series (5 models)
NG Series (17 models)
RCC Series (4 models)
SRT Series (6 models) SRP Series (4 models)
ERV
COMING SOON
MORE TO COME
ERV
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. Snowy River RV . As of June 30, 2024, Snowy River RVs comprised (i) 13
traditional touring range models under the SRC series, namely SRC14, SRC16,
SRC17, SRC18, SRC19, SRC20, SRC2 0 F ,S R C 2 1 ,S R C 2 1 S ,S R C 2 2 ,S R C 2 2 F ,
SRC22S and SRC23, (ii) six multi-terrain models with multi-terrain suspension
under the SRT series, namely SRT18 , SRT18F, SRT19, SRT20, SRT20F and
SRT22F, and (iii) four models under the SRP series, namely SRP18, SRP18F,
SRP19 and SRP19F.
. Regent RV . As of June 30, 2024, Regent RVs comprised (i) five traditional luxury
models under the Discoverer serie s, namely RDC196, RDC206, RDC210,
RDC210F and RDC236, and (ii) four slide-out luxury models under the Cruiser
series, namely RCC206, RCC216, RCC220 and RCC226F.
. NEWGEN RV . As of June 30, 2024, NEWGEN RVs offered the NG series
comprising 17 models, namely NG1 3, NG15, NG17, NG18, NG18R, NG18F,
NG19, NG19R, NG19S, NG20, NG20SR, NG21F, NG23, NGB19, NGB20,
NGB21F and NGB21S.
In addition, we aspire to creating a sustainable and eco-friendly path for our owners to
embrace RV electrification. We are currently building a trailblazing model of towable ERV
which we anticipate to commence delivery in A ustralasia by the first quarter of 2025. Our
towable ERV model adopts a regenerative braking energy recovery system to charge the
RVs along the drive, which can also serve as the power sources for outdoor electrical
equipment and home backup power supplies. Furthermore, embedded with intelligent
technologies and autonomous driving system, our towable ERV model features the magic
hitch, allowing automatic sight, alignment, and hitching of the RVs through the remote
control of our dual-motor transmission system. Additionally, they come equipped with
stable control functionality, allowing owners to reverse, park, and position the towable RVs
automatically. Furthermore, we expect t ol a u n c hh y b r i do f f - r o a dt o w a b l eR V sa n d
motorized RVs first in Australasia by the end of 2024 and eventually roll out our RV
collections in the European and Canadian markets.
Our Market Opportunities
In recent years, consumers, both domestically and globally, place a greater emphasis
on quality products and services in mobility sol utions, particularly in terms of safety and
convenience. Consumers are more willing to acquire premium products and service
offerings in exchange for enhanced travel experiences, expanded space and additional
privacy and comfort. This trend has positioned RV travel as an increasingly popular choice
among modern travelers seeking versatile and self-contained travel solutions.
Furthermore, increasing needs to invest in q uality of life, particularly in spending time
with family and friends, are fully reflected i n the way of traveling and living inside a RV,
which allows target consumers to travel privately and safely. Through years of
technological advancement and market expansion, RV products have integrated into
various layers of travel and outdoor recreational activities. In North America, Europe, and
Australasia, RVs have emerged as significant a dvocates of modern lifestyles. These regions
consistently represent the largest markets for RV products, collectively commanding
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approximately 97% of the global market share in terms of RVs in use in 2023, according to
Frost & Sullivan. Australasia, in particula r, has been the third largest market for RV
products, following North America and Europe. In 2023, the Australasian RV market
recorded 40,000 units of new RV sales, ac counting for 6.5% of the global market.
While the global RV market experienced a s ignificant decline in sales volume from
2021 to 2023 due to economic uncertainties, supply chain disruptions, and rising material
costs, the Australasia market remained relative ly stable. In 2023, the Australasian-imported
RVs recorded 23,600 units of sales volume, accounting for approximately 59% of the total
sales volume of new RVs in Australasia, with China serving as its primary source.
Additionally, towable RVs are exceptionally popular in Australasia, comprising over 95%
of its RV market, demonstrating tremendous growth potential of our products in such
region. Towable RVs generally offer greater affordability and lower total cost of ownership
compared to their motorized counterparts , making them a more accessible option for
individuals and families looking to purchase th eir first RV or those with budget constraints.
Additionally, towable RVs offer enhanced fl exibility in usage, they can be detached from
the towing vehicle, allowing for easier local ex ploration and the use of the vehicle separately
from the living quarters. As the global econo my recovers post-pandemic, consumers are
expected to have more disposable income for leisure and travel expenditures, and
consequently, the global RV market is expected to grow at a CAGR of 6.6% over the
next five years, reaching over 863,600 uni ts by 2028, according to Frost & Sullivan. In
particular, the Australasia RV market is expected to experience fluctuations in 2024,
followed by a moderate recovery from 2024 to 2028, gradually returning to a more stable
growth trajectory.
The overall Australasia RV market experienced a slight decline in both sales volume
and revenue from 2021 to 2023, primarily due to the surge in demand for RVs in 2021,
driven by the COVID-19 pandemic as more individuals opted for RVs for tourism and
mobility as a result of social distancing measures. This surge led to a market overextension,
resulting in a decline in both sales volume and revenue in 2022 and 2023. Additionally,
according to Frost & Sullivan, shipping prices globally, as well as for major shipping routes,
such as from China to Australasia, reached the all-time highs during 2021 and 2022, as a
result of the disruption to global supply chains caused by COVID-19. This increase put
substantial pressure on RV manufacturers that rely on overseas supply chains. The elevated
costs, combined with extended shipping time s, disrupted production processes and squeezed
profit margins, creating considerable challenges for RV manufacturers.
Furthermore, following the implementation of stricter regulations under the Road
Vehicle Standards Act (RVSA), which came into effect on July 1, 2021, the market
witnessed a decline in the number of manufacturers in 2022 and 2023. The RVSA required
all light trailer manufacturers and importers to fully comply with its regulations by June 30,
2023, which significantly raised the entry barriers for smaller RV manufacturers. See
‘‘Regulatory Overview — Laws and Regulations in Australia — Import — Road Vehicle
Type Approvals’’ for further details. Pursuant to the implementation of the RVSA,
according to Frost & Sullivan, the number of RV manufacturers in Australasia, which
exceeded 220 in 2021 with nearly half being sma ll, family-owned businesses, had dropped to
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fewer than 190 by December 2023, reflecting a trend of market consolidation. This
consolidation highlights a gr owing concentration of larger RV manufacturers, allowing
major players like us to further strengthen their leading market position.
Despite the decline in the overall Australasia RV market growth during the Track
Record Period, our financial performance withstood such general market condition,
demonstrated by consistent growth in revenue, gross profit, and net profit. We attribute this
to our upstream efforts in product development, as well as downstream capabilities from
logistics to sales. Upstream, our consistent investment in R&D enables us to introduce
trend-setting RV models annually, keeping our o fferings attractive and addressing evolving
consumer preferences. The RV models we i ntroduced from 2021 to 2023 have garnered
significant recognition in the Australasi an market, which has been a key driver of our
strong performance growth. Notably, the Snowy River models, including the SRC16,
SRC17, SRC19, SRC21, SRC22S, SRT19, S RT20 and SRT22F, which represent the
majority of our sales, have experienced contin uous and robust sales growth over this period.
Similarly, the RCC 216 and RCC 220 models under the Regent Cruiser series, along with
the NG19R, NG20SR and NG21F models under the NEWGEN brand, have also seen a
remarkable increase in sales. This sustained growth across multiple models and brands
demonstrates the market’s recognition of the appeal of our product offerings, underpinning
our ability to drive sales momentum and achie ve growth, despite challenges in the boarder
industry.
Downstream, our resilient supply chain, which has not experienced the disruptions
affecting many competitors, is underpinned by our strong partnerships with third-party
logistics service providers which ensures efficient, reliable, and cost-effective cross-border
transportation, especially maritime logistics, of our RVs. Such uninterrupted delivery of
RVs to our end market amid COVID-19 supported timely delivery and smooth sales of our
RVs. Eventually, in terms of sales outreach, our robust and expanding dealership network
enhances the distribution and accessibility of o ur products. This is further complemented by
our effective marketing strategy that boosts our market visibility. The higher proportion of
our retail sales of RVs through self-owned stores and JV stores compared to sales to dealers
at wholesale prices, which are generally lower than retail prices, also drives our business
growth. These attributes altogether allow us to capitalize on market opportunities and
position us well to navigate market fluctuations during this period, which were largely
influenced by COVID-19.
We are well positioned to capture the enormous market opportunities, particularly in
the mid- to high-end towable RV industry. We have been continuously rejuvenating and
broadening our product collection, which we believe is a key driver to sustaining the growth
of our business. Going forward, we will continue to prudently allocate resources towards
product research and development, as part of our commitment to delivering top-tier RV
products and services, attracting and retaining customers, and fortifying our market
leadership in the mid- to hig h-end towable RV industry.
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OUR STRENGTHS
We believe that the following competitive strengths are critical to our current success
and crucial to our future growth.
Widely recognized brands and invigorating RV collection
Our collection of bespoke RVs is curated und er three characteristic brands, namely
Snowy River, Regent and NEWGEN, which we regard as emblems of quality,
craftsmanship, innovation and performance. We acquired the renowned brand Regent
with a long heritage of over 30 years in 2014, and over the years have injected new vitality
into this brand through our capabilities in vis ionary design, refined manufacturing and
localized sales and distribution. Immediately after such acquisition, we launched Snowy
River in 2015 in Australia, which offers a range of affordable and stylish RVs with
high-quality craftmanship, allowing us to expand rapidly in and penetrate a variety of
regions across Australasia, and tap into a more diverse customer base to fuel further
growth.
Built upon a vertically integrated business model, we combine our in-house product
design and manufacturing expertise in China wi th our local sales capabilities in Australasia,
effectuating end-to-end owner experiences for RV owners from conceptualization, design
selection, customization, delivery to vario us after-sales services. Our Regent and Snowy
River RVs have successfully established market recognition in Australasia. Snowy River
won the awards of the ‘‘Best Value for Money’’ for its SRC-21 RV model in 2019 and 2022.
In pursuit of relentless innovation and product development, in 2019, we, together with
our JV partner Green RV, launched a new series of RVs under the NEWGEN brand, which
embodies a semi-off-road bra nd, designed to appeal to the outdoor adventurers. Our
NEWGEN RVs cater to customers seeking semi-o ff-road capabilities without all the rugged
features of the SRT series of Snowy River. Positioned between the SRC and SRT series of
Snowy River, NEWGEN RVs offer a balanced blend of affordability and performance
while rejuvenizing our reputation among RV players with this adventuresome RV series.
We believe consistent rejuvenation and exp ansion of our RV collection is a key driver
to our business growth. In addition to periodically launching new models, we continuously
upgrade and rejuvenate our existing product collection by incorporating interior and
exterior upgrades to our RVs, based on market research and customer feedback. During the
Track Record Period, we developed and launched nine new models under Regent, six new
models under Snowy River, upgraded 21 models under Snowy River, and developed and
launched five new models under NEWGEN.
To further outreach our brand recognition and acquire customers, we actively engage
in targeted marketing through event sponsor ships, advertisement p lacements, as well as
digital and social media marketing. Notably, we sponsored Tickford Racing Team for
2022–2023 and will sponsor Blanchard Racing Team for 2024–2025 in V8 Supercars, which
helped raise our brand awareness and gain widespread exposure. We also embrace the RV
lifestyle scene by actively participating in local events and activities that offer camping
experiences and align with the RV lifestyle, p lacing our brands at the heart of a key target
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market which comprises of outdoor adventurers who are potential RV enthusiasts. These
platforms serve as valuable opportunities to showcase our products, conduct live
demonstrations, and interact directly with potential customers, providing an additional
avenue for sales and brand visibility. In particular, our SRT and SRC models are
prominently featured at major RV shows in B risbane, Australia and other key cities.
Robust product development capabilities
We design, develop, manufacture, and sell a wide array of bespoke towable RVs,
ranging from family-friendly models for fam ily’s recreational use, compact models for
adventurers, slide-out models for those who crave additional space in their RVs, to
multi-terrain models for the ultimate semi-o ff-road adventures. As of June 30, 2024, we had
successfully mass-produced a comprehensi ve lineup of 49 RV models which were all
standard caravans, spanning eight distinct series under three characteristic brands.
Continuously rejuvenating and broadening of our product collection to attract
customers and drive sales necessitates a disciplined, scalable and cost-effective
technological framework for product dev elopment. Over the past years, we have
continuously made investment in our proprietary technology and infrastructure, enabling
us to introduce trend-setting RV models with smart, lightweight and eco-friendly features.
Equipped with advanced functionalities s uch as solar power, intelligent control and
sustainably-made materials, our RVs re define the standards of modern travel.
By leveraging our robust technological advancement, our RV products can be
customized and tailored to adapt to various harsh outdoor conditions, including extreme
weather conditions such as ultraviolet radia tion, torrential rains, and hailstorms. The
reliability and scalability of our technological infrastructure are evidenced by our periodical
launch of new models and continuous upgrades to our existing RV collection. During the
Track Record Period, we developed and launched nine new models under Regent, six new
models under Snowy River, upgraded 21 models under Snowy River, and developed and
launched five new models under NEWGEN. Emb edded with intelligent technologies and
autonomous driving system, we are currently developing a trailblazing model of towable
ERV and anticipate commencing delivery of these towable ERVs in Australasia by the first
quarter of 2025.
We believe that our capability to continue offering customer value propositions
characterized by high quality, refined design solutions and excellent technical performance
is pivotal to our sustained success. We intend to continue our R&D capabilities and increase
our investment in product development in the coming years, which we believe is essential for
preserving the appeal of our product offerings, thereby serving as a key driver for
improving customer satisfaction and main taining competitiveness in the RV market.
Manufacturing excellence with precision and cost efficiency
We prioritize refined manufacturing excelle nce with precision and cost efficiency. Our
production facilities in Zhejiang, China cove r a sprawling area of approximately 47,567
square meters, consisting of five specialized workshops: welding, painting, lamination,
tailoring and furniture, alongside two cutting -edge assembly lines. Furthermore, our two
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final assembly lines in Australia complement our primary manufacturing capabilities in
China by undertaking final assembly of our R Vs. Their proximity to end customers in the
local market also enables us to swiftly address their needs for finishing touches and
customization requests.
Benefiting from our integrated manufacturing capabilities, we design and produce RV
products with advanced craftsmanship and uncompromised quality. We have implemented
stringent quality control procedures across all our brands and design models, ensuring each
product is equipped with durability and safety features, as well as esthetic appeal. For
example, all our RVs’ exterior floors, walls, roofs are constructed using ALOPEX
®
sandwich panels, featuring a combination of a luminum extrusions and high-density XPS
insulating foam, finished with fiberglass sh eets. This combination ensures that our RVs are
lightweight, rain and hail resistant, while well- insulated from extreme temperature. Beneath
the floor lies an organic zinc-rich silver metallic chassis with a 50mm ball coupling and
torsion suspension, enhancing safety and delivering a smoother driving experience. Our
interior cabinets and furniture are manufactured from high-quality solid plywood and
eco-friendly panels, with rounded edges adding a touch of class and style.
We pride ourselves on our ability to achieve m anufacturing excellence while upholding
cost efficiency. Through the standardiza tion and automation of our facilities and
centralized supply chain management, we have meticulously honed every stage of
production, from innovative design to precision engineering, to deliver exceptional
quality without compromising affordab ility. We are devoted to optimizing our
manufacturing processes and enhancing productivity, ensuring that every RV leaving our
facilities embodies high-qualit y craftsmanship while remaining competitively priced in the
market.
Furthermore, we source raw materials, components, and parts, including furniture and
appliances, from both domestic and international suppliers. Through our growing
operations, we have been striving to control c osts associated with material procurement
on a per-unit basis, realizing economies of scale.
Effective and diversified distribution channels
Effective execution of our sales and marketing strategies is critical to our sales growth.
We market our RVs and interact with customers through a dynamic, multifaceted sales and
distribution network of 19 stores in total and a myriad of marketing initiatives across
Australasia. As of June 30, 2024, we had built a robust dealership network consisting of 13
third-party dealer stores, and had successfully established an extensive presence in major
locations across Australasia. Furthermore , we had established two self-owned stores in
Australia as of the Latest Practicable Date, ensuring direct local presence, fostering
connection with our clientele, and acquiring invaluable market insights firsthand. We
launched our first self-owned store in Western Australia in 2022, which swiftly garnered
widespread market acclaim and has achieved significant revenue growth. The store’s
revenue surged from A$5.4 million (equiva lent to RMB24.4 million) in 2022 to A$22.1
million (equivalent to RMB99.9 million) in 2023, marking an impressive threefold increase.
In addition, we opened our first JV store in 2020 and another three JV stores in 2023 with
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our JV partners, allowing us to expand our sales and distribution network while mitigating
substantial overhead costs. Our geographic footprint spans across major cities in
Australasia, including Melbourne, Sydney, Brisbane, Adelaide, Perth, Canberra,
Auckland and Christchurch, with a strategic presence of one to three dealer stores, JV
stores, and/or self-owned stores covering each location.
Full supply chain management and timely delivery
To execute and harmonize with the high degree of customization of our RVs, we have
integrated the (i) customer relationship man agement (CRM) system, (ii) product lifetime
management (PLM) system, and (iii) systems a pplications and produc ts (SAP) system, into
every aspect of our operations, enabling us to promptly retrieve and analyze operational
and financial data in real-time, including procurement, sales, inventory and customers. This
comprehensive business system p rovides us with scalability and efficiency advantages across
various aspects of our operations, including production, procurement, and supply chain
management.
With our experienced team, advanced digital capabilities, and years of expertise in the
RV industry, we consistently deliver high-q uality, bespoke RVs in a timely manner. Nearly
every aspect of our RVs can be customized and tailored to the specific needs, preferences
and tastes of individual customers.
Moreover, we have entered into cooperation agreements with a Chinese multinational
conglomerate, an independent third party that engages in global shipping and logistics
services, which further fortifies our capabilit y to ensure efficient and reliable maritime
logistics and prompt delivery, demonstrating our refined management strategies across
every facet of our business operations.
As a pioneer in manufacturing and exporting towable RVs from China, we possess
significant advantages over our competitors, particularly in product delivery, capacity
planning, and supply chain management. In 2021, 2022 and 2023 and for the six months
ended June 30, 2024, we delivered an aggregate of 1,330, 2,127, 2,694 and 1,427 RVs to our
customers, respectively, representing an in crease of 59.9% from 2021 to 2022 and 26.7%
from 2022 to 2023.
Visionary management team with extensive interdisciplinary expertise
Our senior management team consists of veterans from the automotive industry with
deep understanding of the industry as well as experience in corporate strategy, technology
development and investment. Members of our senior management team have an average of
10 years of experience in the RV industry and two decades of experience in the broader
automotive industry.
Mr. Miao Xuezhong, our founder, the chief executive officer of our Group and the
chairman of the Board, has over 25 years of e xperience in the automotive industry and
extensive management experience. Prio r to establishing our Group, Mr. Miao also
established the GONOW Group and had experiences with other automobile companies
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including GAC Motor (Hangzhou) Co., Ltd ( 廣汽乘用車（杭州）有限公司) and Geely
Automobile Group Co., Ltd. ( 吉利汽車集團有限公司). For Mr. Miao’s biographical details,
see ‘‘Directors and Senior management — Boa rd of Directors — Executive Directors’’.
Our visionary management team comprises o ther members who are industry veterans
with diverse expertise, including Ms. Liu Qin, our executive Director and a general manager
of our Group, Mr. Andrew Robert Crank, our executive Director and a general manager of
our Group, and Mr. Liu Tao, our executive Director and chief financial officer of our
Group.
Ms. Liu Qin possesses extensive experience in the RV industry and the broader
automotive industry. Prior to joining our Group, Ms. Liu Qin worked at Ordos (Wuhan)
Forest River Automotive Co., Ltd.* ( 鄂爾多斯（武漢）森林河汽車有限公司)f r o mM a r c h
2012 to September 2014.
Mr. Andrew Robert Crank has extensive experience in the RV industry and deep
insights into the local markets across Austral asia. Prior to joining our Group, Mr. Andrew
Robert Crank worked at Jayco Corporation Pty Ltd, an established RV company in
Australia, from July 2017 to June 2020.
Mr. Liu Tao possesses two decades of experience in financial management and
investment. Before he joined our Group, Mr. Liu Tao served as the vice president of
financial department at Hangzhou Hongjing Drive Technology Co., Ltd.* ( 杭州宏景智駕科
技有限公司), an autonomous driving solutions p rovider in the PRC, from March 2022 to
April 2023 and the chief financial officer at Zhejiang Tiancheng Controls Co., Ltd. ( 浙江天
成自控股份有限公司), a company primarily engaged in th e business of vehicle seats and
which was listed on the Shanghai Stock Exchange (stock code: 603085), from February
2020 to January 2022.
OUR STRATEGIES
Strengthen Australasian leadership and expand into the European and Canadian markets
Our RVs have been commercially successful and our brands have garnered widespread
acclaim in the Australasian market. Acco rding to Frost & Sullivan, we achieved the
second-largest market share in Australasia’s RV industry in terms of sales volume in 2023.
Our top-selling brand, Snowy River, has models that have won numerous awards for their
innovative designs and high-quality craftsmanship, including the ‘‘Best Value for Money’’
Award by CZONE for its SRC-21 RV model in 2019 and 2022 and the ‘‘Best Aussie Van
Under 60k’’ award by Caravan World Media in 2022. Our goal is to be the number one
seller in Australasia in the near future an d the preferred RV brand for Australasian
customers. To fortify our market leadership po sition in Australasia, we will intensify our
efforts by establishing partnerships with more dealers and expand our presence through
establishing more self-owned stores (by way of organic growth or acquiring other suitable
RV stores at desirable locations) and JV stores. Furthermore, we will further enhance the
sales performance of our existing stores thr ough providing comprehensive training to our
sales team, upgrading our customer relationship management system and conducting
relevant data analysis.
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Building upon our success in the Australasian market, we are geared up to expand our
presence into Europe and Canada to reach more potential customers. We intend to replicate
our success in the Australian market to these new territories. Similar to our business model
in Australasia, we intend to employ a combination of dealer stores and self-owned stores to
effectively harness the sales and marketing resources of our own and our local partners. As
confirmed by Frost & Sullivan, no import dut y was applicable to RVs of a Chinese origin
exported into Europe or Canada as of the Latest Practicable Date. For our potential tariff
exposure in light of our expansion plan in Europe and Canada, see ‘‘Risk Factors — Risks
relating to our Business and our Industry — We may be subject to tariffs in countries where
w eo p e r a t eo rp l a nt oe x p a n do u rb u s i n e s s . ’ ’
We intend to allocate 16.7% of the net p roceeds from the Global Offering for
expansion of our sales channels. See ‘ ‘Future Plans and Use of Proceeds.’’
Maintain and elevate our brand image in the towable RV market
We plan to continue to maintain and elevate our brand image and reputation for
towable RVs to not only expand our customer base but also foster stronger loyalty among
existing ones. We will focus on further deepening our penetration into the mid- to high-end
market, where we will meticulously craft a br and image centered on private space, safety,
comfort, and customization, while remaining c ompetitively priced in the market. With our
bespoke RV collection, we will continue to cura te individualized ownership experiences for
each of our RV owners.
We seek to increase our brand awareness through various marketing activities. These
may include sponsorships for racing series and music festivals, participation in RV shows
and special events, advertisement placements, digital and social media marketing, and
cooperation with brand ambassadors and celebrities. Each initiative will be designed to
showcase the essence of our brand image and resonate with our customers on a deeper level.
Continue to rejuvenate and broaden our RV collection
In 2023, we captured a market share of 6.8% in the RV market and 9.7% in the
standard caravan market in Australasia, acco rding to Frost and Sullivan. To capitalize on
the opportunities in the global market, we will continue to upgrade and rejuvenate our
existing product collection by incorporating interior and exterior upgrades to our RVs, as
well as to introduce new models, to attract new customers with different needs, generate
repurchase from existing customers and expand our product collection. Furthermore, we
expect to launch hybrid off-road towable RVs a nd motorized RVs first in Australasia by the
end of 2024 and eventually roll out our RV collections in the European and Canadian
markets.
In addition, as of the Latest Practicable Date, steering the evolution of the RV
industry, we had developed and will continue to strengthen our new towable ERV models,
which were lighter in weight and featured wit h automotive design and constructions. See
‘‘— Product Development and Innovation — Our Towable ERV Model in the Pipeline.’’
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We intend to allocate 10.0% of the net pr oceeds from the Global Offering to our
product research and development efforts. See ‘‘Future Plans and Use of Proceeds.’’
Upgrade and automate our production facilities
We plan to acquire land and establish state -of-the-art production facilities over the
next three years. This strategic facility e xpansion is expected to provide us with the
infrastructure needed to support future growth. Furthermore, we are committed to ongoing
plant upgrades and equipment automation, ensuring that our facilities remain at the
forefront of technological advancement.
In the RV industry, the product itself is at heart of consumer decision-making, serving
as the cornerstone of consumer satisfaction and loyalty. Recognizing this, we are dedicated
to elevating our production efficiency and efficacy to satisfy and exceed the evolving
demands of our customers. We plan to constantly optimize production workflows by
upgrading our furniture production, welding, and tailoring processes.
In parallel with our production upgrades, w e are committed to investing in research
and development to pioneer new technologies and manufacturing techniques, with an aim
to reducing costs and achieving greater precis ion in manufacturing processes. By investing
in automation, we aim to achieve cost reduction, enhance operational efficiency, and
improve product consistency to meet stringent quality standards. Additionally, we consider
investment in the product development and pro duction facilities of ERVs a critical part of
our growth strategy, aligning with the ind ustry’s shift towards sustainability and
eco-friendliness.
We intend to allocate 63.3% of the net proceeds from the Global Offering to
construction and renovation our production facilities. See ‘‘Future Plans and Use of
Proceeds.’’
OUR BUSINESS MODEL
We are a recreational vehicle enterprise with an extensive presence in Australasia that
designs, develops, manufactures and sells bespoke towable RVs, commanding the
second-largest market share in Australasia’s RV industry in terms of both revenue and
sales volume in 2023, according to Frost & S ullivan. Our product offering is showcased
under three distinctive brands, namely the mi d-end and top-selling brand, Snowy River, the
luxury brand, Regent, and the semi-off-road brand, NEWGEN. Envisioning our RV
owners who seek to live, holiday or travel in the RVs, we offer towable RVs ranging from
family-friendly models for family’s recreati onal use, compact models for adventurers,
slide-out models for those who crave additional space in their RVs, to multi-terrain models
for the ultimate semi-off-road adventure. Dri ven by our relentless dedication to customer
satisfaction, we offer a high degree of cus tomization for all our RV models. See ‘‘— Our
Product and Brand.’’ We design and manufact ure our RVs with emphasis on comfortability,
safety and functionality. According to Frost & Sullivan, we achieved the second-largest
market share in Australasia’s RV industry in terms of sales volume in 2023. In addition, as
of the Latest Practicable Date, steering the evolution of the RV industry, we were in the
final stage of developing new towable ERV mod els, which are lighter in weight and featured
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with automotive design and constructions, a n dw e r ea m o n gt h ef i r s tb a t c ho fR Ve x p e r t s
that bring towable ERV options to commercia lization. See ‘‘— Product Development and
Innovation — Our Towable ERV Model in the Pip eline.’’ Furthermore, we expect to launch
hybrid off-road towable RVs and motorized RVs first in Australasia by the end of 2024 and
eventually roll out our RV collections in the European and Canadian markets. As
confirmed by Frost & Sullivan, no import dut y was applicable to RVs of a Chinese origin
exported into Europe or Canada as of the Latest Practicable Date. Where necessary, we will
engage independent tax advisors and/or tariff advisors in the future to ensure compliance
with tax and custom policies in countries where we operate or plan to expand our business.
For our potential tariff exposure in light of our expansion plan in Europe and Canada, see
‘‘Risk Factors — Risks relating to our Business and our Industry — We may be subject to
tariffs in countries where we operate or plan to expand our business.’’
Built upon a vertically integrated business model, we combine our in-house product
design and manufacturing expertise in China wi th our local sales capabilities in Australasia,
effectuating superior end-to-end owner exper iences for RV owners from conceptualization,
design selection, customization, delivery to va rious after-sales services. Our manufacturing
team in China works closely with our marketing and distribution team in Australasia to
deliver end-to-end services to our customers . To capture the benefit of our integrated
manufacturing capabilities in the PRC and our l ocal decade-long presence, extensive sales
and distribution network and rich marketing experience in the RV industry in Australasia,
we produce our frame and chassis in China utiliz ing the latest vacuum press technology and
a d v a n c e dc r a f t s m a n s h i p ,a n dt h e ns h i pt h e mt oo u ra s s e m b l yl i n e si nM e l b o u r n et ob e
assembled according to Australian federal st andards that can be marketed in both Australia
and New Zealand.
Our RVs are available for sale and delivery in Australia and New Zealand and have a
pre-tax base price ranging from A$50,900 (equivalent to RMB230,093) to A$84,990
(equivalent to RMB384,197), depending on the brands and models. As of June 30, 2024, we
had built a dynamic, multifaceted sales and dis tribution network, leveraging a combination
of three distinct channels: (i) a robust and extensive network of 13 third-party dealer stores
in Australasia, enhancing our sales coverag e and market penetration; (ii) two self-owned
stores in Australia alongside online official we bsites, ensuring direct local presence,
fostering connection with our clientele, and a cquire invaluable market insights firsthand;
and (iii) four JV stores with our JV partne rs, allowing us to expand our sales and
distribution network while mitigating substantial overhead costs. Our geographic footprint
spans across major cities in Australasia, including Melbourne, Sydney, Brisbane, Adelaide,
Perth, Canberra, Auckland and Christchurch , with a strategic presence of one to three
dealer stores, JV stores, and/or self-owned stores covering each location. See ‘‘— Sales and
Distribution.’’
We also offer auxiliary services that suppor t and synergize with our core business. As
of June 30, 2024, we had a network of 54 recommended RV workshops (including our
self-owned stores and JV stores) offering various after-sales services, including RV
maintenance, repairs, and sales and upgrade of a wide selection of RV parts and
accessories, ensuring that our customers have access to everything they need to keep their
vehicles running smoothly and efficiently. By integrating these additional offerings into our
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business model, we strive to foster lasting relationships with our RV owners that goes
beyond mere transactions, ensuring satisfaction, long-term customer loyalty, and an
exceptional ownership experien ce. Additionally, starting from 2023, we provide an option
for customers to trade in their eligible pre-owned RV for purchase of a new RV that we
offer at all of our self-owned stores and JV stores, and resell these pre-owned RVs typically
at the same stores.
The following table sets forth our revenue breakdown by products, both in absolute
amount and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Sale of RVs 298,586 99.6% 498,116 99.9% 710,747 98.7% 309,526 100.0% 396,894 94.1%
— Snowy River 233,273 77.8% 402,690 80.7% 550,175 76.4% 235,517 76.1% 335,096 79.4%
— Regent 35,098 11.7% 49,347 9.9% 84,338 11.7% 35,514 11.5% 26,514 6.3%
— NEWGEN 30,215 10.1% 46,079 9.2% 76,234 10.6% 38,495 12.4% 35,284 8.4%
Sale of pre-owned RVs — — — — 8,691 1.2% — — 23,396 5.5%
Others
(1) 1,086 0.4% 664 0.1% 865 0.1% — — 1,683 0.4%
Total 299,672 100.0% 498,780 100.0% 720,303 100. 0% 309,526 100.0% 421,973 100.0%
Note:
(1) Others include revenue generated from sales of RV parts during our provisio n of after-sales services
which are auxiliary to our core business of sales of our RVs.
The following table sets forth a breakdown of our gross profit and gross profit margin
by products for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
(Unaudited)
(RMB in thousands, except for percentages)
Sales of RVs 49,755 16.7% 82,172 16.5% 179,521 25.3% 71,381 23.1% 127,662 32.2%
— Snowy River 39,455 16.9% 63,590 15.8% 140,804 25.6% 55,844 23.7% 105,169 31.4%
— Regent 6,938 19.8% 7,535 15.3% 15,572 18.5% 6,517 18.4% 8,207 31.0%
— NEWGEN 3,362 11.1% 11,047 24.0% 23,145 30.4% 9,020 23.4% 14,286 40.5%
Sales of pre-owned RVs — — — — 1,415 16.3% — — 6,777 29.0%
Others 348 32.1% 72 10.9% 115 13.3% — — 464 27.6%
Total 50,103 16.7% 82,244 16.5% 181,051 25.1% 71,381 23.1% 134,903 32.0%
Overall, the fluctuations in our gross profit margin for sales of RVs were primarily
affected by the following factors: (i) high degree of customization of our RV owners which
typically yields higher gross profit margin , (ii) the proportion of our retail sales of RVs
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through self-owned stores and JV stores attribut able to the relatively higher retail prices
compared to the wholesale prices for dealers, an d (iii) fluctuations in shipping and handling
expenses.
More specifically, our gross profit margi n for the Snowy River RVs decreased from
16.9% in 2021 to 15.8% in 2022, primarily due to an increase in shipping and handling
expenses amid COVID-19. Our gross profit margin for the Snowy River RVs increased to
25.6% in 2023, primarily due to (i) a highe r degree of customization, (ii) a higher
proportion of retail sales, and (iii) the higher shipping and handling expenses in 2022 amid
COVID-19. Our gross profit margin for the Snowy River RVs increased from 23.7% for the
six months ended June 30, 2023 to 31.4% for the six months ended June 30, 2024, primarily
due to a higher proportion of our retail sales of RVs through self-owned stores and JV
stores than sales to dealers at wholesale prices which are generally lower than retail prices.
Our gross profit margin for the Regent RVs during the Track Record Period was
primarily affected by fluctuations in shippi ng and handling expenses. The gross profit
margin decreased from 19.8% in 2021 to 15.3% in 2022 and then increased to 18.5% in
2023, primarily due to (i) higher shipping an d handling expenses on a per-unit basis as a
result of higher levels of shipping prices due to the disruption to global supply chains caused
by COVID-19, and (ii) the relatively larger revenue contribution of RV models which have
higher gross profit margin in 2021. Our gross profit margin for the Regent RVs increased
from 18.4% for the six months ended June 30, 2023 to 31.0% for the six months ended June
30, 2024, primarily due to a higher proportion of our retail sales of RVs through self-owned
stores and JV stores than sales to dealers at who lesale prices which are generally lower than
retail prices.
Our gross profit margin for the NEWGEN RVs increased from 11.1% in 2021 to
24.0% in 2022, primarily due to (i) a higher deg ree of customization, and (ii) a reduction in
procurement costs as a result of our collaboration with more cost-effective suppliers for
certain components of the NEWGEN models. Our gross profit margin for the NEWGEN
RVs increased to 30.4% in 2023, primarily due to (i) the higher shipping and handling
expenses in 2022 amid COVID-19, and (ii) a higher proportion of retail sales. Our gross
profit margin for the NEWGEN RVs increased from 23.4% for the six months ended June
30, 2023 to 40.5% for the six months ended June 30, 2024, primarily due to a higher
proportion of our retail sales of RVs through self-owned stores and JV stores than sales to
dealers at wholesale prices which are generally lower than retail prices.
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OUR PRODUCT AND BRAND
Our Products
We design, produce and sell a wide range of towable RVs. Each of our RV is designed
and produced with focus on comfortability, safety and functiona lity. Our RVs boast
innovative designs and a suite of advanced technologies, setting them apart from our
competitors’ offerings. Our RVs disp lay the following common features.
. Exterior. We employ sandwich panels for the construction of our RVs’ floor, walls
and roof, ensuring they are sturdy, lightweight, and water-resistant. Beneath the
floor lies an organic zinc-rich silver metallic chassis with a 50mm ball coupling
and torsion suspension, enhancing safety and delivering a smoother driving
experience. Moreover, our anti-sway cont rol system enhances vehicle stability,
further improving driving safety and comfort.
o Floor, Walls and Roof. All our exterior floors, walls, roofs are constructed
using ALOPEX
® sandwich panels. These sandwich panels are manufactured
in-house at our production facilities in China, utilizing state-of-the-art
machinery procured from the United States. The ALOPEX ® sandwich panels
feature a combination of aluminum extrusions and high-density XPS
insulating foam, finishe d with fiberglass sheets. This combination ensures
that our RV is lightweight, rain and hail resistant, while well insulated from
extreme temperature.
o Chassis. The chassis is manufactured using DuraGal rectangular hollow
sections using steels with 250Mpa (TB C) in strength. The chassis is fully
welded by highly skilled welders, and then painted for final finish and
protection. The chassis have been designed and tested to meet Australian
federal standards with a rating of either 3,000 kg depending on the model.
o Suspensions. We adopt torsion suspension to our Snowy River SRC series,
Regent Discoverer and Cruiser series. T he torsion suspension is comprised of
a unique hexagonal outer axle tube, which houses three rubber elements held
in place by a triple-fluted inner tube axle, to damp shocks along the ride,
providing a smooth, stable, and safe towing experience. With the torsion
suspension, our RVs can navigate rough road conditions from dirt tracks to
bitumen freeways. Our RV models under the Snowy River SRT series and
NEWGEN NG series are equipped with 3.5T independent coil trailing arm
suspension, creating a high ground cle arance. This trailing arm suspension is
designed and tested in-house, and excels in traversing challenging terrain,
including undulating off-road tracks.
o Anti-sway control System. All our towable RVs are fitted with trial-safe
emergency braking system, which immediately applies brakes and brings the
towable RVs to a standstill when it is detached from the towing vehicle. In
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addition, we provide an anti-sway control system, which can distribute
weight, manage braking output and make advanced braking maneuvers to
effectively control trailer sway, as a customization option to our owners.
. Interiors . We meticulously design and manufacture interior fittings and
customized furnishings for our RVs in-house, aligning with our commitment to
fulfilling the high degree of high-end cus tomization of our RV owners, enhancing
the competitiveness of our products in the market. To keep abreast of market
trends, we also collaborate with third-pa rty interior design consultants to select
interior themes and colors through market research and study on focus groups.
Every element inside our RVs is care fully curated by our team of skilled
professionals, ensuring exceptional quality and customization to meet diverse
tastes and preferences of our owners.
o Furniture. Our cabinets and furniture are manufactured from high quality
solid plywood. Each panel and cupboard door are glued and screwed
together and is laminated with acrylic material chosen from a wide range of
colors and styles. We adopt rounded edges on all doors complimented with
soft closing gas struts and heavy duty handles and latches to add a touch of
class and style.
o Electrical. All RVs are fitted with Projecta battery management systems,
including a fuse box, solar controlle r, battery charger, water pump switch,
hot water cut-off switch, and primary load. These systems are integrated to
ensure the safety of our occupants in case of various overload events. The
majority of the electrical system is grouped together in a single overhead
cupboard for ease of access. All of our RVs are rigorously inspected by a
qualified electrician prior to delivery and provided with an electrical
certificate in accordance with A ustralian federal standards.
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o Safety Features. Safety of the owners and passengers is paramount to our
business. We equip our RVs with fire extinguisher, smoke alarm and critical
equipment shut off switches to deal with emergencies. In addition, all our
towable RVs are fitted with trial-safe emergency braking system, which
immediately applies brakes and brings the towable RVs to a standstill when it
is detached from the towing vehicle.
We pride ourselves on our commitment to customization. With our superior
manufacturing capabilities and skilled crafts manship, we offer a made-to-order service
that fosters a high level of personalization and ensures every RV reflects the unique
preferences and needs of its owner. From exterior esthetics to interior layout and feature,
and whether it is incorporating unique desig n elements, adding special amenities, or
fine-tuning every detail, our team is dedicat ed to creating RVs that reflect individualized
demands of different RV owners.
We maintain a high degree of customization for all our RV models, ranging from
interior layouts, appliances, external deigns to furnishings and fittings, which can be almost
completely adapted to match customer requ irements, while still maintaining cost
advantages associated with our production cycle. For the owners to visualize their dream
RVs, we offer virtual selection interface online with estimated pricing under different
options.
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Our Brands
Our collection of bespoke RVs is curated und er three characteristic brands, namely
Snowy River, Regent and NEWGEN, which we regard as emblems of quality,
craftsmanship, innovation and performance. Each of our brands stands out in style and
technical performance characteristics with d istinctive features and precise identities:
. Snowy River is our top-selling brand that perfectly combines contemporary and
modern design elements with attention to details and functionalities, targeting
mid-end customers.
. Regent is our luxury, high-end brand with more than three decades of history,
characterized by luxurious cabins with sp acious and elegantly designed interior
layouts.
. NEWGEN is a semi-off-road brand, designed to appeal to the younger generation
of customers.
Snowy River
Launched in 2015 in Australia, Snowy River RVs offer a range of affordable and
stylish RVs with high-quality craftmanship, inc luding touring range and multi-terrain range
models. With various layouts to choose from, Snowy River RVs cater to customers looking
for the best value-for-money RV in Australia. Since its debut in 2015, Snowy River has won
awards, including the ‘‘Best Value for Money’’ Award by CZONE in 2019 and 2022, the
‘‘Best Aussie Van Under 60k’’ award by Caravan World Media in 2022, and ‘‘Caravan of the
Year for the Value for Money Category’’ award by MSA 4x4 Accessories in 2022.
As of June 30, 2024, Snowy River RVs offered three series, namely (i) the SRC,
traditional touring range RVs, (ii) the SRT, m ulti-terrain range RVs, with multi-terrain
suspension, which further branch off to 17 models based on size, layouts and range, and (iii)
the SRP, pop top range RVs.
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. SRC Series. The SRC series offer a wide range of family-friendly models, compact
models for solo adventurers and slide-out models for those who crave additional
space. The interior design and furnishing of our SRC models are designed with a
touch of modernity and elegance. SRC models come with an en suite, internal
kitchen, queen-sized bed (single beds are optional on most models), and either an
L-shaped lounge, club lounge, or cafe ´dinette seating area. The SRC models are
equipped with rounded benchtops and unique curved overhead cupboards to offer
a sense of spaciousness, which is further enhanced by LED cupboard strip
lighting. Customers can choose from a wide selection of stylish upholstery and
fabric options for furnishings.
. SRT Series. The SRT series are designed to tackle rough and undulating road
conditions. We equip all SRT models with a 3.5T independent coil trailing arm
suspension, which provides a smoother ride over corrugated tracks without
compromising the stability and control of the RVs. In addition, SRT models are
equipped with extensive stone protection f eatures, including rock coat finish to
the chassis, stone guards with large mudflaps and underfloor brushes, to
safeguard the RVs against damage duri ng off-road travels. The SRT models are
equipped with abundant solar power and lithium batteries to ensure sufficient
energy for off-grid camping.
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. SRP Series. The SRP series represents a blend of innovation, style, and
functionality. Designed with the mod ern adventurer in mind, the SRP series
features a pop-up roof that expands at the touch of a button, creating an airy and
spacious interior for camping experience. During travel, the roof lowers to
improve aerodynamics, ensuring smooth handling and better fuel efficiency while
on the road. The SRP series also boasts a low profile when the roof is down,
making storage in standard garages hassle-free. With layouts tailored for both
couples and families, including opti ons with bunk beds, the SRP models are
equipped with dedicated seating, en-suite bathrooms, a equipped kitchen, and a
comfortable bed.
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The table below sets out specifications of models under our Snowy River brand.
Model Launch Time Size 1
Sleeps
up to
List Price as of
June 30, 2024 2
(mm)
(A$ in
thousands)
(Equivalent
to RMB in
thousands)
SRC (Touring range)
SRC-14 November 2020 L5927*W2390*H3071 2 50.9 230.1
SRC-16 December 2020 L6452*W2390*H3071 2 54.1 244.6
SRC-17 November 2020 L6827*W2390*H3071 2 56.4 255.0
SRC-18 November 2020 L7127*W2390*H3071 2 62.3 281.6
SRC-19 November 2020 L7452*W2390*H3071 2 63.6 288.0
SRC-20 November 2020 L7727*W2390*H3071 2 65.0 293.8
SRC-20F November 2020 L7727*W2390*H3071 4 66.4 300.1
SRC-21 November 2020 L8027*W2390*H3071 2 66.4 300.1
SRC-21S December 2020 L8027*W2390*H3221 2 71.4 322.8
SRC-22 November 2020 L8327*W2390*H3071 2 67.3 304.2
SRC-22F November 2020 L8327*W2390*H3071 5 70.0 316.4
SRC-22S December 2020 L8327*W2390*H3221 2 72.3 326.8
SRC-23 November 2020 L8527*W2390*H3071 2 68.6 310.1
SRT (Multi-terrain range)
SRT-19 December 2021 L8220*W2390*H3110 2 76.4 345.3
SRT-20 December 2021 L8520*W2390*H3110 2 77.7 351.2
SRT-20F January 2022 L8520*W2390*H3110 4 81.8 369.8
SRT-22F January 2022 L9120*W2390*H3110 5 81.8 369.8
SRT18 May 2024 L8000*W2390*H3100 2 83.0 375.2
SRT18F May 2024 L8100*W2390*H3100 4 84.5 382.0
SRP (Pop top range)
SRP18 May 2024 L7052*W2390*H2658 2 58.5 264.4
SRP18F May 2024 L7052*W2390*H2658 4 60.5 273.5
SRP19 May 2024 L7302*W2390*H2658 2 61.5 278.0
SRP19F May 2024 L7302*W2390*H2658 4 63.0 284.8
Notes:
1 Measured by external body measurement.
2 The final retail price equals to list price plus customiza tion fee, which typically ranges from approximately
5.0% to 10.0% of the list price.
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Regent
The Regent brand was acquired by us in 2014. See ‘‘History, Reorganization and
Corporate Structure — Corporate Development — Establishment of Regent Company.’’ In
2021, leveraging our manufacturing capab ilities, we converted R egent RVs from using
old-fashioned wood construction into a new full composite sandwich panel construction,
which was then beyond reach for most local R V manufacturers in Australia. Regent RVs
offer an extensive range of luxury RVs with ou tstanding craftsmanship under two series,
Discoverer and Cruiser. We employ the advan ced technology and equipment across the
range of Regent RVs, ensuring that each one is built with all the features and comfort that
luxury RV owners expect. Over the years, our Regent RVs have been one of the widely
recognized RV brands in Australia.
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While taking advantage of the ALOPEX ® exterior construction technique, the Regent
collection adopts unique single piece fiberglass molds in the front and rear of the body,
offering a bullet-train appearance, with flat ti nted double-glazed windows and rock coated
chassis completing the exterior. We decorate the interior of our Regent collection with
high-quality appliances alongside stylish luxury flat finished cupboards and leather
upholstery. All Regent RVs come standard w ith additional safety features, such as
anti-sway control systems.
As of June 30, 2024, the Regent collection comprised five traditional luxury models
under the Discoverer series and four slide-out luxury models under the Cruiser series. The
following table below sets out specifications of models under our Regent brand.
Model Launch Time Size 1
Sleeps
up to
List Price as of
June 30, 2024 2
(mm)
(A$ in
thousands)
(Equivalent
to RMB in
thousands)
Discoverer
RDC196 September 2020 L8370*W2400*H2950 2 70.9 320.5
RDC206 December 2020 L8670*W2400*H2950 2 72.7 328.6
RDC210 December 2020 L8820*W2400*H2950 2 74.5 336.8
RDC210F January 2021 L8820*W2400*H2950 5 76.4 345.4
RDC236 December 2020 L9570*W2400*H2950 2 78.2 353.5
Cruiser
RCC206 January 2021 L8670*W2400*H2950 2 80.0 361.6
RCC216 August 2020 L8970*W2400*H3100 2 81.8 369.8
RCC220 January 2021 L9120*W2400*H2950 2 83.6 377.9
RCC226F May 2023 L9270*W2400*H3100 5 85.0 384.2
Notes:
1 Measured by external body measurement.
2 The final retail price equals to list price plus customiza tion fee, which typically ranges from approximately
5.0% to 10.0% of the list price.
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NEWGEN
Launched in 2019, NEWGEN RVs cater to customers seeking semi-off-road
capabilities without all the rugged featur es of the SRT range. Positioned between the
SRC and SRT range, the pricing of NEWGEN RVs offers a balanced blend of affordability
and performance. We equip all our NE WGEN models with the same ALOPEX ® exterior
construction techniques as Snowy River, as well as a 3.5T independent coil trailing arm
suspension which provides a smoother ride ove r corrugated tracks without compromising
the stability and control of the RVs. As of the Latest Practicable Date, all our NEWGEN
RVs were only sold through our JV stores operated by our 51%-owned subsidiary, Leisure
Lion.
As of June 30, 2024, NEWGEN offered the NG series comprising 17 models. The
following table sets out specificatio ns of the models under the NG series.
Model Launch Time Size 1
Sleeps
up to
List Price as of
June 30, 2024 2
(mm)
(A$ in
thousands)
(Equivalent
to RMB in
thousands)
NG
NG13 October 2020 L6530*W2390*H3160 2 56.4 255.0
NG15 June 2020 L7135*W2390*H3160 2 58.2 263.1
NG17 August 2019 L7805*W2390*H3160 2 66.4 300.2
NG18 December 2019 L8045*W2390*H3160 2 70.9 320.5
NG18R December 2019 L8045*W2390*H3160 2 68.2 308.3
NG18F 2 Bunks December 2021 L8045*W2390*H3160 4 70.9 320.5
NG19 August 2019 L8355*W2390*H3160 2 71.8 324.6
NG19R January 2020 L8405*W2390*H3160 2 71.8 324.6
NG19S September 2019 L8455*W2390*H3260 2 80.0 361.6
NG20 January 2021 L8655*W2390*H3160 2 72.7 328.6
NG20SR March 2023 L8755*W2390*H3260 2 81.8 369.8
NG21F November 2020 L8755*W2390*H3160 5 75.4 340.8
NG23 March 2020 L9585*W2390*H3160 2 81.8 369.8
NGB19 May 2024 L7717*W2390*H2967 2 68.6 310.1
NGB20 May 2024 L8017*W2390*H2967 2 71.6 323.7
NGB21F May 2024 L8317*W2390*H2967 4 or 5 75.6 341.7
NGB21S May 2024 L8317*W2390*H2967 2 77.1 348.5
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Notes:
1 Measured by external body measurement.
2 The final retail price equals to list price plus customiza tion fee, which typically ranges from approximately
5.0% to 10.0% of the list price.
The following table sets forth a breakdow n of our sales volume and average selling
price by brands for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2024
Sales volume
Average
selling price
Average
selling price Sales volume
Average
selling price
Average
selling price Sales volume
Average
selling price
Average
selling price Sales volume
Average
selling price
Average
selling price
(Unit)
(A$ in
thousands)
(Equivalent
to RMB in
thousands) (Unit)
(A$ in
thousands)
(Equivalent
to RMB in
thousands) (Unit)
(A$ in
thousands)
(Equivalent
to RMB in
thousands) (Unit)
(A$ in
thousands)
(Equivalent
to RMB in
thousands)
Sales of RVs
— Snowy River 1,066 45.3 218.8 1,752 49.2 229.8 2,165 54.2 254.1 1,234 57.9 271.6
— Regent 131 55.4 267.9 173 61.0 285.2 275 65.4 306.7 78 72.4 339.9
— NEWGEN 133 47.0 227.2 202 48.8 228.1 254 64.0 300.1 115 65.4 306.8
Total 1,330 46.5 224.5 2,127 50.1 234.2 2,694 56.2 263.8 1,427 59.2 278.1
The average selling price of our RVs increas ed steadily from approximately A$46,500
(equivalent to RMB224,500) in 2021 to approximately A$59,200 (equivalent to
RMB278,100) for the six months ended June 30, 2024, reflecting a consistent upward
trend, primarily attributable to the following key factors. First, we have been continuously
broadening our collection of RVs by introducing more high-end RV models, which has
resulted in a natural shift toward higher- priced products. Additionally, the higher
proportion of our retail sales of RVs through self-owned stores and JV stores compared
to sales to dealers at wholesale prices, which are generally lower than retail prices, also
drives this increase. Furthermore, the impact of inflation during this period contributed to
upward price adjustments across our product range.
PRODUCT DEVELOPMENT AND INNOVATION
We believe that our success is attributable to our strong product development
capabilities. For this reason, we have increa singly dedicated a s ubstantial amount of
resources to strengthen our product development and technology. For the three years ended
December 31, 2023 and for the six months ende d June 30, 2024, we incurred R&D expenses
of RMB2.8 million, RMB5.1 million, RMB8.0 million and RMB5.6 million, respectively.
As of June 30, 2024, our product development and technology team consisted of 44
members.
We have been continuously rejuvenating and broadening our product collection. In
addition to periodically launching new models, we continuously upgrade and rejuvenate our
existing product collection by incorporating interior and exterior upgrades to our RVs,
based on market research and customer feedback. During the Track Record Period, we
developed and launched nine new models under Regent and four new models under Snowy
River and upgraded 13 models under Snowy River. We are committed to continuously
introducing new models to attract new customers with different needs, generate repurchase
from existing customers and expand our product collection.
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Furthermore, we expect to launch hybrid off-road towab le RVs and motorized RVs
first in Australasia by the end of 2024 and eventually roll out our RV collections in the
European and Canadian markets. In particular, we plan to release six models of hybrid
off-road towable RVs under Snowy River in the fourth quarter of 2024, with lengths
varying from 13 to 16 feet. These hybrid towable RVs combine the compactness of a camper
trailer with the convenience and comfort of a ca ravan, featuring off-road toughness suitable
for adventurous travels. Our new models w ill cater to both couples and young families,
providing versatile and comfortable options f or various travel needs. Additionally, we plan
to release three models of motorized RVs under Snowy River in the fourth quarter of 2024,
with each model built on a different chassis. These motorized RVs, typically designed for
two to three occupants, are manufactured through the conversions of delivery van type
v e h i c l e s ,w h i c hc a nb ed r i v e nw i t has t a n d a r dcar license. To give a fuller coverage of our
products, our upcoming models aim to capture this market segment by providing reliable
and well-equipped products to customers.
Our Towable ERV Model in the Pipeline
We are currently developing a trailblazing model of towable ERV. As of the Latest
Practicable Date, we had finalized the production plan and the 3D design of our towable
ERV model. We anticipate commencing deliver y of these ERV models in Australasia by the
first quarter of 2025. Our towable ERV models are designed using rigorous automotive
manufacturing processes:
. Efficient Towing. The towing of our ERV models is safe and smooth, whether the
owners are towing with a gas vehicle or an electric vehicle. Incorporating
innovative technology to advance the RV i ndustry toward sustainability, we have
developed new self-propelled caravan that provides the necessary power to assist
the towing vehicle. This significantly alle viates range anxiety associated with ERV
towing. We employ an all-aluminum fram e construction to enable a lightweight
composite with sustainable materials, al ong with a dual-motor active propulsion
assist system to power the ERV.
. Smart power. We adopt a regenerative braking energy recovery system to charge
the ERVs along the drive. In addition, our towable ERV models are equipped
with solar energy systems, converting so lar-powered energy into super-charged
power, introducing energy versatility wit h multiple ways to use and share power.
In addition to typical EV battery, we also equip our towable ERV models with
integrated solar charging system, allo wing for self-charging on the go or when
parked.
. Intelligence. Our towable ERV models feature the magic hitch, allowing automatic
sight, alignment, and hitching of the RV . Furthermore, they come equipped with
remote control functionality, allowing owners to reverse, park, and position the
towable RVs automatically.
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Product Development Cycle
We have established a highly structured cycle to govern the launch of new products,
which is centered around various key deci sion nodes. The cycle begins with a market
analysis conducted by the marketing department to identify potential market opportunities,
estimate sales potential, and monitor and analyze the performance of industry peers.
Following the market analysis, our manufactu ring team in China closely collaborates with
the sales and marketing team in Australasia to develop the layout of new products tailored
to the needs of our potential customers in the local markets. Once we complete all
engineering calculations, we design the molds required to produce the fiberglass
components and assemble the initial prototype for our new models. After our prototype
models pass internal quality control, we begin planning for full-scale production. We have
been continuously evolving our offerings by selectively introducing new additions,
withdrawals outdated models, and implementing modifications to align with the
ever-changing needs of consumers and the m arketplace. Our product development cycle
for a new RV model typically takes 12 months.
The flow chart below illustrates the major p hases of our product development cycle:
Market
Analysis
Preliminary
Design
Production of
Molds and
Prototype
Assembly
Production and
Supply Chain
Planning
Market Analysis
At the initial stage of our product development process, we make product innovation
and improvement plans based on market trends and our business strategies. Our marketing
team plays a crucial role in our market analysis. It is responsible for identifying potential
market opportunities, estimating the potential sales volumes associated with these
opportunities and monitoring and analyzing the activities of our competitors. Our
marketing team interacts closely with our cu stomers, dealers and our after-sales service
team to monitor the feedback from customers a nd evaluates the actual performance of our
products and services compared to their targe ts, in order to identify areas of improvement
for our products and customer experience.
Our marketing team compares our product positioning to areas of emerging customer
demand in order to identify potential gaps in our product collection. This approach helps us
to ensure that our product collection cov ers all areas of identified demand, while
minimizing product overlaps both within and across our brands. Our marketing team
also regularly monitors the product offerings and activities of our competitors in order to
provide us with early warnings of product innovations or other actions that may threaten
our competitive position. We believe this helps us to continue offering customer value
propositions characterized by high quality, refined design solutions and excellent technical
performance.
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Preliminary Design
Following the initial concept generation, a p reliminary feasibility study evaluates the
required investment, serving as the basis for determining whether to proceed with the
development or not. Once we make a prelimin ary decision to proceed with the development
of a new model, we carry out design development in close coordination with the project
manager of the brand and in compliance with the technical parameters determined by
relevant laws and regulations. We generally conduct the design development in-house at our
product development and technology center. All our RVs are designed using the
state-of-the-art 3D modeling computer-aid ed design software, complemented by finite
element analysis (FEA). FEA is a sophisticated computerized method that accurately
predicts how a product reacts to real-world forces, including vibration, heat and other
physical elements.
Production of Molds and Prototype Assembly
Once we complete all engineering calcula tions, we design the molds required to
produce the fiberglass components of the prototype using highly qualified workforce with
specialized skills. After assembly, we test the prototype for compliance with all technical
and financial parameters and regulatory and certification requirements.
Production and Supply Chain Planning
After our prototype models passed internal quality control, we begin planning for
full-scale production. Our industrial enginee ring team charts and optimizes all the steps
required for production and assembly, defines the bill of materials (i.e., the list of all raw
materials, components and sub-assemblies used in the production of the new design model),
and organizes a dedicated supply chain within our overall production process.
PRODUCTION
Production Process and Facilities
Production Process
Our production philosophy centers around product quality, continuous improvement,
flexibility, advanced automation and high ope rating efficiency. We possess proprietary
knowledge to produce RVs, from the productio n of frames and chassis to the final assembly
and testing. Moreover, we are continuously optimizing our production techniques. Wedding
our proprietary knowledge with our techniques in production from all aspects supports our
control over the components and quality of our RVs throughout the production process.
Our production cycle for each of our RV bra nds starts in our production facilities in
Zhejiang, China and finishes in our final assem bly lines in Melbourne, Australia. The entire
production process requires approximately 12 weeks, excluding the delivery time
transporting the close-to-final towable RV s to the final assembly lines in Australia.
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The diagram below sets forth the key stages and sub-stages of the production cycle of
our RVs:
Final assembly in
Australia
Assembly of
semi-finished
RVs
Painting
workstation
Furniture
workstation
Lamination
workstation
Tailoring
workstation
Welding of
frame and
chassis workstation
We build our RVs completely in-house. Our production facilities in Zhejiang, China
cover a sprawling area of approximately 47,567 square meters, consisting of five specialized
workshops: welding, painting, laminatio n, tailoring and furniture, alongside two
cutting-edge assembly lines. Furthermore, o ur two final assembly lines in Australia play
a crucial role in the final assembly of our RVs. The process starts with cutting, welding and
assembling steel metals to form the ‘‘skeleton,’’ or frame and chassis, of our RVs. This work
takes place at a single workstation, after which all material is transported to the painting
workstation for spraying and painting.
Concurrently, our staff proceeds to build the interior floors, ceilings, walls and wooden
fixtures at our furniture workstation and production of upholstery at our tailoring
workstation. Our staff also proceeds with the production of sandwich panels to be welded
with the frame to form the exterior of our RVs. Once we finish building the exteriors, highly
skilled artisans install all furniture and decor ations, which are then delivered to our site in
Australia for final assembly.
Suppliers and Procurement
We purchase certain of the RV componen ts and raw materials from third-party
suppliers, which we believe affords us with g reater scalability and flexibility while
complementing customization options. Specifically, critical RV components include
electric appliances, axles, fiberglass panels and wiring harnesses, and key raw materials
include steel, aluminum and electrical wire. We primarily procure these materials
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domestically within China. However, we re tain production of components and assembly
in-house whenever we have an interest in preserving or developing the know-how or
whenever we believe that outsourcing would impair the efficiency and flexibility of our
production process (such as our frames and chassis). We regularly monitor for and maintain
a list of alternative suppliers to ensure th e stability and quality of our supply chain.
We have stringent procedures and screening c riteria to select our suppliers. Before we
on-board a new supplier, we evaluate various aspects, including its quality control and
management, qualifications, R&D capability, pr icing and results of on-site inspection and
only those who meet our requirements are qualified as our approved suppliers. We
periodically review the performance of our exi sting suppliers and evaluate the necessity and
benefit of engaging additional suppliers to produce our RVs. In addition, we have a
dedicated quality assurance team to regularly conduct on-site inspections at the sites of our
suppliers to perform inspections. We have a relatively low reliance on any single source
supplier. Our individual suppliers typically pr ovide a limited range of items, such as tires,
and there are alternative supplie rs for these items in the market.
During the Track Record Period and as of the Latest Practicable Date, none of our
suppliers had committed any material breach of our contractual terms, and we did not have
any material dispute with our suppliers.
Set forth below are key contractual terms in our agreements with our suppliers:
. Contractual period: The term of the agreements is typically one year.
. Orders placement: We place orders with suppliers, specifying the time of delivery
and quantity in need. The suppliers need to execute the order strictly in
accordance with the quantity, unit price, delivery date, and delivery location in
accordance with the order.
. Products quality and inspection: Our agreements with suppliers include various
terms that require them to comply with our and Australian federal quality control
standards. We perform on-site inspection on raw materials upon their delivery, to
ensure product quality.
. Product defects and returns: Our suppliers are obligated to repair the components
supplied within the quality assurance period specified in the agreements and
compensate us for losses arising from such defects. However, any products sold
overseas will not be returned to our suppliers for repair and our suppliers are
obligated to directly compensate us fo r losses arising from such defects.
. Quality deposit: Our suppliers are typically required to deposit with us 2% of the
total purchase value for quality assurance. We return the quality deposit back to
our suppliers typically one month after the expiration of the agreements.
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. Payment: We generally pay our suppliers within 30 to 90 days after receiving the
invoice for the raw materials that we have inspected and accepted.
. Default: Our suppliers shall pay us liquidated damages for any shortage or
delayed delivery of raw materials.
Production Facilities and Assembly Lines
We produce our RVs in three production fac ilities and assembly lines. The following
table summarizes the key characteristics of each of our production facilities and assembly
lines as of June 30, 2024 :
Production Facilities/
Assembly line Location
Approximate
Total Site
Area Production Stages Involved
(sq.m.)
Zhejiang Site Zhejiang, China 47,567 Sheet metal welding;
laminating and painting;
furniture production and
other customization work;
Pre-assembly
Stanley Site Melbourne,
Australia
14,251 Final Assembly (including
customization work and
quality control for local
compliance purposes)
Union Site Melbourne,
Australia
16,320 Final Assembly (including
customization work and
quality control for local
compliance purposes)
The following table sets forth the maximum unit of production, actual unit of delivery
and utilization rate of our production facilities during the Track Record Period:
Year ended/As of December 31, Six months ended/As of June 30,
2021 2022 2023 2024
Max Unit of
Production 1
Actual Unit
of Delivery 2
Utilization
Rate
Max Unit of
Production 1
Actual Unit
of Delivery 2
Utilization
Rate
Max Unit of
Production 1
Actual Unit
of Delivery 2
Utilization
Rate
Max Unit of
Production
Actual Unit
of Delivery
Utilization
Rate
(RMB in million, except for percentage)
Zhejiang Site 4,000 1,801 45% 4,000 2,236 56% 4,000 3,063 77% 4,000 1,541 N/A
Australia Sites 2,000 1,330 67% 3,000 2,127 71% 4,000 2,694 68% 4,000 1,427 N/A
Notes:
(1) The maximum annual production capacity of our Zhejiang Site is based on the maximum number of
towable RVs that our facilities can produce under r elevant government approval during the relevant
period. The maximum annual production capacity of our Australia sites is based on the area of our
assembly lines in square meters. The increase in the m aximum annual production capacity of our Australia
sites during the Track Record Period was due to the a ddition of the Union Site in Melbourne, allowing us
to expand our capabilities to accommodate future bus iness growth and increasing customer demands.
(2) Actual units of delivery are based on the number of RVs delivered during the relevant period.
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Quality Control and Assurance
We have adopted a uniform quality system across all our brands and design models,
which enables our management to monitor our production activities through multiple key
performance indicators and to take prompt corrective action whenever necessary.
Our quality control process comprises three principal phases. The first phase involves
the testing and inspection of the raw materials used in our production cycle as well as the
rigorous evaluation of all suppliers. The second phase involves inspections of semi-finished
products, such as the frames, chassis, furniture and fittings, used in our production cycle to
ensure that they conform to our specification s before we accept delivery. We monitor each
step of our own production processes based on detailed assessment plans, with
re-verification of all materials prior to their installation on a RV and additional testing
of certain critical processes and components. The final phase serves to confirm the correct
assembly and operation of all appliance and interior fittings before the RV leaves the
production facilities in China. We also use this feedback to adjust our production process to
rectify any manufacturing defects that may have emerged or been identified.
With respect to quality assurance, a team is appointed to monitor the product design
and production processes, ensure our compliance with the Australian Road Vehicles
Standard Act, identify potential areas for improvement and take actions for continuous
optimization.
INFORMATION TECHNOLOGY SYSTEMS
To execute and harmonize with the high degree of customization of our RVs,
cooperating with established software developers, we have built an advanced and
comprehensive technology system, which lays the foundation for our efficient business
development and connects every chain of our business operations including, mainly, order
management, supply chain management, production management and after sales services.
To this end, we have integrated (i) customer relationship management (CRM) system, (ii)
product lifetime management (P LM) system, and (iii) systems applications and products
(SAP) system, enabling us to promptly retrieve a nd analyze operational and financial data,
including procurement, sales, inventory and customers, on a real-time basis.
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The diagram below sets forth the major functions of our information technology
systems:
CRM
Line
Management
Customer
Selection
Product
Configuration
Management
Plan
Management
Production
Schedule
Quality
Management
Shipment
Management
Order
Management
EBOM
Generation MRP
Production
Bill of Material
Management
Quotations for
Products
Order
Generation
Delivery of
Vehicle
After-Sales
Services
Business
Opportunity
Management
PLM SAP
/PO
TUBOEBSE
4UBOEBSE
. CRM System. We have designed and established a centralized customer
relationship management center to collect basic customer information, generate
order specifications, and estimate build prices based on the degree of
customization of our customers. Customer orders submitted through our
websites, during car shows or in physical stores are aggregated and processed
on our CRM system. In addition, once we re ceive orders, we utilize the customers’
postcodes to connect them with their nearest dealers for consultation and RV
customization. Our CRM system also man ages after-sales services, including
repairs and warranties for RVs left our facilities.
. PLM System. Through the PLM system, we have built and maintained a
standardized and well-regulated p roduct database and an online design
specification system for promoting the ef ficiency of our product customization
process. Our PLM system manages all of the information and processes at every
step of the RV production cycle across our supply chain, including management
of data from items, parts, products, documents, requirements, engineering change
orders, and quality workflows. Once the order information enters our PLM
system, the engineering bill of material s (EBOM) will generate a list of the raw
materials and components required based on the specific order information. In
June 2024, we expect to further enh ance the efficiency, accuracy and
responsiveness of our PLM system through upgrading key aspects such as
product design data management, bill of materials (BOM) management, product
configuration management and project m anagement. Furthermore, in line with
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our customer-to-manufacturer strategy, we will streamline the process of receiving
order information from our CRM system by 2024 and automatically transmitting
such information to production BOMs in our PLM system, aiming to further
improve our efficiency of production management.
. SAP System. At the core of our technology capa bilities is our central internal
management system, which enables every department to access and share common
data to enhance cooperation across our business. The SAP system effectively
manages our order information from customers and controls production
planning, order management, quality control and logistic managements through
information collected across various departments. Our SAP system assists us in
planning and managing our inventory and r aw materials. The SAP system delivers
real-time information of inventories and raw materials, providing our
management team with clear visibility on the data.
SALES AND DISTRIBUTION
We market our RVs and interact with customers through a dynamic, multifaceted sales
and distribution network across Australasia. As of June 30, 2024, our sales and distribution
network of 19 stores in total comprised: (i) a ro bust and extensive network of 13 third-party
dealer stores in Australasia, enhancing our sa les coverage and market penetration; (ii) two
self-owned stores in Australia alongside online official websites, ensuring direct local
presence, fostering connection with our client ele, and acquire invaluable market insights
firsthand; and (iii) four JV stores with our JV p artners, allowing us to expand our sales and
distribution network while mitigating substantial overhead costs. Our geographic footprint
spans across major cities in Australasia, including Melbourne, Sydney, Brisbane, Adelaide,
Perth, Canberra, Auckland and Christchurch , with a strategic presence of one to three
dealer stores, JV stores, and/or self-owned st ores covering each location. We believe that
our sales and distribution strategy allows us to effectively reach customers across
Australasia while optimizing our investmen t in sales infrastructure and maximizing
flexibility in sales coverage. According to Fr ost & Sullivan, it is consistent with industry
norm for providers of RV products to engage dealers in order to take advantage of their
knowledge in relation to local marketin g practices and consumer preferences.
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SOUTH
AUSTRALIA
QUEENSLAND
TASMANIA
NEW SOUTH
WALES
VICTORIA
NORTHERN
TERRITORY
WESTERN
AUSTRALIA
New
Zealand
Coral Sea
Tasman Sea
Arafura Sea
Timor Sea
INDIAN OCEAN
INDIAN OCEAN
QUEENSLAND
Dealer stores
NEW SOUTH
WALES VICTORIA SOUTH
AUSTRALIA
WESTERN
AUSTRALIA TASMANIA NEW
ZEALAND
Self-owned stores
JV stores
Dealer stores
Self-owned stores
JV stores
Total
3322-12
--1-1--
2 1 1----
5442112
Melbourne
Christchurch
Sydney
Brisbane
Canberra
Auckland
Adelaide
Perth
We sell RVs through a multifaceted sales and distribution network of 19 stores
comprising three distinct channels: third-party dealer stores, JV stores, as well as our
self-owned stores operated by Snowy River RV Company.
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Direct seller-buyer model — We typically have a direct selle r-buyer relationship with
the third-party dealers (in connection with the dealer stores), the JV dealers (in connection
with the JV stores) and Snowy River RV Company (in connection with our self-owned
stores). These stores then sell RVs to end customers and collect payments directly from end
customers.
Regent Company Sales Channel Operators(1) End Customers
Payments
Product Delivery Product Delivery
Payments
Note:
(1) Sales channel operators consist of (i) Snowy River RV Company, which operates our self-owned
stores, (ii) third-party dealers, and (iii) JV dealers.
Financing model — Alternatively, we also collaborate with our Financing Partner to
provide financing options to all three types of our sales channel operators, whereby the
Financing Partner provides financing to these sales channel operators to acquire inventories
of our Regent RVs and Snowy River RVs through comprehensive floor-plan finance
arrangement. See ‘‘— Financing Arrangements’’ for further details.
We offer a made-to-order service across a ll our RVs, allowing owners to personalize
various aspects of their RV. End customers place orders with our sales channel operators
after conducting initial consultation. The sales channel operators then complete order
configuration forms reflecting a variety of specifications and the end customers’ design
selections, including varying floor layouts, interior and exterior colors and many other
features. We commence production of the ordered RV after receiving the final confirmation
from our sales channel operators. Custom ization requests from end customers are
predominantly managed and handled by us during the manufacturing process. However,
for enhancements that do not involve structural changes to the RV, such as the installation
of solar panels, our sales channel operators are equipped and qualified to carry out these
nonstructural modifications. Our average or der fulfillment perio d for our sales channel
operators was six months.
Under the direct seller-buyer model, the sales channel operators are required to make
full payments to us within 21 days when the o rdered RVs are dispatched from our final
assembly lines in Australia. Under the financin g model, the Financing Partner is required to
make full payments to us within 21 days from the date of our invoices, which are sent before
our delivery of the ordered RVs from the final assembly lines in Australia to the sales
channel operators. During the T rack Record Period and up to the Latest Practicable Date,
we did not experience any material delay in payments from our sales channel operators.
In addition, sales channel operators typically require the RV purchasers to make a
down payment (generally not more than 10% of the final retail price) to the sales channel
operators. Pursuant to the standard sales c ontracts, in the event that an end customer
cancels their order, the sales channel operators have the right to terminate the sales contract
and retain the down payment. During the Track Record Period, in the rare event that the
RV purchasers canceled their orders, we had g ood faith discussions with the sales channel
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operators to either convert a canceled order into another order that the sales channel
operators needed to make as part of their day-to-day business needs or convert the order
into a stock display RV. As such, we did not incur any material losses in connection with
order cancellation during the Track Record Period.
The following table sets forth a breakdown of our revenue from sales of RVs by sales
model, both in absolute amount and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Direct seller-buyer model 298,586 100.0% 485,429 97.5% 627,779 88.3% 272,771 88.1% 385,725 97.2%
Financing model — — 12,687 2.5% 82,968 11.7% 36,755 11.9% 11,169 2.8%
Total 298,586 100.0% 498,116 100.0% 710,747 100. 0% 309,526 100.0% 396,893 100.0%
We introduced the floor-plan financing option in 2022. Our revenue generated from
sales of RVs through financing model incre ased from RMB12.7 million in 2022 to RMB83.0
million in 2023, primarily due to the increase in sales volume of RVs through financing
model from 51 units in 2022 to 331 units in 2023, which was in line with our business
growth. Our revenue generated from sales of RVs through financing model decreased from
RMB36.8 million for the six months ended June 30, 2023 to RMB11.2 million for the six
months ended June 30, 2024, primarily because one large dealer of ours chose to explore
other financing institutions, which result ed in the reduced utilization of our floor-plan
financing arrangements.
The following table sets forth a breakdown of our gross profit and gross profit margin
from sales of RVs by sales model for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
(Unaudited)
(RMB in thousands, except for percentages)
Direct seller-buyer model 49,755 16.7% 80,215 16.5% 162,375 25.9% 63,095 23.1% 125,524 32.5%
Financing model — — 1,957 15.4% 17,146 20.7% 8,286 22.5% 2,138 19.1%
Total 49,755 16.7% 82,172 16.5% 179,521 25.3% 71,381 23.1% 127,662 32.2%
Our gross profit margin for direct seller- buyer model remained relatively stable at
16.7% and 16.5% in 2021 and 2022, respectively, and then increased to 25.9% in 2023. This
trend is generally consistent with the trend in our overall gross profit margin for sales of
RVs for the same periods, given the minimal revenue contribution of the financing model in
2022 and the limited financial impact of the f inancing model on gross profit margin on a
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per-unit basis. Our gross profit margin for dir ect seller-buyer model increased from 23.1%
for the six months ended June 30, 2023 to 32.5% for the six months ended June 30, 2024,
primarily due to a higher proportion of retail sales through direct seller-buyer model.
Our gross profit margin for financing model increased from 15.4% in 2022 to 20.7% in
2023, which was generally consistent with the upward trend in our overall gross profit
margin for sales of RVs for the same periods. Compared to the direct seller-buyer model,
our financing model has a relatively lower gross profit margin primarily due to (i) the
additional expenses we incurred under the financing model that were recognized as a
reduction in revenue, and (ii) the higher propo rtion of retail sales for direct seller-buyer
model. Our gross profit margin for financing model decreased from 22.5% for the six
months ended June 30, 2023 to 19.1% for the si x months ended June 30, 2024, primarily due
to an increase in our financing costs resulting from the extended number of days of interest
paid by us under the floor-plan financing arrangements.
Dealer Stores
When we sell through dealer stores, we ha ve a seller-buyer relationship with our
dealers. We do not retain ownership over the RVs that we sell to the dealers once we receive
the full payment from the dealers. All signifi cant risks and insurance responsibilities
associated with these RVs will pass to the dealers immediately when the RVs are dispatched
from our production facilities for final ass embly located in Australia. Accordingly, we
recognize revenues from sales to our dealers u pon delivery of our RVs to and acceptance of
the same by them. In addition, our dealers are provided with an option for the floor-plan
finance arrangement offered by our Financing Partner. Under such financing arrangements,
the Financing Partner pays us for these funded RVs, sold to our dealers who in turn sell the
RVs to end customers. Dealers then fulfill their obligations directly to the Financing
Partner according to agreed-upon financing terms. See ‘‘— Financing Arrangements’’ for
further details.
When we sell through our dealers, we do not have any contractual relationships with
their end customers, and such relationships are not subject to our control or oversight. The
dealers undertake certain responsibilitie s to us under the dealership agreements. For
instance, according to the dealership agreements, the dealers shall use their best endeavors
to sell RVs at the recommended list prices specified in the price lists published by us from
time to time, allowing us to apply reasonable a nd transparent market prices with consistent
and high quality products uniformly. We maintain transparency with both our dealers and
end customers by openly displaying all recommended prices on our corporate website. We
also feature a ‘‘Build Your Dream’’ tool on our website, where customers can customize
their RVs and see the recommended prices populated automatically. Customers can use this
quote as a benchmark when negotiating with dealers, ensuring they have a reference to the
recommended retail price. Additionally, every dealer receives a detailed price list with both
wholesale and recommended retail prices for all RV models and accessories, and we
encourage them to align with suggested pric ing. Although we cannot directly mandate
pricing practices by dealers, the competitive market dynamics among dealers help keep the
pricing consistent and fair.
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As of June 30, 2024, we had 11 third-party dealers, all of which, except for our JV
partner, Green RV, were independent third parties. For the three years ended December 31,
2023 and for the six months ended June 30, 2024, revenues generated from sales of RVs
through our dealers were approximately RMB298.6 million, RMB472.8 million, RMB581.6
million and RMB252.5 million, representing 100.0%, 94.9%, 81.8% and 63.6% of our
revenues generated from sal es of RVs, respectively.
The following table sets forth a breakdown of our revenues from sales of RVs by
distribution channels for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Sales to dealers 298,586 100.0% 472,834 94. 9% 581,632 81.8% 268,175 86.6% 252,513 63.6%
Direct sales
— Via self-owned
stores — — 25,282 5.1% 100,769 14.2% 41,351 13.4% 76,302 19.2%
—V i aJ Vs t o r e s (1) — — — — 28,346 4.0% — — 68,079 17.2%
Total 298,586 100.0% 498,116 100.0% 710,747 100. 0% 309,526 100.0% 396,893 100.0%
Note:
(1) We have conducted sales of RVs through JV stores since we opened our first JV store operated by
Leisure Lion in Queensland, Australia in 2020. As of June 30, 2024, we had a total of four JV stores:
three were operated by Leisure Lion, compri sing one opened in 2020 and two in 2023; and one
opened in 2023 and operated by United RV. See ‘‘B usiness — Sales and Distribution — Self-owned
Stores and JV Stores’’ for more details. Leisure L ion, initially an equally-owned joint venture,
subsequently became our 51%-owned subsidiary in September 2023. United RV has been our
subsidiary since its incorporation. Accordingl y, with respect to the JV stores operated by Leisure
Lion, we recognized revenue from sales of RVs as revenue generated from sales to dealers for 2021,
2022, and the period in 2023 when Leisure Lion remained as our equally-owned joint venture. After
Leisure Lion became our subsidiary in September 2023, revenue was recorded as revenue generated
from direct sales via JV stores. As a result, no rev enue was recorded from direct sales via JV stores in
2021 and 2022 despite our first JV store being established in May 2020. With respect to the JV store
operated by United RV, which was opened in 2023, revenue was recorded as revenue generated from
direct sales via JV stores.
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The following table sets forth a breakdown of our gross profit and gross profit margin
from sales of RVs by distribution channels for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
Gross
Profit
Gross
profit
margin
(Unaudited)
(RMB in thousands, except for percentages)
Sales to dealers 49,755 16.7% 73,235 15. 5% 127,451 21.9% 55,133 20.6% 63,659 25.2%
Direct sales
— Via self-owned
stores — — 8,937 35.3% 40,820 40.5% 16,248 39.3% 34,196 44.8%
— Via JV stores — — — — 11,250 39.7% — — 29,807 43.8%
Total 49,755 16.7% 82,172 16.5% 179,521 25.3% 71,381 23.1% 127,662 32.2%
The trend in our gross profit margin for sales of RVs through the respective
distribution channels was generally consistent with that in our overall gross profit margin
for sales of RVs for the same periods. This trend was primarily affected by the following
factors that also drive our overall gross profit margin: (i) a higher degree of customization
which typically yields higher gross profit margin, (ii) increases in list prices of our RVs as a
result of interior and exterior upgrades and rejuvenation to our RV models, and (iii) the
impact of the higher shipping and handling expenses in 2022 as a result of the COVID-19
pandemic.
Moreover, we conduct retail sales of RVs through self-owned stores and JV stores at
relatively higher retail prices compared to the wholesale prices for dealers, because as a
natural practice for dealership operations, the wholesale prices for dealers factor in a
discount to the retail prices, allowing dealers to sell the RVs at a profit. As a result, both the
direct sales via self-owned stores and JV sto res achieved higher gross profit margins
compared to the sales to dealers.
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The following table sets forth the movement in the number of our dealers for the
periods indicated.
For the year ended December 31,
For the six
months ended
June 30,
2021 2022 2023 2024
Number of dealers at the
beginning of the period 779 1 1
Addition of new dealers 0 2 3 0
Termination of existing dealers 0 0 1 0
Number of dealers at the end of
the period 7 9 11 11
Turnover rate of dealers 0% 0% 11.1% 0%
Note:
(1) Turnover rate is calculated by dividing the num ber of termination of existing dealers for a given
year/period by the number of dealers pres ent at the beginning of that year/period.
The following table sets forth the movement in the number of our dealer stores for the
periods indicated.
For the year ended December 31,
For the six
months ended
June 30,
2021 2022 2023 2024
Number of dealer stores at the
beginning of the period 7 9 11 13
Addition of new dealer stores 2 2 3 0
Termination of existing dealer
s t o r e s 001 0
Number of dealer stores at the end
of the period 91 11 3 1 3
Turnover rate of dealer stores 0% 0% 9.1% 0%
Note:
(2) Turnover rate is calculated by dividing the num ber of termination of existing dealer stores for a
given year/period by the number of dealer store s present at the beginning of that year/period.
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During the Track Record Period, we terminated the collaboration with one dealer who
operated one dealer store, since the dealer had permanently closed its store. In 2021, 2022
and 2023 and for the six months ended June 30, 2024, the revenue contribution from this
dealer store was A$13.0 million (equivalent to RMB62.0 million), A$19.4 million
(equivalent to RMB92.4 million), A$7.7 millio n (equivalent to RMB36.7 million) and nil,
respectively. As the store permanently closed after selling its entire inventory of RVs, we did
not repurchase any unsold units from such dealer.
The following table sets forth the key operating data of our dealer stores in operation
as of June 30, 2024.
No. Dealer store Dealer RV brand Location
Time of
commencement of
operations
1. Green RV — Forest Glen Green RV Regent
Snowy River
Queensland, Australia 2015
2. Green RV — Tanah
Merah
Green RV Regent
Snowy River
Queensland, Australia 2021
3. Auswide Caravans —
South Nowra
Auswide Caravans &
RV’s Pty Ltd
Regent
Snowy River
New South Wales,
Australia
2016
4. Dario Caravans St. Marys Intuitive Sales Pty Ltd Snowy River South Australia,
Australia
2017
5. Dario Caravans Pooraka Intuitive Sal es Pty Ltd Snowy River South Australia,
Australia
2019
6. Sherriff Caravans Westside Panels Pty Ltd Regent
Snowy River
Tasmania, Australia 2019
7. Vanari Caravans Vanari Caravans
Limited
Regent
Snowy River
New Zealand 2020
8. Newcastle RV Super
Centre
New Age Caravans
Newcastle Pty Ltd
Regent
Snowy River
New South Wales,
Australia
2022
9. ABCO Caravans ABCO Caravan Services
Pty Ltd
Snowy River New South Wales,
Australia
2021
10. Regent RV Townsville
(The Caravan Hub)
Townsville Caravan
Repair Centre Pty
Ltd
Regent
Snowy River
Queensland, Australia 2022
11. Great Ocean Road RV &
Caravans
(Warrnambool)
Great Ocean Road RV
and Caravans Pty Ltd
Regent
Snowy River
Victoria, Australia 2023
12. Bendigo Caravan Group Decas Victoria Pty Ltd Snowy River Victoria, Australia 2023
13. CMG Campers Euromarque Holdings
Ltd
Regent
Snowy River
New Zealand 2023
We enter into standardized dealership agreements with our dealers. Key terms of our
dealership agreements include:
. Terms. An initial term of one year, renewable for an optional term of two to five
years by mutual agreement of the parties.
. Designated geographic area. Our authorized dealers can only open the stores
within the designated areas that are strategically analyzed and permitted by us,
and their local advertising activities sh ould be limited to specified distances.
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. Supply of RVs. Dealers agree to act as our non-exclusive distributors and we
undertake to fulfill orders received from the dealers for RVs within a reasonable
time period; however, we shall not be liable in anyway for any loss incurred by the
dealers if the delivery and/or making of the RVs fit for sale is delayed due to
planning, production or logistic delays.
. Payment terms. Payment by our dealers must be made within 21 days from the
date of the invoices.
. Sales target. We set annual sales targets for our dealers, which we use to monitor
dealer performance and market evolution. From 2021 to 2024, the average annual
sales target per dealer was approximately 156, 241, 277 and 319 units,
respectively, which were determined with reference to the size of the dealer
store, the geographic location of the dealer store, as well as the sales territory of
the dealership.
. Working stock level. We set minimum stock holding of respective branded RVs for
our dealers, subject to changes with our introduction of new models. Such RVs
represent the displayed RVs that are customized to meet the specific requirements
of our dealers, and the dealers bear the costs associated with displaying these RVs.
The average annual minimum stock holding required for each dealer is
approximately 44 units, depending on the dealer’s annual sales target.
. Price management. Dealers agree to use their best efforts to sell RVs at the
recommended list prices specified in th e price lists published by us from time to
time.
. Intellectual Property. We grant dealers a non-exclusive and royalty-free license to
use trademarks, service marks, logo, tr ade names, business name, symbols or
designs or color schemes for the sale and promotion of the RVs during the term of
our agreement with dealers.
. Indemnity. Dealer agrees to keep us indemnified and save us harmless from and
against all actions, proceedings, judgments, damages, claims, costs and expenses
which may be suffered or incurred by us whether directly or indirectly as a result
of the conduct of the dealer or the dealer’s relations with its customers, the public
or other third parties or occasioned wholly or in part by any act, neglect, default
or omission by the dealer or its employees or otherwise its representatives. A
similar indemnity is granted by us to the dealer. During the Track Record Period
and as of the Latest Practicable Date, neither we nor dealers made any payments
with respect to the indemnity obligation to the other party.
. Assignment. Dealers shall not sell, transfer or assign these dealership agreements.
. Confidentiality. Each of the parties undertakes not to disclose the other party’s
trade secrets or other business information to any third party.
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. Termination. The dealership agreements may be terminated, among others, (i) by
either party giving 90 days’ written not ice of its intention to terminate the
agreements; (ii) by the non-defaulting p arty in the event of a material breach; or
(iii) by either party in the case of winding up, liquidation, bankruptcy or
insolvency of the other party.
. Disposal of RVs. Upon termination or expiration of the dealership agreements, we
have the option to purchase all or some of the unsold RVs for the purchase price
as agreed between the parties, but in any event not exceeding the original invoice
price excluding freight, for the pur poses of avoiding our RVs falling into
receivership and further protecting our brand values.
During the Track Record Period and as of the Latest Practicable Date, we did not
experience any breach of agreements, or any dispute or claim with any dealers, that had a
material adverse impact on our business operations. During the Track Record Period, we
did not invoke the aforementioned clause with respect to our option to purchase any unsold
RVs from our dealers upon their termination or expiration of the dealership agreements.
In addition, we collaborated with two RV sales companies on a non-exclusive basis for
approximately two years during the Track Record Period, providing additional sales
channels through which we sold a small quantity of our RVs. However, we have since
terminated these collaboration s, considering factors such as their proximity to our existing
or upcoming stores and past sales performance.
Dealer Management
We select our dealers based on their proven di stribution abilities, familiarity with their
own target markets, financial strength, credit records and scale of operations. We require
all our dealers to possess all licenses and permits necessary for the sales and distribution of
our products. Where a dealer breaches the relevant dealership agreement, including
non-compliance with applicable laws and regul ations, we will give the dealer a notice and
require rectification. If no remedial action is taken within a prescribed time period, we will
have the right to terminate the relevant de alership agreement. During the Track Record
Period, we did not terminate our business relationship with any dealers due to their breach
of their dealership agreements or their non-compliance with regulatory requirements.
In addition, we adopt a comprehensive set of national marketing initiatives to elevate
our brand presence and drive pr oduct visibility through our ex tensive dealer network. We
supply our dealers with an array of point-of-sale materials, including product brochures,
flags and other branded items which can enhanc e in-store experiences. Furthermore, we
actively support our dealers to participate in RV shows by providing financial assistance
and deploying experienced sales personnel to aid in live product demonstrations and
customer engagement. Other assistance aiming to bolster our dealers’ marketing endeavors
includes leads distribution through our cor porate websites and social media channels,
supplying dealers with ready-to-post content on social media, promoting dealership sales
events and inviting our brand ambassador to dealership events.
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From 2021 to 2023, we employed the following methods to gather inventory
information. Our representatives carried out unscheduled visits to our sales channel
operators to verify inventory levels and assisted with their specific needs. Our sales team
also maintained regular co mmunications with the sales channel operators to discuss
inventory levels. Additionally, we can monitor the inventory levels of our sales channel
operators through the floor-plan finance arrangements, as the sales channel operators may
utilize the financing provided by our Financ ing Partner to acquire inventories of RVs.
These measures collectively ensure that we h ad a grasp on the inventory levels of our sales
channel operators, allowing us to maintain eff ective inventory management. Starting from
2024, we have implemented a comprehensive reporting system to monitor the inventory
levels of our sales channel operators. This system enables us to receive up-to-date and
accurate inventory information from our sales channel operators on a weekly basis. As of
the Latest Practicable Date, the total amount of unsold inventory held by our sales channel
operators was 662 units, of which 50 units were aged over one year.
Self-owned Stores and JV Stores
To accelerate the expansion of our brick-and-mortar sales and service network, we
started to roll out JV stores in 2020 and established our self-owned stores in 2022. Our
stores are strategically located in high-traffi c areas, as we believe such locations effectively
enhance brand visibility and attract custo mer traffic in a cost-efficient manner. Our
self-owned stores integrate functions includ ing display and sales, providing our customers
with convenient, efficient and personalized purchasing experience. We ensure consistent
treatment across all sales channels by maintaining arm’s length transactions with our
self-owned stores and JV stores. Furthermore, our self-owned stores and JV stores are
provided with the same 21-day credit term as third-party dealers under the direct
seller-buyer model. We seek to expand our sales and distribution network by establishing
additional self-owned stores and JV stores in t he future, taking account of macroeconomics,
market conditions and our regional focus.
Additionally, starting from 2023, we provide an option for customers to trade in their
eligible pre-owned RV for purchase of a new RV that we offer at all of our self-owned stores
and JV stores, and resell these pre-owned RVs typically at the same stores. Our revenue
generated from sales of pre-owned RVs was R MB8.7 million, representing nominal 1.2% of
our total revenue, in 2023.
Our trade-in policy ensures an organized and transparent process for trading in and
appraising pre-owned RVs. Eligible pre-owned RVs must be less than 10 years old, in good
condition, and have a clear title with no outstanding liens or encumbrances. The trade-in
price determination involves an initial estim ation based on the basic information provided
by customers, followed by a comprehensive inspection assessing the RV’s condition, age,
model, market demand and other relevant considerations. A service technician can help
conduct mechanical evaluation if necessary. The final offer, based on our thorough
inspection and appraisal, is approved by the stores’ general sales managers.
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The following image showcases our self-ow ned store located in Traralgon, Australia.
The following image showcases our JV store located in Melbourne, Australia.
The following table sets forth the number of our self-owned stores and JV stores as of
the dates indicated.
As of December 31, As of June 30,
2021 2022 2023 2024
Number of self-owned stores 0 1 2 2
Number of JV stores 1 1 4 4
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The following table sets forth the key operating data of our self-owned stores in
operation as of June 30, 2024.
No. Self-owned store RV brand Location
Time of
commencement
of operations
1. Regent RV Perth
1 Regent
Snowy River
Western Australia,
Australia
2022
2. Regent RV
Traralgon
Regent
Snowy River
Victoria, Australia 2023
Note:
(1) We have entered into a new five-year lease agreement starting from March 1, 2024, to secure an additional
warehouse for displaying RVs as well a s providing after-sales services.
The following table sets forth the key operating data of our JV stores in operation as of
June 30, 2024.
N o . J Vd e a l e r J Vs t o r e J Vp a r t n e r
Ownership
held by the
Company RV brand Location
Time of
commencement
of operations
1. Leisure Lion QLD Caravan
Clearance Centre
(Leisure Lion
Gympie)
Green RV
1 51% NEWGEN Queensland,
Australia
2020
Regent RV Toowoomba Green RV 1 51% Snowy River
Regent
NEWGEN
Queensland,
Australia
2023
NEWGEN Caravans
NSW (Morisset)
2
Green RV 1 51% NEWGEN New South
Wales,
Australia
2023
2. United RV Regent RV Frankston Buyit RV
Pty Ltd
51% Regent
Snowy River
Victoria,
Australia
2023
Notes:
(1) Green RV is also our dealer. See ‘‘— Sales and Dis tribution — Dealer Stores’’ for more details.
(2) We have entered into a new five-year lease agreement starting from May 1, 2024, and have gradually
relocated this JV store from Morisset to Heatherbrae since July 2024. The lease for the original Morisset
location is set to end in September 2024.
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Key terms of our arrangements fo r the two JV dealers include:
. Purpose. The purpose of the JV dealer is to engage in the marketing and sale of
RVs within Australia. Our Company shall be responsible for assembly and
production, while our JV partner shall be responsible for marketing and sales.
. Term. The JV dealer will continue until m utually agreed upon dissolution,
completion of the project, or legal winding-up.
. Contribution of capital and share of profits and losses. Profits and losses will be
shared according to the shareholding structure.
. Transfer of shares. A transfer of shares by a party will only be effective if and
when the transferee agrees in writing with the other parties to assume, observe,
perform and satisfy the obligations of the transferor party under the articles and
the relevant agreement.
. Sale of shares to a third party. If a party wishes to accept an offer from a third
party to acquire the whole of its shareho lding, then that party must immediately
notify the other parties in writing of its desire to accept the offer, and give the
other parties 14 days to agree to acquire such interest on the same terms and
conditions with completion to take place within a further 30 days.
. Employment of parties. The JV dealer must employ any party who is qualified to
render services or provide goods, while the wholesale manufacturing costs of the
RVs provided by us shall be payable upon satisfaction of certain conditions.
. Board of directors. We have two board seats in the board of directors of the JV
dealer while the JV partner has one.
For 2021, 2022 and 2023 and for the six months ended June 30, 2024, the number of
RVs we sold to retail customers through our self-owned stores and JV stores was nil, 83, 394
and 438, respectively. During the same peri ods, revenues generated from our self-owned
stores and JV stores in aggregate wer e nil, RMB25.3 million, RMB129.1 million and
RMB144.4 million, representing nil, 5.1%, 18.2% and 36.4% of our total revenues
generated from sales of RVs, respectively.
Financing Arrangements
We have partnered with an independent thir d-party financial institution to provide
financing options to our sales channel operators, namely, Snowy River RV Company,
which operates our self-owned stores, third-party dealers, and JV dealers since 2022. The
Financing Partner provides financing for all three types of our sales channel operators to
acquire inventories of our Regent RVs and Snowy River RVs through floor-plan finance
arrangement. According to Frost & Sullivan , it is consistent with industry norm for
providers of RV products to cooperate with third-party financial institutions to provide
financing options to sales channel operators. Such floor-plan finance arrangement enables
us to receive payments more quickly, and helps free up cash flows for our sales channel
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operators, allowing them to maintain the upk eep of their businesses without interrupting
the inventory growth. In 2022 and 2023 an d for the six months ended June 30, 2024, we
delivered an aggregate of 51, 331 and 48 RVs that were covered by such floor-plan finance
arrangements.
The diagram below illustrates the typical floor-plan finance arrangement among
Regent Company, the three types of sales channel operators within our sales and
distribution network, and our Financing Partner, leading to the eventual sale of our RV
to the end customer.
Financial Partner
Regent Company Sales Channel
Operators(1)
End Customers
Payments
Payments
Product Delivery
Payments
Guarantee
Product Delivery
Note:
(1) Sales channel operators consist of (i) Snowy River RV Company, which operates our self-owned
stores, (ii) third-party dealers, and (iii) JV dealers.
Under such floor-plan finance arrangement, the Financing Partner pays us for these
funded RVs sold to the relevant sales channel o perator which in turn sells the RVs to its end
customer. The sales channel operator then fulf ills its obligations directly to the Financing
Partner according to their agreed-upon financing terms. The funded RV is directly
transferred from us to the stores designat ed by the sales channel operator, where the
customer collects the RV.
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In connection with the aforementioned arra ngement, we have separately entered into
an agreement with the Financing Partner to pr ovide a guarantee to the Financing Partner
that in the event of default by the sales channel operators, we are required to repurchase the
RV from the Financing Partner. During the Track Record Period and as of the Latest
Practicable Date, there was no default by the sales channel operators. Therefore, this
repurchasing obligation had never been invoked. We began providing such guarantee since
2022. The maximum amounts of the guarant ee issued were RMB8.2 million, RMB27.5
million and RMB20.6 million as of Decembe r 31, 2022 and 2023 and June 30, 2024,
respectively. The increase in the amount of the guarantee issued from 2022 to 2023 was
directly associated with our strategic expansion in the number of our stores to fortify our
market leadership position in Australasia, wh ich necessitated more displayed RVs across
our new stores. As a result, we required more extensive floor-plan financing to
accommodate the additional stock needed for these expanded display purposes in
promoting RV sales. The amount of the guarantee issued decreased as of June 30, 2024,
primarily because one large dealer of ours chose to explore other financing institutions,
which resulted in the reduced utilization of o ur floor-plan financing arrangements.
In addition, we have adopted policies to mitigate the risk of defaults by our sales
channel operators. By conducting monthly stoc k reviews, we effectively monitor the stock
levels of our sales channel operators, which allows us to promptly address issues relating to
aging stock. Additionally, our representatives carry out irregular, unscheduled visits to our
sales channel operators to verify stock levels and assess their performance, which helps
ensure their continuous compliance and operational efficiency.
To incentivize the sales channel operators, the floor-plan finance arrangement provides
an interest free period of 90 days. The sales channel operators shall make the full payment
of the RV, as well as the associated interest post the interest free period, at the earlier of the
time the RV is sold or expiration of the maximu m facility term under the floor-plan finance
arrangement, which generally ranges from one to two years.
The key terms of the agreement among Regent Company, our sales channel operators
and the Financing Partner are as follows:
. Parties and purpose. The Financing Partner agrees t o provide certain financing
programs to sales channel operators. Sales channel operators act as distributors of
certain equipment (i.e., RVs) approved by the Financing Partner and sell such
equipment to end customers. Regent Company makes certain undertakings
regarding the performance of sales channel operators’ obligations as stated in the
terms of obligations and indemnity by Regent Company below under this
agreement.
. Applications. Sales channel operators may submit applications to the Financing
Partner, which has an absolute discretion to approve or reject any application.
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. Obligations of sales channel operators mainly include the following:
o except as otherwise expressly disclosed in writing to the Financing Partner,
ensure that the sale/invoice price is b a s e do na r m ’ sl e n g t hm a r k e tv a l u e st o
ensure any financial assistance provid ed to sales channel operators is based
on the true market re-sale value of the equipment;
o at the Financing Partner’s cost, do all such things that are reasonably
requested by the Financing Partner for the purpose of protecting the
Financing Partner’s rights and interests under the relevant financial product
agreement;
o not repossess or consent to the return of any equipment or modify the terms
of any financial product agreement without the prior written consent of the
Financing Partner.
. Indemnity by sales channel operators. Sales channel operators indemnify the
Financing Partner against any loss, damage, cost, charge, liability or expense
suffered or incurred by the Financing Partner arising from or in relation to a
breach of any warranties or representations made or entered into between the
sales channel operators and end customers, untrue or incorrect representation or
warranty by sales channel operators under this agreement, or any breach of this
agreement by sales channel operators.
. Obligations and indemnity by Regent Company. Regent Company makes certain
undertakings regarding the due and proper performance of all obligations and the
payment of all monies at any time payable to the Financing Partner under this
agreement by sales channel operators. Additionally, Regent Company will cover
the interest for the sales channel operators during an interest free period of up to
90 days, or until the RV is sold, whichever comes first, at an interest rate
comprising the Rabo prime rate in Australia ranging from 6.11% to 7.56% per
annum during the Track Record Period plus an additional 2.09% per annum.
Such arrangement is designed to encourage sales channel operators to maintain an
optimal working stock level, allowing them to manage inventory effectively
without immediate financial strain. Furthermore, it can motivate our sales
channel operators to rotate their working stock, primarily comprising displayed
RVs, within the 90-day period, ensuring that the newest RV models are regularly
showcased to attract potential customers and further enhancing overall sales
efficiency. According to Frost & Sullivan , such interest payment arrangement is
consistent with the industry norm. In 2022 and 2023 and for the six months ended
June 30, 2024, we delivered an aggregate of 51, 331 and 48 RVs that were covered
by the floor-plan finance a rrangements, with the corresponding recognized total
revenue of RMB12.7 million, RMB83.0 million and RMB11.2 million,
respectively. During the same periods, the average number of days of interest
paid by Regent Company per RV was approximately 48, 69 and 74 days, with the
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corresponding total interest expense of A$25,606 (equivalent to RMB120,201),
A$534,451 (equivalent to RMB2,507,199) and A$94,361 (equivalent to
RMB441,183), respectively.
. Term and termination. This agreement is set for a term of 36 months with
automatic extensions for 12 months unless terminated by either party with prior
notice. It can be terminated immediately u pon certain events such as insolvency,
breach of agreement, or by the Financing Partner without cause with 90 days’
notice.
After-Sales Services and Warranties
We offer competitive warranty terms for our RVs, which include (i) a five-year
structural warranty covering chassis, walls, floors and roofs of the RVs, and (ii) a two-year
material and part warranty covering all other components of the RVs. We generally make
provisions for product warranty by reference to the sales volume and the expected unit costs
for warranty services. We re-evaluate the ad equacy of the warranty accrual on a regular
basis. As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had product warranty
provision in the amount of RMB2.9 million, RMB4.9 million, RMB6.7 million and
RMB6.9 million, respectively. For further deta ils, see ‘‘Financial Information — Material
Accounting Policies Information, Judgm ents and Estimates — Material Accounting
Judgments and Estimates — Warranty Provisions.’’
We place great emphasis on the satisfaction of our customers. Our products are
complemented by a comprehensive set of after-sa les services, to foster lasting relationships
with our RV owners that goes beyond mere transactions, ensuring satisfaction, long-term
customer loyalty, and an exceptional ownership experience. Our self-owned stores and JV
stores offer various after-sales services, in cluding RV maintenance, repairs, and sales and
upgrade of a wide selection of RV parts, ensuring that our customers have access to
everything they need to keep their vehicles running smoothly and efficiently. At the same
time, we recommend qualified third-party RV workshops to offer repair services to our
customers. As of June 30, 2024, we had a n etwork of 54 recommended RV workshops
(including our self-owned stores and JV stores) , covering 33 cities and regions in Australia
and New Zealand. When recommending a third-party RV workshop, we typically assess the
workshop’s experience, historical performanc e in delivering after-sales services, as well as
their established relationship with us.
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The following table sets forth the movement in the number of our recommended RV
workshops, including our self-owned stores and JV stores, for the periods indicated.
For the year ended December 31,
For the six
months ended
June 30,
2021 2022 2023 2024
Number of recommended RV
workshops at the beginning of
the year/period 47 47 48 54
Number of recommended RV
workshops newly engaged
during the year/period 0 1 7 0
Number of recommended RV
workshops terminated during
the year/period 0 0 1 0
Number of recommended RV
workshops at the end of the
year/period 47 48 54 54
Turnover rate of recommended RV
workshops 0% 0% 2.1% 0%
Note:
(1) Turnover rate is calculated by dividing the num ber of termination of existing recommended RV
workshops for a given year/period by the number of recommended RV workshops present at the
beginning of that year/period.
In accordance with our product returns po licy, we accept product returns subject to
certain conditions in the event that there are product defects, damages or other faults that
render the RV unsatisfactory or not meeting the specifications. For minor damages
including cracks, dints, chips, scratches and solar panel defects, we typically arrange for
repairs to the RV. For major damages including product or part failure such as battery
defects, incorrect specifications and other ma lfunction problems, we assess and consider the
feasibility of rectifying such damages. The rect ification measures include outsourcing the
repair work to an independent repairer close to the sales channel operator’s location,
bringing the damaged RV back to our assembly lines in Australia for repairs, accepting the
return of the damaged RV, and/or offering a replacement for the damaged RV to our sales
channel operators. According to Frost & Sulliv an, our product returns policy is consistent
with industry norm.
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Product safety and liability
Vehicle safety is of utmost importance to our business operations, and we are
committed to ensuring the safety of our RVs. To accomplish this objective, we have adopted
a set of extensive internal testing and quality control procedures on our RVs. See ‘‘—
Production — Quality Control and Assurance.’’
According to the Australian Consumer Law, if relevant goods have a safety defect and
an individual suffers injuries because of suc h safety defect, the individual may recover the
loss or damage suffered from the manufacturer. See ‘‘Regulatory Overview — Laws and
Regulations in Australia — Product Regulati ons’’ for further details. As a result, we are
legally obligated to assume the product liabilit y in the event of any quality defects in our
RVs that result in personal or property damage.
To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date, our RVs were not involved in any accident caused by defects in our RVs.
During the Track Record Period and up to the Latest Practicable Date, we did not have any
product recalls, nor did we experience any complaints, disputes, product liability claims or
other legal claims from our customers due to issues associated with the quality and safety of
our RVs.
Notwithstanding the foregoing, during the Track Record Period, we have, out of good
faith, accepted return of 10 RVs, with a total contract value of A$557,852 (equivalent to
RMB2,521,770.0), that presented some workma nship issues, such as color variations and
differences in interior finishes. These RVs were part of an early production phase and while
we maintain that all standards were met, we have taken proactive steps to further refine our
processes, ensuring that our products contin ue to meet high customer standards. These
instances are by no means product recalls or product quality incidents but are our goodwill
gestures in consideration of the strong cooper ative relationships we have cultivated with
our sales channel operators and our commit ment to maintaining high and recognizable
quality standards. During the Track Record Period, there were no issues relating to
suppliers that impacted our product quality or s afety, and therefore, no specific measures
were required to address any supplier-related concerns. Regarding the returned RVs, we
promptly addressed them by making any necessary adjustments to ensure they are in
marketable condition. Once these enhancemen ts are completed, the RVs will be reclassified
and offered as pre-owned or ex-demo RVs. As o f June 30, 2024, of the 10 returned RVs, one
had already been sold, four were undergoin g necessary adjustments at our final assembly
lines in Australia, and the remaining five were in the final stages of preparation, awaiting to
be sold as ex-demo RVs.
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BACKLOG
Backlog refers to our estimate of the contract value of work that remains to be
completed as of a certain date. The contract value represents the amount that we expect to
receive under the terms of the contract, assumi ng the contract is performed in accordance
with its terms. Backlog is not a measure defin ed by generally accepted accounting policies.
See ‘‘Risk Factors — Risks Relating to Our Business and Our Industry — Backlog is subject
to unexpected adjustments and cancellations and, therefore, may not be indicative of our
future results of operations.’’
The following table sets forth the outstanding contract value of projects in our backlog
by brands as of the dates indicated:
As of December 31, As of June 30,
As of the Latest Practicable Date2021 2022 2023 2024
RV Unit
A$ in
thousands
Equivalent
to RMB in
thousands % RV Unit
A$ in
thousands
Equivalent
to RMB in
thousands % RV Unit
A$ in
thousands
Equivalent
to RMB in
thousands % RV Unit
A$ in
thousands
Equivalent
to RMB in
thousands % RV Unit
A$ in
thousands
Equivalent
to RMB in
thousands %
Snowy River 955 48,028 217,111 76.3 1,337 73,004 330,015 80.7 1,240 68,457 309,460 83.9 1,236 66,806 301,997 82.8 1,267 70,629 319,278 92.3
Regent 144 8,692 39,292 13.8 173 11,354 51,326 12.6 72 4,631 20,934 5.7 77 4,924 22,259 6.1 13 868 3,926 1.1
NEWGEN 116 6,194 28,000 9.8 94 6,023 27,227 6.7 144 8,465 38,266 10.4 158 8,973 40,562 11.1 90 5,053 22,841 6.6
Total 1,255 62,914 284,403 100.0 1,604 90,381 408,567 100.0 1,456 81,553 368,660 100.0 1,471 80,703 364,818 100.0 1,370 76,550 346,045 100.0
As of December 31, 2021, 2022 and 2023 and June 30, 2024, the aggregate value of
contracts in our backlog was approximately A$62.9 million (equivalent to RMB284.3
million), A$90.4 million (equivalent to RMB4 08.7 million), A$81.6 million (equivalent to
RMB368.9 million) and A$80.7 million (equivale nt to RMB364.8 million), respectively. Our
backlog increased from A$62. 9 million (equivalent to RMB284.3 million) as of December
31, 2021 to A$90.4 million (equivalent to RM B408.7 million) as of December 31, 2022,
primarily because the influx of orders outpaced our productivity, resulting in longer lead
times for order fulfillment. Our backlog d ecreased from A$90.4 million (equivalent to
RMB408.7 million) as of December 31, 2022 t o A$81.6 million (equivalent to RMB368.9
million) as of December 31, 2023, primaril y because we strategically boosted our
productivity to support our sales forecast. Our backlog remained relatively stable at
A$80.7million (equivalent to RMB364.8 million) as of June 30, 2024.
During the Track Record Period, the avera ge contract duration of our backlog was
approximately seven months. As of the Latest Practicable Date, our order backlog
comprised 1,370 RV units, all of which were made-to-order, including 889 displayed RVs.
These units require approximately five months to manufacture and deliver based on our
production capacity. Depending on configurati on, in general, the lead time for delivering a
RV from our final assembly lines in Australia to a RV owner after an order is placed is
approximately six months. Regarding our orders in 2021 and 2022, we did not have any
cancellations or associated loss incurred rel ating to our backlog. Regarding the orders in
2023 and the six months ended June 30, 2024, we canceled a total of three and nine RVs,
respectively. All of these cancellations were made by us and involved purchases of displayed
RVs from our sales channel operators. We regu larly monitor their inventory levels and
maintain frequent communication with the m. Based on our assessment of their sales
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performance, we cancel certain orders to hel p them adjust inventory levels and alleviate
their cash flow pressure. This, in turn, hel ps us avoid delayed payment issues by the
operators resulting from a slowdown in sales.
We did not incur any loss as a result of the se cancellations because they were made
before the final confirmation from our sales channel operators on product specifications, at
which point we had not yet started procurement or manufacturing of the ordered RVs. See
‘‘— Sales and Distributions’’ for further details on our order cancellation policy.
LOGISTICS AND INVENTORY MANAGEMENT
Logistics and Warehouse
We operate our warehouses in both China and Australia primarily for storing our
work in progress, finished products and certain components and raw materials. We
generally use third-party logistics service providers to transport (i) our semi-finished RVs
from our warehouses in China to our warehous es in Australia for final assembly, and (ii)
our finished RVs from our Australian warehouses to our end customers. Such third-party
logistics service providers are responsible for any damage and loss caused by their
negligence during the course of their logistics services, including transfer, loading,
unloading, transportation and delivery to our customers. As of June 30, 2024, we
cooperated with 19 logistics service providers in Australasia for transporting our RVs. We
have also entered into cooperation agreements with a Chinese multinational conglomerate,
an independent third party that engages in glob al shipping and logistics services, which
further fortifies our capability to ensure effici ent and reliable maritime logistics and prompt
delivery.
When selecting a logistics service provider, we carefully take a range of factors into
consideration to ensure efficie nt, reliable, and cost-effective transportation of our RVs. We
typically assess the provider’s specific exper tise in the type of logistics needed, including
their capabilities in international and domestic logistics for cross-border RV
transportation. Additionally, we review their historical performance and financial
stability in adhering to service level agreemen ts and consistently delivering logistics
services.
A comprehensive understanding of all associated costs, including fuel, tolls, and
transportation fees, as well as the size and com position of the provider’s fleet to meet our
logistic demands, and the extensive coverage matching our shipping needs, is also crucial to
our decision-making process. Furthermore, we evaluate the provider’s compliance with
industry regulations like the Heavy Vehicle National Law in Australia, safety standards,
roadworthiness of vehicles, adequacy of insurance coverage, and relevant accident history.
As advised by our PRC Legal Advisor and our Australian Legal Advisor, during the
Track Record Period and up to the Latest Practicable Date, we had obtained all necessary
licenses and approvals and complied with the requirements of relevant laws and regulations
in the PRC and Australia with respect to exporting our RVs from China to Australasia.
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Inventory Management
Our inventory primarily includes raw mater ials, work in process and finished goods.
Our inventory turnover days were 174 days, 122 days, 138 days and 166 days in 2021, 2022
and 2023 and for the six months ended June 30, 2 024, respectively. We generally implement
a made-to-order production approach and produce our RVs based on customer orders to
minimize our inventory.
We have inventory management policies and systems in place to monitor fluctuations
in the supply chain and to ensure that we carry appropriate inventory to account for
variations in demand and to facilitate the co unting process and reconciliation of the
perpetual record and the actual count. Physical inventories will be carried out regularly to
verify stocks shown on the balance sheet corresponding to the actual existing items, both in
terms of quantity and value. Additionally, w e have put in place a digitalized inventory
management system, which timely and accurately tracks the movement of inventory items.
All supporting documents, from count sheets dated and signed by the persons in charge of
counting to summary reports issued from our inventory management system must be kept
auditable. The final reports showing impact in value and volume will also be retained in our
finance department to corroborate adjustm ents that are necessary due to the physical
inventory procedures. During the Track Record Period, we did not experience any
significant write-offs of our inventory.
MARKETING AND CUSTOMER ENGAGEMENT
Pricing
We aim to offer premium quality products at compelling prices. We price our RVs
considering a variety of factors, such as produ ct positioning, competitive landscape,
spending patterns of target customers and our cost base.
Specifically, in a landscape where hidden costs can tarnish the purchasing experience,
our Snowy River RVs and Regent RVs stand apart with their transparent tow away pricing
policy. This uniformity in pricing across all dealerships enables the customers to rest
assured knowing that they can pick up their chosen RV anywhere in the country for the
same transparent price, which further u nderscores our position as a credible and
consumer-friendly brand and our commitment to providing exceptional products and
services without compromising transparency.
Marketing
We actively engage in targeted marketing thr ough online promotions and offline events
to further enhance our brand recognition and acquire customers. For the three years ended
December 31, 2023 and for the six months e nded June 30, 2024, we incurred selling and
distribution expenses of RMB6.5 millio n, RMB19.3 million, RMB41.5 million and
RMB32.2 million, respectively, representing 2.2%, 3.9%, 5.8% and 7.6% of our revenues
during the respective periods.
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Our principal brand promotion activities in clude sponsorships, participation in RV
shows and special events, advertisement placements, and digital and social media
marketing. In 2022, we also engaged James Courtney, a former champion and one of the
most recognizable drivers i n the V8 Supercars series as our racer and brand ambassador.
We believe our collaboration with James Courtney by featuring him in RV shows and
sharing promotions through his social media accounts will contribute to the improvement
of our brand image and awareness.
We carry out these brand promotion activities with a dedicated team which comprised
59 employees as of June 30, 2024. We believe these initiatives further enhance our customer
engagement, while promoting brand loyalty in the process, which contributes to more
recurring business as well as brand advocacy by our customers.
Sponsorships
Our sponsorship activities also serve as a cr ucial means of enhancing brand awareness.
Notably, we sponsored Tickford Racing Team for 2022–2023 and will sponsor Blanchard
Racing Team for 2024–2025 in V8 Supercars which is a premier racing series in Australia,
aiming to gain widespread exposure through v arious channels, including television and
social media platforms, racing team intervi ews, behind-the-scenes content and branded
merchandise in marketing materials.
In addition, we embrace the vibrant festival scene by sponsoring major music festivals,
particularly those offering camp ing experiences. This strateg ic initiative places our brands
at the heart of a key target market which comprises of music festival-goers who love
outdoor activities and are potential RV enthusiasts.
RV Shows and Local Events
We frequently participate in major RV and outdoor lifestyle shows and exhibitions in
Australia as well as some local events and activi ties that align with the RV lifestyle. These
offline events enable us to present live product demonstrations and interact with potential
customers, and may also contribute to direct sales of our products and services.
Digital and Social Media Marketing
We use data-driven and targeted online marketing through a variety of channels to
increase our visibility and to ca pture information about customer preferences and market
trends. We mainly utilize (i) the individual w ebsites of each of our brands, (ii) our official
accounts on online social media platforms, such as Facebook, Instagram and YouTube, (iii)
advertising placements on online portals lik e Google AdWords and popular social media
platforms, and (iv) attractive and updated lis tings on third-party e-commerce platforms,
such as Caravan & Camping Sales and RV Trade r. In addition, our third-party dealers
promote our RV models on their own websites.
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Customer Engagement
We are dedicated to continuously improving our customer experience, effectively
managing and converting our sales leads, and developing trusting and close customer
relationships. We drive customer engagemen t by holding multi-dimensional online and
offline promotion events and owner group activities to support our user growth and
cultivate a vibrant user community. Users an d customers, existing and prospective, are
invited to participate in our regular mee t-ups and RV trips, which are designed to be
informative, engaging and entertaining. Through these events, we interact with our users to
understand their needs and preferences on a reg ular basis to collect timely feedback based
on their user experience. In addition, owner groups for people who currently own or who
have placed an order for our RVs have been established by us to create a dynamic user
community. As of the Latest Practicable Date, our owner groups had an aggregate of over
10,000 members within our Facebook community. We also regularly work with key opinion
customers and facilitate the sharing of their RV insights and experiences online and offline.
User-generated content from these events ha s been shared by our customers on major online
platforms, which significantly contributes to our brand recognition and product awareness.
INTELLECTUAL PROPERTY
We believe our proprietary technologies, and intellectual property rights are critical to
our success. We seek to protect our intellectual property against third-party infringement
through the registration of trademarks, the filing of patents, as well as through other means,
including licenses, confidentiality and n on-disclosure agreements. As of the Latest
Practicable Date, we had 20 registered trademarks and two registered or authorized
patents in China, Australia and New Zealand. As of the Latest Practicable Date, we had
five material domain names. As of the Latest P racticable Date, the Group had registered
patents for all our core technologies. For details, see ‘‘Appendix IV — Statutory and
General Information — B. Further Information about Our Business — 2. Intellectual
Property Rights of Our Group.’’
During the Track Record Period and up to t he Latest Practicable Date, we were not
aware of any material infringement (i) by us of any intellectual property rights owned by
third parties, or (ii) by any third parties of a ny intellectual property rights owned by us.
COMPETITION
Factors that affect competition in our indu stry include price, reliability, safety,
regulations, reputation, equipment and qualit y, timely delivery capabilities, high degree of
customization, consistency and ease of service. We believe that we compete primarily based
on our reputation for quality, the performance and design of our RVs, pricing, our brand
image and the user experience that we provide to our customers. We are a notable company
in the RV industry in Australasia. Accord ing to Frost & Sullivan, we achieved the
second-largest market share in Australasia’s RV industry in terms of sales volume in 2023.
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We believe that we have competitive advan tages over our peers in the RV industry,
including our collection of iconic brands with a long heritage, broad and diverse range of
products with unique brand matrix, effective and diversified sales and distribution strategy,
superior production capabilities and substa ntial investments in product development.
TOP CUSTOMERS AND SUPPLIERS
Top Customers
Our customers primarily consist of our dealers through which we sell our RVs to end
customers. In each year/period of the Track Record Period, sales to our five largest
customers in the aggregate accounted for 80.5%, 74.4%, 55.2% and 46.2% of our total
revenues, respectively. In each year/period o f the Track Record Period, sales to our largest
customer accounted for 26.2%, 27.3%, 25.1% and 23.8% of our total revenues,
respectively. None of our five largest customers in each year/period of the Track Record
Period was also our supplier.
Green RV held 49% equity interest in our s ubsidiary, Leisure Lion, and was also a
dealer operating two of our dealer stores as of June 30, 2024. Green RV was our largest
customer in each year/period of the Track Rec ord Period. See ‘‘Connected Transactions —
Partially-Exempt Continuing Connected Tran saction — Green RV Dealership Agreement’’
for more details.
Leisure Lion was initially a joint venture established by Regent Company, together
with Green RV, in Australia in July 2019, with each of Green RV and us holding 50%
equity interest, respectively. Subsequently, Leisure Lion became one of our subsidiaries in
September 2023 when the shareholding interest of Regent Company in it increased to 51%.
Leisure Lion was one of our five largest customers in 2021, 2022 and 2023, respectively.
To the best of our knowledge, all of our five largest customers in each year/period of
the Track Record Period, except for Green R V as our JV partner, and Leisure Lion as our
JV dealer, were independent third parties, and none of our Directors, their respective
associates or any shareholder who, to the knowledge of our Directors, owned more than 5%
of our issued share capital, had any interest in any of our five largest customers in each
year/period of the Track Record Period.
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The following tables set forth the details of our top five customers in each year/period
during the Track Record Pe riod in terms of revenues.
Customer
Major
products/
services
purchased
by us
Business
relationship
since
Credit
terms *
Settlement
information
Amount
of sales
As
a percentage
of our total
revenue
(RMB in
thousands) (%)
For the six months ended June 30, 2024
Green RV
(1) RVs 2014 21 days or
90 days
Bank transfer 100,434.9 23.8
Customer B (4) RVs 2022 21 days or
90 days
Bank transfer 29,870.8 7.1
Customer F (8) RVs 2022 21 days or
90 days
Bank transfer 29,354.1 7.0
Customer A (2) RVs 2016 21 days or
90 days
Bank transfer 18,508.0 4.4
Customer C (5) RVs 2017 21 days or
90 days
Bank transfer 16,897.4 3.9
Total 195,065.2 46.2
Customer
Major
products/
services
sold by us
Business
relationship
since
Credit
terms *
Settlement
information
Amount
of sales
As
a percentage
of our total
revenue
(RMB in
thousands) (%)
For the year ended December 31, 2023
Green RV
(1) RVs 2015 21 days or
90 days
Bank transfer 181,139.9 25.1
Customer A (2) RVs 2016 21 days or
90 days
Bank transfer 75,000.4 10.4
Leisure
Lion (3)
RVs 2020 21 days or
90 days
Bank transfer 51,809.3 7.2
Customer B (4) RVs 2022 21 days or
90 days
Bank transfer 49,095.3 6.8
Customer C (5) RVs 2017 21 days or
90 days
Bank transfer 41,295.7 5.7
Total 398,340.6 55.2
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Customer
Major
products/
services
sold by us
Business
relationship
since Credit terms
Settlement
information
Amount
of sales
As
a percentage
of our total
revenue
(RMB in
thousands) (%)
For the year ended December 31, 2022
Green RV
(1) RVs 2015 21 days or
90 days
Bank transfer 136,027.7 27.3
Customer D (6) RVs 2016 21 days or
90 days
Bank transfer 90,638.5 18.2
Customer A (2) RVs 2016 21 days or
90 days
Bank transfer 70,789.1 14.2
Leisure
Lion (3)
RVs 2020 21 days or
90 days
Bank transfer 37,568.2 7.5
Customer E (7) RVs 2019 21 days or
90 days
Bank transfer 36,010.8 7.2
Total 371,034.3 74.4
Customer
Major
products/
services
sold by us
Business
relationship
since Credit terms
Settlement
information
Amount
of sales
As
a percentage
of our total
revenue
(RMB in
thousands) (%)
For the year ended December 31, 2021
Green RV
(1) RVs 2015 21 days or
90 days
Bank transfer 78,588.1 26.2
Customer D (6) RVs 2016 21 days or
90 days
Bank transfer 62,968.2 21.0
Customer A (2) RVs 2016 21 days or
90 days
Bank transfer 43,529.6 14.5
Customer C (5) RVs 2017 21 days or
90 days
Bank transfer 30,372.0 10.1
Leisure
Lion (3)
RVs 2020 21 days or
90 days
Bank transfer 26,062.9 8.7
Total 241,520.8 80.5
Notes:
* The credit term of 21 days is under the direct seller-buyer model, and the credit term of 90 days is under
the financing model. See ‘‘— Sales and Distribution’’ for details.
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(1) Green RV is a proprietary company limited by shares registered in Australia on June 13, 2018 and
our JV partner.
(2) Established in 2013, Customer A is a reputationa l dealer selling high-quality new and pre-owned
RVs in the South Coast of Australia. It is also a member of the Caravan & Camping Industry
Association in New South Wales.
(3) Leisure Lion was initially a joi nt venture established by Regent Company, together with Green RV,
in Australia in July 2019, with each of Green RV and us holding 50% interest, respectively.
Subsequently, Leisure Lion became one of our subsidiaries in September 2023 when the
shareholding interest of Regent Company in it increased to 51%.
(4) Customer B started selling RVs since January 2016 in New South Wales, Australia. It has expanded
its business scale and commenced to sell Regent and Snowy River RVs as our dealer since 2022.
(5) Customer C is a family run business with mor e than 40 years’ experience in the RV industry
according to its website. It operates two sites in both Northern and Southern Adelaide, Australia.
(6) Customer D is a leading RV dealer in Melbourne, Australia. It is a family-owned RV dealer with
nearly 50 years’ experience in the RV industry and offers a wide range of RVs.
(7) Customer E is a family-owned RV dealer located in Tasmania, focusing on the sales of Snowy River
RVs. It also provides repair services to diff erent RV brands and models and a wide range of RV
parts to meet customer needs.
(8) Customer F is a privately owned independent dealer located in Townsville, Far North Queensland.
Its yard was opened in 2020.
Top Suppliers
Our suppliers mainly include suppliers of our p roduction inputs. In each year/period of
the Track Record Period, purchases from our five largest suppliers in the aggregate
accounted for 38.7%, 30.1%, 22.8% and 22.9% of our total purchases, respectively. In each
year/period of the Track Record Period, the purchases from our largest suppliers accounted
for approximately 20.6%, 11.1%, 8.8% and 7.8% of our total purchases, respectively. None
of our five largest suppliers in each year/period of the Track Record Period was also our
customer.
Daide Power Machinery, one of our five largest suppliers in both 2021 and 2022, is an
affiliate of Daide Longtree, mainly engaging in trading business. Daide Power Machinery is
a limited liability company established under the laws of the PRC in 2010 and is controlled
by Mr. Miao, one of our Controlling Shareholder s. To strengthen our bargaining position
and secure more favorable procurement terms, we centralized the procurement of materials,
including raw materials, electric applian ces, and interior and exterior furniture and
decorations, through Daide Power Machinery in 2021 and 2022. Such centralized
procurement arrangement was terminated in 2023. Given that the RV business operates
relatively independently and we offer a ma de-to-order service for our customers,
independent procurement allows us greater f lexibility, enabling us to be more proactive
in meeting the specific needs and tastes of our customers. Furthermore, as our business
continues to expand, our bargaining power has been steadily strengthening, making a
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decentralized procurement approach more advantageous. The termination of such
centralized procurement arrangement has no impact on our financial and operational
performance.
Shangqiu Jishun, one of our five largest suppliers for the six months ended June 30,
2024, is an indirect subsidiary of Daide Longtree and a connected person of our Company,
mainly engaging in RV parts manufacturing. S hangqiu Jishun is a limited liability company
established under the laws of the PRC in 2021 and is controlled by Mr. Miao, one of our
Controlling Shareholders. For details of our transactions with Shangqiu Jishun, see
‘‘Connected Transaction — Partially exempt co ntinuing connected transactions — RV Parts
Purchase Framework Agreement.’’
T ot h eb e s to fo u rk n o w l e d g e ,a l lo fo u rf i v elargest suppliers in each year/period of the
Track Record Period were independent third parties, except for the above-mentioned Daide
Power Machinery and Shangqiu Jishun, and none of our Directors, their respective
associates or any shareholder who, to the knowledge of our Directors, owned more than 5%
of our issued share capital, had any interest in any of our five largest suppliers in each
year/period of the Track Record Period.
The following tables set forth the details of our top five suppliers in each year/period
during the Track Record Period in terms of purchases.
Supplier
Major products/
services purchased
by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As
a percentage
of our total
purchases
(RMB in
thousands) (%)
For the six months ended June 30, 2024
Supplier A
(1) Electric appliance,
doors and
awnings
2014 30–60 days Bank transfer and
bank notes
14,496.0 7.8%
Supplier C
(3) Substrates 2017 30 days Bank transfer and
bank notes
7,986.2 4.3%
Shangqiu
Jishun (9)
Doors and
windows
2022 45 days Bank transfer and
bank notes
6,831.0 3.7%
Supplier G (8) Fiberglass panel 2020 30 days Bank transfer and
bank notes
6,786.8 3.7%
Supplier H (10) Electric appliance 2020 60 days Bank transfer and
bank notes
6,398.1 3.4%
Total 42,498.1 22.9%
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Supplier
Major products/
services purchased
by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As
a percentage
of our total
purchases
(RMB in
thousands) (%)
For the year ended December 31, 2023
Supplier A
(1) Electric appliance,
doors and
awnings
2014 30–60 days Bank transfer and
bank notes
40,540.8 8.8%
Supplier B
(2) Interior and
exterior
2018 60 days Bank transfer and
bank notes
18,585.3 4.1%
Supplier C (3) Substrates 2017 30 days Bank transfer and
bank notes
16,056.2 3.5%
Supplier D (4) Substrates 2016 40–60 days Bank transfer and
bank notes
15,260.8 3.3%
Supplier E (5) Plumbing 2017 30–60 days Bank transfer 14,398.2 3.1%
Total 104,841.3 22.8%
Supplier
Major products/
services purchased
by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As
a percentage
of our total
purchases
(RMB in
thousands) (%)
For the year ended December 31, 2022
Supplier A
(1) Electric appliance,
doors and
awnings
2014 30–60 days Bank transfer and
bank notes
32,473.5 11.1%
Supplier E
(5) Plumbing 2017 30–60 days Bank transfer 17,039.7 5.8%
Daide Power
Machinery (6)
Centralized
purchases
through related
parties
2021 90 days Bank transfer and
bank notes
14,735.4 5.0%
Supplier B
(2) Interior and
exterior
2018 60 days Bank transfer and
bank notes
13,370.2 4.6%
Supplier D (4) Substrates 2016 40–60 days Bank transfer and
bank notes
10,814.0 3.6%
Total 88,432.8 30.1%
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Supplier
Major products/
services purchased
by us
Business
relationship
since Credit terms
Settlement
information
Amount of
purchases
As
a percentage
of our total
purchases
(RMB in
thousands) (%)
For the year ended December 31, 2021
Daide Power
Machinery
(6)
Centralized
procurement
through related
parties
2021 90 days Bank transfer and
bank notes
52,093.3 20.6%
Supplier A
(1) Electric appliance,
doors and
awnings
2014 30–60 days Bank transfer and
bank notes
16,366.5 6.5%
Supplier C
(3) Substrates 2017 30 days Bank transfer and
bank notes
11,291.3 4.5%
Supplier D (4) Substrates 2016 40–60 days Bank transfer and
bank notes
9,746.1 3.9%
Supplier
Group F (7)
Electric appliance 2021 30 days Bank transfer and
bank notes
8,061.3 3.2%
Total 97,558.5 38.7%
Notes:
(1) Supplier A, with its business presence in both C hina and Australia, is a global leading company
specializing in brand solutions for mobile livin g in the application areas of food and beverage,
climate, power and control and others.
(2) Established in 2014, Supplier B specializes in th e production of doors, windows, refrigerators and
other value-added products of RVs. It has estab lished its business presence in more than 30
countries and regions across Europe, the United St ates, and Canada and has established strategic
partnerships with many well-known dom estic and foreign enterprises.
(3) Established in 2003, Supplier C is located in X uzhou, Jiangsu Province. It specializes in the
production of panels, plywood, furniture and accessories.
(4) Established in 2008, Supplier D is located in Ningbo, Zhejiang Province. It specializes in the
wholesale and retail of construction material s, electronic components, and needle textiles.
(5) Supplier E is a company which specializes in the p rovision of plumbing and electrical contract labor
solutions to RV manufacturers. It operates a separa te service workshop providing warranty support
as well as after-sales maintenance, repairs, upg rades and import compliance to both trade and
end-user customers.
(6) Daide Power Machinery is an affiliate of Dai de Longtree, mainly engaging in trading business.
(7) From 2021 to 2023, we purchased products from Supplier Group F and two of its subsidiaries.
Supplier Group F was established in Zhejiang, Ch ina in 2020, primarily engaging in automobile
manufacturing business.
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(8) Supplier G was established on January 26, 2018, and i ts business scope primarily includes fiberglass
products.
(9) Shangqiu Jishun is an indirect wholly-owned s ubsidiary of Daide Longtree and a connected person
of our Company, mainly engaging in RV parts manufacturing.
(10) Supplier H was established in 2014, and its busin ess scope primarily includes refrigeration
equipment, air conditioners and refrigerators used in caravans.
EMPLOYEES
As of June 30, 2024, we had a total of 733 employees, comprising 526 employees based
in China and 207 employees based in Australia.
The table below sets forth the numbers of our employees by function as of December
31, 2021, 2022 and 2023 and June 30, 2024.
As of December 31, As of June 30,
2021 2022 2023 2024
Function
Number
of
employees
%o f
total
employees
Number
of
employees
%o f
total
employees
Number
of
employees
%o f
total
employees
Number
of
employees
%o f
total
employees
Production and Supply
Chain 417 89.1% 405 78.9% 531 79.2% 566 77.2%
Sales and Marketing 6 1.3% 24 4.7% 52 7.8% 59 8.0%
General and
Administrative
Support 19 4.1% 38 7.4% 43 6.4% 54 7.4%
Product Development
and Technology 26 5.5% 46 9.0% 44 6.6% 54 7.4%
Total 468 100.0% 513 100.0% 670 100.0% 733 100.0%
We believe that maintaining a stable and moti vated employee force is critical to the
success of our business. We invest in staff train ing through various training programs on a
regular basis as we believe the level of professional knowledge and skill of our employees
plays an important role in our continued su ccess. We recruit personnel from the open
market, and we formulate our recruitment policy based on market conditions, our business
demand and expansion plans. We adopt comprehensive assessment criteria when selecting
candidates, taking into acco unt a number of factors such as experience, skills, and
competencies. We assess the credentials and suitability of candidates through interviews
and aptitude tests as appropriate.
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We offer our employees different remuneration packages based on their positions.
Generally, the remuneration structure of our employees includes salary, benefits and bonus.
Our compensation programs are designed to remunerate our employees based on their
performance, measured against specified objective criteria. We maintain standard employee
benefit plans for our employees based in China as required by PRC laws and regulations,
including housing fund contribution, pension insurance, medical insurance, workplace
injury insurance, unemployment insurance, an d maternity insurance. In Australia, we make
standard superannuation contributions for employees, provide employees with leave
entitlements, and maintain necessary insu rances (including workers’ compensation
insurance) as required under Australian laws and regulations. During the Track Record
Period, Regent RV Company has engaged independent contractors for a relatively short
period of time. As advised by our Australian Legal Advisor, we were in compliance with our
contributions to superannuation funds in respect of the registered employees and applicable
Australian labor laws and regulations in all material respects during the Track Record
Period and up to the Latest Practicable Date. However, as the Australian labor laws are
currently under reform, there is a risk that the independent contractors engaged by Regent
RV Company may be able to assert themselves that they have been historically misclassified
and are in fact employees at law pursuant to the new changes in the relevant laws. If an
independent contractor is misclassified and later found to be an employee at law, we may be
subject to claims for unpaid employee entitlements and superannuation contributions with
a six year look back period under the Australian labor laws.
We believe we maintain a good working relationship with our employees, and we had
not experienced any material labor dispute or any difficulty in recruiting staff for our
operations during the Track Record Peri o da n du pt ot h eL a t e s tP r a c t i c a b l eD a t e .
We also employ dispatched workers from employment agencies in the PRC who
primarily work at our final assembly, furniture, welding and lamination workshops. During
the Track Record Period, we entered into service agreements with certain independent
human resources service providers to engage dispatched workers. According to the service
agreements, the individuals dispatched by the service providers are employees of such
providers. The service providers are therefore required to bear the costs of salaries, social
insurance and housing provident funds or other employee benefits of these dispatched
workers, while we are responsible for paying s ervice fees to such employment agencies.
According to the Interim Pro visions on Labor Dispatch ( 勞務派遣暫行規定,t h e
‘‘Interim Provisions’’) issued on January 24, 2014 and implemented on March 1, 2014 by the
Ministry of Human Resources and Social Security, the number of the dispatched workers
shall not exceed 10% of the total number of the employees. During the Track Record Period
and as of the Latest Practicable Date, the number of dispatched workers engaged by us had
not exceeded the 10% regulatory threshold.
In accordance with applicable PRC laws and regulations, we are obligated to
contribute to social insurance and housing provident funds for our employees. During the
Track Record Period, we did not make adequate social insurance and housing provident
fund contributions for employees with the relevant social insurance and housing provident
fund authorities primarily because some of our employees were reluctant to make full
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contributions to social insurance and housing provident funds for personal considerations.
We made provisions of approximately RMB 0.7 million, RMB1.7 million, RMB2.1 million
and RMB0.5 million with respect to the potenti al liabilities arising from shortfalls in social
insurance and/or housing provident fund contributions for each of the three years and for
the six months ended June 30, 2024 during the Track Record Period, respectively. We had
obtained written confirmations from local social insurance and housing provident fund
authorities, which confirmed that no violation of laws and regulations in relation to labor
by us was found, and we had been subject to no penalties related to social insurance or
housing provident fund during the Track Record Period. Our PRC Legal Advisor is of the
opinion that the relevant writte n confirmations are addressed by competent authorities.
Furthermore, we are in the process of improvi ng relevant internal control measures to
strengthen our oversight and management in relation to the social insurance and housing
provident funds, including incorporating compliance payments for social insurance and
housing provident funds into our internal policies, learning official rules and regulations
promulgated by the competent authorities, reviewing the social insurance and housing
provident funds contribution for all eligible employees on a regular basis and conducting
regular internal trainings for personnel responsible for human resource matters on the
relevant laws and regulations as well as regulatory updates. For further details on the risks
associated with the shortfall in our contribu tions, see ‘‘Risk Factors — Risks Relating to
Our Business and Our Industry — We may be subject to additional contributions of
employee benefit plans and late payments an d fines imposed by relevant governmental
authorities.’’ We plan to adjust the payment b ase for our employees’ social insurance and
housing provident funds contributions in batches to make full contribution in compliance
with the applicable laws and regulations and e xpect such adjustment to be completed by the
end of 2024.
INSURANCE
We maintain various insurance policies to s afeguard against risks and unexpected
events. We maintain property insurance, machinery breakdown insurance, public and
product liability insurance, empl oyer’s liability insurance and d river’s liability insurance,
which we believe is in line with the commercial practices in our industry. In particular, our
public and product liability insurance cover s standard public and pro duct liability for our
RVs, including claims for third parties’ injuries and property damages due to our product
defects and relevant litigation expenses. Limits on indemnity in the policy are up to A$20
million for each public liability claim and eac h products liability claim, and as annual
aggregate for each public liability and each prod uct liability claim, respectively. That is, the
maximum amount of indemnity per each public liability claim and each products liability
claim that the insurer bears, represents a n amount up to A$20 million, and the maximum
amount of indemnity for all public liability c laims and for all products liability claims
occurred during the insured period (i.e., one year) on an aggregated basis is the same
amount. As advised by Frost & Sullivan, the pub lic and product liability coverage is in line
with the industry practices in the RV industry . We do not maintain any key-man insurance
or insurance policies covering damages to our information technology systems. We believe
that our insurance coverage is adequate to cove r our key assets, facilities, and liabilities.
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During the Track Record Period, we did no t make any material insurance claims in
relation to our business.
PROPERTIES
As of the Latest Practicable Date, we leased certain properties in connection with our
business operations in China and Australia. Our leases generally have a term ranging from
three to six years, and we expect to renew the l eases upon their expiration. For further
details, see ‘‘— Production — Production Pro cess and Facilities — Production Facilities
and Assembly Lines.’’ As of the Latest Practicable Date, we had not completed lease
registration for one leased property in China and seven leased properties in Queensland,
Western Australia, Tasmania and New South Wales in Australia. For any of our leased
properties with the aforementioned defects, we believe we are able to find comparable
properties as alternatives at commercially acceptable terms to us if we must stop occupying
any of these leased properties, without any delay, significant costs and interruption to our
business. In respect of our unregistered leased property in China, we were advised by our
PRC Legal Advisor that failure to register the l ease agreement would not affect the validity
and enforceability of such lease agreement. Howe ver, if we and the landlords fail to register
such lease agreement as required by the relevan t competent authorities, we may be subject
to a fine of RMB1,000 to RMB10,000 for the unregistered lease agreement. As of the Latest
Practicable Date, we had not been subject to any administrative penalties by the relevant
competent authorities. In respect of our unregistered leased properties in Australia, we were
advised by our Australian Legal Advisor that f ailure to register lease agreements does not
affect the enforceability and binding natur e of such leases, but may invoke the issue of
indefeasible title, whereby a third party (for i nstance, a creditor of the landlord) may take
possession of such leased properties and will not be bound by the unregistered leases. As
advised by our PRC Legal Advisor and our Australian Legal Advisor, the defects of such
leased properties would not affect the validity of such agreements under PRC laws and
Australian laws, respectively. For further det ails on the risks of our leased properties, see
‘‘Risk Factors — There are legal defects regarding some of our leased properties.’’
One of our landlords for our pr oduction facilities located in Zhejiang, China is our
connected person. See ‘‘Connected Transactions — One-off connected transaction’’ for
more details.
As none of our properties had a carrying amount of 15% or more of our consolidated
total assets as of June 30, 2024, we are not required to include a property valuation report in
this Prospectus according to Chapter 5 of the Listing Rules and Chapter 32L of the Laws of
Hong Kong.
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LICENSES, CERTIFICATES AND PERMITS
We are required to obtain various licenses, permits and approvals for our operations.
During the Track Record Period and up to the La test Practicable Date, we had obtained all
material licenses, approvals and permits n ecessary for our business operations from
relevant authorities. We renew all such license s, approvals and permits from time to time to
comply with the relevant laws and regulations.
The following table sets forth a list of our material licenses, approvals and certificates.
No. Holder
Name of License,
Approval and Permit Initial Grant Date Expiration Date
China
330494000Y Xing Longtree Customs Filing (Consignee and
Consignor of Import and Export
Goods ( 海關備案（進出口貨物收發貨
人）)
January 26, 2024 December 31, 2099
Australia
EQPL35816883 Regent
Company
Equipment license to import SGG
Equipment pursuant to the Ozone
Protection and Synthetic Greenhouse
Gas Management Act 1989 (Cth)
April 29, 2024 April 28, 2026
MD29380 Snowy River
(trading as
Regent RV
Perth)
Vehicle Dealers License for a
Corporation under the Motor
Vehicle Dealers Act 1973 (WA) at
the place of business, 1110–1116
Albany Highway, St James, WA 6102
April 28, 2022 April 27, 2025
4618678 Leisure Lion Motor Dealer license issued pursuant to
the Motor Dealers and Chattel
Auctioneers Act 2014
November 3, 2022 November 3, 2025
MD091066 Leisure Lion License under the Motor Dealers and
Repairers Act 2013 (NSW) at the
place of business, 21 Advantage
Avenue, Morisset, NSW 2264
November 22, 2022 November 21, 2027
As advised by the Australian Legal Advisor , United RV operates a retail business that
supplies Regent RVs directly to customer in Victoria, Australia, where it connects directly
with end customers through physical JV stores in Victoria, Australia. As there is no
requirement to hold a Vehicle Dealers License t os e l lR V si nV i c t o r i a ,A u s t r a l i a ,U n i t e dR V
does not need to apply for a Vehicle Dealers License.
We monitor the validity of, and make timely applications for the renewal of, relevant
licenses, permits and certificates prior to the expiration date. We had not experienced any
material difficulty in obtaining or renewing t he required licenses, pe rmits and certificates
for our business operations during the Track Record Period and up to the Latest
Practicable Date. Our PRC Legal Advisor and Australian Legal Advisor have advised us
that there is no material legal impediment to renewing such permits or licenses.
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AWARDS AND RECOGNITION
During the Track Record Period and up to the Latest Practicable Date, we received a
number of awards and recognition in respect of the quality and popularity of our products
and services. Some of the significant awards and recognition that we and our management
have received are set forth below.
Award/Recognition Award Year Awarding Institution/Authority
Caravan of the Year for the Value for
Money Category
2022 MSA 4x4 Accessories
(Australia)
Best Aussie Van in the Value for Money
Category
2019 CZONE|BLA (Australia)
2023 Outstanding Entrepreneurs of
Zhejiang Province (2023 浙江省優秀
企業家)
2023 Zhejiang Entrepreneurs Union
(浙江省企業家聯合會)
Zhejiang Entrepreneurs
Association
(浙江省企業家協會)
2022 Soaring Eagle Award for Leadership
Excellence in the RV Camping Industry
(2022 年度房車露營行業卓越領袖
飛鷹獎)
2022 21st Century RV website
(21世紀房車網)
2021 Green Urban Transportation and
Distribution Promotional Figures (2021
綠色城配推廣人物)
2021 China New Energy
Transportation Vehicle
Green Urban Cargo
Distribution Conference
(中國新能源物流車綠色城配
大會)
2014 China Reform Outstanding People
Award (2014 中國
改革優秀人物獎)
2014 China Economic Herald of
National Development and
Reform Commission
(國家發展改革委中國經濟導
報社)
2014 Most Influential People in China
(Automotive) Industry (2014 中國
（汽車）行業最具影響力人物)
2014 Organizing Committee of the
third China Finance Summit
(第三屆中國財經峰會組委會)
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ENVIRONMENTAL, SOCI AL AND GOVERNANCE
We are committed to promoting corporate s ocial responsibility and sustainable
development and integrating it into all ma jor aspects of our business operations.
Accordingly, our Board of Directors has adopted a comprehensive policy on
environmental, social and governan ce, or ESG, responsibilities (the ‘‘ ESG Policy ’’) in
accordance with the standards of Append ix C2 to the Listing Rules. The ESG Policy
outlines, among others, (i) the appropriate risk governance on ESG matters, including
climate-related risks and op portunities, (ii) ESG strategy formation procedures, (iii) ESG
risk management and monitoring, (iv) the identification of key performance indicators
(‘‘KPIs ’ ’ )a n d( v )t h er e l e v a n tm e a s u r ements and mitigating measures.
Our ESG Policy also sets out different parties’ respective responsibilities and authority
in managing ESG matters. Our Board has ove rall responsibility for overseeing and
determining our environmental, social, and climate-related risks and opportunities
impacting us, establishing and adopting the ESG Policy and the related targets, and
reviewing our performance annually against the ESG targets and revising the ESG
strategies as appropriate if significant variance from the targets is identified. Our Board has
established an ESG working group that comprises four members, including managements of
relevant ESG departments. The ESG working g roup serves a supportive role to our Board
in (a) implementing the agreed ESG Policy, targets and strategies; (b) conducting
materiality assessments of environmental-relate d, climate-related and social-related risks
and assessing how we adapt its business in light of climate change; (c) collecting ESG data
from different parties while preparing for the ESG report; and (d) continuous monitoring of
the implementation of measures to address our Group’s ESG-related risks. The ESG
working group has to report to our Board on an annual basis on our ESG performance and
the effectiveness of our ESG systems.
As advised by our PRC Legal Advisor, we were in compliance with the applicable
environmental laws and regulations in all mate rial respects during the Track Record Period
and as of the Latest Practicable Date. As advised by the Australian Legal Advisor, having
considered the business models and the major business operations of Regent RV, Snowy
River RV Company and United RV, Australian environmental laws and regulations were
not applicable to our business operations in Australia in material respects during the Track
Record Period and as of the Latest Practicable Date.
Governance
Our Board views oversight and effectiv e management of ESG related risks and
opportunities essential to our ability to execute our growth strategies and achieve long-term
sustainable growth. To that end, our Board re ceives regular updates on a variety of ESG
topics, including sustainability and climate- related matters, as part of its annual, in-depth
strategy and risk management sessions, as well as ongoing discussions and regular reports
throughout the year.
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At the management level, our ESG working group is responsible for ensuring
climate-related risks and opportunities are fully integrated into our long-term business
strategy. Our ESG working group oversees and reports to the Board on management’s
progress against our key strat egic ESG objectives, coveri ng various sustainability and
climate-related topics and initiatives.
Strategy and Climate-related Risks and Opportunities
We integrate climate-related risks and opportunities into our larger corporate strategy
to strengthen strategic decision-making wit h long-term, resilient operations in mind. We
recognize that the regulatory environment f or environmental protection is becoming
increasingly stringent, posing significant operational and financial risks if not properly
addressed. Stricter emissions controls, wate r usage restrictions, and waste management
requirements could all impact our ability to maintain efficient and cost-effective
production. Failure to meet these evolving regulations could also result in penalties, legal
liabilities, and reputational damage.
We have established a comprehensive risk management framework that identifies,
assesses and monitors key ESG-related risks, including those arising from climate change
and other disruptive forces, across our operations. This includes conducting enterprise-wide
risk assessments at least annually, wit h our Board and Audit Committee providing
oversight of our risk management approach.
Based on these risk assessments, we have im plemented the following key mitigating
measures:
. Emissions reduction initiatives: We have invested in upgrading our production
equipment and processes to improve energy efficiency and reduce air pollutant
and greenhouse gas emissions. This includes transitioning to cleaner fuel sources,
installing emissions control technologies , and optimizing production workflows.
. Resource conservation programs: To address our energy and water consumption,
we have rolled out resource conservation initiatives such as implementing water
recycling systems, upgrading to more efficient lighting and heating, ventilation
and air-conditioning systems, and rais ing employee awareness on sustainable
practices.
. Supplier engagement: We are actively en gaging our suppliers to better understand
and manage environmental impacts across our value chain. This includes
collaborating on initiatives to reduce emissions, waste and resource use in raw
material sourcing and logistics.
. Climate risk analysis: We incorporate c limate-related physical and transition
risks, such as extreme weather events and changes in regulations, into our regular
risk assessment processes. If deemed materi al, we integrate these climate-related
risks and opportunities into our strategic and financial planning.
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The following tables specify further the ESG risks and opportunities of our Company.
Risk Type
Potential
Financial Impact
Short
(0–1 year)
Medium
(1–5 years)
Long
(5–20 years) Mitigation Strategy
Transition
Risks
Policy and
Legal
International
governments have
imposed fuel
consumption
standards for
motorized RVs,
which are
applicable to the
motorized RVs to
be launched by
the Company by
the end of 2024.
Products that do
not meet these
requirements will
be unable to be
sold.
Medium
risk
Medium
risk
Medium risk To comply with the new
requirements for
improving fuel
efficiency, we will
implement the following
designs in our motorized
RVs, aiming to reduce
their weight by 15% to
20% compared to
traditional RVs:
1. Lightweight
structural design:
We will utilize
hollow subframes
and add process
holes to ensure
structural strength
while maximizing
weight reduction.
2. Application of
lightweight new
materials: We will
use lightweight
materials such as
polyurethane (PU)
foam insulation
boards, aviation
aluminum panels,
and polyurethane
(PU) keels.
3. Weight-optimized
furniture: We will
use lightweight
plywood and
polyethylene
terephthalate
(PET) to make
furniture to
reduce the overall
weight of RVs.
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Risk Type
Potential
Financial Impact
Short
(0–1 year)
Medium
(1–5 years)
Long
(5–20 years) Mitigation Strategy
Transition
Risks
Policy and
Legal
Increased pricing of
greenhouse gas
emissions due to
regulations
Low risk Low risk Low risk To cope with the PRC’s
national plans to
achieve carbon
neutrality by 2060, we
have taken
environmental
protection measures,
including reducing
greenhouse gas
emissions and energy
consumption.
O u rs t r a t e g yi sp r i m a r i l y
focused on avoiding and
reducing emissions
wherever possible.
Increased
compliance costs
related to stricter
environmental
protection
measures on
existing products
Low risk Low risk Medium risk We proactively engage with
governments, regulators
and industry
organizations. Our
Technical Department
address increased
interest in ESG and
climate through the
development of new
products and research.
Market Reduced demand for
goods and
services due to
shift in consumer
preferences
Low risk Low risk Medium risk Our management monitors
the sales trend and
market development to
meet changing market
demands.
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Risk Type
Potential
Financial Impact
Short
(0–1 year)
Medium
(1–5 years)
Long
(5–20 years) Mitigation Strategy
Physical
Risks
Acute Extreme weather
disrupt the
availability and
production of raw
materials used in
our
manufacturing
process
Low risk Low risk Medium risk We diversify our supplier
base across various
geographical areas to
minimize the risk of
simultaneous disruption
due to localized weather
event affecting a single
area.
Chronic Increased cost
related to
persistently rising
temperatures
Low risk Low risk Medium risk We take energy-saving
measures to reduce
electricity consumption
and eliminate
unnecessary usage.
Opportunity Type
Potential
Financial Impact
Short
(0–1 year)
Medium
(1–5 years)
Long
(5–20 years) Realization Strategy
Resources Efficiency Reduced operating
costs through
efficiency gains and
cost reductions
Low risk Low risk Low risk We constantly seek
energy-efficient
alternatives and
initiatives to implement
throughout energy
saving measures. We set
environmental impact
reduction targets, and
assess our performance
against these targets
annually.
Products and
Services
Increased revenue
through demand for
sustainable products
Low risk Low risk Medium risk Our products offer an
alternative mobility
solution that can be more
environmentally-friendly
compared to traditional
modes of transportation,
and encourage people to
choose a more sustainable
way to explore the
outdoors. We will keep
educating our customers
and raising their
awareness about
environmental issues.
Our Board, Audit Committee and ESG working group maintain ongoing oversight of
our risk management approach, including reviewing the effectiveness of our mitigation
measures and environmental, social and climate-related performance on an annual basis.
We are committed to revising our ESG strategies as appropriate to address any evolving
risks or opportunities.
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Moreover, to push ourselves to strive for reduction of our Group’s pollutants
emissions, energy and water consumption, we set up a reduction target of 3% in the future
one year, 7% in the future three years, and 10% i nt h ef u t u r ef i v ey e a r so fc o m p a r e dt ot h e
usage in 2023. We believe these wide-ranging initiatives, supported by clear targets and
senior management commitment, will be effect ive in mitigating our environmental impacts
and ensuring compliance with e volving regulations. We rem ain vigilant in continuously
reviewing and enhancing these programs to drive further performance improvements.
Our ESG working group will continue to explore the opportunities to reduce the
pollutants emissions, energy and water consumption by working with our suppliers and
internal staff by sourcing green materials, improving the efficiency and effectiveness of our
production facilities, streamlining of our process flow etc. Our ESG working group will
regularly report the effectiveness of measure s and target achievement status to the Board
regularly.
Metrics and Targets
Our Board sets targets for each material KPI at the beginning of each financial year in
accordance with the disclosure requirements of Appendix C2 to the Listing Rules and other
relevant rules and regulations upon listing. T he relevant targets on material KPIs will be
reviewed on an annual basis to ensure that they remain appropriate to our needs. In setting
targets for the KPIs, we have taken into account their respective historical levels and have
considered our future business expansion thoroughly and prudently with an aim to balance
our business growth and environmental prote ction to achieve sustainable development.
Environmental
Greenhouse gas emissions
We regularly monitor the level of greenhouse gas (‘‘ GHG’’) emissions. Our greenhouse
gas emissions are mainly resulted from the usage of fuel for logistics of RVs, and electricity
used in our production and office sites. For 2021, 2022 and 2023, our greenhouse gas
emissions are listed below:
2021 2022 2023
Scope 1 (tons of CO2-e) 4.5 4.5 4.5
Scope 2 (tons of CO2-e) 1,075.3 1,089.0 1,352.4
Total (tons of CO2-e) 1,079.8 1,093.4 1,356.9
Total Intensity (tons of CO2-e/revenue) 0.004 0.002 0.002
Our scope 3 emissions are categorized into upstream and downstream activities in
accordance with the Greenhouse Gas Protocol — A Corporate Accounting and Reporting
Standard (Revised Edition) published by the World Business Council for Sustainable
Development and the World Resources Institute, which include emissions resulting from
extraction and production of raw materials and components (e.g. electric appliances) used
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in manufacturing our RVs, transportation and distribution of purchased raw materials and
finished RVs for production, assembly and distribution and sale, respectively, disposal of
our sold RVs at the end of their useful life and employees’ business travels.
As a manufacturer of RVs, we recognize th at scope 3 emissions likely represent a
portion of our overall carbon footprint across our upstream and downstream value chain
activities. However, we have not yet completed a comprehensive assessment to identify,
quantify and categorize these scope 3 emission sources. This is an area we are actively
working to improve, as we aim to enhance the transparency and completeness of our
greenhouse gas emissions reporting. We are in the process of developing better data
collection processes and engaging with our suppliers and other parties to gather the
information needed to provide a more detailed breakdown of our scope 3 emissions in the
future. We target to disclose the scope 3 greenhouse gas emissions performance in the
financial year 2025. With 2025 as the base year, we plan to reduce the scope 3 greenhouse
gas emissions per revenue by 3% in the future three years, and 5% in the future five years.
We target to gradually reduce the greenhouse gas emissions per revenue in the future
one year of 3%, three years of 7%, and five years of 10% compared to the usage in 2023.
We have implemented the following measures:
. Enhance our production facilitates to improve energy efficiency;
. Provide training to staff to enhance t heir awareness of energy saving; and
. Conduct continuous monitoring to ensure staff complying with the energy saving
guidelines.
Environment and Natural Resources
Use of resources
We consume energy and water to support our daily business operation, primarily
including production and office facilities. We evaluate our energy and water usage level
using the metric of annual power usage and annual water usage, respectively. We endeavor
to proactively conserve energy and water through various measures as described below. We
also raise our employees’ energy and water conservation awareness during our internal
trainings. We intend to continuously make our efforts to reducing the level of our power
and water usage in the future. The energy and water consumption during the Track Record
Period are as follows:
2021 2022 2023
Electricity Consumption (MWh) 1,784.4 1,786.5 2,186.4
Electricity Consumption Intensity
(MWh/revenue) 0.006 0.004 0.003
Water (m
3) 16,238.0 14,334.0 17,407.0
Water Intensity (cm3/revenue) 0.006 0.003 0.002
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We intend to continuously reduce the level of our water and energy consumption. We
target to gradually reduce the consumption of production utilities per revenue in the future
one year of 3%, three years of 7%, and five years of 10% compared to the usage in 2023.
We have implemented the following measures:
. Switch off the audio, air conditioning, lighting and other electrical appliances
after the meeting, and conduct regular checks to ensure compliance by all
employees;
. Strengthen the inspection of various types of pipelines, valves, pumps, gear boxes,
etc., and promptly eliminate the phenomenon of running, popping, dripping, and
leaking; and
. Organize the production department to continuously reform and innovate,
minimize the emission of pollutants, strictly prohibit excessive water use, and
maximize energy conservation, consumption reduction, emission reduction and
efficiency improvement.
Waste Management
Our main hazardous wastes mainly comprise production wastes generated by our
production facilities; our non-hazardous wastes are mainly production wastes generated by
our production facilities and office. For the c ollection of hazardo us wastes, we engage
qualified third parties for treatment. The non-hazardous production wastes, for instance,
waste metal, are collected by third-party recycling companies. The garbage and kitchen
wastes are handled by government garbage collection department. Waste water for washing
RVs are being recycled. Domestic waste water is discharged into the municipal sewage pipe
network. We have obtained a discharge license valid until October 2027. The amount of
hazardous wastes, non-hazardous wastes, and waste water discharged during the Track
Record Period are as follows:
2021 2022 2023
Hazardous Waste (tons) 23.8 42.6 37.1
Hazardous Waste Intensity (kg/revenue) 0.0001 0.0001 0.0001
Non-hazardous Waste (tons) 1,202.0 1,401.0 1,667.3
Non-hazardous Waste Intensity
(kg/revenue) 0.004 0.003 0.002
Waste Water (m
3) 13,610.0 12,027.0 16,212.0
Waste Water Intensity (cm3) 0.005 0.002 0.002
As part of our commitment to environmental protection, we have engaged a
third-party inspection company to conduct an inspection of the waste water, air
emissions and solid waste generated by our production site in April 2024. The standards
we follow for emissions and discharges are all within statutory limits.
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We intend to continuously reduce the intensity of our waste discharge per revenue in
the future one year of 3%, three years of 7%, and five years of 10% compared to the usage
in 2023 by implementing the following measures:
. Continue developing new production innovation to minimize the production
waste and water discharge;
. Explore ways of recycling the production waste and water discharge; and
. Encourage paper conservation by printing on both sides of office papers and
reusing one-sided printed papers.
Business Activities aligned with Climate-related Opportunities and Risks
We have integrated climate-related ris ks and opportunities into our corporate
strategies so that strategic decisions can be s trengthened to address these challenges. In
the supplier selection process, we give priori ty to sustainable suppliers that prioritize
environment-friendly practices when sourcing materials. During product design, we
incorporate energy-efficient design principle s into caravan manufacturing, including using
lightweight materials to reduce fuel consumption. We also integrate renewable energy into
our product by installing solar panel into RVs to generate clean energy. In manufacturing
process, we implement initiatives to measure and reduce our carbon footprint. We optimize
our production processes, reducing energy consumption, promoting waste reduction and
recycling. Our management is confident that th e company will benefit from climate-related
opportunities in terms of revenue as our caravan products inspire individuals to embrace a
more sustainable approach to outdoor exploration. Therefore, our revenue generated from
new and used caravan sales are aligned with clim ate-related opportunities. However, since
the financial effects on climate- related opportunities cannot be separately identifiable, we
are unable to quantify the financial effects resulting from climate-related opportunities.
In terms of climate-related risks, our utility expenses and sewage charges are
vulnerable to climate-related transition ris ks. The increased pricing of waste treatment
and air emissions due to stricter regulations may lead to increased operating expenses. We
estimate that approximately RMB2.8 million of u tility expenses and se wage charges that we
incurred in 2023 are vulnerable to climate-rela ted transition risks. A portion of our cost of
sales may also be vulnerable to climate-related t ransition risks. It is possible that the market
would demand for more sustainable products, resulting in an increase in the cost of sales. In
s p i t eo ft h i s ,w ea r ec o n f i d e n tt h a tt h ec o s to fsustainable products would decrease as the
market continues to mature. As a result, the effect on our cost of sales would be
insignificant. Our assets are not materially su bjected to physical risks, since our production
facilities, warehouse and office are indoo r. Nonetheless, we are aware of the need to
strengthen our protection against future extr eme climate risks and emergencies. We have set
up a leading group for emergency response plan to deal with future occurrences of extreme
weather events.
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In order to ensure our production facilit ates are in compliance with national
environmental standards, we have invested approximately RMB6.08 million on
environmental facilitates, including waste gas treatment facilitates , sewage collection and
treatment, hazardous waste warehouse and solid waste disposal, and sound insulation
facilitates.
Social Responsibilities
Health and Safety Working Environment
We have adopted and maintained a comprehensive set of rules, standard operating
procedures, and measures to maintain our employees’ healthy and safe environment. We
implement safety guidelines to set out information about potential safety hazards. We
require new employees to participate in safety training to familiarize themselves with the
relevant safety rules and procedures. In additi on, existing employees are required to attend
refreshing training based on their roles and responsibilities, such as hazardous waste
handling procedures. Moreover, monthly inspections are conducted at our production
facilities to proactively identify and promptly a ddress any potential hazards or unsafe areas.
In case safety-related incident occurs, our Safety Committee will submit incident
report to the human resources department which then will report to the regulatory
department. During the Track Record Period, there was no work-related fatality or
material work-related injury.
Anti-Corruption
We have established anti-corruption policy by outlining the standards of behaviors for
employees regarding business ethics, anti-corruption and anti-bribery, conflict of interests
and data confidentiality to ensure that our business and operations are of high ethical
standard. We also set up whistle-blowing channels for employees and external stakeholders
to report any kinds of malpractices and suspected misconduct. Our Company protects the
identity of whistle-blower and keeps the reported information confidential. Internal
investigation will be undergone to verify th e reported cases and rem edial actions will be
taken where necessary based on the re sult findings of the investigation.
Supply Chain Management
We embrace the close collaboration with a wide range of suppliers with diverse
backgrounds, aiming to contribute additional values to our business. We have set up
procurement management policy to specify our commitment in open, fair and effective
competition in procurement process, and stringent management procedures to carefully
select suppliers with high standard of business integrity and product and service reliability.
To proper manage the environmental and social risks of our supply chain, we have
outlined our expectations and requireme nts, including environmental and social
performance, in our procurement documents and contracts to ensure that suppliers fully
understand and are obliged by the rules in our b usiness activities. Based on the criteria of
delivery, quality of materials and services, management system and price, we conduct
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regular performance assessments for our existi ng on-list suppliers to ensure the consistency
of product and service quality. We will request a ll suppliers to take timely rectification in
the event of any non-conformity is found. For those suppliers who consecutively fail to
fulfill our required standards and are found in violation of laws and regulations, they will
be removed from the approved supplier list.
HEALTH AND OCCUPATIONAL SAFETY
We are subject to various laws and regulations in respect of health and occupational
safety. We have adopted and maintained a series of measures to maintain a healthy and safe
environment for our employees. For example, we require new employees to participate in
safety training to familiarize themselves with the relevant safety rules and procedures. In
addition, we conduct on-site sa fety assessment and hazard identification, which help us
enhance our overall health and safety management effectiveness. We have a system in place
for recording and handling accidents. We have designated personnel responsible for
handling work accidents and injuries as we ll as maintaining health and work safety
compliance record. During the Track Record Period and up to the Latest Practicable Date,
we did not experience any material accidents in the course of our operations that resulted in
claims for personal or property damages or compensation paid to employees.
LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
We are subject to legal proceedings, disputes and claims that arise in the ordinary
course of business. During the Track Record Period and up to the Latest Practicable Date,
we were not a party to any material legal, arbit ral or administrative proceedings, and we
were not aware of any pending or threatened le gal, arbitral or administrative proceedings
against us or our Directors that could, indiv idually or in the aggregate, have a material
adverse effect on our business, financial condition and results of operations.
Compliance
During the Track Record Period and up to the Latest Practicable Date, we had not
been and were not involved in any material non-c ompliance incidents that have led to fines,
enforcement actions or other penalties that co uld, individually or in the aggregate, have a
material adverse effect on our business, financial condition and results of operations.
DATA PROTECTION AND PRIVACY
We are committed to complying with data protection and privacy laws and protecting
the security of user data. On the one hand, we are only engaged in manufacturing processes
in the PRC, which does not involve in the collection and storage of user data. On the other
hand, we generally do not collect personal information from individual customers as they
are largely dealt with by our third party dealers in third party dealer stores, except for the
data relating to our customers for product registration and warranty claims associated with
the operations of Regent Company, Snowy River RV Company and the JV dealers,
including their names, addresses, telephone numbers and emails at our JV stores and
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self-owned stores. In particular, we employ a variety of technologies to protect the data
which we are entrusted. For instance, we store c onfidential personal data collected by us in
encrypted format. We also take other technological measures to ensure secure processing,
transmission and usage of data. To minimize access to sensitive data, we adopt an internal
classification and grading system of sensitiv e data. Once sensitive data is classified and
graded, only a small number of authorized personnel can access to such data. All data
collected or preserved by us is stored in our own information system and will not be shared
or transferred to any external person. We also adopt a comprehensive backup system
whereby data will be backed up in different storage systems to ensure that the data we
collected is well maintained. We also conduct periodic data recovery testing to ensure the
data we collected is secured. Our compliance team is also tasked to monitor our business
operations to ensure we are compliant with the latest applicable policies, rules and
regulations, including ensuring the collection, use, storage, transmission and dissemination
of the data collected are in compliance with a pplicable laws and with prevalent industry
practice from the aspects of data privacy and cybersecurity. As advised by our PRC legal
advisor and our Australian Legal Advisor, we were in compliance with the applicable laws
and regulations on data privacy and security in all material respects during the Track
Record Period and as of the Latest Practicable Date.
RISK MANAGEMENT AND INTERNAL CONTROL
Risk Management
We are exposed to various risks during our operations. Our management has designed
and implemented risk management and internal control systems consisting of policies and
procedures that we consider to be appropriate for our business operations. We face key
operational risks originating from changes in the overall market conditions relating to our
industry, our ability to manage the growth of ou r business in anticipation of the growth of
the market in which we operate, our competitiveness among industry peers and our
compliance with ever-changing regulations and evolving industry standards. See ‘‘Risk
Factors’’ for a discussion of various key risks and uncertainties that we face with respect to
our business operations. We are committed to integrating a compliance culture into our
everyday workflow and promoting corporate p olicies and procedures to strengthen our
compliance status.
Our Board of Directors is responsible for establishing and maintaining adequate risk
management and internal control systems, ov erseeing the overall risk management and
assessing and updating our risk management policy on an annual basis.
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In order to meet these challenges, we have established a risk management framework,
which is summarized as follows:
. Our Audit Committee, established with experienced and competent personnel, is
responsible for reviewing and overseeing the financial reporting system, risk
management and internal control system of our Company, making
recommendations to our Board of Directors on the appointment and removal
of external auditors, and advising our Board of Directors on policies and practices
in relation to corporate governance.
. Our Board of Directors is responsible fo r (i) formulating and supervising our
overall risk management policy and objectives; (ii) reviewing and approving
annual major risk manage ment matters of our Company; (iii) reviewing the
effective operation of the risk management system and providing guidance on our
risk management approach to the risk and compliance department of our
Company; (iv) approving risk assessment reports for major decisions; (v)
approving risk assessment standards and major risk management solutions; and
(vi) approving the Company’s comprehensive annual risk management reports.
. The risk and compliance department o f our Company is responsible for
implementing our risk management policy and our day-to-day risk management
practices. In order to standardize risk management across our Company and
establish transparent and standardized risk management performance, the risk
and compliance department of our Company will (i) improve risk management
system, formulate comprehensive ris k management policies and implement
fundamental management process; (ii) coordinate relevant departments to
prepare comprehensive annual work pl ans for risk manage ment and facilitate
their implementation; (iii) formulate risk assessment standards, and oversee the
identification and evaluation of significa nt and critical risks within our Company;
(iv) coordinate relevant departments to produce independent risk assessment
reports concerning major plans, investment projects and new business; (v)
monitor all departments to identify and evaluate significant and important risks
within their respective departments and e nhance risk control measures; and (vi)
coordinate relevant departments to collect best practices and case studies on
major risks from home and abroad.
Internal Control
We have developed and have been implementing a number of internal control policies
and procedures that provide us a reasonable level of assurance that our objectives will be
met, including those relating to effective and efficient operations, accurate financial
reporting, and compliance with all relevant laws and regulations. Summarized below are the
internal control policies and procedures we have adopted or will continue to adopt:
. Our Board of Directors and senior management are responsible for overseeing
and managing the overall risks associated with our business operations.
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. Our internal audit department conducts independent internal audit and regular
review of internal reports, oversees the imp lementation of such policies, measures
and procedures and reports to general manager of the Company directly.
. We have in place a code of conduct that requires all our employees adhere to the
highest standards of ethics, integrity and behavior when dealing with our clients
and other stakeholders.
. We have adopted various measures and procedures across our business
operations, including sales and purchase management, production and
inventory management, financial management, legal and compliance
management, quality assurance, informati on disclosure, anti-corruption policy,
intellectual property protection, environmental protection, occupational health
and safety, etc. We provide our employees with regular training on these measures
and procedures as part of our employee training program.
. Our Audit Committee reviews and evaluat es our financial reporting system and
internal control system on an ongoing basis to ensure that our systems are
effective in identifying, managing and mitigating risks associated with our
business operations.
We have engaged an independent internal control consultant to thoroughly assess our
internal control system and procedures on a factual basis and to provide recommendations
to bolster the effectiveness of our internal controls and corporate governance practices. The
key areas of inspection include sales and procurement, R&D, production and inventory,
human resource and remuneration, insurance, financial reporting, information technology,
connected transaction, and taxation. We have adopted the recommendations made by our
internal control consultant and they have not identified any material deficiencies in our
internal control system.
We have also engaged Caitong Internationa l Capital Co., Limited as our compliance
advisor to advise our Directors and manageme nt team until the end of the first fiscal year
after the Listing regarding matters relatin g to the Listing Rules. Our compliance adviser
will provide support and advice regarding requirements of relevant regulatory authorities
under the Listing Rules in a timely manner.
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OUR GROUP OF CONTROLLING SHAREHOLDERS
Our Group was founded by Mr. Miao, who is an executive Director, the chairman of
the Board and the chief executive officer of our Group. As of the Latest Practicable Date,
our group of Controlling Shareholders led by Mr. Miao comprises Mr. Miao himself, Ms.
Wang (spouse of Mr. Miao), Ms. Miao (daughter of Mr. Miao and Ms. Wang), Snowy
Limited, M.X.Z Holdings, Miao Wanyi Holdings, Miao Wanyi Trust, WDH Holdings and
MWY Holdings. Our group of Controlling Share holders, through Snowy Limited as the
direct shareholder of our Company, held approximately 99.17% of the total issued share
capital of our Company. Snowy Limited is owned as to (i) 1% by M.X.Z Holdings (a
company wholly-owned by Mr. Miao) and (ii) 99% by Miao Wanyi Holdings (a company
wholly-owned by the Miao Wanyi Trust, whic h was established by Mr. Miao as the settlor
of the trust, with WDH Holdings, a company wholly-owned by Ms. Wang, and MWY
Holdings, a company wholly-owned by Ms. Miao, as the beneficiaries of the trust).
Immediately following the completion o f the Capitalization Issue and the Global
Offering (assuming the Over-allotment Optio n is not exercised), our group of Controlling
Shareholders will, collectively, continue to c ontrol in aggregate approximately 74.4% of our
voting power and hence will remain as our Co ntrolling Shareholders upon Listing.
No Competition Confirmation
Our Controlling Shareholders have confirme d that as of the Latest Practicable Date,
none of them was interested in any business, other than our business, which competes or is
likely to compete, either directly or indirectly , with our business, which requires disclosure
pursuant to Rule 8.10 of the Listing Rules.
OUR RELATIONSHIP WITH THE GONOW GROUP
Since our inception in 2014, our business has been operating as an independent venture
to explore and establish presence in the RV in dustry in Australasia, which was the third
largest market for RV products in 2014 acco rding to Frost & Sullivan, and is in closer
proximity to China to leverage our producti on capabilities (in comparison to other two
largest RV markets being North America and Europe). Through the incorporation of
Regent Company and the acquisition of the ass ets and business associated with the Regent
brand, our Group commenced our business to focus on the design, develop, manufacture,
and sale of bespoke towable RVs in Australasia. For details, see ‘‘History, Reorganization
and Corporate Structure — Corporate Development.’’
Mr. Miao, on the other hand, holds interest in the GONOW Group through Zhejiang
Gonow. As of the Latest Practicable Date, Zhejiang Gonow, was held as to 65% by Mr.
Miao and 35% by Shanghai Hongwan Technology, which was in turn held as to 55% by
Ms. Wang as the general partner, and 45% by Ms. Miao as the limited partner. The
GONOW Group commenced its business in September 2013, and is engaged in a wide range
of businesses solely in the PRC, including, manufacture, sale and leasing of
logistics-oriented electric vehicles, manufacture, leasing and sale of motorized RVs,
manufacture of vehicle parts, operation of campsites and development of leisure and
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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recreational platform. As such, there is clear geographical delineation between the business
of the GONOW Group and our Group’s business which have entirely different business
focuses.
INDEPENDENCE FROM OUR CON TROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying out our business independentl y of our Controlling Shareholders and their
respective close associates after the Listing.
Management Independence
Our Board comprises four executive Direct ors and three independent non-executive
Directors. See ‘‘Directors and Senior Management’’ for more details of our Directors. Save
for Mr. Miao, one of our executive Directors, the chairman of our Board and the chief
executive officer of our Company who also remained as a director of Zhejiang Gonow (the
holding company of the GONOW Group) and six subsidiaries of the GONOW Group, none
of our Directors or senior management will hold any position in the GONOW Group. See
‘‘Directors and Senior Management’’ for biographical details of Mr. Miao.
We believe that our Directors and senior management can perform their duties in our
Company independently from our Controlling S hareholders, for the following reasons:
. six out of seven members of our Board will be entirely independent from, and not
having any role, in the GONOW Group;
. each of our Directors is aware of his or her fiduciary duties as a Director which
require, among other things, that he or she must act for the benefit of and in the
best interests of our Company and not allow his or her personal interests to
interfere with our Company’s best interests. In the event that there is a potential
conflict of interest arising out of any transaction to be entered into between our
Company and a Director (e.g., Mr. Miao) or his or her respective close associates,
he or she shall abstain from voting on any Board resolutions approving any
contract, arrangement or any other proposal in which he or she or any of his or
her close associates has a material interest and shall not be counted in the quorum
present at the relevant Board meeting;
. our Board has a balanced composition of executive Directors and independent
non-executive Directors which ensures the independence of our Board in making
decisions affecting our Company. Specifically, (i) our independent non-executive
Directors are not associated with Mr. Miao or his associates, (ii) our independent
non-executive Directors a ccount for over one-third o f the Board, and (iii) our
independent non-executive Directors indi vidually and collectively possess the
requisite knowledge and experience as in dependent directors of listed companies
and will be able to provide professional and experienced advice to our Company.
We believe that our independent non-executive Directors can bring independent
judgment to the decision-making process of our Board and hence protect the
i n t e r e s t so fo u rC o m p a n ya n do u rS h a r e h o l d e r sa saw h o l e ;a n d
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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. we will establish corporate governance measures and adopt sufficient and effective
control mechanisms to manage conflicts of interest, if any, between our Group
and Mr. Miao, which would support our independent management. See ‘‘—
Corporate Governance Measures’’ for further details.
Operational Independence
Notwithstanding Property Lease Agreement (details of which are further elaborated
below), we have operated, and will continue to operate, independently as a distinct and
separate business from the business of the GONOW Group. We have independent
management team to handle our day-to-day op erations. We do not rely on our Controlling
Shareholders and their close associates (including the GONOW Group) for our R&D,
production and supply chain, sa les and marketing, administra tion, facilities management or
company secretarial functions, and have our own staff team and own departments
specializing in these respective areas which have been in operation and are expected to
continue to operate separately and independ ently from the Controlling Shareholders and
their close associates (including the GON OW Group). We are also in possession of all
relevant licenses and intellectual property r ights necessary to carry on and operate our
Group’s business, and intend to utilize a portion of our proceeds to migrate to a new
production base in Zhejiang province when appropriate. See ‘‘Future Plans and Use of
Proceeds.’’
Connected Transactions
We conducted certain transactions with our Controlling Shareholders and/or their
close associates during and subsequent to the Track Record Period. Among such connected
transactions, one constituted an one-off conn ected transaction, and one will continue after
the Listing as a continuing connected transaction of our Company under the Listing Rules.
Production facilities
As part of the Reorganization, our Group’s business in the PRC, namely, the
manufacturing, development, design and sale of towable RVs, has been transferred from
Daide Longtree to Xing Longtree. See ‘‘History, Reorganization and Corporate Structure
— Reorganization’’ for further details. To ensure a smooth transition and prevent any
interruption to our manufacturing activitie s, we have entered into the Property Lease
Agreement with Longtree Zhejiang, a subsid iary of the GONOW Group on April 30, 2024,
for the use of the production facilities for manufacturing our Group’s towable RVs for a
term of five years. The Property Lease Agreem ent is recognized as right-of-use assets in
accordance with HKFRS 16, constitutes an o ne-off connected transaction of our Group
and is classified as an one-off acquisition of capital assets under the Listing Rules. See
‘‘Connected Transactions — One-off Connected Transaction’’ for further details.
Upon the Reorganization, we own all of the manufacturing machineries, electronics,
equipment, inventories (including the rights of use of all necessary licenses, raw materials
and semi-finished products) for the purpose of manufacturing our towable RVs. Hence,
despite the Property Lease Agreement which provides the premise in which our
manufacturing activities are and will be co nducted, our business will be operated and
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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conducted by our Group independently. We als o intend to utilize a portion of our proceeds
from the Global Offering for constructing our new production base in Zhejiang province
when appropriate. See ‘‘Future Plans and Use of Proceeds’’ for details. As such, our
Directors are of the view that we are able to operate independently from the GONOW
Group in all material respects notwithst anding the Property Lease Agreement.
Supply and procurement
During and subsequent to the Track Record Period, our Group has procured RV parts
for towable RVs from Shangqiu Jishun, a 30%-controlled company of Mr. Miao, for the
purpose of manufacturing our Group’s towable RVs. This transaction will constitute a
continuing connected transaction of our Group upon the Listing under the Listing Rules.
See ‘‘Connected Transactions — Partially-Exempt Continuing Connected Transaction —
RV Parts Purchase Framework Agreement’’ for further details. The transaction amounts
between our Group and Shangqiu Jishun amounted to nil, 0.6%, 2.2% and 3.7% of our
total amount of purchase for the three years ended December 31, 2023, and for the six
months ended June 30, 2024, respectively. Our Group has independent access to other
suppliers that supply RV parts that can serve as substitutes of RV parts procured from
Shangqiu Jishun at comparab le terms, and has maintained an approved list of suppliers
from which our Group can readily source substitutes form. As such, our Directors are of the
view that the RV Parts Purchase Framework A greement will not affect our operational
independence.
The foregoing connected transactions are entered into in the ordinary and usual course
of business of our Group and our Directors confirm that the terms of such transactions are
determined at arm’s length negotiations and are no less favorable to our Company than
terms offered by independent third parties. O ur Directors believe that the continuing
connected transactions between our Company and our Controlling Shareholders and their
close associates do not indicate any undue reliance by our Company on our Controlling
Shareholders and are beneficial to our Company and our Shareholders as a whole.
Based on the above, our Directors believe that we are able to operate independently of
our Controlling Shareholders and their cl ose associates (excluding our Group).
Financial Independence
We have established our own finance department with a team of financial staff, who
are responsible for financial control, accounting, reporting, group credit and internal
control of our Company. Our finance department is able to function without any undue
influence from our Controlling Shareholders. W e have also established an internal control
system, an independent audit system, a standardized financial and accounting system and
have set our own accounting policy based on the applicable PRC accounting principle and
standards. In addition, we have been and are capable of obtaining financing from
independent third parties without relying on any guarantee or security provided by our
Controlling Shareholders or their respectiv e close associates (excluding our Group).
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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As of the Latest Practicable Date, there were no outstanding loans, advances or
balances due to our Controlling Shareholders or th eir respective close associates, and there
were no outstanding pledges or guarantees provided for our benefit by our Controlling
Shareholders or their respective close associates.
Based on the above, our Directors are satisf ied that we are able to maintain financial
independence from our Controlling Sharehold ers and their respective close associates
(excluding our Group).
DEED OF NON-COMPETITION
Each of our Controlling Shareholders, as covenantors, has entered into a
non-competition agreement in favor of the Company on November 22, 2024 (the ‘‘ Deed
of Non-competition ’’), pursuant to which each of ou r Controlling Shareholders has
unconditionally and irrevocably made the following undertakings, that, among other
things:
(i) at any time during the Relevant Period ( as defined below), he/she/it will not, and
will procure its close associates (except any member of our Group) not to, whether
directly or indirectly, in any manner (including but not limited to any joint
venture, association, partnership, equity or debt participation or acting as agent,
principal, trustee, employee or any other capacity) domestically or abroad, solely,
through or by facilitation of third parties (be it a natural person, corporation,
partnership or any organization), invest in, develop, engage in, participate in or
acquire interest in the following businesses: (i) the design, development,
manufacturer and sale of motorized RVs to other countries or regions other
than the PRC (including but not limited to Australasia), (ii) the design,
development, manufacturer and sale of towable RVs to other countries or
regions other than the PRC (including but not limited to Australasia) and (iii)
other business that competes, or may com pete, directly or indirectly with the
principal business (namely the design, manufacture, export and sales of bespoke
towable RVs in Australasia) of our Group (the ‘‘ Restricted Business ’’);
(ii) each of the Controlling Shareholders will not to, at any time during the Relevant
Period (as defined below), (a) participate in or be engaged in any activities which
may be detrimental to the interests of our Group, or (b) induce or procure any of
our customers, suppliers or key business partners to terminate its relationship
with us; and
(iii) as of the date of the Deed of Non-competition, each of the Controlling
Shareholders or any of their respective c lose associates (other than members of
our Group) had not engaged in or participated in any Restricted Business, and
had not held any direct or indirect interest in any company or enterprise engaged
in the Restricted Business.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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The above confirmations and/or covenants are not applicable to the following
circumstances:
(i) the direct or indirect in terests held by the Contro lling Shareholders and/or
his/her/its close associates (other th an members of our Group) in members of our
Group to conduct the Restricted Businesses;
(ii) the interests held by each of the Contro lling Shareholders and/or his/her/its close
associates (other than members of our Group) pursuant to the paragraph headed
‘‘— Options for New Business Opportunities’’ below where we decide not to
proceed with the New Business Opportunities (as defined below); or
(iii) the interests held by each of the Contro lling Shareholders and/or his/her/its close
associates in any entities other than me mbers of our Group, provided that (a) the
aggregate number of shares or equity interest held by the Controlling
Shareholders and/or their close associates (other than members of our Group)
is less than 10% of any class of the issued shares or the entire equity interest of
any such entity, and (b) none of the Contro lling Shareholders and/or his/her/its
close associates (other than members of our Group) has any right to appoint a
majority of the board of directors of any such company nor participates in the
management or daily operations of any such company.
In addition, under the Deed of Non-competition, each of ou r Controlling Shareholders
unconditionally and irrevocably granted us the option to acquire new business
opportunities and right of first refusa l in respect of the Restricted Business.
Options for New Business Opportunities
Each of our Controlling Shareholders has unconditionally and irrevocably undertaken
in the Deed of Non-competition that within 20 business days of he/she/it or any of its close
associates (other than members of the Group) becomes aware of any new business
opportunity in the Restricted Business that is being offered to it (‘‘ New Business
Opportunity(ies) ’’), he/she/it shall and shall procure h is respective close associates (other
than members of our Group) to refer or recommend the New Business Opportunity by
notifying us in writing and provide to us all necessary information, including but not
limited to the nature and details of the new business, as well as cost of acquisition (the
‘‘Offer Notice ’’) enabling us to consider (a) whether such New Business Opportunity is
categorized as a Restricted Business, and (b) whether acquiring interest in such New
Business Opportunity is in the interest of our Group. He/she/it is obliged to use his best
efforts to procure that such opportunity is f irst offered to us on terms that are fair and
reasonable and no less favorable than those ter ms first offered to him/it. It shall not engage,
participate or hold any right or interest in any New Business Opportunity until the earlier
of: (i) a written notice from us declining the offered opportunity, or (ii) our failure to
respond within 20 business days, which may be extended by an additional 30 business days
at our request, of our receipt of the Offer Notice.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Our independent non-executive Directors will be responsible for reviewing, considering
and deciding whether or not to take up any New Business Opportunity referred to us by our
Controlling Shareholder(s) or its/their respect ive close associate(s). Within seven business
days of receipt of an Offer Notice, we will notify our independent non-executive Directors
(excluding any independent non-executive Directors with conflict of interests) for their
consideration. We will disclose in our annual report and make an announcement in due
course on any decision to pursue or decline a ny New Business Opportunity and the basis of
such decision.
Should there be any material changes in the terms and conditions of the New Business
Opportunity that has been referred or reco mmended to us previously, the Controlling
Shareholders or his close associates (other than members of our Group) shall follow the
same procedures as set out above in providing us the Offer Notice reflecting the revised
terms and conditions and the assistance in acquiring such revised New Business
Opportunity.
Right of First Refusal
Each of our Controlling Shareholders has unconditionally and irrevocably undertaken
that if he/she/it or any of his/her/its close asso ciates intends to transfer, sell, lease, license or
by any other means transfer or grant the right to any New Business Opportunity which has
been offered to but has not been taken up by u s, and has been retained by our Controlling
Shareholder(s) or any of its/their close associates (the ‘‘ Proposed Transaction ’’), then we
shall have the right to be offered the Proposed Transaction on the same terms as, and before
or at the same time of, the offer of the Proposed Transaction to any third party, in
accordance with applicable laws and regulations, the articles of association, shareholders’
agreements and shareholders’ undertaking of our Controlling Shareholder(s) or its/their
close associate(s) (as the case may be). He/she/it shall promptly notify us of the Proposed
Transaction by written notice (the ‘‘ Selling Notice ’’), which shall attach the terms of the
Proposed Transaction and all information reasonably required by us to make a decision on
whether or not to exercise our right of first re fusal. Our Controlling Shareholder(s) or any
of its/their close associates (as the case may be) shall not engage or participate in any
Proposed Transaction with any third party until the earlier of: (i) a notice from us declining
to exercise our right of first refusal, or (ii) our failure to respond to the issuance of the
Selling Notice within 20 business days, which m ay be extended by an additional 30 business
days at our request, of our receipt of the Selling Notice. The terms and conditions under
which our Controlling Shareholder(s) enter into the Proposed Transaction shall be no more
favorable than those offered to us.
Our independent non-executive Directors will be responsible for reviewing, considering
and deciding whether or not to exercise our righ t of first refusal. Within seven business days
of receipt of a Selling Notice, we will notify our independent non-executive Directors
(excluding the independent non-executive Directors with conflict of interests) and furnish
them with necessary informatio n for their consideration.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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If we decide to exercise our right of first refusal, the terms will be determined between
the relevant Controlling Shareholder(s) or its /their close associate(s) (as the case may be)
and us, in accordance with applicable laws an d regulations and principles of fairness and
reasonableness.
Any exercise of such options and right of first refusal described above would constitute
connected transactions as defined under the Listing Rules and would be subject to the
applicable disclosure and/or independent Shareholders’ approval requirements under the
Listing Rules. Under the Deed of Non-competition, each of our Controlling Shareholders
has unconditionally and irrevocably undertaken that:
(a) as required by us, from time to time, provide or procure his/her/its close
associates to provide us and our auditors with all corporate and financial
information related to Restricted Businesses and New Business Opportunity(ies);
(b) to the extent that he/she/it does not violate any confidentiality agreement, as
reasonably required by us or our auditors, provide material financial or corporate
information about any third party transactions which may be required to
determine whether each of the Controlling Shareholders has complied with the
Deed of Non-competition;
(c) he/she/it will commit to, and procure his/her/its close associates to, provide us
with the necessary information require d for ascertaining the enforcement and
compliance of the Deed of Non-competitio n, including annual confirmation of
our Controlling Shareholders’ and their close associates’ compliance and
enforcement of the Deed of Non-compet ition, which includes whether our
Controlling Shareholders and their close as sociates have given priority in offering
us New Business Opportunity(ies) and other confirmations that our independent
non-executive Directors consider appropriate, and agree to have the foregoing
confirmations be included in our announcements or annual/interim reports as
required by the Listing Rules;
(d) he/she/it will allow us to disclose (i) the details of the Deed of Non-competition
and (ii) any information relating to the R estricted Business or the New Business
Opportunity to any legal, regulatory or securities exchange authorities, including
but not limited to disclosures (i) required for the Listing; and (ii) relating to our
decision on rejecting the New Business Opportunity in our announcements,
annual/interim reports; and
(e) he/she/it will not, without our prior consent, make any public announcement
regarding, or provide or disclose to any company, entity, organization or
individual, any information about our business or any materials or information
relating to the Deed of Non-competition.
We will disclose in our annual report and make an announcement in due course on any
decision to exercise or waive applicable right o f first refusal and the basis of such decision.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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In order to monitor ongoing compliance with the Deed of Non-competition, we intend
to adopt the following measures:
(a) provision to our independent non-executive Directors of any Offer Notice or
Selling Notice received, within se ven business days of receipt;
(b) disclosure in our annual reports of the findings of our independent non-executive
Directors on each Offer Notice and/or Selling Notice received, and the basis of
their decisions; and
(c) disclosure in our annual reports of the confirmation by our Controlling
Shareholders of compliance with the Deed of Non-competition by them and
their close associates.
Our Directors are of the opinion that our independent non-executive Directors have
sufficient experience for the purposes of assessing such new business opportunities. In
addition, our independent non-executive Directors may appoint financial advisors or other
professional experts to advise them in connection with their consideration of exercise of
rights under the Deed of Non-competition.
The Deed of Non-competition shall tak ee f f e c tf r o mt h ed a t eo fL i s t i n ga n dw i l l
terminate upon the earlier of:
(a) our Controlling Shareholders and/or the ir close associates, individually or as a
group, (other than any member of our Group) cease to be our Controlling
Shareholders (as defined under the Listing Rules from time to time), or
(b) our Shares no longer being listed on the Main Board of the Stock Exchange (the
‘‘Relevant Period ’’).
CORPORATE GOVERNANCE MEASURES
In order to further safeguard the interests of our minority Shareholders, we will adopt
the following corporate governance measures to manage potential conflicts of interest
between our Group and our Controlling Shareholders:
. our Controlling Shareholders will provide a n annual confirmation that they are in
compliance with their undertakings un der the Deed of Non-competition for
disclosure in our annual report;
. our independent non-executive Directors will review, on an annual basis, the
compliance by our Controlling Shareholders of their undertakings under the Deed
of Non-competition;
. our Controlling Shareholders will provid e all information requested by our
Company which is necessary for the review of any conflict of interest between our
Group and Mr. Miao and the performance of the Deed of Non-competition,
including an annual review by the independent non-executive Directors;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 286 ---
. our Company will disclose decisions on matters reviewed by the independent
non-executive Directors relating to the compliance and enforcement of our
Controlling Shareholders ’ undertak ings in our annual reports or by way of
announcement to the public in compliance w ith the requirements of the Listing
Rules;
. our Directors (including the independent non-executive Directors) will seek
independent and professional opinions from external advisors at our Company’s
cost as and when appropriate in accordance with the Corporate Governance Code
and Corporate Governance Report as set out in Appendix 14 to the Listing Rules;
. any transactions between our Company and its connected persons shall be in
compliance with the relevant requiremen ts of Chapter 14A of the Listing Rules,
including the announcement, annual reporting and independent shareholders’
approval requirements (if applicable) under the Listing Rules;
. in the event of any potential conflict of interests, our Director(s) with an interest
in the relevant transaction(s) shall abstain from voting at the relevant Board
meeting and shall not be counted towards the quorum in respect of the relevant
resolution(s) at such Board meeting;
. in the event of any potential conflict of interests at the shareholders’ level, our
Controlling Shareholders shall abstain f rom voting at the Shareholders’ meeting
of our Company with respect to the relevant resolutions; and
. we have appointed Caitong International Capital Co., Limited as our Compliance
Advisor to provide advice and guidance to us in respect of compliance with the
Listing Rules, including various requirements relating to corporate governance.
Based on the above, our Directors are satisfied that sufficient corporate governance
measures have been put in place to manage conflicts of interest between our Group and the
Controlling Shareholders, and to protect minori ty Shareholders’ interests after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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We set out below (i) our Group’s one-off transaction with certain connected person
before the Listing and (ii) certain transactions with connected persons that will constitute
continuing connected transactions of our Group under Chapter 14A of the Listing Rules.
CONNECTED PERSONS
The following connected persons have entered into an one-off connected transaction or
will enter into continuing connected transactions with us:
Connected persons Connected relationship
Longtree Zhejiang Longtree Zhejiang is a 30%-controlled company of Mr.
Miao, our executive Director, our chairman of our Board
and the chief executive officer of our Group, and one of our
Controlling Shareholders.
Green RV Green RV is a substantial shareholder of our subsidiary,
Leisure Lion, and is a 30%-controlled company of Mr. Carl
Green, a director of Leisure Lion.
Shangqiu Jishun Shangqiu Jishun is a 30%-controlled company of Mr. Miao,
our executive Director, our chairman of our Board and the
chief executive officer of our Group, and one of our
Controlling Shareholder.
SUMMARY OF OUR CONNECTED TRANSACTIONS
Historical transaction amounts Proposed annual cap
For the years ended December 31,
For the six months
ended June 30, For the years ended December 31,
2021 2022 2023 2024 2024 2025 2026
Transactions
Applicable
Listing Rules Waiver sought (’000) (’000) (’000) (’000) (’000) (’000) (’000)
One-off Connected
Transaction
Property Lease Agreement N/A N/A RMB5,708 RMB5,708 RMB5,708 RMB5,708 N/A N/A N/A
Partially-exempt continuing
connected transaction
RV Parts Purchase
Framework Agreement
Rule 14A.76 (2) Announcement
requirement
Nil RMB1,806 RMB9,988 RMB6,831 RMB15,004 RMB18,985 RMB19,890
Green RV Dealership
Agreement
Rule 14A.101 Announcement
requirement
A$16,262
(equivalent to
RMB78,588 Note )
A$29,094
(equivalent to
RMB136,028 Note )
A$38,613
(equivalent to
RMB181,140 Note )
A$21,395
(equivalent to
RMB100,435 Note )
A$46,014
(equivalent to
RMB219,257)
A$50,832
(equivalent to
RMB245,354)
N/A
Note:
The equivalent amount in RMB is calculated based on the exchange rates of A$1.00 :RMB4.8325, A$1.00 :
RMB4.6755, A$1.00 :RMB4.6912 and A$1.00 :RMB4.6943 for each of 2021, 2022 and 2023, and the six
months ended June 30, 2024, respectively, which were the average exchange rates of each of the
corresponding periods.
CONNECTED TRANSACTIONS
–2 7 7–


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ONE-OFF CONNECTED TRANSACTION
Property Lease Agreement
Principal Terms
On April 30, 2024, our Company entered into a lease agreement with Longtree
Zhejiang, pursuant to which Lo ngtree Zhejiang agreed to lease t he production facilities with
a GFA of approximately 47,567 sq.m. located in Zhejiang province to our Company (the
‘‘Property Lease Agreement ’’) for a term of five years commencing from April 30, 2024,
which may be renewed as the parties may mutually agree, subject to compliance with the
requirements under Chapter 14A of the Listing Rules and all other applicable laws and
regulations.
Pricing Policies
The annual rental amount, calculated on a RMB10.00 per square meter per month
basis, for each of the years for the five years ending April 30, 2029 is RMB5,708,047.20. The
annual rental amount was arrived at after arm’s le ngth negotiations with reference to (i) the
rental price of the neighboring facility which is leased by Daide Longtree and to a tenant for
a term of five years, being 2022 to 2027, of RMB10.00 per square meter per month and (ii)
the market rental price of neighboring fac ilities which are generally in the range of
approximately RMB9.00 to RMB10.50 per square meter per month. Our Directors are of
the view that the transactions contemplat ed under the Property Lease Agreement are on
n o r m a lc o m m e r c i a lt e r m so rb e t t e ra n dt h er e n ti np a r t i c u l a ri sc o m p a r a b l et om a r k e tr a t e
in the same area. Our PRC Legal Advisor also confirmed that the terms of the Property
Lease Agreement are valid, binding and enforceable against the parties thereto.
Reasons for the Transaction
Prior to the Reorganization, the manufacturing of our Group’s towable RVs has been
conducted in the production facilities owned by Longtree Zhejiang, which is the same
premise under the Property Lease Agreement. Se e ‘‘History, Reorganization and Corporate
Structure — Reorganization’’ for details of the Reorganization. Our Directors consider the
existing production facilities best accommod ates the manufacturing needs of the Company,
and any relocation may cause disruption to our Group’s operations and incur unnecessary
costs.
Historical Amounts
For the three years ended December 31, 202 3 and for the six months ended June 30,
2024, the total rental amount was approximately RMB5,708,000, RMB5,708,000,
RMB5,708,000 and RMB5,708,000, respectively.
CONNECTED TRANSACTIONS
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Accounting Treatment with respect to the Property Lease Agreement and Listing Rules
Implication
According to applicable accoun ting standards, the Group as the lessee shall recognize
a lease as a right-of-use asset in the consolid ated statement of financial position of the
Group pursuant to HKFRS 16. In this connection, the Property Lease Agreement
constitutes an acquisition of capital asset an d one-off connected transaction, instead of a
continuing connected transaction for the Company under Chapter 14A of the Listing Rules.
Accordingly, the reporting, announcement, an nual review and independent shareholders’
approval requirements in Chapter 14A of the Listing Rules will not be applicable.
PARTIALLY-EXEMPT CONTINUI NG CONNECTED TRANSACTION
RV Parts Purchase Framework Agreement
Principal Terms
On December 18, 2024, Xing Longtree entered into a RV Parts Purchase Framework
Agreement (the ‘‘ RV Parts Purchase Framework Agreement ’’) with Shangqiu Jishun,
pursuant to which Xing Longtree agreed to procure from Shangqiu Jishun certain RV parts,
including primarily doors and windows, for the purpose of manufacturing our Group’s
RVs. The RV Parts Purchase Framework Agreement will be valid for a term of three year
commencing from the Listing Date, which may be renewed as the parties may mutually
agree, subject to compliance with the requirements under Chapter 14A of the Listing Rules
and all other applicable laws and regulations.
Pricing Policies
The price of the RV parts Xing Longtree procured from Shangqiu Jishun for the
manufacturing of our Group’s RVs shall be determined pursuant to the list prices (which
will be subject to review and adjustment every six months) as stated in the RV Parts
Purchase Framework Agreement. The said list prices are, and will be, determined with
reference to (i) costs and expenses in the manufacturing of the RV parts, taking into
account an acceptable level of profit margin ( i.e. approximately 17%) of Shangqiu Jishun,
(ii) market prices of the relevant RV parts at each adjustment to be made, (iii) the prices of
the RV parts which are offered to our Group by independent third parties, and (iv) the
historical prices transacted between our Group and Shangqiu Jishun (including the
historical prices transacted between Daide Lon gtree, being the transaction party prior to
the Reorganization, and Shangqiu Jish un). As confirmed by Frost & Sullivan, the
above-mentioned cost-plus pricing mechanism, and the level of profit margin taken into
account when setting the list prices is in line w ith the usual market practice for similar in the
RV industry.
CONNECTED TRANSACTIONS
–2 7 9–


--- page 290 ---
Reasons for the Transaction
Our Group is engaged in the business of design, development, manufacture and sale of
bespoke towable RVs in Australasia. To balance our Group’s need of RV parts for the
manufacturing of RVs and to avoid over reliance on a certain supplier, our Group has
purchased, and will continue to purchase, RV p arts from suppliers that can offer products
which are most compatible with our Group’s RVs. Shangqiu Jishun has been our Group’s
supplier of RV parts during the Track Record Period. Sourcing new suppliers that produce
RV parts that are compatible with our Group’s R Vs will incur unnecessary costs and cause
disruption to our business operations. The purchase of RV parts from Shangqiu Jishun
under the RV Parts Purchase Framework Agr eement is in the ordinary and usual course of
our business, and the prices and terms offered by Shangqiu Jishun to our Group are no
more favorable than those offered to other dealers who are independent third parties.
Historical Amounts
For the three years ended December 31, 202 3 and for the six months ended June 30,
2024, the purchase of materials from Shangqiu Jishun by the Group was approximately nil,
RMB1,806,000, RMB9,988,000 and RMB6,831,000, respectively, representing nil,
approximately 0.43%, 1.85% and 2.38% of the total amount of cost of sales of the
corresponding periods.
Annual Caps and Basis for Annual Caps
The proposed annual caps for the transaction amounts under the RV Parts Purchase
Framework Agreement for the three years ending December 31, 2026 are approximately
RMB15.00 million, RMB18.99 million a nd RMB19.89 million, respectively.
The proposed annual caps are estimated primarily based on the following reasons and
factors:
(i) the historical transaction amounts of purchase of materials between our Group
and Shangqiu Jishun (including historical transaction amounts between Daide
Longtree, being the transaction party prior to the Reorganization, and Shangqiu
Jishun) during the three years ended December 31, 2023, which was nil,
RMB1,806,000 and RMB9,988,000 for ea ch corresponding financial year,
respectively. As Shangqiu Jishun was incorporated in March 2021 and was at
the preparation stage of business, we did not procure any RV parts from them in
2021. The transaction amounts between our Group and Shangqiu Jishun
increased significantly in 2023 from 2022 due to (i) the increase in types of RV
parts that Shangqiu Jishun was able to offer as their business developed and (ii)
the increase in our Group’s demand for R V parts with the surge in the number of
RV deliveries given the increase in number of our dealers, self-owned stores and
JV stores in 2023. For details of our business development during the Track
Record Period, see ‘‘Business — Sales and Distribution.’’ As our business
continues to expand, we expect our demand for Shangqiu Jishun’s RV parts (and
hence the estimated transaction amounts) will correspondingly increase;
CONNECTED TRANSACTIONS
–2 8 0–


--- page 291 ---
(ii) the anticipated increase in the amo unt of RV parts to be supplied by Shangqiu
Jishun and the types of RV parts manufactured by Shangqiu Jishun that are
compatible with our Group’s RVs. During the three years ended December 31,
2023, as Shangqiu Jishun’s business devel oped and the transactions between our
Group and Shangqiu Jishun increased, Shangqiu Jishun has developed a better
knowledge of the specifications of our Group’s different brands and models of
RVs, and therefore has bee n able to provide more types of RV parts that are
compatible with our Group’s RVs. From 2022 to 2023, the types of RV parts
s u p p l i e db yS h a n g q i uJ i s h u nh a di n c r e a s e df r o m1 3t o3 2 ,a n di se x p e c t e dt o
further increase to more than 37 types for the three years ending December 31,
2026. In addition, as Shangqiu Jishun’s production capacity also continues to
expand, it is expected that they will be able to manufacture and supply RV parts
in a larger volume for the three years ending December 31, 2026;
(iii) the anticipated continuous increase in our Group’s demand for RV parts as a
result of the expansion of our Group’s business in the near future. As we continue
to expand our production capacity and product collection, the increase in the
number of delivery units of our RVs would result in a higher demand in RV parts.
While we also engage other independent s uppliers to supply RV parts for our
RVs, we expect the transaction amounts with Shangqiu Jishun for 2025 and 2026
would remain relatively high; and
(iv) the estimated market prices for the RV parts for the three years ending December
31, 2026.
Listing Rules Implication
The highest applicable percentage ratio for each of the proposed annual caps for the
three years ending December 31, 2026 calculat ed under Chapter 14A of the Listing Rules, is
expected to exceed 0.1% but less than 5% on an annual basis. Pursuant to Chapter 14A of
the Listing Rules, the transactions under the RV Parts Purchase Framework Agreement will
constitute partially-exempt continuing connected transactions upon Listing, and will be
exempt from the circular and independent shareholders’ approval (including
recommendation from an independent financial advisor) requirements, but will be subject
to announcement requirements and annual reporting requirements under Chapter 14A of
the Listing Rules.
Waiver Application
As the transactions under the RV Parts Purchase Framework Agreement are expected
to be carried out on a recurring basis and will be carried out from time to time, our
Directors consider that strict compliance with the aforesaid requirements will be impractical
and may lead to unnecessary administrative costs to our Company.
CONNECTED TRANSACTIONS
–2 8 1–


--- page 292 ---
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted, pursuant to Rule 14A.105 of the Listi ng Rules, waiver from strict compliance with
the announcement requirement under Rules 14A.35 of the Listing Rules in respect of the
transactions contemplated under the RV Part s Purchase Framework Agreement, provided
that the total amount of transactions for each of the three years ending December 31, 2026
will not exceed the relevant proposed annual caps as set out in this section.
The independent non-executive Directors and auditors of our Company will review
whether the transactions under the RV Parts Purchase Framework Agreement have been
entered into pursuant to the principal terms and pricing policies under the agreement. The
confirmation from our independent non-executive Directors and our auditors will be
disclosed annually according to the requirements of the Listing Rules.
Green RV Dealership Agreement
Principal Terms
On May 14, 2024, Regent Company entered into a dealership agreement, as amended
by a supplemental agreement dated December 19, 2024 (together, the ‘‘ Green RV Dealership
Agreement ’’) with Green RV, pursuant to which Green RV agreed to act as a non-exclusive
dealer of Regent Company and Regent Company agreed to supply RVs and RVs associated
products and merchandise (the ‘‘ RVs and RV Parts ’’) to Green RV for sale and distribution
in Australia, for a term of one year commencing from the Listing Date, which may be
renewed for another one year term as the parties may mutually agree, subject to compliance
with the requirements under Chapter 14A of the Listing Rules and all other applicable laws
and regulations. The term of the Green RV Deal ership Agreement is therefore expected to
last two years in total if the renewal is made.
Pricing Policies
The price of the RVs and RV Parts sold from the Group to Green RV for its
distribution as our non-exclusive dealer shall be determined under the separate purchase
orders made under the Green RV Dealership Agreement, which shall be referenced to the
set of unified national-based list prices which our Group offers to all of its dealers from
time to time. The said list prices shall be determined based on (i) costs and expenses in the
manufacturing of the RVs and RV Parts, taking into account an acceptable level of profit
margin of both our Group and Green RV, which ranges from 10% to 30%, and (ii) market
prices of the RVs and RV Parts at the relevan t time. As confirmed by Frost & Sullivan, the
above-mentioned cost-plus pricing mechanism adopted between a manufacturer and a
dealer and the level of profit margin incorpora ted when setting the list price is in line with
the usual market practice in the RV industry.
CONNECTED TRANSACTIONS
–2 8 2–


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Reasons for the Transaction
Our Group is engaged in the business of design, development, manufacture and sale of
bespoke towable RVs in Australasia and our Group conducted the sale of towable RVs
through third-party dealers which are located in Australia and New Zealand. As of June 30,
2024, our Group had nine third-party dealers in Australia and two third-party dealers in
New Zealand. Our sales and distribution network with dealers is crucial to our Group’s
business as it allows our Group to effectively reach customers across Australia and New
Zealand while mitigating substantial overhead costs. See ‘‘Business — Sales and
Distribution’’ for details of our operations with dealers. Our Directors believe our Group
can continuously enhance our sales coverage by leveraging the expertise of sales processes,
benchmarking, training programs and software development of Green RV. The sales of RVs
and RV Parts to Green RV under the Green RV Dealership Agreement is in the ordinary
and usual course of our business, and the prices and terms offered by our Group to Green
RV are no more favorable than those offered to other dealers which are independent third
parties.
Historical Amounts
For the three years ended December 31, 202 3 and for the six months ended June 30,
2024, the total amount of our sales to Gr een RV was approximately A$16,262,000
(equivalent to RMB78,588,000
Note ), A$29,094,000 (equivalent to RMB136,028,000 Note ),
A$38,613,000 (equivalent to RMB181,140,000 Note ) and A$21,395,000 (equivalent to
RMB100,435,000 Note ), respectively, representing approximately 25.1%, 27.3%, 26.2%
and 23.8% of the total amount of revenue of the corresponding periods.
Annual Caps and Basis for Annual Caps
The proposed annual caps for the transaction amounts under the Green RV Dealership
Agreement is A$46.0 million (equivalent to RMB222.0 million) for the year ending
December 31, 2024 and A$50. 83 million (equivalent to RMB245.4 million) for the year
ending December 31, 2025, respectively. The p roposed annual caps are estimated primarily
based on the following reasons and factors:
(i) the historical transaction amounts, including the total amount of sales of RVs and
RV Parts to Green RV for the three years ended December 31, 2023. During the
three years ended December 31, 2023, our revenue increased by 66.4% from 2021
to 2022, and further increased by 44.4% from 2022 to 2023, primarily due to the
increase in the number of RVs delivered to our customers, which had increased by
59.9% from 2021 to 2022 and 26.7% from 2022 to 2023. During the three years
ended December 31, 2023, the historical transaction amounts under the Green RV
Dealership Agreement has a year-on-year increase of 73.1% from 2021 to 2022
and 33.2% from 2022 to 2023, which was generally in line with the
Note:
The equivalent amount in RMB is calculated based on the exchange rates of A$1.00 :RMB4.8325, A$1.00 :
RMB4.6755, A$1.00 :RMB4.6912 and A $1.00 :RMB4.6943 for each of 2021, 2022 and 2023 and the six months
ended June 30, 2024, respectively, which were the av erage exchange rates of the corresponding periods.
CONNECTED TRANSACTIONS
–2 8 3–


--- page 294 ---
abovementioned trend of significant increase in revenue for the corresponding
periods. In determining our annual caps, we have taken into consideration the
increasing trend in the delivery units of our RVs as we continue to expand our
production capacity and product collection, and the proportion of sales to Green
RV contributed to our total revenue duri ng the three years ended December 31,
2023. For details of our production expansion plan, see ‘‘Future Plans and Use of
Proceeds — Use of Proceeds.’’ As our pr oduction capacity and production
collection expand, we will be able to incr ease the delivery units to our dealers
(including Green RV) for sale. As such, w e expect the transaction amounts with
Green RV will also increase proportionally for 2024 and 2025;
(ii) the anticipated year-on-year increa se of approximately 3% in list prices for the
RVs and RV Parts which are adjusted based on the professional judgment of
Regent Company’s management members with reference to estimated increase in
operational costs (including labor costs, material costs and administrative costs)
due to inflation and the market conditions; and
(iii) the anticipated growth of our Group’ s business which leads to an increase in
demand for our Group’s RVs and RV Parts. As confirmed by Frost & Sullivan, it
is expected that the market size of the RV industry in Australasia will continue to
grow and towable RVs will continue to dominate the Australasian RV market for
2024 and 2025. As we continue to expand the sales and distribution network of
our Group, we expect to expand our customer base by enhancing our brand image
and reputation, which would in turn drive up the demand of our Group’s RVs.
Listing Rules Implication
As of the Latest Practicable Date, Green RV was a substantial shareholder of our
subsidiary, Leisure Lion, and a 30%-controlled company of Mr. Carl Green, a director of
Leisure Lion. Therefore, Green RV is a connected person of our Company at the subsidiary
level. Given that (i) our Board has approved the Green RV Dealership Agreement and the
transactions contemplated thereunder and (ii) all the independent non-executive Directors
have confirmed that the terms of the Green RV Dealership Agreement are fair and
reasonable, on normal commercial terms or better and in the interests of our Company and
the Shareholders as a whole, the transactions contemplated thereunder are subject to the
reporting, annual review and announcement requirements, but exempt from independent
Shareholders’ approval requirement pursuant to Rule 14A.101 of the Listing Rules.
Waiver Application
Our Directors (including our independent non-executive Directors) are of the view that
the Green RV Dealership Agreement benefits our business operations, given the importance
of the distribution network of our dealers to the expansion for our sales coverage. As the
transactions under the Green RV Dealership Agreement are expected to be carried out on a
recurring basis and will be carried out from time to time, our Directors consider that strict
compliance with the aforesaid requirements will be impractical and may lead to unnecessary
administrative costs to our Company.
CONNECTED TRANSACTIONS
–2 8 4–


--- page 295 ---
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted, pursuant to Rule 14A.105 of the Listi ng Rules, waiver from strict compliance with
the announcement requirement under Chapter 14A of the Listing Rules in respect of the
Green RV Dealership Agreement.
The independent non-executive Directors and auditors of our Company will review
whether the transactions under the Green RV D ealership Agreement have been entered into
pursuant to the principal terms and pricing policies under the agreement. The confirmation
from our independent non-executive Directors and our auditors will be disclosed annually
according to the requirements of the Listing Rules.
CONFIRMATION FROM OUR DIRECTORS
Our Directors (including our independent non-executive Directors) consider that the
partially non-exempt continuing connected transactions under the RV Parts Purchase
Framework Agreement and Green RV Dealersh ip Agreement, including but not limited to
terms and annual caps thereof, have been entered into and will be entered into, as
applicable, (i) in the ordinary and usual cou rse of our business; (ii) on normal commercial
terms or better, and (iii) are fair and reason able and in the interests of our Company and
our Shareholders as a whole.
CONFIRMATION FROM THE SOLE SPONSOR
The Sole Sponsor has reviewed the relevant information prepared and provided by our
Company in relation to the continuing connected transactions described in this section.
Based on the above, the Sole Sponsor is of the view (i) that the transactions under the RV
Parts Purchase Framework Agreement and Green RV Dealership Agreement have been and
will be entered into in the ordinary and usual course of business of the Company on normal
commercial terms or better that are fair and r easonable and in the interests of the Company
and its Shareholders as a whole, and (ii) that the proposed annual caps for the
partially-exempt continuing connected transactions described in this section are fair and
reasonable and in the interests of the Company and the Shareholders as a whole.
INTERNAL CONTROL MEASURES
In order to ensure that (i) the terms under the RV Parts Purchase Framework
Agreement and Green RV Dealership Agreement are fair and reasonable, and no more
favorable to Shangqiu Jishun and Green RV than terms available to independent third
parties, and (ii) the continuing connected transactions thereunder are carried out under
normal commercial terms or better, we will adopt the following internal control procedures
upon the Listing:
. our Board and the finance department of our Group will be jointly responsible for
evaluating the transactions under the RV Parts Purchase Framework Agreement
and Green RV Dealership Agreement, in particular, the fairness of the pricing
policies and annual caps to ensure compliance with the Listing Rules;
CONNECTED TRANSACTIONS
–2 8 5–


--- page 296 ---
. our Board and the finance department of our Group will be jointly responsible for
reviewing our Group’s list of connected persons and information about the
continuing connected transactions contemplated under the RV Parts Purchase
Framework Agreement and Green RV Dealership Agreement to ensure such
information is consistent, accurate an dc o m p l e t e ,a n di nc o m p l i a n c ew i t ht h e
Listing Rules;
. our Board and the finance department of our Group will regularly monitor the
fulfillment status of the annual caps and the transaction updates under the RV
Parts Purchase Framework Agreemen t and Green RV Dealership Agreement;
. our Board and the finance department of our Group will regularly monitor the
continuing connected transactions under the RV Parts Purchase Framework
Agreement and Green RV Dealership Agreement and shall timely report to the
finance department and our Board once they are made aware of any
non-compliant matters or that certain connected transactions have been
restricted by any regulatory authorities; and
. our independent non-executive Directors and auditors will conduct annual review
of the continuing connected transactions under the RV Parts Purchase
Framework Agreement and Green RV Dealership Agreement and provide
annual confirmation to ensure that, in a ccordance with the Listing Rules, the
transactions are conducted in accordance with the terms and pricing policies of
the agreement, and are on normal commercial terms or better.
CONNECTED TRANSACTIONS
–2 8 6–


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BOARD OF DIRECTORS
The Board consists of seven Directors, including four executive Directors and three
independent non-executive Directors. The following table sets forth certain information
regarding the Directors.
Name Age
Date of
joining the
Group
Date of
appointment as a
Director Position Responsibilities
Relationship
with other
Directors and
senior
management
Mr. MIAO
Xuezhong
(繆雪中)
53 February 19,
2014
May 17, 2022 Executive Director,
chief executive
officer of our
Group and
chairman of the
Board
Day-to-day
management,
strategic planning
and overall
operations of the
Group
Nil
Mr. LIU Tao
(劉濤)
47 March 20,
2023
May 22, 2024 Executive Director
and chief financial
officer of our
Group
Overall financial
management of the
Group
Nil
Ms. LIU Qin
(劉芹)
37 September 1,
2014
May 22, 2024 Executive Director
and general
manager of our
Group
Day-to-day
management and
strategic planning
of the Group and
day-to-day
management of our
Group’s PRC
operations
Nil
Mr. Andrew
Robert
CRANK
52 May 11, 2020 May 22, 2024 Executive Director
and general
manager of our
Group
Day-to-day
management and
strategic planning
of the Group and
day-to-day
management of our
Group’s Australian
operations
Nil
Mr. YU
Mingyang
(余明陽)
60 May 22, 2024
(effective
from the
prospectus
date)
May 22, 2024
(effective
from the
prospectus
date)
Independent
non-executive
Director
Supervising and
providing
independent advice
on the operation
and management of
our Group
Nil
Ms. HE Jie
(何潔)
44 May 22, 2024
(effective
from the
prospectus
date)
May 22, 2024
(effective
from the
prospectus
date)
Independent
non-executive
Director
Supervising and
providing
independent advice
on the operation
and management of
our Group
Nil
Ms. NG Weng
Sin
(吳永蒨)
52 May 22, 2024
(effective
from the
prospectus
date)
May 22, 2024
(effective
from the
prospectus
date)
Independent
non-executive
Director
Supervising and
providing
independent advice
on the operation
and management of
our Group
Nil
DIRECTORS AND SENIOR MANAGEMENT
–2 8 7–


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Executive Directors
Mr. MIAO Xuezhong ( 繆雪中), aged 53, is our founder, an executive Director, the chief
executive officer of our Group and the chairman of the Board. Mr. Miao was appointed as a
Director on May 17, 2022. Mr. Miao has been leading our Group since February 2014 when
he assumed office as the chief executive officer of Daide Longtree, one of our major
operating entities of our Group’s business during the Track Record Period. He was
re-designated as an executive Director on Ma y 22, 2024 and is primarily responsible for
day-to-day management, strategic planning and overall operations of the Group.
Prior to establishing our Group, Mr. Miao established Zhejiang Gonow which had
later developed into the GONOW Group. He has acted as a director of Zhejiang Gonow
a n ds e r v e do ns e v e r a lr o l e si ni t ss u b s i d i a r i e ss i n c ei t si n c o r p o r a t i o ni nN o v e m b e r2 0 0 9 .F o r
details of the GONOW Group, see ‘‘Relations hip with our Controlling Shareholders — Our
Relationship with the GONOW Group.’’ From December 2010 to May 2016, Mr. Miao
served as the vice chairman of the board of directors of GAC Motor (Hangzhou) Co., Ltd
(廣汽乘用車（杭州）有限公司) (formerly known as GAC Passenger Vehicle (Hangzhou) Co.,
Ltd* ( 廣州汽車集團乘用車（杭州）有限公司) and GAC Ji’ao Automobile Co., Ltd* ( 廣汽吉
奧汽車有限公司)). From September 2003 to December 2010, Mr. Miao acted as the
chairman of the board of directors of Zhejiang Ji’ao Automobile Ltd* ( 浙江吉奧汽車有限公
司). Prior to that, Mr. Miao had also served as a supervisor at Shanghai Gonow Sunshine
Plat Co., Ltd.* ( 上海吉奧陽光板有限公司) and Shanghai Huita Sunshine Plate Co., Ltd*
(上海匯塔陽光板有限公司), from September 2002 to April 2008 and from July 2002 to
February 2005, respectively. From October 1999 to June 2002, Mr. Miao worked at
different subsidiaries of Geely Automobile Group Co., Ltd. ( 吉利汽車集
團有限公司), with
his last position as the president of Zhejiang Geely Automobile Co., Ltd. ( 浙江吉利汽車有
限公司), where he was responsible for overseeing the overall operations of the group.
Mr. Miao obtained a certificate to recognize his further education in business
administration from Hong Kong Finance and Economics College in June 2009.
Mr. Miao has been elected as a representative of the Taizhou Municipal People’s
Congress ( 台州市人大代表) in March 2005, awarded with Brand China (Automotive
Industry) Person of the Year ( 品牌中國（汽車產業）年度人物) presented by the Top Brand
Union ( 品牌聯盟) in December 2012, and 2013 New Economic Leader of China (2013 中國經
濟新領導人物) presented by 2013 China Economic Peak Forum (2013 中國經濟高峰論壇).
He was also previously elected as a vice president of the Zhejiang Young Entrepreneurs
Association ( 浙江省青年企業家協會副會長).
DIRECTORS AND SENIOR MANAGEMENT
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Mr. Miao was a supervisor or person-in-charge of the following companies at the time
of their respective revocation of business license. The relevant details are as follows:
Name of company
Place of
incorporation Position held Nature of business
Date of
revocation
Reasons for
revocation
Hanzhong Gonow
Automotive Co., Ltd.*
(漢中吉奧汽車有限公司)
PRC Supervisor Manufacturing and sales
of automobile
accessories and
motorcycle accessories
June 28, 2016 Long-term inactivity
of business
operation
Shanghai Gonow
Sunshine Plate Co.,
Ltd.* ( 上海吉奧陽光板
有限公司)
PRC Supervisor Manufacturing and sales
of wooden plates and
plastic steel plates
February 21,
2005
Long-term inactivity
of business
operation
Shanghai Huita Sunshine
Plate Co., Ltd.* ( 上海匯
塔陽光板有限公司)
PRC Supervisor Manufacturing and sales
of sunshades
April 14, 2008 Long-term inactivity
of business
operation
Linhai Fenghuolun
Motorcycle Sales Co.,
Ltd.* (Jinjiang Branch)
(臨海市風火輪摩托車銷
售有限公司晉江分公司)
PRC Person-in-charge Sales of motorcycle and
motorcycle accessories
December 25,
2001
Long-term inactivity
of business
operation
Mr. Miao confirmed that, to the best of his knowledge and belief, (i) each of the above
companies was solvent immediately prior to the ir respective revocation; (ii) as of the Latest
Practicable Date, no claims had been made against him and he was not aware of any
threatened or potential claim which has been or could potentially be made against him and
there were no outstanding claims and/or liabilities as a result of such revocation; and (iii)
there was no wrongful act on his part leading to the revocation of the above companies.
Mr. LIU Tao ( 劉濤), aged 47, is an executive Directo r and our Group’s chief financial
officer. Mr. Liu joined our Group as the chie f financial officer in March 2023 and was
appointed as an executive Director on May 22, 2024. He is primarily responsible for overall
financial management of the Group.
From March 2022 to April 2023, Mr. Liu served as the vice president of financial
department at Hangzhou Hongjing Drive Technology Co., Ltd.* ( 杭州宏景智駕科技有限公
司), an autonomous driving solutions provider in the PRC, where he was responsible for
investment financing activities and finance- related matters. From February 2020 to January
2022, Mr. Liu served as the chief financial offi cer at Zhejiang Tiancheng Controls Co., Ltd.
(浙江天成自控股份有限公司), a company primarily engaged in the business of vehicle seats
and which was listed on the Shanghai Stock Exchange (stock code: 603085), where he was
responsible for the management of financing and investment activities. From October 2018
to December 2019, Mr. Liu served as the chief financial officer at Healthcare Co., Ltd ( 夢百
合家居科技股份有限公司), a company primarily engaged in the business of household
products and listed on the Shanghai Stock Exchange (stock code: 603313), where he was
responsible for investment and financing activities and finance-related matters. From
October 2014 to April 2018, Mr. Liu worked at Axalta Coating Systems (Shanghai) Co.,
Ltd.* ( 艾仕得塗料系統（上海）有限公司)( ‘ ‘Axalta Coating Shanghai ’ ’ ) ,w h e r eh es e r v e da s
the operations control manager and the chief financial officer of Shanghai Axalta Jinlitai
DIRECTORS AND SENIOR MANAGEMENT
–2 8 9–


--- page 300 ---
Coatings Co., Ltd.* ( 上海艾仕得金力泰塗料有限公司), a subsidiary of Axalta Coating
Shanghai. From July 2011 to September 2014, Mr. Liu served as the financial manager of
North China region at Flextronics Electronic Technology (Shanghai) Co., Ltd.* ( 偉創力電
子科技（上海）有限公司), a wholly-owned subsidiary of Flex Ltd. ( 偉創力集團), a company
l i s t e do nt h eN A S D A Q( s t o c kc o d e :F L E X ) ,where he oversaw the overall financial
management of the company. From April 2010 to June 2011, Mr. Liu served as the senior
manager of the internal audit department of Jintianyuan (China) Investment Co., Ltd.
(Shanghai Branch)* ( 金天源（中國）投資有限公司上海分公司), where he was responsible for
overseeing internal audit work. From February 2007 to April 2010, Mr. Liu worked at
Deloitte Touche Tohmatsu (Singapore) ( 德勤會計師事務所（新加坡）) ,w h e r eh es e r v e da s
the audit manager and was responsible for providing audit work to clients. From January
2004 to April 2007, Mr. Liu served as the senior auditor at the risk advisory services
department at BDO Accounting Firm (Singapore) ( 立信會計師事務所（新加坡）). From
September 2001 to June 2004, Mr. Liu worked at Harbin Institute of Technology Bada
Group* ( 哈爾濱工業大學八達集
團).
Mr. Liu obtained his bachelor’s degree i n management majoring in accounting from
Harbin Institute of Technology ( 哈爾濱工業大學) in the PRC in July 2001. Mr. Liu
obtained his Certified Public Accountant certi ficate issued by The Association of Chartered
Certified Accountants in July 2007. He also obtained his Singapore Chartered Accountant
qualification issued by the Institute of Singapore Chartered Accountants in July 2013.
Ms. LIU Qin ( 劉芹), aged 37, is an executive Director and a general manager of our
Group. Ms. Liu joined our Group as a project manager and public relations manager of
Daide Longtree in September 2014 and has been serving as the general manager of Daide
Longtree from January 2022 to May 2024. She has been serving as a general manager of our
Group since our incorporation, and was appointed as an executive Director on May 22,
2024. Ms. Liu is primarily responsible for the day-to-day management and strategic
planning of the Group and day-to-day management of our Group’s PRC operations.
From March 2012 to September 2014, Ms. Liu worked at Ordos (Wuhan) Forest River
Automobile Co., Ltd.* ( 鄂爾多斯（武漢）森林河汽車有限公司).
Ms. Liu obtained her bachelor’s degree in English from Central South University ( 中南
大學) in June 2010.
Mr. Andrew Robert CRANK , aged 52, is an executive Director and a general manager
of our Group. Mr. Crank joined our Group as the general manager of Regent Company in
May 2020, and has been appointed as a director in March 2022. Mr. Crank has been
appointed as a general manager of our Group since our incorporation, and was appointed
as an executive Director on May 22, 2024. He is primarily responsible for day-to-day
management and strategic planning of the Group and day-to-day management of our
Group’s Australian operations.
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From July 2017 to June 2020, Mr. Crank worked at Jayco Corporation Pty Ltd, an
established RV company in Australia. From April 2000 to November 2017, Mr. Crank
served as a director at Actco-Pickering Metal Industries Pty Ltd (‘‘ APMI ’’), a privately
owned and operated metal manufacturing conglomerate, where he was mainly responsible
for day to day management of the business. During this period, he assumed the office of
director of finance in 2000, director of operations & projects from 2001 to 2017 and director
of design and R&D in 2005. At the same time, he commenced the Trade Service Bodies
division (now known as Ridgeback Service Bodies), an internal division of APMI. He also
held the role of general manager and sales manager of Pioneer Campers in 2011, which was
internal division of APMI and an award-winni ng manufacturer of off-road camper trailers.
From October 1995 to August 2000, Mr. Crank served as a managing director at Surcan
Projects Pty Ltd, where he was mainly responsible for day-to-day management of the
company.
Mr. Crank obtained his associate diploma of engineering from Box Hill College of
Technical and Further Education in Australia in December 1993.
Independent Non-executive Directors
Ms. HE Jie ( 何潔), aged 44, has been appointed as a n independent non-executive
Director of the Company with effect from December 31, 2024. She is primarily responsible
for supervising and providing independent advice on the operation and management of the
Group.
Since January 2024, Ms. He served as the business development executive for Lotus
Cars Limited. From November 2023 to December 2023, Ms. He worked at Shanghai Lotus
Information Technology Services Co., Ltd. ( 上海路特斯信息技術服務有限公司). From
December 2014 to August 2022, Ms. He worked at FCA Asia Pacific Investment Co., Ltd.,
a subsidiary of Fiat Chrysler Automobiles N.V., a multinational automobile listed on the
New York Stock Exchange (stock code: FCA U). From January 2014 to November 2014,
Ms. He worked at Fiat (China) Commercial Co. Shanghai Branch ( 菲亞特（中國）商務有限
公司上海分公司). From February 2006 to June 2011, Ms. He served as a senior associate in
Gide Loretta Nouel (Shanghai Rep Office), wh ere her practice focused on cross-border
merger and acquisition transactions, forei gn direct investment in China and real estate
transactions in China.
Ms. He obtained her bachelor’s degree in law from East China University of Political
Science and Law ( 華東政法大學) in the PRC in July 2003. Ms. He obtained her master’s
degree in law from Chicago Kent College of Law in the U.S. in May 2004. Ms. He has also
been pursuing her master of business admini stration degree (Global Executive MBA
program) from University of Toronto in Canada since 2023. Ms. He was admitted to New
York State Bar in May 2004.
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Mr. YU Mingyang ( 余明陽), aged 60, has been appointed as an independent
non-executive Director of the Company with effect from December 31, 2024. He is
primarily responsible for supervising and providing independent advice on the operation
and management of the Group.
Currently, Mr. Yu is serving as the dean of the Institute of Chinese Enterprises
Development of Shanghai Jiao Tong University ( 上海交通大學中國企業發展研究院). He
has also served as a professor and doctoral supervisor at Antai College of Economics and
Management of Shanghai Jiao Tong University ( 上海交通大學安泰經濟與管理學院)s i n c e
September 2005.
Apart from being an academia, Mr. Yu also served as a director at various listed
companies. From July 2023 to August 2024, Mr. Yu served as a non-executive director of
J i n h a iM e dT e c hL i m i t e d(今海醫療科技股份有限公司), a company listed on the Stock
Exchange (stock code: 02225). From January 2021 to January 2024, Mr. Yu served as an
independent director of Golden Home Living Co., Ltd. ( 金牌廚櫃家居科技股份有限公司), a
company listed on the Shanghai Stock Exchange (stock code: 603180). From September
2007 to January 2016, Mr. Yu served as an independent non-executive director of Carpenter
Tan Holdings Limited ( 譚木匠控股有限公司), a company listed on the Stock Exchange
(stock code: 837). From March 2011 to April 2015, Mr. Yu served as an independent
director of Shandong Homey Aquatic Development Co., Ltd. ( 山東好當家海洋發展股份有
限公司), a company listed on the Shanghai Stock Exchange (stock code: 600467). From
June 2007 to March 2010, Mr. Yu served as an i ndependent director of Zoneco Group Co.,
Ltd. ( 獐子島集團股份有限公司), a company listed on the Shenzhen Stock Exchange (stock
code: 002069). From November 2000 to May 2002, Mr. Yu served as the general manager
of Shede Spirits Co. ( 捨得酒業股份有限公司) (formerly known as Tuopai Qujiu Co., Ltd.
(四川沱牌曲酒股份有限公司)), a liquor company listed on the Shanghai Stock Exchange
(stock code: 600702), where he was respons ible for overseeing the operations of the
company.
Mr. Yu has also been serving as an independent non-executive director of MedSci
Healthcare Holdings Limited ( 梅斯健康控股有限公司), a company listed on the Stock
Exchange (stock code: 02415) since April 2023; an independent director of Shanghai
Phoenix Enterprise (Group) Co., Ltd. ( 上海鳳凰企業（集團）股份有限公司), a company
listed on the Shanghai Stock Exchange (stock code: 600679), since January 2022; and an
independent director of Shanghai Xujiahui Commercial Co., Ltd. ( 上海徐家匯商城股份有限
公司), a company listed on the Shenzhen Stock Exchange (stock code: 002561), since April
2020.
Mr. Yu obtained his bachelor’s degree in philosophy from Hangzhou University ( 杭州
大學) in the PRC in July 1983. Mr. Yu obtained a master’s degree and a doctor’s degree in
management from Fudan University ( 復旦大
學) in the PRC in July 1993 and July 1996,
respectively.
DIRECTORS AND SENIOR MANAGEMENT
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Ms. NG Weng Sin ( 吳永蒨), aged 52, has been appointed as an independent
non-executive Director of the Company with effect from December 31, 2024. She is
primarily responsible for supervising and providing independent advice on the operation
and management of the Group.
Ms. Ng has more than 25 years of experience in financial reporting, management and
services. Since April 2024, Ms. Ng serves as an independent non-executive director of New
H o r i z o nH e a l t hL t d .(諾輝健康), a company listed on the Stock Exchange (stock code:
6606). Since February 2024, Ms. Ng serves as an independent non-executive director of
Xiamen Jihong Technology Co., Ltd. ( 廈門吉宏科技股份有限公司), a company listed on the
Shenzhen Stock Exchange (stock code: 002803). From December 2016 to November 2021,
Ms. Ng successively served as a consultant, an executive director, a company secretary, an
authorized representative and the chief finan cial officer of China Public Procurement Ltd*
(中國公共採購有限公司) (now known as Cherish Sunshine International Ltd ( 承輝國際有限
公司)), a company listed on the Main Board of the Stock Exchange (stock code: 1094).
From July 2014 to November 2015, Ms. Ng served as the company secretary and authorized
representative, and from May 2014 to December 2015, Ms. Ng served as the chief financial
officer of Xiwang Special Steel Company Limited ( 西王特鋼有限公司) (stock code: 1266)
and Xiwang Property Holdings Company Limited ( 西王置業控股有限公司) (stock code:
2088), both companies of which were listed on the Main Board of the Stock Exchange.
From August 2010 to October 2013, she served as the chief financial officer, and from
February 2011 to October 2013, she served as the company secretary and the authorized
representative of Billion Industrial Holdings Limited ( 百宏實業控股有限公司), a company
listed on the Main Board of the Stock Exchange (stock code: 2299). From May 2006 to
February 2010, she was the financial controller, the company secretary and authorized
representative of China Information Technology Development Limited ( 中國信息科技發展
有限公司), a company listed on the Stock Exchange (stock code: 8178). From November
2004 to May 2006, she worked at Norstar Automobile Industrial Holding Limited (
北泰汽
車工業控股股份有限公司). From November 2003 to November 2004, she worked at Hua
Yang Printing Holdings Co., Ltd. ( 華洋印刷控股有限公司). From September 2001 to May
2003, she worked at Hong Kong Wing On Travel Service Limited ( 香港永安旅遊有限公司).
From August 1997 to September 2001, Ms. Ng worked at Deloitte Touche Tohmatsu ( 德勤
會計師事務所).
Ms. Ng obtained her bachelor’s degree of arts in accountancy in 1996, a master’s
degree of professional accounting in 2010, a master’s degree of corporate finance in 2013
from the Hong Kong Polytechnic University. She further obtained a master of business
administration degree (Executive MBA pro gram) from the Chinese University of Hong
Kong in 2015. She is a fellow member of the Hong Kong Institute of Certified Public
Accountants and the Association of Chartered Certified Accountants . She is also a fellow
member of The Hong Kong Chartered Governance Institute.
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SENIOR MANAGEMENT
The following table sets out certain infor mation regarding the senior management of
the Company.
Name Age
Date of joining the
Group
Date of appointment as
a senior management
member Position Responsibilities
Mr. MIAO
Xuezhong
(繆雪中)
53 February 19, 2014 February 19, 2014 Executive Director, chief
executive officer of our
Group and chairman of the
Board
Day-to-day management and
strategic planning of the
Group
Mr. LIU Tao
(劉濤)
47 March 20, 2023 March 20, 2023 Executive Director and chief
financial officer of our
Group
Overall financial management of
the Group
Ms. LIU Qin
(劉芹)
37 September 1, 2014 January 1, 2022 Executive Director and general
manager of our Group
Day-to-day management and
strategic planning of the
Group and day-to-day
management of our Group’s
PRC operations
Mr. Andrew Robert
CRANK
52 May 4, 2020 May 4, 2020 Executive Director and general
manager of our Group
Day-to-day management and
strategic planning of the
Group and day-to-day
management of our Group’s
Australian operations
For biographical details of Mr. MIAO Xuezhong ( 繆雪中), Mr. LIU Tao ( 劉濤), Ms.
LIU Qin ( 劉芹), and Mr. Andrew CRANK, see ‘‘— Board of Directors’’.
JOINT COMPANY SECRETARIES
Mr. CHANG Ke ( 常可), was appointed as one of our joint company secretaries on May
22, 2024.
Prior to joining the Group, Mr. Chang served at Hozon New Energy Automobile Co.,
Ltd ( 合眾新能源汽車股份有限公司) from July 2021 to April 2024, during which he had
acted as the board secretary, company secretary and general manager of securities center.
Mr. Chang had also previously worked at the investment banking division of Guosen
Securities Co., Ltd. ( 國信證券股份有限公司), a company listed on the Shenzhen Stock
Exchange (stock code: 002736), and King & Wood Mallesons.
Mr. Chang obtained his master’s degree in law from the University of Southern
California in November 2014.
DIRECTORS AND SENIOR MANAGEMENT
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Ms. JIAN Xuegen ( 簡雪艮), was appointed as one of our joint company secretaries on
May 22, 2024. She has over 14 years of experience in accounting, finance, and the corporate
secretary field. Ms. Jian is currently an assistant vice president of SWCS Corporate Services
Group (Hong Kong) Limited.
Ms. Jian obtained her bachelor’s degree of accounting from the South China
University of Technology in July 2008. She is a member of the Hong Kong Institute of
Certified Public Accountants since Januar y 2019, and is also a member of the Chinese
Institute of Certified Public Accountants since December 2010.
BOARD COMMITTEES
Audit Committee
Our Company has established an Audit Committee (with effect from the Listing Date)
with written terms of reference in complianc e with Rule 3.21 of the Listing Rules and the
Corporate Governance Code as set out in Appendix C1 to the Listing Rules. The Audit
Committee consists of three members, na mely Ms. NG Weng Sin, Mr. YU Mingyang and
Ms. HE Jie. Ms. NG Weng Sin has been appointed as the chairman of the Audit Committee.
The primary duties of the Audit Committee are to review and supervise the financial
reporting process and internal control sys tem of our Group, oversee the audit process,
review and oversee the existing and potential risks of our Group and perform other duties
and responsibilities as assigned by our Board.
Remuneration Committee
Our Company has established a Remuneration Committee (with effect from the Listing
Date) with written terms of reference in comp liance with Rule 3.25 of the Listing Rules and
the Corporate Governance Code as set out in Appendix C1 to the Listing Rules. The
Remuneration Committee has three members, namely Ms. HE Jie, Mr. YU Mingyang and
Ms. NG Weng Sin. Ms. HE Jie has been appointed as the chairman of the Remuneration
Committee. The primary duties of the Remuneration Committee are to establish and review
the policy and structure of the remuneration for our Directors and senior management and
make recommendations on employee benefit arrangement.
Nomination Committee
Our Company has established a Nomination Committee (with effect from the Listing
Date) with written terms of reference in compliance with the Corporate Governance Code
as set out in Appendix C1 to the Listing Rules. The Nomination Committee consists of
three members, namely Mr. Miao, Ms. NG Weng Sin and Mr. YU Mingyang, and Mr.
Miao is the chairman of the Nomination Commi ttee. The primary duties of the Nomination
Committee are to make recommendations to our Board on the appointment and removal of
Directors of our Company.
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BOARD DIVERSITY POLICY
The Board has adopted a board diversity policy (the ‘‘ Board Diversity Policy ’’) to
enhance the effectiveness of our Board and to maintain high standard of corporate
governance. The Board Diversity Policy sets ou t the criteria in selecting candidates to our
Board, including but not limited to gender, age, cultural and educational background,
ethnicity, professional experience, skills, kno wledge, and length of service. The ultimate
d e c i s i o nw i l lb eb a s e do nm e r i ta n dc o n t r i b u t i on that the selected candidates will bring to
our Board.
Our Directors have a balanced mixed of kno wledge and skills, including but not
limited to overall business management, finance, legal, accounting and marketing. They
obtained degrees in diversified majors includin g accounting, philosophy, corporate finance,
law and engineering. The Board is of the view that our Board satisfies the Board Diversity
Policy. In addition, our Board has a wide range of age, ranging from 36 years old to 60
years old. Three of our Directors are female. While we recognize that the gender diversity at
our Board level can be improved given the majority of our Directors are male, we will
continue to apply the appointment criteria based on competence and with reference to the
overall diversity policy. Our Board will also ensure that appropriate balance of gender
diversity is achieved with reference to investors’ expectation, and international and local
recommended best practices.
To further ensure gender diversity of our Board in the long run, our Group will also
identify and select several female individuals with a diverse range of skills, experience and
knowledge in different fields from time to time, and maintain a list of such female
individuals who possess qualities to become o ur Board members, which will be reviewed by
our Nomination Committee periodically in order to develop a pipeline of potential
successors to our Board to promote gender diversity of our Board. In addition to the Board
level, we are also committed in promoting gende r diversity at the senior management and all
other levels of our Group by providing career development opportunities for female staff,
making available to them knowledge and skills training in support of succession planning
and ensuring future gender diversity can be achieved on the Board.
The Nomination Committee is responsible f or reviewing the diversity of the Board.
After Listing, the Nomination Committee will monitor and evaluate the implementation of
the Board Diversity Policy from time to time to ensure its continued effectiveness. The
Nomination Committee will also include in successive annual reports a summary of the
Board Diversity Policy, including any measurabl e objectives set for implementing the Board
Diversity Policy and the progress on achieving these objectives.
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CONFIRMATION FROM OUR DIRECTORS
Rule 8.10 of the Listing Rules
None of our Directors had interests in any other companies as of the Latest Practicable
Date that may, directly or indirectly, compete with our business and would require
disclosure under Rule 8.10 of the Listing Rules.
Rule 3.09D of the Listing Rules
Each of our Directors confirms that he or she (i) has obtained the legal advice referred
to under Rule 3.09D of the Listing Rules on May 22, 2024, and (ii) understands his or her
obligations as a director of a listed c ompany under the Listing Rules.
Rule 3.13 of the Listing Rules
Each of the independent non-executive Directors confirms (i) his/her independence as
regards each of the factors referred to in Rule 3.13(1) to (8) of the Listing Rules, (ii) that
he/she had no past or present financial or other interest in the business of the Company or
its subsidiaries or any connection with any core connected person of the Company under
the Listing Rules as of the Latest Practicabl e Date, and (iii) that there are no other factors
that may affect his/her independence at the time of his/her appointment.
Interests of Directors and senior management
Except as disclosed in this Prospectus, as of the Latest Practicable Date, each of the
Directors and senior management (i) did not hold other positions in our Group as of the
Latest Practicable Date; (ii) had no other relationship with any of the Directors and senior
management as of the Latest Practicable Date; and (iii) did not hold any other directorship
and supervisor’s position in listed companies in the three years prior to the Latest
Practicable Date. For the Directors’ interests in the Shares within the meaning of Part XV
of the SFO, see ‘‘Appendix IV — Statutory and General Information.’’
DEVIATION FROM CORPORATE GOVERNANCE CODE
Pursuant to code provision C.2.1 in the Corporate Governance Code as set out in
Appendix C1 to the Listing Rules, the roles of chairman and chief executive officer should
be separate and should not be performed by the same individual.
Mr. Miao Xuezhong is currently serving as the chairman of the Board as well as the
chief executive officer of the Company. He has been primarily involved in developing
overall corporate and business strategies of our Group and making significant business and
operational decisions of our Group. Our Direc tors consider that vest ing the roles of both
the chairman of the Board and the chief executive officer of the Company in Mr. Miao is
beneficial to the business prospects of the Gr oup by ensuring consistent leadership to the
Group as well as prompt and effective decisio n making and implementation. In addition,
our Directors believe that this structure will not impair the balance of power and authority
between the Board and the management of the Company, given that: (i) decision to be made
DIRECTORS AND SENIOR MANAGEMENT
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by our Board requires approval by at least a majority of our Directors; (ii) Mr. Miao and
the other Directors are aware of and undertake to fulfill their fiduciary duties as Directors,
which require, among other things, that he acts for the benefit and in the best interests of
our Company and will make decisions for our Company accordingly; (iii) the balance of
power and authority is ensured by the operations of the Board, which consists of four
executive Directors (including Mr. Miao) and three independent non-executive Directors,
and has a fairly strong independence element; and (iv) the overall strategic and other key
business, financial, and operational policies of our Company are made collectively after
thorough discussion at both the Board, and senior management levels.
We will continue to review our corporate governance policies and compliance with the
Listing Rules and will adhere to the relevant principles as set out in the Corporate
Governance Code after the Listing.
DIRECTORS’ REMUNERATION
The compensation and remuneration of the Directors and members of the senior
management of the Company are determined by the Shareholders’ meetings and the Board
as appropriate in the form of salaries and bonuses. The Company also reimburses them for
expenses which are necessary and reasonably incurred in providing services to the Company
or discharging their duties in relation to the operations of the Company. When reviewing
and determining the specific remuneration p ackages for our Directors and members of the
senior management of the Company, the Shareholders’ meetings and the Board take into
account factors such as salaries paid by comp arable companies, time commitment, level of
responsibilities, employment elsewhere in our Group and desirability of performance-based
remuneration.
Our Company offers executive Directors and senior management members, who are
also employees, compensation in the form of salaries, bonuses, social security plans,
housing provident fund plans and other benefits. The independent non-executive Directors
receive compensation based on their responsibilities.
The aggregate amounts of remuneration paid to the Directors for the three years ended
December 31, 2023 and for the six months ended June 30, 2024 were approximately RMB1.2
million, RMB1.5 million, and RMB2.5 million a nd RMB1.6 million, respectively.
The aggregate amounts of remuneration paid to the five highest paid individuals for
the three years ended December 31, 2023 and for the six months ended June 30, 2024 were
approximately RMB3.1 million, RMB3.3 m illion, RMB3.6 million and RMB1.3 million,
respectively.
It is estimated that remuneration equivalent to approximately RMB4.2 million in
aggregate will be paid to the Directors by our Company for the year ending December 31,
2024, based on the arrangements in force as of the date of the Prospectus.
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No remuneration was paid by the Company to the Directors or the five highest paid
individuals as inducement to join or upon joining the Company or as a compensation for
loss of office during the Track Record Period. Furthermore, none of the Directors had
waived or agreed to waive any remuneration during the Track Record Period.
PRE-IPO SHARE OPTION SCHEME
We adopted the Pre-IPO Share Option Scheme. See ‘‘Appendix IV — Statutory and
General Information — D. Pre-IPO Share Option Scheme’’ in this Prospectus for further
details.
COMPLIANCE ADVISOR
The Company appointed Caitong International Capital Co., Limited as the compliance
advisor pursuant to Rule 3A.19 of the Listing Rules, and the compliance advisor will advise
our Company in the following circumstances:
. before the publication of any regulatory announcement, circular or financial
report;
. where a transaction, which might be a notifiable or connected transaction, is
contemplated, including share issues and share repurchases;
. where our Company proposes to use th e proceeds of the Global Offering in a
manner that is different from that detailed in this Prospectus or where our
business activities, developments or results deviate from any forecasts, estimates
or other information in this Prospectus; and
. where the Stock Exchange makes an inquiry of our Company regarding unusual
movements in the price or trading volume of the Shares, the possible development
of a false market in the Shares or any other matters.
The terms of the appointment of the compliance advisor will commence on the Listing
Date and end on the date when the Company distributes the annual report of its financial
results for the first full financial y ear commencing after the Listing Date.
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SUBSTANTIAL SHAREHOLDERS
So far as our Directors are aware, immediately following the completion of the
Capitalization Issue and the Global Offering (assuming the Over-allotment Option is not
exercised), the following persons will have , or be deemed, or taken to have an interest
and/or short position in the Shares or underlying Shares which would fall to be disclosed to
our Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV
of the SFO, or will be, directly or indirectly, i nterested in 10% or more of the nominal value
of any class of share capital carrying rights to vote in all circumstances at general meetings
of our Company:
Shares held as of the Latest
Practicable Date (1)
Shares held immediately
following completion of
the Capitalization Issue and
the Global Offering (1)
Name of Shareholder Nature of interest Number % Number %
Mr. Miao Interest in controlled
corporations (3)
99,173,500 99.17% 99,173,500 74.4%
Settlor of a discretionary
trust (3)
99,173,500 99.17% 99,173,500 74.4%
M s .W a n g I n t e r e s to fs p o u s e (2) ;
Interest held jointly with
another person
(3)
99,173,500 99.17% 99,173,500 74.4%
Ms. Miao Interest held jointly with
another person (3)
99,173,500 99.17% 99,173,500 74.4%
Miao Wanyi Trust (3) Interest in controlled
corporations (3)
99,173,500 99.17% 99,173,500 74.4%
Miao Wanyi Holdings (3) Interest in controlled
corporation (3)
99,173,500 99.17% 99,173,500 74.4%
Snowy Limited (3) Beneficial owner 99,173,500 99.17% 99,173,500 74.4%
Notes:
(1) All interests stated are long positions.
(2) Mr. Miao is the spouse of Ms. Wang. By virtue of the SFO, Ms. Wang is deemed to be interested in
the Shares in which Mr. Miao is interested in.
(3) Snowy Limited is held by M.X.Z Holdings as to 1 %, and M.X.Z Holdings is in turn a wholly-owned
c o m p a n yo fM r .M i a o .H e n c e ,M r .M i a oi sd e e m e dt ob ei n t e r e s t e di nt h eS h a r e sh e l db yS n o w y
Limited under the SFO.
Snowy Limited is held by Miao Wanyi Holdings as to 99%. Miao Wanyi Holdings is a company
i n c o r p o r a t e di nt h eB V Ia n di sh e l da st o1 0 0 %b yM i a oW a n y iT r u s t ,w h i c hw a se s t a b l i s h e db yM r .
Miao as the settlor. Dedao Trust Limited is the trustee of the Miao Wanyi Trust, and WDH
Holdings and MWY Holdings are the beneficiaries of the Miao Wanyi Trust.
SUBSTANTIAL SHAREHOLDERS
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Save as disclosed herein, our Directors are not aware of any person who will,
immediately following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exer cised), have an interest or short position in
the Shares or underlying Shares which will be required to be disclosed to our Company and
the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or will
be, directly or indirectly, interested in 10% or more of the nominal value of any class of
share capital carrying rights to vote in all circumstances at general meetings of our
Company.
SUBSTANTIAL SHAREHOLDERS
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AUTHORIZED AND ISSUED SHARE CAPITAL
The following is a description of the authorized shares and shares of our Company in
issue and to be issued as fully paid or credit ed as fully paid prior to and immediately
following the completion of the Capita lization Issue and the Global Offering:
Nominal value
(US$)
As of the date of this Prospectus
Authorized share capital as of the date of this Prospectus
500,000,000 Shares of US$0.0001 each 50,000
Issued share capital as of the date of this Prospectus
100,000,000 Shares of US$0.0001 each 10,000
Immediately following the Capitalization Issue and the Global Offering
Authorized share capital
2,000,000,000 Shares of US$0.0001 each 200,000
Shares to be issued pursuant to the Capitalization Issue
620,000,000 Shares of US$0.0001 each 62,000
Shares to be issued under the Global Offering assuming the
Over-allotment Option is not exercised
240,000,000 Shares of US$0.0001 each 24,000
ASSUMPTIONS
The above table assumes that the Global Offering becomes unconditional and the
Shares are issued pursuant to the Capitalization Issue and the Global Offering. The above
does not take into account any Shares which may be allotted and issued pursuant to the
exercise of the Over-allotment Option.
RANKING
The Offer Shares are ordinary shares in our share capital and rank equally with all
Ordinary Shares currently in issue or to be issue d and, in particular, will rank in full for all
dividends or other distributions declared, made or paid on the Shares in respect of a record
date which falls after the date of this Prospectus.
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CIRCUMSTANCES UNDER WHICH GENERAL MEETING AND CLASS MEETING
ARE REQUIRED
Upon completion of the Capitalization Issue and the Global Offering, our Company
has only one class of shares, namely ordinary shares, each of which ranks pari passu with
the other Shares. Pursuant to the Cayman Companies Act and the terms of the
Memorandum and Articles, our Company may from time to time by ordinary resolution
of shareholders (i) increase its capital; (ii) co nsolidate and divide its capital into shares of a
larger amount; (iii) subdivide its shares into shares of a smaller amount; and (iv) cancel any
shares which have not been taken. In addition, our Company may subject to the provisions
of the Cayman Companies Act reduce its share capital or share capital redemption reserve
by its shareholders passing a special resolution. See ‘‘Appendix III — Summary of the
Constitution of the Company and Cayman Islands Company Law — 2. Articles of
Association — 2.1 Shares — (c) Alteration of Capital’’ for details.
Pursuant to the Cayman Companies Act and the terms of the Memorandum and
Articles, all or any of the rights attached to the shares or any class of shares may be varied
either with the consent in writing of the holders of at least three-fourths of the issued shares
of that class or with the approval of a resolution passed by at least three-fourths of the votes
cast by the holders of the shares of that class present and voting in person or by proxy at a
general meeting of such holders. See ‘‘Appendix III — Summary of the Constitution of the
Company and Cayman Islands Company Law — 2. Articles of Association — 2.1 Shares —
(b) Variation of Rights of Existing Shares or Classes of Shares’’ for details.
Further, our Company will also hold general meetings from time to time as may be
required under the Listing Rules and the Articles, a summary of which is set out in the
section headed ‘‘Appendix III — Summary of the Constitution of the Company and
Cayman Islands Company Law.’’
GENERAL MANDATE TO ISSUE SHARES
Subject to the conditions stated in the sectio n headed ‘‘Structure of the Global Offering
— Conditions of the Global Offering’’ in this Prospectus, our Directors have been granted a
general unconditional mandate to allot, issue and deal with Shares or securities convertible
into Shares or options, warrants or similar rights to subscribe for Shares or such convertible
securities and to make or grant offers, agreements or options which would or might require
the exercise of such powers, provided that the aggregate nominal value of Shares allotted or
agreed to be allotted by the Directors other than pursuant to:
(a) the exercise of any subscription rights, warrants which may be issued by our
Company from time to time;
(b) any scrip dividend scheme or similar arr angement providing for the allotment of
Shares in lieu of the whole or part of a dividend on Shares in accordance with our
Articles;
(c) a specific authority granted by the Shareholders in general meeting of our
Company,
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shall not exceed the aggregate of:
(i) 20% of the total nominal value of our shar e capital in issue immediately following
the completion of the Global Offering; and
(ii) the total nominal value of our share capital repurchased by us (if any) under the
general mandate to repurchase Shares referred to in the section headed ‘‘—
General Mandate to Repurchase Shares’’ below.
This general mandate to issue Shares will expire at the earliest of:
(1) the conclusion of the next annual general meeting of our Company unless
otherwise renewed by an ordinary resolution of the Shareholders in general
meeting, either unconditionally or subject to condition;
(2) the expiration of the period within which our Company’s next annual general
m e e t i n gi sr e q u i r e db yt h eA r t i c l e so ra ny other applicable laws to be held; or
(3) the date on which it is varied or revoked by an ordinary resolution of our
Shareholders in general meeting of our Company.
See ‘‘Appendix IV — Statutory and General Information — A. Further Information
about our Group — 4. Resolutions of Our Shareholders in Relation to the Global Offering’’
for further details of this general mandate.
GENERAL MANDATE TO REPURCHASE SHARES
Subject to the conditions stated in the sectio n headed ‘‘Structure of the Global Offering
— Conditions of the Global Offering’’, our Directors have been granted a general
unconditional mandate to exercise all of o ur powers to repurchase Shares with a total
nominal value of not more than 10% of the total nominal value of our share capital in issue
immediately following the completion of the Capitalization Issue and the Global Offering.
The repurchase mandate relates only to repurchases made on the Stock Exchange, or
on any other stock exchange on which the Shares are listed (and which is recognized by the
SFC and the Stock Exchange for this purpose ), and made in accordance with the Listing
Rules. A summary of the relevant Listing Rules is set out in the section headed ‘‘Appendix
IV — Statutory and General Information — A. Further Information about our Group — 6.
Corporate Reorganizatio n’’ for further details.
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This general mandate to repurchase Sh ares will expire at the earliest of:
(i) the conclusion of the next annual general meeting of our Company unless renewed
by an ordinary resolution of the Shareholders in general meeting either
unconditionally or subject to condition;
(ii) the expiration of the period within which our Company’s next annual general
m e e t i n gi sr e q u i r e db yt h eA r t i c l e so ra ny other applicable laws to be held; or
(iii) the date on which it is varied or revoked by an ordinary resolution of our
Shareholders in general meeting of our Company,
See ‘‘Appendix IV — Statutory and General Information — A. Further Information
about our Group — 6. Corporate Reorganization’’ for further details of this general
mandate.
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You should read the following discussion and analysis in conjunction with our historical
financial information as of and for the three financial years ended December 31, 2023 and
for the six months ended June 30, 2024 included in the Accountants’ Report set out in
Appendix I to this Prospectus, together with the accompanying notes. Our historical
financial information has been prepared in accordance with the HKFRSs issued by the
HKICPA.
The following discussion and analysis contain forward-looking statements that reflect
our current views with respect to future events a nd financial performan ce that involve risks
and uncertainties. These statements are based on assumptions and analysis made by us in
light of our experience and perception of historical events, current conditions and expected
future developments, as well as other factors we believe are appropriate under the
circumstances. However, our actual results and the timing of selected events could differ
materially from those anticipated in these forward-looking statements as a result of various
factors, including those set forth under the section headed ‘‘Risk Factors’’ and elsewhere in
this Prospectus.
OVERVIEW
We are a recreational vehicle enterprise with an extensive presence in Australasia that
designs, develops, manufactures and sells bespoke towable RVs, commanding the
second-largest market share in Australasia’s RV industry in terms of both revenue and
sales volume in 2023, according to Frost & S ullivan. With our capabilities in product
research and development, manufacturing and sales and distribution, we design every
aspect of our RV owners’ user experience from conceptualization to ownership. We design
and manufacture our RVs with emphasis on c omfortability, safety and functionality,
creating mobile homes that can address RV owners’ needs for both extra physical and
mental space. Our capabilities span the enti re RV industry value chain, encompassing
visionary design, refined manufacturing, lo calized sales and distribution, and auxiliary
after-sales services. We pride ourselves on our commitment to customization, offering a
made-to-order service for our owners to personalize various aspects of their RV.
Our revenues continued to grow during the Track Record Period. We achieved
revenues of RMB299.7 million in 2021, RMB 498.8 million in 2022, and RMB720.3 million
in 2023, with corresponding gross profit margins of 16.7%, 16.5% and 25.1% for those
years, respectively. Our revenues increas ed from RMB309.5 million for the six months
ended June 30, 2023 to RMB422.0 million for the six months ended June 30, 2024, with
corresponding gross profit margins of 23.1% and 32.0% for those periods. Our net profits
were RMB25.1 million in 2021, RMB33.0 million in 2022, and grew significantly to
RMB78.8 million in 2023. Our net profit increased from RMB31.6 million for the six
months ended June 30, 2023 to RMB40.4 million for the six months ended June 30, 2024.
Our adjusted net profit (non-HKFRS meas ure) was RMB25.1 million, RMB33.0 million,
RMB78.8 million and RMB55.7 million in 2021, 2022 and 2023 and for the six months
ended June 30, 2024, respectively.
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BASIS OF PREPARATION AND PRESENTATION OF THE HISTORICAL
FINANCIAL INFORMATION
Our Company is an investment holding company and have not carried on any business
since the date of our incorporation, save for the corporate reorganization as described
below. Our Group are principally engaged in the manufacturing and exporting the RVs to
Australia and selling RVs through dealership and stores in Australia and New Zealand.
During the Track Record Period, our business was conducted through various entities
controlled by Controlling Shareholders. To rationalize the corporate structure in
preparation of the listing of our shares on Hong Kong Stock Exchange, our Group
underwent a reorganization as detailed in the section headed ‘‘History, Reorganization and
Corporate Structure’’ in this Prospectus. Upon completion of the Reorganization, our
Company became the holding company of our Group. As our business was ultimately
controlled by Controlling Shareholders duri ng the Track Record Period and both before
and after the Reorganization, the control is not transitory and consequently and there was a
continuation of the risks and benefits to Cont rolling Shareholders. The Reorganization is
therefore treated as a combination of businesses under common control.
Accordingly, the historical financial in formation has been prepared and presented
using the merger basis of accounting as if the current structure of our Group had been in
existence and remained unchanged throughout the Track Record Period. The consolidated
statements of profit or loss and other comprehe nsive income, the consolidated statements of
changes in equity and the consolidated statements of cash flows of our Group include the
financial performance and cash flows of our business for the Track Record Period. The
consolidated statements of financial position of our Group as of December 31, 2021, 2022
and 2023 and June 30, 2024 have been prepared to present the financial position of our
business as of those dates. The assets and lia bilities of our business have been measured at
their carrying amounts prior to the Reorganization. Intra-group balances, transactions and
unrealized gains/losses on int ra-group transactions were e liminated when preparing the
historical financial information.
During the Track Record Period and before the completion of the Reorganization, our
certain manufacturing activities were carried out by two entities that were under common
control of Controlling Shareholders, which did not become part of our Group upon the
completion of the Reorganization. For the purpose of the Accountants’ Report in Appendix
I to this Prospectus, a process has been complete d to specifically identify assets, liabilities,
revenue, expenses and cash flows of those two entities associated with our business during
the Track Record Period in preparing the historical financial information. The historical
financial information only includes transactions and balances that are attributable to our
business. Since the manufacturing activities were conducted as a division of the two entities
before the Reorganization, the net parent inve stment, representing the net assets related to
the Listing Businesses which were managed a nd controlled by these two entities, has been
shown in lieu of shareholders’ equity in the historical financial information. For more
details, see ‘‘Basis of Preparation and Presentation of the Historical Financial Information’’
to the Accountants’ Report in Appendix I to this Prospectus.
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Our historical financial information h as been prepared in accordance with all
applicable HKFRSs, which colle ctive term includes all applicable individual HKFRSs,
HKASs and Interpretations issued by HKICPA.
The HKICPA has issued a number of new and revised HKFRSs. For the purpose of
preparing this historical financial information, we have consistently adopted all applicable
new and revised HKFRSs that are effective dur ing the Track Record Period, except for any
new standards or interpretations that are n ot yet effective for the Track Record Period.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business, results of operations and financial condition have been, and are expected
to continue to be, affected by a number of factors, including those set out below and in the
section headed ‘‘Risk Factors’’ in this Prospectus.
General factors
Our results of operations are affected by general factors affecting the overall economic
growth and level of per capita disposable income, the consumption willingness of residents
i nt h er e g i o n sw h e r ew eo p e r a t e ,f l u c t u a t i o nin currency exchange rates between our main
transaction currencies and foreign currencies used in these regions, raw material and
transportation costs, the flourishing development of leisure and cultural tourism in our
target markets, and the competitive landscape of the RV industry both globally and
regionally.
Specific factors
Our results of operations are also primarily and more directly affected by the following
specific factors:
Investments in expansion and renewal of our product collection
We have been continuously rejuvenating and broadening our product collection to
attract customers and drive sales. For the three years ended December 31, 2023 and for the
six months ended June 30, 2023 and 2024, we had research and development expenses of
RMB2.8 million, RMB5.1 million, RMB8.0 million, RMB4.0 million and RMB5.6 million,
respectively, in connection with our product development, upgrade, and innovation.
Our product offering is currently showcased u nder three distinctive brands, namely the
mid-end and top-selling brand, Snowy Riv er, the luxury brand, Regent, and the
semi-off-road brand, NEWGEN. Envision ing our RV owners who seek to live, holiday
or travel in the RVs, we offer towable RVs ranging from family-friendly models for family’s
recreational use, compact models for adventurers, slide-out models for those who crave
additional space in their RVs, to multi-terr ain models for the ultimate semi-off-road
adventure. Additionally, we are currently bu ilding a trailblazing model of towable ERV
which we anticipate to commence delivery in Australasia by the first quarter of 2025. We
intend to continue our investments in rejuvenating and broadening our product collection
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in the coming years, which we believe is essential for preserving the appeal of our product
offerings, thereby serving as a key driver for sustaining the growth of our business. See
‘‘Business — Our Strategies.’’
Our ability to continuously expand our sales and distribution network and execute effective
sales and marketing strategies
Effective execution of our sales and marketing strategies are critical to our sales
growth. As of June 30, 2024, we had built a dynamic, multifaceted sales and distribution
network, leveraging a combination of three distinct channels: (i) a robust and extensive
network of 13 third-party dealer stores in Australasia; (ii) two self-owned stores in
Australia alongside online official websites; a nd (iii) four JV stores with our JV partners.
We will continue to increase the number of stores to expand our brick-and-mortar sales and
service network across Australia and New Zealand, strengthening network effect and
synergy within our Group, which could in turn attract new customers, increase our revenue
base and enhance our operating efficiency.
Expansion of our sales and distribution network, either through cooperating with
third-party dealerships or establishing ne w self-owned stores and JV stores, involves
significant investment. In particular, our operating results could be influenced by the timing
of opening new self-owned stores and JV stores and the number of these new stores, given
that new stores generally have lower income and higher operating costs during the initial
stages of their operations. Our profitabili ty is also subject to various other factors,
including our ability to build and maintain strong relationships with new and existing
dealerships to promote and sell our RVs effectively.
We also actively engage in targeted marketing through a variety of other channels,
including online promotions and offline events, including sponsorships, participation in RV
shows and special events, advertisement pla cements, digital and social media marketing,
and cooperation with brand ambassadors and celebrities. For the three years ended
December 31, 2023 and for the six months ended June 30, 2023 and 2024, we incurred selling
and distribution expenses of RMB6. 5 million, RMB19.3 million, RMB41.5 million,
RMB17.3 million and RMB32.2 million, respectively, representing 2.2%, 3.9%, 5.8%,
5.6% and 7.6% of our revenues during the respect ive periods. We believe these initiatives
further enhance our customer engagement, while promoting brand loyalty in the process,
which contributes to more recurring business as well as brand advocacy by our customers.
We intend to continue investing in these marketing efforts.
Our ability to control costs and improve operational efficiency
Our results of operations and financial co nditions depend on our ability to manage our
costs and expenses and improve our operational efficiency. Our cost of sales consists of cost
of raw materials, staff costs, shipping and handling expenses, as well as overhead.
We aim to improve operating efficiency in every aspect of our business, such as
product development, supply chain, manufacturing, as well as sales and marketing. For
instance, we have strategically built a robust s ales and distribution network leveraging a
combination of third-party dealerships, self -owned stores and JV stores, which allows us to
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expand our sales and distribution network while mitigating substantial overhead costs.
Furthermore, our supply chain affects our cost of sales and gross margin, and we expect
ongoing reductions in the bill-of-material cos t of components and parts on a per-unit basis,
as we scale up production volume and realize economies of scale. We also focus on
enhancing efficiency in the manufacturing process, taking advantage of the strategic
distribution of our manufacturing operatio ns across production facilities in Zhejiang,
China and assembly lines in Melbourne, Australia.
Moreover, our shipping and handling expenses constitute a significant component of
our costs. We generally partner with third-party logistics service providers for the
transportation of our RVs. Accordingly, global and local dynamics within the logistics
landscape, including fluctuations in freight capacities and prices, regional differences in
infrastructure and labor ava ilability, and other broader ind ustry challenges or specific
issues affecting these third-party logistics pr oviders, can influence our logistics processes
and associated costs. In additi on, these issues could impact our ability to plan our pricing
effectively.
According to Frost & Sullivan, shipping pri ces globally, as well as for major shipping
routes, such as from China to Australasia, reached the all-time highs during 2021 and 2022,
as a result of the disruption to global supply chains caused by COVID-19. Since 2022, the
effects of COVID-19 have gradually diminished and shipping prices have started to
normalize, returning to pre-pandemic lev els in mid-2023. We recorded shipping and
handling expenses of RMB27.7 million, RM B55.3 million, RMB20.3 million, RMB8.3
million and RMB18.9 million for the three years ended December 31, 2023 and for the six
months ended June 30, 2023 and 2024, respectively, primarily attributable to the higher
levels of shipping prices due to the disruption to global supply chain caused by COVID-19.
Foreign exchange rate fluctuations
We are primarily subject to the effect of fluctuations in foreign exchange rates
concerning the Australian dollars relative to Renminbi. Our historical financial information
is presented in Renminbi, our presentation currency. For each Group entity, items included
in its financial statements are generally recorded in the currency of the country where such
Group entity operates, which may be, among others, Australian dollars or, to a nominal
extent, New Zealand dollars. Our financial information as expressed in Renminbi may be
significantly affected by fluctuations in foreig n exchange rates, primarily in relation to the
Australian dollars. As a result, the figures m ay vary, either increasing or decreasing,
compared to what would be expected if excha nge rates were stable. See ‘‘Risk Factors —
Risks Relating To Our Business and Our Industry — Exchange rate fluctuations may
adversely affect our business’’.
HISTORICAL IMPACT OF THE COVID-19 PANDEMIC
Since the end of December 2019, the outbreak of a novel strain of coronavirus, or
COVID-19, has affected the global economy. In response to the COVID-19 pandemic,
including the recurrence of the Omicron variant of COVID-19 since the end of 2021 across
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the world, governments had implemented numerous measures to contain the spread of the
virus, including mandatory quarantine, closu re of workplaces and facilities, travel bans and
restrictions and stay-at-home orders.
We encountered various challenges due to the impact of the COVID-19. For instance,
certain of our employees were subject to quaran tine requirements imposed on particular
areas and were not allowed to work onsite due to pandemic prevention and control policies
during the Track Record Period. In addition, the global shipping and logistics systems have
been negatively affected resulting from the special or temporary restrictions or closings of
facilities or transportation networks by gove rnments in response to the pandemic, which
resulted in the increases in our s hipping and handling expenses.
Despite the impact mentioned above, neither our operations nor our financial
performance was materially and adversely affected by the COVID-19 pandemic during
the Track Record Period. Moreover, as th e global economy recovers post-pandemic,
consumers are expected to have more disposable income for leisure and travel expenditures,
and are motivated to subscribe to premium product and service offerings and an enhanced
traveling experience in exchange for enhan ced travel experiences, expanded space and
additional privacy and comfort. According to Frost & Sullivan, the Australasian RV
market saw significant growth between 2021 and 2023, particularly notable in 2022, driven
by a remarkable 9.2% increase for imported RVs. In addition, our revenues increased by
66.4% from RMB299.7 million in 2021 to RMB4 98.8 million in 2022, and further increased
by 44.4% to RMB720.3 million in 2023, with corre sponding gross profit margins of 16.7%,
16.5% and 25.1% for those years, respectively. Our revenues increased from RMB309.5
million for the six months ended June 30, 2 023 to RMB422.0 million for the six months
ended June 30, 2024, with corresponding gross profit margins of 23.1% and 32.0% for those
periods. In 2021, 2022 and 2023 and for the six months ended June 30, 2024, we delivered an
aggregate of 1,330, 2,127, 2,694 and 1,427 RVs to our customers, respectively, representing
an increase of 59.9% from 2021 to 2022 and 26.7% from 2022 to 2023.
MATERIAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES
We prepare our consolidated financial information in accordance with HKFRSs,
which requires us to make judgments, estimates and assumptions that affect the application
of policies and reported amounts of asset s, liabilities, income and expenses. We
continuously evaluate these estimates a nd assumptions based on the most recently
available information, our own historical experiences and on various other assumptions
t h a ta r eb e l i e v e dt ob er e a s o n a b l eu n d e rt h ecircumstances, the results of which form the
basis for making judgments ab out the carrying values of assets and liabilities that are not
readily apparent from other sources. As the use of estimates is an integral component of the
financial reporting process, actual results in subsequent financial reporting that differ from
estimates could result in deviations from previous financial reporting. We consider the
policies and estimates discussed below to be critical to an understanding of our consolidated
financial information as their application places the most significant demands on our
management’s judgment. For details of our material accounting policies and accounting
judgments and estimates, see Notes 2 and 3 to the Accountants’ Report in Appendix I to
this Prospectus.
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Material Accounting Policies
Revenue and Other Income
Income is classified by us as revenue when it arises from the sale of goods, the
provision of services or the use by others of our assets under lease in the ordinary course of
our business.
Revenue is recognized when control over a product or service is transferred to the
customer at the amount of promised considera tion to which we are expected to be entitled,
excluding those amounts collected on behalf of third parties such as value added tax or
other sales taxes.
Further details of our revenue and other income recognition policies are as follows:
Sale of Goods
We are principally engaged in the manufacturing and sale of RVs and parts. Revenue
from sale of RVs and parts is recognized at the point in time when we transfer control over
a product to the customer at the amount of promised consideration to which we are
expected to be entitled, excluding those amounts collected on behalf of third parties. We
offer warranties for our products for up to five years from the date of sale.
Revenue from Rendering of Services
Revenue from rendering of services is brought as income when the performance
obligation has been satisfied, which is when the related services have been provided.
Interest income
Interest income is recognized using the effective interest method. The ‘‘effective interest
rate’’ is the rate that exactly discounts estima ted future cash receipts through the expected
life of the financial asset to the gross carrying a mount of the financial asset. In calculating
interest income, the effective interest rat e is applied to the gross carrying amount of the
asset (when the asset is not credit-impaired). However, for financial assets that have become
credit-impaired subsequent to initial recognition, interest income is calculated by applying
the effective interest rate to the amortized cost of the financial asset. If the asset is no longer
credit-impaired, then the calculation of in terest income reverts to the gross basis.
Government grants
Government grants are recognized in the consolidated statements of financial position
initially when there is reasonable assuran ce that they will be received and that we will
comply with the conditions attaching to them.
Grants that compensate us for expenses incurred are recognized as income in profit or
loss on a systematic basis in the same per iods in which the expenses are incurred.
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Income from financial guarantees issued
Income from financial guarantees issued is r ecognized over the terms of the guarantees.
Income from financial guarantees issued derives from guarantee we provide to our
Financing Partner under the floor-plan finance arrangement that in the event of default by
the sales channel operators, we are required to repurchase the RV from the Financing
Partner. During the Track Record Period and as of the Latest Practicable Date, there was
no default by the sales channel operators. Therefore, this repurchasing obligation had never
been invoked. For more details, see ‘‘Busi ness — Sales and Distribution — Financing
Arrangements.’’
We began providing such guarantee in 2022. The maximum amounts of the guarantee
issued were RMB8.2 million, RMB27.5 mill ion and RMB20.6 million as of December 31,
2022 and 2023 and June 30, 2024, respectively. We monitor the risk of defaults based on
information provided by the Financing Partner and adjust the guarantee liability at the end
of each reporting period based on informatio n reasonably available at that time. As the
estimated likelihood of the default is remote and the recovery from the collateral can cover
the expected cash outflow from guarant ee, the guarantee liability is minimum.
Plant and Equipment
Plant and equipment are stated at cost less accumulated depreci ation and impairment
losses.
If significant parts of an item of plant and equipment have different useful lives, then
they are accounted for as separa te items (major components).
A n yg a i no rl o s so nd i s p o s a lo fa ni t e mo fp l ant and equipment is recognized in profit
or loss.
Depreciation is calculated to write off the cost or valuation of items of plant and
equipment less their estimated residual values, if any, using the straight-line method over
their estimated useful lives, and is ge nerally recognized in profit or loss.
The estimated useful lives in the historica l financial information are as follows:
Machinery and equipment 5–10 years
Office equipment and furniture 3–5 years
Motor vehicles 4 years
Depreciation methods, useful lives and resid ual values are reviewed at each reporting
date and adjusted if appropriate.
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Leased Assets
At inception of a contract, we assess whether the contract is, or contains, a lease. This
is the case if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. Control is conveyed where the customer has
both the right to direct the use of the identified asset and to obtain substantially all of the
economic benefits from that use.
Where the contract contains lease component(s) and non-lease component(s), we have
elected not to separate non-lease componen ts and accounts for each lease component and
any associated non-lease components as a single lease component for all leases.
At the lease commencement date, we recogni ze a right-of-use asset and a lease liability,
except for short-term leases that have a lea se term of 12 months or less, and leases of
low-value items such as laptops and office fur niture. When we enter into a lease in respect
of a low-value item, we decide whether to capitalize the lease on a lease-by-lease basis. If
not capitalized, the associated lease paym ents are recognized in profit or loss on a
systematic basis over the lease term.
Where the lease is capitalized, the lease lia bility is initially recognized at the present
value of the lease payments payable over the lease term, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, using a relevant
incremental borrowing rate. After initial r ecognition, the lease liability is measured at
amortized cost and interest expense is recognized using the effective interest method.
Variable lease payments that do not depend on an index or rate are not included in the
measurement of the lease liability, and a re charged to profit or loss as incurred.
The right-of-use asset recognized when a le ase is capitalized is initially measured at
cost, which comprises the initial amount o f the lease liability adjusted for any lease
payments made at or before the commencement d ate, plus any initial direct costs incurred
and an estimate of costs to dismantle and re move the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease incentives received. The
right-of-use asset is subsequently stated at cost less accumulated depreciation and
impairment losses.
Refundable rental deposits are accounted fo r separately from the right-of use assets in
accordance with the accounting policy applicab le to investments in non-equity securities
carried at amortized cost. Any excess of the nominal value over the initial fair value of the
deposits is accounted for as additional lease payments made and is included in the cost of
right-of-use assets.
The lease liability is remeasured when there is a change in future lea se payments arising
from a change in an index or rate, if there is a change in our estimate of the amount
expected to be payable under a residual value guarantee, or if we change our assessment of
whether we will exercise a purchase, extension or termination option. When the lease
liability is remeasured in this way, a corres ponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of
the right-of-use asset h as been reduced to zero.
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The lease liability is also remeasured when t here is a lease modification, which means a
change in the scope of a lease or the consideration for a lease that is not originally provided
for in the lease contract, if such modification is not accounted for as a separate lease. In this
case, the lease liability is remeasured based on the revised lease payments and lease term
using a revised discount rate at the effective d ate of the modification. The only exceptions
are rent concessions that occurred as a direct consequence of the COVID-19 pandemic and
met the conditions set out in paragraph 46B of HKFRS 16 Leases. In such cases, we have
taken advantage of the practical expedient n ot to assess whether the rent concessions are
lease modifications, and recognized the change in consideration as negative variable lease
payments in profit or loss in the period in which the event or condition that triggers the rent
concessions occurred.
In the consolidated statement of financial position, the current portion of long-term
lease liabilities is determined as the present value of contractual payments that are due to be
settled within twelve months after the reporting period.
Inventories
Inventories are assets which are held for sale in the ordinary course of business, in the
process of production for such sale or in the form of materials or supplies to be consumed in
the production process or in the rendering of services.
Inventories are carried at the lower of cost and net realizable value.
Cost is calculated using the weighted average cost formula and comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their
present location and condition.
Net realizable value is the estimated selling price in the ordinary course of business less
the estimated costs of completion and the estimated costs necessary to make the sale.
When inventories are sold, the carrying amount of those inventories is recognized as an
expense in the period in which the related revenue is recognized.
The amount of any write-down of inventories to net realizable value and all losses of
inventories are recognized as an expense in the period the write-down or loss occurs. The
amount of any reversal of any write-down of inventories is recognized as a reduction in the
amount of inventories recognized as an expense in the period in which the reversal occurs.
Employee benefits
Short-term employee benefits and contributions to defined contribution retirement plans
Short-term employee benefits are expensed as the related service is provided. A liability
is recognized for the amount expected to be pa id if we have a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
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Obligations for contributions to defined contribution retirement plans are expensed as
the related service is provided.
Termination benefits
Termination benefits are expensed at the e arlier of when we can no longer withdraw the
offer of those benefits and when we recognize costs for a restructuring.
Provisions and conti ngent liabilities
Generally, provisions are determined by disc ounting the expected future cash flows at
a pre-tax rate that reflects current market a ssessment of the time value of money and risks
specific to the liability.
A provision for warranties is recognized when the underlying products or services are
sold, based on historical warranty data and a w eighting of possible outcomes against their
associated probabilities.
A provision for onerous contracts is measured at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of continuing with the
contract, which is determined based on the in cremental costs of fulf illing the obligation
under that contract and an allocation of othe r costs directly related to fulfilling that
contract. Before a provision is established, our Group recognizes any impairment loss on
the assets associated with that contract.
Where some or all of the expenditure required to settle a provision is expected to be
reimbursed by another party, a separate asset i s recognized for any expected reimbursement
that would be virtually certa in. The amount recognized for t he reimbursement is limited to
the carrying amount of the provision.
Translation of Foreign Currencies
Transactions in foreign currencies are tr anslated into the respective functional
currencies of group companies at the exchan ge rates at the dates of the transactions.
Monetary assets and liabilitie s denominated in foreign currencies are translated into
the functional currency at the exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a foreign currency are translated into the
functional currency at the exchange rate when the fair value was determined. Non-monetary
assets and liabilities that are measured base d on historical cost in a foreign currency are
translated at the exchange rate at the date of the transaction. Foreign currency differences
are generally recognized in profit or loss.
The assets and liabilities of foreign oper ations, including goodwill and fair value
adjustments arising on acquisition, are translated into RMB at the exchange rates at the
reporting date. The income and expenses of foreign operations are translated into RMB at
the exchange rates at the dates of the transactions.
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Foreign currency differences are recogni zed in OCI and accumulated in the exchange
reserve, except to the extent that the translation difference is allocated to NCI.
Material Accounting Judgments and Estimates
Impairment of trade and other receivables
Our management determines the loss allowance for expected credit losses on trade and
other receivables based on an assessment of the present value of all expected cash shortfalls.
These estimates are based on the information about past events, current conditions and
forecasts of future economic conditions. Our management reassesses the loss allowance at
each reporting period end.
Net realizable value of inventories
Net realizable value of invento ries is the estimated selling price in the ordinary course
of business, less estimated distribution exp enses and related taxes. These estimates are
based on the current market condition and historical experience of selling products of
similar nature. It could change significantly as a result of competitor actions in response to
changes in market conditions. Any change in the assumptions would increase or decrease
the amount of inventories write-down or the rela ted reversals of write-downs and affect our
profit or loss and net asset value.
Determining the lease term
As explained in policy Note 2(h) to the Accountants’ Report in Appendix I to this
Prospectus, the lease liability is initially recognized at the prese nt value of the lease
payments payable over the lease term. In determining the lease term at the commencement
date for leases that include renewal options exercisable by us, we evaluate the likelihood of
exercising the renewal options taking into acc ount all relevant facts and circumstances that
create an economic incentive for us to exercise the option, including favorable terms,
leasehold improvements undertaken and the importance of that underlying asset to our
operation. The lease term is reassessed when t here is a significant event or significant
change in circumstance that is within our control. Any increase or decrease in the lease term
would affect the amount of lease liabilities and right-of-use assets recognized in future
years.
Income tax
Determining income tax provisions involves judgment on the future tax treatment of
certain transactions. The management carefully evaluates tax implications of transactions
and tax provisions are set up accordingly. The tax treatment of these transactions is
reconsidered periodically to take into account changes in tax legislations. Deferred tax
assets are recognized for deductible temporary differences and cumulative tax losses.
As those deferred tax assets can only be recognized to the extent that it is probable that
future taxable profit will be available again st which they can be utilized, management’s
judgment is required to assess the probability of future taxable profits. Management’s
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assessment is constantly reviewed and additional deferred tax assets are recognized if it
becomes probable that future taxable profits will allow the deferred tax asset to be
recovered.
Warranty provisions
As explained in Note 2(r) to the Accountants’ Report in Appendix I to this Prospectus,
we make provisions under the warranties we give on sale of our RVs taking into account our
recent claim experience. As we are continually upgrading our product designs and
launching new models, it is possible that the recent claim experience is not indicative of
future claims that we will receive in respect of past sales. Any increase or decrease in the
provision would affect profit or loss in future years.
R E S U L T SO FO P E R A T I O N S
The following table sets forth a summary of our consolidated statement of profit or
loss with line items in actual terms and as a percentage of our total revenue for the periods
indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Revenue 299,672 100.0% 498,780 100.0% 720,303 100. 0% 309,526 100.0% 421,973 100.0%
Cost of sales (249,568) (83.3%) (416,536) (83.5%) ( 539,252) (74.9%) (238,145) (76.9%) (287,070) (68.0%)
Gross profit 50,104 16.7% 82,244 16.5% 181,051 25.1% 71,381 23.1% 134,903 32.0%
Other income/(loss) 8,107 2.7% 9,115 1. 8% 14,517 2.0% 7,667 2.5% (2,667) (0.6%)
Selling and distribution expenses (6,479) (2.2%) (19, 316) (3.9%) (41,547) (5.8%) (17,255) (5.6%) (32,184) (7.6%)
Administrative expenses (12,385 ) (4.1%) (21,155) (4.2%) (36,209) (5. 0%) (14,078) (4.5%) (35,605) (8.4%)
Research and development
expenses (2,835) (0.9%) (5,112) (1.0%) (7, 968) (1.1%) (4,010) (1.3%) (5,625) (1.3%)
(Provision)/reversal of impairment
loss on trade receivables (9) (0.0%) (65) (0.0%) 34 0.0% 7 0.0% (21) (0.0%)
Share of profit/(loss) of a joint
venture 912 0.3% 1,083 0.2% 113 0.0% (283) (0.1%) — —
Profit from operations 37,415 12.5% 46,794 9.4% 109,991 15.3% 43,429 14.0% 58,801 13.9%
Finance costs (3,090) (1.0%) (2,533) (0.5%) ( 2,315) (0.3%) (1,079) (0.3%) (4,796) (1.1%)
Profit before taxation 34,325 11.5% 44,261 8.9% 107,676 14.9% 42,350 13.7% 54,005 12.8%
Income tax (9,245) (3.1%) (11,305) (2.3%) (28, 908) (4.0%) (10,702) (3.5%) (13,575) (3.2%)
Profit for the year/period 25,080 8.4% 32,956 6.6% 78,768 10.9% 31,648 10.2% 40,430 9.6%
Attributable to:
Equity shareholders of the
Company 25,080 8.4% 32,956 6.6% 79,973 11.1% 31,648 10.2% 39,532 9.4%
Non-controlling interests — — — — (1,205) (0.2%) — — 898 0.2%
Profit for the year/period 25,080 8.4% 32,956 6.6% 78,768 10.9% 31,648 10.2% 40,430 9.6%
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NON-HKFRS MEASURES
To supplement our consolidated financial statements which are presented in
accordance with HKFRS, we also use adju sted net profit (non-HKFRS measure) as
additional financial measure, which is not r equired by, or presented in accordance with,
HKFRS. We believe that such non-HKFRS measu re facilitates compar isons of operating
performance from period to period and company to company by eliminating potential
impact of certain items.
We believe that adjusted net profit (non-HKFRS measure) provides useful information
to investors and others in understanding and evaluating our consolidated statements of
profit or loss and other comprehensive income in the same manner as they help our
management. However, our presentation of adjusted net profit (non-HKFRS measure) may
not be comparable to similarly titled measure s presented by other companies. The use of
adjusted net profit (non-HKFRS measure) has limitations as an analytical tool, and you
should not consider it in isolation from, or as a substitute of, our consolidated statements of
profit or loss and other comprehensive income or financial performance as reported under
HKFRS.
We define adjusted net profit for the year/period (non-HKFRS measure) as profit for
the year/period adjusted by adding listing expenses.
The following table reconciles our adjusted net profit for the year/period (non-HKFRS
measure) and our profit for the year/period presented in accordance with HKFRS for the
periods indicated:
For the year ended December 31,
For the six months ended
June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands)
Profit for the year/period 25,080 32,956 78,768 31,648 40,430
Add:
Listing expenses
(1) — — — — 15,305
Adjusted net profit for the
year/period (non-HKFRS
measure) 25,080 32,956 78,768 31,648 55,735
Note:
(1) Listing expenses relate to this Global Offering of the Company.
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KEY COMPONENTS OF OUR CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Revenue
During the Track Record Period, we primarily generated revenue from sales of RVs.
For 2021, 2022 and 2023 and for the six months ended June 30, 2023 and 2024, we generated
total revenue of RMB299.7 million, RMB4 98.8 million, RMB720.3 million, RMB309.5
million and RMB422.0 million, respectively.
Revenue breakdown by products
The following table sets forth a breakdown of our revenue by products, both in
absolute amount and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Sale of RVs 298,586 99.6% 498,116 99.9% 710,747 98.7% 309,526 100.0% 396,894 94.1%
— Snowy River 233,273 77.8% 402,690 80.7% 550,175 76.4% 235,517 76.1% 335,096 79.4%
— Regent 35,098 11.7% 49,347 9.9% 84,338 11.7% 35,514 11.5% 26,514 6.3%
— NEWGEN 30,215 10.1% 46,079 9.2% 76,234 10.6% 38,495 12.4% 35,284 8.4%
Sale of pre-owned RVs — — — — 8,691 1.2% — — 23,396 5.5%
Others (1) 1,086 0.4% 664 0.1% 865 0.1% — — 1,683 0.4%
Total 299,672 100.0% 498,780 100.0% 720,303 100. 0% 309,526 100.0% 421,973 100.0%
Note:
(1) Others include revenue generated from sales of RV parts during our provisio n of after-sales services
which are auxiliary to our core business of sales of our RVs.
Revenue breakdown by g eographical markets
The following table sets forth a breakdown of our revenue by geographical markets,
both in absolute amount and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Australia 280,331 93.5% 471,037 94.4% 675,987 93.8% 291,106 94.0% 400,332 94.9%
New Zealand 19,341 6.5% 27,743 5.6% 44,316 6.2% 18,420 6.0% 21,641 5.1%
Total 299,672 100.0% 498,780 100.0% 720,303 100. 0% 309,526 100.0% 421,973 100.0%
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Cost of sales
Our cost of sales consists of cost of raw mater ials, staff costs, shipping and handling
expenses and overhead.
The following table sets for a breakdown of our cost of sales by nature, both in
absolute amounts and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Cost of raw materials 168,099 67.3% 292,263 70.2% 419,556 77.8% 190,470 80.0% 221,371 77.1%
Staff costs 36,666 14.7% 45,054 10.8% 69,999 13.0% 28,350 11.9% 35,536 12.4%
Shipping and handling expenses 27,702 11.1% 55,335 13.3% 20,302 3.8% 8,261 3.5% 18,929 6.6%
Overhead
— Depreciation 1,243 0.5% 2,431 0. 6% 2,633 0.5% 1,215 0.5% 1,441 0.5%
— Depreciation of right-of-use
assets 10,138 4.1% 13,480 3.2% 18, 531 3.4% 5,634 2.4% 5,644 2.0%
— Utilities expenses 1,258 0.5% 1, 498 0.4% 1,915 0.4% 955 0.4% 958 0.3%
—O t h e r s (1) 4,462 1.8% 6,475 1.5% 6,316 1.1% 3,260 1.3% 3,191 1.1%
17,101 6.9% 23,884 5.7% 29,395 5.4% 11,064 4.6% 11,234 3.9%
Total 249,568 100.0% 416,536 100.0% 539,252 100. 0% 238,145 100.0% 287,070 100.0%
Note:
(1) Others primarily include warran ty expenses, office expenses, labor insurance fees and maintenance
expenses.
Gross profit and gross profit margin
Gross profit represents revenue less cost of sales, and gross profit margin represents
gross profit divided by total revenue, expressed as a percentage. For the three years ended
December 31, 2023 and for the six months ended June 30, 2023 and 2024, our gross profit
was RMB50.1 million, RMB82.2 million, RMB181.1 million, RMB71.4 million and
RMB134.9 million, respectively, and our gross profit margin was 16.7%, 16.5%, 25.1%,
23.1% and 32.0% during the same periods.
Other income/loss
Our other income primarily consists of fore ign exchange gain/loss, government grants
and lease modification. For the three years ended December 31, 2023, our other income was
RMB8.1 million, RMB9.1 million, and RMB14.5 million, respectively . For the six months
ended June 30, 2023 and 2024, we recorded oth er income of RMB7.7 million and other loss
of RMB2.7 million, respectively.
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The following table sets forth a breakdown of our other income, both in absolute
amounts and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Interest income 1 0.0% 8 0.1% 39 0.3% 18 0.2% 26 0.9%
Government grants 1,103 13.6% 1,603 17.6% — — — — — —
Net loss on sale of equipment — — (617) (6.8%) — — — — (25) (0.9%)
Lease modification
(1) 6,704 82.7% — — — — — — — —
Foreign exchange gain/(loss) (2) 98 1.2% 7,544 82.8% 14,017 96.5% 7, 772 101.4% (2,464) (92.4%)
Others 201 2.5% 577 6.3% 461 3.2% (123) (1.6%) (204) (7.6%)
Total 8,107 100.0% 9,115 100.0% 14,517 100.0% 7,667 100.0% (2,667) 100.0%
Note:
(1) In 2018, we entered into a five-year lease agreement for our production facilities in Australia, with an
option to extend the term for up to an additional fiv e years upon its expiration. We later decided to
relocate our production facilities to a larger loc ation to accommodate our future business expansion.
Consequently, in June 2021, we decided to partially ex ercise the extension option, extending the lease term
by one additional year. Since the overall lease term was shortened from ten years to six years, we
recognized a lease modification of RMB6.7 million in 2021.
(2) Our foreign exchange gains/(loss) derive from the sales of RVs by our operating entities in the PRC
primarily conducted in Australian dollars in the ord inary and usual course of our business. It is recorded
when there is a change in the exchange rate between Australian dollars and Renminbi during the period
between the sale and settlement. Our foreign exchan ge gain/(loss) consists of both realized gains/(loss)
from completed transactions and unrealized gains/(lo ss), reflecting the antici pated gains/(loss) from
pending settlements.
Selling and distribution expenses
Our selling and distribution expenses primar ily consist of staff costs and advertising
and promotion expenses. For the three years ended December 31, 2023 and for the six
months ended June 30, 2023 an d 2024, our selling and distribution expenses were RMB6.5
million, RMB19.3 million, RMB41.5 million, RMB17.3 million and RMB32.2 million,
respectively.
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The following table sets forth a breakdown o f our selling and distribution expenses,
both in absolute amounts and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Staff costs 2,833 43.7% 7,372 38.2% 17,322 41.7% 6,229 36.1% 14,811 46.0%
Advertising and promotion
expenses 3,457 53.4% 10,618 55.0% 18,230 43.9% 9,361 54.3% 10,750 33.4%
Travel expenses 29 0.5% 344 1.8% 1,501 3.6% 650 3.8% 1,250 3.9%
Depreciation and amortization
expenses 21 0.3% 240 1.2% 1,079 2.6% 372 2.2% 2,820 8.8%
Office expenses 126 1.9% 708 3. 7% 1,903 4.6% 367 2.1% 1,241 3.9%
Others
(1) 13 0.2% 34 0.1% 1,512 3.6% 276 1.5% 1,312 4.0%
Total 6,479 100.0% 19,316 100.0% 41,547 100. 0% 17,255 100.0% 32,184 100.0%
Note:
(1) Others primarily include utiliti es expenses and insurance fees.
Administrative expenses
Our administrative expenses primarily consis t of staff costs, professional services and
office expenses. For the three years ended D ecember 31, 2023 and for the six months ended
June 30, 2023 and 2024, our administrativ e expenses were RMB12.4 million, RMB21.2
million, RMB36.2 million, RMB14.1 million and RMB35.6 million, respectively.
The following table sets forth a breakdown of our administrative expenses, both in
absolute amounts and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Staff costs 8,609 69.5% 15,551 73.5% 24,990 69.0% 9,361 66.5% 12,925 36.3%
Professional services 477 3.9% 1,154 5.5% 946 2.6% 588 4.2% 253 0.7%
Recruitment expenses 700 5.7% 614 2.9% 1,638 4.5% 668 4.7% 954 2.7%
Depreciation and amortization
expenses 330 2.7% 704 3.3% 1,244 3.4% 564 4.0% 586 1.6%
Office expenses 1,009 8.1% 1,198 5. 7% 2,864 7.9% 1,414 10.0% 3,334 9.4%
IT expenses — — 395 1.9% 1,575 4.3% 578 4.1% 760 2.1%
Travel expenses 648 5.2% 737 3. 5% 1,729 4.9% 491 3.5% 799 2.2%
Listing expenses — — — — — — — — 15,305 43.0%
Others
(1) 612 4.9% 802 3.7% 1,223 3.4% 414 3.0% 689 2.0%
Total 12,385 100.0% 21,155 100.0% 36,209 100. 0% 14,078 100.0% 35,605 100.0%
Note:
(1) Others primarily include security fees , cleaning fees and utilities expenses.
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Research and development expenses
Our research and development expenses prima rily consist of staff costs. For the three
years ended December 31, 2023 and for the six months ended June 30, 2023 and 2024, our
research and development expenses were RMB2.8 million, RMB5.1 million, RMB8.0
million, RMB4.0 million and RMB5.6 million, respectively.
The following table sets forth a breakdown of our research and development expenses,
both in absolute amounts and as a percentage, for the periods indicated.
For the year ended December 31, For the six months ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands, except for percentages)
Staff costs 2,782 98.1% 4,756 93.0% 7,826 98.2% 3,973 99.1% 5,216 92.7%
Others (1) 53 1.9% 356 7.0% 142 1.8% 37 0.9% 409 7.3%
Total 2,835 100.0% 5,112 100.0% 7,968 100. 0% 4,010 100.0% 5,625 100.0%
Note:
(1) Others primarily include costs of materials used for research and development projects.
Impairment loss on trade receivables
O u ri m p a i r m e n tl o s so nt r a d er e c e i v a b l es represents provisions or reversals of
impairment of trade receivables. We recorded a provision of impairment loss on trade
receivables of RMB9,000 and RMB65,000 in 2021 and 2022, respectively, and a reversal of
impairment loss on trade receivables of RMB34,000 in 2023, in line with the trend in trade
receivables. We had a reversal of impairment loss on trade receivables of RMB7,000 for the
six months ended June 30, 2023 and a provision of impairment loss on trade receivables of
RMB21,000 for the six months ended June 30, 2024, respectively. We typically grant our
dealers a credit term of 21 days and, in the eve nt that they choose the floor-plan finance
arrangement offered by our Financing Partner, they are given a credit term of 90 days.
Impairment loss on trade receivables is associated with trade receivables that remain
unsettled by applying the expected credit loss model following applicable accounting
standards.
Share of profit/loss of a joint venture
Our share of profit/loss of a joint venture represents our share of profit/loss from
Leisure Lion before it became one of our subsidiaries in September 2023. For the three
years ended December 31, 2023, our share of profit of a joint venture was RMB0.9 million,
RMB1.1 million and RMB0.1 million, respectivel y. For the six months e nded June 30, 2023,
our share of loss of a joint venture was RMB0.3 million. Our share of profit/loss of a joint
venture was nil for the six months ended June 30, 2024 because Leisure Lion has become
one of our subsidiaries since September 2023.
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Finance costs
Our finance costs primarily consist of inter est expense on lease liabilities and interest
on loans and borrowings. For the three years ended December 31, 2023 and for the six
months ended June 30, 2023 and 2024, our fi nance costs were RMB3.1 million, RMB2.5
million, RMB2.3 million, RMB1.1 million and RMB4.8 million, respectively.
Profit before taxation
We had profit before taxation of RMB34.3 million, RMB44.3 million, RMB107.7
million, RMB42.4 million and RMB54.0 million, for the three years ended December 31,
2023 and for the six months ended Jun e 30, 2023 and 2024, respectively.
Income tax
Income tax consist of current income tax and deferred income tax. For the three years
ended December 31, 2023 and for the six months ended June 30, 2023 and 2024, we recorded
income tax expenses of RMB9.2 million, RMB11.3 million, RMB28.9 million, RMB10.7
million and RMB13.6 million, respectively.
Our effective income tax rate, calculated by d ividing total income tax by profit before
taxation, was 26.9%, 25.5%, 26.8%, 25.3% a nd 25.1% for the three years ended December
31, 2023 and for the six months ended June 30, 2023 and 2024.
Taxation
We are subject to various rates of income tax under different jurisdictions. The
following summarizes the major factors aff e c t i n go u ra p p l i c a b l et a xi nH o n gK o n g ,P R C
and Australia, which we believe are significant.
PRC
The income tax provision of us in respect of our operations in the PRC was subject to
statutory tax rate of 25% on the assessable profits during the Track Record Period based on
the existing legislation, interpretation and practices in respect thereof.
According to the New Corporate Income Tax Law (‘‘ New EIT Law ’’), beginning
January 1, 2008, distribution of profits earn ed by companies in mainland China since
January 1, 2008 to foreign investors is subject to withholding tax of 5% or 10%, depending
on the country of incorporation of the foreign i nvestor, upon the distribution of profits to
overseas-incorporated immediate holding companies.
We do not have any plan in the foreseeable future to require our subsidiaries in
mainland China to distribute their retained e a r n i n g sa n di n t e n dt or e t a i nt h e mt oo p e r a t e
and expand their business in mainland China. A ccordingly, no deferred income tax liability
related to withholding tax in mainland China on undistributed earnings was accrued as of
the end of each Track Record Period.
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Hong Kong
Entities incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of
16.5% for taxable income earned in Hong Kong before April 1, 2018. Starting from the
financial year commencing on April 1, 2018, th e two-tiered profits tax regime took effect,
under which the tax rate is 8.25% for assessable profits on the first HK$2 million and
16.5% for any assessable profits in exces s of HK$2 million. No provision for Hong Kong
profits tax was made as we had no estimated assessable profit that was subject to Hong
Kong profits tax during the Track Record Period.
Australia
An Australian tax resident company is s ubject to income tax on its non-exempt
worldwide income. A foreign tax resident company is subject to Australian income tax only
on Australian sourced income. The Australian company tax rate is currently 30%. Income
of non-resident companies from Australian s ources is similarly taxable at the company tax
rate if it is not subject to any withholding tax or treaty protection. However, a company
that is tax resident of a country that has a double tax agreement with Australia, not
operating in Australia through a permanent establishment is generally subject to tax only
on Australian sourced passive income, such as rent, interest, royalties and dividends.
Companies incorporated in Aus tralia are generally reside nts of Australia for income
tax purposes. If a company is carrying on business in Australia with either their central
management and control in Australia or their voting power controlled by Australian
residents, the company can be considered as Australian resident for tax purposes.
Our subsidiaries established in Australia are subject to the standard income tax rate of
30% on their taxable income during the Track Record Period, in accordance with the
relevant Australia Income Tax Assessment Act.
Profit for the year/period
As a result of the foregoing, our profit for the year/period was RMB25.1 million,
RMB33.0 million, RMB78.8 million, RMB31.6 million and RMB40.4 million for the three
years ended December 31, 2023 and for the six months ended June 30, 2023 and 2024,
respectively.
PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS
Year Ended December 31, 2021 Compar ed to Year Ended December 31, 2022
Revenue
Our total revenue increased by RMB199.1 million, or 66.4%, from RMB299.7 million
in 2021 to RMB498.8 million in 2022, primarily driven by revenue generated from sales of
RVs. Our revenue generated from sales of RVs increased by RMB199.5 million, or 66.8%,
from RMB298.6 million in 2021 to RMB498.1 m illion in 2022, primarily due to the increase
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in sales volume of RVs from 1,330 units in 2021 to 2,127 units in 2022, mainly driven by
increased demand for our products as we have been continuously expanding our sales and
distribution network and renewing and broadening our collection of RVs.
Cost of sales
Our cost of sales increased by RMB167.0 million, or 66.9%, from RMB249.6 million in
2021 to RMB416.5 million in 2022, primarily du e to (i) an increase in cost of raw materials
relating to our increased purchase of certain critical RV components and key raw materials,
such as interior and exterior parts and mater ials including electric appliance, doors and
awnings, plumbing fixtures, and substrates, in line with our business growth, and (ii) an
increase in shipping and handlin ge x p e n s e sa sar e s u l to ft h eh i g h e rl e v e l so fs h i p p i n gp r i c e s
due to the disruption to global supply chains caused by COVID-19.
Gross profit and gross profit margin
As a result of the foregoing, our gross profit increased by RMB32.1 million, or 64.1%,
from RMB50.1 million in 2021 to RMB82.2 million in 2022. Our gross profit margin
decreased from 16.7% in 2021 to 16.5% in 2022, primarily because cost of sales grew at a
faster pace than revenue, driven by an increase in shipping and handling expenses amid
COVID-19.
Other income
Our other income increased by RMB1.0 m illion, or 12.4%, from RMB8.1 million in
2021 to RMB9.1 million in 2022, primarily due to (i) an increase in foreign exchange gain of
RMB7.4 million, and (ii) an increase in gove rnment grants of RMB0.5 million in 2022;
partially offset by a lease modification of RMB6.7 million we incurred in 2021. In 2018, we
entered into a five-year lease agreement for ou r production facilities in Australia, with an
option to extend the term for up to an additional five years upon its expiration. We later
decided to relocate our product ion facilities to a larger locati on to accommodate our future
business expansion. Consequently, in June 2021, we decided to partially exercise the
extension option, extending the lease term by one additional year. Since the overall lease
term was shortened from ten years to six years, we recognized a lease modification of
RMB6.7 million in 2021.
Selling and distribution expenses
Our selling and distribution expenses increased by RMB12.8 million from RMB6.5
million in 2021 to RMB19.3 million in 2022, primarily due to (i) an increase in staff costs as
a result of increased headcounts of selling a nd distribution pers onnel to support our
business growth, and (ii) an increase in advertising and promotion expenses resulting from
our increased marketing efforts, including spon sorships, advertisement placements, online
promotions and offline events, to enhance our brand recognition and acquire customers.
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Administrative expenses
Our administrative expenses increased by RMB8.8 million, or 71.0%, from RMB12.4
million in 2021 to RMB21.2 million in 2022, primarily due to an increase in staff cost as a
result of increased headcounts of administrative personnel to support our business growth.
Research and development expenses
Our research and development expenses i ncreased by RMB2.3 million, or 80.3%, from
RMB2.8 million in 2021 to RMB5.1 million in 2022, primarily due to (i) an increase in staff
costs associated with expanded personnel engaged in product research and development to
support our business growth, and (ii) research and development efforts dedicated to our
towable ERV model.
Impairment loss on trade receivables
We recorded a provision of impairment loss on trade receivables of RMB9,000 and
RMB65,000 in 2021 and 2022, respectively, in line with the trend in trade receivables.
S h a r eo fp r o f i to faj o i n tv e n t u r e
Our share of profit of a joint venture remained relatively stable at RMB0.9 million in
2021 and RMB1.1 million in 2022.
Finance costs
Our finance costs decreased by RMB0.6 million, or 18.0%, from RMB3.1 million in
2021 to RMB2.5 million in 2022, primarily due to a decrease in interest expenses on lease
liabilities in 2022.
Income tax
Our income tax increased by RMB2.1 million, or 22.3%, from RMB9.2 million in 2021
to RMB11.3 million in 2022, in line with our profit growth.
Profit for the year
As a result of the foregoing, our profit for the year increased by RMB7.9 million, or
31.4%, from RMB25.1 million in 2021 to RMB33.0 million in 2022.
Year Ended December 31, 2022 Compar ed to Year Ended December 31, 2023
Revenue
Our total revenue increased by RMB221.5 million, or 44.4%, from RMB498.8 million
in 2022 to RMB720.3 million in 2023, primarily driven by revenue generated from sales of
RVs.
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Our revenue generated from sale of RVs increased by RMB212.6 million, or 42.7%,
from RMB498.1 million in 2022 to RMB710.7 m illion in 2023, primarily due to the increase
in sales volume of RVs from 2,127 unit in 2022 to 2,694 unit in 2023, in line with our
business growth. Additionally, we recorded revenue from sales of pre-owned RVs of
RMB8.7 million in 2023, see ‘‘Business — Sales and Distribution — Self-owned Stores and
JV Stores’’ for more details.
Cost of sales
Our cost of sales increased by RMB122.7 million, or 29.5%, from RMB416.5 million in
2022 to RMB539.3 million in 2023, primarily due to an increase in cost of raw materials
relating to our increased purchase of certain critical RV components and key raw materials,
such as interior and exterior parts and mater ials including electric appliance, doors and
awnings, plumbing fixtures, and substrates, in line with our business growth; partially offset
by a decrease in shipping and handling expenses. Since 2022, the effects of COVID-19 have
gradually diminished and shipping prices have started to normalize, returning to
pre-pandemic levels in mid-2023.
Gross profit and gross profit margin
As a result of the foregoing, our gross pr ofit increased by RMB98.8 million from
RMB82.2 million in 2022 to RMB181.1 million in 2023. Our gross profit margin increased
from 16.5% in 2022 to 25.1% in 2023, primarily due to (i) the higher shipping and handling
expenses in 2022 as a result of the COVID-19 pandemic, and (ii) the increase in the revenue
contribution of RV models which incorporate enhanced customized options and have
relatively higher gross profit margin.
Other income
Our other income increased by RMB5.4 m illion, or 59.3%, from RMB9.1 million in
2022 to RMB14.5 million in 2023, primarily due to an increase in foreign exchange gain of
RMB6.5 million in 2023; partially offset b y a decrease in government grants of RMB1.6
million in 2023.
Selling and distribution expenses
Our selling and distribution expenses increased by RMB22.2 million from RMB19.3
million in 2022 to RMB41.5 million in 2023, primarily due to (i) an increase in staff costs as
a result of increased headcounts of selling a nd distribution pers onnel to support our
business growth, and (ii) an increase in advertising and promotion expenses resulting from
our increased marketing efforts, including spon sorships, advertisement placements, online
promotions and offline events, to enhance our brand recognition and acquire customers.
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Administrative expenses
Our administrative expenses increased by RMB15.1 million, or 71.0%, from RMB21.2
million in 2022 to RMB36.2 million in 2023, primarily due to an increase in staff costs as a
result of an increase in the headcounts of administrative personnel to support our business
growth.
Research and development expenses
Our research and development expenses i ncreased by RMB2.9 million, or 55.9%, from
RMB5.1 million in 2022 to RMB8.0 million in 2023, primarily due to (i) an increase in staff
costs associated with expanded personnel engaged in product research and development to
support our business growth and (ii) research and development efforts dedicated to our
towable ERV model.
Impairment loss on trade receivables
We recorded a provision of impairment loss on trade receivables of RMB65,000 in
2022 and a reversal of impairment loss on trade receivables of RMB34,000 in 2023, in line
with the trend in trade receivables.
S h a r eo fp r o f i to faj o i n tv e n t u r e
Our share of profit of a joint venture was RMB1.1 million in 2022 and RMB0.1 million
in 2023. In 2023, this item represents our share of profit from Leisure Lion before it became
one of our subsidiaries in September 2023, while it represents our share of profit from this
entity, then a joint venture, for the entire 2022. Additionally, Leisure Lion commenced
operating two new JV stores in 2023, resulting in significant initial costs that affects its
profitability in 2023.
Finance costs
Our finance costs remained relatively s table at RMB2.5 million in 2022 and RMB2.3
million in 2023.
Income tax
Our income tax increased by RMB17.6 million from RMB11.3 million in 2022 to
RMB28.9 million in 2023, primarily due to a hig her profit before taxation in 2023 compared
to 2022.
Profit for the year
As a result of the foregoing, our profit for the year increased by RMB45.8 million from
RMB33.0 million in 2022 to RMB78.8 million in 2023.
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Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2024
Revenue
Our total revenue increased by RMB122.5 million, or 36.3%, from RMB309.5 million
for the six months ended June 30, 2023 to RM B422.0 million for the six months ended June
30, 2024, primarily driven by revenue generated from sales of RVs.
Our revenue from RV sales increased by RMB87.4 million, or 28.2%, from RMB309.5
million for the six months ended June 30, 2 023 to RMB396.9 million for the six months
ended June 30, 2024. This growth was driven by the strong sales of our RVs and an increase
in the average selling price, see ‘‘Business — Our Product and Brand — Our Brands’’ for a
breakdown of our sales volume and average selling price by brands. In particular, we
achieved a substantial increase in the sales volume of RVs sold through direct sales via
self-owned stores and JV stores in the six mon ths ended June 30, 2024, which resulted in a
corresponding rise in revenue during the same period. The sales volume of RVs via direct
sales increased from 127 units for the six months ended June 30, 2023 to 438 units for the six
months ended June 30, 2024. Consequently, revenue from direct sales via self-owned stores
and JV stores grew from RMB41.4 million f or the six months ended June 30, 2023 to
RMB144.4 million for the six months ended J une 30, 2024. At the same time, the sales
volume of RVs through sales to dealers decrea sed from 1,063 units for the six months ended
June 30, 2023 to 989 units for the six months e nded June 30, 2024. Accordingly, revenue
generated from sales to dealers decreased f rom RMB268.2 million for the six months ended
June 30, 2023 to RMB252.5 million for th e six months ended June 30, 2024.
Additionally, we recorded revenue from sales of pre-owned RVs of RMB23.4 million
for the six months ended June 30, 2024, see ‘‘Business — Sales and Distribution —
Self-owned Stores and JV Stores’’ for more details of our trade-in option.
Cost of sales
Our cost of sales increased by RMB49.0 million, or 20.6%, from RMB238.1 million for
the six months ended June 30, 2023 to RMB287 .1 million for the six months ended June 30,
2024, primarily due to an increase in (i) cost of raw materials relating to our increased
purchase of certain critical RV components and key raw materials, such as interior and
exterior parts and materials including electr ic appliance, doors and a wnings, fiberglass
panel, doors and windows, and substrates, and (ii) shipping and handling expenses, in line
with our business growth.
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Gross profit and gross profit margin
As a result of the foregoing, our gross pr ofit increased by RMB63.5 million from
RMB71.4 million for the six months ended June 30, 2023 to RMB134.9 million for the six
months ended June 30, 2024. Our gross profit margin increased from 23.1% for the six
months ended June 30, 2023 to 32.0% for the si x months ended June 30, 2024, primarily due
to the higher proportion of our retail sales o f RVs through self-owned stores and JV stores
during the same period, attributable to the rel atively higher retail prices compared to the
wholesale prices for dealers.
Other income/loss
We recorded other loss of RMB2.7 million f or the six months e nded June 30, 2024,
compared to other income of RMB7.7 million f or the six months ende d June 30, 2023. The
change was primarily due to the transition f rom foreign exchange gain of RMB7.8 million
for the six months ended June 30, 2023 to forei gn exchange loss of RMB2.5 million for the
six months ended June 30, 2024, driven by the o verall weakening of the Australian dollar
relative to the Renminbi in the latter period.
Selling and distribution expenses
Our selling and distribution expenses increased by RMB14.9 million from RMB17.3
million for the six months ended June 30, 2023 to RMB32.2 million for the six months
ended June 30, 2024, primarily due to (i) an increase in staff costs as a result of increased
headcounts of selling and distribution personnel to support our business growth and (ii) an
increase in the depreciation of right-of-u se assets associated with the two new lease
agreements we entered into in the first half o f 2024 for a self-owned store (namely, Regent
RV Perth) and a JV store (namely, NEWGEN Caravan NSW (Morisset)) of ours; see
‘‘Business — Sales and Distribution — Self-o wned Stores and JV stores’’ for more details of
the lease agreements.
Administrative expenses
Our administrative expen ses increased by RMB21.5 million from RMB14.1 million for
the six months ended June 30, 2023 to RMB3 5.6 million for the six months ended June 30,
2024, primarily due to an increase in listing expenses of RMB15.3 million in connection
with this Global Offering and an increase in staff costs of RMB3.6 million as a result of
increased headcounts of administrative personnel to support our business growth.
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Research and development expenses
Our research and development expenses i ncreased by RMB1.6 million from RMB4.0
million for the six months ended June 30, 2023 t o RMB5.6 million for the six months ended
June 30, 2024, primarily due to research and development efforts dedicated to product
development and upgrade.
Impairment loss on trade receivables
We recorded a reversal of impairment loss o n trade receivables of RMB7,000 for the
six months ended June 30, 2023 and a provision of impairment loss on trade receivables of
RMB21,000 for the six months ended June 30, 2024, in line with the trend in trade
receivables.
Share of loss of a joint venture
Our share of loss of a joint venture was RM B0.3 million for the six months ended June
30, 2023 and nil for the six months ended June 30, 2024. For the six months ended June 30,
2023, this item represents our share of loss from Leisure Lion before it became one of our
subsidiaries in September 2023.
Finance costs
Our finance costs increased by RMB3.7 million from RMB1.1 million for the six
months ended June 30, 2023 to RMB4.8 millio n for the six months ended June 30, 2024,
primarily due to the increase in interest expense on borrowings from our related party,
Zhejiang Bing Huodi Technology Service Co., Ltd., and the Financing Partner, in line with
our business growth.
Income tax
Our income tax increased by RMB2.9 m illion from RMB10.7 million for the six
months ended June 30, 2023 to RMB13.6 million for the six months ended June 30, 2024,
primarily due to a higher profit before taxation during the same period.
Profit for the period
As a result of the foregoing, our profit fo r the period increased by RMB8.8 million
from RMB31.6 million for the six months ende d June 30, 2023 to RMB40.4 million for the
six months ended June 30, 2024.
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SELECTED ITEMS FROM THE CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
The following table sets forth our financial position as of the dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
ASSETS
Non-current assets
Plant and equipment 13,029 15,134 19,189 19,690
Right-of-use assets 53,666 42,559 50,848 82,531
Intangible assets 21 — — 107
Investment in a joint venture 724 900 — —
Deferred tax assets 10,646 11,811 14,541 19,289
Total non-current assets 78,086 70,404 84,578 121,617
Current assets
Inventories 112,443 155,636 242,827 272,374
Trade and other receivables 19,710 45,275 46,138 60,939
Prepayments 2,934 2,689 6,021 11,554
Restricted cash 2,350 4,753 4,889 14,738
Cash and cash equivalents 8,797 21,466 14,345 43,882
Total current assets 146,234 229,819 314,220 403,487
LIABILITIES
Current liabilities
Trade and other payables 101,589 161,656 240,666 274,399
Contract liabilities 4,843 7,596 12,803 7,103
Loans and borrowings 26,686 9,117 31,208 104,588
Lease liabilities 14,469 23,726 29,016 10,646
Current taxation — 1,251 7,418 10,037
Provisions 914 1,896 2,970 3,079
Total current liabilities 148,501 205,242 324,081 409,852
Net current (liabilities)/assets (2,267) 24,577 (9,861) (6,365)
Total assets less current liabilities 75,819 94,981 74,717 115,252
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As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Non-current liabilities
Loans and borrowings — — 408 345
Lease liabilities 46,862 34,995 43,362 75,826
Provisions 1,987 3,032 3,761 3,798
Total non-current liabilities 48,849 38,027 47,531 79,969
NET ASSETS 26,970 56,954 27,186 35,283
CAPITAL AND RESERVES
Share capital — — — —
Reserves 26,970 56,954 25,282 32,500
Total equity attributable to equity
shareholders of the Company 26,970 56,954 25,282 32,500
Non-controlling interests — — 1,904 2,783
TOTAL EQUITY 26,970 56,954 27,186 35,283
Plant and equipment
Our plant and equipment primarily consist o f (i) machinery and equipment, (ii) office
equipment and furniture, and ( iii) motor vehicles. Our plant and equipment increased from
RMB13.0 million as of December 31, 2021 to RMB15.1 million as of December 31, 2022,
RMB19.2 million as of December 31, 2023, and further to RMB19.7 million as of June 30,
2024, primarily due to the renovations and additions of machinery and equipment in our
production facilities and assembly lines.
Right-of-use assets
Our right-of-use assets represent leases of o ffice buildings, stores and warehouses. Our
right-of-use assets decreased from RMB53 .7 million as of December 31, 2021 to RMB42.6
million as of December 31, 2022, primarily due to depreciation of right-of-use assets. Our
right-of-use assets increased to RMB50.8 million as of December 31, 2023, and further to
RMB82.5 million as of June 30, 2024, primarily because we entered into new lease
agreements during the six months ended June 30, 2024.
FINANCIAL INFORMATION
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Investment in a joint venture
Our investment in a joint venture represen ts our equity interest in Leisure Lion,
initially a joint venture established by Reg ent Company, together with Green RV, in
Australia in July 2019, with each of Green RV a nd us holding 50% interest, respectively.
Subsequently, Leisure Lion became one of our subsidiaries in September 2023 when the
shareholding interest of Regent Company in it increased to 51%. As a result, Leisure Lion
is owned as to 51% by Regent Company and 49% by Green RV. For more details, see
‘‘History, Reorganization and Corporate Structure — Corporate Development —
Subsidiaries of Regent Company.’’
Our investment in a joint v enture increased from RMB 0.7 million as of December 31,
2021 to RMB0.9 million as of Dece mber 31, 2022, primarily as a result of the improvement
in operations of our joint venture. Our investment in a joint venture was nil and nil as of
December 31, 2023 and June 30, 2024, respectiv ely, primarily because Leisure Lion has
become one of our subsidiaries since September 2023.
Deferred tax assets
Our deferred tax assets primarily arise f rom unrealized gains from intra-group
transactions, provision for product warranties, lease liabilities, and right-of-use assets. Our
deferred tax assets increased from RMB10.6 million as of December 31, 2021 to RMB11.8
million as of December 31, 2022, and further to RMB14.5 million as of December 31, 2023,
primarily due to increases in the temporary differences attributable to (i) unrealized gains
from intra-group transactions, and (ii) prov ision for product warranties, in line with our
growing business and sales of RVs. Our defe rred tax assets increased from RMB14.5 million
as of December 31, 2023 to RMB19.3 million a s of June 30, 2024, primarily due to the
impact of an increase in unrealized gains from in tra-group transactions. This increase was
driven by a substantial rise in the RVs held in stock for display in our self-owned stores and
JV stores under the direct sales model.
Inventories
Our inventories primarily consist of raw mat erials, work in process and finished goods.
Our inventories increased from RMB112. 4 million as of December 31, 2021 to RMB155.6
million as of December 31, 2022, RMB242.8 million as of December 31, 2023, and further to
RMB272.4 million as of June 30, 2024. Such increases were driven by the launch of new RV
models, increases in production volume and RV delivery to meet robust customer demand,
a n dt h ei n c r e a s ei ns t o c kt ob es h o w c a s e di no ur newly established self-owned stores and JV
stores.
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The table below sets forth our inventories by nature as of the dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Raw materials 35,967 43,359 88,431 42,775
Work in process 79,587 92,815 72,680 109,846
Finished goods 3,217 24,095 86,996 127,332
Sub-total 118,771 160,269 248,107 279,953
Less: Provision for impairment of
inventories (6,328) (4,633) (5,280) (7,579)
Total 112,443 155,636 242,827 272,374
The following table sets forth an aging analysis of inventories as of the dates indicated.
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Within 1 year 110,715 151,562 239,504 265,922
1 to 2 years 3,082 5,184 7,836 11,554
2 to 3 years 1,663 1,643 227 2,275
Over 3 years 3,311 1,880 540 202
118,771 160,269 248,107 279,953
Less: inventory provision (6,328) (4,633) (5,280) (7,579)
112,443 155,636 242,827 272,374
We have implemented several inventory management policies, including but not
limited to procuring materials based on the production schedule, regularly monitoring our
inventory levels and assessing for obsolete and damaged items to ensure proper inventory
condition, etc. We make provisions for obsoleted and damaged items, as well as for items
whose costs are below their net realizable va lues. The inventory provisions were RMB6.3
million, RMB4.6 million, RMB5.3 million and RMB7.6 million as of D ecember 31, 2021,
2022 and 2023 and June 30, 2024, respectively, representing 5.3%, 2.9%, 2.1% and 2.7% of
the total gross inventories as of the same dat e, respectively. Due to our made-to-sale model
and the fact that our RVs are sold at a profit, we face lower exposure to risks associated
with net realizable value. We believe sufficient provision has been made and there is no
material recoverability issue for inventories.
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Furthermore, work in process and finished goods collectively accounted for 69.7%,
72.9%, 64.4% and 84.7% of our total inventor ies as of December 31, 2021, 2022 and 2023
and June 30, 2024, respectively. These items consistently present a high level of our
inventories, primarily due to the length of the production and delivery timelines. We
generally implement a made-to-order production approach and produce our RVs based on
customer orders to minimize our inventory. The entire production process of our RVs
requires approximately 12 weeks, excluding the delivery time transporting the close-to-final
towable RVs to the final assembly lines in Aus tralia. Additionally, the transportation
process from China to Australia further lengthens this period. Furthermore, with more
stores under the direct sales model opened in 2023, there was a substantial rise in the RVs
held in stock for display in our newly established self-owned stores and JV stores, which led
to further increase in finished goods.
The following table sets forth our inventory turnover days for the periods indicated:
For the year ended December 31,
For the
six months
ended
June 30,
2021 2022 2023 2024
Inventory turnover days
(1) 174 122 138 166
Note:
(1) We calculate inventory turnover days using the av erage of the beginning and ending balances of total
inventories for a period, divided by the corresponding total cost of sales for the same period, multiplied by
the number of days in such period.
Our inventory turnover days were 174 days, 122 days, 138 days, and 166 days for the
three years ended December 31, 2023 and for the six months ended June 30, 2024,
respectively. The decrease in our inventory turnover days from 2021 to 2022 was primarily
because the increase in cost of sales, which w as primarily driven by increased shipping and
handling expenses resulting from rising shipping costs amid COVID-19, outpaced the
increase in inventories. The increase in our inventory turnover days from 2022 to 2023
indicates that our cost of sales grew at a slower pace compared to inventories. Since 2022,
the effects of COVID-19 have gradually diminished and shipping prices have started to
normalize, resulting in lower per-unit sh ipping and handling expenses in 2023. Our
inventory turnover days significantly improved in 2022 and 2023 compared to 2021,
indicating progress in our operational efficiency. The increase in our inventory turnover
days from 2023 to the six months ended June 30, 2024 was mainly due to the increase in
stock to be showcased in our self-owned stores and JV stores.
Our inventory turnover days ranged from 122 to 174 days during the Track Record
Period, primarily due to the length of the pro duction and delivery tim elines which affects
our inventory levels. Our production process requires approximately 12 weeks, with
additional time needed for delivery.
FINANCIAL INFORMATION
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As of October 31, 2024, RMB2 27.9 million, or 83.7%, of our inventories as of June 30,
2024 had been subsequently sold or utilized.
Trade and other receivables
Our trade and other receivables primarily co nsist of trade receivables. Trade and other
receivables are classified as current assets if they are expected to be collected in one year or
less. All of our trade and other receivables are expected to be recovered within one year.
Our management has a credit policy in place and the exposure to these credit risks are
monitored on an ongoing basis.
The following table sets forth our trade and other receivables as of the dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Trade receivables 19,421 43,043 39,918 48,067
Tax receivable — — — 5,523
Relocation subsidy receivable — — — 2,477
Others 289 2,232 6,220 4,872
Total 19,710 45,275 46,138 60,939
Our trade and other receivables as of December 31, 2021, 2022 and 2023 and June 30,
2024 were RMB19.7 million, RMB45.3 million, RMB46.1 million and RMB60.9 million,
respectively. Increases in our trade and other receivables was primarily driven by our trade
receivables, in line with our business growth.
We typically grant our customers a credit term of 21 days or 90 days. The following
table sets forth the aging analysis of our trade receivables, based on the past due aging and
net of loss allowance, as of the dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Within 90 days 19,421 42,971 39,918 47,994
More than 90 days less than 180
days — 72 — 73
Total 19,421 43,043 39,918 48,067
FINANCIAL INFORMATION
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The following table sets forth our trade and other receivables turnover days for the
periods indicated:
For the year ended December 31,
For the
six months
ended
June 30,
2021 2022 2023 2024
Trade and other receivables
turnover days (1) 23 24 23 23
Note:
(1) We calculate trade and other receivables turnov er days using the average of the beginning and ending
balances of trade and other receivables for a period, divided by the corresponding revenue for the same
period, multiplied by the number of days in such period.
For the three years ended December 31, 202 3 and for the six months ended June 30,
2024, our trade and other receivables turnover days were 23 days, 24 days, 23 days and 23
days, respectively, remaining relatively stable.
As of October 31, 2024, RMB46.0 million, or 75.5%, of our trade and other receivables
as of June 30, 2024 had been subsequently settled. During the Track Record Period and up
to the Latest Practicable Date, we did not have any material dispute or disagreement with
our customers in relation to the timing, amo unts of billing or the collection of our trade
receivables.
We have implemented several credit contro l measures, including but not limited to
regularly performing reconciliation with ou r dealers, monitoring our accounts receivables
by aging analysis and assessing if cert ain dealer has operating issues, etc.
We make impairment loss for accounts receivables based on expected credit loss model.
We recorded a provision of impairment loss on trade receivables of RMB9,000 and
RMB65,000 in 2021 and 2022, respectively, and a reversal of impairment loss on trade
receivables of RMB34,000 in 2023. We recorded a provision of impairment loss on trade
receivables of RMB21,000 for the six months ended June 30, 2024.
We typically grant our customers a credit term of 21 days or 90 days. As of December
31, 2021, 2022 and 2023 and June 30, 2024, 100%, 99.8%, 100% and 99.8% of our trade
receivables were within 90 days. Besides, the t urnover days for trade and other receivables
remained relatively stable during the Track Record Period, fluctuating between 23 and 24
days.
Given that most of the trade receivables are collected within the credit terms and there
has been no history of defaults, sufficient p rovision for impairment losses on accounts
receivables has been made, and there are no material recoverability issues for trade
receivables.
FINANCIAL INFORMATION
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Prepayments
Our prepayments are primarily associated with purchases of materials and services.
The following table sets forth a breakdown of our prepayments as of the dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Prepayments for:
Purchases of materials 2,699 1,687 3,369 4,366
Purchases of services 235 1,002 2,652 2,927
Prepayment for listing expenses — — — 4,261
Total 2,934 2,689 6,021 11,554
Our prepayments as of December 31, 2021, 2022 and 2023 and June 30, 2024 were
RMB2.9 million, RMB2.7 million, RMB6.0 m illion and RMB11.6 million, respectively. Our
prepayments remained relatively stable a t RMB2.9 million as of December 31, 2021 and
RMB2.7 million as of December 31, 2022. Our p repayments increased from RMB2.7
million as of December 31, 2022 to RMB6.0 million as of December 31, 2023, primarily due
to (i) an increase in purchases of materials resulting from the production expansion, in line
with our business growth; and (ii) an increase in purchases of services resulting from our
increased marketing efforts, including onlin e promotions and offline events, to enhance our
brand recognition and acquire customers. O ur prepayments increased from RMB6.0 million
as of December 31, 2023 to RMB11.6 million as of June 30, 2024, primarily due to
prepayment for listing expenses in connection with this Global Offering.
As of October 31, 2024, RMB9.7 million, or 83.6%, of our prepayments as of June 30,
2024 had been subsequently utilized.
Restricted cash
As of December 31, 2021, 2022 and 2023 and June 30, 2024, our bank deposits of
RMB2.4 million, RMB4.8 million, RMB4.9 million and RMB14.7 million were restricted
for the purposes of leasing deposits and pledged as guarantees of loans and borrowings.
Trade and other payables
Our trade and other payables primarily represent the amount due to our suppliers and
accrued payroll and other benefits. Our suppliers typically grant us a credit term of 30 days
to 90 days. Trade and other payables are classi fied as current liabilities if payment is due
within one year or less, and as non-current liabilities if due over one year. They are
recognized initially at their fair value and sub sequently measured at amortized cost using
the effective interest method.
FINANCIAL INFORMATION
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The following table sets forth the breakdown of our trade and other payables as of the
dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Trade payables due to
related parties 7,562 7,658 6,545 6,542
third parties 78,113 133,454 197,540 209,581
Bills payable 3,280 3,000 4,760 9,270
Accrued payroll and other
benefits 7,079 11,566 21,513 17,608
VAT and sundry taxes payable 3,113 5,489 7,435 11,516
Listing expenses payable — — — 12,017
Accrued expense 1,810 — 2,468 7,670
Other payables 2,442 489 2,873 195
Trade and other payables 101,589 161,656 240,666 274,399
Our trade and other payables as of Decem ber 31, 2021, 2022 and 2023 and June 30,
2024 were RMB101.6 million, RMB161.7 million, RMB240.7 million and RMB274.4
million, respectively. Our trade and other paya bles increased from RMB101.6 million as of
December 31, 2021 to RMB161.7 million as o f December 31, 2022, RM B240.7 million as of
December 31, 2023, and further to RMB274.4 million as of June 30, 2024, primarily due to
the increases in trade payables due to thir d parties resulting from the increases in
procurement of raw materials and components. The increase in our trade and other
payables from RMB240.7 million as of Decem ber 31, 2023 to RMB274.4 million as of June
30, 2024 was also attributable to listing expen ses payable in connection with this Global
Offering and an increase in the VAT and sundry taxes payable.
The following table sets forth the aging analysis of our trade payables and bills
payable, based on the invoice date, as of the dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Within 1 year 88,572 143,286 204,983 220,690
1 year to 2 years 383 826 3,077 4,696
2y e a r st o5y e a r s — — 7 8 5 7
Total 88,955 144,112 208,845 225,393
FINANCIAL INFORMATION
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The following table sets forth our trade and other payables turnover days for the
periods indicated:
For the year ended December 31,
For the
six months
ended
June 30,
2021 2022 2023 2024
Trade and other payables
turnover days (1) 149 115 136 162
Note:
(1) We calculate trade and other payables turnover days using the average of the beginning and ending
balances of trade and other payables for a period, di vided by the corresponding cost of sales for the same
period, multiplied by the number of days in such period.
For the three years ended December 31, 202 3 and for the six months ended June 30,
2024, our trade and other payables turnover d ays were 149 days, 115 days, 136 days and 162
days, respectively. The decreases in our trade and other payables turnover days from 149 in
2021 to 115 in 2022 was primarily because the in crease in cost of sales, which was primarily
driven by increased shipping and handling expenses resulting from rising shipping costs
amid COVID-19, outpaced the increase in trade and other payables. Our trade and other
payables turnover days increased from 115 in 2022 to 136 in 2023, indicating that our cost
of sales grew at a slower pace compared to trad e and other payables. Since 2022, the effects
of COVID-19 have gradually diminished and shipping prices have started to normalize,
resulting in lower per-unit shipping and handling expenses in 2023. The increase in our
trade and other payables turnover days from 136 in 2023 to 162 for the six months ended
June 30, 2024 was mainly due to the increases in t rade payables due to third parties resulting
from the increases in procurement of raw materials and components, as well as the listing
expenses payable.
As of October 31, 2024, RMB148.0 million, or 53.9%, of our trade and other payables
as of June 30, 2024 had been subsequently settled. During the Track Record Period and up
to the Latest Practicable Date, we had no materi al defaults in our trade and other payables.
FINANCIAL INFORMATION
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Contract liabilities
We recognize a contract liability when the cust omer pays non-refund able consideration
before we recognize the related revenue. A co ntract liability is also r ecognized if we have an
unconditional right to receive non-refundable consideration before we recognize the related
revenue. Our contract liabilities represent advances received from our customers. The
following table sets forth a breakdown of our c ontract liabilities as of the dates indicated:
As of December 31,
As of
June 30,
2021 2022 2023 2024
(RMB in thousands)
Advances from customers 4,843 7,596 12,803 7,103
Total 4,843 7,596 12,803 7,103
Our contract liabilities increased from RMB4.8 million as of December 31, 2021 to
RMB7.6 million as of December 31, 2022, an d further to RMB12.8 million as of December
31, 2023, primarily due to an increase in advances received from our customers in relation
to the sales of our products. Our contract lia bilities decreased from RMB12.8 million as of
December 31, 2023 to RMB7.1 million as of June 30, 2024, primarily due to a decrease in
advances received from our customers in relation to the sales of our products.
As of October 31, 2024, RMB4.5 million, or 63.4%, of our contract liabilities as of
June 30, 2024 had been subsequently utilized an d recognized in revenue. This utilization
rate primarily reflects the impact of customer- specified delivery schedules. For each RV, we
allow customers to specify their requested d elivery dates. While our production process
requires approximately 12 weeks with additional time needed for delivery, many customers
opt for delivery dates that extend well beyond this production and delivery timeframe for
various reasons, such as their financial plannin g. As a result, contract liabilities remain, and
the recognition of revenue is deferred, until the RVs are delivered as per the customer’s
requested date.
FINANCIAL INFORMATION
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Current taxation
Our current taxation represents tax payable calculated based on the expected taxable
income for the year/period, using the tax r ates enacted or substantially enacted at the
financial position date, and any adjustment of tax payable for previous years. The following
table sets forth more details of our curre nt taxation as of the dates indicated:
For the year ended December 31,
For the
six months
ended
June 30,
2021 2022 2023 2024
(RMB in thousands)
At beginning of the year/period — — 1,251 7,418
Provision for PRC income tax 6,334 11,055 25,486 14,710
Provision for overseas tax — 1,241 5,932 3,741
Provisional profits tax paid — — — (5,680)
Deemed contribution (6,334) (11,055) (25,486) (9,995)
Exchange adjustments — 10 235 (157)
A tt h ee n do ft h ey e a r / p e r i o d — 1,251 7,418 10,037
We made provisions for PRC income tax for each year/period during the Track Record
Period, which were settled by the assets at t he legal entity level of Daide Longtree and
Longtree Zhejiang, as accounted for as deemed contribution. Additionally, we made
provisions for overseas tax related to our operations in Australia.
Net deficit
As of January 1, 2021, the Group’s net deficit of RMB3.2 million primarily resulted
from the accumulated losses of RMB37.6 million from its Australian subsidiaries, which
were offset by a net parent investment of RMB34.4 million related to the net assets of
certain manufacturing activities of the listing business carried out by two entities that were
under common control of the Controlling Shareholders in the PRC. The accumulated losses
as of January 1, 2021 mainly arose from the losses incurred in early stage when the Group
acquired Regent Company and tapped into the Australian market in 2014. The sales volume
was low while the operating and production costs were comparatively fixed at that time.
FINANCIAL INFORMATION
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LIQUIDITY AND CAPITAL RESOURCES
Sources of Liquidity and Working Capital
The following table sets forth a summary of our liquidity and working capital as of the
dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2021 2022 2023 2024 2024
(Unaudited)
(RMB in thousands)
CURRENT ASSETS
Inventories 112,443 155,636 242,827 272,374 232,026
Trade and other receivables 19,710 45,275 46,138 60,939 90,755
Prepayments 2,934 2,689 6,021 11,554 19,730
Restricted cash 2,350 4,753 4,889 14,738 49,945
Cash and cash equivalents 8,797 21,466 14,345 43,882 30,407
Total current assets 146,234 229,819 314,220 403,487 422,863
CURRENT LIABILITIES
Trade and other payables 101,589 161,656 240,666 274,399 297,240
Contract liabilities 4, 843 7,596 12,803 7,103 7,167
Loans and borrowings 26,686 9,117 31,208 104,588 74,728
Lease liabilities 14,469 23,726 29,016 10,646 14,230
Current taxation — 1,251 7,418 10,037 11,293
Provisions 914 1,896 2,970 3,079 3,723
Total current liabilities 148,501 205,242 324,081 409,852 408,381
NET CURRENT
(LIABILITIES)/ASSETS (2,267) 24,577 (9,861) (6,365) 14,482
As of October 31, 2024, we had net current assets of RMB14.5 million, primarily due to
(i) inventories of RMB232.0 million, represen ting a decrease of RMB40.4 million compared
to RMB272.4 million as of June 30, 2024 and (ii) trade and other receivables of RMB90.8
million, representing an increase of RMB29. 9 million compared to RMB60.9 million as of
June 30, 2024, partially offset by (iii) tra de and other payables of RMB297.2 million,
representing an increase of RMB22.8 million compared to RMB274.4 million as of June 30,
2024, and (iv) loans and borrowings of RMB 74.7 million, representing a decrease of
RMB29.9 million compared to RMB104.6 million as of June 30, 2024.
As of June 30, 2024, we had net current liabilit ies of RMB6.4 million, primarily due to
(i) trade and other payables of RMB274.4 m illion, representing an increase of RMB33.7
million compared to RMB240.7 million as o f December 31, 2023, and (ii) loans and
borrowings of RMB104.6 million, representi ng an increase of RMB73.4 million compared
to RMB31.2 million as of December 31, 2023, p artially offset by (iii) inventories of
RMB272.4 million, representing an increase of RMB29.6 million compared to RMB242.8
million as of December 31, 2023, (iv) trade and other receivables of RMB60.9 million,
FINANCIAL INFORMATION
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representing an increase of RMB14.8 million compared to RMB46.1 million as of December
31, 2023, and (v) cash and cash equivalents of R MB43.9 million, representing an increase of
RMB29.6 million compared to RMB14.3 million as of December 31, 2023.
As of December 31, 2023, we had net current liabilities of RMB9.9 million, primarily
due to (i) trade and other payables of RMB2 40.7 million, representing an increase of
RMB79.0 million compared to RMB161.7 millio n as of December 31, 2022, (ii) loans and
borrowings of RMB31.2 million, representing an increase of RMB22.1 million compared to
RMB9.1 million as of December 31, 2022, and (iii) lease liabilities of RMB29.0 million,
representing an increase of RMB5.3 millio n compared to RMB23.7 million as of December
31, 2022; partially offset by (iv) inventorie s of RMB242.8 million, representing an increase
of RMB87.2 million compared to RMB155.6 mill ion as of December 31, 2022, and (v) trade
and other receivables of RMB46.1 million, re presenting an increase of RMB0.8 million
compared to RMB45.3 millio n as of December 31, 2022.
We underwent the Reorganization which was completed in May 2024, see ‘‘History,
Reorganization and Corporate Structure’’ for more details. Before the Reorganization, we
recorded a cash outflow in financing activit ies from deemed distribution of RMB138.2
million for the year ended December 31, 2023. A fter the Reorganization, we determine the
distribution to shareholders according to our liquidity status and no further deemed
distribution is or will be recorded. Elimination of this outflow is expected to strengthen our
position to reduce net current liabilities over time.
We had net current assets of RMB14.5 million a s of October 31, 2024, compared to net
current liabilities of RMB6.4 million as of June 30, 2024, primarily due to an increase of
RMB19.4 million in total current assets, which was mainly driven by an increase in
restricted cash and trade and other receivables, partially offset by a decrease in inventories,
resulting from the Company’s overall business growth and sustained profitability. We
expect to improve our liquidity position by monitoring our cash flow and aligning capital
expenditure prudently. Furthermore, our liquidity position can continue to benefit from net
profit. By utilizing cash generated from opera tions, we can strengthen our ability to meet
short-term obligations and improve our n et current liabilities position over time.
As of December 31, 2022, we had net current assets of RMB24.6 million, primarily due
to (i) inventories of RMB155.6 million, re presenting an increase of RMB43.2 million
compared to RMB112.4 million as of December 31, 2021, (ii) trade and other receivables of
RMB45.3 million, representing an increase of RMB25.6 million compared to RMB19.7
million as of December 31, 2021, and (iii) cash and cash equivalents of RMB21.5 million,
representing an increase of RMB12.7 millio n compared to RMB8.8 million as of December
31, 2021; partially offset by (iv) trad e and other payables of RMB161.7 million,
representing an increase of RMB60.1 million compared to RMB101.6 million as of
December 31, 2021, and (v) leas e liabilities of RMB23.7 million, representing an increase of
RMB9.2 million compared to RMB14 .5 million as of December 31, 2021.
FINANCIAL INFORMATION
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As of December 31, 2021, we had net current liabilities of RMB2.3 million, primarily
due to (i) trade and other payables of RMB 101.6 million, (ii) loans and borrowings of
RMB26.7 million, and (iii) lease liabilities o f RMB14.5 million; partially offset by (iv)
inventories of RMB112.4 million, and (v) tr ade and other receivables of RMB19.7 million.
Cash Flows
During the Track Record Period and up to the Latest Practicable Date, we have funded
our cash requirements principally from cash generated from our sales of RVs. As of
December 31, 2021, 2022 and 202 3 and June 30, 2024, we had cash and cash equivalents of
RMB8.8 million, RMB21.5 million, RMB14.3 m illion and RMB43.9 million, respectively.
The following table sets forth a summary of our cash flows for the periods indicated:
For the year ended December 31,
For the six months ended
June 30,
2021 2022 2023 2023 2024
(Unaudited)
(RMB in thousands)
Net cash generated from operating
activities 19,409 57,784 119,770 108,160 35,554
Net cash used in investing activities (4,499) (5,409) (2,703) (1,974) (3,141)
Net cash used in financing activities (8,970) (39,881) (124,801) (114,550) (2,545)
Net increase/(decrease) in cash and
cash equivalents 5,940 12,4 94 (7,734) (8,364) 29,868
Cash and cash equivalents as of
January 1 3,101 8,797 21,466 21,466 14,345
Effect of foreign exchange rate
changes (244) 175 613 325 (331)
Cash and cash equivalents at end of
the year/period 8,797 21,466 14,345 13,427 43,882
Cash flows generated from operating activities
For the six months ended June 30, 2024, our net cash generated from operating
activities was RMB35.6 million, primaril y due to profit before taxation of RMB54.0
million, adjusted to reflect mainly (i) depreciation and amortization of RMB10.5 million
and finance costs of RMB4.8 million, and (ii) ch anges in working capital. Adjustments for
changes in working capital primarily consis t of (iii) an increase in inventories of RMB29.5
million, and (iv) an increase in trade and oth er receivables of RMB14.8 million; partially
offset by (iv) an increase in trade and other payables of RMB35.3 million.
For the year ended December 31, 2023, our net cash generated from operating
activities was RMB119.8 million, primarily d ue to profit before taxation of RMB107.7
million, adjusted to reflect mainly (i) depreciation and amortization of RMB16.3 million
and finance costs of RMB2.3 million, and (ii) ch anges in working capital. Adjustments for
changes in working capital primarily consis t of (iii) an increase in inventories of RMB39.8
FINANCIAL INFORMATION
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--- page 359 ---
million; partially offset by (iv) an increase in trade and other payables of RMB24.5 million,
(v) a decrease in trade and other receivable s of RMB6.0 million, and (vi) an increase in
contract liabilities of RMB5.2 million.
For the year ended December 31, 2022, our net cash generated from operating
activities was RMB57.8 million, primaril y due to profit before taxation of RMB44.3
million, adjusted to reflect mainly (i) depreciation and amortization of RMB14.3 million
and finance costs of RMB2.5 million, and (ii) ch anges in working capital. Adjustments for
changes in working capital primarily consis t of (iii) an increase in inventories of RMB43.2
million, and (iv) an increase in trade and oth er receivables of RMB23.9 million; partially
offset by (v) an increase in trade an d other payables of RMB60.1 million.
For the year ended December 31, 2021, our net cash generated from operating
activities was RMB19.4 million, primaril y due to profit before taxation of RMB34.3
million, adjusted to reflect mainly (i) depreciation and amortization of RMB12.3 million,
partially offset by lease modification o f RMB6.7 million, and (ii) changes in working
capital. Adjustments for changes in working capital primarily consist of (i) an increase in
inventories of RMB62.7 million, and (ii) a decr ease in contract liabilities of RMB18.3
million; partially offset by (iii) an increase in trade and other payables of RMB58.4 million.
Cash flows used in investing activities
During the Track Record Period, our cash outflows used in investing activities
primarily consist of payment for purchase of plant and equipment, while our cash inflows
from investing activities primarily consist o f (i) proceeds from sale of plant and equipment,
and (ii) acquisition of a subsidiary, net of cash acquired.
For the six months ended June 30, 2024, our net cash used in investing activities was
RMB3.1 million, primarily due to payment for pu rchase of plant and equipment of RMB3.0
million.
For the year ended December 31, 2023, our net cash used in investing activities was
RMB2.7 million, primarily due to payment for pu rchase of plant and equipment of RMB7.2
million; partially offset by acquisition of a subsidiary, net of cash acquired of RMB4.0
million.
For the year ended December 31, 2022, our net cash used in investing activities was
RMB5.4 million, primarily due to payment for pu rchase of plant and equipment of RMB6.3
million; partially offset by proceeds fro m sale of equipment of RMB0.9 million.
For the year ended December 31, 2021, our net cash used in investing activities was
RMB4.5 million, primarily due to payment for pu rchase of plant and equipment of RMB4.6
million.
FINANCIAL INFORMATION
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Cash flows used in financing activities
During the Track Record Period, our cash outflows used in financing activities
primarily consist of (i) repayment of loans an d borrowings, (ii) capital element of lease
rentals paid, and (iii) deemed distribution, while our cash inflows from financing activities
primarily from the (iv) proceeds from loans and b orrowings, and (v) capital contributions
from non-controlling share holders of subsidiaries.
For the six months ended June 30, 2024, our net cash used in financing activities was
RMB2.5 million, primarily due to (i) payment a rising from the Reorganization of RMB52.8
million, (ii) repayment of loans and borro wings of RMB43.8 million, and (iii) capital
element of lease rentals paid of RMB7.2 million; partially offset by (iv) proceeds from loans
and borrowings of RMB114.0 million.
For the year ended December 31, 2023, our net cash used in financing activities was
RMB124.8 million, primarily due to (i) dee med distribution of RMB138.3 million, (ii)
repayment of loans and borrowings of RMB19.5 million, and (iii) capital element of lease
rentals paid of RMB8.3 million; partially offset by (iv) proceeds from loans and borrowings
of RMB41.1 million, and (v) capital contributio ns from a non-controlling shareholder of a
subsidiary of RMB1.2 million.
For the year ended December 31, 2022, our net cash used in financing activities was
RMB39.9 million, primarily due to (i) deemed distribution of RMB57.4 million, (ii) capital
element of lease rentals paid of RMB4.7 million, and (iii) repayment of loans and
borrowings of RMB2.5 million; partially offset by proceeds from loans and borrowings of
RMB27.9 million.
For the year ended December 31, 2021, our net cash used in financing activities was
RMB9.0 million, primarily due to (i) capital element of lease rentals paid of RMB3.8
million, (ii) deemed contribution of RMB3.8 million, and (iii) interest element of lease
rentals paid of RMB1.3 million.
Working Capital Sufficiency
Taking into account the financial resources available to us, including the estimated net
proceeds from the Global Offering, cash flow g enerated from our operations, facilities
available to us and cash and cash equivalents, our Directors are of the opinion, and the Sole
Sponsor concurs, that we will have sufficient funds to meet our working capital
requirements and financial requirements for capital expenditure for at least the next 12
months from the date of this Prospectus.
FINANCIAL INFORMATION
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CAPITAL EXPENDITURES
Our capital expenditures during the Track Record Period primarily consisted of
payment for purchases of plant and equipment. Our capital expenditures were RMB5.0
million, RMB6.0 million, RMB7.0 million and RMB3.0 million for the three years ended
December 31, 2023 and for the six months ended June 30, 2024, respectively.
We expect that our capital expenditures in 2024 and 2025 will primarily consist of
payment for purchases of plant and equipment for our continued expansion plan. See
‘‘Business — Our Strategies’’ and ‘‘Future Plans and Use of Proceeds’’ in this Prospectus for
additional details of our current expansion plans. Our current capital expenditure plans for
any future period are subject to change, and we may adjust our capital expenditures
according to our future cash flows, results of operations and financial condition, our
business plans, the market conditions and various other factors we believe to be
appropriate.
INDEBTEDNESS
The following table sets forth the breakdown of our indebtedness as of the dates
indicated:
As of December 31,
As of
June 30,
As of
October 31,
2021 2022 2023 2024 2024
(Unaudited)
(RMB in thousands)
Current
Loans and borrowings 26,686 9,117 31,208 104,588 74,728
Lease liabilities 14,469 23,726 29,016 10,646 14,230
Non-current
Loans and borrowings — — 408 345 408
Lease liabilities 46,862 34,995 43,362 75,826 72,195
Total 88,017 67,838 103,994 191,405 161,561
Loans and Borrowings
As of December 31, 2021, 2022 and 2023, June 30, 2024 and October 31, 2024, we had
loans and borrowings of RMB26.7 million, RMB9.1 million, RMB31.6 million, RMB104.9
million and RMB75.1 million, respectively.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our loans and borrowings as of the dates
indicated:
As of December 31,
As of
June 30,
As of
October 31,
2021 2022 2023 2024 2024
(Unaudited)
(RMB in thousands)
Current
Unsecured related party loans 26,686 — — 35,474 —
Secured loans and borrowings — 9,117 31,208 69,114 62,011
Unsecured bank loans — — — — 12,717
Non-current
Unsecured bank loans — — 408 345 408
Total 26,686 9,117 31,616 104,933 75,136
Our total loans and borrowings as of December 31, 2021 represent the unsecured
related party loans which were provided by Flourishing and were payment on demand. In
2022, all the remaining related party loans were converted into capital to Regent Company,
resulting in unsecured related party loans of nil as of December 31, 2022.
Our total loans and borrowings as of Decem ber 31, 2022 and 2023 primarily comprise
secured loans and borrowings provided by the Financing Partner to our subsidiaries, which
operate our self-owned stores and JV stores, in the event that they opt for the floor-plan
finance arrangement to finance their RV purchase. These secured loans and borrowings are
with interest rates of benchmark interest rate in Australia plus 2.09% and secured by the
funded RVs. For more details, see ‘‘Busine ss — Sales and Distribution — Financing
Arrangements.’’ The increase in our total loans and borrowings as of December 31, 2023
compared to 2022 is in line with our sales growth with respect to these subsidiaries.
Our total loans and borrowings as of June 30, 2024 primarily comprise (i) the secured
loans and borrowings provided by the Financing Partner to the aforementioned
subsidiaries, which operate our self-own ed stores and JV stores, and (ii) unsecured
related party loans representing the remaining balance of a temporary financing
arrangement for the payment of consideration involved in the Reorganization, which
were provided by an indirect 30%-controlled c ompany by our Controlling Shareholders and
were settled in October 2024.
Our total loans and borrowings as of October 31, 2024 as compared to those as of June
30, 2024 reflected a new loan granted by a PRC commercial bank which comprised
RMB12.7 million of unsecured loan. As of October 31, 2024, we had obtained facilities of
RMB69.1 million, of which RMB15.3 million, or 22.1%, was unutilized and available. The
foregoing facilities have been a pproved and formally confirmed by our Financing Partner in
the relevant facility agreements and no restri ction is imposed on the use of such facilities
under the relevant facility agreements. Our Au stralian Legal Adviser is of the view that the
relevant facility agreements are valid under the Australian laws. Furt her, according to the
relevant facility agreements, our Financing Par tner can only terminate the agreements if
FINANCIAL INFORMATION
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there is an event of default stipulated in the facility agreements by the Australian
Companies or they elect to exercise their optio ns to terminate. As of the Latest Practicable
Date, our Directors confirmed that (i) no event of default has been triggered by our
Australian Companies, and (ii) our Financing Partner did not express any intention (written
or verbal) to exercise their option to termin ate the relevant facility agreements. Hence, as
confirmed by our Directors and advised by our Australian Legal Adviser, there is nothing
that would cause us to cast doubt o n the certainty of such facilities.
The following table sets forth the maturity profile of our loans and borrowings as of
the dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2021 2022 2023 2024 2024
(Unaudited)
(RMB in thousands)
Within 1 year 26,686 9,117 31,208 104,588 74,728
1 year to 5 years — — 408 345 408
Total 26,686 9,117 31,616 104,933 75,136
Our Directors confirm that as of the Latest Practicable Date, the agreements under our
borrowings did not contain any covenant that would have a material adverse effect on our
ability to make additional borrowings or issue debt or equity securities in the future. Our
Directors further confirm that we had no material defaults in bank and other borrowings,
nor did we breach any covenants during the Track Record Period and up to the Latest
Practicable Date. Our Directors further confirm that during the Track Record Period and
up to the Latest Practicable Date, we did not experience any material difficulty in obtaining
credit facilities, or withdrawal of fac ilities or request for early repayment.
Lease Liabilities
As of December 31, 2021, 2022 and 2023, June 30, 2024 and October 31, 2024, we had
lease liabilities of RMB61.3 million, RMB 58.7 million, RMB72.4 million, RMB86.5 million
and RMB86.4 million, respectively.
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The following table sets forth the maturity p rofile of our lease liabilities as of the dates
indicated:
As of December 31,
As of
June 30,
As of
October 31,
2021 2022 2023 2024 2024
(Unaudited)
(RMB in thousands)
Within 1 year 14,469 23,726 29,016 10,646 14,230
1 year to 2 years 12,142 10,301 6,615 10,178 11,064
2 years to 5 years 21,076 16,036 21,915 33,169 28,097
After 5 years 13,644 8,658 14,832 32,479 33,034
Total 61,331 58,721 72,378 86,472 86,425
Our lease liabilities decreased from R MB61.3 million as of December 31, 2021 to
RMB58.7 million as of December 31, 2022, pri marily due to the reduction in lease
obligations related to existin g leases, which outweighed the additional lease obligations
incurred from new leases entered into durin g 2022. Our lease liabilities increased to
RMB72.4 million as of December 31, 2023. Our l ease liabilities further increased to
RMB86.5 million as of June 30, 2024, primarily due to the new lease agreements we entered
into during the period.
As of October 31, 2024, our lease liabilit ies amounted to RMB86.4 million, certain of
which were secured by the rental deposits and all of which were unguaranteed.
Contingent Liabilities and Guarantees
As of December 31, 2021, 2022 and 2023, June 30, 2024 and October 31, 2024, the
maximum amounts of guarantee issued were nil, RMB8.2 million, RMB27.5 million,
RMB20.6 million and RMB13.6 million, respectively. Save as disclosed above, we did not
have any other material contingent liabilit ies, guarantees, or l egal, arbitration or
administrative proceedings pending or th reatened against us that we expect would
materially adversely affect our financial position or result of operations.
Indebtedness Statement
Save as disclosed above, as of December 3 1, 2021, 2022 and 2023, June 30, 2024 and
October 31, 2024, we did not have any other loan capital issued and outstanding or agreed
to be issued, bank overdrafts, borrowings and other similar indebtedness, liabilities under
acceptance (other than normal trade bills) or a cceptance credits, debentures, mortgages,
charges, hire purchase commitments, guarant ees or other material contingent liabilities.
Save as disclosed above, our Directors confirm that there has not been any material change
in our indebtedness since October 31, 2024 and up to the Latest Practicable Date.
CAPITAL COMMITMENTS
As of December 31, 2021, 2022 and 2023 and June 30, 2024, we had no material capital
commitment.
FINANCIAL INFORMATION
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OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
commitments or arrangements.
MATERIAL RELATED PARTY TRANSACTIONS
Transactions with Related Parties
Parties are considered to be related if one part y has the ability, directly or indirectly, to
control the other party or exercise signific ant influence over the other party in making
financial and operational decisions. Parties are also considered to be related if they are
subjected to common control. Members of our key management and their close family
members are also considered as related parti es. See Note 27 to the Accountants’ Report set
out in Appendix I to this Prospectus for further details about our relate d party transactions
during the Track Record Period.
We enter into transactions with our related p arties from time to time. During the Track
Record Period, we entered into a number of transactions with related parties in relation to
sales of products, purchase of materials, le ase, borrowings, and conversion of debt to
capital. Particularly, Daide Power Machinery, one of our five largest suppliers in both 2021
and 2022, is an affiliate of Daide Longtree, mainly engaging in trading business. To
strengthen our bargaining position and secure more favorable procurement terms, we
centralized the procurement of materials, including raw materials, electric appliances, and
interior and exterior furniture and decorations, through Daide Power Machinery in 2021
and 2022. In 2021, 2022 and 2023 and for the six months ended June 30, 2024, the amount
of purchase from Daide Power Machinery wa s RMB52.1 million, RMB14.7 million, nil and
nil, respectively. The purchase amount r educed to nil in 2023, mainly because the
centralized procurement arrangement was terminated in 2023.
Our Directors are of the view that each of the related party transactions in Note 27 to
the Accountants’ Report set out in Appendix It ot h i sP r o s p e c t u sw a sc o n d u c t e do na n
arm’s-length basis. Our Directors are also of the view that our related party transactions
during the Track Record Period would not distort our track record results or make our
historical results not reflective of our future performance.
FINANCIAL INFORMATION
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KEY FINANCIAL RATIOS
T h ef o l l o w i n gt a b l es e t sf o r t ho u rk e yf i n a n c i a lr a t i o sa so ft h ed a t e so rf o rt h ep e r i o d s
indicated:
As of/For the year ended December 31,
As of/ For the six months
ended June 30,
2021 2022 2023 2023 2024
(Unaudited)
Gross profit margin (1) 16.7% 16.5% 25.1% 23.1% 32.0%
N e tp r o f i tm a r g i n(2) 8.4% 6.6% 10.9% 10.2% 9.6%
Return on equity (3) 93.0% 78.5% 187.2% N/A 258.9%
Return on total assets (4) 11.2% 12.6% 22.5% N/A 17.5%
Adjusted net profit margin
(non-HKFRS measure) (5) 8.4% 6.6% 10.9% 10.2% 13.2%
Current ratio (6) 1.0 1.1 1.0 N/A 1.0
Quick ratio (7) 0.2 0.4 0.2 N/A 0.3
Debt-to-equity ratio (8) 1.0 0.2 1.2 N/A 3.0
Notes:
(1) Gross profit margin is calculated using gross profit divided by revenue and multiplied by 100%.
(2) Net profit margin is calculated using profit for th e year/period divided by revenue and multiplied by
100%.
(3) Return on equity ratio is calculated using profit fo r the year as a percentage of the average balance of total
equity at the beginning and the end of the year and multiplied by 100%. The ratio for the six months
ended June 30, 2024 is annualized by dividing the p rofit for the period by the number of days in the
period, multiplying by 365, and then dividing by the average balance of total equity at the beginning and
the end of the period, with the result expressed as a percentage. The annualized ratio is solely for the
purpose of being comparable to prior years, a nd may not be indicative of actual results.
(4) Return on total assets ratio is calculated using profit for the year as a percentage of the average balance of
total assets at the beginning and the end of the year and multiplied by 100%. The ratio for the six months
ended June 30, 2024 is annualized by dividing the p rofit for the period by the number of days in the
period, multiplying by 365, and then dividing by the a verage balance of total assets at the beginning and
the end of the period, with the result expressed as a percentage. The annualized ratio is solely for the
purpose of being comparable to prior years, a nd may not be indicative of actual results.
(5) Adjusted net profit margin (non-HKFRS measure) is calculated using adjusted p rofit for the year/period
(non-HKFRS measure) divided by revenue and multipl ied by 100%. For details of the adjusted profit for
the year/period (non-HKFRS measure), see ‘‘— Non-HKFRS Measures.’’
(6) Current ratio is calculated using total curre nt assets divided by total current liabilities.
(7) Quick ratio is calculated using total current assets less inventories divided by total current liabilities.
(8) Debt-to-equity ratio is calculated using total deb t (being the carrying balance of loans and borrowings)
divided by total equity.
FINANCIAL INFORMATION
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Gross profit margin
For the three years ended December 31, 202 3 and for the six months ended June 30,
2023 and 2024, our gross profit margin was 16.7%, 16.5%, 25.1%, 23.1% and 32.0%,
respectively. See ‘‘— Period-to-period Compa rison of Results of Operations’’ for factors
affecting our gross profit margin during the respective periods.
N e tp r o f i tm a r g i n
For the three years ended December 31, 202 3 and for the six months ended June 30,
2023 and 2024, our net profit margin was 8.4%, 6.6%, 10.9%, 10.2% and 9.6%,
respectively. See ‘‘— Period-to-period Compa rison of Results of Operations’’ for factors
affecting our net profit margin during the respective periods.
Return on equity
Our return on equity was 78.5% in 2022, compared to 93.0% in 2021, primarily due to
the net increase in average balance of total equity. In 2022, all the remaining unsecured
related party loans were converted into capital to Regent Company, resulting in a
substantial increase in our total equity. Our return on equity increased to 187.2% in 2023,
primarily due to the significant increase in ou r profit and a net decrease in average balance
of total equity as a result of larger amount of deemed distribution for the year. Our
annualized return on equity increased to 258.9% for the six months ended June 30, 2024,
primarily due to a larger increase in our annu alized profit compared to total equity.
Return on total assets
Our return on total assets remained relati vely stable at 11.2% in 2021 and 12.6% in
2022. Our return on total assets increased to 22.5% in 2023, primarily attributable to the
significant increase in our profit for the year. Our annualized return on total assets
decreased to 17.5% for the six months ended June 30, 2024, primarily due to a larger
increase in our total assets compared to profit.
Adjusted net profit margin (Non-HKFRS measure)
For the three years ended December 31, 202 3 and for the six months ended June 30,
2023 and 2024, our adjusted net profit margin (non-HKFRS measure) was 8.4%, 6.6%,
10.9%, 10.2% and 13.2%, respectively.
Current ratio
Our current ratio remained relatively stable at 1.0, 1.1, 1.0 and 1.0 as of December 31,
2021, 2022 and 2023 and June 30, 2024, respectively.
Quick ratio
Our quick ratio remained relatively stable at 0.2 as of December 31, 2021, 0.4 as of
December 31, 2022, and 0.2 as of Decemb er 31, 2023 and 0.3 as of June 30, 2024.
FINANCIAL INFORMATION
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Debt-to-equity ratio
Our debt-to-equity ratio decreased from 1.0 as of December 31, 2021 to 0.2 as of
December 31, 2022, primarily because all the remaining unsecured related party loans were
converted into capital to Regent Company in 2 022. Our debt-to-equity ratio increased from
0.2 as of December 31, 2022 to 1.2 as of Decembe r 31, 2023, primarily due to (i) increase in
total debt, driven by an increase in secure d short-term loans and borrowings, and (ii)
decrease in total equity as a result of deemed distribution. Our debt-to-equity ratio
increased to 3.0 as of June 30, 2024, primarily due to an increase in total debt, driven by an
increase in unsecured short-term related party loans and an increase in secured short-term
loans and borrowings, partially offs et by an increase in total equity.
TRANSFER PRICING ARRANGEMENT
During the Track Record Period, we conducted our operations primarily through our
subsidiaries in the Australia and PRC. We prima rily conducted our sales activities through
Regent RV, Snowy River, and Leisure Lion, our subsidiaries in Australia. During the Track
Record Period, one of our key operating ent ities in the PRC, Daide Longtree is primarily
responsible for manufacturing, assembly and exporting of towable RVs. Regent RV, Snowy
River, and Leisure Lion then sells the RVs to ou r customers through our self-owned stores,
JV stores and dealer stores in Australasia.
The OECD, an international organization of international cooperation, promulgated
the OECD Transfer Pricing Guidelines, whi ch is generally followed by the relevant tax
jurisdictions involved in the intra-Group transactions including the Australia and PRC.
According to the OECD Transfer Pricing Guidelines, the intra-Group transactions should
be at arm’s length basis to avoid distorted taxable income in different jurisdictions.
We have engaged the Transfer Pricing Advisor to conduct transfer pricing review on
our cross-border intra-Group transaction s during the Track Record Period to ensure
compliance with the relevant transfer pricing regulations and to conduct benchmarking
studies on the intra-Group transactions during the Track Record Period in accordance with
the OECD Transfer Pricing Guideline.
The Transfer Pricing Advisor selects asse ssment methodology based on the nature and
characteristics of the intra-Group transac tions. Transactional net margin methodology
(‘‘TNMM ’’) was selected for manufacturing and exporting activities, and resale price (‘‘ RP’’)
methodology was selected as a supplementar y method for distribution activities. TNMM
compares the full-cost mark-up (FCMU) of i ntra-Group transactions with the same of
comparable transactions between independent parties. RP compares the gross margin (GM)
of intra-Group transactions with the same of com parable transactions between independent
parties. The Transfer Pricing Advisor conducted independent analysis and confirmed that,
during the Track Record Period, the weighted average price and profit levels of the
intra-Group transactions were fair and fell within or above their respective profit range of
arm’s length transactions, which complied with the principle of independent transactions.
Therefore, the Transfer Pricing Advisor is of the view that our pricing arrangements have
been in compliance with the applicable laws, r egulations and guidelines, and the risk of
incurring material transfer pricing income tax is remote.
FINANCIAL INFORMATION
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Our Directors confirm that during the Track Record Period and up to the Latest
Practicable Date, we had not been subject to nor were we aware of any outstanding
enquiries, audit, investigation or challenge by any tax authorities in Australian and the
PRC in relation to our intra-group transactions and transfer pricing arrangements.
We have been and will continue to closely monitor our transfer pricing arrangement
including reviewing the reasonableness of the pricing policy of intra -group transactions
from time to time. However, similar to other ma tters relating to tax, we cannot assure that
our transfer pricing arrangement will not be sub ject to review and possible challenge by any
tax authorities in future, though the Directo rs believe that we have reasonable grounds to
defend ourselves against such possible challenge. Please see the section headed ‘‘Risk
Factors — Risks relating to our business and our industry — We may be subject to risks
associated with our transfer pricing arrangement.’’
MARKET RISKS
We are exposed to various types of financial and market risks, including credit risk,
liquidity risk, interest rate risk, and currency risk. Our Directors review and agree on
financial management policies and practices for managing each of these risks. See Note 25
to the Accountants’ Report set out in Appendix I to this Prospectus for further details.
Credit risk
Credit risk refers to the risk that a counte rparty will default on its contractual
obligations resulting in a financial loss to us. Our credit risk is primarily attributable to
trade receivables. The directors of our Company are of the opinion that our exposure to
credit risks arising from cash and FVOCI is limited because the counterparties are banks
with good credit standing, for which we consider having low credit risk. We do not provide
any guarantees which would expose us to credit risk.
Liquidity risk
Our policy is to regularly monitor liqui dity requirements, and to ensure that we
maintain sufficient reserves of cash and ade quate committed lines of funding from major
financial institutions to meet our liquidity requirements in the short and longer term.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates.
Our interest rate risk arises p rimarily from cash at bank, rest ricted cash, lease liabilities
and loans and borrowings. Our interest-bearing financial instruments at variable rates as of
December 31, 2021, 2022 and 2023 and June 30, 2024 are primarily the cash at banks, loans
and borrowings and the cash flow interest rate risk arising from the change of market
interest rate on these balances is not considered significant.
FINANCIAL INFORMATION
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Currency risk
We are exposed to currency risk primarily th rough sales and purchases which give rise
to receivables, payables and cash balances that are denominated in a foreign currency, i.e., a
currency other than the functi onal currency of the operations to which the transactions
relate. The currencies giving rise to this risk are primarily Australian dollars.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted net tangible assets of our
Group is prepared in accordance with paragraph 4.29 of the Listing Rules and is set out
below for the purpose to illustrate the effect of the Global Offering on t he consolidated net
tangible assets attributable to equity shareholders of our Company as of June 30, 2024 as if
it had taken place on June 30, 2024.
The unaudited pro forma statement of adjusted net tangible assets has been prepared
for illustrative purpose only and because of i ts hypothetical nature, it may not give a true
picture of the financial position of our Group had the Global Offering been completed as of
June 30, 2024 or at any future dates.
Consolidated
net tangible
assets
attributable to
the equity
shareholders of
our Company
as of June 30,
2024 (1)
Estimated net
proceeds from
the Global
Offering (2)(4)
Unaudited pro
forma adjusted
net tangible
assets
attributable
to equity
shareholders
of our
Company (3)(5)
Unaudited pro forma adjusted
net tangible assets attributable
to equity shareholders of our
Company per Share
RMB’000 RMB’000 RMB’000 RMB (5)
(HK$
equivalent) (4)
B a s e do na nO f f e rP r i c eo f
HK$1.24 per Share 32,393 243,240 275,633 0.29 0.31
B a s e do na nO f f e rP r i c eo f
HK$1.64 per Share 32,393 328,451 360,844 0.38 0.41
Notes:
(1) The consolidated net tangible assets of our Gr oup attributable to equity shareholders of our
Company as of June 30, 2024 is arrived at after deducting the intangible assets of RMB107,000 from
the consolidated total equity attributable to th e equity shareholders of our Company as of June 30,
2024 of RMB32,500,000, which are extracted fro m the Accountants’ Report set forth in Appendix I
to this Prospectus.
(2) The estimated net proceeds from the Global Offering are based on 240,000,000 Shares to be issued at
the estimated Offer Prices of HK$1.24 per Share (b eing the low-end of the Offer Price) and HK$1.64
per Share (being the high-end of the Offer Price), r espectively, after deduction of the estimated
underwriting fees and other esti mated related expenses paid or payable by our Group (excluding
listing expenses of RMB15,305,000 which have been charged to profit or loss on or before June 30,
2024), without taking into account of any shares which may be issued upon the exercise of the
Over-allotment Option and the options gran ted under the Pre-IPO Share Option Scheme.
FINANCIAL INFORMATION
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(3) The unaudited pro forma adjusted net tangible as sets attributable to equity shareholders of our
Company per Share is arrived at after the above adjustment and on the basis that 954,049,200
Shares were in issue immediately following the Cap italization Issue and Global Offering (excluding
5,950,800 shares, representing 826,500 shares adjusted by the Capitalization Issue, held by employee
shareholding platform for the Pre-IPO Share Op tion Scheme) assuming the Global Offering had
completed on June 30, 2024 and the Over-allotment Option and the options granted under the
Pre-IPO Share Option Scheme are not exercised.
(4) For illustrative purpose, the estimated net pro ceeds from the Global Offering is converted from the
Hong Kong dollar into Renminbi and the unaudite d pro forma adjusted net tangible assets
attributable to equity shareholders of our Company per Share is converted from the Renminbi into
Hong Kong dollar at the exchange rate of HK$1.00 to RMB0.92468, the exchange rate set by PBOC
prevailing on the Latest Practicable Date. No r epresentation is made that Renminbi amount have
been, could have been or may be converted to Hong Kong dollars, or vice versa, at the rate or at any
other rate.
(5) No adjustment has been made to the unaudited pro forma adjusted net tangib le assets attributable
to equity shareholders of our Company to reflect our any trading results or other transactions
entered into subsequent to June 30, 2024.
DIVIDEND POLICY
During the Track Record Period, no dividend has been paid or declared by our
Company.
Our Company currently does not have any dividend policy. Our Board of Directors
may declare dividends in the future after taking into account our results of operations,
financial condition, cash requirements an d availability and other factors as it may deem
relevant at such time. Any declaration and payment of dividends will be subject to our
constitutional documents and applicable laws. Our shareholders at a general meeting must
approve any declaration of dividends, which must not exceed the amount recommended by
our Board of Directors. In addition, our Directors may from time to time pay such interim
dividends as our Board of Directors considers to be justified by our profits and overall
financial requirements, or special dividends of such amounts and on such dates as they
think appropriate. No dividend shall be declared or payable except out of our profits and
reserves lawfully available for distribution. Our future declaration of dividends may or may
not reflect our historical declarations of dividends and will be at the absolute discretion of
our Board of Directors.
DISTRIBUTABLE RESERVES
As of June 30, 2024, we did not have any distributable reserves.
FINANCIAL INFORMATION
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LISTING EXPENSES
Listing expenses primarily include profe ssional fees, underwriting commission, and
other fees incurred in connection with the Global Offering. We estimate that our listing
expenses will be approximately HK$53.0 millio n, representing approximately 15.3% of the
gross proceeds from the Global Offering (assuming an Offer Price of HK$1.44 per Share
(being the mid-point of the indicative Offer Price range)), which consist of (i)
underwriting-related expenses (including but not limited to commissions and fees) of
approximately HK$13.8 million, and (ii) no n-underwriting-related expenses of
approximately HK$39.2 million, including ( a) fees and expenses of legal advisors and
accountants of approximately HK$23.5 m illion, and (b) other fees and expenses of
approximately HK$15.7 million. Approximately HK$22.2 million of the listing expenses is
directly attributable to the issue of our Shares to the public and is expected to be recognized
directly as a deduction from equity upon th e Listing, approximately HK$16.8 million has
been expensed during the Track Record Period, and the remaining amount of
approximately HK$14.0 million of the listing expenses is expected to be expensed prior
to the Listing.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
We confirm that, as of the Latest Practicable Date, there were no circumstances that
would give rise to a disclosure requirement und er Rules 13.13 to 13.19 of the Listing Rules.
NO MATERIAL ADVERSE CHANGE
After performing suffici ent due diligence work whic h our Directors consider
appropriate and after due and careful consideration, our Directors confirm that, up to
the date of this Prospectus, there had been no material adverse change in our financial or
operating position or prospects since June 30, 2024, which is the end date of the periods
reported on in the Accountants’ Report set out in Appendix I to this Prospectus, and there
had been no event since June 30, 2024 and up to the date of this Prospectus that would
materially affect the information as set out in the Accountants’ Report included in
Appendix I to this Prospectus.
FINANCIAL INFORMATION
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FUTURE PLANS
As a recreational vehicle enterprise with an extensive presence in Australasia that
designs, develops, manufactures and sells bespoke towable RVs, we design and manufacture
our RVs with emphasis on comfortability, safe ty and functionality. We intend to achieve
this through our growth strategies. For details, see ‘‘Business — Our Strategies.’’
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of
approximately HK$292.6 millio n, after deducting underwri ting commissions, fees and
estimated expenses borne by us in connection with the Global Offering, assuming the
Over-allotment Option is not exercised and based on the Offer Price of HK$1.44 per Share
(being the mid-point of the indicative O ffer Price range of HK$1.24 and HK$1.64).
We currently intend to apply these net proceeds for the following purposes:
. Approximately 63.3%, or HK$185.3 milli on, will be allocated to construct a new
production base and upgrade our existing production facilities. This strategic
production expansion is expected to provide us with the infrastructure needed to
support our future growth in the long run and to meet the growing demand from
overseas customers as we widen our market share in Australasia and make maiden
entrance into new markets in Europe and Canada.
We intend to replicate our success in the Australasian market to these new
territories. We will continue to adopt a pro duct strategy focused on customization
and quality. We intend to customize our RV designs to meet regional demands in
the European and Canadian markets, such as enhanced insulation for colder
climates and improved off-road cap abilities for diverse terrains.
We will also ensure our RVs meet loc al quality and safety standards,
implementing rigorous quality control throughout production. Additionally, we
intend to invest in research and development to introduce smart features in our
RVs, such as intelligent control system s and solar charging, aligning with
consumer preference for latest technologies. Consistent with the successful
approach we have implemented in the Australasian market, we intend to adopt
a pricing strategy that balances compet itiveness with profitability for the new
markets.
Building a strong brand presence is another crucial strategy. We intend to invest
in enhancing visibility by participating in key RV expos and outdoor exhibitions
in these regions and forming strategic partnerships with local tourism boards and
campgrounds. We also intend to build a highly responsive customer service system
aimed at strengthening customer satisfaction and loyalty, driving positive
word-of-mouth and enhancing our brand reputation in the new markets.
FUTURE PLANS AND USE OF PROCEEDS
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Similar to our business model in Australasia, we intend to employ a combination
of dealer stores and self-owned stores to effectively harness the sales and
marketing resources of our own and our local partners. We also plan to enhance
our online presence through a dedicated website, supported by targeted social
media campaigns, to attract potential consumers. In addition, we plan to partner
with rental companies to increase product visibility.
To maintain our edge to effectively compete in these new markets, we will
continuously invest in research and development to keep abreast of the technology
trend, such as renewable energy solutions and smart features. We will also
evaluate opportunities for collaborating with local manufactu rers, suppliers, and
sales channels, which could enable us to le verage shared resources and strengths,
and we expect to participate in industry associations to enhance our influence and
stay informed about industry developments. Furthermore, we will recruit and
train talents with market-specific experti se. We also intend to proactively identify
and mitigate potential risks, such as foreign currency fluctuations, trade policy
changes, and evolving market demand. Leveraging our extensive experience
managing cross-border operations in the Australasian market, we believe we are
well-prepared to navigate the complexities of these new markets.
It is expected that, with the expansion of our Group’s business in terms of caravan
models and sales and distribution network, the estimated production amount of
RVs would reach approximately 87.5%, 117.0% 175.0% of our current
production capacity by 2024, 2025 and 2026, respectively. Therefore, upgrading
the current production facilities to satisfy the needs in the short run and
constructing a new production base to increase the Group’s production capacity
in the long run is necessary to cover the ex pected production capacity needs. In
particular, constructing a new self-owned production base would also be an
essential step towards enhancing the Group’s operational independence by
vacating its current production base f rom Longtree Zhejiang, a subsidiary of
the GONOW Group as disclosed in the section headed ‘‘Connected transactions’’.
Upon completion of construction of the new production base and upgrading of
our existing production facilities and ta king into consideration the expected
growth in our business, it is expected that the utilization rate will reach
approximately 90%. This increase will not only support current demand but
also position us to support our future growth effectively.
(i) approximately 60.0%, or HK$175.5 million, will be used to construct our
new production base in Zhejiang, China, including:
a. approximately 8.3%, or HK$24.4 million, to be used for the purchase of
land use rights for our new production base in Zhejiang, with a total site
area of more than 100,000 sq.m..
FUTURE PLANS AND USE OF PROCEEDS
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We selected Zhejiang as the location of our new production base
because, (i) Zhejiang is a vibrant hub of China’s automotive industry,
and its pro-business environment and thriving supply chain ecosystems
attract top automotive companies to build their operation and
manufacturing facilities, which may bring us significant advantages in
production management and research and development; (ii) its unique
geographical location and well-de veloped port facilit ies in the region
provide us with convenient access to ports for shipping our RVs; and
(iii) its proximity to our current facilities in China enables us to better
coordinate the day-to-day operations of our various sites.
b. approximately 23.3%, or HK$68.2 million, to be used in the
construction of factories of the production base;
c. approximately 15.0%, or HK$43.9 million, to be used for the
construction of associated warehouses, office buildings and
dormitories for employees of the production base;
d. approximately 13.3%, or HK$39.0 million, to be used to purchase
manufacturing equipment and systems for the operation of our new
production facility.
We plan to deploy five production lines in our new facility, including two
intelligent woodwork produ ction lines and three automated assembly lines.
Assuming we will be able to locate a suitable place and obtain the land use
right in the second quarter of 2025, the new production base is scheduled for
completion in the first half of 2026.
(ii) approximately 3.3%, or HK$9.8 millio n, will be used to continually upgrade
our existing production facilitie s by rolling out ongoing equipment
automation and upgrades, ensuring that our facilities remain at the
forefront of technological advancement. We intend to upgrade and
automate our existing workstations, such as our welding, furniture,
painting and lamination workstations. We also intend to upgrade our
warehousing system at our warehous e through acquiring intelligent
equipment. Through investments in smart production system, we can
achieve a more efficient, standardized and cost-effective production process.
There will be sufficient market demand to support our expansion plan.
Australasia is the third largest RV market with 895.4 thousand RVs in use in
2023, according to Frost & Sullivan. It is expected that the total RV in use in
Australasia will reach 1,120.1 thousand units in 2028, representing a CAGR of
4.6% from 2024, outpacing the growth in North America and Europe. See
‘‘Industry Overview — Global and Australasia RV Market Overview —
Australasia is the Third-largest and One of the Fastest-growing RV Markets
Globally’’ for more details. The market’s growth trajectory underscores strong
consumer demand for RVs, supported by trends towards leisure travel, adventure
FUTURE PLANS AND USE OF PROCEEDS
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tourism, and a preference for outdoor lifestyles. The Group intends to continue
penetrating a variety of regions across Australasia and tapping into a more
diverse customer base to fuel further growth.
According to the 2023 sales volume data, the top five participants collectively
hold approximately 55.4% of the market share. Company A, the largest market
player, had a substantial market share of 29.2%. Following Company A, we
ranked as the second-large st RV company in Australas ia, selling 2.7 thousand
units and capturing about 7.8% of the market share. Each of the other three top
players held market shares ranging from 4% to 5%. See ‘‘Industry Overview —
Competitive Landscape of Australasia RV Market’’ for more details. While the
Australasia RV market is competitive and exhibits a relatively concentrated
structure, the market itself is substantial and growing and there remains ample
opportunity for us to capture additional market share and drive growth.
Furthermore, building upon our success in the Australasian market, we plan to
eventually roll out our RV collections in the European and Canadian markets.
North America, Europe, and Australasia are the top three RV markets globally,
RV in use in the three markets collectively account for approximately 97% of the
global total volume in 2023.
According to Frost & Sullivan, North America has been the largest RV market
globally and is expected to maintain this position, with a projected CAGR of
2.8% from 2024 to 2028, reaching an estimated 16,384.3 thousand RVs in use by
2028. Similarly, Europe ranks as the second largest RV market globally and is
anticipated to continue growing at a CAGR of 1.9% from 2024 to 2028, reaching
an estimated 6,881.5 thousand RVs in use by 2028. Both markets demonstrate
significant and growing demand for RVs. See ‘‘Industry Overview — Global and
Australasia RV Market Overview — Austra lasia is the Third-largest and One of
the Fastest-growing RV Market s Globally’’ for more details.
As confirmed by Frost & Sullivan, no i mport duty was applicable to RVs of a
Chinese origin exported into Europe or Canada as of the Latest Practicable Date.
Where necessary, we will engage independen t tax advisors and/or tariff advisors in
the future to ensure compliance with tax and custom policies in countries where
we operate or plan to expand our business. For our potential tariff exposure in
light of our expansion plan in Europe and Canada, see ‘‘Risk Factors — Risks
relating to our Business and our Industry — We may be subject to tariffs in
countries where we operate or plan to expand our business.’’
. Approximately 16.7%, or HK$48.7 million, will be used to scale up our business
operations through strengthening our sales and distribution network, in order to
further expand our customer base and enhance our customer stickiness, and
further amplify our market share in the RV industry in Australasia, including:
(i) approximately 3.3%, or HK$9.7 million, will be used to establish new
self-owned and/or JV stores, thereby expanding our business footprint and
obtaining wider market coverage. We plan to use such proceeds to cover
FUTURE PLANS AND USE OF PROCEEDS
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capital expenditures including renovation, purchase and installation of
facilities and equipment, as well as to cover rental expenses and other
ancillary expenses. Our average invest ment payback period of our existing
self-owned and JV stores was approximately 18 months. Our targeted
average investment payback period of a newly established self-owned and/or
JV store is approximately 18 to 24 months with reference to the average
investment payback period in the au tomotive industry in similar areas
according to Frost & Sullivan. We p lan to open approximately two new
self-owned and/or JV stores in the next three years. As of the Latest
Practicable Date, we had commenced preparatory work according to our
expansion plan, including market research for the new geographical locations
that we intend to enter, exploration of potential new sites for our planned
new self-owned stores, and search for new staff members for the stores.
(ii) approximately 13.4%, or HK$39.0 million, will be used to pursue the
acquisition of third-party offline sto res (which may not necessarily be those
within our existing dealership network) if suitable opportunities emerge. We
plan to acquire approximately four third-party offline stores. We plan to
focus on those stores in new locations in Australasia which are not already
covered by our current offline network . According to Frost & Sullivan, as of
the Latest Practicable Date, there were more than 100 stores operating in the
RV industry. Where we acquire any third-party offline store and transfer it
into self-owned store or JV Store, w e will look for cooperation with an
additional third-party offline sto re to ensure that the total number of
third-party offline stores remain s teadily the same. As of the Latest
Practicable Date, we had not identified suitable potential targets for
acquisitions.
When looking for new third-party offl ine stores, we plan to target those in
either New Zealand or in Queensland, New South Wales, Victoria or
Northern Territory of Australia. In addition to the location, we would take
into consideration factors of the store including (a) the traffic condition and
transportation density in the store’s locality, (b) size and operational track
record, (c) overall presentation and products being sold, (d) shareholding and
management structure, an d (e) general reputation.
In addition, to prevent potential c annibalization, we will observe the
following criteria below in managing our sales and distribution network in
Australasia:
a. No store shall be located within a driving distance of two hours between
each other;
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b. We will regulate the maximum number of dealer stores in a state or
territory, which ranges from one to seven. The ceiling for each present
region will be determined and revie wed regularly with reference to
various factors such as population, average household incomes and
unemployment rate within such region.
We believe that by opening these new stores, we are poised to capture additional
market share and address the increasing market demand. See the preceding use of
proceeds for a discussion on the sufficient market demand supporting our
expansion plan.
. Approximately 10.0%, or HK$29.3 millio n, will be used for our continued
product research and development efforts. To capitalize on the opportunities in
the global market (excluding the PR C), we will continue to upgrade and
rejuvenize our existing product collection by incorporating interior and exterior
upgrades to our RVs, as well as to introduce new models, such as RVs smaller in
size, to attract new customers with different customization needs, generate
repurchase from existing customers and expand our product collection. Steering
the evolution of the RV industry, we will expand our pipeline of new towable ERV
models. As (a) we will develop more models for our hybrid off-road towable RVs
and ERVs, and (b) we intend to promote our towable RVs and ERVs in new
geographical locations where the customers tend to have preferences in style and
technical performance characteristics of the RVs that are different from those in
Australasia, we expect an increase in research and development expenses
compared to that during the Track Record Period due to the expected efforts in
new models development as well as market research for the new geographical
locations. In particular, we plan to r ecruit more research and development
professionals with appropriate qualifications, who have experience in RV research
and development, to facilitate the constr uction, design and upgrading of our RV
and towable ERV models. We plan to implement the following hiring plans with a
total annual salary amounting to app roximately HK$3.4 million to HK$3.7
million.
a. one experienced interior designer in Australia equipped with degree in
Interior Design or related field and proficiency in design software, who will
be responsible for conceptualizing and executing interior design strategies
tailored to our caravan models, with a n estimated annual salary of AUD90
thousand;
b. one experienced structure engineer in the PRC equipped with degree in
Mechanical Engineering, Structural Integration or related field, who will be
responsible for structural design for our caravan models, with an estimated
annual salary of RMB200 thousand to RMB300 thousand;
FUTURE PLANS AND USE OF PROCEEDS
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c. one experienced interior designer in the PRC equipped with degree in Interior
Design, Home Design or related field, who will be responsible for design for
interior layout and features of our ca ravan models, with an estimated annual
salary of RMB200 thousand to RMB300 thousand;
d. one experienced mechanical engineer in Australia equipped with degree in
Mechanical Engineering or related field, responsible for designing and
developing mechanical systems and components specifically tailored for
caravan applications, with an estimated annual salary of AUD110 thousand;
e. two experienced industry designers in Australia equipped with degree in
Industrial Design, Product Design, or re lated field, responsible for creating
innovative and esthetically pleasing designs for caravan exteriors and
interiors, with an estimated average annual salary of AUD90 thousand; and
f. two experienced product managers equipped with degree in Business
Administration, Marketing, Engineerin g, or related field, responsible for
overseeing the entire lifecycle of caravan products, from concept
development to market launch and ongoing product management,
comprising one in Australia with an estimated annual salary of AUD125
thousand and one in the PRC with an estimated annual salary of RMB300
thousand to RMB400 thousand.
We also intend to purchase more industr ial design software and requisite raw
materials to support our research and development efforts.
As part of our strategy of developing new towable ERV models, in December
2024, we have entered into a strategic collaboration agreement with Tianjin
Guoxuan New Energy Technology Co., Ltd* ( 天津國軒新能源科技有限公司)
(‘‘Guoxuan ’’), a wholly-owned subsidiary of Guoxuan High Tech Co., Ltd.* ( 國軒
高科股份有限公司), a company listed on the Shenzhen Stock Exchange (stock
code: 002074), pursuant to which Guoxuan will provide customized power battery
solutions for our new towable ERV models, and the research and development of
which is expected to commence in 2025. Wit h such strategic co llaboration, we will
be able to leverage Guoxuan’s expertise and marketing resources to promote our
n e wt o w a b l eE R Vm o d e l si nt h ef u t u r e .
. Approximately 10.0%, or HK$29.3 millio n, will be allocated to our working
capital and general corporate purposes.
The following table sets forth the expected a llocation of the use of net proceeds for the
for the three years after the Listing. This table is based on the assumptions of future events
which by their nature are subject to certain unc ertainties, including but not limited to that
there will be no material changes to the indust ry in which we operate and the conditions of
the market in which we sell products or provide services, and the risk factors set forth in the
section headed ‘‘Risk Factors’’ of this Prosp ectus. Therefore, there is no assurance that our
business plans will materialize in accordance with the estimated time frame and that our
future plans will be accomplished at all.
FUTURE PLANS AND USE OF PROCEEDS
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Expected allocation of the use of net proceeds
First year
after the
Listing
Second year
after the
Listing
Third year
after the
Listing Total
(HK$ in million)
Construction of a new production base
and upgrade of existing production
facilities 68.2 117.0 0.0 185.3
— Construction of a new production
base in Zhejiang, China 68.2 107.3 0.0 175.5
— Upgrade of existing production
facilities 0.0 9.8 0.0 9.8
Strengthening of sales and distribution
network 3.3 22.7 22.7 48.7
— Establishment of new self-owned
and/or JV stores 3.3 3.2 3.2 9.7
— Potential acquisition of
third-party offline stores 0.0 19.5 19.5 39.0
Product research and development 6.3 10.0 12.9 29.3
Working capital and general corporate
purposes 9.8 9.8 9.8 29.3
If the Offer Price is set at the high-end or t he low-end of the indicative Offer Price
range, being HK$1.64 or HK$1.24 per Offer Share, respectively, the net proceeds to us from
the Global Offering (assuming that the Ove r-allotment Option is not exercised) will
respectively increase or decr ease by approximately HK$46.1 m illion. If the Over-allotment
Option is exercised in full, we estimate that we will receive total net proceeds of
approximately HK$289.4 million at the low-en d of the indicative Offer Price range of
HK$1.24 per Offer Share and HK$395.3 million at the high-end of the indicative Offer Price
range of HK$1.64 per Offer Share, after deducting the estimated underwriting fees and
expenses payable by us.
If any part of our development plan does not proceed as planned for reasons such as
changes in government policies that would re nder the development of any of our projects
not viable, or the occurrence of force majeure e vents, we will carefully evaluate the situation
and may reallocate the net proceeds from the Global Offering. We will make an appropriate
announcement if there is any change to the above proposed use of proceeds or if any
amount of the proceeds will be used for general corporate purpose.
To the extent that the net proceeds of the Global Offering are not immediately used for
the purposes described above and to the extent permitted by the relevant laws and
regulations, we will only deposit the net I PO proceeds in short-term interest-bearing
accounts at licensed commercial banks and/or other authorized financial institutions (as
defined under the Securities and Futures Ord inance or applicable laws and regulations in
other jurisdictions).
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
Huatai Financial Holdings (Hong Kong) Limited
CLSA Limited
CMB International Capital Limited
BOCI Asia Limited
Shenwan Hongyuan Securities (H.K.) Limited
First Shanghai Securities Limited
Fosun International Securities Limited
I Win Securities Limited
Livermore Holdings Limited
TradeGo Markets Limited
Wanhai Securities (HK) Limited
Winbull Securities International (Hong Kong) Limited
UNDERWRITING
This Prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis on the terms and conditions set out in this Prospectus and the Hong Kong
Underwriting Agreement. The International O ffering is expected to be fully underwritten by
the International Underwriters. If, for any reason, the Offer Price is not agreed upon
between our Company and the Overall Coordinators (on behalf of the Underwriters), the
Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 24,000,000
Hong Kong Offer Shares and the International Offering of initially 216,000,000
International Offer Shares, subject, in each c ase, to reallocation on the basis as described
in the section headed ‘‘Structure of the Global Offering’’ in this Prospectus as well as to the
Over-allotment Option in the case of the International Offering.
UNDERWRITING ARRANGEMENTS AND EXPENSES
The Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, we are offering the Hong Kong
Offer Shares for subscription by the public in Hong Kong in accordance with the terms and
conditions of this Prospectus.
Subject to:
(i) the Listing Committee granting approval for the listing of, and permission to deal
in, the Shares to be offered as mentioned in this Prospectus pursuant to the Global
Offering, and
UNDERWRITING
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(ii) certain other conditions set out in the Hong Kong Underwriting Agreement
(including but not limited to the Offer Price being agreed upon among us and the
Overall Coordinators (for itself and on behalf of the Underwriters)),
the Hong Kong Underwriters have agreed severally and not jointly to subscribe or procure
subscribers for their respective applicable proportions of the Hong Kong Offer Shares now
being offered, which are not taken up under the Hong Kong Public Offering, on the terms
and conditions of this Prospectus and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional upon and subject to, amongst
others, the execution and delivery of the Inte rnational Underwriting Agreement and the
obligations of the International Underwriters thereunder having become unconditional and
not having been terminated in accordance with its terms.
Grounds for Termination
The Sole Sponsor and the Overall Coordinators (for themselves on behalf of the Hong
Kong Underwriters) shall, in their sole and absolute discretion, be entitled by notice (in
writing) to the Company to terminate the Hong Kong Underwriting Agreement with
immediate effect if prior to 8 : 00 a.m. on the Listing Date:
(1) there develops, occurs, exists or comes into force:
(i) any event or circumstance in the nature of force majeure (including, without
limitation, any acts of government, declaration of a regional, national or
international emergency or war, cala mity, crisis, epidemic, pandemic,
outbreak or escalations of infectious disease or its escalation, mutation or
aggravation (including, without lim itation, COVID-19 and Severe Acute
Respiratory Syndrome (SARS), swin e or avian flu, H5N1, H1N1, H1N7,
H7N9, Ebola virus, Middle East respiratory syndrome (MERS) and such
related/mutated forms, but excluding such epidemic, pandemic and infectious
disease subsisting as of the date of this Agreement which have not materially
escalated thereafter), accidents or prolonged interruption or delay in
transportation, economic sanctions, strikes, labor disputes, other industrial
actions, lock-outs, fire, explosion, flooding, earthquake, tsunami, volcanic
eruption, civil commotion, riots, severe transport disruption, paralysis in
government operation, public disorder, acts of war, outbreak or escalation of
h o s t i l i t i e s( w h e t h e ro rn o tw a ri sd e c l a r e d ) ,a c t so fG o do ra c t so ft e r r o r i s m
(whether or not responsibility has been claimed)), economic sanctions,
paralysis in government operations, interruptions or delay in transportation
in or affecting Hong Kong, the PRC, the United States, the United Kingdom,
the European Union (or any member thereof) or any other jurisdictions
relevant to any member of our Group or t he Global Offering (collectively,
the ‘‘Relevant Jurisdictions ’’); or
UNDERWRITING
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(ii) any change, or any development involving a prospective change (whether or
not permanent), or any event or circumstance likely to result in any change or
development involving a prospective change in local, national, regional or
international financial, economic, polit ical, military, industrial, legal, fiscal,
regulatory, currency, credit or market conditions, equity securities or
exchange control or any monetary or trading settlement system or other
financial markets (including, without limitation, conditions in the stock and
bond markets, money and foreign exchange markets, the interbank markets
and credit markets) in or affecting any of the Relevant Jurisdictions; or
(iii) any moratorium, suspension or restrict ion (including, wit hout limitation, any
imposition of or requirement for any minimum or maximum price limit or
price range) in or on trading in securi ties generally on the Stock Exchange,
the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the New York
Stock Exchange, the NASDAQ Global Market or the London Stock
Exchange; or
(iv) any general moratorium on commercial banking activities in Hong Kong
(imposed by the Financial Secretary or the Hong Kong Monetary Authority
or other competent authority), the PRC, New York (imposed at the U.S.
Federal or New York State level or by any other competent authority),
London, or any other Relevant Jurisdictions (declared by the relevant
authorities) or any disruption in commercial banking or foreign exchange
trading or clearance services, procedures or matters in or affecting any of the
Relevant Jurisdictions; or
(v) any event, act or omission which gives or is likely to give rise to any liability
of any of the indemnifying parties pursuant to the Hong Kong Underwriting
Agreement; or
(vi) an authority or a political body or or ganization in any Relevant Jurisdiction
commencing any investigation or other action, or announcing an intention to
investigate or take other action, against any executive Director; or
(vii) any new laws, or any change or development involving a prospective change
or any event or circumstance likely to result in a change or a development
involving a prospective change in (or in t he interpretation or application by
any court or other competent authority of) existing laws, in each case, in or
affecting any of the Relevant Jurisdictions; or
(viii) the imposition of sanctions, in whatever form, directly or indirectly, by, or
for, any of the Relevant Jurisdictions or any other jurisdiction relevant to
any member of the Group; or
(ix) any valid demand by any creditor for repayment or payment of any
indebtedness of any member of the Group or in respect of which any member
of the Group is liable prior to its stated maturity; or
UNDERWRITING
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(x) a change or development involving a prospective change in or affecting
taxation or exchange control, currency exchange rates or foreign investment
regulations (including, without limit ation, a material devaluation of the
Hong Kong dollar or RMB against any foreign currencies, or the
implementation of any exchange control, in any of the Relevant
Jurisdictions; or
(xi) other than with the prior written consent of the Overall Coordinators, the
issue or requirement to issue by the Co mpany of a supplement or amendment
to the Hong Kong Prospectus, the CSRC Filings (as defined in the Hong
Kong Underwriting Agreement) or other documents in connection with the
offer and sale of the Offer Shares pursuant to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance or the Listing Rules or the CSRC
Rules (as defined in the Hong Kong Underwriting Agreement) or upon any
requirement or request of the Stock Exchange, the SFC and/or the CSRC; or
(xii) any litigation, dispute, legal actio n or claim or regulatory or administrative
investigation or action being threatened or instigated or announced against
any member of the Group, any Director or any Controlling Shareholder; or
(xiii) a Director or a member of the Group’s senior management as named in or
t h eP r o s p e c t u sb e i n gc h a r g e dw i t ha nindictable offense or prohibited by
operation of Law or otherwise disqualified from taking part in the
management or taking directorship of a company; or
(xiv) a contravention by any member of our Group or any Director of the Listing
Rules or any applicable laws; or
(xv) a prohibition by an authority on the Company for whatever reason from
offering, allotting, issuing or selling a ny of the Shares pursuant to the terms
of the Global Offering; or
(xvi) any change or development or eve nt involving a prospective change, or a
materialization of, any of the risks s et out in the section headed ‘‘Risk
Factors’’ in this Prospectus; or
(xvii) non-compliance of this Prospectus (or any other documents used in
connection with the contemplated offer and sale of the Shares), the CSRC
filings or any aspect of the Global Offering with the Listing Rules, the CSRC
rules or any other applicable laws; or
(xviii) there is any order or petition for the winding-up of any member of the Group
or any composition or arrangement made by any member of the Group with
its creditors or a scheme of arrangement entered into by any member of the
Group or any resolution for the winding-up of any member of the Group or
the appointment of a provisional liquidator, receiver or manager over all or
UNDERWRITING
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part of the material assets or undertaking of any member of the Group or
anything analogous thereto occurring in respect of any member of the
Group; or
(xix) except with the prior written consent of the Overall Coordinators, the issue
or requirement to issue by our Company of any supplement or amendment to
this Prospectus (or to any other documents used in connection with the
contemplated offer and sale of the Shares) pursuant to the Companies
Ordinance, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance or the Listing Rules or any requirement or request of the Stock
Exchange and/or the SFC; or
(xx) a portion of the orders placed or confirmed in the bookbuilding process, or
of the investment commitments made by any cornerstone investors under
agreements signed with such cornerstone investors, have been withdrawn,
terminated or cancelled,
which, individually or in the aggregate, in the sole and absolute opinion of the
Overall Coordinators and the Sole Sponsor:
(a) has or will have or may have a material adverse effect on the assets,
liabilities, business, general affairs, ma nagement, prospects, shareholders’
equity, profits, losses, results of operations, position or condition (financial
or otherwise), or performance of our Group taken as a whole; or
(b) has or will have or may have a material adverse effect on the success of the
Global Offering or the level of applications under the Hong Kong Public
Offering or the level of interest under the International Offering; or
(c) makes or will make or may make it inadvisable or inexpedient or
impracticable for the Global Offering to proceed or to market the Global
Offering or the delivery or distribution of the Offer Shares on the terms and
i nt h em a n n e rc o n t e m p l a t e db yt h i sP r o s p e c t u so ra n yo t h e rd o c u m e n t si n
connection with the offering and sale of the Offer Shares; or
(d) has or will have the effect of making any part of the Hong Kong
Underwriting Agreement (includ ing underwriting) incapable of
performance in accordance with its terms or preventing or delaying the
processing of applications and/or payments pursuant to the Global Offering
or pursuant to the underwriting thereof; or
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(2) there has come to the notice of the Overall Coordinators and the Sole Sponsor:
(a) that any statement contained in any of the offering documents, the formal
notice, the operative documents, the preliminary offering circular, the post
hearing information pack of the Company and/or in any notices,
announcements, advertisements, communications or other documents
issued or used by or on behalf of the Company in connection with the
Hong Kong Public Offering (collectively, the ‘‘ Offer Related Documents ’’)
(including any supplement or amendment thereto) was, when it was issued, or
has become, untrue, incorrect, inaccurate, incomplete or misleading or
deceptive in any material respect, or that any forecast, estimate, expression of
opinion, intention or expectation contained in any of the Offer Related
Documents (including any supplement or amendment thereto) is not fair and
honest and based on reasonable assumptions; or
(b) any of the CSRC Filings relating to or in connection with the Global
Offering, or any amendments or supplements thereto (in each case, whether
or not approved by the Sole Sponsor, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters and the CMIs, or any of them) containing any untrue, incorrect
or inaccurate or alleged untrue, incorrect incomplete in any material respects
or misleading or deceptive, or that an y estimate, forecast, expression of
opinion, intention or expectation contained in any of such documents is not
fair and honest and based on reasonable grounds or reasonable assumptions;
or
(c) that any matter has arisen or has been discovered which would, had it arisen
or been discovered immediately before the date of this Prospectus, constitute
a material omission from or material misstatement in any of the Offer
Related Documents (including any supplement or amendment thereto) and
the CSRC Filings; or
(d) any material breach of any of the obligations imposed upon any party to the
Hong Kong Underwriting Agreement or the International Underwriting
Agreement (other than upon any of the Hong Kong Underwriters or the
International Underwriters); or
(e) any material adverse change as defined in the Hong Kong Underwriting
Agreement; or
(f) any breach of, or any event or circumst ance rendering untrue or incorrect,
incomplete or misleading in any material respect, any of the warranties in the
Hong Kong Underwriting Agreement; or
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(g) that approval by the Listing Committee of the Stock Exchange of the listing
of, and permission to deal in, the Shares to be issued or sold (including any
additional Shares that may be issued or sold pursuant to the exercise of the
Over-Allotment Option) under the Glo bal Offering is refused or not granted,
other than subject to customary conditions, on or before the Listing Date, or
if granted, the approval is subsequently withdrawn, qualified (other than by
customary conditions) or withheld; or
(h) the Company withdraws any of the offering documents or the Global
Offering; or
(i) any expert (other than the Sole Sponsor) specified in this Prospectus, whose
consent is required for the issue of the prospectus with the inclusion of its
reports, letters or opinions and references to its name included in the form
and context in which it respectively a ppears, has withdrawn its consent to
being named in this Prospectus or to the issue of any other documents issued
or used in connection with the Global Offering; or
(j) the chairman, any other Director, chief executive officer or the chief financial
officer is vacating his or her office; or
(k) any Director or member of senior management of the Company is being
c h a r g e dw i t ha ni n d i c t a b l eo f f e n c eo ris prohibited by operation of law or
otherwise disqualified from taking part in the management of a company.
Undertaking to the Hong Kong Stock Exchange pursuant to the Listing Rules
Undertaking by our Company
Pursuant to Rule 10.08 of the Listing Rules, our Company has undertaken to the Stock
Exchange that no further Shares or securities convertible into our Company’s equity
securities (whether or not of a class already issued) may be issued by our Company or form
the subject of any agreement to such an issue by our Company within six months from the
L i s t i n gD a t e( w h e t h e ro rn o ts u c hi s s u eo fS h a r e so ro u rC o m p a n y ’ ss e c u r i t i e sw i l lb e
completed within six months from the Listing Date), except for Shares issued or to be issued
pursuant to the Global Offering or any of the circumstances provided under Rule 10.08 of
the Listing Rules.
Undertakings by the Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, each of the Controlling Shareholders has
undertaken to the Stock Exchange and the Company that, except pursuant to any lending of
Shares pursuant to the Stock Borrowing Agreement, it will not and will procure that the
UNDERWRITING
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relevant registered holder(s) will not wit hout the prior written consent of the Stock
Exchange or unless otherwise in compliance with the applicable requirement of the Listing
Rules:
(1) in the period commencing on the date of this Prospectus and ending on the date
which is six months from the Listing Date, dispose of, nor enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of, any of the Shares in respect of which he/she/it is
shown by this Prospectus to be the beneficial owner(s); or
(2) in the period of six months commencing on the date on which the period referred
to (1) above expires, dispose of, nor enter into any agreement to dispose of or
otherwise create any options, rights, interests or encumbrances in respect of, any
such Shares referred to in (1) above if, immediately following such disposal, or
upon the exercise or enforcement of such options, rights, interests or
encumbrances, he/she/it would cea se to be a Controlling Shareholder.
Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of the Controlling
Shareholders has undertaken to the Stock E xchange and the Company that, within the
period commencing on the date by reference to which disclosure of his/her/its holding of
Shares is made in this Prospectus and ending on the date which is 12 months from the
Listing Date, he/she/it will and will procure tha t the relevant registered holder(s) will: (1)
when he/she/it pledges or charges any Shares beneficially owned by him/her/it in favor of an
authorized institution (as defined in the Ba nking Ordinance) pursuant to Note 2 to Rule
10.07(2) of the Listing Rules, immediately inform the Company of such pledge or charge
together with the number of Shares so pledged or charged; and (2) when he/she/it receives
indications, either verbal or written, from the pledgee or chargee of any Shares that any of
the pledged or charged Shares will be disposed of, immediately inform the Company of such
indications.
Undertakings pursuant to the Hong Kong Underwriting Agreement
(A) Undertaking by our Company
Pursuant to the Hong Kong Underwriting Ag reement, we have undertaken to each of
the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and the Hong Kong Underwrite rs that during the period commencing on the
date of the Hong Kong Underwriting Agreement and ending on and including, the date that
is six months after the Listing Date (the ‘‘ First Six-month Period ’’), except for the offer,
allotment and issue of the Offer Shares pursuant to the Global Offering (including pursuant
to the exercise of the Over-allotment Option), we will not without the prior written consent
UNDERWRITING
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of the Sole Sponsor and the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters) and unless in compliance with the requirements of the Listing
Rules:
(a) allot, issue, sell, accept subscription for, offer to allot, issue, repurchase or sell,
contract or agree to allot, issue or sell, mortgage, charge, pledge, hypothecate,
hedge, lend, grant or sell any option, warrant, contract or right to subscribe for or
purchase, grant or purchase any option, warrant, contract to sell, or otherwise
transfer or dispose of or create a mortgage , charge, pledge, lien or other security
interest or any option, restriction, right of first refusal, right of pre-emption or
other third party claim, right, interest or preference or any other encumbrance of
any kind (the ‘‘Encumbrance ’’) over, or contract or agree to transfer or dispose of
or create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, any Shares or other equity securities of our Company, as
applicable, or any interest in any of the fo regoing (including, without limitation,
any securities convertible into or exchangeable or exercisable for or that represent
the right to receive, or any warrants or other rights to subscribe or purchase, any
Shares or any equity securities of our Company), or deposit any Shares or other
securities of our Company, as applicable , with a depositary in connection with the
issue of depositary receipts; or
(b) enter into any swap or other arrangemen t that transfers to another, in whole or in
part, any of the economic consequences of subscription or ownership of any
Shares or other securities of our Company, or any interest in any of the foregoing
(including, any securities convertible into or exchangeable or exercisable for or
that represent the right to receive, or any warrants or other rights to purchase, any
Shares or other securities of our Company, as applicable, or any interest in any of
the foregoing); or
(c) enter into any transaction with the s ame economic effect as any transaction
specified in paragraph (a) or (b) above; or
(d) offer to or agree to or announce any intention to effect any transaction specified
in paragraphs (a), (b) or (c) above,
in each case, whether any of the transactions specified in paragraphs (a), (b) or (c) above is
to be settled by delivery of Shares or other securities of our Company or Shares, or in cash
or otherwise (whether or not the issue of such Shares or other shares or securities will be
completed within the First Six-month Period).
In the event that, at any time during the period of six months immediately following
the expiry of the First Six-month Period (the ‘‘ Second Six-month Period ’’), we enter into any
of the transactions specified in paragraph (a), (b) or (c) above or offer to or agree to or
announce any intention to effect any such transaction, we have undertaken to take all
reasonable steps to ensure that it will not create a disorderly or false market in the securities
of our Company.
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(B) Undertaking by Mr. Miao, Snowy Limited, M.X.Z Holdings
Each of Mr. Miao, Snowy Limited, M.X.Z Holdings has undertaken to each of our
Company, the Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and the Hong Kong Underwri ters that, except as pursuant to the Global
Offering without the prior written consent of the Sole Sponsor and the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and unless
in compliance with the requirements of the Listing Rules:
(a) he/she/it will not, at any time during the First Six-month Period,
(i) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge,
hypothecate, lend, grant or sell any option, warrant, contract or right to
purchase, grant or purchase any option, warrant, contract or right to sell, or
otherwise transfer or dispose of or create an Encumbrance over, or agree to
transfer or dispose of or create an Encumbrance over, either directly or
indirectly, conditionally or uncondit ionally, any Share or other securities of
our Company or any interest therein (including, any securities convertible
into or exchangeable or exercisable for or that represent the right to receive,
or any warrants or other rights to purchase, any Shares (the ‘‘ Locked-up
Securities ’’), or deposit any Shares or other securities of our Company with a
depositary in connection with the issue of depositary receipts; or
(ii) enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of any Locked-up
Securities; or
(iii) enter into any transaction with the same economic effect as any transaction
described in subparagraphs (i) or (ii) above; or
(iv) offer to or agree to or announce any intention to effect any transaction
specified in subparagraphs (i), (ii) or (iii) above,
in each case, whether any of the transaction described in subparagraphs (i), (ii) or
(iii) above is to be settled by delivery of Shares or other securities of our Company
or in cash or otherwise (whether or not the settlement or delivery of such Shares
or other securities will be completed wit hin the First Six-month Period or the
Second Six-Month Period); and
(b) until the expiry of the Second Six-month Period, he/she/it will comply with the
lock-up requirement under the PRC law an d in the event that he/she/it enters into
any of the transactions specified in subparagraphs (i), (ii) or (iii) above or offer to
or agrees to announces any intention to effect any such transaction, he/she/it will
take all reasonable steps to ensure that he/she/it will not create a disorderly or
false market in the securities of our Company.
UNDERWRITING
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Indemnity
We, Mr. Miao, Snowy Limited and M.X.Z Holdings have agreed to indemnify the Sole
Sponsor, the Sponsor-Overall Coordinator, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and the Hong Kong Underwrite rs for certain losses which they may suffer,
including losses arising from the performance of their obligations under the Hong Kong
Underwriting Agreement and any breach by our Company of the Hong Kong Underwriting
Agreement.
Hong Kong Underwriters’ Interests in our Company
Except for its obligations under the Hong Kong Underwriting Agreement and save as
disclosed in this Prospectus, none of the Hong Kong Underwriters has any shareholding
interest in our Company or any right or option (whether legally enforceable or not) to
subscribe for or nominate persons to subscribe for securities in our Company.
Following the completion of the Global Offering, the Hong Kong Underwriters and
their affiliated companies may hold a certain portion of the Shares as a result of fulfilling
their obligations under the Hong Kong Underwriting Agreement.
Restrictions on the Offer Shares
No action has been taken to permit a public offering of the Offer Shares, other than in
Hong Kong, or the distribution of this Prospectus in any jurisdiction other than Hong
Kong. Accordingly, this Prospectus may not be used for the purpose of, and does not
constitute, an offer or invitation in any jurisd iction or in any circumstances in which such
an offer or invitation is not authorized or to any person to whom it is unlawful to make
such an offer or invitation.
The International Offering
International Underwriting Agreement
In connection with the International Offering, it is expected that we will enter into the
International Underwriting Agreement with, am ong others, the International Underwriters.
Under the International Underwriting Agreement, subject to the conditions set out therein,
it is expected that the International Underwriters would, severally and not jointly, agree to
procure purchasers for, or to purchase, their respective proportions of the International
Offer Shares being offered pursuan t to the International Offering.
It is expected that the International Underwriting Agreement may be terminated on
similar grounds as the Hong Kong Underwriting Agreement. Potential investors are
reminded that in the event that the International Underwriting Agreement is not entered
into, the Global Offering will not proceed.
UNDERWRITING
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Over-allotment Option
We expect to grant to the International Und erwriters, exercisable in whole or in part
by the Overall Coordinators at their sole and absolute discretion (on behalf of the
International Underwriters), the Over-allotm ent Option, which will be exercisable from the
Listing Date until 30 days after the last day for the lodging of applications under the Hong
Kong Public Offering (the last day for the exercise of the Over-allotment Option being
Friday, February 7, 2025), to require our Company to allot and issue up to an aggregate of
36,000,000 Shares, representing no more than 15% of the initial Offer Shares, at the Offer
Price under the International Offering, to cover over-allocations in the International
Offering, if any.
Commissions and Expenses
The Underwriters and the Capital Market In termediaries will receive an underwriting
commission equal to 3% of the aggregate Offer Price of all the Offer Shares (the ‘‘ Fixed
Underwriting Commissions ’’). Our Company may, at our sole and absolute discretion, pay to
one or more Underwriters or Capital Market Intermediaries an incentive fee up to but not
exceeding 1% of the Offer Price of all the Offer Shares. As of the date of this prospectus, the
allocation of a portion of the Fixed Underwriting Commissions remains subject to the
Company’s discretion. Accordingly, the una llocated portion of the Fixed Underwriting
Commissions will be regarded as the discretionary fees for the purpose of the Listing Rules.
The ratio of the fixed fees and discretionary fees (as classified under and for the purpose of
Rule 3A.34 of the Listing Rules) payable by the Company to all syndicate members (both
before and after the exercise of the Over-allotment Option, if any) is expected to be
approximately 68.25 : 31.75, assuming the discretionary fees will be paid in full. For
unsubscribed Hong Kong Offer Shares realloca ted to the International Offering, we will
pay an underwriting commission at the rate applicable to the International Offering and
such commission will be paid to the relevant International Underwriters and not the Hong
Kong Underwriters.
Assuming the Over-allotment Option is not exercised, the aggregate commissions and
incentive fees (if any), together with the Stock Exchange listing fees, SFC transaction levy
and the Stock Exchange trading fee, AFRC transaction levy, legal and other professional
fees and printing and all other expenses relating to the Global Offering, which are estimated
to amount in aggregate to approximately HK $53.0 million (assuming an Offer Price of
HK$1.44 per Offer Share (being the mid-point of the indicative Offer Price range stated in
this Prospectus)), are payable and borne by our Company.
INDEPENDENCE OF THE SOLE SPONSOR
The Sole Sponsor satisfies the independence criteria applicable to sponsors set out in
Rule 3A.07 of the Listing Rules.
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ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering
(together, the ‘‘Syndicate Members ’’) and their affiliates may ea ch individually undertake a
variety of activities (as further described be low) which do not form part of the underwriting
or stabilizing process.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, fund management, trading, hedging,
investing and other activities for their own account and for the account of others. Such
activities may involve or relate to assets, securities and/or instruments of our Company
and/or persons and entities with relationship with the Company and may also include swaps
and other financial instruments entered into for hedging purposes in connection with our
Group’s loans and other debt.
In relation to the Shares, those activities c ould include acting as agent for buyers and
sellers of the Shares, entering into transactions with those buyers and sellers in a principal
capacity, including as a lender to initial purchasers of the Shares (which financing may be
secured by the Shares) in the Global Offering , proprietary trading in the Shares, and
entering into over-the-counter or listed der ivative transactions or listed and unlisted
securities transactions (including issuing s ecurities such as derivative warrants listed on a
stock exchange) which have as their underlying assets, assets including the Shares. Those
activities may require hedging activity by those entities involving, directly or indirectly, the
buying and selling of the Shares. All such acti vity could occur in Hong Kong and elsewhere
in the world and may result in the Syndicate Members and their affiliates holding long
and/or short positions in the Shares, in baskets o f securities or indices including the Shares,
in units of funds that may purchase the Shar es, or in derivatives related to any of the
foregoing.
In relation to issues by Syndicate Members o r their affiliates of any listed securities
having the Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the relevant rules of the exchange may require the issuer of those
securities (or one of its affiliates or agents) to act as a market maker or liquidity provider in
the security, and this will also result in he dging activity in the Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period
described in the section headed ‘‘Structure of the Global Offering’’ in this Prospectus. Such
activities may affect the market price or value of the Shares, the liquidity or trading volume
in the Shares and the volatility of the price of the Shares, and the extent to which this occurs
from day to day cannot be estimated.
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It should be noted that when engaging in any of these activities, the Syndicate
Members will be subject to certain restrictions, including the following:
(a) the Syndicate Members must not, in connection with the distribution of the Offer
Shares, effect any transactions (including issuing or entering into any option or
other derivative transactions relating to the Offer Shares), whether in the open
market or otherwise, with a view to stabilizing or maintaining the market price of
any of the Offer Shares at levels other than those which might otherwise prevail in
the open market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false tra ding, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their r espective affiliates have provided from
time to time, and expect to provide in the future , investment banking, derivative and other
services to us, our affiliates or our shareholde rs for which such Syndicate Members or their
respective affiliates have received or will receive customary fees and commissions.
UNDERWRITING
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THE GLOBAL OFFERING
This Prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The Global Offering consists of (subject to reallocation and the
Over-allotment Option):
(i) the Hong Kong Public Offering of 24,000, 000 Shares (subject to reallocation) in
Hong Kong as described below under the sub-section headed ‘‘The Hong Kong
Public Offering’’ below; and
(ii) the International Offering of 216,000,000 Shares (subject to reallocation and the
Over-allotment Option) outside the United States in reliance on Regulation S.
You may apply for the Hong Kong Offer Shares or if qualified to do so, indicate an
interest in the International Offer Shares, but you may not apply in both.
The Offer Shares will represent 25% of the enlarged issued share capital of our
Company immediately after completion of the Global Offering without taking into account
the exercise of the Over-allotment Option. If t he Over-allotment Option is exercised in full,
the additional International Offer Shares will represent approximately 3.61% of the
enlarged issued share capital of our Company immediately after completion of the Global
Offering and the exercise of the Over-allotment Option as set out in ‘‘— The International
Offering — Over-allotment Option’’ in this section below.
The Hong Kong Public Offering is open to members of the public in Hong Kong as
well as institutional and professional investors and other investors in Hong Kong. The
International Offering will involve selective marketing of the International Offer Shares to
institutional and professional investors and other investors expected to have a sizeable
demand for the International Offer Shares in Hong Kong and other jurisdictions outside the
United States in reliance on Regulation S. The I nternational Underwriters are soliciting
from prospective investors indications of interest in acquiring the International Offer
Shares. Prospective investors will be required to specify the number of International Offer
Shares under the International Offering they would be prepared to acquire either at
different prices or at a particular price.
References in this Prospectus to applications, application monies or to the procedure
for application relate solely to the Hong Kong Public Offering.
The number of the Hong Kong Offer Shares and the International Offer Shares to be
offered under the Hong Kong Public Offering and the International Offering respectively,
may be subject to reallocation as described below under the sub-section headed ‘‘Pricing
and allocation’’ below.
STRUCTURE OF THE GLOBAL OFFERING
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CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for the Offer Shares will be conditional on, among other
things:
(i) the Stock Exchange granting the listing of, and permission to deal in, the Shares
to be issued and sold as mentioned herein (including any additional shares which
may be issued and sold pursuant to the exercise of the Over-allotment Option) and
such listing and permission not subsequently having been revoked prior to the
commencement of dealings in the Shares on the Stock Exchange;
(ii) the Offer Price having been duly determ ined and the execution and delivery of the
International Underwriting Agreement on or around the Price Determination
Date; and
(iii) the obligations of the Underwriters under the Underwritin g Agreements becoming
unconditional (including, if relevant, as a result of the waiver of any conditions by
the Overall Coordinators (acting f or themselves and on behalf of other
Underwriters)) and such obligations no t being terminated in accordance with
the terms of the respective agreements,
in each case, on or before the dates and times specified in the Underwriting Agreements
(unless and to the extent such conditions are validly waived on or before such dates and
times) and in any event not later than the date that is 30 days after the date of this
Prospectus.
The consummation of each of the International Offering and the Hong Kong Public
Offering is conditional upon, among other things, the other becoming unconditional and
not having been terminated in accordance with their respective terms.
If the above conditions are not fulfilled or waived prior to the times and dates
specified, the Global Offering will lapse a nd the Stock Exchange will be notified
immediately. We will publish a notice of the lapse of the Global Offering on the website
of our Company at
www.newgonowrv.hk and the Stock Exchange at www.hkexnews.hk on
the next day following such lapse.
In the above situation, we will return all app lication monies to the applicants, without
interest and on the terms set out in ‘‘How to Apply for the Hong Kong Offer Shares’’ in this
Prospectus. In the meantime, we will hold all ap plication monies in a separate bank account
or separate bank accounts with the receiving banker or other bank(s) licensed under the
Banking Ordinance (Chapter 155 of the Laws of Hong Kong) (as amended).
We expect to dispatch Share certificates for the Offer Shares on Friday, January 10,
2025. However, these Share certificates will only become valid evidence of title if (i) the
Global Offering has become unconditional in all respects and (ii) the right of termination as
described in the section headed ‘‘Underwriting’’ in this Prospectus has not been exercised,
w h i c hi se x p e c t e dt ob ea t8 : 0 0a . m .( H o n gK o n gt i m e )o nt h eL i s t i n gD a t e .
STRUCTURE OF THE GLOBAL OFFERING
–3 8 6–


--- page 397 ---
PRICING AND ALLOCATION
Indicative range of the Offer Price
The Offer Price will not be more than HK$1.64 per Offer Share and is expected to be
not less than HK$1.24 per Offer Share, unless otherwise announced no later than the
morning of the last day for lodging applications under the Hong Kong Public Offering, as
explained below. Applicants for Hong Kong Offer Shares may be required to pay, on
application (subject to applic ation channels), the maximum Offer Price of HK$1.64 for each
Hong Kong Offer Share (plus brokerage, SFC tr ansaction levy, AFRC transaction levy and
the Stock Exchange trading fees).
Prospective investors should be aware that the Offer Price to be determined on the Price
Determination Date may be, but is not expected to be, lower than the indicative range of the
Offer Price stated in this Prospectus.
Determining the Offer Price
The International Underwriters are solicitin g from prospective investors indications of
interest in acquiring the International Offer Sha res. Prospective investors will be required to
specify the number of the International Offer Shares they would be prepared to acquire
either at different prices or at a particular pric e. This process, known as ‘‘book-building’’, is
expected to continue up to, the Price Determination Date.
The Offer Price is expected to be fixed by agreement between the Overall Coordinators
(acting for itself and on behalf of the other Underwriters) and our Company on the Price
Determination Date. The Price Determin ation Date is expected to be on or around
Thursday, January 9, 2025 and in any event, no later than 12 : 00 noon on Thursday,
January 9, 2025.
If, for any reason, the Overall Coordinators (acting for themselves and on behalf of the
other Underwriters) and our Company are unable to reach agreement on the Offer Price on
or before 12 : 00 noon on Thursday, January 9 , 2025, the Global Offering will not proceed
and will lapse.
Reduction in Offer Price range and/or number of Offer Shares
If the Overall Coordinators (acting for themselves and on behalf of the other
Underwriters) consider it appropriate, the indicative Offer Price range and/or the number
of Offer Shares may be reduced below that stated in this Prospectus at any time prior to the
morning of the last day for lodging applicat ions under the Hong Kong Public Offering with
the consent of our Company.
STRUCTURE OF THE GLOBAL OFFERING
–3 8 7–


--- page 398 ---
In such a case, our Company will, as soon as practicable following the decision to
make any such reduction, and in any event not later than the morning of the last day for
lodging applications under the Hong Kong Offer Shares, cause to be published on the
websites of the Stock Exchange at
www.hkexnews.hk and our Company at
www.newgonowrv.hk an announcement of the reduction in the indicative Offer Price range
and/or number of Offer Shares. Such notice will also include confirmation or revision, as
appropriate, of the working capital statement, the use of proceeds and the offering statistics
as currently disclosed in the section headed ‘ ‘Summary’’ in this Prospectus, and any other
financial information which may change as a result of such reduction. The Offer Price, if
agreed upon, will be fixed within such revised Offer Price range. Our Company will also, as
soon as practicable follow the decision to make such change, issue a supplemental
prospectus updating investors of the change in the number of Offer Shares being offered
under the Global Offering and/or the Offer Price. The Global Offering must first be
canceled and subsequently relaunched on FINI pursuant to the supplemental prospectus.
Before submitting applications for Hong Kong Offer Shares, applicants should have
regard to the possibility that a ny announcement of a reduction i n the indicative range of the
Offer Price and/or number of Offer Shares may not be made until the day which is the last
day for lodging applications under the Hong Kong Public Offering. Applicants under the
Hong Kong Public Offering should note that in no circumstances can applications be
withdrawn once submitted, even if the indicative range of the Offer Price and/or number of
Offer Shares is so reduced. However, if the number of Offer Shares and/or the Offer Price is
reduced, our Company will issue a supplemental prospectus updating investors of the
change in the number of Offer Shares being offered under the Global Offering and/or the
Offer Price. The Global Offering must first be canceled and subsequently relaunched on
FINI pursuant to the supplemental prospectus.
Announcement of Final Offer Price
The final Offer Price, the level of applicat ions in the Hong Kong Public Offering, the
level of indications of interest in the Internat ional Offering, and the basis of allocations of
the Hong Kong Offer Shares are expected to be announced on Friday, January 10, 2025, on
our website
www.newgonowrv.hk (in English and Chinese) and on the Stock Exchange’s
website (www.hkexnews.hk ) and in a variety of channels in the manner described in the
paragraph headed ‘‘How to Apply for the Hong Kong Offer Shares — B. Publication of
Results’’ in this Prospectus. You should note that our website and all information contained
in our website, does not form part of this Prospectus.
STRUCTURE OF THE GLOBAL OFFERING
–3 8 8–


--- page 399 ---
THE HONG KONG PUBLIC OFFERING
The Hong Kong Public Offering is a fully underwritten public offer (subject to
agreement as to pricing and satisfaction or waiver of the other conditions set out in the
Hong Kong Underwriting Agreement including those described in the paragraphs under
‘‘Conditions of the Global Offering’’ above) f or the subscription in Hong Kong of, initially,
24,000,000 Offer Shares at the Offer Price, representing 10% of the initial number of the
Offer Shares (before any exercise of the Over-allotment Option). Subject to the reallocation
of Offer Shares between the International Offering and the Hong Kong Public Offering, the
Hong Kong Offer Shares will represent 2.5% of the enlarged number of our Shares in issue
immediately after completion of the Global Offering and the Capitalization Issue but before
any exercise of the Over-allotment Option.
Allocation of the Offer Shares under the Hong Kong Public Offering will be based
solely on the level of applications received under the Hong Kong Public Offering. The basis
of allocation may vary depending on the number of Hong Kong Offer Shares applied for by
applicants. The allocation of Hong Kong Offer Shares could, where appropriate, consist of
balloting, which would mean that some applicants may receive a higher allocation than
others who have applied for the same number of Hong Kong Offer Shares, and those
applicants who are not successful in the b allot may not receive any Hong Kong Offer
Shares.
For allocation purposes only, the total number of Offer Shares available under the
Hong Kong Public Offering (after taking into account of any reallocation of Hong Kong
Offer Shares and International Offer Shares) is to be divided equally into two pools (with
any odd lots being allocated to pool A):
Pool A : The Hong Kong Offer Shares in pool A will be allocated on an
equitable basis to applicants who have applied for the Offer Shares
with an aggregate subscription price of HK$5 million or less
(excluding brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee payable); and
Pool B : The Hong Kong Offer Shares in pool B will be allocated on an
equitable basis to applicants who have applied for the Hong Kong
Offer Shares with an aggregate subscription price of more than HK$5
million and up to the total value of pool B (excluding brokerage, SFC
transaction levy, AFRC transact ion levy and the Stock Exchange
trading fee payable).
Investors should be aware that applicat ions in pool A and applications in pool B may
receive different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of
the pools are undersubscribed, the surplus Hong Kong Offer Shares will be transferred to
the other pool to satisfy demand in the pool and be allocated accordingly. For the purpose
of this paragraph only, the ‘‘price’’ for the Offer Shares means the price payable on
application therefor (without regard to the O ffer Price as finally determined). Applicants
can only receive an allocation of Hong Kong Offer Shares from either pool A or pool B but
STRUCTURE OF THE GLOBAL OFFERING
–3 8 9–


--- page 400 ---
not from both pools. Multiple or suspected multiple applications under the Hong Kong
Public Offering and any application for mo re than 12,000,000 Hong Kong Offer Shares,
being the number of Hong Kong Offer Shares available under each pool, are liable to be
rejected.
Reallocation
The allocation of Offer Shares between the Hong Kong Public Offering and the
International Offering is subject to reallo cation. A clawback mechanism following the
closing of the application lists shall be applied on the following basis:
(a) where the International Offer Shares are fully subscribed or oversubscribed:
(i) if the Hong Kong Public Offering is fully subscribed and the number of Offer
Shares validly applied for under the Hong Kong Public Offering represents
less than 15 times the number of Offer Shares initially available for
subscription under the Hong Kong Public Offering, the total number of
Offer Shares available under the Hong Kong Public Offering will be
increased to no more than 48,000,000 Offer Shares, representing 20% of
the Offer Shares initially availa ble under the Global Offering;
(ii) if the number of Offer Shares validly applied for under the Hong Kong
Public Offering represents 15 times or more but less than 50 times the number
of Offer Shares initially available for subscription under the Hong Kong
Public Offering, the total number of Offer Shares available under the Hong
Kong Public Offering will be 72,000,000 Offer Shares, representing 30% of
the Offer Shares initially availa ble under the Global Offering;
(iii) if the number of Offer Shares validly applied for under the Hong Kong
Public Offering represents 50 times or more but less than 100 times the
number of Offer Shares initially available for subscription under the Hong
Kong Public Offering, then the number of Shares to be reallocated to the
Hong Kong Public Offering from the International Offering will be increased
so that the total number of Offer Shares available under the Hong Kong
Public Offering will be 96,000,000 Offer Shares, representing 40% of the
Offer Shares initially available under the Global Offering; and
(iv) if the number of Offer Shares validly applied for under the Hong Kong
Public Offering represents 100 times or more the number of Offer Shares
initially available for subscription under the Hong Kong Public Offering,
then the number of shares to be reallocated to the Hong Kong Public
Offering from the International Offering will be increased, so that the total
number of Offer Shares available under the Hong Kong Public Offering will
be 120,000,000 Offer Shares, representing 50% of the Offer Shares initially
available under the Global Offering.
STRUCTURE OF THE GLOBAL OFFERING
–3 9 0–


--- page 401 ---
(b) where the International Offer Shares are undersubscribed:
(i) if the Hong Kong Offer Shares are also undersubscribed, the Global Offering
will not proceed unless the Underwri ters would subscribe for or procure
subscribers for their respective applicable proportions of the Offer Shares
being offered which are not taken up under the Global Offering on the terms
and conditions of this Prospectus and the Underwriting Agreements; and
(ii) if the Hong Kong Offer Shares are fully subscribed or oversubscribed
(irrespective of the extent of over-subscription), then up to 24,000,000 Offer
Shares may be reallocated to the H ong Kong Public Offering from the
International Offering, so that the total number of the Offer Shares available
under the Hong Kong Public Offering will be increased to no more than
48,000,000 Offer Shares, representing 20% of the total number of the Offer
Shares initially available under the Global Offering.
In such cases, the number of Offer Shares allo cated in the International Offering will
be correspondingly reduced, in such manner as the Overall Coordinators deem appropriate,
and such additional Offer Shares will be reallocated between Pool A and Pool B. If the
Hong Kong Offer Shares are not fully subscribed, the Overall Coordinators have the
authority to reallocate all or any unsubscribed Hong Kong Offer Shares to the
International Offering, in such proportions as the Overall Coordinators deem
appropriate. In the event of a reallocation of the Offer Shares between the Hong Kong
Public Offering and the International Offering in the circumstances under paragraphs (a)(i)
or (b)(ii) above, the final Offer Price shall b e fixed at the low-end of the indicative Offer
Price range (i.e. HK$1.24 per Offer S hare) stated in this Prospectus.
In addition, the Overall Coordinators may, in their sole and absolute discretion,
reallocate the Offer Shares from the Inte rnational Offering to the Hong Kong Public
Offering to satisfy valid applications under the Hong Kong Public Offering. In accordance
with Chapter 4.14 of the Guide for New Listing Applicants issued by the Stock Exchange, if
such reallocation is done other than pursuant to Practice Note 18 of the Listing Rules, the
maximum total number of Offer Shares that may be reallocated to the Hong Kong Public
Offering following such reallocation shall b e not more than double the initial allocation to
the Hong Kong Public Offering (i.e. 48,000,000 Offer Shares). Also, subject to the forgoing
paragraphs, the Offer Shares to be offered in the Hong Kong Public Offering and the
International Offering may, in certain circumstances, be reallocated as between these
offerings at the discretion of the Overall Coordinators.
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him or her that he or she and
any person(s) for whose benefit he or she is making the application have not indicated an
interest for or taken up and will not indicate an interest for or take up any International
Offer Shares, and such applicant’s application will be rejected if the said undertaking
and/or confirmation is breached and/or untrue. Our Company, our Directors and the Hong
Kong Underwriters will take reasonable steps to identify and reject applications under the
STRUCTURE OF THE GLOBAL OFFERING
–3 9 1–


--- page 402 ---
Hong Kong Public Offering from investors who have received Shares in the International
Offering, and to identify and reject indication s of interest in the International Offering from
investors who have received Shares in the Hong Kong Public Offering.
The Overall Coordinators (acting for themselves and on behalf of the other
Underwriters) may require any investo rw h oh a sb e e no f f e r e dS h a r e su n d e rt h e
International Offering and who has made an application under the Hong Kong Public
Offering to provide sufficient information to the Overall Coordinators so as to allow it to
identify the relevant applications under the Hong Kong Public Offering and to ensure that
it is excluded from any application for the Shares under the Hong Kong Public Offering.
THE INTERNATIONAL OFFERING
The number of the Offer Shares to be initially offered for subscription and sale under
the International Offering will be 216,000,000 Offer Shares, representing 90% of the initial
number of the Offer Shares (before the exercis e of the Over-allotment Option). Subject to
the reallocation of Offer Shares between the International Offering and the Hong Kong
Public Offering, the International Offer Share s will represent 22.5% of the enlarged number
of our Shares in issue immediately following completion of the Global Offering and the
Capitalization Issue but before any exercise of the Over-allotment Option.
Pursuant to the International Offering, the International Offer Shares will be
conditionally placed on behalf of us by the International Underwriters or through selling
agents appointed by them. Internationa l Offer Shares will be placed with certain
professional and institutional investors and other investors anticipated to have sizeable
demand for the International Offer Shares in Hong Kong, Europe and other jurisdictions
outside the United States in offshore transactions meeting the requirements of, and in
reliance on Regulation S or another exemption from registration requirements under the
U.S. Securities Act. Prospective investors may be required to give an undertaking and
confirmation that they have not applied or taken up any Hong Kong Offer Shares. The
International Offering is subject to the Hong Kong Public Offering becoming
unconditional.
Allocation of the Offer Shares under the International Offering will be determined by
the Overall Coordinators and will be based on a number of factors including the level and
timing of demand, total size of the relevant investor’s invested assets or equity assets in the
relevant sector and whether or not it is expected that the relevant investor is likely to buy
further, and/or hold or sell Shares after the listing of the Shares on the Stock Exchange.
Such allocation may be made to professional, institutional and corporate investors and is
intended to result in a distribution of the Shares on a basis which would lead to the
establishment of a stable shareholder base to the benefit of our Company and our
Shareholders as a whole.
STRUCTURE OF THE GLOBAL OFFERING
–3 9 2–


--- page 403 ---
Over-allotment Option
We are expected to grant to the International Underwriters the Over-allotment Option,
exercisable by the Overall Coordinators at any time from the signing of the International
Underwriting Agreement until the 30th day after the last date for the lodging of
applications in the Hong Kong Public Offering, to require us to issue up to 36,000,000
additional Shares, representing 15% of the initial number of the Offer Shares. These Shares
will be issued at the same price per Share under the International Offering to cover, among
other things, over-allocations in the International Offering, if any. An announcement will
be made in the event that the Over- allotment Option is exercised.
OVER-ALLOCATION AND STABILIZATION
Stabilization is a practice used by underw riters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the new
securities in the secondary market, during a specified period of time, to retard and, if
possible, prevent any decline in the market pr ice of the securities below the offer price. In
Hong Kong and certain other jurisdictions, activity aimed at reducing the market price is
prohibited, the price at which stabilization i s effected is not permitte d to exceed the offer
price.
In connection with the Global Offering, the Stabilizing Manager, or any person acting
for it, on behalf of the Underwriters, may, to the extent permitted by applicable laws of
Hong Kong or elsewhere, over-allocate or e ffect any other transactions with a view to
stabilizing or maintaining the market price of the Shares at a level higher than that which
might otherwise prevail in the open market for a limited period after the last day for the
lodging of applications under the Hong Kong Public Offering. Any market purchases of
Shares will be effected in compliance with all ap plicable laws and regulatory requirements.
However, there is no obligation on the Stabi lizing Manager or any person acting for it to
conduct any such stabilizing activity, whic h if commenced, will be done at the absolute
discretion of the Stabilizing Manager an d may be discontinued at any time. Any such
stabilizing activity is required to be brought to an end within 30 days of the last day for the
lodging of applications under the Hong Kong Public Offering. The number of Shares that
may be over-allocated will not exceed the number of Shares that may be sold under the
Over-allotment Option, name ly 36,000,000 Shares, which is 15% of the Offer Shares
initially available under the Global Offering.
STRUCTURE OF THE GLOBAL OFFERING
–3 9 3–


--- page 404 ---
Stabilizing action will be entered into in accordance with the laws, rules and
regulations in place in Hong Kong and stabilization action permitted in Hong Kong
pursuant to the Securities and Futures (Price Stabilizing) Rules under the SFO includes: (i)
over-allocation for the purpose of preventin g or minimizing any reduction in the market
price of the Shares; (ii) selling or agreeing to sell the Shares so as to establish a short
position in them for the purpose of preventin g or minimizing any reduction in the market
price of the Shares; (iii) purchasing or subscr ibing for, or agreeing to purchase or subscribe
for, the Shares pursuant to the Over-allotmen t Option in order to close out any position
established under (i) or (ii) above; (iv) purchasing, or agreeing to purchase, any of the
Shares for the sole purpose of preventing or min imizing any reduction in the market price of
the Shares; (v) selling or agreeing to sell any Sh ares in order to liquidate any position held
as a result of those purchases; and (vi) offering or attempting to do anything described in
(ii), (iii), (iv) or (v) above.
Specifically, prospective applicants for and investors in the Offer Shares should note
that:
(i) the Stabilizing Manager, or any person acting for it, may, in connection with the
stabilizing action, maintain a long position in the Shares;
(ii) there is no certainty regarding the extent to which and the time period for which
the Stabilizing Manager, or any person act ing for it, will maintain such a position;
(iii) liquidation of any such long position by the Stabilizing Manager may have an
adverse impact on the market price of the Shares;
(iv) no stabilizing action can be taken to s upport the price of the Shares for longer
than the stabilizing period which will begin on the Listing Date following
announcement of the Offer Price, and is e xpected to expire on the 30th day after
the last date for lodging applications under the Hong Kong Public Offering. After
this date, when no further stabilizing act ion may be taken, demand for the Shares,
and therefore the price of the Shares, could fall; and
(v) the price of the Shares cannot be assured to stay at or above the Offer Price either
during or after the stabilizing period by the taking of any stabilizing action; and
stabilizing bids may be made or transactions effected in the course of the
stabilizing action at any price at or below the Offer Price, which means that
stabilizing bids may be made or transacti ons effected at a price below the price
paid by applicants for, or investors in, the Shares.
Our Company will ensure that a public announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules will be made within seven days of the
expiration of the stabilizing p eriod. In connection with the Gl obal Offering, the Overall
Coordinators may over-allocate up to and not more than an aggregate of 36,000,000 Shares
and cover such over-allocations by (amongst oth er methods) exercising the Over-allotment
Option, making purchases in the secondary market at prices that do not exceed the Offer
Price or by any combination of these means.
STRUCTURE OF THE GLOBAL OFFERING
–3 9 4–


--- page 405 ---
STOCK BORROWING ARRANGEMENT
In order to facilitate the settlement of o ver-allocations in connection with the
International Offering, the Stabilizing Manag er or any person acting for it may choose to
borrow Shares from Snowy Limited under th e Stock Borrowing Agreement, or acquire
Shares from other sources, including the exercising of the Over-allotment Option. The
Stock Borrowing Agreement will not be subject to the restrictions of Rule 10.07(1)(a) of the
Listing Rules provided that the requirements set out in Rule 10.07(3) of the Listing Rules
are to be complied with as follows:
(i) such stock borrowing arrangement with Snowy Limited will only be effected by
the Stabilizing Manager for settlement of o ver-allocations in the International
Offering and covering any short position prior to the exercise of the
Over-allotment Option;
(ii) the maximum number of Shares borrowed from Snowy Limited under the Stock
Borrowing Agreement will be limited to the maximum number of Shares which
may be issued upon exercise of the Over-allotment Option;
(iii) the same number of Shares so borrowed must be returned to Snowy Limited or its
nominees on or before the third business day following the earlier of (a) the last
day on which the Over-allotment Option may be exercised or (b) the day on which
the Over-allotment Option is exercised in full;
(iv) the stock borrowing arrangement und er the Stock Borrowing Agreement will be
effected in compliance with all applicab le laws, listing rules and regulatory
requirements; and
(v) no payment will be made to Snowy Lim ited by the Stabilizing Manager or its
authorized agents in relation to su ch stock borrowing arrangement.
SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
All necessary arrangements have been made to enable the Shares to be admitted into
the CCASS.
If the Stock Exchange grants the listing of, and permission to deal in, the Shares and
our Company complies with the stock admission requirements of HKSCC, the Shares will
be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the date of commencement of dealings in the Shares on the Stock Exchange
or any other date HKSCC chooses. Settlement o f transactions between participants of the
Stock Exchange is required to take place in CCASS on the second settlement day after any
trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
STRUCTURE OF THE GLOBAL OFFERING
–3 9 5–


--- page 406 ---
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before
8 : 00 a.m. in Hong Kong on Monday, January 13, 2025, dealings in the Shares on the Stock
Exchange are expected to commence at 9 : 00 a.m. on Monday, January 13, 2025.
The Shares will be traded in board lots of 2,000 Shares each and are freely transferable
and the stock code is 0805.
STRUCTURE OF THE GLOBAL OFFERING
–3 9 6–


--- page 407 ---
IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering. We will not provide any printed copies of this prospectus for use by the public.
This Prospectus is available at the website of the Hong Kong Stock Exchange at
www.hkexnews.hk under the ‘‘HKEXnews > New Listings > New Listing Information ’’
section and our website at www.newgonowrv.hk . If you require a printed copy of this
Prospectus, you may download and print from the website addresses above.
The contents of the Prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to section 342C of the Companies
(WUMP) Ordinance. Set out below are procedures through which you can apply for the
Hong Kong Offer Shares electronically. We will not provide any physical channels to
accept any application for the Hong Kong Offer Shares by the public.
A. APPLICATION FOR THE HONG KONG OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose
benefit you are applying for:
. a r e1 8y e a r so fa g eo ro l d e r ;a n d
. h a v eaH o n gK o n ga d d r e s s(for the HK eIPO White Form service only).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted
by the Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you
or the person(s) for whose benefit you are applying for:
. are an existing Shareholder or close associates; or
. are a Director or any of his/her close associates (as defined in the Listing
Rules).
2. Application Channels
The Hong Kong Public Offering period will begin at 9 : 00 a.m. on Tuesday,
December 31, 2024 and end at 12 : 00 noon on Wednesday, January 8, 2025 (Hong
Kong time).
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
–3 9 7–


--- page 408 ---
To apply for Hong Kong Offer Shares, you may use one of the following
application channels:
Application Channel Platform Target Investors Application Time
HK eIPO White
Form service
www.hkeipo.hk Investors who would like to
receive a physical Share
certificate. Hong Kong
Offer Shares successfully
applied for
will be allotted and issued
in your own name.
From 9 : 00 a.m. on
Tuesday, December 31
2024 to 11 : 30 a.m. on
Wednesday, January 8,
2025, Hong Kong time.
The latest time for
completing full payment
of application monies
will be 12 : 00 noon on
Wednesday, January 8,
2025, Hong Kong time.
HKSCC EIPO
channel
Your broker or custodian
who is a HKSCC
Participant will submit
an EIPO application on
your behalf through
HKSCC’s FINI system
in accordance with your
instruction
Investors who would
not like
to receive a physical Share
certificate. Hong Kong
Offer Shares successfully
applied for will be allotted
and issued in the name of
HKSCC Nominees,
deposited directly into
CCASS and credited to
your designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the
earliest and latest time
for giving such
instructions, as this
m a yv a r yb yb r o k e ro r
custodian.
The HK eIPO White Form service and the HKSCC EIPO channel are facilities
subject to capacity limitations and potential service interruptions and you are advised
not to wait until the last day of the application period to apply for Hong Kong Offer
Shares.
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit
through the HK eIPO White Form service to make an application for Hong Kong Offer
Shares, an actual application shall be deemed to have been made. If you are a person
for whose benefit the electronic application instructions a r eg i v e n ,y o us h a l lb ed e e m e d
to have declared that only one set of electronic application instructions has been given
for your benefit. If you are an agent for another person, you shall be deemed to have
declared that you have only given one set of electronic application instructions for the
benefit of the person for whom you are an agent and that you are duly authorized to
give those instructions as an agent.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
–3 9 8–


--- page 409 ---
For the avoidance of doubt, giving an application instruction under the HK eIPO
White Form service more than once and obtaining different payment reference numbers
without effecting full payment in respect of a particular reference number will not
constitute an actual application.
If you apply through the HK eIPO White Form service, you are deemed to have
authorized the HK eIPO White Form Service Provider to apply on the terms and
conditions in this Prospectus, as supplemented and amended by the terms and
conditions of the HK eIPO White Form service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares
on your behalf through the HKSCC EIPO Channel, you (and, if you are joint
applicants, each of you jointly and seve rally) are deemed to have instructed and
authorized HKSCC to cause HKSCC Nominees (acting as nominee for the relevant
HKSCC Participants) to apply for Hong Kong Offer Shares on your behalf and to do
on your behalf all the things stated in this Prospectus and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be
deemed to have been made for any application instructions given by you or for your
benefit to HKSCC (in which case an application will be made by HKSCC Nominees on
your behalf) provided such application instruction has not been withdrawn or
otherwise invalidated before the closing time of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC
nor HKSCC Nominees shall be liable to you or any other person in respect of any
actions taken by HKSCC or HKSCC Nominees on your behalf to apply for Hong
Kong Offer Shares or for any breach of the terms and conditions of this Prospectus.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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3 . I n f o r m a t i o nR e q u i r e dt oA p p l y
You must provide the following info rmation with your application:
For Individual Applicants For Corporate Applicants
. Full name(s)
2 a ss h o w no ny o u r
identity document
. Identity document’s issuing country
or jurisdiction
. Identity document type, with order
of priority:
i. Hong Kong Identity card
(‘‘HKID ’’); or
ii. National identification
document; or
iii. Passport; and
. Identity document number
. Full name(s) 2 a ss h o w no ny o u r
identity document
. Identity document’s issuing country
or jurisdiction
. Identity document type, with order
of priority:
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document;
and
. Identity document number
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a
valid e-mail address, a contact telephone number and a Hong Kong Address. You are also
required to declare that the identity informati on provided by you follows the requirements as
described in note 2 below. In particular, where you cannot provide a HKID number, you must
confirm that you do not hold a HKID card. The number of joint applicants may not exceed
four. If you are a firm, the applicant m ust be in the individual members’ names.
2. The applicant’s full name as shown on their iden tity document must be used. If an applicant’s
identity document contains both an English and Chinese name, both English and Chinese
names must be used. Otherwise, either English or Chinese names will be accepted. The order of
priority of the applicant’s identity documen t type must be strictly followed and where an
individual applicant has a val id HKID card, the HKID number must be used when making an
application to subscribe for shares in a public of fer. Similarly for corporate applicants, a LEI
number must be used if an entity has a LEI certificate.
3. If the applicant is a trustee, th e client identification data (‘‘ CID’’) of the trustee, as set out
above, will be required. If the applicant is an i nvestment fund (i.e. a collective investment
scheme, or CIS), the CID of the asset management company or the individual fund, as
appropriate, which has opened a trading account with the broker will be required, as above.
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--- page 411 ---
4. The maximum number of joint a ccount holders on FINI is capped at 4 1 in accordance with
market practice.
5. If you are applying as a nominee, you must provi de: (i) the full name (as shown on the identity
document), the identity document’s issuing count ry or jurisdiction, the identity document
type; and (ii), the identity document number, for each of the beneficial owners or, in the
case(s) of joint beneficial owners, for each joi nt beneficial owner. If you do not include this
information, the application will be t reated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is
dealing in securities; and (ii) you exercise s tatutory control over that company, then the
application will be treated as being for your benefit and you should provide the required
information in your application as stated above.
‘‘Unlisted company’’ means a company with no e quity securities listed on the Stock Exchange
or any other stock exchange.
‘‘Statutory control’’ means you:
. control the composition of the board of directors of the company;
. control more than half of the voting power of the company; or
. hold more than half of the issued share capit al of the company (not counting any part of
it which carries no right to participate beyond a specified amount in a distribution of
either profits or capital).
For those applying through HKSCC EIPO channel, and making an application
under a power of attorney, we and the Overall Coordinators, as our agent, have
discretion to consider whether to accept it on any conditions we think fit, including
evidence of the attorney’s authority.
Failing to provide any required information may result in your application being
rejected.
1 Subject to change, if the Company’s Articles of Incorporation and applicable company law prescribe a lower
cap.
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4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 2,000 Shares for one board lot
Permitted number of
Hong Kong Offer
Shares for application
and amount payable
on application/
successful allotment
: Hong Kong Offer Shares are available for
a p p l i c a t i o ni ns p e c i f i e db o a r dl o ts i z e so n l y .
Please refer to the amount payable associated
with each specified board lot size in the table
below.
The maximum Offer Price is HK$1.64 per
Share.
If you are applying through the HKSCC EIPO
channel, you are required to pre-fund your
application based on the amount specified by
your broker or custodian , as determined based
on the applicable laws and regulations in Hong
Kong.
By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO Channel, you (and,
if you are joint applicants, each of you jointly
and severally) are deemed to have instructed
a n da u t h o r i z e dH K S C Ct oc a u s eH K S C C
Nominees (acting as nominee for the relevant
HKSCC Participants) to arrange payment of
the final Offer Price, brokerage, SFC
transaction levy, the Stock Exchange trading
fee and the AFRC transaction levy by debiting
the relevant nominee bank account at the
Designated Bank for your broker or custodian .
If you are applying through the HK eIPO White
Form service, you may refer to the table below
for the amount payable for the number of
Shares you have selected. You must pay the
respective maximum amount payable on
application in full upon application for Hong
Kong Offer Shares.
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--- page 413 ---
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
H K $H K $H K $H K $
2,000 3,313.08 40,000 66,261.58 200,000 331,307.88 4,000,000 6,626,157.60
4,000 6,626.16 50,000 82,826.96 300,000 496,961.82 5,000,000 8,282,697.00
6,000 9,939.24 60,000 99,392.37 400,000 662,615.75 6,000,000 9,939,236.40
8,000 13,252.31 70,000 115,957.76 500,000 828,269.70 7,000,000 11,595,775.80
10,000 16,565.39 80,000 132,523.15 600,000 993,923.65 8,000,000 13,252,315.20
12,000 19,878.47 90,000 149,088.55 700,000 1,159,577.58 9,000,000 14,908,854.60
14,000 23,191.55 100,000 165,653.95 800,000 1,325,231.52 10,000,000 16,565,394.00
16,000 26,504.63 120,000 198,784.73 900,000 1,490,885.45 12,000,000
(1) 19,878,472.80
18,000 29,817.71 140,000 231,915.51 1,000,000 1,656,539.40
20,000 33,130.79 160,000 265,046.30 2,000,000 3,313,078.80
30,000 49,696.18 180,000 298,177.09 3,000,000 4,969,618.20
Notes:
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong
Kong Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange
trading fee and AFRC transaction levy. If your application is successful, brokerage will be
paid to the Exchange Participants (as defined in the Listing Rules) or to the HK eIPO White
Form Service Provider (for applications made through the application channel of the HK eIPO
White Form Service Provider) while the SFC transacti on levy, the Stock Exchange trading fee
and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the AFRC,
respectively.
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your
own benefit, except where you are a nominee and provide the information of the
underlying investor in your application as required under the paragraph headed ‘‘ —A .
Applications for Hong Kong Offer Shares — 3. Information Required to Apply ’’ in this
section. If you are suspected of submitting or cause to submit more than one
application, all of your applications will be rejected.
Multiple applications made either through (i) the HK eIPO White Form service,
(ii) HKSCC EIPO channel, or (iii) both channe ls concurrently are prohibited and will
be rejected. If you have made an application through the HK eIPO White Form service
or HKSCC EIPO channel, you or the person(s) for whose benefit you have made the
application shall not apply for a ny International Offer Shares.
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The Hong Kong Share Registrar would record all applications into its system and
identify suspected multiple applications with identical names and identification
document numbers according to the Be st Practice Note on Treatment of
Multiple/Suspected Mult iple Applications (‘‘ Best Practice Note ’’) issued by the
Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through HK eIPO White Form service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the
following things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us
and/or the Overall Coordinators, as our agents, to execute any documents for
you and to do on your behalf all things necessary to register any Hong Kong
Offer Shares allocated to you in your name or in the name of HKSCC
Nominees as required by the Articles of Association, and (if you are applying
through the HKSCC EIPO channel) to deposit the allotted Hong Kong Offer
Shares directly into CCASS for the credit of your designated HKSCC
Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and
application procedures set out in this Prospectus and the designated website
of the HK eIPO White Form service (or as the case may be, the agreement
you entered into with your broker or custodian), and agree to be bound by
them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the
arrangements, undertakings and warranties under the participant agreement
between your broker or custodian and HKSCC and observe the General Rules
of HKSCC and the HKSCC Operational Procedures for giving application
instructions to apply for Hong Kong Offer Shares;
(iv) confirm that you are aware of the restr ictions on offers and sales of shares set
out in this Prospectus and they do not apply to you, or the person(s) for
whose benefit you have made the application;
(v) confirm that you have read this Prospectus and any supplement to it and
have relied only on the information and representations contained therein in
making your application (or as the case may be, causing your application to
be made) and will not rely on any other information or representations;
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(vi) agree that the Sole Sponsor, the Sponsor-Overall Coordinator, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the
Joint Lead Managers, the Underwriters, the Capital Market Intermediaries,
any of their or the Company’s respective directors, officers, employees,
partners, agents, advisers and any other parties involved in the Global
Offering (the ‘‘ Relevant Persons ’’), the Hong Kong Share Registrar and
HKSCC will not be liable for any information and representations not in this
Prospectus and any supplement to it;
(vii) agree to disclose the details of your application and your personal data and
any other personal data which may be required about you and the person(s)
for whose benefit you have made the application to us, the Relevant Persons,
the Hong Kong Share Registrar, HKSCC, HKSCC Nominees, the Hong
Kong Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations,
for the purposes under the paragraph headed ‘‘— G. Personal Data — 3.
Purposes and 4. Transfer of personal data’’ in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, H KSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent
misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or
HKSCC Nominees on your behalf cannot be revoked once it is accepted,
which will be evidenced by the notification of the result of the ballot by the
Hong Kong Share Registrar by way of publication of the results at the time
a n di nt h em a n n e ra ss p e c i f i e di nt h ep a r a g r a p hh e a d e d‘ ‘ —B .P u b l i c a t i o no f
Results’’ in this section;
(x) confirm that you are aware of the situations specified in the paragraph
headed ‘‘— C. Circumstances In Which You Will Not Be Allocated Hong
Kong Offer Shares’’ in this section;
(xi) agree that your application or HKSCC Nominees’ application, any
acceptance of it and the resulting contract will be governed by and
construed in accordance with the laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up
and Miscellaneous Provisions) Ordin ance, the Articles of Association and
laws of any place outside Hong Kong that apply to your application and that
neither we nor the Relevant Persons will breach any law inside and/or outside
Hong Kong as a result of the acceptance of your offer to purchase, or any
action arising from your rights a nd obligations under the terms and
conditions contained in this Prospectus;
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(xiii) confirm that (a) your application or HKSCC Nominees’ application on your
behalf is not financed directly or indirectly by the Company, any of the
directors, chief executives, substa ntial Shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their
respective close associates; and (b) you are not accustomed or will not be
accustomed to taking instructions from the Company, any of the directors,
chief executives, substantial shareholde r(s) or existing shareholder(s) of the
C o m p a n yo ra n yo fi t ss u b s i d i a r i e so ra n yo ft h e i rr e s p e c t i v ec l o s ea s s o c i a t e s
in relation to the acquisition, dispo sal, voting or other disposition of the
Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely
on your declarations and representations in deciding whether or not to
allocate any Hong Kong Offer Shares to you and that you may be prosecuted
for making a false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number
allocated to you under the application;
(xvii) declare and represent that this is the only application made and the only
application intended by you to be made to benefit you or the person for
whose benefit you are applying;
(xviii) (if the application is made for your own benefit) warrant that no other
application has been or will be made for your benefit by giving electronic
application instructions to HKSCC directly or indirectly or through the
application channel of the HK eIPO White Form Service Provider or by any
one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another
person) warrant that (1) no other application has been or will be made by you
as agent for or for the benefit of that person or by that person or by any
other person as agent for that person by giving electronic application
instructions to HKSCC and the HK eIPO White Form Service Provider (2)
you have due authority to give electronic application instructions on behalf of
that other person as its agent.
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--- page 417 ---
B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successf ully allocated any Hong Kong Offer
Shares through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website from ‘‘Allotment Results’’ page at the
designated results of a llocations website
at www.tricor.com.hk/ipo/result or
www.hkeipo.hk/IPOResult with a
‘‘search by ID’’ function.
The full list of (i) wholly or partially
successful applicants using the HK eIPO
White Form service and HKSCC EIPO
channel, and (ii) the number of Hong
Kong Offer Shares conditionally allotted
to them, among other things, will be
displayed at
www.hkeipo.hk/IPOResult
or www.tricor.com.hk/ipo/result .
24 hours, from 11 : 00 p.m. on Friday,
January 10, 2025 to 12 : 00 midnight
on Thursday, January 16, 2025 (Hong
Kong time)
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.newgonowrv.hk which will provide
links to the above mentioned websites of
the Hong Kong Share Registrar.
No later than 11 : 00 p.m. on Friday,
January 10, 2025 (Hong Kong time).
Telephone +852 3691 8488 — th e allocation results
telephone enquiry line provided by the
Hong Kong Share Registrar
between 9 : 00 a.m. and 6 : 00 p.m.
from Monday, January 13, 2025 to
Thursday, January 16, 2025 (Hong
Kong time) on a business day
For those applying through HKSCC EIPO cha nnel, you may also check with your broker or
custodian from 6 : 00 p.m. on Thursday, January 9, 2025 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6 : 00
p.m. on Thursday, January 9, 2025 (Hong K ong time) on a 24-hour basis and should
report any discrepancies on allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the results of the fin al Offer Price, the level of indications
of interest in the International Offering, the level of applications in the Hong Kong
Public Offering and the basis of allocations of Hong Kong Offer Shares on the Hong
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Kong Stock Exchange’s website at www.hkexnews.hk and our website at
www.newgonowrv.hk by no later than 11 : 00 p.m. on Friday, January 10, 2025 (Hong
Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application m ade by HKSCC Nominees on your behalf
may be revoked pursuant to Section 44A ( 6 )o ft h eC o m p a n i e s( W i n d i n gU pa n d
Miscellaneous Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the Hong Kong Share Registrar and their
respective agents and nominees have full discretion to reject or accept any
application, or to accept only part of any application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does
not grant permission to list the Shares either:
. within three weeks from the closing date of the application lists; or
. within a longer period of up to six weeks if the Stock Exchange notifies us of
that longer period within three weeks of the closing date of the application
lists.
4. If:
. you make multiple applications or suspected multiple applications. You may
refer to the paragraph headed ‘‘— A. Applications for Hong Kong Offer
Shares — 5. Multiple Applications Pr ohibited’’ in this section on what
constitutes multiple applications;
. your application instr uction is incomplete;
. your payment (or confirmation of funds, as the case may be) is not made
correctly;
. the Underwriting Agreements do not become unconditional or are
terminated;
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. we or the Overall Coordinators believes that by accepting your application, it
or we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold suffici ent application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the
Receiving Bank will collect the portion of these funds required to settle each HKSCC
Participant’s actual Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. I nt h ee x t r e m ee v e n to fm o n e y
settlement failure by a HKSCC Participant ( or its Designated Bank), who is acting on
your behalf in settling payment for your allotted shares, HKSCC will contact the
defaulting HKSCC Participant and its Des i g n a t e dB a n kt od e t e r m i n et h ec a u s eo f
failure and request such defaulting HKSCC Participant to rectify or procure to rectify
the failure.
However, if it is determined that such se ttlement obligation cannot be met, the
affected Hong Kong Offer Shares will be rea llocated to the International Offering.
Hong Kong Offer Shares applied for by you through the broker or custodian may be
affected to the extent of the settlement failure. In the extreme case, you will not be
allocated any Hong Kong Offer Shares due to the money settlement failure by such
HKSCC Participant. None of us, the Relevant Persons, the Hong Kong Share
Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are not allocated
to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF SHA RE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the Shares. No receipt will
be issued for sums paid on application.
Share certificates will only become valid at 8 : 00 a.m. on Monday, January 13, 2025
(Hong Kong time), provided that the Global Offer has become unconditional and the right
of termination described in the section headed ‘‘Underwriting’’ has not been exercised.
Investors who trade Shares prior to the receipt of Share certificates or the Share certificates
becoming valid do so entirely at their own risk.
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
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The following sets out the re levant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of Share certificate 2
For application of
1,000,000 Hong
Kong Offer Shares or
more
C o l l e c t i o ni np e r s o na tH o n gK o n g
Share Registrar, Tricor Investor
Services Limited, at 17/F, Far East
Finance Centre, 16 Harcourt Road,
Hong Kong
Time: from 9 : 00 a.m. to 1 : 00 p.m. on
Monday, January 13, 2025
(Hong Kong time)
If you are an individual, you must not
authorize any other person to
collect for you. If you are a
corporate applicant, your
authorized representative must bear
a letter of authorization from your
corporation stamped with your
corporation’s chop.
Both individuals and authorized
representatives must produce, at the
time of collection, evidence of
identity acceptable to the Hong
Kong Share Registrar.
Note: If you do not collect your
Share certificate(s) personally
within the time above, it/they
will be sent to the address
specified in your application
instructions by ordinary post
at your own risk
Share certificate(s) will be issued in
the name of HKSCC Nominees,
deposited into CCASS and credited
to your designated HKSCC
Participant’s stock account
No action by you is required
For application of less
than 1,000,000 Hong
Kong Offer Shares
Your Share certificate(s) will be sent
to the address specified in your
application instructions by
ordinary post at your own risk
Date: Friday, January 10, 2025
2 Except in the event of a tropical cyclone warning sig nal number 8 or above, a black rainstorm warning
and/or an ‘‘extreme conditions’’ announcement issued after a super typhoon in force in Hong Kong in the
morning on Friday, January 10, 2025 rendering it impos sible for the relevant Share certificates to be
dispatched to HKSCC in a timely ma nner, the Company shall procure the Hong Kong Share Registrar to
arrange for delivery of the supporting documents and Share certificates in accordance with the contingency
arrangements as agreed between them. You may refer to ‘‘— E. Bad Weather Arrangements’’ in this section.
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HK eIPO White Form service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date Monday, January 13, 2025 Subject to the arrangement between
you and your broker or custodian
Responsible party Hong Kong Share Registrar Your broker or custodian
Application monies paid
through single bank
account
HK eIPO White Form e-Auto Refund
payment instructions to your
designated bank account
Your broker or custodian will arrange
refund to your designated bank
account subject to the arrangement
between you and it
Application monies paid
through multiple
bank accounts
Refund check(s) will be despatched to
the address as specified in your
application instructions by
ordinary post at your own risk
E. BAD WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, January 8, 2025 if,
there is:
. a tropical cyclone warning signal number 8 or above;
. a black rainstorm warning; and/or
. Extreme Conditions
(collectively, ‘‘Bad Weather Signals ’’),
in force in Hong Kong at any time between 9 : 00 a.m. and 12 : 00 noon on Wednesday,
January 8, 2025.
Instead they will open between 11 : 45 a.m. and 12 : 00 noon and/or close at 12 : 00
noon on the next business day which does not have Bad Weather Signals in force at any
time between 9 : 00 a.m. and 12 : 00 noon.
Prospective investors should be aware that a postponement of the opening/closing
of the application lists may result in a delay in the listing date. Should there be any
changes to the dates mentioned in the section headed ‘‘Expected Timetable’’ in this
Prospectus, an announcement will be made and published on the Stock Exchange’s
website at
www.hkexnews.hk and our website at www.newgonowrv.hk of the revised
timetable.
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If a Bad Weather Signal is hoisted on Friday, January 10, 2025, the Hong Kong
Share Registrar will make appropriate arrangements for the delivery of the share
certificates to the CCASS Depository’s service counter so that they would be available
for trading on Monday, January 13, 2025.
If a Bad Weather Signal is hoisted on Friday, January 10, 2025, for application of
less than 1,000,000 Offer Shares, the dispa tch of physical Share certificates will be
made by ordinary post when the post office re-opens after the Bad Weather Signal is
lowered or canceled (e.g. in the afternoon of Friday, January 10, 2025 or on Monday,
January 13, 2025).
If a Bad Weather Signal is hoisted on Monday, January 13, 2025, for application
of 1,000,000 Offer Shares or more, the physical Share certificates will be available for
collection in person at the Hong Kong Share Registrar’s office after the Bad Weather
Signal is lowered or canceled (e.g. in the afternoon of Monday, January 13, 2025 or on
Tuesday, January 14, 2025).
Prospective investors should be aware that if they choose to receive physical Share
certificates issued in their own name, there may be a delay in receiving the Share
certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and
settlement in CCASS with effect from the date of commencement of dealings in the Shares
or any other date HKSCC chooses. Settlement of transactions between Exchange
Participants is required to take place in CCASS on the second settlement day after any
trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
You should seek the advice of your broker or other professional advisor for details of
the settlement arrangement as such arrangem ents may affect your rights and interests.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
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G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the Hong K ong Share Registrar, the receiving banks
and the Relevant Persons about you in the same way as it applies to personal data about
applicants other than HKSCC Nominees. This personal data may include client identifier(s)
and your identification information. By giv ing application instructions to HKSCC, you
acknowledge that you have read, understood and agree to all of the terms of the Personal
Information Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Sta tement informs the applicant for, and
holder of, Hong Kong Offer Shares, of the policies and practices of the Company and
the Hong Kong Share Registrar in relation to personal data and the Personal Data
(Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to
ensure that personal data supplied to the Company or its agents and the Hong Kong
Share Registrar is accurate and up-to-date when applying for Hong Kong Offer Shares
or transferring Hong Kong Offer Shares into or out of their names or in procuring the
services of the Hong Kong Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in
your application for Hong Kong Offer Shares being rejected, or in the delay or the
inability of the Company or the Hong Kong Sh are Registrar to effect transfers or
otherwise render their services. It may also prevent or delay registration or transfers of
Hong Kong Offer Shares which you have successfully applied for and/or the despatch
of Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform
the Company and the Hong Kong Share Registrar immediately of any inaccuracies in
the personal data supplied.
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever
means) for the following purposes:
. processing your application and ref und check and e-Auto Refund payment
instruction(s), where applicable, ver ification of compliance with the terms
and application procedures set out in this Prospectus and announcing results
of allocation of Hong Kong Offer Shares;
. compliance with applicable laws an d regulations in Hong Kong and
elsewhere;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
–4 1 3–


--- page 424 ---
. registering new issues or transfers into or out of the names of the holders of
the Shares including, where applicable, HKSCC Nominees;
. maintaining or updating the register of members of the Company;
. verifying identities of applicants for a nd holders of the Shares and identifying
any duplicate applicat ions for the Shares;
. facilitating Hong Kong Offer Shares balloting;
. establishing benefit entitlements of holders of the Shares, such as dividends,
rights issues, bonus issues, etc.;
. distributing communications from the Company and its subsidiaries;
. compiling statistical information and profiles of the holder of the Shares;
. disclosing relevant information to f acilitate claims on entitlements; and
. any other incidental or associated purposes relating to the above and/or to
enable the Company and the Hong Kong Share Registrar to discharge their
obligations to applicants and holders of the Shares and/or regulators and/or
any other purposes to which applicants and holders of the Shares may from
time to time agree.
4. Transfer of personal data
Personal data held by the Company and the Hong Kong Share Registrar relating
to the applicants for and holders of Hong Kong Offer Shares will be kept confidential
but the Company and the Hong Kong Share Registrar may, to the extent necessary for
achieving any of the above purposes, disclose, obtain or transfer (whether within or
outside Hong Kong) the personal data to, from or with any of the following:
. the Company’s appointed agents such as financial advisers, receiving banks
and overseas principal share registrar;
. HKSCC or HKSCC Nominees, who will use the personal data and may
transfer the personal data to the Hong Kong Share Registrar, in each case for
the purposes of providing its services or facilities or performing its functions
in accordance with its rules or procedures and operating FINI and CCASS
(including where applicants for the Hong Kong Offer Shares request a
deposit into CCASS);
. any agents, contractors or third-party service providers who offer
administrative, telecommunications, computer, payment or other services
to the Company or the Hong Kong Share Registrar in connection with their
respective business operation;
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
–4 1 4–


--- page 425 ---
. the Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations,
including for the purpose of the Stock Exchange’s administration of the
Listing Rules and the SFC’s performan ce of its statutory functions; and
. any persons or institutions with which the holders of Hong Kong Offer
Shares have or propose to have dealings, such as their bankers, solicitors,
accountants or brokers etc.
5. Retention of personal data
The Company and the Hong Kong Share Registrar will keep the personal data of
the applicants and holders of Hong Kong Offer Shares for as long as necessary to
fulfill the purposes for which the personal data were collected. Personal data which is
no longer required will be destroyed or dea lt with in accordance with the Personal
Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain
whether the Company or the Hong Kong Share Registrar hold their personal data, to
obtain a copy of that data, and to correct any data that is inaccurate. The Company
and the Hong Kong Share Registrar have the right to charge a reasonable fee for the
processing of such requests. All requests for access to data or correction of data should
be addressed to the Company and the Hong Kong Share Registrar, at their registered
address disclosed in the section headed ‘‘Corporate information’’ in this Prospectus or
as notified from time to time, for the atten tion of the company secretary, or the Hong
Kong Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR THE HONG KONG OFFER SHARES
–4 1 5–


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The following is the text of a report set out on pages I-1 to I-67, received from the
Company’s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF NEW GONOW RECREATIONAL VEHICLES INC. AND HUATAI
FINANCIAL HOLDINGS (HONG KONG) LIMITED
Introduction
We report on the historical financial info rmation of New Gonow Recreational Vehicles
Inc. (the ‘‘Company’’) and its subsidiaries (together, the ‘‘Group’’) set out on pages I-4 to
I-67, which comprises the consolidated statements of financial position of the Group as at
31 December 2021, 2022 and 2023 and 30 June 2024, the statements of financial position of
the Company as at 31 December 2022 and 2023 and 30 June 2024, and the consolidated
statements of profit or loss and other comprehe nsive income, the consolidated statements of
changes in equity and the consolidated statements of cash flows, for each of the years ended
31 December 2021, 2022 and 2023 and six months ended 30 June 2024 (the ‘‘Relevant
Periods’’), and material accounting policy information and other explanatory information
(together, the ‘‘Historical Financial Informati on’’). The Historical Financial Information
set out on pages I-4 to I-67 forms an integral part of this report, which has been prepared
for inclusion in the prospectu s of the Company dated 31 December 2024 (the ‘‘Prospectus’’)
in connection with the initial listing of sh ares of the Company on the Main Board of The
Stock Exchange of Hong Kong Limited.
Directors’ responsibility for the H istorical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of
preparation and presentation set out in Note 1 to the Historical Financial Information, and
for such internal control as the directors of the Company determine is necessary to enable
the preparation of the Historical Financial Information that is free from material
misstatement, whether due to fraud or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and
to report our opinion to you. We conducted our work in accordance with Hong Kong
Standard on Investment Circular Reporting Engagements 200 ‘‘Accountants’ Reports on
Historical Financial Information in Investment Circulars’’ issued by the Hong Kong
Institute of Certified Public Accountants (th e ‘‘HKICPA’’). This standard requires that we
comply with ethical standards and plan and perform our work to obtain reasonable
assurance about whether the Historical Financial Information is free from material
misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1–


--- page 427 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material
misstatement of the Historical Financial Information, whether due to fraud or error. In
making those risk assessments, the reporting ac countants consider internal control relevant
to the entity’s preparation of the Historical F inancial Information that gives a true and fair
view in accordance with the basis of preparation and presentation set out in Note 1 to the
Historical Financial Information in order to design procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. Our work also inc luded evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the Historical Financial
Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purpose of the
accountants’ report, a true and fair view of the Company’s financial position as at 31
December 2022 and 2023 and 30 June 2024 and th e Group’s financial position as at 31
December 2021, 2022 and 2023 an d 30 June 2024, and of the Group’s financial performance
and cash flows for the Relevant Periods in accordance with the basis of preparation and
presentation set out in Note 1 to the Historical Financial Information.
Review of stub period corresponding financial information
We have reviewed the stub period corresponding financial information of the Group
which comprises the consolidated statement of profit or loss and other comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the six months ended 30 June 2023 and other explanatory information (the
‘‘Stub Period Corresponding Financial Information’’). The directors of the Company are
responsible for the preparation and presentation of the Stub Period Corresponding
Financial Information in accordance with the basis of preparation and presentation set out
in Note 1 to the Historical Financial Information. Our responsibility is to express a
conclusion on the Stub Period Corresponding Financial Information based on our review.
We conducted our review in accordance with Hong Kong Standard on Review Engagements
2410 ‘‘Review of Interim Financial Informat ion Performed by the Independent Auditor of
the Entity’’ issued by the HKICPA. A review consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit conducted in
accordance with Hong Kong Standards on Auditing and consequently does not enable us to
obtain assurance that we would become awar e of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion. Based on our
review, nothing has come to our attention that causes us to believe that the Stub Period
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2–


--- page 428 ---
Corresponding Financial Information, for the purpose of the accountants’ report, is not
prepared, in all material respects, in accordance with the basis of preparation and
presentation set out in Note 1 to the Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited and the Companies (Winding Up and Miscellaneous Provisions)
Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note 24(d) to the Historical Fin ancial Information which states that no
dividends have been paid by the Company in respect of the Relevant Periods.
No statutory financial statements for the Company
No statutory financial statements have been prepared for the Company since its
incorporation.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
31 December 2024
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3–


--- page 429 ---
HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of
this accountants’ report.
The consolidated financial statements of the Group for the Relevant Periods, on which
the Historical Financial Information is based, were audited by KPMG Huazhen LLP
Shanghai Branch in accordance with Hong Kong Standards on Auditing issued by the
HKICPA (the ‘‘Underlying Financial Statements’’).
The Historical Financial Information is pre sented in Renminbi (‘‘RMB’’) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4–


--- page 430 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue 4 299,672 498,780 720,303 309,526 421,973
Cost of sales (249,568) (416,536) (539,252) (238,145) (287,070)
Gross profit 50,104 82,244 181,051 71,381 134,903
Other income/(loss) 5 8,107 9,115 14,517 7,667 (2,667)
Selling and distribution expenses (6,479) (19,316) (41,547) (17,255) (32,184)
Administrative expenses (12,385) (21,155) (36,209) (14,078) (35,605)
Research and development expenses (2,835) (5,112) (7,968) (4,010) (5,625)
(Provision)/reversal of impairment loss
on trade receivables (9) (65) 34 7 (21)
Share of profit/(loss) of a joint venture 13 912 1,083 113 (283) —
Profit from operations 37,415 46,794 109,991 43,429 58,801
Finance costs 6(a) (3,090) (2,533) (2,315) (1,079) (4,796)
Profit before taxation 6 34,325 44,261 107,676 42,350 54,005
Income tax 7 (9,245) (11,305) (28,908) (10,702) (13,575)
Profit for the year/period 25,080 32,956 78,768 31,648 40,430
Attributable to:
Equity shareholders of the Compa ny 25,080 32,956 79,973 31,648 39,532
Non-controlling interests — — (1,205) — 898
Profit for the year/period 25,080 32,956 78,768 31,648 40,430
Earnings per share
Basic and diluted earnings per share
(RMB) 10 N/A N/A N/A N/A N/A
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5–


--- page 431 ---
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Other comprehensive income/(loss)
for the year/period (after tax and
reclassification adjustments)
Items that are or may be reclassified
subsequently to profit or loss:
Exchange differences on translation of
financial statements of overseas
subsidiaries 2,551 (803) 1,231 495 (560)
Other comprehensive income/(loss)
for the year/period 2,551 (803) 1,231 495 (560)
Total comprehensive income
for the year/period 27,631 32,153 79,999 32,143 39,870
Attributable to:
Equity shareholders of the Compa ny 27,631 32,153 81,107 32,143 38,991
Non-controlling interests — — (1,108) — 879
Total comprehensive income
for the year/period 27,631 32,153 79,999 32,143 39,870
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6–


--- page 432 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
At 31 December At 30 June
2021 2022 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Plant and equipment 11 13,029 15,134 19,189 19,690
Right-of-use assets 12 53,666 42,559 50,848 82,531
Intangible assets 21 — — 107
Investment in a joint
venture 13 724 900 — —
Deferred tax assets 23(b) 10,646 11,811 14,541 19,289
78,086 70,404 84,578 121,617
Current assets
Inventories 14 112,443 155,636 242,827 272,374
Trade and other
receivables 15 19,710 45,275 46,138 60,939
Prepayments 16 2,934 2,689 6,021 11,554
Restricted cash 17(b) 2,350 4,753 4,889 14,738
Cash and cash
equivalents 17(a) 8,797 21,466 14,345 43,882
146,234 229,819 314,220 403,487
Current liabilities
Trade and other
payables 18 101,589 161,656 240,666 274,399
Contract liabilities 19 4,843 7,596 12,803 7,103
Loans and borrowings 20 26,686 9,117 31,208 104,588
Lease liabilities 21 14,469 23,726 29,016 10,646
Current taxation 23(a) — 1,251 7,418 10,037
Provisions 22 914 1,896 2,970 3,079
148,501 205,242 324,081 409,852
Net current (liabilities)/
assets (2,267) 24,577 (9,861) (6,365)
Total assets less current
liabilities 75,819 94,981 74,717 115,252
APPENDIX I ACCOUNTANTS’ REPORT
–I - 7–


--- page 433 ---
At 31 December At 30 June
2021 2022 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000
Non-current liabilities
Loans and borrowings 20 — — 408 345
Lease liabilities 21 46,862 34,995 43,362 75,826
Provisions 22 1,987 3,032 3,761 3,798
48,849 38,027 47,531 79,969
NET ASSETS 26,970 56,954 27,186 35,283
CAPITAL AND
RESERVES 24
Share capital — — — —
Reserves 26,970 56,954 25,282 32,500
Total equity attributable
to equity shareholders
of the Company 26,970 56,954 25,282 32,500
Non-controlling
interests — — 1,904 2,783
TOTAL EQUITY 26,970 56,954 27,186 35,283
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 8–


--- page 434 ---
STATEMENTS OF FINANCIAL POSITION
At 31 December At 30 June
2022 2023 2024
Note RMB’000 RMB’000 RMB’000
Non-current assets
Interest in subsidiaries — — —
———
Current assets
Cash and cash equivalents — — —
———
Current liabilities
Trade and other payables — — —
Net current assets ———
Total assets less current liabilities ———
NET ASSETS ———
CAPITAL AND RESERVES
Share capital — — —
Reserves — — —
TOTAL EQUITY ———
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 9–


--- page 435 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity shareholders of the Company
Share
capital
Other
reserves
Accumulated
losses
Net parent
Investment
(Note 1)
Exchange
reserve Sub-total
Non-controlling
interests
Total (deficit)/
equity
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2021 — — (37,611) 34,434 — (3,177) — (3,177)
Changes in equity for 2021 :
Profit for the year — — 6,077 19,003 — 25,080 — 25,080
O t h e r c o m p r e h e n s i v e i n c o m e ———— 2 , 5 5 1 2 , 5 5 1— 2 , 5 5 1
Total comprehensive income — — 6,077 19,003 2,551 27,631 — 27,631
Deemed contribution 1 — — — 2,516 — 2,516 — 2,516
Balance at 31 December 2021
and 1 January 2022 — — (31,534) 55,953 2,551 26,970 — 26,970
Changes in equity for 2022 :
(Loss)/profit for the year — — (1,474) 34,430 — 32,956 — 32,956
O t h e r c o m p r e h e n s i v e l o s s ———— ( 8 0 3 ) ( 8 0 3 ) — ( 8 0 3 )
Total comprehensive income — — (1,474) 34,430 (803) 32,153 — 32,153
Capital contribution converted
from debts 20 — 44,191 — — — 44,191 — 44,191
Deemed distribution 1 — — — (46,360) — (46,360) — (46,360)
Balance at 31 December 2022 — 44,191 (33,008) 44,023 1,748 56,954 — 56,954
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 0–


--- page 436 ---
Attributable to equity shareholders of the Company
Share
capital
Other
reserves
Accumulated
losses
Net parent
Investment
(Note 1)
Exchange
reserve Sub-total
Non-controlling
interests
Total equity/
(deficit)
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2023 — 44,191 (33,008) 44,023 1,748 56,954 — 56,954
Changes in equity for 2023 :
Profit/(loss) for the year — — 4,779 75,194 — 79,973 (1,205) 78,768
O t h e r c o m p r e h e n s i v e i n c o m e ———— 1 , 1 3 4 1 , 1 3 49 7 1 , 2 3 1
Total comprehensive income — — 4,779 75,194 1,134 81,107 (1,108) 79,999
Capital injection from a
non-controlling shareholder —————— 1 , 1 5 4 1 , 1 5 4
Acquisition of equity interest of
a joint venture and become
a s u b s i d i a r y o f t h e G r o u p 1 3 —————— 1 , 8 5 8 1 , 8 5 8
Deemed distribution 1 — — — (112,779) — (112,779) — (112,779)
Balance at 31 December 2023
and 1 January 2024 — 44,191 (28,229) 6,438 2,882 25,282 1,904 27,186
Changes in equity for the period
ended 30 June 2024 :
Profit for the period — — 9,513 30,019 — 39,532 898 40,430
O t h e r c o m p r e h e n s i v e l o s s ———— ( 5 4 1 ) ( 5 4 1 ) ( 1 9 ) ( 5 6 0 )
Total comprehensive income — — 9,513 30,019 (541) 38,991 879 39,870
Arising from Reorganisation 1 — 4,684 — (57,513) — (52,829) — (52,829)
Deemed contribution 1 — — — 21,056 — 21,056 — 21,056
Balance at 30 June 2024 — 48,875 (18,716) — 2,341 32,500 2,783 35,283
(Unaudited)
Balance at 1 January 2023 — 44,191 (33,008) 44,023 1,748 56,954 — 56,954
Changes in equity for the period
ended 30 June 2023 :
Profit for the period — — 255 31,393 — 31,648 — 31,648
O t h e r c o m p r e h e n s i v e i n c o m e ———— 4 9 5 4 9 5— 4 9 5
Total comprehensive income — — 255 31,393 495 32,143 — 32,143
Deemed distribution — — — (103,498) — (103,498) — (103,498)
Balance at 30 June 2023 — 44,191 (32,753) (28,082) 2,243 (14,401) — (14,401)
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 1–


--- page 437 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Operating activities
Cash generated from operations 17(c) 19,409 57,784 119,770 108,160 41,234
Income tax paid — — — — (5,680)
Net cash generated from operating
activities 19,409 57,784 119,770 108,160 35,554
Investing activities
Payment for purchase of plant and
equipment (4,563) (6,271) (7,185) (1,981) (3,049)
Proceeds from sale of equipment 64 850 458 7 18
Payment for purchase of intangible assets — — — — (110)
Proceeds from sale of intangible assets — 12 — — —
Acquisition of a subsidiary,
n e to fc a s ha c q u i r e d 1 3 — — 4 , 0 2 4 — —
N e tc a s hu s e di ni n v e s t i n ga c t i v i t i e s (4,499) (5,409) (2,703) (1,974) (3,141)
Financing activities
Capital contributions from
a non-controlling shareholder of
as u b s i d i a r y — — 1 , 1 5 4 — —
Proceeds from loans and borrowings 17(d) — 27,893 41,055 11,070 113,985
Repayment of loans and borrowings 17(d) — (2,504) (19,538) (8,841) (43,769)
Capital element of lease rentals paid 17(d) (3,803) (4,655) (8,320) (2,478) (7,206)
Interest element of lease rentals paid 17(d) (1,349) (843) (887) (339) (1,124)
Payment for restricted cash — (2,357) — — (2,084)
Payment of listing expenses — — — — (1,552)
Payment arising from the Reorganisation 1 — — — — (52,829)
Deemed distribution 1 (3,818) (57,415) (138,265) (113,962) (7,966)
N e tc a s hu s e di nf i n a n c i n ga c t i v i t i e s (8,970) (39,881) (124,801) (114,550) (2,545)
Net increase/(decrease) in cash and
cash equivalents 5,940 12,494 (7,734) (8,364) 29,868
Cash and cash equivalents at beginning
of the year/period 17(a) 3,101 8,797 21,466 21,466 14,345
Effect of foreign exchange rate changes (244) 175 613 325 (331)
Cash and cash equivalents at end of the
year/period 17(a) 8,797 21,466 14,345 13,427 43,882
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 1 2–


--- page 438 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
(Expressed in RMB unless otherwise indicated)
1 BASIS OF PREPARATION AND PRESENTA TION OF THE HISTORICAL FINANCIAL
INFORMATION
New Gonow Recreational Vehicles Inc. (the ‘‘Compa ny’’) was incorporated in Cayman Islands on 17 May
2022 as an exempted company with limited liabili ty under the Companies Act (Cap.22, Law 3 of 1961, as
consolidated and revised) of the Cayman Islands. The address of the Company’s registered office is 4 th Floor,
Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands.
The Company is an investment holding company and has not carried on any business since the date of its
incorporation save for the corporate reorganisation a s described below. The Company and its subsidiaries
(together the ‘‘Group’’) are principally engaged in the m anufacturing and exporting the recreational vehicles
(‘‘RVs’’) to Australia and sales RVs through dealership a nd stores in Australia and New Zealand (the ‘‘Listing
Businesses’’).
During the Relevant Periods and before the completion of the reorganization described below, the Listing
Businesses were conducted through various entities controlled by Mr. Miao Xuezhong, Wang Danhong and
Miao Wanyi (together, the ‘‘Controlling Shareholders’’). To rationalize the corporate s tructure in preparation of
the listing of the Company’s shares on The Stock Exchan ge of Hong Kong Limited (‘‘The Stock Exchange’’), the
Group underwent a reorganisation (the ‘‘Reorganisat ion’’) as detailed in the section headed ‘‘History,
Reorganisation and Corporate Structure’’ in the Pro spectus. Upon completion of the Reorganisation in May
2024, the Company became the holding company of the Group. As the Listing Businesses were ultimately
controlled by the Controlling Shareholders during t he Relevant Periods and both before and after the
Reorganisation, the control is not transitory and conse quently and there was a continuation of the risks and
benefits to Controlling Shareholders. The Reorganisat ion is therefore treated as a combination of businesses
under common control.
Accordingly, the Historical Financi al Information has been prepared and presented using the merger basis
of accounting as if the current group structure had been in existence and remained unchanged throughout the
Relevant Periods. The consolidated statements of pr ofit or loss and other comprehensive income, the
consolidated statements of changes in equity and the c onsolidated statements of cash flows of the Group include
the financial performance and cash flows of the Listing B usinesses for the Relevant Periods. The consolidated
statements of financial position of the Group as at 31 December 2021, 2022 and 2023 and 30 June 2024 have
been prepared to present the financ ial position of the Listing Busines ses as at those dates. The assets and
liabilities of the Listing Businesses have been measured at their carrying amounts prior to the Reorganisation.
Intra-group balances, transactions an d unrealized gains/losses on intra-g roup transactions were eliminated
when preparing the Historic al Financial Information.
During the Relevant Periods and before the completi on of the Reorganisation, certain manufacturing
activities of the Listing Business es were carried out by two entities that were under common control of the
Controlling Shareholders but did not become the compa nies now comprising the Group upon the completion of
the Reorganisation. For the purpose of this report, a proces s has been completed to specifically identify assets,
liabilities, revenue, expenses and cash flows of those two entities associated with th e Listing Businesses during
the Relevant Periods in preparing the Historical Financ ial Information. The Historical Financial Information
only includes transactions and balances that are attributable to the Listing Bu sinesses. Since the manufacturing
APPENDIX I ACCOUNTANTS’ REPORT
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activities were conducted as a division of the two entities before the Reorganisation, the net parent investment,
representing the net assets related to the Listing Bus inesses which were managed and controlled by these two
entities, has been shown in lieu of shareholders’ equity in the Historical Financial Information. Transactions
and balances were attributed to the Listing Businesses ba sed on specific identification except for those set out
below, for which they were accounted for using the m ost relevant bases in th e views of the Directors:
— Staff costs, other administrative and operating ex penses have been principa lly allocated either based
on headcount to the extent a separate group of pe rsonnel could be specifically identified and
attributed to the Listing Businesses, or oth erwise allocated based on production volume;
— Income taxes were determined based on the assu mptions that the Listing Businesses carried out by
the division of the two entities were separately tax able entities. As the income tax has been charged
at the legal entity level, the tax payments related to the Listing Businesses carried out by the division
of those two entities are regarded as deemed contri bution in the consolidated statements of changes
in equity and non-cash transactions to the Lis ting Businesses, amount ing to RMB6,334,000,
RMB11,055,000, RMB25,486,000, RMB10,464, 000 (unaudited) and RMB9,995,000 during the
Relevant Periods (Note 23); and
— Cash used by the Listing Businesses which were managed and controlled by those two entities under
common control of the Controlling Sharehol ders, with the net amount of cash used of
RMB3,818,000, RMB57,415,000, RMB138,265,000, RMB113,962,000 (unaudited) and
RMB7,966,000 during the Relevant Periods for the Listing Businesses are presented as deemed
distribution in the consolidated statements of ch anges in equity and consolidated statements of cash
flows.
As part of the Reorganisation, Xing Longtree Auto motive Technology (Zhejiang) Co., Ltd. (‘‘Xing
Longtree’’), a subsidiary of the Group, and Zhejiang Daide Longtree Automobile Co., Ltd. (‘‘Daide Longtree’’),
an entity controlled by the Controlling Shareholders, entered into an agreement on 13 March 2024, whereby
Xing Longtree acquired all of the assets and assumed, ex cept the lease liabilities of RMB19,027,000, all of the
liabilities related to the Listing Businesses from Daide Longtree with a cash consideration of RMB52,829,000.
The lease liabilities of R MB19,027,000, which was n o longer assumed by the Group upon the completion of the
transaction on 30 April 2024, is regarded as a deemed contribution in the consolidated statement of changes in
equity.
As part of the Reorganisation, Longtree Recreationa l Vehicles Holdings Limited (‘‘Longtree RV’’), a
subsidiary of the Group, entered into an agreement on 7 May 2024 to acquire entire equity interest of Regent
RV Pty Ltd. (‘‘Regent RV’’) from Flourishing Emerald I nternational Limited (‘‘Flourishing’’), an entity
controlled by the Controlling Shareholders. According t o the equity transfer agreement, the consideration is
Australian Dollar 1,000,000 (equivalent to RMB4,769, 000), which was settled by a promissory note granted by
Longtree RV in favour of Flourishing for an advance of Australian Dollar 1,000,000. Such advance was
subsequently waived by Flourishing in full. Upon completion of this transaction, Regent RV has become a
directly wholly-owned subsidiary of the Group.
At the date of the report, the Company has direct or indi rect interests in the following subsidiaries, all of
which are private companies.
APPENDIX I ACCOUNTANTS’ REPORT
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Place and date of
incorporation/
establishment
Registered/issued
and fully paid up
capital
Percentage of
equity
attributable to
the Company Principal activities
At the date of
the report
Subsidiaries
Direct equity interest held:
New Gonow Recreational
Vehicles Holdings Limited
The BVI
24 May 2022
USD1 100% Investment holding
Longtree Recreational Vehicles
Holdings Limited
The BVI
13 November 2023
USD1 100% Investment holding
Equity interest held via its
subsidiaries:
New Gonow Recreational
Vehicles Limited
Hong Kong
23 November 2023
HK$10,000 100% Investment
holding
Xing Longtree Automotive
Technology (Zhejiang) Co.,
Ltd.
興隆翠汽車科技（浙江）有限
公司 (iv)
The PRC
15 January 2024
RMB100,000,000 100% Sale and
production of
RVs
Regent RV Pty Ltd. (ii) Australia
2 September 2014
Australian Dollar
9,300,100
100% Sale and
production of
RVs
Snowy River RV Pty Ltd. (ii) Australia
23 December 2015
Australian Dollar
100
100% Sales of RVs
Leisure Lion Pty Ltd. (ii) Australia
11 July 2019
Australian Dollar
100
51% Sales of RVs
Captivating Caravans Pty Ltd.
(ii)
Australia
6 September 2018
Australian Dollar
100
100% Sales of RVs
United RV Pty Ltd. (ii) Australia
6 June 2023
Australian Dollar
100
51% Sales of RVs
Notes:
(i) All companies comprising the Group have adopted 31 December as the financial year end.
(ii) Regent RV Pty Ltd. and its subsidiaries (incl uding Snowy River RV Pty Ltd., Captivating Caravans
Pty Ltd., United RV Pty Ltd., and Leisure Lion Pty Ltd., together as ‘‘Regent RV Group’’). The
financial statements of Regent RV for the financial year ended 31 December 2021 and 2022 were
audited by Nexia Melbourne Audit Pty Ltd.. The a udit of the financial statements of Regent RV
Group for the financial year ended 31 December 2023 is under preparation and has not completed
yet at the date of the report.
(iii) Except for Regent RV Group, no statutory fin ancial statements have been prepared for the
Company and its other subsidiaries for the Relevant Periods.
(iv) The English name of the subsidiary incorporated in the PRC referred to above in this note represent
management’s best efforts in tra nslating the Chinese name as no En glish name has been registered or
is available.
As at 30 June 2024, the Group had net current liabili ties of RMB6,365,000. Based on projection of the
Group’s profit and cash inflows from ope rations, the Directors are of the opi nion that the Group has sufficient
financial resources to continue as a going concern for the next twelve months from the date of this report.
Therefore, the Directors are satisfie d that it is appropriate to prepare the Historical Financial Information on a
going concern basis.
APPENDIX I ACCOUNTANTS’ REPORT
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The Historical Financial Information has been pr epared in accordance with all applicable Hong Kong
Financial Reporting Standards (‘‘HK FRSs’’), which collective term incl udes all applicable individual HKFRSs,
Hong Kong Accounting Standards (‘‘HKASs’’) and Inte rpretations issued by the Hong Kong Institute of
Certified Public Accountants (‘‘HKI CPA’’). Further details of the mate rial accounting policy information
adopted are set out in Note 2.
The HKICPA has issued a number of new and revis ed HKFRSs. For the purpose of preparing this
Historical Financial Information, the Group has consis tently adopted all applicable new and revised HKFRSs
that are effective during the Relevant Periods, except for any new standards or interpretations that are not yet
effective for the Relevant P eriods. The revised and new accounting standards and interpretations issued but not
yet effective for the Relevant Periods are set out in Note 29.
The Historical Financial Information also complies w ith the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exc hange of Hong Kong Limited. The accounting policies set
out below have been applied consistently to all periods presented in the Historic al Financial Information.
The Stub Period Corresponding Financial Information has been prepared in accordance with the same
basis of preparation and presentation adopted in respect of the Historical Financial Information.
2 MATERIAL ACCOUNTING POLICIES
(a) Basis of measurement
The measurement basis used in the preparation o f the Historical Financial Information is the
historical cost basis.
(b) Use of estimates and judgments
The preparation of the Historical Financial In formation in conformity with HKFRSs requires
management to make judgements, estimates and assum ptions that affect the application of policies and
reported amounts of assets, liabilities, income and exp enses. The estimates and associated assumptions are
based on historical experience and various other fac tors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent fr om other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions ar e reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in w hich the estimate is revised if the revision affects
only that period, or in the period of the revision and fut ure periods if the revision affects both current and
future periods.
Judgements made by management in the applicatio n of HKFRSs that have significant effect on the
Historical Financial Information and major sources of estimation unc ertainty are discussed in Note 3.
(c) Business combination involving entities under common control
A business combination involving entities under c ommon control is a business combination in which
all of the combining entities are ultimately controll ed by the same party or parties both before and after
the business combination, and that control is not tran sitory. The assets acquired and liabilities assumed
are measured based on their carrying amounts in the fina ncial statements of the ultimate controlling party
at the combination date. The difference between the c arrying amounts of the net assets acquired and the
consideration paid for the combination is adjusted to equity. Any costs direct ly attributable to the
combination are recognised in profit or loss when in curred. The combination date is the date on which one
combining entity obtains control of other combining entities.
APPENDIX I ACCOUNTANTS’ REPORT
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(d) Subsidiaries and non-controlling interests
Subsidiaries are entities contro lled by the Group. The Group controls an entity when it is exposed
to, or has rights to, variable returns from its involvement with the entit y and has the ability to affect those
returns through its power over the entity. The financi al statements of subsidiaries are included in the
Historical Financial Information from the date o n which control commences until the date on which
control ceases.
Intra-group balances and transactions, and any unr ealised income and expenses (except for foreign
currency transaction gains or losses) arising from in tra-group transactions, are eliminated. Unrealised
losses resulting from intra-group transactions are eli minated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
For each business combination , the Group can elect to measure any non-controlling interests
(‘‘NCI’’) either at fair value or at the NCI’s proportiona te share of the subsidiary’s net identifiable assets.
NCI are presented in the consolidated statement of f inancial position within e quity, separately from
equity attributable to the equity shareholders of the Company. NCI in the results of the Group is
presented on the face of the consolidated statement o f profit or loss and other comprehensive income as an
allocation of the total profit or loss and total comp rehensive income for the year between NCI and the
equity shareholders of the Company.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted
for as equity transactions.
When the Group loses control of a subsidiary, it d erecognises the assets and liabilities of the
subsidiary, and any related NCI and other component s of equity. Any resulting gain or loss is recognised
in profit or loss. Any interest retained in that former subsidiary is measured at fair value when control is
lost.
In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less
impairment losses (see Note 2(i)(iii)), unless it is cla ssified as held for sale (or included in a disposal group
classified as held for sale).
(e) Joint ventures
A joint venture is an arrangement in which the Group or the Company has joint control, whereby
the Group or the Company has the rights to the net a ssets of the arrangement, rather than rights to its
assets and obligations for its liabilities.
An interest in a joint venture is accounted for using the equity method, unless it is classified as held
for sale (or included in a disposal group classified as he ld for sale). They are initially recognised at cost,
which includes transaction costs. Subs equently, the consolidated financ ial statements include the Group’s
share of the profit or loss and other comprehensive inc ome (‘‘OCI’’) of those investees, until the date on
which significant influenc e or joint control ceases.
When the Group’s share of losses exceeds its interest in the associate or the joint venture, the
Group’s interest is reduced to nil and recognition of fur ther losses is discontinued except to the extent that
the Group has incurred legal or constructive obligat ions or made payments on behalf of the investee. For
this purpose, the Group’s interes t is the carrying amount of the investment under the equity method,
together with any other long-term interests that in substance form part of the Group’s net investment in
the joint venture, after applying the ECL model to suc h other long-term interests where applicable (see
Note 2(i)(i)).
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 443 ---
Unrealised gains arising from transactions with e quity-accounted investees are eliminated against
the investment to the extent of the Group’s interest in t he investee. Unrealised losses are eliminated in the
same way as unrealised gains, but onl y to the extent there is no evidence of impairment. When the Group
disposes of a joint venture, the rel evant proportion of the cumulative a mount is reclassified to profit or
loss.
(f) Plant and equipment
Plant and equipment are stated at cost less accumu lated depreciation and impairment losses (see
Note 2(i)(iii)).
If significant parts of an item of plant and equi pment have different useful lives, then they are
accounted for as separate items (major components).
Any gain or loss on disposal of an item of plant a nd equipment is recogni sed in profit or loss.
Depreciation is calculated to write off the cost or valuation of items of plant and equipment less
their estimated residual values, if any, using the straig ht line method over their estimated useful lives, and
is generally recognised in profit or loss.
The estimated useful lives i n the Historical Financial Information are as follows:
Machinery and equipment 5–10 years
Office equipment and furniture 3–5 years
Motor vehicles 4 years
Depreciation methods, useful lives and residual v alues are reviewed at each reporting date and
adjusted if appropriate.
(g) Intangible assets
Expenditure on research activities is recognis ed in profit or loss as incurred. Development
expenditure is capitalised only if the expenditure can be measured reliably, the product or process is
technically and commercially fea sible, future economic benefits ar e probable and the Group intends to
and has sufficient resources to complete development a nd to use or sell the resulting asset. Otherwise, it is
recognised in profit or loss as incu rred. Capitalised development expe nditure is subsequently measured at
cost less accumulated amortisation and any accumulated impairment losses.
Intangible assets are acquired by the Group and have finite useful lives are measured at cost less
accumulated amortisation and any accumulated impairment losses (see Note 2(i)(iii)).
Amortisation is calculated to wr ite off the cost of intangible assets less their estimated residual
values using the straight-line method over their estimated useful lives, if any, and is generally recognised in
profit or loss.
The estimated useful lives i n the Historical Financial Information are as follows:
Software 5 years
Amortisation methods, useful lives and residua l values are reviewed at each reporting date and
adjusted if appropriate.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 444 ---
(h) Leased assets
At inception of a contract, the Group assesses wheth er the contract is, or contains, a lease. This is
the case if the contract conveys the right to control t he use of an identified asset for a period of time in
exchange for consideration. Control is conveyed wher e the customer has both the right to direct the use of
the identified asset and to obtain substantiall y all of the economic benefits from that use.
Where the contract contains lease component(s) a nd non-lease component(s), the Group has elected
not to separate non-lease components and account s for each lease component and any associated
non-lease components as a single lease component for all leases.
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability,
except for leases that have a short lease term of 12 m onths or less, and leases of low-value items such as
laptops and office furniture. When the Group enters into a lease in respect of a low-value item, the Group
decides whether to capitalise the lease on a lease-by- lease basis. If not capitalised, the associated lease
payments are recognised in profit or loss on a systematic basis over the lease term.
Where the lease is capitalised, the lease liability is initially recognised at the present value of the
lease payments payable over the lease term, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, using a rele vant incremental borrowing rate. After initial
recognition, the lease liability is measured at amort ised cost and interest expense is recognised using the
effective interest method. Variab le lease payments that do not depend on an index or rate are not included
in the measurement of the lease liability, and are charged to profit or loss as incurred.
The right-of-use asset recognised when a lease is capitalised is initially measured at cost, which
comprises the initial amount of the lease liability a djusted for any lease payments made at or before the
commencement date, plus any initi al direct costs incurred and an es timate of costs to dismantle and
remove the underlying asset or to restore the underlyi ng asset or the site on which it is located, less any
lease incentives received. The right-of-use asset is subsequently stated at cost less accumulated
depreciation and impairment lo sses (see Notes 2(i)(iii)).
Refundable rental deposits are accounted for sepa rately from the right-of-use assets in accordance
with the accounting policy applicable to investments i n non-equity securities carried at amortised cost.
Any excess of the nominal value over the initial fair value of the depos its is accounted for as additional
lease payments made and is included in the cost of right-of-use assets.
The lease liability is remeasured when there is a change in future lease payments arising from a
change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be
payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise
a purchase, extension or termination option. When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit
or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The lease liability is also remeasured when there is a lease modification, which means a change in the
scope of a lease or the consideration for a lease that is not originally provided for in the lease contract, if
such modification is not accounted for as a separate le ase. In this case, the lease liability is remeasured
based on the revised lease payments and lease term us ing a revised discount rate at the effective date of the
modification. The only exceptions are rent conces sions that occurred as a direct consequence of the
COVID-19 pandemic and met the conditions set out in paragraph 46B of HKFRS 16 Leases .I ns u c h
cases, the Group has taken advantage of the practical expedient not to assess whether the rent concessions
are lease modifications, and recognised the change in consideration as negative variable lease payments in
profit or loss in the period in which the event or condi tion that triggers the rent concessions occurred.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 445 ---
In the consolidated statement of financial position, the current portion of long -term lease liabilities
is determined as the present value of contractual paym ents that are due to be settled within twelve months
after the reporting period.
(i) Credit losses and impairment of assets
(i) Credit losses from financial instruments, contract assets and lease receivables
The Group recognises a loss allowance fo r expected credit losses (‘‘ECL’’s) on:
— financial assets measured at amortised c ost (including cash, pledged bank deposits,
restricted cash and trade and other recei vables that are held for the collection of
contractual cash flows which represent solely payments of principal and interest);
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Generally, credit losses are
measured as the present value of all expected cash shortfalls between the contractual and expected
amounts.
For undrawn loan commitments, expected cas h shortfalls are measured as the difference
between (i) the contractual cash flows that w ould be due to the Group if the holder of the loan
commitment draws down on the loan and (ii) the cash flows that the Group expects to receive if the
loan is drawn down.
The expected cash shortfalls are discounted usin g the following rates if the effect is material:
— fixed-rate financial assets, trade and oth er receivables and contract assets: effective
interest rate determined at initial recognition or an approximation thereof;
— variable-rate financial assets: current effective interest rate;
— lease receivables: discount rate used in the measurement of the lease receivable;
The maximum period considered when estima ting ECLs is the maximum contractual period
over which the Group is exposed to credit risk.
ECLs are measured on either of the following bases:
— 12-month ECLs: these are the portion of ECLs that result from default events that are
possible within the 12 months af ter the reporting date (or a shorter period if the expected
life of the instrument is less than 12 months); and
— l i f e t i m eE C L s :t h e s ea r et h eE C L st h a tr e s u lt from all possible default events over the
expected lives of the items to which the ECL model applies.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the
following, which are measured at 12-months ECLs:
— financial instruments that are determined to have low credit risk at the reporting date;
and
— other financial instruments (including lo an commitments issued) for which credit risk
(i.e. the risk of default occurring over the ex pected life of the financial instrument) has
not increased significantly since initial recognition.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 2 0–


--- page 446 ---
Loss allowances for trade receivables are a lways measured at an amount equal to lifetime
ECLs.
Significant increases in credit risk
When determining whether the credit risk o f a financial instrument (including a loan
commitment) has increased significantly since in itial recognition and when measuring ECLs, the
Group considers reasonable and supportable inf ormation that is relevant and available without
undue cost or effort. This includes both quantitativ e and qualitative information and analysis, based
on the Group’s historical experience and informed credit assessment, that includes forward-looking
information.
The Group assumes that the credit risk on a finan cial asset has increased significantly if it is
more than 30 days past due.
For loan commitments, the date of initial reco gnition for the purpose of assessing ECLs is
considered to be the date that the Group becomes a party to the irrevocable commitment. In
assessing whether there has been a significant increa se in credit risk since initial recognition of a loan
commitment, the Group considers changes in the r isk of default occurring on the loan to which the
loan commitment relates.
The Group considers a financial asset to be in default when:
— the debtor is unlikely to pay its credit obli gations to the Group in full, without recourse
by the Group to actions such as realising security (if any is held); or
— the financial asset is 90 days past due.
ECLs are remeasured at each reporting date to re flect changes in the financial instrument’s
credit risk since initial recognition. Any chang e in the ECL amount is reco gnised as an impairment
gain or loss in profit or loss. The Group recognis es an impairment gain or loss for all financial
instruments with a corresponding adjustment to th eir carrying amount through a loss allowance
account.
Credit-impaired financial assets
At each reporting date, the Group assesses whet her a financial asset is credit-impaired. A
financial asset is credit-impaired when one or mo re events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impa ired includes the following observable events:
— significant financial dif ficulties of the debtor;
— a breach of contract, such as a default or being more than 90 days past due;
— the restructuring of a loan or advance by the Group on terms that the Group would not
consider otherwise;
— it is probable that the debtor will enter bankr uptcy or other financial reorganisation; or
— the disappearance of an active market for a s ecurity because of financial difficulties of
the issuer.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 447 ---
Write-off policy
The gross carrying amount of a financial asset i s written off to the extent that there is no
realistic prospect of recovery. This is generally the case when the Group otherwise determines that
the debtor does not have assets or sources of income that could generate sufficient cash flows to
repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previo usly written off are recognised as a reversal
of impairment in profit or loss in the period in which the recovery occurs.
(ii) Credit losses from financial guarantees issued
Financial guarantees are contracts that require th e issuer (i.e. the guarantor) to make specified
payments to reimburse the beneficiary of the guara ntee (the ‘‘holder’’) for a loss the holder incurs
because a specified debtor fails to make payment when due in accordance with the terms of a debt
instrument.
Financial guarantees issued ar e initially recognised at fair value, which is determined by
r e f e r e n c et of e e sc h a r g e di na na r m ’ sl e n g t ht r a n s action for similar services, when such information
is obtainable, or to interest rate di fferentials, by comparing the actual rates charged by lenders when
the guarantee is made available with the estimate d rates that lenders would have charged, had the
guarantees not been available, where reliable est imates of such information can be made. Where
consideration is received or receivable for the issuance of the guarantee, the consideration is
recognised in accordance with the Group’s policie s applicable to that category of asset. Where no
such consideration is received or receivable, an imme diate expense is recognised in profit or loss.
The amount initially recognised as deferred income is subsequently amortised in profit or loss
over the term of the guarantee as income (see Note 2(s)(v)).
The Group monitors the risk that the specifi ed debtor will default on the contract and
remeasures the above liability at a higher amount when ECLs on the financial guarantees are
determined to be higher than the carrying amount in respect of the guarantees.
A 12-month ECL is measured unless the risk th at the specified debtor will default has
increased significantly since the guarantee is i ssued, in which case a lifetime ECL is measured. The
same definition of default and the same assessment o f significant increase in credit risk as described
in Note 2(i)(i) apply.
As the Group is required to make payments onl y in the event of a default by the specified
debtor in accordance with the terms of the instrument that is guaranteed, an ECL is estimated based
on the expected payments to reimburse the holder for a credit loss that it incurs less any amount that
the Group expects to receive from the holder of the guarantee, the specified debtor or any other
party. The amount is then discounted using the current risk-free rate adjusted for risks specific to
the cash flows.
(iii) Impairment of other non-current assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets
(other than inventories, deferred tax assets) t o determine whether there is any indication of
impairment. If any such indication exists, the n the asset’s recoverable amount is estimated.
Goodwill is tested annually for impairment.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 448 ---
For impairment testing, assets are grouped tog ether into the smallest group of assets that
generates cash inflows from continuing use that a re largely independent of the cash inflows of other
assets or cash-generating units (‘‘CGU’’s). G oodwill arising from a business combination is
allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the
combination.
The recoverable amount of an asset or CGU is the g reater of its value in use and its fair value
less costs of disposal. Value in use is based on the e stimated future cash flows, discounted to their
present value using a pre-tax discount rate that refl ects current market assessments of the time value
of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its
recoverable amount.
Impairment losses are recognised in profit o r loss. They are allocated first to reduce the
carrying amount of any goodwill allocated to the C GU, and then to reduce the carrying amounts of
the other assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss
is reversed only to the extent that the resulting carrying amount does not exceed the carrying
amount that would have been determined, net of depr eciation or amortisation, if no impairment loss
had been recognised.
(j) Inventories
Inventories are assets which are held for sale in t he ordinary course of business, in the process of
production for such sale or in the form of material s or supplies to be consumed in the production process
or in the rendering of services.
Inventories are carried at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost fo rmula and comprises all costs of purchase, costs
of conversion and other costs incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimat ed costs necessary to make the sale.
When inventories are sold, the carrying amount of those inventories is recognised as an expense in
the period in which the related revenue is recognised.
The amount of any write-down of inventories to net r ealisable value and all losses of inventories are
recognised as an expense in the period the write- down or loss occurs. The amount of any reversal of any
write-down of inventories is recognised as a reduc tion in the amount of inventories recognised as an
expense in the period in which the reversal occurs.
(k) Contract liabilities
A contract liability is recognised when the custome r pays non-refundable consideration before the
Group recognises the related revenue (see Note 2(s)(i)). A contract liab ility is also recognised if the Group
has an unconditional right to receive non-refundable c onsideration before the Group recognises the
related revenue. In such latter cases, a correspondi ng receivable is also recognised (see Note 2(l)).
APPENDIX I ACCOUNTANTS’ REPORT
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(l) Trade and other receivables
A receivable is recognised when the Group has an unconditional right to receive consideration and
only the passage of time is required before p ayment of that consideration is due.
Trade receivables that do not contain a significan t financing component are initially measured at
their transaction price. Trade receivables that cont ain a significant financing component and other
receivables are initially measured at fair value plu s transaction costs. All receivables are subsequently
stated at amortised cost (see Note 2(i)(i)).
(m) Cash and cash equivalents
Cash and cash equivalents comprise cash at ban k and on hand, demand deposits with banks and
other financial institutions, and ot her short-term, highly liquid investm ents that are readily convertible
into known amounts of cash and which are subject to an i nsignificant risk of changes in value, having been
within three months of maturity at acquisition. Bank overdrafts that are repayable on demand and form
an integral part of the Group’s cash management a re also included as a component of cash and cash
equivalents for the purpose of the consolidated ca sh flow statement. Cash and cash equivalents are
assessed for ECL (see Note 2(i)(i)).
(n) Trade and other payables
Trade and other payables are initially recognised at fair value. Subsequent to initial recognition,
trade and other payables are stated at amortised cost unless the effect of discount ing would be immaterial,
in which case they are stated at invoice amounts.
(o) Interest-bearing borrowings
Interest-bearing borrowings are measured initially a t fair value less transaction costs. Subsequently,
these borrowings are stated at amortised cost using the effective interest method. Interest expense is
recognised in accordance with Note 2(v).
(p) Employee benefits
(i) Short-term employee benefits and contribut ions to defined contribution retirement plans
Short-term employee benefits are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid if the Group has a present legal or constructive
obligation to pay this amount as a result of past ser vice provided by the employee and the obligation
can be estimated reliably.
Obligations for contributions to defined contribution retirement plans are expensed as the
related service is provided.
(ii) Termination benefits
Termination benefits are expensed at the e arlier of when the Group can no longer withdraw
the offer of those benefits and when the Gr oup recognises costs for a restructuring.
(q) Income tax
Income tax expense comprises current tax and deferred tax. It is recognised in profit or loss except to
the extent that it relates to a business combinati on, or items recognised directly in equity or in OCI.
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Current tax comprises the estimated tax payable or receivable on the taxable income or loss for the
year and any adjustments to the tax payable or receivable in respect of previous years. The amount of
current tax payable or receivable is the best estimate of the tax amount expected to be paid or received
that reflects any uncertainty related to income taxes. It is measured using tax rates enacted or
substantively enacted at the reporting date. Curre nt tax also includes any tax arising from dividends.
Current tax assets and liabilities are o ffset only if certain criteria are met.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for:
— temporary differences on the initial recognitio n of assets or liabilities in a transaction that is
not a business combination and that affects nei ther accounting nor taxable profit or loss and
does not give rise to equal taxable and d eductible temporary differences;
— temporary differences related to investment in subsidiaries, associates and joint venture to the
extent that the Group is able to control the timi ng of the reversal of the temporary differences
and it is probable that they will not reverse in the foreseeable future;
— taxable temporary differences arising o n the initial recognition of goodwill; and
— those related to the income taxes arising fro m tax laws enacted or substantively enacted to
implement the Pillar Two model rules published by the Organisation for Economic
Co-operation and Development.
The Group recognised deferred tax assets and defe rred tax liabilities separately in relation to its
lease liabilities and right-of-use assets.
Deferred tax assets are recognised for unused ta x losses, unused tax credits and deductible
temporary differences to the extent that it is probabl e that future taxable profit s will be available against
which they can be used. Future taxable profits are determined based on the reversal of relevant taxable
temporary differences. If the amount of taxable tem porary differences is insufficient to recognise a
deferred tax asset in full, then fut ure taxable profits, adjusted for r eversals of existing temporary
differences, are considered, based on the business p lans for individual subsidiaries in the Group. Deferred
tax assets are reviewed at each reporting date and a re reduced to the extent that it is no longer probable
that the related tax benefit will be realised; such re ductions are reversed when the probability of future
taxable profits improves.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in
which the Group expects, at the reporting date, to r ecover or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(r) Provisions and contingent liabilities
Generally provisions are determi ned by discounting the expected fu ture cash flows at a pre-tax rate
that reflects current market assessment of the time value of money and the risks specific to the liability.
A provision for warranties is reco gnised when the underlying products or services are sold, based on
historical warranty data and a weighting of possibl e outcomes against their as sociated probabilities.
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A provision for onerous contracts is measured at t he present value of the lower of the expected cost
of terminating the contract and the expected net cos t of continuing with the cont ract, which is determined
based on the incremental costs of fulfilling the obl igation under that contract and an allocation of other
costs directly related to fulfilling that contract. Befor e a provision is established, the Group recognises any
impairment loss on the assets associated with that contract (see Note 2(i)(iii)).
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by
another party, a separate asset is recognised for a ny expected reimbursement that would be virtually
certain. The amount recognised for the reimbursement is limited to the carrying amount of the provision.
(s) Revenue and other income
Income is classified by the Group as revenue when it arises from the sale of goods, the provision of
services or the use by others of the Group’s asset s under lease in the ordinary course of the Group’s
business.
Revenue is recognised when control over a product o r service is transferred to the customer at the
amount of promised consideration to which the Group is expected to be entitled, excluding those amounts
collected on behalf of third parties such as value added tax or other sales taxes.
Further details of the Group’s revenue and other income recognition policies are as follows:
(i) Sale of goods
The Group is principally engaged in the manuf acturing and sale of RVs and parts. Revenue
from sale of RVs and parts is recognised at the poi nt in time when the Group transfers control over
a product to the customer at the amount of promised consideration to which the Group is expected
to be entitled, excluding those amounts collect ed on behalf of third parties. The Group offers
warranties for its products for up to five years from the date of sale. A related provision is
recognised in accordance with Note 2(r).
(ii) Revenue from rendering of services
Revenue from rendering of services is brought as income when the performance obligation has
been satisfied, which is when the related services have been provided.
(iii) Interest income
Interest income is recognised using the effectiv e interest method. The ‘‘effective interest rate’’
is the rate that exactly discounts estimated futu re cash receipts through the expected life of the
financial asset to the gross carrying amount of the fin ancial asset. In calculat ing interest income, the
effective interest rate is applied to the gross c arrying amount of the asset (when the asset is not
credit-impaired). However, for financial assets that have become credit-impaired subsequent to
initial recognition, interest income is calculat ed by applying the effective interest rate to the
amortised cost of the financial asset. If the asset i s no longer credit-impaired, then the calculation of
interest income reverts to the gross basis.
(iv) Government grants
Government grants are recognised in the consolidat ed statements of financ ial position initially
when there is reasonable assurance that they wi ll be received and that the Group will comply with
the conditions attaching to them.
Grants that compensate the Group for expenses i ncurred are recognised as income in profit or
loss on a systematic basis in the same periods in which the expenses are incurred.
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(v) Income from financial guarantees issued
Income from financial guarantees issued is recognised over the term of the guarantees (see
Note 2(i)(ii)).
(t) Research and development costs
Research and development costs comprise all costs that are directly attributable to research and
development activities or that can be allocated on a reasonable basis to such activities. Because of the
nature of the Group’s research and development activit ies, the criteria for the recognition of such costs as
an asset are generally not met until late in the development stage of the project when the remaining
development costs are immaterial. Hence both res earch costs and development costs are generally
recognised as expenses in the period in which they are incurred.
(u) Translation of foreign currencies
Transactions in foreign currencies are translated into the respective functional currencies of Group
companies at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in fore ign currencies are translated into the functional
currency at the exchange rate at the reporting date. Non- monetary assets and liabilities that are measured
at fair value in a foreign currency are translated into the functional currency at the exchange rate when the
fair value was determined. Non-monetary assets and lia bilities that are measured based on historical cost
in a foreign currency are translated at the exchange ra te at the date of the transaction. Foreign currency
differences are generally re cognised in profit or loss.
The assets and liabilities of foreign operations, inc luding goodwill and fair val ue adjustments arising
on acquisition, are translated into RMB at the excha nge rates at the reporting date. The income and
expenses of foreign operations are translated i nto RMB at the exchange rates at the dates of the
transactions.
Foreign currency differences are recognised in OCI and accumulated in the exchange reserve, except
to the extent that the translation difference is allocated to NCI.
(v) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an
asset which necessarily takes a substantial period o f time to get ready for its intended use or sale are
capitalised as part of the cost of that asset. Other bor rowing costs are expensed in the period in which they
are incurred.
(w) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same Group (which means that each
parent, subsidiary and fellow subs idiary is related to the others).
APPENDIX I ACCOUNTANTS’ REPORT
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(ii) One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the
third party.
(v) The entity is a post-employment benefit p lan for the benefit of employees of either the
Group or an entity related to the Group.
(vi) The entity is controlled or jointly c ontrolled by a person identified in (a).
(vii) A person identified in (a)(i) has signifi cant influence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of whi ch it is a part, provides key management
personnel services to the Group or to the Group’s parent.
Close members of the family of a person are t hose family members who may be expected to
influence, or be influenced by, that person in their dealings with the entity.
(x) Segment reporting
Operating segments, and the amounts of each segment item reported in the Historical Financial
Information, are identified from the financial infor mation provided regularly to the Group’s most senior
executive management for the purposes of allocating re sources to, and assessing the performance of, the
Group’s various lines of busines s and geographical locations.
Individually material operating segments are not aggregated for f inancial reporting purposes unless
the segments have similar economic ch aracteristics and are similar in respect of the nature of products and
services, the nature of production processes, the typ e or class of customers, the methods used to distribute
the products or provide the services, and the nature o f the regulatory environment. Operating segments
which are not individually material may be aggreg ated if they share a majority of these criteria.
3 ACCOUNTING JUDGEMENTS AND ESTIMATES
As detailed in Note 1, for those transactions and b alances that cannot be attributed to the Listing
Businesses based on specific identification, allocations were made based on the most relevant allocation bases in
the views of the Directors. The Directors believe that these allocation bases are reasonable.
Key sources of estimation uncertainty in the proces s of applying the Group’s accounting policies are as
follows:
(a) Impairment of trade and other receivables
The Group’s management determines the loss all owance for expected credit losses on trade and
other receivables based on an assessment of the pres ent value of all expected cash shortfalls. These
estimates are based on the information about past ev ents, current conditions and forecasts of future
economic conditions. The Group’s management reassesses t he loss allowance at each reporting period end.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 454 ---
(b) Net realizable value of inventories
Net realisable value of inventories is the estimate d selling price in the ordinary course of business,
less estimated distribution expenses and related t axes. These estimates are based on the current market
condition and historical experience of selling products of similar nature. It could c hange significantly as a
result of competitor actions in response to changes in market conditions. Any change in the assumptions
would increase or decrease the amount of inventories w rite-down or the related reversals of write-downs
and affect the Group’s profit or loss and net asset value.
(c) Determine the lease term
As explained in policy Note 2(h), the lease liabilit y is initially recognised at the present value of the
lease payments payable over the lease term. In dete rmining the lease term at the commencement date for
leases that include renewal options exercisabl e by the Group, the Group evaluates the likelihood of
exercising the renewal options taking into account al l relevant facts and circumstances that create an
economic incentive for the Group to exercise the option, including favorable terms, leasehold
improvements undertaken and the importance of tha t underlying asset to the Group’s operation. The
lease term is reassessed when there is a significant e vent or significant change in circumstance that is
within the Group’s control. Any increase or decrease in the lease term would affect the amount of lease
liabilities and right-of-use assets recognised in future years.
(d) Income tax
Determine income tax provisions involves judgement on the future tax treatment of certain
transactions. The management carefully evaluates tax implications of transacti ons and tax provisions are
set up accordingly. The tax treatment of these transa ctions is reconsidered periodically to take into
account changes in tax legislations. Deferred tax assets are recognised for deductible temporary
differences and cumulative tax losses.
As those deferred tax assets can only be recognis ed to the extent that it is probable that future
taxable profit will be available against which they can b e utilised, management’s judgement is required to
assess the probability of future taxable profits. Ma nagement’s assessment is constantly reviewed and
additional deferred tax assets are recognised if it b ecomes probable that futur e taxable profits will allow
the deferred tax asset to be recovered.
(e) Warranty provisions
As explained in Note 2(r), the Group makes provi sions under the warranties it gives on sale of its
RVs taking into account the Group’s recent claim experi ence. As the Group is continually upgrading its
product designs and launching new models it is possibl e that the recent claim experience is not indicative
of future claims that it will receive in respect of past sa les. Any increase or decrease in the provision would
affect profit or loss in future years.
APPENDIX I ACCOUNTANTS’ REPORT
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4 REVENUE AND SEGMENT REPORTING
The Group is principally engaged i n manufacturing and sales of RVs.
(a) Revenue
(i) Disaggregation of revenue
Disaggregation of revenue from contracts with customers by major products or service lines is
as follows:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue from contracts with
customers within the scope
of HKFRS 15
Disaggregated by major
products or service lines
— Sale of RVs 298,586 498,116 710,747 309,526 396,893
— Sale of pre-owned RVs — — 8,691 — 23,396
— Others 1,086 664 865 — 1,684
299,672 498,780 720,303 309,526 421,973
Disaggregated by timing of
revenue recognition
Point in time 299,672 498,780 720,303 309,526 421,973
(ii) Information about major customers
During the Relevant Periods, the Group’s cus tomers with whom transactions have exceeded
10% of the Group’s revenue in the respective years ar e as follows. Details of concentrations of credit
risk of the Group are set out in Note 25(a).
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Company A 78,588 136,028 181,140 80,732 100,435
Company B 62,968 90,639 NA* NA* NA*
Company C 43,530 70,789 75,000 35,509 NA*
Company D 30,372 NA* NA* NA* NA*
Company E NA* NA* NA* 32,366 NA*
215,458 297,456 256,140 148,607 100,377
* Less than 10% of the Group’s revenue in the respective year.
The Group has also applied the practical expedient in paragraph 121(a) of HKFRS 15 of not
disclosing the transaction price allocated to the r emaining performance ob ligations as the original
expected duration of the contracts for sa les of RVs are within one year or less.
APPENDIX I ACCOUNTANTS’ REPORT
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(b) Segment reporting
(i) Segment information
HKFRS 8, Operating Segments, requires identif ication and disclosure of operating segment
information based on internal financial reports th at are regularly reviewed by the Company’s chief
operating decision maker for the purpose of resour ces allocation and performance assessment. The
Group manages its businesses as a whole by the most senior executive management for the purposes
of resource allocation and perfo rmance assessment. The Group’s chief operating decision maker is
the chief executive officer of the Group who revie ws the Group’s consolidated results of operations
in assessing performance of and making decisions about allocations to this segment. On this basis,
the Company has determined that it only has one operating segment.
Geographic information
The geographical information of the revenue based on the country at which RVs are sold is as
follows:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Australia 280,331 471,037 675,987 291,106 400,332
New Zealand 19,341 27,743 44,316 18,420 21,641
299,672 498,780 720,303 309,526 421,973
(ii) Non-current assets
The geographical information of the non-curren t assets (excluding deferred tax assets and
investment in a joint venture) based on the country at which these assets locate is as follows:
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Australia 22,068 16,640 33,340 68,665
PRC 44,648 41,053 36,697 33,663
66,716 57,693 70,037 102,328
APPENDIX I ACCOUNTANTS’ REPORT
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5 OTHER NET INCOME/(LOSS)
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest income 1 8 39 18 26
Government grants (i) 1,103 1,603 — — —
Net loss on sale of equipment — (617) — — (25)
L e a s e m o d i f i c a t i o n ( i i ) 6 , 7 0 4————
Foreign exchange gain/(loss) 98 7,544 14,017 7,772 (2,464)
Others 201 577 461 (123) (204)
8,107 9,115 14,517 7,667 (2,667)
Notes:
(i) Government grants represent various forms of in centives and subsidies granted to the Group by the
local government authorities in the PRC.
(ii) In June 2021, the Group made m odification of one of lease contract s, to shorten the lease term from
10 years to 6 years. As a result of the modification, there was a disposal of right-of-use assets and
lease liabilities (Note 12) and the relevant disposal income is RMB6,704,000.
6 PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging:
(a) Finance costs
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on loans and borrowings — 141 79 40 3,076
Interest expense on lease liabilities 3,090 2,392 2,236 1,039 1,720
3,090 2,533 2,315 1,079 4,796
(b) Staff costs
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, wages and other benefits 54,270 83,123 134,160 57,251 68,713
Contributions to defined
contribution retirement plans
(Notes (i), (ii) and (iii)) 3,411 5,728 9,748 4,109 5,663
57,681 88,851 143,908 61,360 74,376
APPENDIX I ACCOUNTANTS’ REPORT
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Notes:
(i) The employees of the subsidiaries of the Group established in the PRC p articipate in defined
contribution retirement benefit schemes managed by the local government authorities,
whereby these subsidiaries ar e required to contribute to the schemes at rates range from 16%
to 20% of the employees’ basic salaries during the Relevant Periods. Employees of these
subsidiaries are entitled to receive retirement be nefits, calculated based on a percentage of the
average salaries level in the PRC, from the a bove mentioned retirement schemes at their
normal retirement age. The Group has no other material obligation for payment of other
retirement benefits bey ond the above contributions.
(ii) The subsidiaries of the Group established i n Australia are required to contribute certain
percentage of its employee’s ordinary time e arnings into superannuation funds in accordance
with superannuation legislation. The percentage was 10% applied on 1 Jul 2021 and increase
by 0.5% every year thereafter on 1 Jul of each year until the rate reaches 12%. Such
contributions are fully and immediately ves ted in employees once made. Contributions to
defined contribution fund are recognised as an expense as they become payable.
(iii) The Group has no other material obligation for payment of pension benefits beyond the
annual contributions described above.
(c) Other items
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Other items:
Amortisation cost of intangible
assets 17 10 — — 4
Depreciation charges
— plant and equipment (Note 11) 2,153 2,769 4,109 1,768 2,376
— right-of-use assets (Note 12) 10,118 11,563 12,153 5,800 8,115
Short-term leases charges (Note 12) 440 428 429 214 1,177
Increase in provisions (Note 22) 3,158 5,502 7,065 2,993 5,412
L i s t i n g e x p e n s e s ———— 1 5 , 3 0 5
Cost of inventories (Note 14(b)) 249,568 416,536 539,252 238,145 287,070
Notes:
(i) During the Relevant Periods, cost of invento ries included staff costs of RMB43,458,000,
RMB61,172,000, RMB93,774,000 and RMB41,99 3,000, depreciation and amortisation
expenses of RMB1,808,000, RMB2,129,000, RMB2,730,000 and RMB1,323,000, which
amounts are also included in the respective tot al amounts disclosed in Notes 6(b) and 6(c).
(ii) During the Relevant Periods, research and development expenses included staff costs of
RMB2,782,000, RMB4,756,000, RMB7,827,000 and RMB5,217,000, which is also included in
the total amounts disclosed in Note 6(b).
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 459 ---
7I N C O M E T A X
(a) Taxation in the consolidated statements of profit and loss represents:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current tax
Provision for the year/period 6,334 12,296 31,418 10,464 18,451
Deferred tax
Reversal/(origination) of temporary
differences 2,911 (991) (2,510) 238 (4,876)
Income tax expense 9,245 11,305 28,908 10,702 13,575
(b) Reconciliation between income tax expense and profit before taxation at applicable tax rates:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Profit before taxation 34,325 44,261 107,676 42,350 54,005
Notional tax on profit before
taxation calculated at the rates
applicable to profits in the
jurisdiction concerned
(Notes (i), (ii), (iii) and (iv)) 7,202 11,305 28,172 10,702 13,570
Tax effect of non-deductible
expenses 2,043 — — — 5
Tax effect of temporary differences
and tax losses not recognised in
current year/period — — 736 — —
9,245 11,305 28,908 10,702 13,575
Notes:
(i) Pursuant to the rules and regulations of the Cayman Islands and the BVI, the Group is not
subject to any income tax in the Cayman Islands and the BVI.
(ii) No provision for Hong Kong Profits Tax has been made, as the subsidiary of the Group
incorporated in Hong Kong did not have asse ssable profits which are subject to Hong Kong
Profits Tax during the Relevant Periods.
(iii) The subsidiary of the Gr oup established in the PRC (excluding Hong Kong) is subject to PRC
Corporate Income Tax (‘‘CIT’’) rate at 25% during the Relevant Periods.
(iv) The subsidiaries of the Group established i n Australia are subject to the standard income tax
rate of 30% on its taxable income, in accordance with the relevant Australia Income Tax
Assessment Act.
APPENDIX I ACCOUNTANTS’ REPORT
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8 DIRECTORS’ EMOLUMENTS
For the directors as at the date of this report, their e moluments for the Relevant Periods are as follows:
Year ended 31 December 2021
Directors’ fee
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Chairman:
Mr. Miao Xuezhong (i) — — — — —
Executive directors:
Mrs. Liu Qin (ii) — 157 18 11 186
Mr. Andrew Robert Crank (ii) — 701 200 99 1,000
— 858 218 110 1,186
Year ended 31 December 2022
Directors’ fee
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Chairman:
Mr. Miao Xuezhong (i) — — — — —
Executive directors:
Mrs. Liu Qin (ii) — 210 24 11 245
Mr. Andrew Robert Crank (ii) — 795 299 120 1,214
— 1,005 323 131 1,459
Year ended 31 December 2023
Directors’ fee
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Chairman:
Mr. Miao Xuezhong (i) — — — — —
Executive directors:
Mr. Liu Tao (iii) — 625 62 77 764
Mrs. Liu Qin (ii) — 363 29 11 403
Mr. Andrew Robert Crank (ii) — 798 375 129 1,302
— 1,786 466 217 2,469
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 5–


--- page 461 ---
Six months ended 30 June 2024
Directors’ fee
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Chairman:
Mr. Miao Xuezhong (i) — — — — —
Executive directors:
Mr. Liu Tao (iii) — 430 45 55 530
Mrs. Liu Qin (ii) — 168 12 7 187
Mr. Andrew Robert Crank (ii) — 563 188 83 834
— 1,161 245 145 1,551
Six months ended 30 June 2023 (unaudited)
Directors’ fee
Salaries,
allowances and
benefits in
kind
Discretionary
bonuses
Retirement
scheme
contributions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Chairman:
Mr. Miao Xuezhong (i) — — — — —
Executive directors:
Mr. Liu Tao (iii) — 229 21 18 268
Mrs. Liu Qin (ii) — 164 14 3 181
Mr. Andrew Robert Crank (ii) — 398 187 64 649
— 791 222 85 1,098
Notes:
(i) Mr. Miao Xuezhong was appointed as the director of the Company on 17 May 2022.
(ii) Mrs. Liu Qin and Mr. Andrew Robert Crank w ere appointed as the director of the Company on 22
May 2024.
(iii) Mr. Liu Tao joined the Group on 20 March 2023 and was appointed as the director of the Company
on 22 May 2024.
(iv) The emoluments shown above represent the remuneration they have received in the capacity as
employees of the Group during the Relevant Periods . During the Relevant Periods, no emoluments
were paid by the Group to the director as an inducement to join or upon joining the Group or as
compensation for loss of office. No direct or of the Group waived or agreed to waive any
emoluments during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 6–


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9 INDIVIDUALS WITH HIGHEST EMOLUMENTS
Of the five individuals with the highest emoluments during the years ended 31 December 2021, 2022 and
2023, and six months ended 30 June 2023 and 2024, only one, one, one, one (unaudited) and two are directors,
respectively, whose emoluments are disclosed in Not e 8. The aggregate of the emoluments in respect of the
remaining four, four, four, four (unaudited) and thr ee individuals during the years ended 31 December 2021,
2022 and 2023, and six months ended 30 June 2023 and 2024 are as follows:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries and other emoluments 2,668 2,815 3,026 1,509 1,162
Discretionary bonuses 150 154 188 94 —
Retirement scheme contributions 310 327 353 176 128
3,128 3,296 3,567 1,779 1,290
The emoluments of the four, four, four, four (una udited) and three individuals with the highest
emoluments are within the following bands:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
HK$Nil to HK$1,000,000 23243
HK$1,000,001 to HK$1,500,000 2 1 2 — —
44443
10 EARNINGS PER SHARE
Earnings per share information is not presented as its inclusion for the purpose of this report is not
considered meaningful due to the Reorganisation and the preparation of the results of the Group for the
Relevant Periods on the basis as disclosed in Note 1.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 7–


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11 PLANT AND EQUIPMENT
Machinery
and
equipment
Office
equipment
and furniture
Motor
vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2021 17,010 547 716 — 18,273
Additions 3,443 565 555 — 4,563
Disposals (57) (10) — — (67)
Exchange adjustments (335) (33) (81) — (449)
At 31 December 2021 and
1 January 2022 20,061 1,069 1,190 — 22,320
Additions 3,674 1,428 1,169 — 6,271
Disposals (654) (1,273) (445) — (2,372)
Exchange adjustments 87 8 29 — 124
At 31 December 2022 and
1 January 2023 23,168 1,232 1,943 — 26,343
Additions 4,010 1,174 2,001 — 7,185
Disposals — (31) (724) — (755)
Addition through acquisition of
a subsidiary 454 190 535 — 1,179
Exchange adjustments 217 54 128 — 399
At 31 December 2023 and
1 January 2024 27,849 2,619 3,883 — 34,351
Additions 1,054 612 308 1,075 3,049
Disposals (210) (4) — — (214)
Exchange adjustments (114) (17) (62) — (193)
At 30 June 2024 28,579 3,210 4,129 1,075 36,993
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 8–


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Machinery
and
equipment
Office
equipment
and furniture
Motor
vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Accumulated depreciation:
At 1 January 2021 (6,807) (264) (272) — (7,343)
Charge for the year (1,828) (185) (140) — (2,153)
W r i t t e nb a c ko nd i s p o s a l s 1 2 — — 3
Exchange adjustments 151 23 28 — 202
At 31 December 2021 and
1 January 2022 (8,483) (424) (384) — (9,291)
Charge for the year (2,125) (343) (301) — (2,769)
Written back on disposals 404 488 13 — 905
Exchange adjustments (40) (4) (10) — (54)
At 31 December 2022 and
1 January 2023 (10,244) (283) (682) — (11,209)
Charge for the year (2,654) (634) (821) — (4,109)
Written back on disposals — 3 294 — 297
Exchange adjustments (87) (17) (37) — (141)
At 31 December 2023 and
1 January 2024 (12,985) (931) (1,246) — (15,162)
Charge for the period (1,618) (337) (421) — (2,376)
Written back on disposals 168 3 — — 171
Exchange adjustments 43 5 16 — 64
At 30 June 2024 (14,392) (1,260) (1,651) — (17,303)
Net book value:
At 31 December 2021 11,578 645 806 — 13,029
At 31 December 2022 12,924 949 1,261 — 15,134
At 31 December 2023 14,864 1,688 2,637 — 19,189
At 30 June 2024 14,187 1,950 2,478 1,075 19,690
APPENDIX I ACCOUNTANTS’ REPORT
–I - 3 9–


--- page 465 ---
12 RIGHT-OF-USE ASSETS
Properties
leased for own
use carried
at cost
RMB’000
Cost:
At 1 January 2021 41,080
Additions 42,461
Lease modification (19,371)
Exchange adjustments (2,512)
At 31 December 2021 and 1 January 2022 61,658
Additions 136
Exchange adjustments 440
At 31 December 2022 and 1 January 2023 62,234
Addition through acquisi tion of a subsidiary 2,844
Additions 16,769
Exchange adjustments 1,382
At 31 December 2023 and 1 January 2024 83,229
Additions 39,725
Disposals (19,626)
Exchange adjustments (194)
At 30 June 2024 103,134
Accumulated depreciation:
At 1 January 2021 (10,270)
Charge for the year (10,118)
Lease modification 11,873
Exchange adjustments 523
At 31 December 2021 and 1 January 2022 (7,992)
Charge for the year (11,563)
Exchange adjustments (120)
At 31 December 2022 and 1 January 2023 (19,675)
Charge for the year (12,153)
Exchange adjustments (553)
At 31 December 2023 and 1 January 2024 (32,381)
Charge for the period (8,115)
W r i t t e nb a c ko nd i s p o s a l s 19,626
Exchange adjustments 267
At 30 June 2024 (20,603)
Net book value:
At 31 December 2021 53,666
At 31 December 2022 42,559
At 31 December 2023 50,848
At 30 June 2024 82,531
The Group leases various office bui ldings, stores and warehouses in the PRC and Australia. Rental
contracts are typically entered into for fixed periods of 3 to 10 years.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 0–


--- page 466 ---
(a) The analysis of expense items in relation to leases recognised in profit or loss is as follows:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Depreciation charges of right-of-use
assets 10,118 11,563 12,153 5,800 8,115
Interest on lease liabilities
(Note 6(a)) 3,090 2,392 2,236 1,039 1,720
Expense relating to short-term leases 440 428 429 214 1,177
Details of total cash outflow for leases, the maturit y analysis of lease liabilities and the future cash
outflows arising from leases that are not yet c ommenced are set out in Note 17(e) and Note 21
respectively.
13 INTEREST IN A JOINT VENTURE
Details of the Group’s interest in a joint venture, w hich is accounted for using the equity method in the
consolidated financial sta tements, are as follows:
As at 31 December 2021 and 2022
Proportion of ownership interest
Name of joint
venture
Form of business
structure
Place of
incorporation and
business
Particulars of
issued and
paid up capital
Group’s
effective
interest
Held by the
Company
Held by a
subsidiary Principal activity
Leisure Lion Pty
Ltd.
Incorporated Queensland
Australia
100 Australian
Dollar
50% 0% 50% Sales of RVs
On 11 July 2019, Leisure Lion Pty Ltd. was established by the Croup together with Green RV Pty Ltd. in
Australia under the joint venture agreement.
On 13 September 2023, the Group acquired additional 1% shares of Leisure Lion Pty Ltd. from Green RV
Pty Ltd. for cash consideration of Australian Dollar 1 5,000 (equivalent to RMB73, 000). After the acquisition,
Leisure Lion Pty Ltd. (‘‘Leisure Lion’’) became a subsid iary with 51% interest held by the Group. Leisure Lion
contributed revenue of RMB34,004,000 and loss of RMB327 ,000 to the Group’s result since the acquisition
date. If the acquisition had occurred on 1 January 2023, the consolidated revenue and net profit of the Group
would be RMB733,054,000 and RMB86, 029,000, respectively. In determin ing these amounts, the Directors have
assumed that the fair value adjustments, determined prov isionally, that arose on the date of acquisition would
have been the same if the acquisition had occurred on 1 January 2023.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 1–


--- page 467 ---
(i) The following summarises the fair value amounts of a ssets acquired and liabilities assumed at the
date of acquisition:
RMB’000
Cash 4,097
Trade and other receivables 5,542
Prepayments 215
Inventories 47,382
Equipment 1,179
Right-of-use assets 2,844
Loans and borrowings (10)
Trade and other payables (54,498)
Lease liabilities (2,960)
Total identifiable net assets acquired 3,791
51% share of identifiable net assets 1,933
The fair value of inventories is determined based on the estimated selling price in the ordinary
course of the business less the estimated costs of sa les. The fair values of other assets and liabilities
recognised on acquisition are approx imated to their carrying amounts.
(ii) Total consideration transferred
RMB’000
Cash 73
Add: carrying amount of the Group’s p reviously held equity interest in
Leisure Lion at the date of acquisition 1,860
1,933
(iii) Analysis of the net cash flow in respect of the acquisition
RMB’000
Cash consideration paid (73)
Add: cash acquired 4,097
Net cash inflow in acquisition 4,024
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 2–


--- page 468 ---
14 INVENTORIES
(a) Inventories in the consolidated stat ements of financial position comprise:
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials 35,967 43,359 88,431 42,775
Work in process 79,587 92,815 72,680 109,846
Finished goods 3,217 24,095 86,996 127,332
Sub-total 118,771 160,269 248,107 279,953
Less: Provision for
impairment of
inventories (6,328) (4,633) (5,280) (7,579)
Total 112,443 155,636 242,827 272,374
(b) The analysis of the amount of inventories recognised as an expense and included in profit or loss is as
follows:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Carrying amount of inventories sold 243,240 411,903 533,972 233,605 279,491
Write-down of inventories 6,328 4,633 5,280 4,540 7,579
Total 249,568 416,536 539,252 238,145 287,070
15 TRADE AND OTHER RECEIVABLES
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables 19,421 43,043 39,918 48,067
Tax receivable — — — 5,523
Relocation subsidy receivable — — — 2,477
Others 289 2,232 6,220 4,872
19,710 45,275 46,138 60,939
All of the trade receivables are expected to be recove r e dw i t h i no n ey e a r .M a n a gement has a credit policy
in place and the exposure to these credit risks are monitored on an ongoing basis.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 3–


--- page 469 ---
Ageing analysis
As at the end of the Relevant Periods, the ageing analy sis of trade receivables, based on the invoice date
and net of loss allowance, is as follows:
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 90 days 19,421 42,971 39,918 47,994
More than 90 days less than
180 days — 72 — 73
19,421 43,043 39,918 48,067
Trade receivables are due within 21 to 90 days from the d ate of billing, therefor e details of the Group’s
credit policy and credit risk arising from t rade receivable are set out in Note 25(a).
16 PREPAYMENTS
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Prepayments for:
— purchases of materials 2,699 1,687 3,369 4,366
— purchases of services 235 1,002 2,652 2,927
— listing expenses — — — 4,261
2,934 2,689 6,021 11,554
17 CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND OTHER CASH FLOW
INFORMATION
(a) Cash and cash equivalents
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash at banks 8,797 21,466 14,345 43,882
(b) Restricted cash
At 31 December 2021, 2022 and 2023 and 30 June 2024, the Group’s restricted cash of
RMB2,350,000, RMB4,753,000, RMB4,889,000 and R MB14,738,000 were restricted for the purpose of
leasing deposits and bank deposits pledged as gu arantees of the loans and borrowings from an
independent third-party financial institution (Note 20).
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 4–


--- page 470 ---
(c) Reconciliation of profit before taxation to cash generated from operations:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Profit before taxation 34,325 44,261 107,676 42,350 54,005
Adjustments for:
Depreciation and amortization 12,288 14,342 16,262 7,568 10,495
Finance costs 3,090 2,533 2,315 1,079 4,796
Net loss on sale of equipment — 617 — — 25
L e a s e m o d i f i c a t i o n ( 6 , 7 0 4 ) ————
Share of (profits)/loss of a joint
venture (912) (1,083) (113) 283 —
Foreign exchange loss/(gain) 1,602 (871) (933) (885) (91)
Changes in working capital:
Increase in inventories (62,696) (43,193) (39,809) (12,319) (29,547)
(Increase)/decrease in trade and
other receivables (3,652) (23,914) 5,968 (10,704) (14,801)
Decrease/(increase) in
prepayments 931 245 (3,039) (7,075) (5,533)
I n c r e a s e i n r e s t r i c t e d c a s h ———— ( 7 , 8 4 6 )
Increase in trade and other
payables 58,448 60,067 24,512 88,566 35,285
(Decrease)/increase in contract
liabilities (18,257) 2,753 5,207 (837) (5,700)
Increase in provision for product
warranties 946 2,027 1,724 134 146
Cash generated from operations 19,409 57,784 119,770 108,160 41,234
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 5–


--- page 471 ---
(d) Reconciliation of liabilities arising from financing activities:
The table below details changes in the Group’s liabili ties arising from financing activities, including
both cash and non-cash changes. Liabil ities arising from financing activ ities are liabilities for which cash
flows were, or future cash flows wil l be, classified in the Group’s consol idated statements of cash flows as
cash flows from financing activities.
Loans and
borrowings
(Note 20)
Lease
liabilities
(Note 21)
Accrual for
capitalised
listing
expenses
(included in
trade and
other
payables)
(Note 18) Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2021 28,971 37,479 — 66,450
Changes from financing
cash flows:
Capital element of lease
rentals paid — (3,803) — (3,803)
Interest element of lease
rentals paid — (1,349) — (1,349)
Total changes from financing
cash flows — (5,152) — (5,152)
Exchange adjustments (2,285) (2,345) — (4,630)
Other changes:
Increase in lease liabilities
from entering into new
leases during the year — 42,461 — 42,461
Lease modification — (14,202) — (14,202)
Interest expenses
(Note 6(a)) —3 , 0 9 0 —3 , 0 9 0
Total other changes — 31,349 — 31,349
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 6–


--- page 472 ---
Loans and
borrowings
(Note 20)
Lease
liabilities
(Note 21)
Accrual for
capitalised
listing
expenses
(included in
trade and
other
payables)
(Note 18) Total
RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2021 and
1 January 2022 26,686 61,331 — 88,017
Changes from financing
cash flows:
Proceeds from loans and
borrowings 27,893 — — 27,893
Repayment of loans and
borrowings (2,504) — — (2,504)
Capital element of lease
rentals paid — (4,655) — (4,655)
Interest element of lease
rentals paid — (843) — (843)
Total changes from financing
cash flows 25,389 (5,498) — 19,891
Exchange adjustments 1,092 360 — 1,452
Other changes:
Capital contribution
converted from debts (i) (44,191) — — (44,191)
Increase in lease liabilities
from entering into new
leases during the year — 136 — 136
Interest expenses
(Note 6(a)) 141 2,392 — 2,533
Total other changes (44,050) 2,528 — (41,522)
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 7–


--- page 473 ---
Loans and
borrowings
(Note 20)
Lease
liabilities
(Note 21)
Accrual for
capitalised
listing
expenses
(included in
trade and
other
payables)
(Note 18) Total
RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2022 and
1 January 2023 9,117 58,721 — 67,838
Changes from financing
cash flows:
Proceeds from loans and
borrowings 41,055 — — 41,055
Repayment of loans and
borrowings (19,538) — — (19,538)
Capital element of lease
rentals paid — (8,320) — (8,320)
Interest element of lease
rentals paid — (887) — (887)
Total changes from financing
cash flows 21,517 (9,207) — 12,310
Exchange adjustments 893 899 — 1,792
Other changes:
Additions through
acquisition of a subsidiary 10 2,960 — 2,970
Increase in lease liabilities
from entering into new
leases during the year — 16,769 — 16,769
Interest expenses
(Note 6(a)) 79 2,236 — 2,315
Total other changes 89 21,965 — 22,054
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 8–


--- page 474 ---
Loans and
borrowings
(Note 20)
Lease
liabilities
(Note 21)
Accrual for
capitalised
listing
expenses
(included in
trade and
other
payables)
(Note 18) Total
RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2023 and
1 January 2024 31,616 72,378 — 103,994
Changes from financing
cash flows:
Proceeds from loans and
borrowings 113,985 — — 113,985
Repayment of loans and
borrowings (43,769) — — (43,769)
Capital element of lease
rentals paid — (7,206) — (7,206)
Interest element of lease
rentals paid — (1,124) — (1,124)
Payment for listing expenses — — (1,552) (1,552)
Total changes from financing
cash flows 70,216 (8,330) (1,552) 60,334
Exchange adjustments 25 6 — 31
Other changes:
Arising from Reorganisation
and deemed contribution
(Note 1) — (19,027) — (19,027)
Increase in lease liabilities
from entering into new
leases during the period — 39,725 — 39,725
Interest expenses
(Note 6(a)) 3,076 1,720 — 4,796
Capitalisation of listing
expense (Note 16) — — 4,261 4,261
Total other changes 3,076 22,418 4,261 29,755
At 30 June 2024 104,933 86,472 2,709 194,114
(i) In 2022, the Group’s loans from Flourishing Emerald International Limited, amounting to
Australian Dollar 9,300,000 (equivalent to RMB44,191,000), was converted to Regent RV Pty
Ltd.’s capital.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 4 9–


--- page 475 ---
(e) Total cash outflow for leases
Amounts included in the consolidated statements of cash flow for leases comprise the following:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Within operating cash flows 440 428 429 214 1,177
Within financing cash flows 5,152 5,498 9,207 2,817 8,330
5,592 5,926 9,636 3,031 9,507
These amounts relate to the following:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Lease rentals paid 5,592 5,926 9,636 3,031 9,507
5,592 5,926 9,636 3,031 9,507
18 TRADE AND OTHER PAYABLES
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Bills payable 3,280 3,000 4,760 9,270
Trade payables due to
— related parties 7,562 7,658 6,545 6,542
— third parties 78,113 133,454 197,540 209,581
Sub-total 88,955 144,112 208,845 225,393
Accrued payroll and other benefits 7,079 11,566 21,513 17,608
Value added tax and sundry taxes
payable 3,113 5,489 7,435 11,516
Listing expense payable — — — 12,017
Accrued expense 1,810 — 2,468 7,670
Other payables 632 489 405 195
101,589 161,656 240,666 274,399
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 0–


--- page 476 ---
As at the end of the Relevant Periods, the ageing anal ysis of trade payables and bills payable (which are
included in trade and other payables), based on the invoice date, is as follows:
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 88,572 143,286 203,499 220,690
1 year to 2 years 383 826 4,561 4,696
2y e a r st o3y e a r s — — 7 8 5 7
88,955 144,112 208,845 225,393
19 CONTRACT LIABILITIES
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Advances from customers 4,843 7,596 12,803 7,103
4,843 7,596 12,803 7,103
Movements in contract liabilities
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
At the beginning of the year/period — 4,843 7,596 7,596 12,803
Decrease in contract liabilities as a result
of recognising revenue during the year/
period that was included in the contract
liabilities at the beginning of the year/
period — (4,843) (7,596) (7,596) (12,803)
Increase in contract liabilities as a result of
advances from customers 4,843 7,596 12,803 6,759 7,103
Balance at the end of the year/period 4,843 7,596 12,803 6,759 7,103
All of the contract liabilities are expected to be recognised as income within one year.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 1–


--- page 477 ---
20 LOANS AND BORROWINGS
The analysis of the carrying amount of loans and borrowi ngs in the consolidated statements of financial
position is as follows:
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current
Unsecured related party loans (i) 26,686 — — 35,474
Secured loans and borrowings (ii) — 9,117 31,208 69,114
26,686 9,117 31,208 104,588
Non-current
Unsecured bank loans (iii) — — 408 345
Total 26,686 9,117 31,616 104,933
Notes:
(i) Related party loans as at 31 December 2021 wer e unsecured interest-free loans provided by
Flourishing Emerald Internati onal Limited and were payable on demand and were converted into
capital of Regent RV Pty Ltd. in April 2022.
Zhejiang Bing Huodi Technology Service Co., Lt d. provided facility amount of RMB60,000,000 to
the Group with fixed interest rate of 5.00% per a nnum and payable within one year from the date of
draw down. As at 30 June 2024, the Group cumulatively drew down amount of RMB35,474,000.
(ii) The secured short-term borrowings were pro vided by an independent third-party financial
institution under Dealer Floor Plan Financing (as described in Note 25(c)) with interest rate of
Rabo Prime Rate +2.09% and secured by the RVs under the sales arrangements between two of the
subsidiaries within the Group.
(iii) Unsecured bank loans were provided by a commercial bank with fixed interest rates of 6.98% and
7.04% per annum and repayable by instalments in five years.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 2–


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21 LEASE LIABILITIES
As at the end of the Relevant Periods, the leas e liabilities were repayable as follows:
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year 14,469 23,726 29,016 10,646
1 year to 2 years 12,142 10,301 6,615 10,178
2 years to 5 years 21,076 16,036 21,915 33,169
After 5 years 13,644 8,658 14,832 32,479
46,862 34,995 43,362 75,826
61,331 58,721 72,378 86,472
22 PROVISIONS
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current
Product warranty provision 914 1,896 2,970 3,079
Non-current
Product warranty provision 1,987 3,032 3,761 3,798
Total 2,901 4,928 6,731 6,877
The movement of product warranty provision during the Relevant Periods is as follows:
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of the year/period 1,955 2,901 4,928 6,731
Additional provisions made 3,158 5,502 7,065 5,412
Provisions utilised (2,009) (3,548) (5,457) (5,154)
Exchange adjustments (203) 73 195 (112)
At end of the year/period 2,901 4,928 6,731 6,877
Less: amount included under
‘‘current liabilities’’ (914) (1,896) (2,970) (3,079)
1,987 3,032 3,761 3,798
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 3–


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A provision for warranties is recognised when the underlying products are sold. Under the terms of the
Group’s sales agreements, the Group offe rs warranties for the RVs (see Note 2(r)). Provision is therefore made
for the best estimate of the expected settlement under t hese agreements in respect of sales made within the
warranty periods prior to the end of the reporting pe riod. The amount of provision takes into account the
Group’s recent claim experience, historical warranty data and a weighting of all possible outcomes against their
associate probabilities.
23 INCOME TAX IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(a) Current taxation in the consolidated statements of financial position
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
At beginning of the year/period — — 1,251 1,251 7,418
Provision for PRC income tax 6,334 11,055 25,486 10,464 14,710
Provision for overseas tax — 1,241 5,932 — 3,741
P r o v i s i o n a l P r o f i t s T a x p a i d ———— ( 5 , 6 8 0 )
Deemed contribution (Note 1) (6,334) (11,055) (25,486) (10,464) (9,995)
Exchange adjustments — 10 235 — (157)
At end of the year/period — 1,251 7,418 1,251 10,037
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 480 ---
(b) Deferred tax assets and liabilities recognised
(i) Movement of each component of deferred tax assets and liabilities
The components of deferred tax assets/(liabiliti es) recognised in the consolidated statement of
financial position and the movements dur ing the Relevant Periods are as follows:
Right-of-use
assets
Lease
liabilities
Credit loss
allowances
Impairment
of inventory
Provision
for product
warranties
Accrued
payroll
Deductible
tax losses
Unrealized
gains from
intra-group
transactions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2021 (9,243) 11,244 3 247 587 568 11,119 — 14,525
Credited/(charged) to
profit or loss 2,989 (4,548) 3 334 345 355 (3,462) 1,073 (2,911)
Exchange adjustments 597 (686) (1) (34) (62) (60) (722) — (968)
At 31 December 2021
and 1 January 2022 (5,657) 6,010 5 547 870 863 6,935 1,073 10,646
Credited/(charged) to
profit or loss 2,004 (1,356) 20 74 586 605 (4,110) 3,168 991
Exchange adjustments (96) 108 — 11 22 22 103 4 174
At 31 December 2022
and 1 January 2023 (3,749) 4,762 25 632 1,478 1,490 2,928 4,245 11,811
Credited/(charged) to
profit or loss 154 (451) (10) 74 478 703 (2,299) 3,861 2,510
Exchange adjustments (102) 121 — 21 58 66 6 50 220
At 31 December 2023
and 1 January 2024 (3,697) 4,432 15 727 2,014 2,259 635 8,156 14,541
(Charged)/credited to
profit or loss (19,738) 20,038 6 1,402 78 (637) (299) 4,026 4,876
Exchange adjustments (147) 128 1 (3) (33) (48) (15) (11) (128)
At 30 June 2024 (23,582) 24,598 22 2,126 2,059 1,574 321 12,171 19,289
(ii) Reconciliation to the consolidated statement of financial position
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets
recognised in the
consolidated
statement of
financial position 10,646 11,811 14,541 19,289
10,646 11,811 14,541 19,289
APPENDIX I ACCOUNTANTS’ REPORT
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24 CAPITAL AND RESERVES
(a) Share capital
Ordinary share
Number of
shares Amount
RMB
Ordinary shares, issued and is not paid:
Balance at 17 May 2022 (d ate of incorporation),
31 December 2022 and 31 December 2023 10,000 —
Shares allotted and issued 99,990,000 —
Balance at 30 June 2024 100,000,000 —
The Company’s authorised shares were 500,000,000 shares with a par value of US$0.0001 each as of
30 June 2024. Pursuant to the written resolutions of shareholders passed on 22 November 2024, the
authorised share capital of the Company was increas ed from US$50,000 divided into 500,000,000 shares to
US$200,000 divided into 2,000,000,000 shares by the c reation of additional 1,500,000,000 shares. As of the
date of this report, the Company’s issu ed shares were 100,000,000 shares.
(b) Net parent investment
Prior to completion of the Reorganisation, net par ent investment represents changes in net assets
related to the Listing Businesses which were mana ged and controlled by the two entities under common
control of the Controlling Shareholders through the dates presented, inclusive of cumulative operating
results.
(c) Other reserves
Other reserves mainly represent the capital c ontribution from debts c onversion (Note 20(i)).
(d) Dividends
No dividends were paid or declared by the Compa ny and the companies now comprising the Group
during the Relevant Periods.
(e) Exchange reserve
The exchange reserve comprises all foreign exchang e differences arising from the translation of the
financial statements of foreign operations. The rese rve is dealt with in accordance with the accounting
policies set out in Note 2(u).
(f) Capital risk management
The Group’s primary objectives when managing ca pital are to safeguard the Group’s ability to
continue as a going concern, so that it can continue to provide returns for shareholders and benefits for
other stakeholders, by pricing products and services co mmensurately with the level of risk and by securing
access to finance at a reasonable cost.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 6–


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The Group actively and regularly reviews and manages its capital structure to maintain a balance
between the higher shareholder returns that might b e possible with higher lev els of borrowings and the
advantages and security afforded by a sound capita l position, and makes adjustments to the capital
structure in light of changes in economic conditions.
The Group was not subject to any externally impos ed capital requirements during the Relevant
Periods.
25 FINANCIAL RISK MANAGEMENT AND FA IR VALUES OF FINANCIAL INSTRUMENTS
Exposure to credit, liquidity and interest rate ari ses in the normal course of the Group’s business. The
Group’s exposure to these risks and the financial risk management policies and practices used by the Group to
manage these risks are described below:
(a) Credit risk
Credit risk refers to the risk that a counterparty wil l default on its contractual obligations resulting
in a financial loss to the Group. The Group’s credit ris k is primarily attributable to trade receivables. The
directors of the Company are of the opinion that the G roup’s exposure to credit risks arising from cash is
limited because the counterparties are banks with good credit standing, for which the Group considers to
have low credit risk.
Except for the financial guarantee given by the Group as set out in Note 25(b), the Group does not
provide any other guarantees which would expose t he Group to credit risk. The maximum exposure to
credit risk in respect of this financial guarantee a t the end of the reporting period is disclosed in Note
25(b).
Trade receivables
The Group has established a cre dit risk management policy under which individual credit
evaluations are performed on all customers r equiring credit over a certain amount. These
evaluations focus on the customer’s past his tory of making payments when due and current
ability to pay, and take into account information sp ecific to the customer as well as pertaining to the
economic environment in which the customer operates. Trade receivables are due within 21 to 90
days from the date of billing. D ebtors with balances that are more than 3 months past due are
requested to settle all outstandi ng balances before any further cr edit is granted. Normally, the
Group does not obtain coll ateral from customers.
Significant concentrations of credit risk pr imarily arise when the Group has significant
exposure to individual customers. At 31 December 2021, 2022 and 2023 and 30 June 2024, 76.37%,
72.25%, 45.73% and 68.39% of th e total trade receivables was due from the Group’s largest five
customers.
The Group measures loss allowances for trade receivables at an amount equal to lifetime
ECLs, which is calculated using a provision matrix. As the Group’s historical credit loss experience
does not indicate significantly different loss pa tterns for different customer segments, the loss
allowance based on past due status is not furthe r distinguished between the Group’s different
customer bases.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 7–


--- page 483 ---
The following tables provide information ab out the Group’s exposure to credit risk and ECLs
for trade receivables:
At 31 December 2021
Expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within credit periods 0.05% 16,273 (8)
Overdue 1–30 days 0.25% 2,365 (6)
Overdue 31–60 days 0.56% 801 (4)
19,439 (18)
At 31 December 2022
Expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within credit periods 0.05% 34,456 (17)
Overdue 1–30 days 0.31% 4,856 (15)
Overdue 31–60 days 0.83% 1,737 (14)
Overdue 61–90 days 1.01% 1,988 (20)
More than 90 days past due 20.00% 90 (18)
43,127 (84)
At 31 December 2023
Expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within credit periods 0.03% 20,345 (7)
Overdue 1–30 days 0.12% 13,706 (16)
Overdue 31–60 days 0.38% 4,094 (16)
Overdue 61–90 days 0.67% 1,824 (12)
39,969 (51)
At 30 June 2024
Expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Within credit periods 0.04% 24,952 (9)
Overdue 1–30 days 0.10% 16,006 (16)
Overdue 31–60 days 0.32% 4,985 (16)
Overdue 61–90 days 0.62% 2,105 (13)
More than 90 days past due 19.78% 91 (18)
48,139 (72)
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 8–


--- page 484 ---
Expected loss rates are based on actual loss experience. These rates are adjusted to reflect
differences between economic c onditions during the period over which the historic data has been
collected, current conditions and the Group’s view of economic conditions over the expected lives of
the receivables.
Movement in the loss allowance account in respect of trade receivables during the Relevant
Periods is as follows:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
At beginning of the year/period 10 18 84 84 51
Impairment losses recognised 9 65 — — 21
Impairment losses reversed — — (34) (7) —
Exchange (gain)/loss (1) 1 1 2 —
At end of the year/period 18 84 51 79 72
(b) Liquidity risk
The Group’s policy is to regularly monitor liquidi ty requirements, and to ensure that it maintains
sufficient reserves of cash and adequate committed lines of funding from major financial institutions to
meet its liquidity requirements in the short and longer term.
The following tables show the remaining contract ual maturities at the end of the reporting period of
the Group’s non-derivative financial liabilities, w hich are based on contractual undiscounted cash flows
(including interest payments computed using contract ual rates or, if floating, based on rates current at the
end of the reporting period) and the earli est date the Group and can be required to pay:
At 31 December 2021
Contractual undiscounted cash outflow
Within
1y e a ro ro n
demand
More than
1 year but less
than 2 years
More than
2 years but
less than
5y e a r s
More than
5y e a r s T o t a l
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Loans and borrowings 26,686 — — — 26,686 26,686
Trade and other
payables 101,589 — — — 101,589 101,589
Lease liabilities 16,850 14,056 23,632 14,946 69,484 61,331
145,125 14,056 23,632 14,946 197,759 189,606
APPENDIX I ACCOUNTANTS’ REPORT
–I - 5 9–


--- page 485 ---
At 31 December 2022
Contractual undiscounted cash outflow
Within
1y e a ro ro n
demand
More than
1 year but less
than 2 years
More than
2 years but
less than
5y e a r s
More than
5y e a r s T o t a l
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Loans and borrowings 9,117 — — — 9,117 9,117
Trade and other
payables 161,656 — — — 161,656 161,656
Lease liabilities 26,018 11,978 19,541 11,031 68,568 58,721
196,791 11,978 19,541 11,031 239,341 229,494
At 31 December 2023
Contractual undiscounted cash outflow
Within
1y e a ro ro n
demand
More than
1 year but less
than 2 years
More than
2 years but
less than
5y e a r s
More than
5y e a r s T o t a l
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Loans and borrowings 31,311 113 316 — 31,740 31,616
Trade and other
payables 240,666 — — — 240,666 240,666
Lease liabilities 31,234 8,472 25,497 16,849 82,052 72,378
303,211 8,585 25,813 16,849 354,458 344,660
At 30 June 2024
Contractual undiscounted cash outflow
Within
1y e a ro ro n
demand
More than
1 year but less
than 2 years
More than
2 years but
less than
5y e a r s
More than
5y e a r s T o t a l
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Loans and borrowings 107,088 147 226 — 107,461 104,933
Trade and other
payables 274,399 — — — 274,399 274,399
Lease liabilities 14,302 13,481 39,245 39,120 106,148 86,472
395,789 13,628 39,471 39,120 488,008 465,804
Dealer Floor Plan Financing
To assist dealers in obtaining financing for th e purchase of its RVs for inventory, the Group
started to enter into agreements with various de alers and a third-party floor plan lender to
guarantee certain amounts of qualifying dealers’ debt obligations in 2022. The Group’s obligation
under these guarantees becomes effective in the ca se of a default under the financing arrangement
between the dealer and third-party floor plan lender. The agreements provide for the return of
repossessed RVs to the Group in exchange for the Group’s assumption of the debt obligation on
those RVs. There was no dealer default during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 0–


--- page 486 ---
The Group continues to monitor the risk of defa ults arisen from dealer s and remeasures the
obligations at the end of each reporting period ba sed on information reasonably available at that
time. As the estimated likelihood of the default is remote and the recovery from the collateral can
cover the expected cash outflow from guaran tee, the guarantee liability is minimum.
The maximum amount of the guarantee issued of RMB8,242,000, RMB27,533,000 and
RMB20,611,000 as at 31 December 2022 and 2023 and 30 June 2024 respectively.
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates.
The Group’s interest rate risk arises primarily from cash at bank, restricted cash and
interest-bearing borrowings. The G roup’s interest-bearing financial instruments at variable rates as at
31 December 2021, 2022 and 2023 and 30 June 2024 are primarily the cash at bank, and the cash flow
interest rate risk arising from the change of market interest rate on these balances is not considered
significant.
(i) The Group’s interest rate profile as monitored by management is set out below.
As at 31 December As at 30 June
2021 2022 2023 2024
Interest rate Interest rate Interest rate Interest rate
% RMB’000 % RMB’000 % RMB’000 % RMB’000
Fixed rate:
Restricted cash 0.05% 2,350 0.5%/1.25% 4,753 0.5%/1.25% 4,889 0.5%/1.25% 14,738
L o a n s a n d b o r r o w i n g s ———— 6 . 9 8 % / 7 . 0 4 % ( 4 0 8 ) 5 . 0 0 % /
6.98%/7.04%
(35,819)
Lease liabilities 4.75% (61,331) 4.75% (58,721) 4.75% (72,378) 4.75% (86,472)
(58,981) (53,968) (67,897) (107,553)
Variable rate:
Cash Current
deposit rate
8,797 Current
deposit rate
21,466 Current
deposit rate
14,345 Current
deposit rate
43,882
Loans and borrowings Rabo Prime
Rate +
2.09%
—R a b o P r i m e
Rate +
2.09%
(9,117) Rabo Prime
Rate +
2.09%
(31,208) Rabo Prime
Rate +
2.09%
(69,114)
8,797 12,349 (16,863) (25,232)
(ii) Sensitivity analysis
At 31 December 2021, 2022 and 2023 and 30 June 2024, it is estimated that a general
increase/decrease of 100 basis points in interest r ates, with all other variables held constant, would
have decreased/increased the Group’s profit a fter tax accumulated losses by approximately
RMB62,000, RMB86,000, RMB118,00 0 and RMB177,000 respectively.
The sensitivity analysis above indicates the in stantaneous change in the Group’s profit after
tax (and accumulated losses) and net parent inves tment that would arise assuming that the change in
interest rates had occurred at the end of the reporting period and had been applied to re-measure
those financial instruments held by the Group whic h expose the Group to fair value interest rate risk
at the end of the reporting period. In respect of the e xposure to cash flow interest rate risk arising
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 1–


--- page 487 ---
from floating rate non-derivative instruments he ld by the Group at the end of the reporting period,
the impact on the Group’s profit after tax (and accumulated losses) and net parent investment is
estimated as an annualised impact on interest expenses or income of such changes in interest rates.
(d) Currency risk
The Group is exposed to currency risk primarily through sales an d purchases which give rise to
receivables, payables and cash balances that are denom inated in a foreign currency, i.e. a currency other
than the functional currency of the operations to which t he transactions relate. The currencies giving rise
to this risk are primarily Australian dollar, Eu ro, Hong Kong Dollars and United States Dollars.
(i) Exposure to currency risk
The following table details the Group’s ex posure at the end of the reporting periods to
currency risk arising from recogn ised assets or liabilities denomin ated in a currency other than the
functional currency of the entity to which they rel ate. For presentation purposes, the amounts of the
exposure are shown in RMB, translated using th e spot rate at the year end date. Differences
resulting from the translation of the financial s tatements of foreign operations into the Group’s
presentation currency are excluded.
Exposure to foreign currencies (expressed in RMB)
At 31 December At 30 June
2021 2022 2023 2024
Euro
Australian
Dollars Euro
Australian
Dollars
Australian
Dollars
Hong Kong
Dollars
United States
Dollars
Australian
Dollars
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Intercompany receivables — 62,228 — 121,292 117,310 — — 176,453
Intercompany payables — (16,437) — (19,365) (19,946) — — (19,182)
Trade and other payables (1,040) — (3,886) — — (3,454) (4,858) —
C o n t r a c t l i a b i l i t i e s ——————— ( 2 3 7 )
Net exposure arising from
recognised assets and
liabilities (1,040) 45,791 (3,886) 101,927 97,364 (3,454) (4,858) 157,034
(ii) Sensitivity analysis
The following table indicates the instantane ous change in the Group’s profit after tax (and
accumulated losses) and net parent investment th at would arise if foreign exchange rates to which
the Group has significant exposure at the end of t he reporting period had changed at that date,
assuming all other risk variables remained constant.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 2–


--- page 488 ---
At 31 December At 30 June
2021 2022 2023 2024
Increase/
(decrease) in
foreign
exchange
rates
Effect on
profit after
tax and net
parent
investment
Increase/
(decrease) in
foreign
exchange
rates
Effect on
profit after
tax and net
parent
investment
Increase/
(decrease) in
foreign
exchange
rates
Effect on
profit after
tax and net
parent
investment
Increase/
(decrease) in
foreign
exchange
rates
Effect on
profit after
tax and
accumulated
losses
RMB’000 RMB’000 RMB’000 RMB’000
Australian Dollars 1% 3,434 1% 7,645 1% 7,302 1% 11,778
–1% (3,434) –1% (7,645) –1% (7,302) –1% (11,778)
Euro 1% (78) 1% (291) 1% — 1% —
–1% 78 –1% 291 –1% — –1% —
Hong Kong Dollars 1% — 1% — 1% — 1% (259)
–1% — –1% — –1% — –1% 259
United States Dollars 1% — 1% — 1% — 1% (364)
–1% — –1% — –1% — –1% 364
Results of the analysis as presented in the above table represent an aggregation of the
instantaneous effects on each of the Group entiti es’ profit after tax and equity measured in the
respective functional currencies, and then translated into RMB at the exchange rate ruling at the end
of the reporting period for presentation purposes.
The sensitivity analysis assumes that the change in foreign exchange rates had been applied to
re-measure those financial instruments hel d by the Group which expose the Group to foreign
currency risk at the end of the reporting period, in cluding inter-company payables and receivables
within the Group which are denominated in a currency other than the functional currencies. The
analysis excludes differences that would result fro m the translation of the financial statements of
foreign operations into the Group’s presentation currency.
(e) Fair value measurement
The fair value of the Group’s financial instrument s is categorised into the three-level fair value
hierarchy as defined in HKFRS 13, Fair Value measurement . The level, into which a fair value
measurement is classified, is determined with the ref erence to the observability and significance of the
inputs used in the valuation technique as follows:
Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted
prices in active markets for identi cal assets or liabilities at the
measurement date.
Level 2 valuations: Fair value measured using L evel 2 inputs i.e. observable inputs which fail
to meet Level 1, and not using significant unobservable inputs.
Unobservable inputs are inputs for which market data are not available.
Level 3 valuations: Fair value measured using significant unobservable inputs.
The Group did not have any assets or liabilities measured at fair value as at 31 December 2021, 2022
and 2023 and 30 June 2024.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 489 ---
26 COMMITMENTS
The Group does not have material commitments as at 31 December 2021, 2022 and 2023 and 30 June 2024.
27 MATERIAL RELATED PARTY TRANSACTIONS
(a) Names and relationship of the related parties that had material transactions with the Group during the
Relevant Periods
Name of related parties Relationship
Flourishing Emerald I nternational Limited
(‘‘Flourishing’’)
Entity controlled by Mr. Miao
Shangqiu Jishun Auto Parts Co., Ltd. (‘‘Ji shun’’) Entity controlled by Mr. Miao
Zhejiang Daide Power Machinery Co., Ltd.
(‘‘Daide Power Machinery’’)
Entity controlled by Mr. Miao
Longcui (Zhejiang) Automotive Co., Ltd.
(‘‘Longcui Zhejiang’’)
Entity controlled by Mr. Miao
Yuejie (Zhejiang) Automobile Co., Ltd. (‘ ‘Yuejie’’) Entity controlled by Mr. Miao
Zhejiang Hobby Automobile Sales Co., Ltd. ( ‘‘Hobby’’) Entity controlled by Mr. Miao
Henan Jishang Automobile Co., Ltd. (‘‘J ishang’’) Entity controlled by Mr. Miao
Zhejiang Lanmanlong Automobile Co., Ltd.
(‘‘Lanmanlong’’)
Entity controlled by Mr. Miao
Zhejiang Bing Huodi Technology Service Co., Ltd.
(‘‘Zhejiang Biying’’)
Entity over which Mr. Miao has
significant influence
Leisure Lion* A Joint venture of the Group before
13 September 2023
* In September 2023, the Group acquired additional 1% interest of Leisure Lion and it became a
subsidiary of the Group since then, details of which is disclosed in Note 13.
(b) Transactions with related parties
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Sales of product
Leisure Lion 26,063 37,568 51,809 32,320 —
Y u e j i e ———— 1
H o b b y ———— 1
L a n m a n l o n g ———— 4
Purchase of materials
Jishun — 1,806 9,988 4,136 6,831
Daide Power Machinery 52,093 14,735 — — —
J i s h a n g ———— 2 0 9
Lease from
Longcui Zhejiang 5,708 5,708 5,708 5,708 5,708
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 4–


--- page 490 ---
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Additional borrowings
Flourishing — 16,622 — — —
Z h e j i a n g B i y i n g ———— 5 4 , 8 2 9
Repayment of borrowings
Z h e j i a n g B i y i n g ———— 2 0 , 0 0 0
Interest expense on borrowings
Z h e j i a n g B i y i n g ———— 6 4 5
Debt converted to capital
Flourishing — 44,191 — — —
The Group leased a warehouse from Longcui Zhejiang from 1 January 2021 till 30 April 2029 with
annual rental fee of RMB5,708,000.
(c) Balance with related parties
At 31 December At 30 June
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade related:
Trade and other receivables
Leisure Lion (i) 2,213 7,561 — —
Yuejie (i) — — — 1
Hobby (i) — — — 1
Trade and other payables
Jishun (ii) — 840 3,909 4,902
Daide Power Machinery (ii) 7,562 6,818 2,636 1,394
Jishang (ii) — — — 246
7,562 7,658 6,545 6,542
Lease Liabilities
Longcui Zhejiang (iii) 41,296 42,846 44,194 25,763
Non-trade related:
Loans and borrowings
(Note 20)
Flourishing 26,686 — — —
Zhejiang Biying — — — 35,474
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 5–


--- page 491 ---
Notes:
(i) The balances arose from the sale of RVs and RV parts to related parties.
(ii) The balances arose from the purcha se of RVs parts from related parties.
(iii) The balances arose from the leas ing of a warehouse from Longcui Zhejiang.
(d) Key management personnel remuneration
Remuneration for key management personne l of the Group, including amounts paid to the
Company’s directors as disclosed in Note 8 and certain of the highest paid employees as disclosed in Note
9, is as follows:
Year ended 31 December Six months ended 30 June
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, allowances and benefits
in kind 858 1,005 1,786 791 1,161
Discretionary bonuses 218 323 466 222 245
Contributions to retirement
benefit schemes 110 131 217 85 145
1,186 1,459 2,469 1,098 1,551
28 NON-ADJUSTING EVENTS AFTER THE REPORTING PERIOD
On 14 May 2024, the Company allotted and issued 826,500 shares to NRV Benefit Limited which is for the
options granted to the qualified personnel pursuant to t he Pre-IPO share option scheme. As of the report date,
all 826,500 options, associated with 826,500 shares were granted to eight directors, senior management and
other employees of the Group.
29 POSSIBLE IMPACT OF AMENDMENTS, NEW ST ANDARDS AND INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE FOR THE RELEVANT PERIODS
Up to the date of issue of the Historical Financi al Information, the HKICPA has issued a few of
amendments, new standards and interpretations which a re not yet effective for Relevant Periods and which have
not been adopted in Historical Financial Information. Th ese include the following which may be relevant to the
Group:
Effective for accounting
periods beginning on or after
Amendments to HKAS 21, The effects of changes in foreign exchange
rates: Lack of exchangeability
1 January 2025
Amendments to HKFRS 9 and HKFRS 7, Amendments to the
Classification and Measurement of Financial Instruments
1 January 2026
HKFRS 18, Presentation and Disclosure in Financial Statements Basis for
conclusions on HKFRS 18 Illustrative examples on HKFRS 18
1 January 2027
HKFRS 19, Subsidiaries without Public Accountability: Disclosures 1 January 2027
Amendments to HKFRS 10 and HKAS 28, Sale or contribution of assets
between an investor and its associate or joint venture
To be determined
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 6–


--- page 492 ---
The Group is in the process of making an assessm ent of what the impact of these amendments, new
standards and interpretations is expected to be in the period of initial application. So far the Group has
concluded that the adoption of them is unlikely to hav e a significant impact on its Historical Financial
Information.
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company and its
subsidiaries in respect of any period subsequent to 30 June 2024.
APPENDIX I ACCOUNTANTS’ REPORT
–I - 6 7–


--- page 493 ---
The information set forth in this appendix does not form part of the Accountants’ Report
from KPMG, Certified Public Accountants, Hong Kong, the reporting accountants of the
Company, as set forth in Appendix I to this Prospectus, and is in cluded herein for illustrative
purposes only.
The unaudited pro forma financial information should be read in conjunction with the
section headed ‘‘Financial Information’’ in this listing document and the Accountants’ Report
set forth in Appendix I to this Prospectus.
A UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE
ASSETS
The following unaudited pro forma statement of adjusted net tangible assets of our
Group is prepared in accordance with paragraph 4.29 of the Listing Rules and is set out
below for the purpose to illustrate the effect of the Global Offering on t he consolidated net
tangible assets attributable to equity shareholders of the Company as at 30 June 2024 as if it
had taken place on 30 June 2024.
The unaudited pro forma statement of adjusted net tangible assets has been prepared
for illustrative purpose only and because of i ts hypothetical nature, it may not give a true
picture of the financial position of the Group had the Global Offering been completed as at
30 June 2024 or at any future dates.
Consolidated
net tangible
assets
attributable to
the equity
shareholders of
our Company
as of June 30,
2024 (1)
Estimated net
proceeds from
the Global
Offering (2)(4)
Unaudited pro
forma adjusted
net tangible
assets
attributable
to equity
shareholders
of our
Company (3)(5)
Unaudited pro forma adjusted
net tangible assets attributable
to equity shareholders of our
Company per Share
RMB’000 RMB’000 RMB’000 RMB (5)
(HK$
equivalent) (5)
B a s e do na nO f f e rP r i c eo fH K $ 1 . 2 4p e r
Share 32,393 243,240 275,633 0.29 0.31
B a s e do na nO f f e rP r i c eo fH K $ 1 . 6 4p e r
Share 32,393 328,451 360,844 0.38 0.41
Notes:
(1) The consolidated net tangible assets of the Gr oup attributable to equity shareholders of the
Company as at 30 June 2024 is arrived at after deducting the intangible assets of RMB107,000 from
the consolidated total equity attr ibutable to the equity shareholders of the Company as at 30 June
2024 of RMB32,500,000, which are extracted fro m the Accountants’ Report set forth in Appendix I
to this Prospectus.
(2) The estimated net proceeds from the Global Offering are based on 240,000,000 Shares to be issued at
the estimated Offer Prices of HK$1.24 per Share (b eing the low-end of the Offer Price) and HK$1.64
per Share (being the high-end of the Offer Price), r espectively, after deduction of the estimated
underwriting fees and other estimated related ex penses paid or payable by the Group (excluding
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 1–


--- page 494 ---
listing expenses of RMB15,305,000 which have been charged to profit or loss on or before 30 June
2024), without taking into account of any shares which may be issued upon the exercise of the
Over-allotment Option and the options gran ted under the Pre-IPO Share Option Scheme.
(3) The unaudited pro forma adjusted net tangible as sets attributable to equity shareholders of the
Company per Share is arrived at after the above adjustment and on the basis that 954,049,200
Shares were in issue immediately following the Cap italization Issue and Global Offering (excluding
5,950,800 shares, representing 826,500 shares adjusted by the Capitalization Issue, held by employee
shareholding platform for the Pre-IPO Share Op tion Scheme) assuming the Global Offering had
completed on 30 June 2024 and the Over-allotment Option and the options granted under the
Pre-IPO Share Option Scheme are not exercised.
(4) For illustrative purpose, the estimated net pro ceeds from the Global Offering is converted from the
Hong Kong dollar into Renminbi and the unaudite d pro forma adjusted net tangible assets
attributable to equity shareholders of the Compa ny per Share is converted from the Renminbi into
Hong Kong dollar at the exchange rate of HK$1.00 to RMB0.92468, the exchange rate set by PBOC
prevailing on the Latest Practicable Date. No r epresentation is made that Renminbi amount have
been, could have been or may be converted to Hong Kong dollars, or vice versa, at the rate or at any
other rate.
(5) No adjustment has been made to the unaudited pro forma adjusted net tangib le assets attributable
to equity shareholders of the Company to reflect our any trading results or other transactions
entered into subsequent to 30 June 2024.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 2–


--- page 495 ---
B. REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group’s pro forma financial
information for the purpose in this Prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
TO THE DIRECTORS OF NEW GONOW RECREATIONAL VEHICLES INC.
We have completed our assurance engagement to report on the compilation of pro
forma financial information of New Gono w Recreational Vehicles Inc. (the ‘‘ Company ’’)
and its subsidiaries (collectively the ‘‘ Group ’’) by the directors of the Company (the
‘‘Directors ’’) for illustrative purposes only. The un audited pro forma financial information
consists of the unaudited pro forma statement of adjusted net tangible assets as at 30 June
2024 and related notes as set out in Part A of Appendix II to the prospectus dated 31
December 2024 (the ‘‘ Prospectus ’’) issued by the Company. The applicable criteria on the
basis of which the Directors have compiled the pro forma financial information are
described in Part A of Appendix II to the Prospectus.
The pro forma financial information has be en compiled by the Directors to illustrate
the impact of the proposed offering of the ordinary shares of the Company (the ‘‘ Global
Offering ’’) on the Group’s consolidated financial position as at 30 June 2024 as if the
Global Offering had taken place at 30 June 2024. As part of this process, information about
the Group’s consolidated financial position as at 30 June 2024 has been extracted by the
Directors from the Group’s historical financial information included in the Accountants’
Report as set out in Appendix I to the Prospectus.
Directors’ Responsibilities for th e Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (the ‘‘ Listing Rules ’’) and with reference to
Accounting Guideline 7 ‘‘Preparation of Pro Fo rma Financial Information for Inclusion in
Investment Circulars’’ (‘‘AG 7 ’’) issued by the Hong Kong Institute of Certified Public
Accountants (‘‘HKICPA ’’).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on
fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behaviour.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 3–


--- page 496 ---
Our firm applies Hong Kong Standard on Quality Management 1 ‘‘Quality
Management for Firms that Perform Audit s or Reviews of Financial Statements, or
Other Assurance or Related Services Engagements’’, which requires the firm to design,
implement and operate a system of quality m anagement including policies or procedures
regarding compliance with ethical requirements, professional standards and applicable legal
and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the pro forma financial information and to report our opinion to you. We
do not accept any responsibilit y for any reports previously given by us on any financial
information used in the compilation of the pro forma financial information beyond that
owed to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements (‘‘HKSAE ’’) 3420 ‘‘Assurance Engagements to Report on the Compilation of
Pro Forma Financial Information Included in a Prospectus’’ issued by the HKICPA. This
standard requires that the reporting accountants plan and perform procedures to obtain
reasonable assurance about whether the Directors have compiled the pro forma financial
i n f o r m a t i o ni na c c o r d a n c ew i t hp a r a g r a p h4 . 29 of the Listing Rules, and with reference to
AG 7 issued by the HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical or forecast or estimated financial information used in
compiling the pro forma financial information, nor have we, in the course of this
engagement, performed an audit or review of the financial in formation used in compiling
the pro forma financial information.
The purpose of pro forma financial information included in an investment circular is
solely to illustrate the impact of a significant e vent or transaction on unadjusted financial
information of the Group as if the event had occurred or the transaction had been
undertaken at an earlier date selected for pur poses of the illustration. Accordingly, we do
not provide any assurance that the actual outcome of events or transactions as at 30 June
2024 would have been as presented.
A reasonable assurance engagement to rep ort on whether the pro forma financial
information has been properly compiled on th e basis of the applicab le criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the pro forma financial info rmation provide a reasonable basis for
presenting the significant effects directly a ttributable to the event or transaction, and to
obtain sufficient appropria te evidence about whether:
. the related pro forma adjustments give app ropriate effect to those criteria; and
. the pro forma financial information r eflects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 4–


--- page 497 ---
The procedures selected depend on the reporting accountants’ judgement, having
regard to the reporting accountants’ understanding of the nature of the Group, the event or
transaction in respect of which the pro forma financial information has been compiled, and
other relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma
financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practices generally accepted
in the United States of America, auditing s tandards of the Public Company Accounting
Oversight Board (United States) or any overse as standards and accordingly should not be
relied upon as if they had been carried out in accordance with those standards and
practices.
We make no comments regarding the reasonableness of the amount of net proceeds
from the issuance of the Company’s shares, t he application of those net proceeds, or
whether such use will actually take place as des cribed in the section headed ‘‘Future Plans
and Use of Proceeds’’ in the Prospectus.
Opinion
In our opinion:
a) the pro forma financial information h as been properly compiled on the basis
stated;
b) such basis is consistent with the accounting policies of the Group; and
c) the adjustments are appropriate for the purposes of the pro forma financial
information as disclosed pursuant to par agraph 4.29(1) of the Listing Rules.
KPMG
Certified Public Accountants
Hong Kong
31 December 2024
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
–I I - 5–


--- page 498 ---
Set out below is a summary of certain provisions of the constitution of the Company
and certain aspects of the company laws of the Cayman Islands.
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on 17 May 2022 under the Comp anies Act. The Company’s constitutional
documents consist of the Memorandum of Association and the Articles of Association.
1. MEMORANDUM OF ASSOCIATION
The Memorandum provides, inter alia , that the liability of the members of the
Company is limited, that the objects for whic h the Company is established are unrestricted
(and therefore include acting as an investment holding company) and that the Company
shall have full power and authority to carry out any object not prohibited by the Companies
Act or any other law of the Cayman Islands.
2. ARTICLES OF ASSOCIATION
The Articles were conditionally adopted on November 22, 2024 and will become
effective on the Listing Date. A summary of certain provisions of the Articles is set out
below.
2.1 Shares
(a) Classes of Shares
The share capital of the Company consists of a single class of ordinary
shares.
(b) Variation of Rights of Existing Shares or Classes of Shares
If at any time the share capital of the Company is divided into different
classes of Shares, all or any of the rights attached to any class of Shares for the
time being issued (unless otherwise provided by the terms of issue of the Shares of
that class) may, whether or not the Company is being wound up, be varied with
the consent in writing of the holders of at l east three-fourths of the issued Shares
of that class, or with the approval of a resolution passed by at least three-fourths
of the votes cast by the holders of the Shares of that class present and voting in
person or by proxy at a separate meeting of such holders. The provisions of the
Articles relating to general meetings shall apply mutatis mutandis to every such
separate meeting, except that the necessa ry quorum shall be two persons together
holding (or, in the case of a member being a corporation, by its duly authorised
representative), or representing by proxy, at least one-third of the issued Shares of
that class. Every holder of Shares of the class shall be entitled on a poll to one
vote for every such Share held by him, and any holder of Shares of the class
present in person or by proxy may demand a poll.
APPENDIX III SUMMARY OF THE CO NSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I I I - 1–


--- page 499 ---
For the purposes of a separate class meeting, the Board may treat two or
more classes of Shares as forming one class of Shares if the Board considers that
such classes of Shares would be affected in the same way by the proposals under
consideration, but in any other case shall treat them as separate classes of Shares.
Any rights conferred upon the holders of Shares of any class shall not, unless
otherwise expressly provided in the rights attaching to the terms of issue of the
Shares of that class, be deemed to be varied by the creation or issue of further
Shares ranking pari passu therewith.
(c) Alteration of Capital
The Company may by ordinary resolution:
(i) increase its share capital by the c reation of new Shares of such amount
a n dw i t hs u c hr i g h t s ,p r i o r i t i e sa n dprivileges attached to such Shares as
it may determine;
(ii) consolidate and divide all or any of its share capital into Shares of a
larger amount than its existing Sha res. On any consolidation of fully
paid Shares and division into Shares of a larger amount, the Board may
settle any difficulty which may arise as it thinks expedient and, in
particular (but without prejudice to the generality of the foregoing), may
as between the holders of Shares to be consolidated determine which
particular Shares are to be consolidated into a consolidated Share, and
if it shall happen that any person shall become entitled to fractions of a
consolidated Share or Shares, such fractions may be sold by some
person appointed by the Board for that purpose and the person so
appointed may transfer the Shares so sold to the purchaser(s) thereof
and the validity of such transfer shall not be questioned, and the net
proceeds of such sale (after deduction of the expenses of such sale) may
either be distributed among the persons who would otherwise be entitled
to a fraction or fractions of a consolidated Share or Shares rateably in
accordance with their rights and interests or may be paid to the
Company for the Company’s benefit;
(iii) sub-divide its Shares or any of them into Shares of an amount smaller
than that fixed by the Memorandum; and
(iv) cancel any Shares which, as at the date of passing of the resolution, have
not been taken or agreed to be taken by any person and diminish the
amount of its share capital by the amount of the Shares so cancelled.
The Company may by special resolution reduce its share capital or any
undistributable reserve, subject to the provisions of the Companies Act.
APPENDIX III SUMMARY OF THE CO NSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I I I - 2–


--- page 500 ---
(d) Transfer of Shares
Subject to the terms of the Articles, any member of the Company may
transfer all or any of his Shares by an instrument of transfer. If the Shares in
question were issued in conjunction with rights, options, warrants or units issued
pursuant to the Articles on terms that one cannot be transferred without the
other, the Board shall refuse to register the transfer of any such Share without
evidence satisfactory to it of the like tra nsfer of such right, option, warrant or
unit.
Subject to the Articles and the requirements of the Stock Exchange, all
transfers of Shares shall be effected by an instrument of transfer in the usual or
common form or in such other form as the Board may approve and may be under
hand or, if the transferor or transferee is a recognised clearing house or its
nominee(s), under hand or by machine imprinted signature, or by such other
manner of execution as the Board may approve from time to time.
Execution of the instrument of transfer shall be by or on behalf of the
transferor and the transferee, provided that the Board may dispense with the
execution of the instrument of transfer by the transferor or transferee or accept
mechanically executed transfers. The transferor shall be deemed to remain the
holder of a Share until the name of the transferee is entered in the register of
members of the Company in respect of that Share.
Subject to the provisions of the Companies Act, if the Board considers it
necessary or appropriate, the Company may establish and maintain a branch
register or registers of members at such location or locations within or outside the
Cayman Islands as the Board thinks fit. The Board may, in its absolute discretion,
at any time transfer any Share on the principal register to any branch register or
any Share on any branch register to the principal register or any other branch
register.
The Board may, in its absolute discretion, decline to register a transfer of any
Share (not being a fully paid Share) to a person of whom it does not approve or on
which the Company has a lien, or a transfer of any Share issued under any share
option scheme upon which a restriction on transfer subsists or a transfer of any
Share to more than four joint holders. It may also decline to recognise any
instrument of transfer if the proposed transfer does not comply with the Articles
or any requirements of the Listing Rules.
APPENDIX III SUMMARY OF THE CO NSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I I I - 3–


--- page 501 ---
The Board may decline to recognise any instrument of transfer unless a
certain fee, up to such maximum sum as the Stock Exchange may determine to be
payable, is paid to the Company, the instrument of transfer is properly stamped
(if applicable), is in respect of only one class of Share and is lodged at the relevant
registration office or the place at which the principal register is located
accompanied by the relevant share certificate(s) and such other evidence as the
Board may reasonably require is provided to show the right of the transferor to
make the transfer (and if the instrument of transfer is executed by some other
person on his behalf, the authority of that person so to do).
The register of members may, subject to the Listing Rules and the relevant
section of the Companies Ordinance, be closed at such time or for such period not
exceeding in the whole 30 days in each year as the Board may determine (or such
longer period as the members of the Company may by ordinary resolution
determine, provided that such period shall not be extended beyond 60 days in any
year).
Fully paid Shares shall be free from any restriction on transfer (except when
permitted by the Stock Exchange) and shall also be free from all liens.
(e) Redemption of Shares
Subject to the provisions of the Companies Act, the Listing Rules and any
rights conferred on the holders of any Shares or attaching to any class of Shares,
the Company may issue Shares that are to be redeemed or are liable to be
redeemed at the option of the members or the Company. The redemption of such
Shares shall be effected in such manner and upon such other terms as the
Company may by special resolution determine before the issue of such Shares.
(f) Power of the Company to Purchase its own Shares
Subject to the Companies Act, or any other law or so far as not prohibited by
any law and subject to any rights conferred on the holders of any class of Shares,
the Company shall have the power to purchase or otherwise acquire all or any of
its own Shares (which includes redeemable Shares), provided that the manner and
terms of purchase have first been authorised by ordinary resolution and that any
such purchase shall only be made in accord ance with the relevant code, rules or
regulations issued from time to time by th e Stock Exchange and/or the Securities
and Futures Commission of Hong Kong from time to time in force.
(g) Power of any Subsidiary of the Company to own Shares in the Company
There are no provisions in the Articles relating to the ownership of Shares in
the Company by a subsidiary.
APPENDIX III SUMMARY OF THE CO NSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I I I - 4–


--- page 502 ---
(h) Calls on Shares and Forfeiture of Shares
Subject to the terms of allotment and issue of any Shares (if any), the Board
may, from time to time, make such calls as it thinks fit upon the members in
respect of any monies unpaid on the Shares held by them (whether in respect of
par value or share premium). A member who is the subject of the call shall
(subject to receiving at least 14 clear days’ notice specifying the time or times for
payment) pay to the Company at the time or times so specified the amount called
on his Shares. A call may be made payable either in one sum or by instalments,
and shall be deemed to have been made at the time when the resolution of the
Board authorising such call was passed. The joint holders of a Share shall be
severally as well as jointly liable for the p ayment of all calls and instalments due in
respect of such Share.
If a call remains unpaid after it has become due and payable, the member
from whom the sum is due shall pay interest on the unpaid amount at such rate as
the Board shall determine (together with any expenses incurred by the Company
as a result of such non-payment) from the day it became due and payable until it is
paid, but the Board may waive payment of such interest or expenses in whole or in
part.
If a member fails to pay any call or instalment of a call after it has become
due and payable, the Board may, for so long as any part of the call or instalment
remains unpaid, give to such member not less than 14 clear days’ notice requiring
payment of the unpaid amount together with any interest which may have accrued
and which may still accrue up to the date of payment (together with any expenses
incurred by the Company as a result of such non-payment). The notice shall
specify a further day on or before which the payment required by the notice is to
be made. The notice shall also state that, in the event of non-payment at or before
the appointed time, the Shares in respect of which the call was made will be liable
to be forfeited.
If such notice is not complied with, any Share in respect of which the notice
was given may, before the payment required by the notice has been made, be
forfeited by a resolution of the Board. Such forfeiture shall include all dividends,
other distributions and other monies payab le in respect of the forfeited Share and
not paid before the forfeiture.
A person whose Shares have been forfeited shall cease to be a member in
respect of the forfeited Shares, shall surrender to the Company for cancellation
the certificate(s) for the Shares forfeited and shall remain liable to pay to the
Company all monies which, as at the date of forfeiture, were payable by him to the
Company in respect of the Shares together with (if the Board shall in its discretion
so require) interest thereon from the date of forfeiture until the date of payment as
the Board may determine and any expenses incurred by the Company as a result
of such non-payment.
APPENDIX III SUMMARY OF THE CO NSTITUTION OF THE COMPANY
AND CAYMAN ISLANDS COMPANY LAW
–I I I - 5–


--- page 503 ---
2.2 Directors
(a) Appointment, Retirement and Removal
The Company may by ordinary resolution of the members elect any person to
be a Director. The Board may also appoint any person to be a Director at any
time, either to fill a casual vacancy or a s an additional Director subject to any
maximum number fixed by the members in general meeting or the Articles. Any
Director so appointed shall hold office only until the first annual general meeting
of the Company after his appointment and shall then be eligible for re-election at
such meeting. Any Director so appointed by the Board shall not be taken into
account in determining the Directors or the number of Directors who are to retire
by rotation at an annual general meeting.
There is no shareholding qualification f or Directors nor is there any specified
age limit for Directors.
The members may by ordinary resolution remove any Director (including a
managing or executive Director) before the expiration of his term of office,
notwithstanding anything in the Articles or any agreement between the Company
and such Director, and may by ordinary resolution elect another person in his
stead. Nothing shall be taken as depriving a Director so removed of any
compensation or damages payable to such Director in respect of the termination
of his appointment as Director or of any other appointment or office as a result of
the termination of his appointment as Director.
T h eo f f i c eo faD i r e c t o rs h a l lb ev a c a t e di f :
(i) the Director gives notice in writing to the Company that he resigns from
his office as Director;
(ii) the Director is absent, without being represented by proxy or an
alternate Director appointed by him, for a continuous period of 12
months without special leave of absence from the Board, and the Board
passes a resolution that he has by reason of such absence vacated his
office;
(iii) the Director becomes bankrupt or has a receiving order made against
him or suspends payment or compounds with his creditors generally;
(iv) the Director dies or an order is ma de by any competent court or official
on the grounds that he is or may be suffering from mental disorder or is
otherwise incapable of managing his affairs and the Board resolves that
his office be vacated;
(v) the Director is prohibited from being or ceases to be a Director by
operation of law;
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(vi) the Director has been required by the Stock Exchange to cease to be a
Director or no longer qualifies to be a Director pursuant to the Listing
Rules; or
(vii) the Director is removed from office by notice in writing served upon him
signed by not less than three-fourths in number (or, if that is not a round
number, the nearest lower round number) of the Directors (including
himself) then in office.
At each annual general meeting, one-third of the Directors for the time being
shall retire from office by rotation. If the number of Directors is not a multiple of
three, then the number nearest to but not less than one-third shall be the number
of retiring Directors, provided that ever y Director shall be subject to retirement
by rotation at least once every three yea rs. The Directors to retire at each annual
general meeting shall be those who have been in office longest since their last
re-election or appointment and, as between persons who became or were last
re-elected Directors on the same day, those to retire shall (unless they otherwise
agree among themselves) be determined by lot.
(b) Power to Allot and Issue Shares and other Securities
Subject to the provisions of the Companies Act, the Memorandum and
Articles and, where applicable, the Listing Rules, and without prejudice to any
rights or restrictions for the time being attached to any Shares, the Board may
allot, issue, grant options over or otherwise dispose of Shares with or without
preferred, deferred or other rights or restrictions, whether with regard to
dividend, voting, return of capital or otherwise, to such persons, at such times,
f o rs u c hc o n s i d e r a t i o na n do ns u c ht e r m sa n dc o n d i t i o n sa si ti ni t sa b s o l u t e
discretion thinks fit, provided that no Shares shall be issued at a discount to their
par value.
The Company may issue rights, options, warrants or convertible securities or
securities of a similar nature conferring the right upon the holders thereof to
subscribe for, purchase or receive any class of Shares or other securities in the
C o m p a n yo ns u c ht e r m sa st h eB o a r dm a yf r o mt i m et ot i m ed e t e r m i n e .
Neither the Company nor the Board shall be obliged, when making or
granting any allotment of, offer of, option over or disposal of Shares, to make, or
make available, any such allotment, offe r, option or Shares to members or others
whose registered addresses are in any particular territory or territories where, in
the absence of a registration statement or other special formalities, this is or may,
in the opinion of the Board, be unlawful or impracticable. However, no member
affected as a result of the foregoing shall be, or be deemed to be, a separate class
of members for any purpose whatsoever.
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(c) Power to Dispose of the Assets of the Company or any of its Subsidiaries
Subject to the provisions of the Companies Act, the Memorandum and
Articles and any directions given by special resolution of the Company, the Board
may exercise all powers and do all acts and things which may be exercised or done
by the Company to dispose of the assets of the Company or any of its subsidiaries.
No alteration to the Memorandum or Articles and no direction given by special
resolution of the Company shall invalidate any prior act of the Board which
would have been valid if such alteration or direction had not been made or given.
(d) Borrowing Powers
The Board may exercise all the powers of the Company to raise or borrow
money, secure the payment of any sum or sums of money for the purposes of the
Company, mortgage or charge all or any part of its undertaking, property and
uncalled capital of the Company, and, subject to the Companies Act, issue
debentures, debenture stock, bonds and other securities, whether outright or as
collateral security for any debt, liabilit y or obligation of the Company or of any
third party.
(e) Remuneration
A Director shall be entitled to receive such sums as shall from time to time be
determined by the Board or the Company in general meetings. The Directors shall
also be entitled to be repaid all expenses reasonably incurred by them in
connection with attendance at meetings of the Board or committees of the Board,
or general meetings of the Company or separate meetings of the holders of any
class of Shares or debentures of the Company, or otherwise in connection with the
business of the Company and the discharge of their duties as Directors, and/or to
receive fixed allowances in respect thereof as may be determined by the Board.
The Board or the Company in general meetings may also approve additional
remuneration to any Director for any services which in the opinion of the Board
or the Company in general meetings go beyond such Director’s ordinary routine
work as a Director.
(f) Compensation or Payments for Loss of Office
There are no provisions in the Articles relating to compensation or payment
for loss of office.
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(g) Loans to Directors
There are no provisions in the Artic les relating to making of loans to
Directors.
(h) Disclosure of Interest in Contracts with the Company or any of its Subsidiaries
With the exception of the office of auditor of the Company, a Director may
hold any other office or place of profit with the Company in conjunction with his
office of Director for such period and upon such terms as the Board may
determine, and may be paid such extra rem uneration for that other office or place
of profit, in whatever form, in addition to any remuneration provided for by or
pursuant to the Articles. A Director may be or become a director, officer or
member of any other company in which the Company may be interested, and shall
not be liable to account to the Company or the members for any remuneration or
other benefits received by him as a director, officer or member of such other
company.
No person shall be disqualified from the office of Director or alternate
Director or prevented by such office from contracting with the Company, nor
shall any such contract or any other contract or transaction entered into by or on
behalf of the Company in which any Director or alternate Director is in any way
interested be or be liable to be avoided, nor shall any Director or alternate
Director so contracting or being so interested be liable to account to the Company
for any profit realised by or arising in connection with any such contract or
transaction by reason of such Director or alternate Director holding such office or
of the fiduciary relationship established b y it, provided that the nature of interest
of any Director or alternate Director in any such contract or transaction shall be
disclosed by such Director or alternate Director at or prior to the consideration
and vote thereon.
A Director shall not vote on (or be counted in the quorum in relation to) any
resolution of the Board in respect of any contract or arrangement or other
proposal in which he or any of his close associate(s) has a material interest, and if
he shall do so his vote shall not be counted and he shall not be counted in the
quorum for such resolution. This prohibition shall not apply to any of the
following matters:
(i) the giving of any security or indemnity to the Director or his close
associate(s) in respect of money lent or obligations incurred or
undertaken by him or any of them at the request of or for the benefit
of the Company or any of its subsidiaries;
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(ii) the giving of any security or indemnity to a third party in respect of a
debt or obligation of the Company or any of its subsidiaries for which
the Director or his close associate (s) has/have himself/themselves
assumed responsibility in whole or in part whether alone or jointly
under a guarantee or indemnity or by the giving of security;
(iii) any proposal concerning an offer of Shares, debentures or other
securities of or by the Company or any other company which the
Company may promote or be interested in for subscription or purchase,
where the Director or his close associate(s) is/are or is/are to be
interested as a participant in the underwriting or sub-underwriting of
the offer;
(iv) any proposal or arrangement concerning the benefit of employees of the
Company or any of its subsidiaries, including the adoption,
modification or operation of (A) any employees’ share scheme or any
share incentive or share option scheme under which the Director or his
close associate(s) may benefit or (B) any pension fund or retirement,
death or disability benefits scheme which relates to the Director, his
close associates and employees of the Company or any of its subsidiaries
and does not provide in respect of any Director or his close associate(s)
any privilege or advantage not generally accorded to the class of persons
t ow h i c hs u c hs c h e m eo rf u n dr e l a t e s ;a n d
(v) any contract or arrangement in which the Director or his close
associate(s) is/are interested in the same manner as other holders of
Shares, debentures or other securities of the Company by virtue only of
his/their interest in those Shares, debentures or other securities.
2.3 Proceedings of the Board
The Board may meet anywhere in the world for the despatch of business and may
adjourn and otherwise regulate its meetings as it thinks fit. Unless otherwise
determined, two Directors shall be a quorum. Questions arising at any meeting shall
be determined by a majority of votes. In the case of an equality of votes, the chairman
of the meeting shall have a second or casting vote.
2.4 Alterations to the Constitutional Documents and the Company’s Name
The Memorandum and Articles may only be altered or amended, and the name of
the Company may only be changed, by special resolution of the Company.
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2.5 Meetings of Members
(a) Special and Ordinary resolutions
A special resolution must be passed by a majority of not less than two-thirds
(other than in relation to any resolution approving changes to the Company’s
constitutional documents or a voluntary winding up of the Company, in which
case a special resolution must be p a s s e db yam a j o r i t yo fn o tl e s st h a n
three-fourths) of the voting rights held by such members as, being entitled so to
do, vote in person or by proxy or, in the case of any members which is a
corporation, by its duly authorised representative(s) or by proxy, at a general
meeting of which notice specifying the intention to propose the resolution as a
special resolution has been duly given. A special resolution may also be approved
in writing by all the members entitled to vote at a general meeting in one or more
instruments each signed by one or more of such members.
An ordinary resolution, in contrast, is a resolution passed by a simple
majority of the voting rights held by such members as, being entitled to do so,
vote in person or by proxy or, in the case of any member which is a corporation,
by its duly authorised representative(s) or by proxy, at a general meeting. An
ordinary resolution may also be approved in writing by all the members entitled to
vote at a general meeting in one or more instruments each signed by one or more
of such members.
The provisions of special resolutions and ordinary resolutions shall apply
mutatis mutandis to any resolutions passed by the holders of any class of shares.
(b) Voting Rights and Right to Demand a Poll
Subject to any rights, restrictions or privileges as to voting for the time being
attached to any class or classes of Shares, at any general meeting: (a) on a poll
every member present in person (or, in the case of a member being a corporation,
by its duly authorised representative) or by proxy shall have one vote for every
Share and (b) on a show of hands every member who is present in person (or, in
the case of a member being a corporation, by its duly authorised representative) or
by proxy shall have one vote.
In the case of joint holders, the vote of the senior holder who tenders a vote,
whether in person or by proxy shall be accepted to the exclusion of the votes of the
other join holders, and seniority shall be determined by the order in which the
names of the holders stand in the register of members of the Company.
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N op e r s o ns h a l lb ec o u n t e di naq u o r u mo rb ee n t i t l e dt ov o t ea ta n yg e n e r a l
meeting unless he is registered as a member on the record date for such meeting,
nor unless all calls or other monies then payable by him in respect of the relevant
Shares have been paid.
At any general meeting a resolution put to the vote of the meeting shall be
decided by way of poll save that the chairman of the meeting may, pursuant to the
Listing Rules, allow a resolution which relates purely to a procedural or
administrative matter to be voted on by a show of hands.
Any corporation or other non-natural person which is a member of the
Company may in accordance with its constitutional documents, or in the absence
of such provision by resolution of its directors or other governing body or by
power of attorney, authorise such person as it thinks fit to act as its representative
at any meeting of the Company or of any class of members, and the person so
authorised shall be entitled to exercise the same powers as the corporation or
other non-natural person could exercise as if it were a natural person member of
the Company.
If a recognised clearing house or its nominee(s) is a member of the Company,
it may appoint proxies or authorise such person or persons as it thinks fit to act as
its representative(s), who enjoy rights e quivalent to the rights of other members,
at any meeting of the Company (including but not limited to general meetings and
creditors meetings) or at any meeting of any class of members of the Company,
provided that if more than one person is so authorised, the authorisation shall
specify the number and class of Shares in respect of which each such person is so
authorised. A person so authorised shall be entitled to exercise the same rights
and powers on behalf of the recognised clearing house or its nominee(s) as if such
person were a natural person member of the Company, including the right to
speak and vote individually on a show of hands or on a poll.
All members of the Company (including a member which is a recognised
clearing house (or its nominee(s))) shall have the right to (i) speak at a general
meeting and (ii) and vote at a general meeting except where a member is required
by the Listing Rules to abstain from voting to approve the matter under
consideration. Where any member is, under the Listing Rules, required to abstain
from voting on any particular resolution or restricted to voting only for or only
against any particular resolution, any votes cast by or on behalf of such member
in contravention of such requirement or restriction shall not be counted.
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(c) Annual General Meetings and Extraordinary General Meetings
The Company must hold a general meeting as its annual general meeting in
each financial year. Such meeting shall be specified as such in the notices calling
it, and must be held within six months after the end of the Company’s financial
year. A meeting of the members or any cl ass thereof may be held by telephone,
tele-conferencing or other electronic means, provided that all participants are able
to communicate contemporaneously wi th one another, and participation in a
meeting in such manner shall constitute presence at such meetings.
The Board may convene an extraordinar y general meeting whenever it thinks
fit. In addition, one or more members holding, as at the date of deposit of the
requisition, in aggregate not less than one-tenth of the voting rights (on a one vote
per Share basis) in the share capital of the Company may make a requisition to
convene an extraordinary general meeting and/or add resolutions to the agenda of
a meeting. Such requisition, which must state the objects and the resolutions to be
added to the agenda of the meeting and must be signed by the requisitionists, shall
be deposited at the principal place of business of the Company in Hong Kong or,
in the event the Company ceases to have such a principal place of business, the
registered office of the Company. If the Board does not within 21 days from the
date of deposit of such requisition duly proceed to convene a general meeting to
be held within the following 21 days, the requisitionists or any of them
representing more than one-half of the total voting rights of all the
requisitionists may themselves conven e a general meeting, but any such meeting
so convened shall be held no later than the day falling three months after the
expiration of the said 21-day period. A general meeting convened by
requisitionists shall be convened in the same manner as nearly as possible as
that in which general meetings are to be convened by the Board, and all
reasonable expenses incurred by the requ isitionists shall be reimbursed to the
requisitionists by the Company.
(d) Notices of Meetings and Business to be Conducted
An annual general meeting of the Company shall be called by at least 21
days’ notice in writing, and any other general meeting of the Company shall be
called by at least 14 days’ notice in writing. The notice shall be exclusive of the day
o nw h i c hi ti ss e r v e do rd e e m e dt ob es e r v e da n do ft h ed a yf o rw h i c hi ti sg i v e n ,
and must specify the date, time, place and agenda of the meeting, the particulars
of the resolution(s) to be considered at the meeting and the general nature of the
business to be considered at the meeting.
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Except where otherwise expressly stated, any notice or document (including a
share certificate) to be given or issued u nder the Articles shall be in writing, and
m a yb es e r v e db yt h eC o m p a n yo na n y member personally, by post to such
member’s registered address, (to the extent permitted by the Listing Rules and all
applicable laws and regulations) by elect ronic means or (in the case of a notice) by
advertisement published in the manner prescribed under the Listing Rules.
Notwithstanding that a meeting of the Company is called by shorter notice
than as specified above, if permitted by the Listing Rules, such meeting may be
deemed to have been duly called if it is so agreed:
(i) in the case of an annual general meeting, by all members of the
C o m p a n ye n t i t l e dt oa t t e n da n dv o t et h e r e a t ;a n d
(ii) in the case of an extraordinary general meeting, by a majority in number
of the members having a right to attend and vote at the meeting holding
not less than 95% of the total voting rights held by such members.
If, after the notice of a general meeting has been sent but before the meeting
is held, or after the adjournment of a general meeting but before the adjourned
meeting is held (whether or not notice of the adjourned meeting is required), the
Board in its absolute discretion consider that it is impractical or unreasonable for
any reason to hold a general meeting on the date or at the time and place specified
in the notice calling such meeting, it may change or postpone the meeting to
another date, time and place.
The Board also has the power to provide in every notice calling a general
meeting that in the event of a gale warning, a black rainstorm warning or extreme
conditions is/are in force at any time on the day of the general meeting (unless
such warning is cancelled at least a minimum period of time prior to the general
meeting as the Board may specify in the r elevant notice), the meeting shall be
postponed without further notice to be reconvened on a later date.
Where a general meeting is postponed:
(A) the Company shall endeavour to cause a notice of such postponement,
which shall set out the reason for the postponement in accordance with
the Listing Rules, to be placed on the Company’s website and published
on the Stock Exchange’s website as soon as practicable, provided that
failure to place or publish such notice shall not affect the automatic
postponement of a general meeting due to a gale warning, a black
rainstorm warning or extreme conditions being in force on the day of the
general meeting;
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(B) the Board shall fix the date, time and place for the reconvened meeting
and at least seven clear days’ notice shall be given for the reconvened
meeting. Such notice shall specify the date, time and place at which the
postponed meeting will be reconvened and the date and time by which
proxies shall be submitted in order to be valid at such reconvened
meeting (provided that any proxy submitted for the original meeting
shall continue to be valid for the re convened meeting unless revoked or
replaced by a new proxy); and
(C) only the business set out in the notice of the original meeting shall be
considered at the reconvened meeting, and notice given for the
reconvened meeting does not need to specify the business to be
considered at the reconvened meet ing, nor shall any accompanying
documents be required to be recirculated. Where any new business is to
be considered at such reconvened meeting, the Company shall give a
fresh notice for such reconvened meeting in accordance with the
Articles.
(e) Quorum for Meetings and Separate Class Meetings
No business shall be considered at any general meeting unless a quorum is
present when the meeting proceeds to busin ess, and continues to be present until
the conclusion of the meeting.
The quorum for a general meeting shall be two members present in person (or
in the case of a member being a corporation, by its duly authorised representative)
or by proxy and entitled to vote. In respect of a separate class meeting (other than
an adjourned meeting) convened to approve the variation of class rights, the
necessary quorum shall be two persons holding or representing by proxy not less
than one-third of the issued Shares of that class.
(f) Proxies
Any member of the Company (including a member which is a recognised
clearing house (or its nominee(s))) entitled to attend and vote at a meeting of the
Company is entitled to appoint another person (being a natural person) as his
proxy to attend and vote in his place. A member who is the holder of two or more
Shares may appoint more than one proxy to represent him and vote on his behalf
at a general meeting of the Company or at a class meeting. A proxy need not be a
member of the Company and shall be entitled to exercise the same powers on
behalf of a member who is a natural person and for whom he acts as proxy as such
member could exercise. In addition, a proxy shall be entitled to exercise the same
powers on behalf of a member which is a corporation and for which he acts as
proxy as such member could exercise as if it were a natural person member present
in person at any general meeting. On a poll or on a show of hands, votes may be
given either personally (or, in the case of a member being a corporation, by its
duly authorised representative) or by proxy.
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The instrument appointing a proxy shal lb ei nw r i t i n ga n de x e c u t e du n d e rt h e
hand of the appointor or of his attorney duly authorised in writing, or if the
appointor is a corporation or other non-natural person, either under its seal or
under the hand of a duly authorised representative.
The Board shall, in the notice convenin g any meeting or adjourned meeting,
or in an instrument of proxy sent out by the Company, specify the manner by
which the instrument appointing a proxy shall be deposited and the place and time
(being no later than the time appointed for the commencement of the meeting or
adjourned meeting to which the instrument of proxy relates) at which such
instrument shall be deposited.
Every instrument of proxy, whether for a specified meeting or otherwise,
shall be in such form that complies with the Listing Rules as the Board may from
time to time approve. Any form issued to a member for appointing a proxy to
attend and vote at a general meeting at which any business is to be considered
shall be such as to enable the member, according to his intentions, to instruct the
proxy to vote in favour of or against (or, in default of instructions, to exercise the
discretion of the proxy in respect of) each resolution dealing with any such
business.
2.6 Accounts and Audit
The Board shall cause to be kept such b ooks of account as are necessary to give a
true and fair view of the state of the Company’s affairs and to explain its transactions
in accordance with the Companies Act.
The books of accounts of the Company shall be kept at the principal place of
business of the Company in Hong Kong or, subject to the provisions of the Companies
Act, at such other place or places as the Board thinks fit and shall always be open to
inspection by any Director. No member (not being a Director) or other person shall
have any right to inspect any account, book or document of the Company except as
conferred by the Companies Act or ordered by a court of competent jurisdiction or as
authorised by the Board or the Company in general meeting.
The Board shall cause to be prepared and laid before the Company at every
annual general meeting a profit and loss account for the period since the preceding
account, together with a balance sheet as at the date to which the profit and loss
account is made up, a Directors’ report with respect to the profit or loss of the
Company for the period covered by the pro fit and loss account and the state of the
Company’s affairs as at the end of such period, an auditors’ report on such accounts
a n ds u c ho t h e rr e p o r t sa n da c c o u n t sa sm a yb er e q u i r e db yl a wa n dt h eL i s t i n gR u l e s .
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The members shall at each annual general meeting appoint auditor(s) to hold
office by ordinary resolution of the members until the conclusion of the next annual
general meeting on such terms and with such duties as may be agreed with the Board.
The auditors’ remuneration shall be fix ed by the members at the annual general
meeting at which they are appointed by ordinary resolution of the members or in any
other manner as specified in such ordinary resolution. The members may, at any
general meeting convened and held in acco rdance with the Articles, remove the
auditors by ordinary resolution at any time before the expiration of the term of office
and shall, by ordinary resolution, at that meeting appoint new auditors in their place
for the remainder of the term.
The accounts of the Company shall be prepared and audited based on the
generally accepted accounting principles of Hong Kong, the International Accounting
Standards or such other standards as may be permitted by the Stock Exchange.
2.7 Dividends and other Methods of Distribution
Subject to the Companies Act and the Articles, the Company may by ordinary
resolution resolve to declare dividends and other distributions on Shares in issue in any
currency and authorise payment of the dividends or distributions out of the funds of
the Company lawfully available therefor, provided that (i) no dividends shall exceed
the amount recommended by the Board, and (ii) no dividends or distributions shall be
paid except out of the realised or unrealised profits of the Company, out of the share
premium account or as otherwise permitted by law.
T h eB o a r dm a yf r o mt i m et ot i m ep a yt ot h em e m b e r so ft h eC o m p a n ys u c h
interim dividends as appear to the Board to be justified by the financial conditions and
the profits of the Company. In addition, t h eB o a r dm a yf r o mt i m et ot i m ed e c l a r ea n d
pay special dividends on Shares of such amounts and on such dates as it thinks fit.
Except as otherwise provided by the righ ts attached to any Shares, all dividends
and other distributions shall be paid according to the amounts paid up on the Shares
that a member holds during the period in respect of which the dividends and
distributions are paid. No amount paid up on a Share in advance of calls shall for this
purpose be treated as paid up on the Share.
The Board may deduct from any dividends or other distributions payable to any
member of the Company all sums of money (if any) then payable by him to the
Company on account of calls or otherwise. The Board may retain any dividends or
distributions payable on or in respect of a Share upon which the Company has a lien,
and may apply the same in or towards satisfaction of the debts, liabilities or
engagements in respect of which the lien exists.
No dividends or other distributions payable by the Company on or in respect of
any Share shall carry inte rest against the Company.
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Where the Board or the Company in general meeting has resolved that a dividend
should be paid or declared, the Board may further resolve:
(a) that such dividend be satisfied in whole or in part in the form of an allotment
of Shares credited as fully paid on the basis that the Shares so allotted shall
be of the same class as the class already held by the allottee, provided that the
members entitled thereto will be entitled to elect to receive such dividend (or
part thereof) in cash in lieu of such allotment; or
(b) that the members entitled to such dividend will be entitled to elect to receive
an allotment of Shares credited as fully paid in lieu of the whole or such part
of the dividend as the Board may think fit on the basis that the Shares so
allotted shall be of the same class as th e class already held by the allottee.
Upon the recommendation of the Board, the Company may by ordinary
resolution resolve in respect of any one particular dividend of the Company
determine that notwithstanding the foregoing, a dividend may be satisfied wholly in
t h ef o r mo fa na l l o t m e n to fS h a r e sc r e d i t e das fully paid without offering any right to
m e m b e r st oe l e c tt or e c e i v es u c hd i v i d e n di nc a s hi nl i e uo fs u c ha l l o t m e n t .
Any dividends, distributions or other mon ies payable in cash in respect of Shares
may be paid by wire transfer to the holder of such Shares or by cheque or warrant sent
by post to the registered address of such holder, or in the case of joint holders, to the
registered address of the holder who is first named on the register of members of the
Company, or to such person and to such address as the holder or joint holders may in
writing direct. Any one of two or more joint holders may give effectual receipts for any
dividends, distributions or other monies payable in respect of the Shares held by them
as joint holders.
Whenever the Board or the Company in general meeting has resolved that a
dividend be paid or declared, the Board may further resolve that such dividend be
satisfied in whole or in part by the distribution of specific assets of any kind.
Any dividends or other distributions wh ich remain unclaimed for six years from
the date on which such dividends or distributions become payable shall be forfeited
and shall revert to the Company.
2.8 Inspection of Corporate Records
For so long as any part of the share capital of the Company is listed on the Stock
Exchange, any member may inspect any register of members of the Company
maintained in Hong Kong (except when the register of members is closed in accordance
with the Companies Ordinance) without charge and require the provision to him of
copies or extracts of such register in all respects as if the Company were incorporated
under and were subject to the Companies Ordinance.
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2.9 Rights of Minorities in relation to Fraud or Oppression
There are no provisions in the Articles con cerning the rights of minority members
in relation to fraud or oppression. However, certain remedies may be available to
members of the Company und er the Cayman Islands laws, as summarised in paragraph
3.6 below.
2.10 Procedures on Liquidation
Subject to the Companies Act, the members of the Company may by special
resolution resolve to wind up the Company voluntarily or by the court.
Subject to any rights, privileges or restric tions as to the distribution of available
surplus assets on liquidation for the time being attached to any class or classes of
Shares:
(a) if the assets available for distribution among the members of the Company
are more than sufficient to repay the whole of the Company’s paid up capital
at the commencement of the winding up, the surplus shall be distributed pari
passu among such members in proportion to the amount paid up on the
Shares held by them at the commencement of the winding up; and
(b) if the assets available for distribution among the members of the Company
are insufficient to repay the whole of the Company’s paid up capital, such
assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the members in proportion to the capital paid up, or ought to be
paid up, on the Shares held by them at the commencement of the winding up.
If the Company is wound up (whether the liquidation is voluntary or compelled by
the court), the liquidator may, with the app roval of a special resolution and any other
approval required by the Companies Act, divide among the members in kind the whole
or any part of the assets of the Company, whether the assets consist of property of one
kind or different kinds, and the liquidator may, for such purpose, set such value as he
deems fair upon any one or more class or classes of property to be so divided and may
determine how such division shall be carried out as between the members or different
classes of members and the members within each class. The liquidator may, with the
like approval, vest any part of the assets in trustees upon such trusts for the benefit of
the members as the liquidator thinks fit, provided that no member shall be compelled
to accept any shares or other property upon which there is a liability.
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3. COMPANY LAWS OF THE CAYMAN ISLANDS
The Company was incorporated in the Cayman Islands as an exempted company on 17
May 2022 subject to the Companies Act. Certain provisions of the company laws of the
Cayman Islands are set out below but this section does not purport to contain all applicable
qualifications and exceptions or to be a complete review of all matters of the company laws
of the Cayman Islands, which may differ from equivalent provisions in jurisdictions with
which interested parties may be more familiar.
3.1 Company Operations
An exempted company such as the Company must conduct its operations mainly
outside the Cayman Islands. An exempted company is also required to file an annual
return each year with the Registrar of Co mpanies of the Cayman Islands and pay a fee
which is based on the amount of its authorised share capital.
3.2 Share Capital
Under the Companies Act, a Cayman Isl ands company may issue ordinary,
preference or redeemable shares or any com bination thereof. Where a company issues
shares at a premium, whether for cash or otherwise, a sum equal to the aggregate
amount or value of the premium on those shares shall be transferred to an account, to
be called the share premium account. At the option of a company, these provisions
may not apply to premium on shares of that company allotted pursuant to any
arrangements in consideration of the acquis ition or cancellation of shares in any other
company and issued at a premium. The share premium account may be applied by the
company subject to the provisions, if any, of its memorandum and articles of
association, in such manner as the company may from time to time determine
including, but without limitation, the following:
(a) paying distributions or dividends to members;
(b) paying up unissued shares of the company to be issued to members as fully
paid bonus shares;
(c) any manner provided in section 37 of the Companies Act;
(d) writing-off the preliminar y expenses of the company; and
(e) writing-off the expenses of, or the commission paid or discount allowed on,
a n yi s s u eo fs h a r e so rd e b e n t u r e so ft h ec o m p a n y .
Notwithstanding the foregoing, no distribution or dividend may be paid to
members out of the share premium account unless, immediately following the date on
which the distribution or dividend is proposed to be paid, the company will be able to
pay its debts as they fall due in the ordinary course of business.
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Subject to confirmation by the court, a company limited by shares or a company
limited by guarantee and having a share capital may, if authorised to do so by its
articles of association, by special resolution reduce its share capital in any way.
3.3 Financial Assistance to Purchase Shares of a Company or its Holding Company
There are no statutory prohibitions in the Cayman Islands on the granting of
financial assistance by a company to another person for the purchase of, or
subscription for, its own, its holding company’s or a subsidiary’s shares. Therefore,
a company may provide financial assistance provided the directors of the company,
when proposing to grant such financial assistance, discharge their duties of care and
act in good faith, for a proper purpose and in the interests of the company. Such
assistance should be on an arm’s-length basis.
3.4 Purchase of Shares and Warrants by a Company and its Subsidiaries
A company limited by shares or a company limited by guarantee and having a
share capital may, if so authorised by its articles of association, issue shares which are
to be redeemed or are liable to be redeemed at the option of the company or a member
and, for the avoidance of doubt, it shall be lawful for the rights attaching to any shares
to be varied, subject to the provisions of the company’s articles of association, so as to
provide that such shares are to be or are liable to be so redeemed. In addition, such a
company may, if authorised to do so by its a rticles of association, purchase its own
shares, including any redeemable shares; an ordinary resolution of the company
approving the manner and terms of the purchase will be required if the articles of
association do not authorise the manner and terms of such purchase. A company may
not redeem or purchase its shares unless the y are fully paid. Furthermore, a company
may not redeem or purchase any of its shares if, as a result of the redemption or
purchase, there would no longer be any issued shares of the company other than shares
held as treasury shares. In addition, a payment out of capital by a company for the
redemption or purchase of its own shares is not lawful unless, immediately following
t h ed a t eo nw h i c ht h ep a y m e n ti sp r o p o s e dt ob em a d e ,t h ec o m p a n ys h a l lb ea b l et o
pay its debts as they fall due in the ordinary course of business.
Shares that have been purchased or redeemed by a company or surrendered to the
company shall not be treated as cancelled but shall be classified as treasury shares if
held in compliance with the requirements of section 37A(1) of the Companies Act. Any
such shares shall continue to be classified as treasury shares until such shares are either
cancelled or transferred pu rsuant to the Companies Act.
A Cayman Islands company may be able to purchase its own warrants subject to
and in accordance with the terms and conditions of the relevant warrant instrument or
certificate. Thus there is no requirement under the Cayman Islands laws that a
company’s memorandum or articles of association contain a specific provision
enabling such purchases. The directors of a company may under the general power
contained in its memorandum of association be able to buy, sell and deal in personal
property of all kinds.
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A subsidiary may hold shares in its holding company and, in certain
circumstances, may acquire such shares.
3.5 Dividends and Distributions
Subject to a solvency test, as prescribed in the Companies Act, and the provisions,
if any, of the company’s memorandum and articles of association, a company may pay
dividends and distributions out of its share premium account. In addition, based upon
English case law which is likely to be persu asive in the Cayman Islands, dividends may
be paid out of profits.
For so long as a company holds treasury shares, no dividend may be declared or
paid, and no other distribution (whether in cash or otherwise) of the company’s assets
(including any distribution of assets to members on a winding up) may be made, in
respect of a treasury share.
3.6 Protection of Minorities and Shareholders’ Suits
It can be expected that the Cayman Islands courts will ordinarily follow English
case law precedents (particularly the rule in the case of Foss vs. Harbottle and the
exceptions to that rule) which permit a minority member to commence a representative
action against or derivative actions in th e name of the company to challenge acts which
are ultra vires, illegal, fraudulent (and pe rformed by those in control of the Company)
against the minority, or represent an irregu larity in the passing of a resolution which
requires a qualified (or special) majority which has not been obtained.
Where a company (not being a bank) is one which has a share capital divided into
shares, the court may, on the application of members holding not less than one-fifth of
the shares of the company in issue, appoint an inspector to examine the affairs of the
company and, at the direction of the court, to report on such affairs. In addition, any
member of a company may petition the court, which may make a winding up order if
the court is of the opinion that it is just and equitable that the company should be
wound up.
In general, claims against a company by its members must be based on the general
laws of contract or tort applicable in the Cayman Islands or be based on potential
violation of their individual rights as members as established by a company’s
memorandum and artic les of association.
3.7 Disposal of Assets
There are no specific restrictions on the power of directors to dispose of assets of a
company, however, the directors are expected to exercise certain duties of care,
diligence and skill to the standard that a re asonably prudent person would exercise in
comparable circumstances, in addition to f iduciary duties to act in good faith, for
proper purpose and in the best interests of the company under English common law
(which the Cayman Islands courts will ordinarily follow).
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3.8 Accounting and Auditing Requirements
A company must cause proper records of accounts to be kept with respect to: (i)
all sums of money received and expended by it; (ii) all sales and purchases of goods by
it; and (iii) its assets and liabilities.
Proper books of account shall not be deemed to be kept if there are not kept such
books as are necessary to give a true and fair view of the state of the company’s affairs
and to explain its transactions.
If a company keeps its books of account at any place other than at its registered
office or any other place within the Cayman Islands, it shall, upon service of an order
or notice by the Tax Information Authority pursuant to the Tax Information
Authority Act (2021 Revision) of the Cayman Islands, make available, in electronic
form or any other medium, at its registered office copies of its books of account, or any
part or parts thereof, as are specified in such order or notice.
3.9 Exchange Control
There are no exchange control regulations or currency restrictions in effect in the
Cayman Islands.
3.10 Taxation
The Cayman Islands currently levy no taxes on individuals or corporations based
upon profits, income, gains or appreciations and there is no taxation in the nature of
inheritance tax or estate duty. There are no other taxes likely to be material to the
Company levied by the Government of the Cayman Islands save for certain stamp
duties which may be applicable, from t ime to time, on certain instruments.
3.11 Stamp Duty on Transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman
Islands companies save for those which hold interests in land in the Cayman Islands.
3.12 Loans to Directors
There is no express provision prohibiting the making of loans by a company to
any of its directors. However, the company’s articles of association may provide for the
prohibition of such loans under specific circumstances.
3.13 Inspection of Corporate Records
The members of a company have no general right to inspect or obtain copies of
the register of members or corporate recor ds of the company. They will, however, have
such rights as may be set out in the company’s articles of association.
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3.14 Register of Members
A Cayman Islands exempted company may maintain its principal register of
members and any branch registers in any c ountry or territory, whether within or
outside the Cayman Islands, as the company may determine from time to time. There is
no requirement for an exempted compan y to make any returns of members to the
Registrar of Companies in the Cayman Islands. The names and addresses of the
members are, accordingly, not a matter of public record and are not available for
public inspection. However, an exempted company shall make available at its
registered office, in electronic form or any other medium, such register of members,
including any branch register of member, as may be required of it upon service of an
order or notice by the Tax Information Authority pursuant to the Tax Information
Authority Act (2021 Revision) of the Cayman Islands.
3.15 Register of Directors and Officers
Pursuant to the Companies Act, the Company is required to maintain at its
registered office a register of directors, alternate directors and officers. The Registrar
of Companies shall make available the list of the names of the current directors of the
Company (and, where applicable, the current alternate directors of the Company) for
inspection by any person upon payment of a fee by such person. A copy of the register
of directors and officers must be filed with the Registrar of Companies in the Cayman
Islands, and any change must be notified to the Registrar of Companies within 30 days
of any change in such directors or officers, including a change of the name of such
directors or officers.
3.16 Winding up
A Cayman Islands company may be wound up by: (i) an order of the court; (ii)
voluntarily by its members; or (iii) u nder the supervision of the court.
The court has authority to order winding up in a number of specified
circumstances including where, in the opinion of the court, it is just and equitable
t h a ts u c hc o m p a n yb es ow o u n du p .
A voluntary winding up of a company (other than a limited duration company,
for which specific rules apply) occurs where the company resolves by special resolution
that it be wound up voluntarily or where the company in general meeting resolves that
it be wound up voluntarily because it is unable to pay its debt as they fall due. In the
case of a voluntary winding up, the company is obliged to cease to carry on its business
from the commencement of its winding up except so far as it may be beneficial for its
winding up. Upon appointment of a voluntary liquidator, all the powers of the
directors cease, except so far as the company in general meeting or the liquidator
sanctions their continuance.
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In the case of a members’ voluntary winding up of a company, one or more
liquidators are appointed for the purpose of winding up the affairs of the company and
distributing its assets.
As soon as the affairs of a company are fully wound up, the liquidator must make
a report and an account of the winding up, showing how the winding up has been
conducted and the property of the company disposed of, and call a general meeting of
the company for the purposes of laying before it the account and giving an explanation
of that account.
When a resolution has been passed by a company to wind up voluntarily, the
liquidator or any contributory or creditor may apply to the court for an order for the
continuation of the winding up under the supervision of the court, on the grounds that:
(i) the company is or is likely to become inso lvent; or (ii) the supervision of the court
will facilitate a more effective, economic or expeditious liquidation of the company in
the interests of the contributories and creditors. A supervision order takes effect for all
purposes as if it was an order that the company be wound up by the court except that a
commenced voluntary winding up and the prior actions of the voluntary liquidator
shall be valid and binding upon the company and its official liquidator.
For the purpose of conducting the proceedings in winding up a company and
assisting the court, one or more persons may be appointed to be called an official
liquidator(s). The court may appoint to such office such person or persons, either
provisionally or otherwise, as it thinks fit, and if more than one person is appointed to
such office, the court shall declare whether any act required or authorised to be done
by the official liquidator is to be done by all or any one or more of such persons. The
court may also determine whether any and what security is to be given by an official
liquidator on his appointment; if no official liquidator is appointed, or during any
vacancy in such office, all the property of the company shall be in the custody of the
court.
3.17 Mergers and Consolidations
The Companies Act permits mergers and consolidations between Cayman Islands
companies and between Cayman Islands companies and non-Cayman Islands
companies. For these purposes, (a) ‘‘merger’’ means the merging of two or more
constituent companies and the vesting of the ir undertaking, property and liabilities in
one of such companies as the surviving company, and (b) ‘‘consolidation’’ means the
combination of two or more constituent companies into a consolidated company and
the vesting of the undertaking, propert y and liabilities of such companies to the
consolidated company. In order to effect su ch a merger or consolidation, the directors
of each constituent company must approve a written plan of merger or consolidation,
which must then be authorised by (a) a special resolution of each constituent company
and (b) such other authorisation, if any, as may be specified in such constituent
company’s articles of association. The writt en plan of merger or consolidation must be
filed with the Registrar of Companies of the Cayman Islands together with a
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declaration as to the solvency of the consolidated or surviving company, a list of the
assets and liabilities of each constituent company and an undertaking that a copy of
the certificate of merger or consolidation will be given to the members and creditors of
each constituent company and that notific ation of the merger or consolidation will be
published in the Cayman Islands Gazette. Dissenting members have the right to be
paid the fair value of their shares (which, if not agreed between the parties, will be
determined by the Cayman Islands court) if they follow the required procedures,
subject to certain exceptions. Court approval is not required for a merger or
consolidation which is effected in compliance with these statutory procedures.
3.18 Mergers and Consolidations involving a Foreign Company
Where the merger or consolidation involves a foreign company, the procedure is
similar, save that with respect to the fore ign company, the directors of the Cayman
Islands exempted company are required to make a declaration to the effect that, having
made due enquiry, they are of the opinion that the requirements set out below have
been met: (i) that the merger or consolidation is permitted or not prohibited by the
constitutional documents of the foreign company and by the laws of the jurisdiction in
which the foreign company is incorporated, and that those laws and any requirements
of those constitutional documents have been or will be complied with; (ii) that no
petition or other similar proceeding has been filed and remains outstanding or order
made or resolution adopted to wind up or liquidate the foreign company in any
jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has
been appointed in any jurisdiction and is act ing in respect of the foreign company, its
affairs or its property or any part thereof; (iv) that no scheme, order, compromise or
other similar arrangement has been entered into or made in any jurisdiction whereby
the rights of creditors of the foreign company are and continue to be suspended or
restricted.
Where the surviving company is the Cayman Islands exempted company, the
directors of the Cayman Islands exempted company are further required to make a
declaration to the effect that, having made due enquiry, they are of the opinion that the
requirements set out below have been met: (i) that the foreign company is able to pay
its debts as they fall due and that the mer ger or consolidated is bona fide and not
intended to defraud unsecured creditors of the foreign company; (ii) that in respect of
the transfer of any security interest grante d by the foreign company to the surviving or
consolidated company (a) consent or appr oval to the transfer has been obtained,
released or waived; (b) the transfer is permitted by and has been approved in
accordance with the constitutional documen ts of the foreign company; and (c) the laws
of the jurisdiction of the foreign company with respect to the transfer have been or will
be complied with; (iii) that the foreign comp any will, upon the merger or consolidation
becoming effective, cease to be incorporated, registered or exist under the laws of the
relevant foreign jurisdiction; and (iv) that there is no other reason why it would be
against the public interest to perm it the merger or consolidation.
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3.19 Reconstructions and Amalgamations
Reconstructions and amalgamations may be approved by (i) 75% in value of the
members or class of members or (ii) a majority in number representing 75% in value of
the creditors or class of creditors, in each case depending on the circumstances, as are
present at a meeting called for such purpose and thereafter sanctioned by the Grand
Court of the Cayman Islands. Whilst a disse nting member has the right to express to
the court his view that the transaction for which approval is being sought would not
provide the members with a fair value for their shares, it can be expected that the court
would approve the transaction if it is satisfied that (i) the company is not proposing to
act illegally or beyond the scope of our c orporate authority a nd the statutory
provisions as to majority vote have been complied with, (ii) the members have been
fairly represented at the meeting in question, (iii) the transaction is such as a
businessman would reasonable approve and (iv) the transaction is not one that would
more properly be sanctioned under some other provisions of the Companies Act or
t h a tw o u l da m o u n tt oa‘ ‘ f r a u do nt h em i n o r i t y ’ ’ .
If the transaction is approved, no dissenting member would have any rights
comparable to the appraisal rights (namely t he right to receive payment in cash for the
judicially determined value of his shares), which may be available to dissenting
members of corporations in other jurisdictions.
3.20 Takeovers
Where an offer is made by a company for the shares of another company and,
within four months of the offer, the holders of not less than 90% of the shares which
are the subject of the offer accept, the offeror may, at any time within two months after
the expiration of that four-month period, by notice require the dissenting members to
transfer their shares on the terms of the o ffer. A dissenting member may apply to the
Cayman Islands courts within one month of the notice objecting to the transfer. The
burden is on the dissenting member to show that the court should exercise its
discretion, which it will be unlikely to do unl ess there is evidence of fraud or bad faith
or collusion as between the offeror and the holders of the shares who have accepted the
offer as a means of unfairly forcing out minority members.
3.21 Indemnification
The Cayman Islands laws do not limit the extent to which a company’s articles of
association may provide for indemnificat ion of officers and directors, save to the
extent any such provision may be held by the court to be contrary to public policy, for
example, where a provision purports t o provide indemnification against the
consequences of committing a crime.
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3.22 Economic Substance
The Cayman Islands enacted the International Tax Co-operation (Economic
Substance) Act (2024 Revision) together with the Guidance Notes published by the
Cayman Islands Tax Information Autho rity from time to time. If a company is
considered to be a ‘‘relevant entity’’ and is conducting one or more of the nine
‘‘relevant activities’’, then such compan y will be required to comply with the economic
substance requirements in relation to the relevant activity from 1 July 2019. All
companies whether a relevant entity or not is required to file an annual report with the
Registrar of Companies of the Cayman Islands confirming whether or not it is carrying
on any relevant activities and if it is, i t must satisfy an economic substance test.
4. GENERAL
Harney Westwood & Riegels, the Company’s legal adviser on Cayman Islands laws,
has sent to the Company a letter of advice summarising the aspects of the Companies Act
set out in section 3 above. This letter, toge ther with copies of the Companies Act, the
Memorandum and the Articles, is on display on the websites of the Stock Exchange and the
Company as referred to in the paragraph headed ‘‘Documents on display’’ in Appendix V.
Any person wishing to have a detailed summary of the Companies Act or advice on the
differences between it and the laws of any jur isdiction with which he is more familiar is
recommended to seek independent legal advice.
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A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation
Our Company was incorporated under the laws of the Cayman Islands on May 17,
2022, as an exempted company with limited liability. Our registered office is at the
Office of Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South
Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. Our
Company’s headquarters is located at Bu ilding 333, Tongren Road, Tongxiang,
Jiaxing City, Zhe jiang Province, PRC.
Accordingly, our Company’s corporate structure and the Articles are subject to
the relevant laws of the Cayman Islands. A summary of our Articles is set out in
‘‘Appendix III — Summary of the Constitution of the Company and Cayman Islands
Company Law.’’
Our Company has established a principal place of business in Hong Kong at 40/F,
Dah Sing Financial Centre, 248 Queen’s Road East, Wanchai, Hong Kong and have
been registered until the Registrar of Companies in Hong Kong as a non-Hong Kong
Company under Part 16 of the Companies Ordinance on July 12, 2024. Ms. JIAN
Xuegen ( 簡雪艮) at 40/F, Dah Sing Financial Centre, 248 Queen’s Road East,
Wanchai, Hong Kong has been appointed as the authorized representative of our
Company for the acceptance of service of process and notice in Hong Kong.
2. Changes in Share Capital of Our Company
As of May 17, 2022, being the date of incorporation of our Company, our
authorized share capital was US$50,000.00 divided into 500,000,000 Shares and our
issued share capital was US$10,000 divided into 10,000 Shares with a par value of
US$0.0001 each.
On May 14, 2024, our Company allotted and issued 99,163,500 shares and 826,500
shares to Snowy Limited and NRV Benefit Limit ed, respectively, for a consideration at
par value and credited as fully paid.
On November 22, 2024, the authorized share capital of our Company was
increased from US$50,000 divided into 500,000,000 Shares to US$200,000 divided into
2,000,000,000 Shares by the creation of additional 1,500,000,000 Shares, which rank
pari passu in all respects with the Shares in issue.
Save as disclosed herein, there has been no alteration in our share capital and no
redemption, repurchase or sale of any of our share capital within two years
immediately preceding the date of this Prospectus.
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3. Changes in the Share Capital of Our Subsidiaries
A summary of the corporate information and the particulars of our subsidiaries
are set out in Note 1 to the Accountants’ Report as set out in Appendix I to this
Prospectus.
The following sets out the changes in share capital of our major operating
subsidiaries that made a material contribution to our results of operations during the
two years immediately preceding the date of this Prospectus.
LONGTREE RV
On November 13, 2023, LONGTREE RV was incorporated in the BVI as a
BVI business company with a issued share capital of US$50,000 comprising
50,000 ordinary shares, which is held as to 100% by the Company.
New Gonow HK
On November 23, 2023, New Gonow HK was incorporated in Hong Kong
with an issued capital of HK$10,000 comprising of 10,000 ordinary shares, which
was allotted and issued to New Gonow BVI on November 23, 2023.
Xing Longtree
On January 15, 2024, Xing Longtree was incorporated in the PRC as a
limited liability company with a registe red capital of RMB100,000,000, which is
held as to 100% by New Gonow HK.
For details of our principal operating subsidiaries, see ‘‘History, Reorganization
and Corporate Structure — Corporate Development — Subsidiaries of Regent
Company.’’
Save as disclosed above, there has been no alteration in the share capital of any of
the principal operating entities of the Co mpany within the two years immediately
preceding the date of this Prospectus.
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4. Resolutions of Our Shareholders in Relation to the Global Offering
Pursuant to the written resolutions of our Shareholders passed on November 22,
2024, the following resolutions, among other things, were duly passed:
(a) the Articles of Association be and was thereby approved and adopted with
immediate effect and the Articles of Association be and were thereby
conditionally approved and adopted which will come into effect on the
Listing Date;
(b) the authorized share capital of ou r Company be increased from US$50,000
divided into 500,000,000 Shares to US$200,000 divided into 2,000,000,000
Shares by the creation of additional 1,500,000,000 Shares, which rank pari
passu in all respects with the Shares in issue;
(c) conditional upon (i) the Listing Committee granting listing of, and
permission to deal in, the Shares in issue and to be issued as to be stated
in this Prospectus and such listing and permission not subsequently having
been revoked prior to the commencement of dealing in the Shares on the
Stock Exchange; (ii) the Offer Price having been determined; (iii) the
obligations of the Underwriters und er the Underwriting Agreements
becoming unconditional and not being terminated in accordance with the
terms of the Underwriting Agreements or otherwise, in each case on or before
such dates as may be specified in the Unde rwriting Agreements; and (iv) the
Underwriting Agreements having been duly executed by the Underwriters
and our Company,
(i) conditional upon the share premium account of our Company being
credited as a result of the Global Offering, our Directors were
authorized to capitalize an amount of US$62,000 standing to the
credit of the share premium account of our Company by applying such
sum in paying in full at par 620,000,0 00 Shares for allotment and issue
to holders of Shares whose names appear on the register of members of
our Company on the date of passing of this resolution (as nearly as
possible without involving fractions so that no fraction of a Share shall
be allotted and issued) in accordance to their then existing holdings in
our Company and so that the Shares to be allotted and issued pursuant
to this resolution should rank pari passu in all respects with the then
existing issued Shares and our Directors were authorized to give effect
to such capitalization;
(ii) the Global Offering (including the Over-allotment Option) was
approved, subject to such modifications as our Directors (or any
committee established by our Boar d) may in their sole discretion
determine, and our Directors be authorized to effect the same and to
allot and issue the Offer Shares at t he Offer Price (such Offer Shares to
be allotted and issued shall rank equally in all respects with the other
issued Shares) pursuant to the Global Offering;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 529 ---
(iii) a general unconditional mandate was given to our Directors to exercise
all powers of our Company to allot, issue and deal with Shares
(including the power to sell or transfer any treasury Shares or grant
securities which would or might require Shares to be allotted and issued
or treasury Shares to be sold or transferred) or securities convertible
into Shares, and to make or grant offers, agreements or options
(including any warrants, bonds, notes and debentures conferring any
rights to subscribe for or otherwise receive Shares) which might require
such Shares to be allotted and issued or dealt with at any time, subject to
the requirement that the aggregate nominal or par value of the Shares so
allotted and issued or agreed conditionally or unconditionally to be
allotted and issued, shall not exceed 20% of the aggregate nominal value
of the Shares in issue (excluding treasury Shares, if any) immediately
following the completion of the Ca pitalization Issue and the Global
Offering, excluding any Shares to be a llotted, issued, or d ealt with under
a rights issue or scrip dividend scheme or similar arrangements or a
specific authority granted by our Shareholders or upon the exercise of
the Over-allotment Option;
(iv) a general unconditional mandate (the ‘‘ Repurchase Mandate ’’) was given
to our Directors to exercise all powers of our Company to repurchase on
the Stock Exchange or on any other stock exchange on which the
securities of our Company may be listed and which is recognized by the
SFC and the Stock Exchange for this purpose, such number of Shares as
will represent up to 10% of the aggregate nominal or par value of the
Shares in issue immediately following the completion of the
Capitalization Issue and the Global Offering, excluding treasury
Shares and any Shares which may fall to be issued pursuant to the
exercise of the Over-allotment Option;
(v) the general unconditional mandate as mentioned in paragraph (ii) above
was extended by the addition to the aggregate nominal value of the
Shares which may be allotted and issued or agreed to be allotted and
issued by our Directors pursuant to such general mandate of an amount
representing the aggregate nominal value of the Shares purchased by our
Company pursuant to the mandate to purchase Shares referred to in
paragraph (iii) above up to 10% of the aggregate nominal or par value
of the Shares in issue immediately following the completion of the
Capitalization Issue and the Global Offering, excluding any treasury
Shares or any Shares which may fall to be issued pursuant to the exercise
of the Over-allotment Option;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 530 ---
(vi) the grant of the Over-allotm e n tO p t i o nb yo u rC o m p a n yt ot h e
International Underwriters to al lot and issue up to 15% of the Offer
Shares initially available under the Global Offering to cover the
over-allocations in the International Offering was approved and our
Directors be authorized to effect the same and to allot and issue the
Shares at the Offer Price (such Shares to be allotted and issued shall
rank equally in all respects with the other issued Shares) pursuant to the
exercise of the Over-allotment Option;
(vii) a committee comprising of Mr. Miao Xuezhong and Mr. Liu Tao be
authorized to agree with the Sponsor-Overall Coordinator (for itself and
on behalf of the Underwriters) on the Offer Price for the Hong Kong
Public Offering and the Internatio nal Offering and approve such Offer
Price;
(viii)our Directors (or any committee e stablished by our Board) be and is
hereby authorized to approve the transfer (including under any stock
borrowing agreement, if any) of such number of Shares in connection
with the Global Offering on and subject to the terms and conditions
stated in the Prospectus; and
(ix) the proposed Listing was approve d and our Directors were authorized
to implement such Listing.
Each of the general mandates referred to in paragraphs (b)(ii), (b)(iii) and (b)(iv)
above will remain in effect until whichever is the earliest of:
(i) the conclusion of the next annual general meeting of our Company;
(ii) the expiration of the period within which the next annual general meeting of
our Company is required to be held by any applicable law or the Articles of
Association; or
(iii) the time when such mandate is revoked or varied by an ordinary resolution of
the Shareholders in a general meeting.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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5. Restriction on Share Repurchases
This section sets out information required by the Stock Exchange to be included
in this Prospectus concerning the repurchase by our Company of its own securities.
(a) Provisions of the Listing Rules
The Listing Rules permit companies with a primary listing on the Stock
Exchange to repurchase their own securities on the Stock Exchange subject to
certain restrictions, the more important of which are summarized below:
(i) Shareholders’ approval
All proposed repurchase of securities (which must be fully paid up in the
case of shares) by a company with a pri mary listing on the Stock Exchange
must be approved in advance by an ordinary resolution of the Shareholders,
either by way of general mandate or by specific approval of a particular
transaction.
Pursuant to a resolution passed by our Shareholders on November 22,
2024, the Repurchase Mandate was given to our Directors authorizing them
to exercise all powers of our Company to repurchase Shares on the Stock
Exchange, or on any other stock exchange on which the securities of our
Company may be listed and which is recognized by the SFC and the Stock
Exchange for this purpose, with a total nominal value up to 10% of the
aggregate nominal value of our Shares in issue immediately following the
completion of the Global Offering (excluding any Shares which may be issued
under the Over-allotment Option), with such mandate to expire at the earliest
of (i) the conclusion of the next annual general meeting of our Company
(unless otherwise renewed by an ordinary resolution of our Shareholders in a
general meeting, either unconditionally or subject to conditions), (ii) the
expiration of the period within our Company’s next annual general meeting is
required by our Articles of Association or any other applicable laws to be
held, and (iii) the date when it is varied or revoked by an ordinary resolution
of our Shareholders in general meeting.
(ii) Source of funds
Repurchases must be funded out of funds legally available for the
purpose in accordance with the Articles of Association and the Listing Rules
and the applicable laws of Cayman Is lands and other applicable laws and
regulations. A listed company may not repurchase its own securities on the
Stock Exchange for a consideration other than cash or for settlement
otherwise than in accordance with the trading rules of the Stock Exchange in
effect from time to time.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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Subject to the foregoing, any repurchases by us may be made out of
profits of our Company, out of share premium, or out of the proceeds of a
new issue of shares made for the purpose of the repurchase or, subject to the
Cayman Companies Act, out of capital. Any amount of premium payable on
the purchase over the par value of the shares to be repurchased must be out
of profits of our Company, out of share premium, or, subject to the Cayman
Companies Act, out of capital.
(iii) Connected parties
The Listing Rules prohibit our Company from knowingly repurchasing
the Shares on the Stock Exchange from a ‘‘core connected person’’, which
includes a Director, chief executive or substantial Shareholder of our
Company or any of the subsidiaries or a close associate of any of them
and a core connected person shall not knowingly sell Shares to our Company.
(iv) Reasons for Repurchase
Our Directors believe that it is in the best interest of our Company and
our Shareholders as a whole for our Directors to have general authority from
our Shareholders to enable our Company to repurchase Shares in the market.
Such repurchases may, depending on market conditions and funding
arrangements at the time, lead to an enhancement of our Company’s net
asset value per Share and/or earnings per Share and will only be made where
our Directors believe that such repurchases will benefit our Company and
our Shareholders.
(v) Funding of Repurchases
In repurchasing Shares, our Company may only apply funds legally
available for such purpose in accordance with the Articles of Association, the
Listing Rules, the Cayman Islands Co mpanies Law and the applicable laws
of the Cayman Islands.
On the basis of our current financial condition as disclosed in this
Prospectus and taking into account our current working capital position, our
Directors consider that, if the Repurchase Mandate were to be exercised in
full, it might have a material adverse effect on our working capital and/or our
gearing position as compared with the po sition disclosed in this Prospectus.
However, our Directors do not propose to exercise the Repurchase Mandate
to such an extent as would, in the circumstances, have a material adverse
effect on our working capital requireme n t so rt h eg e a r i n gl e v e l sw h i c hi nt h e
opinion of our Directors are from time to time appropriate for us.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 7–


--- page 533 ---
(vi) General
The exercise in full of the Repurchase Mandate, on the basis of
960,000,000 Shares in issue after completion of the Capitalization Issue and
the Global Offering (assuming the Over- allotment Option is not exercised),
would accordingly result in up to 96,000,000 Shares being repurchased by our
Company during the period in which the Repurchase Mandate remains in
force.
None of our Directors nor, to the best of their knowledge having made
all reasonable enquiries, any of their close associates (as defined in the
Listing Rules) currently intends to sell any Share(s) to our Company or our
subsidiaries. Our Directors have undertaken to the Stock Exchange that, so
far as the same may be applicable, they will exercise the Repurchase Mandate
in accordance with the Listing Rules, th e Articles of Association, the Cayman
Islands Companies Law or any other applicable laws of Cayman Islands.
If, as a result of a repurchase of Shares pursuant to the Repurchase
Mandate, a Shareholder’s proportionate interest in the voting rights of our
Company is increased, such increase will be treated as an acquisition for the
purpose of the Takeovers Code. Accordingly, a Shareholder or a group of
Shareholders acting in concert, depending on the level of increase of the
Shareholders’ interest, could obtain or consolidate control of our Company
and may become obliged to make a mandatory offer in accordance with Rule
26 of the Takeovers Code as a result of such increase. Save as disclosed
above, our Directors are not aware of any consequences which would arise
under the Takeovers Code as a consequence of any repurchases pursuant to
the Repurchase Mandate.
Our Directors will not exercise the Repurchase Mandate if the
repurchase would result in the number of Shares which are in the hands of
the public falling below 25% of the total number of Shares in issue (or such
other percentage as many be prescribed as the minimum public shareholding
under the Listing Rules).
No core connected person of our Company has notified us that he/she/it
has a present intention to sell Shares to our Company, or has undertaken not
to do so, if the Repurchase Mandate is exercised.
6. Corporate Reorganization
The companies comprising our Group underwent the Reorganization for
streamlining our corporate structure. See ‘‘History, Reorganization and Corporate
Structure — Reorganization’’ for further details.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 8–


--- page 534 ---
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of Material Contracts
The following contracts (not being contracts entered into in the ordinary course of
business) have been entered into by us within the two years preceding the date of this
Prospectus and are or may be material:
(a) Deed of Indemnity; and
(b) the Hong Kong Underwriting Agreement.
2. Intellectual Property Rights of Our Group
(a) Patents
Registered Patents
As of the Latest Practicable Date, we had the right to use the following
patents which we consider to be or may be material to our business:
No. Patent Patentee
Place of
Registration Patent Number Application Date Expiry Date
1. A type of RV wall suitable
for cold regions ( 一種適用
於寒冷地區的房車牆體)
Xing Longtree PRC ZL201520698239.0 September 10, 2015 September 9,
2025
2. A type of RV wall suitable
for cold regions ( 一種用於
房車的液化氣瓶支架)
Xing Longtree PRC ZL201620770154.3 July 21, 2016 July 20, 2026
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 535 ---
(b) Trademarks
(i) Registered Trademarks
As of the Latest Practicable Date, we had registered the following
trademarks which we consider to be or may be material to our business:
No. Trademark
Place of
Registration
Registration
No.
Registered
Owner Class(es)
Registration
Date Expiry Date
1.
 Australia 897369 Regent
Company
12 December 6,
2001
December 6,
2031
2.
 Australia 916130 Regent
Company
12 June 13, 2002 June 13, 2032
3.
 Australia 1174643 Regent
Company
12 May 3, 2007 May 3, 2027
4.
 Australia 1174644 Regent
Company
12 May 3, 2007 May 3, 2027
5.
 Australia 1174645 Regent
Company
12 May 3, 2007 May 3, 2027
6.
 Australia 1174646 Regent
Company
12 May 3, 2007 May 3, 2027
7.
 Australia 1174647 Regent
Company
12 May 3, 2007 May 3, 2027
8.
 Australia 1282677 Regent
Company
12 January 27,
2009
January 27,
2029
9.
 Australia 1514368 Regent
Company
12 September 24,
2012
September 24,
2032
10.
 Australia 1928836 Regent
Company
Snowy River
RV
Company
12 May 23, 2018 May 23, 2028
11.
 Australia 2032856 Regent
Company
12 August 26,
2019
August 26,
2029
12.
 Australia 2134127 Regent
Company
12 November 6,
2020
November 6,
2030
13.
 Australia 2155385 Regent
Company
12 February 11,
2021
February 11,
2031
14.
 Australia 2319631 Regent
Company
12, 17 December 12,
2022
December 12,
2032
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 0–


--- page 536 ---
No. Trademark
Place of
Registration
Registration
No.
Registered
Owner Class(es)
Registration
Date Expiry Date
15.
 Australia 2319632 Regent
Company
12, 17 December 12,
2022
December 12,
2032
(ii) Trademarks under Application
As of the Latest Practicable Date, we had also applied for the
registration for the following trade marks which we consider to be or may
be material to our business:
No. Trademark
Place of
Registration
Application
No. Applicant Class
Application
Date
1.
 Australia 2453412 Leisure Lion 12, 35, 37 May 27, 2024
(c) Domain Names
As of the Latest Practicable Date, we or our JV partner had registered and
maintained ownership to the following domain names in Australia which we
consider to be or may be material to our business:
No. Domain Name Registrant
Registration
Date Expiry Date
1. www.newgonowrv.hk Our Company May 6, 2024 May 6, 2025
2. snowyrivercaravans.com.au Regent Company May 22, 2024 February 16,
2025
3. regentcaravans.com.au Regent Company May 22, 2024 March 4, 2025
4. regentrvperth.com.au Snowy River RV
Company
May 22, 2024 December 7,
2025
5. newgencaravans.com.au Green RV January 7, 2019 June 9, 2025
Save as disclosed above, as of the Late st Practicable Date, there were no
other patents, trade or service marks, intellectual or industrial property rights
w h i c ha r eo rm a yb em a t e r i a li nr e l a t i o nt oo u rb u s i n e s s .
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 1–


--- page 537 ---
C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Particulars of Directors’ Service Contracts and Letters of Appointment
(a) Executive Directors
Each of Mr. Miao, Mr. Liu Tao, Ms. Liu Qin and Mr. Andrew Robert
Crank, being our executive Directors, has entered into a service contract with our
Company on November 22, 2024. The service contract is for an initial term of
three years commencing from the Listing Date. The service contract may be
renewed in accordance with the Articles and the applicable laws, rules and
regulations.
(b) Independent non-executive Directors
Each of, Ms. He Jie, Mr. Yu Mingyang and Ms. Ng Weng Sin, being our
independent non-executive Directors, has entered into a letter of appointment
with our Company on November 22, 2024. Each letter of appointment is for an
initial term of three years commencin g from the Listing Date. The letters of
appointment may be renewed in accordance with the Articles and the applicable
laws, rules and regulations.
2. Remuneration of Directors
The aggregate remuneration (including fees, salaries, contribution to pension
schemes, housing allowances, other allowanc es and benefits-in-kind and discretionary
bonuses) paid to our Directors for the three years ended December 31, 2023 and for the
six months ended June 30, 2024, were a pproximately RMB1.2 million, RMB1.5
million, RMB2.5 million and RMB1.6 million, respectively.
Based on the arrangements in force as of the Latest Practicable Date, it is
estimated that the total remuneration p aid to the Directors for the year ending
December 31, 2024 will be appr oximately RMB4.2 million.
During the Track Record Period, no remuneration was paid by us to, or receivable
by, our Directors or the five highest paid individuals as an inducement to join or upon
joining our Company. No compensation was paid by us to, or receivable by, our
Directors, former Directors or the five highest-paid individuals for each of the Track
Record Period for the loss of any office in connection with the management of the
affairs of any members of our Group. Furthermore, none of the Directors had waived
agreed to waive any emoluments during the same periods.
Save as disclosed above, no other payments have been made or are payable in
respect of the three years ended December 31, 2023 and for the six months ended June
30, 2024 by any member of our Group to any of our Directors.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 538 ---
3. Disclosure of interests
Disclosure of Interests of Directors and chief executive of our Company
Immediately following the completio n of the Capitalization Issue and the
Global Offering (assuming the Over-allotment Option is not exercised), the
interest or short position of our Directors or chief executives of our Company in
the Shares, underlying shares and deben tures of our Company or its associated
corporations (within the meaning of Part XV of the SFO) which will be required
to be notified to our Company and the Stock Exchange pursuant to Divisions 7
and 8 of Part XV of the SFO (including interest or short positions which they were
taken or deemed to have under such provisions of the SFO) or which will be
required, pursuant to section 352 of the SF O, to be entered in the register referred
to therein, or which will be required, pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers as set out in Appendix 10 to the
Listing Rules, to be notified to our Company and the Stock Exchange, once the
Shares are listed, are as follows:
Interest in the Shares of our Company
Name of Director or
chief executive Nature of interest (1) Number of Shares
Approximate
percentage of
shareholding of the
Company’s share
capital upon
completion of the
Capitalization Issue
and the Global
Offering (assuming
the Over-allotment
Option is not
exercised)
Mr. Miao Interest in controlled
corporations (2)
99,173,500 74.4%
Settlor of a
discretionary trust (2)
Mr. Liu Tao Beneficial owner 297,750 0.223%
Ms. Liu Qin Beneficial owner 297,750 0.223%
Mr. Andrew Robert
Crank
Beneficial owner 62,000 0.047%
Notes:
(1) All interests stated are long positions.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 3–


--- page 539 ---
(2) Snowy Limited is held by M.X.Z Holdings as to 1%, and M.X.Z Holdings is in turn a
wholly-owned company of Mr. Miao. Hence, Mr. Miao is deemed to be interested in the
Shares held by Snowy Limited under the SFO.
Snowy Limited is also held by Miao Wanyi Hol dings as to 99%. Miao Wanyi Holdings is a
company incorporated in the BVI and is held as to 100% by Miao Wanyi Trust, which was
established by Mr. Miao as the settlor. Dedao Trust Limited is the trustee of the Miao Wanyi
Trust, and WDH Holdings and MWY Holdings are the beneficiaries of the Miao Wanyi Trust.
(3) As of the Latest Practicable Date, Mr. Liu Tao was granted 297,750 options by our Company
pursuant to the Pre-IPO Share Option Scheme, upon the exercise of which the same number of
Shares will be issued to him.
(4) As of the Latest Practicable Date, Ms. Liu Qin was granted 297,750 options by our Company
pursuant to the Pre-IPO Share Option Scheme, upon the exercise of which the same number of
Shares will be issued to her.
(5) As of the Latest Practicable Date, Mr. Andr ew Robert Crank was granted 62,000 options by
our Company pursuant to the Pre-IPO Share Option Scheme, upon the exercise of which the
same number of Shares will be issued to him.
Disclosure of interests of substantial shareholders
Save as disclosed in the section headed ‘ ‘Substantial Shareholders’’ in this
Prospectus, our Directors are not aware of any other person who will,
immediately following the completion of the Capitalization Issue and the
Global Offering (assuming the Over-allotment Option is not exercised) have an
interest or short position in the Shar es or the underlying Shares which are
required to be disclosed to our Company and the Stock Exchange under the
provisions of Division 2 and 3 of Part XV of the SFO, or directly or indirectly, be
interested in 10% of more of the nominal value of any class of share capital
carrying the rights to vote in all circums tances at the general meetings of our
Company.
4. Agency Fees or Commissions Received
Save as disclosed in this Prospectus, no commissions, discounts, brokerages or
other special terms were granted within the two years preceding the date of this
Prospectus in connection with the issue or sale of any capital or security of any member
of our Group.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 4–


--- page 540 ---
5. Disclaimers
Save as disclosed herein:
(a) none of our Directors or the chief executive of our Company has any interest
or short position in the Shares, underlying shares or debentures of our
Company or any of its associated corporation (within the meaning of the
SFO) which will have to be notified to our Company and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO or which will be
required, pursuant to section 352 of the SFO, to be entered in the register
referred to therein, or which will be required to be notified to our Company
and the Hong Kong Stock Exchange pursuant to the Model Code for
Securities Transactions by Directors of Listed Issuers once the Shares are
listed;
(b) none of our Directors or any of the experts referred to under paragraph
headed ‘‘E. Other Information — 12. Qualification of Experts’’ in this
appendix has any direct or indirect interest in the promotion of our
Company, or in any assets which have within the two years immediately
preceding the date of this Prospectus been acquired or disposed of by or
leased to any member of our Group, or are proposed to be acquired or
disposed of by or leased to any member of our Group;
(c) none of our Directors is materially inte rested in any contract or arrangement
subsisting at the date of this Prospectu s which is significant in relation to the
business of our Group;
(d) none of our Directors has any existing or proposed service contracts with any
member of our Group (excluding contracts expiring or determinable by the
employer within one year without payment of compensation (other than
statutory compensation));
(e) so far as is known to our Directors or the chief executive of our Company, no
person (not being a Director or chief executive of our Company) will,
immediately following the completion of the Capitalization Issue and the
Global Offering, have an interest or short position in the Shares or
underlying shares of our Company which would fall to be disclosed to our
Company under the provisions of Divisions 2 and 3 of Part XV of SFO or be
interested, directly or indirectly, in 10% or more of the nominal value of any
class of share capital carrying rights to vote in all circumstances at general
meetings of any member of our Group; and
(f) none of our Directors or their respective close associates (as defined under
the Listing Rules) or our Shareholders who are interested in more than 5% of
the issued share capital of our Company has any interest in the five largest
customers or the five largest suppliers of our Group.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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D. PRE-IPO SHARE OPTION SCHEME
1. Purpose
The purpose of the Plan is to enable our Company to attract and retain highly
qualified personnel who will contribute to our Company’s success and to provide
incentives to any officer, director, employee or consultant of our Company or of any of
subsidiary (the ‘‘ Eligible Recipient ’’) selected by the Board to receive grants of share
options pursuant to the Board’s authority in Section 2 below (the ‘‘ Participants ’’), that
are linked directly to increases in shareholder value and will therefore inure to the
benefit of all shareholders of our Company.
2. Administration
The Plan shall be administered by the Board. Pursuant to the terms of the Plan,
the Board shall have the power and authority:
(a) to select those Eligible Recipi ents who shall be Participants;
(b) to determine whether and to what extent options to purchase the Shares
reserved for issuance un der the Plan pursuant to Section 6 below are to be
granted (the ‘‘Options ’’) hereunder to Participants;
(c) to determine the number of the Shares to be covered by each award under the
Plan (the ‘‘Award ’’) granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the terms of the
Plan, of each Award granted hereunder;
(e) to determine the terms and conditions, not inconsistent with the terms of the
Plan, which shall govern all written ins truments evidenci ng Options granted
hereunder; and
(f) to determine the purchase of the Options according to the provisions of the
Plan and the signed written agreement between our Company and the
Participant setting forth the term s and conditions of the Award (the ‘‘ Stock
Option Agreement ’’).
Subject to provisions of the then effective Articles, the Board shall have the
authority, in its sole discretion, to adopt, alter and repeal such administrative rules,
guidelines and practices governing t he Plan as it shall from time to time deem
advisable; to interpret the terms and pr ovisions of the Plan and any Award issued
under the Plan (and any Stock Option Agreement relating thereto); and to otherwise
supervise the administration of the Plan.
All decisions made by the Board pursuant to the provisions of the Plan shall be
final, conclusive and binding on all persons, including our Company and the
Participants.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
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--- page 542 ---
3. Shares Subject to Plan
The total number of shares of Ordinary Shares reserved and available for issuance
under the Plan shall be 826,500 Shares (the ‘‘ Cap Award Number ’’). Such shares shall be
authorized and unissued Shares.
To the extent that an Option expires or is otherwise terminated without being
exercised, such Shares shall again be availa ble for issuance in connection with future
Awards granted under the Plan prior to the G lobal Offering or other earlier date that
the Board determines (the ‘‘ Latest Granting Date ’’). If any Shares have been pledged as
collateral for indebtedness incurred by a Participant in connection with the exercise of
an Option and such Shares are returned to our Company in satisfaction of such
indebtedness, such Shares shall again be available for issuance in connection with
future Awards granted under the Plan prior to the Latest Granting Date. The number
of Shares underlying the Options that are not granted by the Latest Granting Date will
be deducted from the Cap Award Number.
4. Corporate Transactions
In the event of any merger, reorganization, consolidation, recapitalization, stock
dividend or other change in corporate structure affecting the Ordinary Shares, subject
to provisions of the Articles, an equitable substitution or proportionate adjustment
shall be made in (i) the aggregate number of Shares reserved for issuance under the
Plan, (ii) the kind, number and option price of Shares subject to outstanding Options
granted under the Plan, in each case as may be determined by the Board. Such other
substitutions or adjustments shall be mad e as may be determined by the Board, in its
sole discretion but subject to provisions of the Articles. In connection with any event
described in this paragraph, the Board may provide, in its sole discretion, for the
cancellation of any outstanding Awards and payment in cash or other property
therefor.
5. Eligibility
Eligible Recipients shall be eligible to be granted Options. The Participants under
the Plan shall be selected from time to time by the Board, in its sole discretion, from
among the Eligible Recipients.
6. Options
Options may be granted alone or in addition to other Awards granted under the
Plan. Any Option granted under the Plan shall be in such form as the Board may from
time to time approve, and the provisions of each Option need not be the same with
respect to each Participant. Participants who are granted Options shall enter into a
Stock Option Agreement with our Company, in such form as the Board shall
determine, which Stock Option Agreement shall set forth, among other things, the per
share price of Options at which a holder of an Award may purchase the Shares issuable
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 7–


--- page 543 ---
upon exercise of the Award (the ‘‘ Exercise Price ’’) and provisions regarding
exercisability of the Option granted t hereunder. More than one Option may be
granted to the same Participant and be outstanding concurrently hereunder.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additio nal terms and conditions, not inconsistent
with the terms of the Plan, as the Board shall deem desirable:
(a) Option Exercise Price. The Exercise Price for the given Participant under
Plan is discounted to 70% of the price offered to the cornerstone investor in
the Company’s Global Offering.
(b) Vesting. The Options shall become vested at such time or times and subject to
such terms and conditions as shall be determined by the Board and reflected
in the Stock Option Agreement, provided that the Options shall be vested
four equal installments of twenty-five percent (25%) each of the aggregate
number of Options. The first vesting commencement date, marking the start
of the vesting for the initial portion, aligns with the Listing Date. The
subsequent three vesting dates will occur every twelve months following the
Listing Date, with each installment rep resenting an additional twenty-five
percent (25%) of the total Options.
(c) Acceleration of Vesting. Notwithstanding anything to the contrary contained
in this Plan, if a Change in Control ( as defined below) of our Company
occurs, the Options of the Participant not vested under the Plan shall vest in
full so that such vested Options shall, immediately prior to the effective date
of either of the following approved transactions to which our Company is a
party: (i) a merger or consolidation with or into any person or persons,
including the sale of shares of our Company, in which the existing
shareholders of our Company do not possess more than fifty percent
(50%) of the total combined voting power of the company, or (ii) the sale,
transfer or other disposition of all or substantially all of our Company’s
assets (the ‘‘Change in Control ’’), become exercisable and non-forfeitable.
(d) Exercisability. Except as otherwise provided in paragraph 6(c) and paragraph
6(g), no Option may be exercised at any time prior to the Global Offering or
in violation of applicable laws.
(e) Method of Exercise. When the Participant will be required to exercise
Options in the future, Company will ti mely notify the payment arrangement.
If the Participant does not excise such Options within the prescribed period,
the portion of the Options pertaining to this exercise opportunity will be
considered void or canceled.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 8–


--- page 544 ---
(f) Non-Transferability of Options. E xcept under the laws of descent and
distribution or otherwise permitted by the Board, the Participant shall not be
permitted to sell, transfer, pledge or assign any Option, and all Options shall
be exercisable, during the Participant’s lifetime, only by the Participant.
(g) Special adjustment or exit mechan ism. Termination of employment or
service, or application to withdraw f rom Plan while still working in our
Company or subsidiary of our Company to which a Participant provides
services as an Employee, Consultant or as a Director (the ‘‘ Service
Recipient ’’), shall have the following effects on Options granted to the
Participants:
(i) Dismissal for Cause. If a Participant’s employment by or service to the
Service Recipient is terminated by th e Service Recipient for Cause, the
Participant’s Options will terminate upon such termination of
employment or service, whether or not the Option is then vested,
exercisable or exercised;
For purposes of this Plan, the ‘‘ Cause ’’ shall mean any act involving one
or more of the following: (i) the Participant’s unauthorized disclosure of any
trade secret or confidential informat ion of our Company or its subsidiary of
our Company, including without limitation, any term and condition of the
Plan and any Award under the Plan; (ii) the commission of an act by any
Participant which constitutes competition with our Company or its a of our
Company or which induces any customer or supplier to breach a contract
with our Company or a subsidiary of our Company; (iii) the Participant’s
damage of the interests or reputation of our Company or its Subsidiary; (iv)
our Company or a subsidiary of our Company’s suffering from material loss
or damage due to the Participant’s deliberation or gross negligence; or (v) the
c o m m i s s i o no fa n yf e l o n yb yt h eP a r t i c i p a n t .
(ii) Other Terminations of Employment or Service, or application to
withdraw from Plan while still working in Service Recipient. If a
Participant’s employment by or s ervice to the Service Recipient
terminates for any reason other than a termination by the Service
Recipient, or a Participant apply to withdraw from Plan while still
working in Service Recipient:
a. If such Options were not vested, such options shall terminate and
be forfeited upon the Participant’s termination of employment or
service. The Shares subject to the terminated portion of the Option
shall revert to the Plan.
b. If such Options were vested, such Options shall be owned by the
Participant, but shall not be exercised during within the first six
months from our Company’s listing date.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 1 9–


--- page 545 ---
7. Forfeiture of the Options
Any unexercised portion of the Options can be immediately forfeited by our
Company under one of the following conditions:
(a) Pursuant to other terms and condit ions of this Plan or of the Stock Option
Agreement; or
(b) If a Participant expressly waives his or her Option by submitting a written
d e c l a r a t i o nt ot h eB o a r d .
8. Amendment and Termination
Subject to provisions of the Articles, th e Board may amend, alter or discontinue
the Plan, but no amendment, alteration, or discontinuation shall be made that would
impair the rights of a Participant under any Award theretofore granted without such
Participant’s consent.
T h eB o a r dm a ya m e n dt h et e r m so fa n yA w a r dtheretofore granted, prospectively
or retroactively, but, subject to paragraph 3 of this Plan, no such amendment shall
impair the rights of any Participant without his or her consent.
Outstanding Share Options Granted under the Pre-IPO Share Option Scheme
As of the Latest Practicable Date, the number of underlying Shares pursuant to
the outstanding share options granted under the Pre-IPO Share Option Scheme
amounted to 826,500 Shares, representing approximately 0.62% of the issued Shares
immediately following the completion o f the Capitalization Issue and the Global
Offering (assuming that the Over-allotment Option is not exercised).
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 0–


--- page 546 ---
As all of the Shares underlying the options under the Pre-IPO Share Option
Scheme had been issued as of the Latest Practicable Date, there will not be any dilution
effect on the shareholding of our Shareholders or our earnings per Share immediately
following the completion of the Capitalization Issue and the Global Offering
(assuming the Over-allotment Option is not exercised). As of the Latest Practicable
date, all 826,500 options associated with 826,500 Shares were granted to eight
Directors, senior management and other employees of the Group as listed below. No
further options may be granted under the Pre-IPO Share Option Scheme after the
Listing.
Name Position Address Date of grant Vesting period
Exercise
period
Exercise price
per Share
Number of Shares
underlying the
outstanding
options Note(1)
Approximate % of
issued shares
immediately after
completion of the
Capitalization
Issue and the
Global Offering
(RMB)
Directors and senior management
Liu Tao ( 劉濤) Executive Director and
chief financial
officer of our
Group
Room 102, No.1, Sub-lane
56 Lane 8889
Zhongchun Road
Minhang District
Shanghai, PRC
July 1, 2024 Note 2 Note 3 13.125 297,750 0.223%
Liu Qin ( 劉芹) Executive Director and
general manager of
our Group
Room 2603, Building 24
Fusheng Mingdi
Dongshan Street
Nanhu District
Jiaxing City
Zhejiang Province, PRC
July 1, 2024 Note 2 Note 3 13.125 297,750 0.223%
Andrew Robert
Crank
Executive Director and
general manager of
our Group
11 Warringine Creek Lane
Bittern, 3918 Victoria
Australia
July 1, 2024 Note 2 Note 3 13.125 62,000 0.047%
Other employees
Andy HE
(何其駿)
Finance manager of
Regent RV
45 Hamel Street, Box Hill
South, 3128 Victoria
Australia
July 1, 2024 Note 2 Note 3 13.125 57,000 0.043%
YI Shanzhen
(易善臻)
Technology manager Group 1, Tangdian
Village Huangzhai Town
Shangshui County
Henan Province, PRC
July 1, 2024 Note 2 Note 3 13.125 57,000 0.043%
LI Luyan
(李陸晏)
Procurement deputy
manager
No. 18, District 2
Lijia Village
Lunan Street
Luqiao District
Taizhou City
Zhejiang Province, PRC
July 1, 2024 Note 2 Note 3 13.125 55,000 0.041%
826,500 0.62%
Notes:
(1) There is no consideration paid for the acceptance of the options.
(2) The options granted under the Pre-IPO Share Option Scheme will be vested in four equal installments of
25% of the aggregate number of options granted. The f irst installment will be vested on the Listing Date,
and each subsequent installment will be veste d every 12 months following the Listing Date.
(3) The options granted under the Pre-IPO Share Option Scheme can be exercised after vesting on any trading
day but no options may be exercised within the first si x months after the Listing Date, even if such options
have vested.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 1–


--- page 547 ---
E. OTHER INFORMATION
1. Estate Duty
We have been advised that no material liability for estate duty under PRC law or
Australian law is likely to fall upon the Group.
2. Litigation
During the Track Record Period and up to the Latest Practicable Date, save as
disclosed in this Prospectus and so far as o ur Directors are aware, no litigation or
claim of material importance (to our Group’s financial condition or results of
operation) is pending or threatened against any member of our Group.
3. Sole Sponsor
The Sole Sponsor has made an application on our behalf to the Listing Committee
of the Hong Kong Stock Exchange for the listing of, and permission to deal in, the
Shares to be issued as mentioned in this Pro spectus. All necessary arrangements have
been made enabling the Shares to be admitted into CCASS.
The Sole Sponsor satisfies the independence criteria applicable to sponsors as set
out in Rule 3A.07 of the Listing Rules. The total sponsor’s fee paid and payable to the
Sole Sponsor in connection with the Listing payable by our Company is USD800,000.
4. Compliance Advisor
Our Company has appointed Caitong International Capital Co., Limited as our
Compliance Advisor in compliance with Rule 3A.19 of the Listing Rules.
5. Preliminary Expenses
We have not incurred any material preliminary expenses.
6. Promoters
Our Company has no promoter for the purposes of the Listing Rules. Within the
two years immediately preceding the date of this Prospectus, no cash, securities or
other benefit has been paid, allotted or giv en nor are any proposed to be paid, allotted
or given to any promoters in connection with the Share Offer and the related
transactions described in this Prospectus.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 2–


--- page 548 ---
7. Consents of Experts
Each of the experts as referred to in ‘‘E. Other Information — 12. Qualification of
Experts’’ in this Appendix has given and has not withdrawn its consent to the issue of
this Prospectus with the inclusion of its view, report and/or letter and/or legal opinion
(as the case may be) and references to its na me included herein in the form and context
in which it respectively appears.
None of the experts named above has any shareholding interest in our Company
or any of our subsidiaries or the right (whether legally enforceable or not) to subscribe
for or to nominate persons to subscribe for securities in our Company or any of our
subsidiaries.
8. Binding Effect
This Prospectus shall have the effect, if an application is made in pursuance
hereof, of rendering all persons concerned bound by all of the provisions (other than
the penal provisions) of sections 44A and 44B of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance so far as applicable.
9. Bilingual Prospectus
The English language and Chinese language versions of this Prospectus are being
p u b l i s h e ds e p a r a t e l yi nr e l i a n c eo nt h ee x e m p t i o np r o v i d e di ns e c t i o n4o ft h e
Companies Ordinance (Exe mption of Companies and Prospectus from Compliance
with Provisions) Notice (Chapter 32L of the Laws of Hong Kong).
10. Taxation of Holders of Shares
(a) Hong Kong
The sale, purchase and transfer of S hares registered with our Hong Kong
branch register of members will be subject to Hong Kong stamp duty. The current
rate of Hong Kong stamp duty for such sale, purchase and transfer is 0.13% of the
consideration or, if higher, the fair valu e of the Shares being sold or transferred.
Profits from dealings in the Shares arising in or derived from Hong Kong may
also be subject to Hong Kong profits tax. The Revenue (Abolition of Estate Duty)
Ordinance 2005 came into effect on February 11, 2006 in Hong Kong. No Hong
Kong estate duty is payable and no estate duty clearance papers are needed for a
grant of representation in respect of holders of Shares whose death occurs on or
after February 11, 2006.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 3–


--- page 549 ---
(b) Cayman Islands
There is no stamp duty payable in the Cayman Islands on transfers of shares
of Cayman Islands companies save for those which hold interests in land in the
Cayman Islands.
(c) Consultation with Professional Advisors
Intending holders of the Shares are recommended to consult their
professional advisors if they are in any doubt as to the taxation implications of
subscribing for, purchasing, holding or d isposing of or dealing in the Shares. It is
emphasized that none of our Company, our Directors or the other parties
involved in the Global Offering will accept responsibility for any tax effect on, or
liabilities of, holders of Shares resulting from their subscription for, purchase,
holding or disposal of or dealing in the Shares or exercise of any rights attaching
to them.
11. Indemnities
Our Controlling Shareholders (collectively, the ‘‘ Indemnifiers ’’) have entered into
a deed of indemnity on November 22, 2024 (the ‘‘ Deed of Indemnity ’’) with and in favor
of our Company, with effect from the Listing Date, to provide indemnities on a joint
and several basis in respect of, among other matters, any claim to which any member of
our Group may be subject and payable before the Listing Date, and all losses,
liabilities or damages suffered by it in conne ction with the legal proceedings and/or
non-compliance matters relating to, including but not limited to, the licenses required
for our PRC and Australian operations, so cial insurance and housing provident fund
contributions, lease registration, employment and statutory filings.
The Indemnifiers will, however, not be liable under the Deed of Indemnity for any
claim (i) to the extent that such liability is incurred as a result of any event occurring
after the Listing Date (which is not as a result of act or omission of any member of our
Group), or a transaction which income or earnings have been obtained or purported to
have been obtained, or an acquisition or sale of assets in the ordinary course of
business; (ii) to the extent that such liabilit y is incurred as a result of act or omission of
any member of our Group without the prior written consent or agreement of the
Indemnifiers; (iii) to the extent that such lia bility is discharged by another person who
is not a member of our Group and confirms in writing that the Group is not required to
reimburse such person in respect of such discharge of the liability; (iv) as a result of a
retrospective change in the law coming in force after the Listing Date; (v) as a result of
any force majeure event.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 4–


--- page 550 ---
12. Qualification of Experts
The following are the qualifications of the experts who have given opinion or
advice which are contained in this Prospectus:
Name Qualifications
Huatai Financial Holdings
(Hong Kong) Limited
A licensed corporation to conduct Type 1
(dealing in securities), Type 2 (dealing in
futures contracts), Type 4 (advising on
securities), Type 6 (advising on corporate
finance), Type 7 (providing automated trading
services) and Type 9 (asset management)
regulated activities under the SFO
Hylands Law Firm PRC Legal Advisor
Hogan Lovells Australian Legal Advisor
Harney Westwood & Riegels Cayman Islands Legal Advisor
Frost & Sullivan Industry consultant
KPMG Certified Public Accountants
Public Interest Entity Auditor registered in
accordance with the Accounting and Financial
Reporting Council Ordinance
Shanghai Jianjie Management
Consulting Co., Ltd.
Tax advisor to our Company with respect to
transfer pricing arrangement of our Group
13. No Material Adverse Change
Our Directors believe that there has been no material adverse change in the
financial or trading position since June 30, 2024 (being the date on which the latest
audited consolidated financial statements of the Group were prepared).
14. Miscellaneous
(a) save as disclosed in this Prospectus, within the two years immediately
preceding the date of this Prospectus:
(i) no share or loan capital of our Company or any of our subsidiaries had
been issued or agreed to be issued or proposed to be fully or partly paid
either for cash or a consideration other than cash;
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 5–


--- page 551 ---
(ii) no commissions, discounts, brokerages or other special terms had been
g r a n t e do ra g r e e dt ob eg r a n t e di nc o n n e c t i o nw i t ht h ei s s u eo rs a l eo f
any share or loan capital of our Company or any of our subsidiaries;
(iii) no commission had been paid or payable for subscription, agreeing to
subscribe, procuring subscription or agreeing to procure subscription of
any share in our Company or any of our subsidiaries;
(b) save as disclosed in this Prospectus, no share or loan capital of our Company
or any of our subsidiaries had been under option or agreed conditionally or
unconditionally to be put under option;
(c) save as disclosed in this Prospectus, there are no founder, management or
deferred shares, convertible debt securities nor any debentures in our
Company or any of our subsidiaries;
(d) save as disclosed in this Prospectus, none of the persons named in the
sub-paragraph headed ‘‘E. Other In formation — 12. Qualification of
Experts’’ in this appendix is interested beneficially or otherwise in any
shares of any member of our Group or has any right or option (whether
legally enforceable or not) to subscribe for or nominate persons to subscribe
for any securities in any member of our Group;
(e) our Directors confirm that there has been no material adverse change in the
financial or trading position of our Group since June 30, 2024 (being the date
to which the latest audited consolidated financial statements of our Group
were made up);
(f) there has not been any interruption in the business of our Group which may
have or has had a significant effect on the financial position of our Group in
the 12 months preceding the date of this Prospectus; and
(g) no company within our Group is listed on any stock exchange or traded on
any trading system and at present, and our Group is not seeking or proposing
to seek any listing of, or permission to deal in, the share or loan capital of our
Company on any other stock exchange; and there is no arrangement under
which future dividends are waived or agreed to be waived.
APPENDIX IV STATUTORY AND GENERAL INFORMATION
–I V - 2 6–


--- page 552 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to a copy of this Prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) a copy of each of the material contrac ts referred to in the sub-section headed
‘‘Appendix IV — Statutory and General Information — B. Further Information
about Our Business — 1. Summary of Material Contracts’’; and
(b) the written consents referred to in the sub-section headed ‘‘Appendix IV —
Statutory and General Information — E. Other Information — 7. Consents of
Experts’’.
DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be published on the websites of the Stock
Exchange at
www.hkexnews.hk and our Company at www.newgonowrv.hk up to and
including the date which is 14 days from the date of this Prospectus:
(a) the Articles of Association of the Company;
(b) the Accountants’ Report from KPMG, the text of which is set out in ‘‘Appendix I
— Accountants’ Report’’ to this Prospectus;
(c) the report on the unaudited pro forma financial information of our Group from
KPMG, the text of which is set out in ‘‘Appendix II — Unaudited Pro Forma
Financial Information’’ to this Prospectus;
(d) the audited consolidated financial statements of our Group for the three years
ended December 31, 2023 and for the six months ended June 30, 2024;
(e) the PRC legal opinion issued by Hylands Law Firm, our PRC Legal Advisor, in
respect of certain a spects of our Group;
(f) the Australian legal opinion issued b y Hogan Lovells, our Australian Legal
Advisor, in respect of cert ain aspects of our Group;
(g) the Cayman legal opinion issued by Harney Westwood & Riegels, our Cayman
Islands Legal Advisor, in respect of certain aspects of our Group;
(h) the Cayman Companies Act;
(i) the material contracts referred to in the sub-section headed ‘‘Appendix IV —
Statutory and General Information — B. Further Information about Our
Business — 1. Summary of Material Contracts’’;
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
–V - 1–


--- page 553 ---
(j) the written consents referred to in the sub-section headed ‘‘Appendix IV —
Statutory and General Information — E. Other Information — 7. Consents of
Experts’’;
(k) the service contracts and the letters of ap pointment referred to in the sub-section
headed ‘‘Appendix IV — Statutory an d General Information — C. Further
Information about Our Directors and Substantial Shareholders — 1. Particulars
of Directors’ Service Contracts and Letters of Appointment’’;
(l) the industry report issued by Frost & Sullivan, the summary of which is set forth
in the section headed ‘‘Industry Overview’’ in this Prospectus;
(m) the transfer pricing report issued by Shanghai Jianjie Management Consulting
Co., Ltd, our tax advisors with respect to transfer pricing arrangement of our
Group; and
(n) the terms of the Pre-IPO Share Option Scheme.
APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND AVAILABLE ON DISPLAY
–V - 2–


--- page 554 ---
Sole Sponsor, Sponsor-Overall Coordinator, Overall Coordinator,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
GLOBAL
OFFERING
(Incorporated in the Cayman Islands with limited liability)
Stock code : 0805
New Gonow Recreational Vehicles Inc.
ʮ̡
Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers (in alphabetical order)
New Gonow Recreational Vehicles Inc.
ʮ̡
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers (in alphabetical order)
New Gonow Recreational Vehicles Inc.
ʮ̡
