--- page 1 ---
康 復 輔 具Rehabilitation Aids
中
醫
理
療
TCM Therapy
呼吸支持
Respiratory Support
醫
療
護
理
Medical Care
Health Monitoring
健
康監測
Stock Code : 1187
(A joint stock company incorporated in the People’s Republic of China with limited liability)
可孚醫療科技股份有限公司
GLOBAL OFFERING
Joint Sponsors, Sponsor-Overall Coordinators, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Other Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager

* for identification purpose only
Cofoe Medical Technology Co., Ltd.*


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain professional independent advice.
Cofoe Medical Technology Co., Ltd.*
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
Global Offering
Number of Offer Shares under
the Global Offering
: 27,000,000 H Shares
Number of Hong Kong Offer Shares : 2,700,000 H Shares (subject to
reallocation)
Number of International Offer Shares : 24,300,000 H Shares (subject to
reallocation)
Maximum Offer Price : HK$39.33 per H Share, plus brokerage of
1.0%, SFC transaction levy of 0.0027%,
AFRC transaction levy of 0.00015% and
Hong Kong Stock Exchange trading fee
of 0.00565% (payable in full on
application in Hong Kong dollars and
subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 1187
Joint Sponsors, Sponsor-Overall Coordinators, Overall Coordinators,
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Other Overall Coordinator, Joint Global Coordinator,
Joint Bookrunner and Joint Lead Manager
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited 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 any loss howsoever arisin g 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 documents specified in the section headed “Appendix VII — Documents Delivered to the Registrar of Companies and Available on Display”
in this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscella neous Provisions) Ordinance (Chapter
32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to t he contents of this prospectus
or any other documents referred to above.
The Offer Price is expected to be fixed by agreement between the Company and the Sponsor-Overall Coordinators (for themselves and on behalf of the Unde rwriters) on the Price Determination
Date. The Price Determination Date is expected to be on or before Monday, May 4, 2026 and in any event no later than 12:00 noon on Monday, May 4, 2026. If, fo r any reason, the Offer Price
is not agreed by 12:00 noon on Monday, May 4, 2026 (Hong Kong time) between the Sponsor-Overall Coordinators (for themselves and on behalf of the Underw riters) and us, the Global Offering
will not proceed and will lapse. The Offer Price will be no more than HK$39.33 per Offer Share. Applicants for Hong Kong Offer Shares may be required to pa y, on application (subject to
application channels), the maximum Offer Price of HK$39.33 for each Hong Kong Offer Share together with a brokerage fee of 1%, an SFC transaction levy o f 0.0027%, a Stock Exchange trading
fee of 0.00565% and an AFRC transaction levy of 0.00015%.
The Sponsor-Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters) may, where considered appropriate and with our consen t, reduce the number of the
Hong Kong Offer Shares stated in this prospectus at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offe ring. In such a case, notices
of the reduction in the number of the Hong Kong Offer Shares will be published on the websites of the Stock Exchange at www.hkexnews.hk and our Company at
http://www.cofoe.com.cn as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the day for lodging applications und er
the Hong Kong Public Offering. For details, see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares”.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Sponsor-Overall Coordina tors (for themselves and
on behalf of the Hong Kong Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. See “Underwriting” in this prospectus.
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, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securiti es Act. The Offer Shares may only be offered
and sold outside the United States in offshore transactions in reliance on 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 website of the Hong Kong Stock Exchange at www.hkexnews.hk and our website at www.cofoe.com.cn. If you require a pr inted copy of this
prospectus, you may download and print from the websites above.
* for identification purpose only
IMPORTANT
April 27, 2026


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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 and below are the procedures for application.
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.cofoe.com.cn. If you require a printed copy of this
prospectus, you may download and print from the website addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via 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 channels 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 prospectus is available online at the website addresses
stated above.
Please refer to the section headed “How to Apply for 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.
Y our application through the HK eIPO White Form service or the HKSCC EIPO
channel must be for a minimum of 100 Hong Kong Offer Shares and in one of the numbers
set out in the table.
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 H Shares you have selected. Y ou 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 prefund your
application based on the amount specified by your broker or custodian, as determined based
on the applicable laws and regulations in Hong Kong.
IMPORTANT
–i i–


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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
HK$ HK$ HK$ HK$
100 3,972.67 2,000 79,453.28 10,000 397,266.43 300,000 11,917,992.91
200 7,945.32 2,500 99,316.61 20,000 794,532.86 400,000 15,890,657.22
300 11,918.00 3,000 119,179.94 30,000 1,191,799.29 500,000 19,863,321.53
400 15,890.65 3,500 139,043.26 40,000 1,589,065.73 600,000 23,835,985.84
500 19,863.32 4,000 158,906.58 50,000 1,986,332.16 700,000 27,808,650.14
600 23,835.99 4,500 178,769.90 60,000 2,383,598.58 800,000 31,781,314.45
700 27,808.65 5,000 198,633.21 70,000 2,780,865.01 900,000 35,753,978.75
800 31,781.32 6,000 238,359.85 80,000 3,178,131.44 1,000,000 39,726,643.06
900 35,753.98 7,000 278,086.50 90,000 3,575,397.87 1,350,000
(1) 53,630,968.12
1,000 39,726.64 8,000 317,813.15 100,000 3,972,664.30
1,500 59,589.96 9,000 357,539.79 200,000 7,945,328.61
(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) while the SFC transaction levy, the
Stock Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and
the AFRC, respectively.
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 website of our Company at www.cofoe.com.cn and the website
of the Stock Exchange at www.hkexnews.hk .
Date (1)
Hong Kong Public Offering commences ......................... 9:00 a.m. on Monday,
April 27, 2026
Latest time for completing electronic applications
via the HK eIPO White Form service through
the designated website at www.hkeipo.hk (2) ...................1 1:30 a.m. on Thursday,
April 30, 2026
Application lists of the Hong Kong Public
Offering open (3) .......................................1 1:45 a.m. on Thursday,
April 30, 2026
Latest time for (a) completing full payment of
HK eIPO White Form applications by effecting internet banking
transfer(s) or PPS payment transfer(s); or
(b) giving electronic application
instructions to HKSCC
(4) ............................... 12:00 noon on Thursday,
April 30, 2026
If you are instructing your broker or custodian who is a HKSCC Participant to submit
HKSCC EIPO applications on your behalf through HKSCC’s FINI system in accordance with your
instruction, 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) ...................................... 12:00 noon on Thursday,
April 30, 2026
Expected Price Determination Date (5) ...............n o later than 12:00 noon on Monday,
May 4, 2026
Announcement of:
 the final 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 the Hong Kong Offer Shares
to be published on the website of our
Company at www.cofoe.com.cn
(6) and the website of the
Stock Exchange at www.hkexnews.hk .......................n o later than 11:00 p.m.
on Tuesday, May 5, 2026
EXPECTED TIMETABLE (1)
–i v–


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Results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of channels,
including:
 from the “Allotment Results” page on
the designated results of allocations
website at www.tricor.com.hk/ipo/result
or www.hkeipo.hk/IPOResult with a
“search by ID” function from (7) ................. 1 1:00 p.m. on Tuesday, May 5, 2026
to 12:00 midnight on
Monday, May 11, 2026
 the Stock Exchange’s website at www.hkexnews.hk
and our website at www.cofoe.com.cn (6) which will provide
links to the above mentioned websites of
the H Share Registrar .................................n o later than 11:00 p.m.
on Tuesday, May 5, 2026
 from the allocation results telephone
enquiry line by calling +852 3691 8488 between
9:00 a.m. and 6:00 p.m. from ........................W ednesday, May 6, 2026 to
Monday, May 11, 2026
(excluding Saturday, Sunday and
public holidays in Hong Kong)
 for those applying through HKSCC EIPO
channel, you may also check with your
broker or custodian from ...................................... 6:00 p.m. on
Monday, May 4, 2026
H Share certificates in respect of wholly or
partially successful applications to be dispatched
or deposited into CCASS in respect of wholly or
partially successful applications pursuant to
the Hong Kong Public Offering
(8)(9) ..........................o no r before Tuesday,
May 5, 2026
HK eIPO White Form e-Auto Refund payment instructions/refund
cheques in respect of wholly or partially successful
applications if the final Offer Price is less than the
maximum Offer Price per Offer Share initially paid
on application (if applicable), or wholly/partially
unsuccessful applications to be dispatched
(10) .................o no r before Wednesday,
May 6, 2026
Dealings in the H Shares on the Stock Exchange
expected to commence at (9) .............................. 9:00 a.m. on Wednesday,
May 6, 2026
EXPECTED TIMETABLE (1)
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Notes:
(1) Unless otherwise stated, all times and dates refer to Hong Kong local times and dates.
(2) Y ou will not be permitted to submit your application through the HK eIPO White Form service at the designated
website at www.hkeipo.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted
your application and obtained an application reference number from the HK eIPO White Form service at the
designated website prior to 11:30 a.m., you will be permitted to continue the application process (by completing
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 tropical cyclone warning signal number 8 or above and/or Extreme
Conditions (collectively, “ Severe Weather Signal ”) in force in Hong Kong at any time between 9:00 a.m. and 12:00
noon on Thursday, April 30, 2026, the application lists will not open or close on that day. For further details, see “How
to Apply for Hong Kong Offer Shares — E. Severe Weather Arrangements”.
(4) Applicants who apply via HKSCC EIPO channel shall contact their broker or custodian for the earliest and latest time
for giving such instructions, as this may vary by broker or custodian.
(5) The Price Determination Date is expected to be no later than Monday, May 4, 2026. If, for any reason, the Offer Price
is not agreed between the Sponsor-Overall Coordinators (for themselves and on behalf of the other Underwriters) and
us by 12:00 noon on Monday, May 4, 2026, the Global Offering will not proceed and will lapse.
(6) Neither of the websites nor any of the information contained on the websites forms part of this prospectus.
(7) 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.tricor.com.hk/ipo/result or www.hkeipo.hk/IPOResult .
(8) H Share certificates will only become valid at 8:00 a.m. on the Listing Date provided that the Global Offering has
become unconditional and the right of termination described in “Underwriting — Underwriting Arrangements and
Expenses — Hong Kong Public Offering — Grounds for Termination” has not been exercised. Investors who trade
the H Shares on the basis of publicly available allocation details prior to the receipt of H Share certificates or prior
to the H Share certificates becoming valid evidence of title do so entirely at their own risk.
(9) Refund mechanism for surplus application monies paid by application via HKSCC EIPO channel is subject to the
arrangement between applicants and their broker or custodian.
Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel
should refer to “How to Apply for Hong Kong Offer Shares — D. Dispatch/Collection of H Share
Certificates and Refund of Application Monies” for details.
Applicants who apply for the Hong Kong Offer Shares by giving electronic application
instructions to HKSCC via HKSCC’s FINI system should refer to “How to Apply for Hong Kong
Offer Shares — A. Application for Hong Kong Offer Shares — 2. Application Channels” for details.
Applicants who have applied through the HK eIPO White Form service and paid their
applications monies through single bank accounts may have refund monies (if any) dispatched to
the designated bank account in the form of HK eIPO White Form e-Auto Refund payment
instructions. Applicants who have applied through the HK eIPO White Form service and paid their
application monies through multiple bank accounts may have refund monies (if any) dispatched to
the address as specified in their application instructions in the form of refund cheques in favor of
the applicant (or, in the case of joint applications, the first-named applicant) by ordinary post at
their own risk.
Further information is set out in “How to Apply for Hong Kong Offer Shares — D.
Dispatch/Collection of H Share Certificates and Refund of Application Monies”.
The above expected timetable is a summary only. For further details of the structure of the
Global Offering, including its conditions, and the procedures for applications for Hong Kong Offer
Shares, see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in
this prospectus.
If the Global Offering does not become unconditional or is terminated in accordance with its
terms, the Global Offering will not proceed. In such case, our Company will make an announcement
as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
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IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by us 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 making, 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 Hong Kong 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 for purposes of a public offering and
the offering and sale of the Hong Kong Offer Shares in other jurisdictions are subject to
restrictions and 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.
Y ou should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. 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 contained nor made in this
prospectus must not be relied on by you as having been authorized by us, the Joint
Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, the Underwriters, any of our or their respective directors, officers,
employees, agents, or representatives of any of them or any other parties involved in the
Global Offering.
Page
Expected Timetable ................................................. i v
Contents .......................................................... v i i
Summary ......................................................... 1
Definitions ........................................................ 1 6
Glossary of Technical Terms ........................................... 2 5
Forward-Looking Statements .......................................... 2 8
Risk Factors ....................................................... 3 0
Waiver from Strict Compliance with Listing Rules and Exemption from
Compliance with the Companies (Winding Up and Miscellaneous Provisions)
Ordinance ....................................................... 5 6
Information about this Prospectus and the Global Offering ................... 6 7
Directors and Parties Involved in the Global Offering ....................... 7 1
Corporate Information ............................................... 7 4
CONTENTS
– vii –


--- page 9 ---
Industry Overview .................................................. 7 6
Regulatory Overview ................................................ 8 9
History, Development and Corporate Structure ............................ 9 5
Business .......................................................... 1 0 3
Directors and Senior Management ...................................... 1 5 7
Relationship with Our Controlling Shareholders ............................ 1 7 0
Connected Transaction ............................................... 1 7 3
Substantial Shareholders ............................................. 1 7 6
Share Capital ...................................................... 1 7 7
Cornerstone Investors ................................................ 1 7 9
Financial Information ................................................ 1 8 6
Future Plans and Use of Proceeds ...................................... 2 3 0
Underwriting ...................................................... 2 3 4
Structure of the Global Offering ....................................... 2 4 3
How to Apply for Hong Kong Offer Shares ............................... 2 5 0
Appendix I – Accountants’ Report ............................... I - 1
Appendix II – Unaudited Pro Forma Financial Information ............ II-1
Appendix III – Taxation and Foreign Exchange ...................... III-1
Appendix IV – Summary of Principal Legal and Regulatory Provisions .... I V - 1
Appendix V – Summary of the Articles of Association ................ V - 1
Appendix VI – Statutory and General Information ................... VI-1
Appendix VII – Documents Delivered to the Registrar of Companies and
Available on Display ............................. VII-1
CONTENTS
– viii –


--- page 10 ---
This summary aims to give you an overview of the information contained in this
prospectus. As it is a summary, it does not contain all the information that may be important
to you. You should read the whole prospectus 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 the section headed “Risk Factors” in this prospectus. You should
read that section carefully in full before you decide to invest in the Offer Shares.
OVERVIEW
Who We Are
We are a provider of home care medical devices in China. According to Frost & Sullivan, in
terms of the 2024 domestic revenue, we ranked second among all home care medical devices
providers in China, with a market share of 2.1%. The global home care medical devices industry
is highly competitive, particularly the home rehabilitation aids, home respiratory support products,
and home medical care supplies. According to Frost & Sullivan, the home rehabilitation aids
industry and home medical care products industry in which we operate are highly competitive, each
with over 300 market participants in China.
Committed to home care medical devices industry since our inception in 2007, we have been
dedicated to bringing convenient solutions for consumers and patients looking for quality and
advanced home care medical devices. Home care medical devices are medical equipment,
consumables, and other products used by individuals in a home setting for disease prevention,
health monitoring, rehabilitation therapy, health management, or daily health care. Home care
medical devices mainly include home rehabilitation aids products, home health monitoring
products, home medical care products, home respiratory support products, home emergency medical
devices, rehabilitation therapy products, home cosmetic medical devices, and home sleep
management devices. China’s home care medical devices segment amounted to RMB198.2 billion
in 2024, accounting for approximately 21.0% of the total medical device market in China.
Notwithstanding the fact that the current competitive landscape of the home care medical devices
market in China is relatively fragmented, this industry is expected to achieve quick growth in the
foreseeable future, with leading domestic enterprises enjoying a favorable position to capture
opportunities arising from this trend. Leveraging our integrated operations including R&D,
manufacturing and distribution covering full value chain of the industry, we deliver a portfolio of
high quality, clinically validated products which can ensure therapeutic efficacy at affordable
prices. Our product portfolio addresses diverse healthcare scenarios including symptom
improvement, injury rehabilitation, preventive maintenance and wellness enhancement.
As of the Latest Practicable Date, our product portfolio encompassed over 200 product
categories with over ten thousand SKUs.
During the Track Record Period, we have been actively expanding our presence in overseas
markets and attracted a growing base of loyal users worldwide. The Chinese Mainland was our most
important geographic segment by revenue contribution, though our sales were distributed broadly
across many regions globally, mainly Hong Kong, the United States and the United Kingdom. Our
revenue generated from overseas sales accounted for 1.7%, 2.0% and 8.8% of our total revenue in
2023, 2024 and 2025.
Despite fluctuations in demand for certain medical devices caused by public health outbreak
and challenges caused by ever-changing consumer preferences, we have achieved stable and
sustainable development during the Track Record Period. In particular, we achieved continuous
profitability improvements through adopting measures to increase cost-efficiency and optimizing
product portfolio focusing on sales of high value products.
SUMMARY
–1–


--- page 11 ---
Our Products Portfolio and Market Opportunities
We strategically focus on five main categories of home care medical devices that we believe
enjoy strong growth potential and significant market demands in line with evolvement of
demographic groups structure and popular life style of modern society. These include rehabilitation
aids products (ۜmedical care products (ۜhealth monitoring
products (ۜrespiratory support products (ۜand TCM therapy and
other products (ۜIn particular, we ranked first among all rehabilitation
aids products providers in China in 2024, with a market share of 2.4% in terms of domestic revenue.
China’s home rehabilitation aids products market accounted for 23.5% of China’s home care
medical devices market in 2024.
This coverage, in particular rich varieties for each type of product designed for different using
scenarios, makes our stores the go-to places for consumers and patients to seek one-stop solutions
for their related medical needs, creating strong synergies among different products on both
cross-selling opportunities and brand value promotion.
The chart below shows our coverage of product mix.
Elderly
Young /Middle-Aged Adults
Infants /Children /Adolescents
Health Monitoring Respiratory Support
TCM Therapy
Rehabilitation Aids
Medical Care
We are continuously expanding and optimizing our product mix. In determining our R&D
strategy and product launch plan, we focus on advanced technology exhibition, high quality
performance and consumer-centric design with aesthetic. The chart below shows our key products
that symbolically demonstrate our successful implementation of these three core values in product
design and development, all of which are developed and manufactured by us.
We implement a multi-brand marketing strategy to cater to the diverse needs of patients and
customers. Assigning distinctive market positioning and targeted customer groups to each brand,
while ensuring that all of them share a common value that our master brand, Cofoe “
”, we
have successfully established a product portfolio comprising a large number of branded products.
In 2025, we also established a strategic partnership with Royal Philips, under which we are
authorized to distribute Philips branded health monitoring products in the Greater China region.
During the Track Record Period, we primarily had 11 proprietary brands and sold products mainly
under 16 third-party brands. For details, see “Business — Sales and Marketing — Our Brand V alue
Promotion — Our Brand Portfolio”.
SUMMARY
–2–


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Our R&D Strength and Key Achievements
During the Track Record Period, we pursued strategic portfolio expansion focused on
commercializing technologically advanced products that elevate home care standards, as well as
those exhibits thoughtful design in packaging and product specifications that are able to bring
delightful and convenient using experience, all of which collectively advancing our mission to
optimize therapeutic environments for patients and their families in home care scenario. We have
established an in-house R&D team of over 350 staff with cross-principle academic background
SUMMARY
–3–


--- page 13 ---
and/or practice experience. We have also established three research institutes each focuses on a
select area, including medical electronics and rehabilitation medicine, biosensing and innovative
materials, and respiratory support. In 2022, we were awarded as a “National Intellectual Property
Advantage Enterprise (ᗆପᛆᎴැΆุ)” by the National Intellectual Property
Administration of the PRC (ᗆପᛆ҅), in recognition of our strong R&D
track record in home care medical devices industry. To name a few of our key achievements:
 By embedding IoT technology and AI-powered features, our non-invasive ventilators
can continuously monitor sleep quality of users while autonomously detecting and
correcting respiratory events, including snoring, flow limitation, and central sleep apnea,
through real-time pressure adjustments, all of which are processed automatically through
utilizing medical-grade sensors and adaptive signal processing algorithms.
 In 2024, we launched our proprietary blood glucose and uric acid dual-test strip, which
can complete the accurate detection of both blood glucose and uric acid indicators within
10 seconds with only one test paper and one drop of blood, providing an efficient
solution for management of chronic diseases. The relevant research findings have been
published in Biosensors and Bioelectronics, a leading international journal in the field
of biosensing.
 In November 2025, we launched a new generation of bone conduction hearing aids
featuring a 12-nanometer imported chip that enables near-zero latency sound
transmission. Powered by third-party AI algorithms, the device incorporates deep
learning-based acoustic scene recognition technology to intelligently identify
surrounding environments and automatically optimize audio processing.
 In developing our ostomy care products, we carefully studied clinical requirements and
key concerns of patients. Based on these findings, we launched products featuring
ostomy bags with upgraded exhaust valves, which facilitate gas discharge and control
the risk of bag swelling; adhesive removers that reduce pain during peeling; and
leak-proof rings that improve leak resistance. In particular, the hydrocolloid formulation
we use for our ostomy skin barrier delivers high-strength adhesion, corrosion resistance,
and low sensitization in one integrated system, which can maximize the comfort of the
human body and improve the quality of life of patients.
As of December 31, 2025, we held 699 patents. These achievements, together with our strong
manufacturing techniques, allow us to quickly transfer R&D breakthroughs into competitive
features and specifications in products offered to consumers. In addition, based on our R&D
achievements and capabilities of launching innovative products, we were awarded 32nd place in the
overall ranking of the “2024 China Medical Device R&D Comprehensive Strength Ranking”
recognized by Pharmaceutical Industry Information Release Conference in 2024, where we entered
into three sub-lists, namely, equipment, consumables and IVD.
Our Distribution Network
Since inception, we have been committed to strategic development of our omnichannel
distribution network in recognizing its critical role to ensure convenient and efficient delivery of
home care medical devices. On one hand, to accommodate consumers’ evolving shopping habits and
provide a convenient multi-channel shopping experience, we sell our products through our online
stores on major domestic third-party e-commerce platforms. These stores provide a holistic view of,
and facilitate easy access to our products, enabling consumers to make purchases directly through
the platforms at their convenience. On the other hand, we fully recognize importance of offline
coverage for sales of home care medical devices, which is particularly essential for those products
that require pre-purchase diagnosis and post-purchase services, such as hearing aids, as well as
hospital visitors and community residents who prefer quick pick-up and convenient pick-up and
one-stop selections on devices they need.
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Through years of efforts, we have established a sales network with coverage and deep
penetration in China, as well as significant overseas reach. This integrated architecture enables
precise alignment with diverse consumer cohorts and their product-specific purchasing behaviors,
establishing us as the preferred source for trustworthy home care medical devices.
 As of the Latest Practicable Date, we have established full coverage across all major
e-commerce platforms, including Tmall, JD.com, Douyin, Rednote, Pinduoduo and
YSB. Capitalizing on our category-focused market insight and industry experience, our
strong infrastructure layout ensures swift and efficient logistics arrangements, and
technology-backed analysis capabilities, we have successfully established a leading
position in online sales of home care medical products across different e-commerce
platforms. In terms of sales for the entire year of 2025, our branded products ranked first
in 10 product categories and top 3 in 18 product categories in home care medical devices
industry on Douyin; ranked top 3 in 25 product categories and top 10 in 43 product
categories in home care medical devices industry on Tmall; and ranked top 3 in 11
product categories and top 10 in 27 product categories in the industry on JD. Our strong
market share and penetration in online sales allows us to make quick response towards
market needs while optimizing costs efficiency.
 As of December 31, 2025, we had 668 self-owned stores, among which, 618 of them
were our “JOYOR HearingCare ( ਄Ѐᛓɢ)” centers, covering 128 cities across China
where we offer professional audiology services and selection of great variety of quality
hearing aids, including our proprietary Cofoe brands. In addition, as of December 31,
2025, through Humana Medical Limited that we acquired in 2025, we operated over 30
medical product retail centers, seven professional podiatry centers and one
extracorporeal counterpulsation treatment center in Hong Kong, laying a solid
foundation for our further expansion in this region. Besides, we also collaborate with
reputable third party pharmacy store chain operators and reliable offline distributors, to
fully leverage their market penetration and geographic coverage to improve sales of our
products. As of December 31, 2025, we cooperated with over 80 pharmacy store chain
operators that are ranked as “Top 100 pharmacy store chain operators” in China and
facilitated distribution of our products to 31 provinces and municipalities in China
through over 200 thousand pharmacy stores. As of the same date, the number of our
offline distributors reached nearly 200 and our distributor network effectively
supplements our cooperation with third party pharmacy store chain operators,
constituting a broad distribution network where we have more direct influence on
service quality and product delivery.
We actively participated in and hold various marketing and sales campaigns that we deem suit
our brand image and core corporate value. In particular, our pursuit to establish us a platform offers
a comprehensive product portfolio that effectively addresses home care medical needs for
consumers and patients of all ages, offering patients and their families trustworthy options to choose
from. For instance, we have participated health care program on CCTV , the leading
telecommunication station in China, upon passing relevant qualification tests and validation
procedures, through which, we managed to convey our scientific and professional brand concepts
to audiences across China. In addition, we sponsor public events promoting public awareness on
health care and conveying importance on daily care on body conditions, forming a close tie in
consumers’ cognition between health and our brands.
Our Manufacturing and Logistics Capability
We have established strong production capacity and supply chain management capabilities
supported by our technology-driven manufacturing system. Our technology-backed production
capacity, embedded in our production plants equipped with advanced production equipment and
automated production lines, allows us to quickly transform technology breakthroughs and designs
into quality products while enjoying competitive affordability. We invested in implementing
SUMMARY
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advanced equipment and latest technologies to enhance the accuracy and efficiency of our quality
inspections. enhance the accuracy and efficiency of our quality inspections. By doing so, we ensure
that our products meet industry-wide quality standard while effectively reducing waste.
As of December 31, 2025, we had four major manufacturing bases in China. In recognizing
our advanced manufacturing capacity, we were awarded as a “National Industrial Design Center ( ਷
ʕː)” by the Ministry of Industry and Information Technology of the People’s
Republic of China in 2023, and “an enterprise with excellent national intelligent manufacturing
scenarios (౽ঐႡிᎴӸఙ౻Άุ)” by the Ministry of Industry and Information Technology in
2022.
During Track Record Period, we also strategically engage OEM/ODM suppliers to produce
selected types of our branded medical products, particularly those do not carry sophisticated
technology specifications and/or demand advanced manufacturing techniques. In this way, we are
able to achieve production capacity expansion in a more dynamic and cost-efficient way as we deem
appropriate, while focusing on producing products with higher value at our own plants.
In addition, our logistics and supply chain management capability and technology
achievement associated therein are the foundations of our business success. Capitalizing on our
well-developed logistics and warehouse infrastructure, we adopted advanced software technologies
in establishing our smart logistics system capable of service automation and operation
digitalization.
In addition, capitalizing on our digitalization systems, we could ensure seamless integration
with, and dynamic management on, third party transportation service providers, bringing secure and
quick solutions. In 2020, we opened up our logistics capabilities and resources to external
customers for home care medical devices related needs, charging fees for using our warehousing
and logistics services. We consider this business line effectively supplements our main business
operations, by allowing us to effectively tap into their business reach and penetration in covered
regions, achieve deep insight into evolving market demands and consumer preferences, while
enhancing our business relationships with relevant leading enterprises.
OUR COMPETITIVE STRENGTHS
We believe the following competitive strengths contribute to our success:
 With nearly 20 years of dedication to home care medical devices industry, we have
established leadership at many sectors in China. Our product portfolio can effectively
serve home care needs of consumers and patients throughout their life cycle;
 Aligning with our strategic commitment to offer consumers convenient selection of
quality home care medical devices with great variety of choices, we have developed and
offered a comprehensive product portfolio of over 200 types of products across over
10,000 SKUs, structured within five core therapeutic domains;
 Leveraging successful development of omni-channel backed by strong technology
capability, and our well-recognized brand, we have been leading development of
omni-channel commercialization of home care medical devices in China since our
inception and set successful leadership in many product categories;
 Capitalizing on our devotion in innovative research and development, emphasizing on
in-depth integration of AI algorithms with medical hardware, we are able to
continuously launch products catered to the most frontier market demands;
SUMMARY
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 Our industry-leading manufacturing and logistics infrastructure that are equipped with
advanced facilities and software systems allow us to continuously drive cost efficiency
optimization while enhancing stringent quality control;
 Our senior management team has unparalleled strategic vision on, and long-term
devotion in home care medical devices industry. Their leadership and commitment,
complemented by exceptional organizational execution, establishes a solid foundation
for us to achieve sustainable success.
OUR DEVELOPMENT STRATEGIES
We strive to solidify our market leadership and will pursue the following strategies:
 Accelerating global expansion to meet the growing demands for high-quality home care
medical devices in overseas markets;
 Focusing on R&D and product innovation to capture opportunities brought up by market
demands for AI-driven smart functions and pursuit of digitalization across home care
medical devices industry;
 Continuously expanding and optimizing the online and offline sales channel network to
maintain industry-leading position in terms of sales and marketing capability;
 Improving the refined management capabilities and operational efficiency by leveraging
digitalization and information technologies;
 Continuously enhancing brand influence through ensuring premium product quality and
public recognition.
OUR CUSTOMERS AND SUPPLIERS
Our customers primarily include e-commerce platforms, pharmacy chains, distributors and
individual consumers. In 2023, 2024 and 2025, our five largest customers in each year during the
Track Record Period contributed 43.8%, 33.7% and 36.1%, respectively, to our total revenue. Sales
to our largest customer in each year during the Track Record Period accounted for 27.0%, 18.9%
and 21.9% of our total revenue for the respective years. The composition of our five largest
customers remained unchanged throughout the Track Record Period. Our suppliers primarily
include finished goods and raw materials providers, services providers, and packaging material
suppliers. In 2023, 2024 and 2025, our five largest suppliers in each year during the Track Record
Period contributed 22.3%, 24.7% and 23.1%, respectively, to our total purchases.
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financial data from our financial information during
the Track Record Period, extracted from the Accountants’ Report set out in Appendix I to this
prospectus.
SUMMARY
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Summary of Consolidated Statements of Profit or Loss and Other Comprehensive Income
The following table sets forth selected consolidated statement of profit or loss and other
comprehensive income for the years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 2,982,931 3,387,499
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,681,144) (1,474,227) (1,635,894)
Gross Profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,551 1,508,704 1,751,605
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,101 103,427 90,022
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(740,704) (973,313) (1,158,175)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130,338) (143,955) (196,129)
Research and development expenses /H1118/H1118/H1118/H1118/H1118(114,330) (96,410) (87,284)
Impairment losses on financial assets,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,830) (6,857) (1,368)
Fair value gains/(losses) on financial
assets at fair value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,563) 9,400 49,842
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,546) (7,587) (7,383)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,503) (17,912) (16,066)
Share of profits and losses of Associates /H1118 (130) (3,498) 779
Profit Before Tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118285,708 371,999 425,843
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(32,837) (59,655) (55,527)
Profit for the Y ear /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252,871 312,344 370,316
During the Track Record Period, we generated revenue primarily from the (i) sales of medical
and wellness products, (ii) OEM/ODM business and (iii) others. The following table sets forth a
breakdown of our revenue by segments, both in absolute amounts and as percentages of our
revenue, for the years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Sales of medical and wellness
products
Rehabilitation aids products /H1118/H1118/H1118/H1118/H1118/H1118717,795 25.2 1,039,105 34.8 1,178,153 34.8
Medical care products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118734,303 25.7 778,334 26.1 730,155 21.6
Health monitoring products /H1118/H1118/H1118/H1118/H1118/H1118584,621 20.5 476,649 16.0 555,554 16.4
Respiratory support products /H1118/H1118/H1118/H1118/H1118/H1118454,803 15.9 264,182 8.9 261,324 7.7
TCM therapy and other products (1) /H1118/H1118149,998 5.3 178,993 6.0 241,046 7.1
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,641,520 92.6 2,737,263 91.8 2,966,232 87.6
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,152 2.2 104,286 3.5 285,410 8.4
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,023 5.2 141,382 4.7 135,857 4.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 100.0 2,982,931 100.0 3,387,499 100.0
Notes:
(1) Other products include (i) household and personal care products; (ii) mother and infant products; (iii) daily necessities
and (iv) dietary supplement products.
(2) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
SUMMARY
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The following table sets forth a breakdown of our gross profit and gross profit margin by types
of goods or services for the years indicated:
Y ear Ended December 31,
2023 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 %
Sales of medical and wellness
products
Rehabilitation aids products /H1118/H1118/H1118/H1118/H1118/H1118347,458 48.4 645,161 62.1 744,635 63.2
Medical care products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118349,327 47.6 414,040 53.2 384,210 52.6
Health monitoring products /H1118/H1118/H1118/H1118/H1118/H1118220,838 37.8 196,927 41.3 277,328 49.9
Respiratory support products /H1118/H1118/H1118/H1118/H1118/H1118170,114 37.4 102,372 38.8 119,800 45.8
TCM therapy and other products (1) /H1118/H111850,931 34.0 73,736 41.2 108,028 44.8
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,138,668 43.1 1,432,236 52.3 1,634,001 55.1
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,899 12.3 28,319 27.2 61,157 21.4
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,984 17.6 48,149 34.1 56,447 41.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,551 41.1 1,508,704 50.6 1,751,605 51.7
Note:
(1) Other products include: (i) household and personal care products; (ii) mother and infant products; (iii) daily
necessities; and (iv) dietary supplement products.
(2) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
Key Items of the Consolidated Statements of Financial Position
The following table sets forth selected information from our consolidated statement of
financial position as of the dates indicated, which has been extracted from our audited consolidated
financial statements included in Appendix I to this Prospectus:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,413,456 2,497,177 2,793,594
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,830,735 3,925,490 3,835,322
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,086,400 1,361,721 1,588,766
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,744,335 2,563,769 2,246,556
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118249,597 258,596 137,261
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,908,194 4,802,350 4,902,889
SUMMARY
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Our net current assets decreased by RMB317.2 million, or 12.4%, from RMB2,563.8 million
as of December 31, 2024, to RMB2,246.6 million as of December 31, 2025, mainly due to (i) an
increase of RMB176.6 million in trade and bills payables and (ii) disposal of financial assets at fair
value through profit or loss of RMB340.6 million, a substantial portion of proceeds from which was
used for long-term investments, resulting in an increase of RMB175.9 million in investments in
associates, partially offset by an increase of RMB166.7 million in cash and bank balance.
Our net current assets decreased by 6.6% from RMB2,744.3 million as of December 31, 2023
to RMB2,563.8 million as of December 31, 2024, primarily due to an increase in interest-bearing
bank and other borrowings of RMB248.2 million, partially offset by (i) an increase in financial
assets at fair value through profit or loss of RMB506.1 million, (ii) a decrease in cash and bank
balances of RMB290.6 million, and (iii) a decrease in trade and bills receivables of RMB84.2
million.
Our net assets decreased from RMB4,908.2 million as of December 31, 2023 to RMB4,802.4
million as of December 31, 2024, primarily due to dividend declared of RMB365.9 million and
repurchase of A-shares of RMB50.1 million, partially offset by profit for the year of RMB312.3
million and share-based payment reserve of RMB16.0 million. Our net asset increased to
RMB4,902.9 million as of December 31, 2025, primarily due to profit for the year of RMB370.3
million, partially offset by dividend declared of RMB365.8 million.
Summary of the Consolidated Statements of Cash Flow
The following table sets forth a summary of our cash flows information for the years
indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net cash flows from operating activities /H1118/H1118 393,822 663,393 695,726
Net cash flows used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(45,669) (730,968) (68,960)
Net cash flows used in financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(277,661) (234,240) (468,747)
Net increase/(decrease) in cash and
cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,492 (301,815) 158,019
Cash and cash equivalents at
beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,370,540 1,441,213 1,139,986
Effect of foreign exchange differences,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181 588 (3,430)
Cash and cash equivalents at end of the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,441,213 1,139,986 1,294,575
Key Financial Ratios
For information of our key financial ratios, please see “Financial Information — Key
Financial Ratios” to this prospectus.
SUMMARY
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COMPETITIVE LANDSCAPE
We operate in home care medical devices industry. The competitive landscape of the home
care medical devices market in China is relatively fragmented, with key market participants
including large domestic enterprises, multinational corporations, and domestic start-up technology
firms. Among them, large domestic enterprises hold a relatively high market share. We ranked the
second in the home care devices market in China based on domestic revenues in 2024, with a market
share of 2.1%. See “Industry Overview” in this prospectus.
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Zhang, Ms. Nie (Mr. Zhang’s spouse), Changsha
Xiezihao and Changsha Keyuan, collectively being our Controlling Shareholders, were able to
exercise an aggregate of approximately 54.00% voting rights in our Company. Immediately upon
completion of the Global Offering (without taking into account any A Shares to be issued upon
exercise of the share options granted under the Employee Incentive Schemes), Mr. Zhang, Ms. Nie,
Changsha Xiezihao and Changsha Keyuan are expected to be entitled to exercise an aggregate of
approximately 47.82% voting rights in our Company. Mr. Zhang, Ms. Nie, Changsha Xiezihao and
Changsha Keyuan will remain as our Controlling Shareholders upon the Listing. For detail, please
refer to the section headed “Relationship with our Controlling Shareholders”.
GLOBAL OFFERING STATISTICS
All statistics in the following table are based on the assumptions that (i) the Global Offering
has been completed and 27,000,000 H Shares are issued pursuant to the Global Offering, and (ii)
235,897,000 Shares are issued and outstanding following the completion of the Global Offering:
Based on an Offer
Price of HK$39.33 per
H Share, being the
maximum Offer Price
Market capitalization of our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$14,078 million
Unaudited pro forma adjusted net tangible asset per Share (2) /H1118/H1118/H1118/H1118 HK$26.32
Notes:
(1) The calculation of market capitalization of our Shares is based on the aggregation of (i) the market
capitalization of 27,000,000 H shares expected to be issued under the Global Offering; and (ii) the average
market capitalization of 204,400,869 A shares (excluding 4,496,131 treasury shares) in issue with an average
closing price of RMB55.80 (equivalent to approximately HK$63.68) per A Share for the five trading days
immediately preceding the Latest Practicable Date.
(2) The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the parent per
Share is arrived at by dividing the unaudited pro forma adjusted net tangible assets by 232,018,269 shares
(excluding 3,878,731 treasury shares held as at 31 December 2025), being the number of shares in issue
assuming that the Global Offering had been completed on 31 December 2025.
(3) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company as shown on page II-1 have not been adjusted to illustrate the effect of the following:
The Proposal of “2025 Annual Dividend Plan” was approved in the 2nd meeting of the third session of
director’s meeting. It was agreed that the Company will announce a dividend of RMB246,022,000 to the
existing shareholders prior to the Listing based on the Company’s retained profits as of 31 December 2025.
Had the payment of the dividend been made on 31 December 2025, the unaudited pro forma adjusted
consolidated net tangible assets of the Group would decrease from RMB5,349,535,000 to RMB5,103,513,000,
based on the maximum Offer Price of HK$39.33 per Share, and the unaudited pro forma adjusted consolidated
net tangible assets of the Group attributable to owners of the Company as at 31 December 2025 per Share
would be RMB22.00 (equivalent to HK$25.11) based on a maximum Offer Price of HK$39.33 per Share.
Except for the information as disclosed above, no other adjustments have been made to the unaudited pro
forma adjusted consolidated net tangible assets. These amounts are converted from Renminbi to Hong Kong
dollars or Hong Kong dollars to Renminbi at an exchange rate of HK$1.00 to RMB0.8763. No representation
is made that Renminbi/Hong Kong dollars amount have been, could have been or may be converted to Hong
Kong dollars/Renminbi at that rate or at all.
SUMMARY
–1 1–


--- page 21 ---
OUR LISTING ON THE SHENZHEN STOCK EXCHANGE
Since 2021, our Company has been listed on the Shenzhen Stock Exchange. During the Track
Record Period and as of the Latest Practicable Date, our Directors confirmed that we had no
instances of non-compliance with the rules of the Shenzhen Stock Exchange and other applicable
PRC securities laws and regulations in any material respects and, to the best knowledge of our
Directors having made all reasonable enquiries, there was no material matter that should be brought
to the investor’s attention in relation to our compliance record on the Shenzhen Stock Exchange.
Our PRC Legal Advisor advised us that during the Track Record Period and as of the Latest
Practicable Date, we had not been subject to any material administrative penalties or regulatory
measures imposed by relevant PRC securities regulatory authorities. Based on the independent due
diligence conducted by the Joint Sponsors and our PRC Legal Advisor’s view, nothing has come to
the Joint Sponsors’ attention that would reasonably cause them to disagree with the Directors’
confirmation with regard to the compliance records of the Company on the Shenzhen Stock
Exchange in any material respect.
DIVIDENDS
On May 20, 2022, we paid a final dividend of RMB256.6 million (RMB16.0 per 10 A Shares)
for the year ended December 31, 2021. On May 25, 2023, we paid a final dividend of RMB245.8
million (RMB12.0 per 10 A Shares) for the year ended December 31, 2022. On June 12, 2024, we
paid a final dividend of RMB244.4 million (RMB12.0 per 10 A Shares) for the year ended
December 31, 2023. On October 11, 2024, we paid an interim dividend of RMB122.0 million
(RMB6.0 per 10 A Shares) for six months ended June 30, 2024. On May 30, 2025, we paid a final
dividend of RMB244.1 million (RMB12.0 per 10 A Shares) for the year ended December 31, 2024.
On September 19, 2025, we paid an interim dividend of RMB6 per 10 shares (tax inclusive),
totaling RMB121.9 million for the six months ended June 30, 2025. On March 9, 2026, our board
of directors approved a dividend of RMB12.0 per 10 shares (tax inclusive) for shareholders of our
A share, totaling RMB246.0 million for the year ended December 31, 2025. We plan to submit this
dividend plan to shareholders for approval at the annual general meeting on March 31, 2026.
Currently, we do not intend to adopt a formal dividend policy or a fixed dividend distribution ratio
following the Global Offering. For details of our dividend policies, please see “Financial
Information — Dividends and Dividend Policy”.
USE OF PROCEEDS
We estimate the net proceeds of the Global Offering which we will receive, assuming an Offer
Price of HK$39.33 per H Share (being the maximum Offer Price stated in the prospectus), will be
approximately HK$1,007.2 million, after deduction of underwriting fees and commissions and
estimated expenses payable by us in connection with the Global Offering. In accordance with our
strategy, we plan to use the proceeds for the following intended purposes in the amounts set forth
below:
 30.0%, or approximately HK$302.1 million, will be used for global expansion;
 30.0%, or approximately HK$302.1 million, will be used for our ongoing product
research and development and technological innovation, including our AI and Internet of
Things applications;
 20.0%, or approximately HK$201.4 million, will be used for expanding our domestic
sales channels and distribution network;
 10.0%, or approximately HK$100.7 million, will be used for branding and marketing
activities;
SUMMARY
–1 2–


--- page 22 ---
 10.0%, or approximately HK$100.7 million will be used for the working capital and
general corporate purposes.
See “Future Plans and Use of Proceeds”.
LISTING EXPENSE
Listing expenses to be borne by us are estimated to be approximately RMB48.1 million
(HK$54.8 million) (including underwriting commission), at the Offer Price of HK$39.33 per Share
(being the maximum Offer Price), among which (i) underwriting-related expenses, including
underwriting commission and other expenses are approximately RMB15.3 million (HK$17.4
million) and (ii) non-underwriting-related expenses are approximately RMB32.8 million (HK$37.4
million), comprising (a) fees and expenses of legal advisors and accountants of approximately
RMB20.0 million (HK$22.8 million) and (b) other fees and expenses of approximately RMB12.8
million (HK$14.6 million).
We estimate that listing expenses of approximately RMB48.1 million (HK$54.8 million)
(including underwriting commissions of approximately RMB15.3 million (HK$17.4 million), based
on the Offer Price of HK$39.33 per Offer Share) will be incurred by our Company, approximately
RMB2.6 million (HK$2.9 million) of which is expected to be charged to our statements of profit
or loss, and approximately RMB45.5 million (HK$51.9 million) of which is expected to be deducted
from equity as expenses directly attributable to the issue of Shares. Our listing expenses as a
percentage of gross proceeds is 5.2%, assuming an Offer Price of HK$39.33 per Share (being the
maximum Offer Price). The listing expenses above are the latest practicable estimate for reference
only, and the actual amount may differ from this estimate.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
In the first three months of 2026, we have experienced continued business growth across all
business lines compared to the same periods in 2025, thanks to our successful achievements in
commercialization of technology R&D and product innovation, expansion of business network and
penetration, as well as strategic investment in promoting synergies among different product lines as
our brand recognition kept growing. In particular, we achieved significant increase in our
respiratory support products and substantial growth in rehabilitation aids products and medical care
products.
In this period, we have successfully completed NMPA registration of helicobacter pylori
antigen test kits, exhibiting another milestone achievement in our R&D efforts. In addition, we also
launched iterated ventilators with innovated features and improved performance that we developed
based on study on market needs. Leveraging the improved product competitiveness, we have also
enhanced cooperation with online platforms, along with optimization on layout of, and management
on offline sales network. These achievements collectively contributed to our business growth in the
first quarter in 2026, while laying solid foundation for expected full year development.
After December 31, 2025, which is the end of the Track Record Period, our revenue and gross
profit recorded steady growth in the three months ended March 31, 2026 as compared to the same
period in 2025.
Our revenue and gross profit from respiratory support products recorded significant growth in
the three months ended March 31, 2026 as compared to the same period in 2025. In particular, the
sales volume of our ventilator products increased significantly in the three months ended March 31,
2026 as compared to the same period in 2025, primarily attributable to expanded customer
recognition and increase customer demand of our new generation of smart ventilators, which feature
comprehensive upgrades in noise reduction and intelligent algorithms as a result of our research and
SUMMARY
–1 3–


--- page 23 ---
development efforts. The average selling price of our ventilator products slightly decreased in the
three months ended March 31, 2026 as compared to the same period in 2025, primarily due to an
increase in the sales proportion of our mid-range priced products, as part of our efforts to expand
customer coverage.
Our revenue and gross profit from rehabilitation aids products recorded steady growth in the
three months ended March 31, 2026 as compared to the same period in 2025. In particular, the sales
volume of our orthopedic/posture correction products increased steadily in the three months ended
March 31, 2026 as compared to the same period in 2025, primarily attributable to our enhanced
promotional efforts through our online sales channels, particularly during the Chinese New Y ear
holiday period. The average selling price of such products also increased steadily in the three
months ended March 31, 2026 as compared to the same period in 2025, primarily due to the launch
of our mid-to-high-end correction products with new features such as intelligent adjustment and
ergonomic design, together with a decrease in the sales proportion of entry-level products with
comparatively lower selling prices.
Our revenue and gross profit from medical care products recorded steady growth in the three
months ended March 31, 2026 as compared to the same period in 2025. In particular, the sales
volume and average selling price of our dressing and patch products increased in the three months
ended March 31, 2026 as compared to the same period in 2025, primarily attributable to the launch
of our higher-end new products, such as hydrocolloid dressings and alginate dressings, together
with our enhanced promotional efforts through online platforms.
Our revenue and gross profit from TCM therapy and other products recorded significant
growth in the three months ended March 31, 2026 as compared to the same period in 2025. In
particular, the sales volume of our TCM physiotherapy devices increased significantly in the three
months ended March 31, 2026 as compared to the same period in 2025, primarily due to increased
market demand for such products, which was driven by our increased marketing efforts through
livestreaming platforms and health community channels that enabled us to effectively reach our
target customers. The average selling price of such products remained relatively stable in the three
months ended March 31, 2026 as compared to the same period in 2025.
Our revenue from health monitoring products remained relatively stable, while our gross
profit from health monitoring products increased steadily, in the three months ended March 31,
2026 as compared to the same period in 2025.
We plan to publish the Group’s first quarterly results announcement for 2026 on the Shenzhen
Stock Exchange on the evening of April 29, 2026.
Our Directors confirm that, up to the date of this prospectus, there had been no material
adverse change in our financial, operational or prospects since December 31, 2025 being the latest
balance sheet date of our consolidated financial statements in the Accountants’ Report in Appendix
I to this prospectus.
RISK FACTORS
Our business faces risks including those set out in the section headed “Risk Factors”. As
different investors may have different interpretations and criteria when determining the significance
of a risk, you should read the “Risk Factors” section in its entirety before you decide to invest in
our Shares. Some of the major risks that we face include:
 Our success is dependent on the continued popularity and market acceptance of our
products and our ability to compete effectively in the home care medical devices
industry;
SUMMARY
–1 4–


--- page 24 ---
 We may face challenges as we expand our product portfolio and explore new business
areas;
 We rely on third-party e-commerce platforms to sell our products online. If the services
or operations of such platforms are interrupted, or if our cooperation with them
terminates, deteriorates or becomes more costly, our business, financial condition and
results of operations may be materially and adversely affected;
 We face intense competition in both domestic and international home-care medical
devices industry;
 Any failure to protect our intellectual property rights could undermine our competitive
position and adversely affect our business prospects. Litigation to protect our
intellectual property rights may be costly and ineffective.
SUMMARY
–1 5–


--- page 25 ---
In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below.
“A Share(s)” ordinary share(s) issued by our Company, with a nominal
value of RMB1.00 each, which is/are subscribed for or
credited as paid in Renminbi and is/are listed for trading on
the Shenzhen Stock Exchange
“Accountants’ Report” the accountants’ report of our Company from Ernst &
Y oung, the text of which is set out in Appendix I to this
prospectus
“affiliate(s)” with respect to any specified 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 articles of association of our Company adopted on
August 26, 2025, with, with effect upon the Listing Date (as
amended from time to time), a summary of which is set out
in Appendix V to this prospectus
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Audit Committee” the audit committee of our Board
“Board” or “Board of Directors” the board of Directors of our Company
“Business Day” a day on which banks in Hong Kong are generally open for
normal business to the public and which is not a Saturday,
Sunday or public holiday in Hong Kong
“Capitalization Issue 2022” On May 10, 2022, our Shareholders resolved to increase the
share capital of our Company from RMB160,375,000 to
RMB208,487,500 by way of capitalization of the capital
reserve of our Company. As a result, 48,122,500 Shares was
issued and allotted to all then Shareholders with 3 Shares
per 10 Shares
“Capital Market Intermediary(ies)”
or “CMI(s)”
the capital market intermediary(ies) as named in the section
headed “Directors and Parties Involved in the Global
Offering” in this prospectus and has the meaning ascribed
thereto under the Listing Rules
“CCASS” the Central Clearing and Settlement System established and
operated by HKSCC
DEFINITIONS
–1 6–


--- page 26 ---
“Changsha Keyuan” Changsha Keyuan Tongchuang Enterprise Management
Center (Limited Partnership) (๕Ν௴௴ุҳ༟Υྫ
Άุ(Υྫ)), a limited partnership established in
Chinese Mainland on September 6, 2017, of which, Mr.
Zhang served as the executive partner and the general
partner with 5% partnership interest and Ms. Nie (the spouse
of Mr. Zhang) and Mr. Zhang Zhiming (׼one of our
executive Directors) are the limited partners with 55% and
40% partnership interest, respectively, one of our
Controlling Shareholders
“Changsha Xiezihao” Changsha Xiezihao Medical Investment Co., Ltd. (Ӎ૛ο
ʮ̡), a company established in Chinese
Mainland with limited liability on September 7, 2017 and is
owned as to 90% and 10% by Mr. Zhang and his spouse, Ms.
Nie, respectively, one of our Controlling Shareholders
“China” or “Chinese Mainland” or
“PRC”
the People’s Republic of China, which only in the context of
describing PRC rules, laws, regulations, regulatory
authority, and any PRC entities or citizens under such rules,
laws and regulations and other legal or tax matters in this
prospectus, excludes Taiwan, Hong Kong and the Macau
Special Administrative Region of the People’s Republic of
China
“close associate(s)” has the meaning ascribed thereto under the Listing Rules
“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”
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” Cofoe Medical Technology Co., Ltd. (΅Ϟ
ʮ̡), a joint stock company with limited liability
incorporated in Chinese Mainland, the predecessor of which
was Hunan Cofoe Medical Technology Development Co.,
Ltd. (ʮ̡), a limited liability
company established in the PRC on November 19, 2009, and
if the context requires, includes its predecessor
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“Controlling Shareholders” has the meaning ascribed thereto under the Listing Rules
and in this context, refers to Mr. Zhang, Ms. Nie, Changsha
Xiezihao and Changsha Keyuan, further details of which are
set out in the section headed “Relationship with Our
Controlling Shareholders” in this prospectus
“core connected person(s)” has the meaning ascribed thereto under the Listing Rules
DEFINITIONS
–1 7–


--- page 27 ---
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ၍
ึ)
“Director(s)” the director(s) of our Company
“Dividend Distribution(s)” including: (i) on September 19, 2025, our Company
distributed dividends of RMB6 per 10 ordinary Shares to
then existing Shareholders; (ii) on May 30, 2025, our
Company distributed dividends of RMB12 per 10 ordinary
Shares to then existing Shareholders; (iii) on October 11,
2024, our Company distributed dividends of RMB6 per 10
ordinary Shares to then existing Shareholders; (iv) on June
12, 2024, our Company distributed dividends of RMB12 per
10 ordinary Shares to then existing Shareholders; (v) on
May 25, 2023, our Company distributed dividends of
RMB12 per 10 ordinary Shares to then existing
Shareholders; and (vi) on May 20, 2022, our Company
distributed dividends RMB16 per 10 ordinary Shares to then
existing Shareholders
“EIT” enterprise income tax
“Employee Incentive Schemes” including the Employee Incentive Scheme 2021 and the
Employee Incentive Scheme 2024, referring to the share
option schemes adopted by our Company in 2021 to 2024,
respectively, the principal terms of which are set out in
“Statutory and General Information — Further Information
about our Directors and Substantial Shareholders — 5.
Employee Incentive Schemes” in Appendix VI to this
prospectus
“ESG” environmental, social and governance
“Extreme Conditions” extreme conditions caused by a super typhoon or other
natural disaster of a substantial scale seriously affects the
working public’s ability to resume work or brings safety
concern for a prolonged period as announced by the
government of Hong Kong
“F&S” or “Frost & Sullivan” or
“Industry Consultant”
Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., our
industry consultant
“FINI” 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
“General Rules of HKSCC” General Rules of HKSCC published by the Stock Exchange
and as amended from time to time
“Global Offering” the Hong Kong Public Offering and the International
Offering
DEFINITIONS
–1 8–


--- page 28 ---
“Group”, “our Group”, “we”, “our”
or “us”
our Company and its subsidiaries or, where the context so
requires, in respect of the period before our Company
became the holding company of its present subsidiaries at
the relevant time, the business acquired or operated by such
subsidiaries or their predecessors (as the case may be)
“Guide for New Listing
Applicants” or “Guide”
the Guide for New Listing Applicants published by the
Stock Exchange
“H Share(s)” overseas listed foreign ordinary share(s) in the share capital
of our Company with a nominal value of RMB1.00 each,
which are to be subscribed for and traded in Hong Kong
dollars and to be listed on the Hong Kong Stock Exchange
“H Share Registrar” Tricor Investor Services Limited
“HK$”, “Hong Kong Dollars”,
“HK Dollars” or “cents”
Hong Kong dollars and cents respectively, the lawful
currency of Hong Kong
“HK eIPO White Form ” the application for Hong Kong Offer Shares to be issued in
the applicant’s own name, submitted online through the
designated website at www.hkeipo.hk
“HK eIPO White Form
Service Provider”
the HK eIPO White Form service provider designated by
our Company as specified on the designated website at
www.hkeipo.hk
“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 CCASS to be credited to your designated HKSCC
Participant’s stock account through causing HKSCC
Nominees to apply on your behalf, including by instructing
your broker or custodian who is a clearing participant or a
custodian participant under HKSCC 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 Limited, a wholly owned subsidiary of
the HKSCC
“HKSCC Operational Procedures” the operational procedures of HKSCC in relation to CCASS,
containing the practices, procedures and administrative
requirements relating to the operations 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
DEFINITIONS
–1 9–


--- page 29 ---
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the PRC
“Hong Kong Listing Rules” or
“Listing Rules”
the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited, as amended or
supplemented from time to time
“Hong Kong Offer Shares” the 2,700,000 H Shares being initially offered by us for
subscription 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 for subscription of the Hong Kong Offer Shares to
the public in Hong Kong, on and subject to the terms and
conditions described in the section headed “Structure of the
Global Offering” in this prospectus
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering as listed
in the section headed “Underwriting” in this prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated April 24, 2026 relating to
the Hong Kong Public Offering and entered into by, among
others, our Company, the Controlling Shareholders, the
Sponsor-Overall Coordinators and the Hong Kong
Underwriters, as further described in the section headed
“Underwriting” in this prospectus
“IFRSs” International Accounting Standards, International Financial
Reporting Standards, amendments and the related
interpretations issued by the IASB
“IIT Law” the Individual Income Tax Law of the PRC ( ʕശɛ͏΍
)
“Independent Third Party(ies)” any person(s) or entity(ies) who/which is not a connected
person of our Company within the meaning of the Listing
Rules
“International Offer Shares” the 24,300,000 H Shares being initially offered by us for
subscription under the International Offering (subject to
reallocation as described in the section headed “Structure of
the Global Offering” in this prospectus)
“International Offering” the conditional placing of the International Offer Shares at
the Offer Price outside the United States (including to
professional and institutional investors within Hong Kong)
in offshore transactions in reliance on Regulation S, as
further described in the section headed “Structure of the
Global Offering” in this prospectus
DEFINITIONS
–2 0–


--- page 30 ---
“International Underwriters” the group of international underwriters expected to enter
into the International Underwriting Agreement to underwrite
the International Offering
“International Underwriting
Agreement”
the underwriting agreement expected to be entered into by,
among others, our Company, our Controlling Shareholders,
the Joint Sponsors, the Sponsor-Overall Coordinators, the
Overall Coordinators and the International Underwriters in
respect of the International Offering, as further described in
“Underwriting — Underwriting Arrangements and Expenses
— The International Offering” in this prospectus
“Joint Bookrunners” the Joint Bookrunners as named in the section headed
“Directors and Parties Involved in the Global Offering” in
this prospectus
“Joint Global Coordinators” the Joint Global Coordinators as named in the section
headed “Directors and Parties Involved in the Global
Offering” in this prospectus
“Joint Sponsors” the Joint Sponsors as named in the section headed
“Directors and Parties Involved in the Global Offering” in
this prospectus
“Latest Practicable Date” April 18, 2026, being the latest practicable date for the
purpose of ascertaining certain information contained in this
prospectus prior to its publication
“Listing” the listing of the H Shares on the Main Board of the Hong
Kong Stock Exchange
“Listing Date” the date, expected to be on or about Wednesday, May 6,
2026, on which the H Shares are listed on the Hong Kong
Stock Exchange and dealings in the H Shares are first
permitted to commence on the Hong Kong Stock Exchange
“Main Board” the stock market (excluding the option market) operated by
the Hong Kong Stock Exchange which is independent from
and operated in parallel with the GEM of the Hong Kong
Stock Exchange
“MIIT” Ministry of Industry and Information Technology of the
PRC (ʷ௅)
“MOF” Ministry of Finance of the PRC (௅)
“Mr. Zhang” or “Mr. Zhang Min” Mr. Zhang Min ( ੵઽ), chairman of the Board, executive
Director and general manager of our Company, one of our
Controlling Shareholders
“Ms. Nie” or “Ms. Nie Juan” Ms. Nie Juan (ࢇthe spouse of Mr. Zhang and one of our
Controlling Shareholders
DEFINITIONS
–2 1–


--- page 31 ---
“NDRC” National Development and Reform Commission of the PRC
(ึ)
“NMPA” National Medical Products Administration of PRC ( ʕശɛ
္ຖ၍ଣ҅)
“Nomination Committee” the nomination committee of our Board
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍ձ
ɽึ)
“Offer Price” the final offer price per Offer Share (exclusive of brokerage
of 1.0%, SFC transaction levy of 0.0027%, AFRC
transaction levy of 0.00015% and Hong Kong Stock
Exchange trading fee of 0.00565%) at which the Offer
Shares are to be subscribed for and issued pursuant to the
Global Offering as described in the section headed
“Structure of the Global Offering” in this prospectus
“Offer Shares” the Hong Kong Offer Shares and the International Offer
Shares
“Overall Coordinators” the Overall Coordinators as named in the section headed
“Directors and Parties Involved in the Global Offering” in
this prospectus
“Overseas Listing Trial Measures” the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( ྤʫΆุ
) promulgated by the
CSRC on February 17, 2023
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC Company Law” the Company Law of the People’s Republic of China ( ʕ
)
“PRC Government” the central government of the PRC and all governmental
subdivisions (including provincial, municipal and other
regional or local government entities) and instrumentalities
thereof or, where the context requires, any of them
“PRC Legal Advisor” Hunan Qiyuan Law Firm, the legal advisor of our Company
as to the PRC laws
“PRC Securities Law” the Securities Law of the PRC ( ʕശɛ͏΍ձ਷ᗇՎ
), as amended, supplemented or otherwise modified
from time to time
“Price Determination Agreement” the agreement to be entered into between our Company and
the Sponsor-Overall Coordinators (for themselves and on
behalf of the Underwriters) on the Price Determination Date
to fix and record the Offer Price
DEFINITIONS
–2 2–


--- page 32 ---
“Price Determination Date” the date, expected to be on or before Monday, May 4, 2026
(Hong Kong time), on which the Offer Price is determined
and, in any event, no later than 12:00 noon on Monday, May
4, 2026
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of our Board
“Renminbi” or “RMB” Renminbi, the lawful currency of the PRC
“Reporting Accountants” Ernst &Y oung, the reporting accountants of our Company
“SAFE” the State Administration of Foreign Exchange of the PRC
(ʕശɛ͏΍ձ਷̮ි၍ଣ҅)
“SAMR” the State Administration for Market Regulation (̹ఙ္
ຖ၍ଣᐼ҅)
“Securities and Futures
Commission” or “SFC”
the Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, including both A Shares
and H Shares
“Shareholder(s)” holder(s) of our Share(s)
“Shenzhen-Hong Kong Stock
Connect”
a securities trading and clearing links program developed by
the Hong Kong Stock Exchange, Shenzhen Stock Exchange,
HKSCC and China Securities Depository and Clearing
Corporation Limited for mutual market access between
Hong Kong and Shenzhen
“Sponsor-Overall Coordinators” the Sponsor-Overall Coordinators as named in the section
headed “Directors and Parties Involved in the Global
Offering” in this prospectus
“sq.m.” square meters
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules
“substantial shareholder(s)” has the meaning ascribed thereto under the Listing Rules
DEFINITIONS
–2 3–


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“Takeovers Code” the Code on Takeovers and Mergers and Share Buy-backs
published by the SFC (as amended, supplemented or
otherwise modified from time to time)
“TCM” Traditional Chinese Medicine
“Track Record Period” the years ended December 31, 2023, 2024 and 2025
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“United States” or “U.S.” the United States of America, its territories, its possessions
and all areas subject to its jurisdiction
“U.S. dollars”, “US$” or “USD” United States dollars, the lawful currency of the United
States
“U.S. Securities Act” the U.S. Securities Act of 1933, as amended, supplemented
or otherwise modified from time to time, and the rules and
regulations promulgated thereunder
“V A T” value-added tax
“YSB” Y aoShiBang Co., Ltd.
“%” per cent
DEFINITIONS
–2 4–


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“blood glucose” the concentration of glucose in the bloodstream, produced
primarily from the degradation of dietary carbohydrates and
also synthesized in the liver and kidneys through processes
such as glycogenolysis and gluconeogenesis
“CAGR” compound annual growth rate, referring to the year-over-
year growth rate, which is calculated by taking the nth root
of the total percentage growth rate over a specified period of
time. The formula for calculating CAGR is: (Ending
V alue/Beginning V alue)^(1/number of years)-1
“cardiovascular disease” any disease involving the heart or blood vessels.
Cardiovascular disease constitute a class of diseases that
includes: coronary artery diseases (e.g. angina, heart attack),
heart failure, hypertensive heart disease, rheumatic heart
disease, cardiomyopathy, arrhythmia, congenital heart
disease, valvular heart disease, carditis, aortic aneurysms,
peripheral artery disease, thromboembolic disease, and
venous thrombosis
“chronic obstructive pulmonary
disease”, or “COPD”
a chronic inflammatory lung disease that causes obstructed
airflow from the lungs, symptoms including breathing
difficulty, cough and mucus production
“DC motor” Direct Current Motor, an electromechanical device that
converts direct current electrical energy into rotational
mechanical energy
“diabetes” a group of common endocrine diseases characterized by
sustained high blood sugar levels
“FDA” The United States Food and Drug Administration, a federal
agency of the Department of Health and Human Services
“GMP” Good Manufacturing Practice, guidelines and regulations
issued from time to time pursuant to the PRC Law on the
Administration of Pharmaceuticals (ۜ
) as part of quality assurance which ensures that
pharmaceutical products subject to these guidelines and
regulations are consistently produced and controlled in
conformity to the quality and standards appropriate for their
intended use
“gross merchandise volume”, or
“GMV”
the total value of all orders placed
“hydrocolloid dressings” opaque, translucent, or transparent medical dressing for
superficial open wounds
“hyperuricemia” an abnormally high level of uric acid in the blood.
Hyperuricemia may be the result of increased production of
uric acid, decreased excretion of uric acid, or both increased
production and reduced excretion
GLOSSARY OF TECHNICAL TERMS
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“ISO” International Organization for Standardization
“IVD” vitro diagnostic, refers to medical tests or procedures
performed on samples taken from the human body (such as
blood, urine, tissue, or other bodily fluids) outside of a
living organism, typically in laboratories, healthcare
facilities, or even at home
“KOC(s)” key opinion consumer(s)
“KOL(s)” key opinion leader(s)
“obstructive sleep apnea”, or
“OSA”
the most common sleep-related breathing disorder. It is
characterized by recurrent episodes of complete or partial
obstruction of the upper airway leading to reduced or absent
breathing during sleep
“ODM” original design manufacturing, where a manufacturer
designs and manufactures a product which is specified by
the customer and eventually marketed and sold under the
customer’s brand name or under no specific brand
“OEM” original equipment manufacturing, where a manufacturer
manufactures a product in accordance with the customer’s
design and specifications and is marketed and sold under the
customer’s brand name or under no specific brand
“POCT” point-of-care testing, the analysis of patient specimens near
or at the site of patient care, usually performed by clinical
staff without laboratory training, also encompassing patient
self-monitoring
“polyurethane” a solid polymeric foam based on polyurethane chemistry. As
a specialist synthetic material with highly diverse
applications, polyurethane foams are primarily used for
thermal insulation and as a cushioning material in
mattresses, upholstered furniture or as seating in vehicles
“R&D” research and development
“recombinant collagen” a form of collagen that is produced through recombinant
DNA technology, using genetically modified organisms to
synthesize collagen proteins that mimic natural human
collagen
“Silver Economy” the system of production, distribution and consumption of
goods and services aimed at using the purchasing potential
of older and aging people and satisfying their consumption,
living and health needs
“SKU(s)” stock keeping unit(s), a unique identifier assigned to each
product or material in inventory
GLOSSARY OF TECHNICAL TERMS
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“sleep apnea-hypopnea” a respiratory sleep disorder characterized by repeated
episodes of partial (hypopnea) or complete (apnea) cessation
of airflow during sleep, leading to oxygen desaturation
and/or sleep fragmentation
“sodium hyaluronate” the sodium salt of hyaluronic acid, a glycosaminoglycan
found in various connective tissue of humans
“uric acid” a heterocyclic compound of carbon, nitrogen, oxygen, and
hydrogen. It forms ions and salts known as urates and acid
urates, such as ammonium acid urate. High blood
concentrations of uric acid can lead to gout and are
associated with other medical conditions, including diabetes
and the formation of ammonium acid urate kidney stones
GLOSSARY OF TECHNICAL TERMS
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This prospectus contains certain forward-looking statements relating to our plans, objectives,
beliefs, expectations, predictions and intentions, which are not historical facts and may not
represent our overall performance for the periods of time to which such statements relate. Such
statements reflect the current views of our management with respect to future events, operations,
liquidity and capital resources, some of which may not materialize or may change. These statements
are subject to certain risks, uncertainties and assumptions, including the other risk factors as
described in this prospectus. Y ou are strongly cautioned that reliance on any forward-looking
statements involves known and unknown risks and uncertainties. The risks, uncertainties and other
factors facing our Company which could affect the accuracy of forward-looking statements include,
but are not limited to, the following:
 our future business development, financial condition and results of operations;
 our business strategies and plans to achieve these strategies;
 our ability to identify and satisfy user demands and preferences;
 our ability to maintain good relationships with business partners;
 general economic, political and business conditions in the industries and markets in
which we operate or plan to operate;
 relevant government policies and regulations relating to our industry, business and
corporate structure;
 our ability to maintain the market leading positions;
 the actions and developments of our competitors;
 our ability to effectively contain costs and optimize pricing;
 the ability of third parties to perform in accordance with contractual terms and
specifications;
 our ability to retain senior management and key personnel and recruit qualified staff;
 our business strategies and plans to achieve these strategies, including our service and
geographic expansion plans;
 our ability to defend our intellectual rights and protect confidentiality;
 our dividend policy;
 change or volatility in interest rates, foreign exchange rates, equity prices, trading
volumes, commodity prices and overall market trends; including those pertaining to the
PRC and the industry and markets in which we operate; and
 all other risk and uncertainties described in the section headed “Risk Factors” in this
prospectus.
In some cases, we use the words “aim”, “anticipate”, “believe”, “can”, “continue”, “could”,
“estimate”, “expect”, “going forward”, “intend”, “ought to”, “may”, “might”, “plan”, “potential”,
“predict”, “project”, “seek”, “should”, “will”, “would” and similar expressions to identify
forward-looking statements. In particular, we use these forward-looking statements in the sections
headed “Business” and “Financial Information” in this prospectus in relation to future events, our
future financial, business or other performance and development, the future development of our
industry and the future development of the general economy of our key markets.
FORW ARD-LOOKING STATEMENTS
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The forward-looking statements are based on our current plans and estimates and speak only
as of the date they were made. We undertake no obligation to update or revise any forward-looking
statements in light of new information, future events or otherwise. Forward-looking statements
involve inherent risks and uncertainties and are subject to assumptions, some of which are beyond
our control. We caution you that a number of important factors could cause actual outcomes to
differ, or to differ materially, from those expressed in any forward-looking statements.
Our Directors confirm that the forward-looking statements are made after reasonable care and
due consideration. Nonetheless, due to the risks, uncertainties and assumptions, the forward-looking
events and circumstances discussed in this prospectus might not occur in the way we expect, or at
all.
Accordingly, you should not place undue reliance on any forward-looking statements in this
prospectus. All forward-looking statements contained in this prospectus are qualified by reference
to this cautionary statement.
FORW ARD-LOOKING STATEMENTS
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An investment in our Shares involves significant risks. 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. The following is a description of what we consider
to be our material risks. Any of the following risks could have a material and adverse effect
on our business, financial condition and results of operations. In any such case, the market
price of our Shares could decline, and 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 the section titled “Forward-Looking Statements” of
this prospectus.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Our success is dependent on the continued popularity and market acceptance of our products
and our ability to compete effectively in the home care medical devices industry.
We operate in the home care medical devices industry, which is characterized by evolving
healthcare needs, rapid technological advancement, changing consumer preferences and increasing
regulatory requirements. Our success depends on our ability to accurately anticipate, respond to and
capitalize on these developments by developing, producing and marketing products that meet the
evolving demands of consumers and healthcare providers. During the Track Record Period, we
launched a broad range of new products, many of which are aimed at meeting the growing demand
for intelligent, personalized and home-based medical solutions. In order to maintain and enhance
our market position, we are required to continuously invest in product innovation, production
capacity expansion, marketing and brand promotion to meet consumers’ needs. These efforts
involve substantial market research, technical development, regulatory filings, execution
capabilities and financial resources. However, there is no assurance that such investments will be
successful or that our new products will gain market acceptance.
In addition, our business and the market demand for our products remain subject to changes
in macroeconomic conditions and consumer spending patterns. In times of economic downturn or
uncertainty, consumers may reduce discretionary spending or postpone purchases of medical
products that are not perceived as essential, which could lead to lower order volumes and reduced
sales. If consumer confidence weakens or overall spending power declines due to factors such as
inflation, unemployment, public health events or other macroeconomic pressures, demand for our
products could decline, which may have a material adverse impact on our business, financial
condition and results of operations.
We may face challenges as we expand our product portfolio and explore new business areas.
We continued to expand our product offerings and business scope through R&D, acquisition
of external technologies and assets, and innovation in business models. For example, we launched
new products in areas such as intelligent respiratory support, electric rehabilitation equipment,
wearable diagnostic devices and TCM therapy, and began exploring new service-oriented offerings.
We also expanded the application scenarios of our products to include home-based chronic disease
management, elderly care, and community-level healthcare. However, our entry into new product
categories or business segments may expose us to new and unforeseen risks. These new initiatives
often require substantial capital investment, R&D input, operational coordination, and market
education, and may not achieve expected commercial success. If we are unable to efficiently
allocate our resources or effectively execute these growth initiatives, our investment may not be
recovered, and our financial condition and results of operations may be materially and adversely
affected.
RISK FACTORS
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We rely on third-party e-commerce platforms to sell our products online. If the services or
operations of such platforms are interrupted, or if our cooperation with them terminates,
deteriorates or becomes more costly, our business, financial condition and results of
operations may be materially and adversely affected.
A significant portion of our product sales during the Track Record Period was derived from
online channels, particularly through third-party e-commerce platforms such as Tmall, JD.com,
Douyin, Rednote, Pinduoduo and YSB. These platforms play a critical role in our brand visibility,
customer engagement and product distribution. In 2023, 2024 and 2025, our revenue generated from
online direct sales amounted to RMB775.7 million, RMB1,068.9 million and RMB1,130.5 million,
respectively, accounting for 27.2%, 35.8% and 33.4% of our revenue of the same years. We operate
official flagship stores on several of these platforms and also cooperate with authorized online
distributors who resell our products through their own e-commerce channels. For details, see
“Business — Our Sales Network — Online Sales Channel” in this prospectus.
We are dependent on the continued operation and popularity of these platforms. Any
disruption or slowdown in their services, including system outages, cybersecurity threats,
regulatory investigations, or reputational issues, could result in reduced traffic to our online stores,
lower conversion rates and diminished sales performance. If we fail to adjust to such changes or to
maintain favorable exposure on these platforms, the effectiveness of our online marketing and sales
efforts may be impaired. Moreover, if our cooperation with these platforms deteriorates, becomes
subject to disputes, or is terminated, or if the platforms impose higher service fees, commission
rates or other operational costs and we fail to replicate the same level of customer reach or
commercial terms elsewhere in a timely or cost-effective manner, our profitability could be
adversely impacted.
We face intense competition in both domestic and international home care medical devices
industry.
The global home care medical devices industry is highly competitive and rapidly evolving,
with participants ranging from established domestic manufacturers to large multinational
companies. During the Track Record Period, our performance was supported by our continuous
investment in R&D, brand reputation, product quality and safety, pricing strategy and the strength
and reach of our sales and distribution networks.
However, according to Frost & Sullivan, market competition is particularly intense in
segments such as home rehabilitation aids, home respiratory support products, and home medical
care supplies, which are the primary focus areas of our business. According to Frost & Sullivan, the
home rehabilitation aids industry and home medical care products industry in which we operate are
highly competitive, each with over 300 market participants in China. The China’s market for home
respiratory support products also has nearly 100 market participants. We face potential competition
from new market entrants or existing players introducing low-cost or innovative alternatives, which
may lead to downward pressure on pricing and profit margins. If we are unable to respond
effectively to such competitive pressures, our market share may decline and our business, financial
condition and results of operations could be materially and adversely affected.
If we are unable to effectively expand and manage our sales, marketing and customer training
infrastructure, our business growth and results of operations may be materially and adversely
affected.
A key component of our growth strategy is the continued expansion and optimization of our
sales, marketing and customer training infrastructure. To support our expansion, we need to attract,
train, retain and manage a growing team of skilled sales and marketing professionals with sufficient
product knowledge and market understanding, as well as technical staff capable of educating
end-users on product usage and care. Moreover, if we are unable to recruit and retain a team of
qualified in-house product trainers and audiologists, our ability to deliver satisfactory after-sales
RISK FACTORS
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services and product usage guidance may be impaired. This could lead to reduced customer
satisfaction and retention, damage to our reputation, and ultimately, hinder further adoption of our
products. If we are unable to scale our sales, marketing and customer service capabilities in a timely
and effective manner, we may not be able to fully capitalize on our growth initiatives, enhance our
brand recognition, or maintain our competitive position, which could materially and adversely
affect our business, financial condition and results of operations.
Changes in laws and regulations applicable to our industry and business could affect our
business operations.
We are subject to extensive government regulation in Chinese Mainland, particularly in
relation to the registration, production, distribution, advertising, labeling, and post-market
surveillance of medical devices and healthcare-related products. Compliance with these laws and
regulations requires significant resources, and any failure to comply may subject us to penalties,
suspension of production or sales, mandatory recalls, loss of certifications or other enforcement
actions by regulatory authorities. Additionally, the regulatory framework governing our industry is
evolving, and new or more stringent laws, regulations, administrative interpretations or
enforcement practices may be introduced from time to time. These changes could impose additional
requirements or operational restrictions that may materially and adversely affect our business.
While we closely monitor developments in the applicable regulatory framework and have
implemented compliance protocols across our operations, we cannot guarantee that we or our
partners will be able to adapt to such changes in a timely and cost-effective manner. Delays or
failures of us or any of our key business partners in responding to regulatory changes could result
in operational disruptions, suspension of product sales, or loss of market access. Any of the
foregoing could materially and adversely affect our business, financial condition and results of
operations.
We depend on certain third parties for various services and products in connection with our
business. Any failure on their part to fulfill obligations in contracts could materially and
adversely affect our results of operations.
We rely on third-party suppliers for various products and services. We endeavor to source
goods and services from third-party providers whom we believe are able to meet our quality,
delivery schedule and other requirements. However, the products and services provided by any of
the third-party service providers may not be provided in a timely manner or of satisfactory quality.
If the third-party providers do not perform satisfactorily, substantially reduce the amount and scope
of goods and services provided to us, increase their prices or terminate their business relationship
with us, we may need to replace the third-party providers or take other remedial measures which
could increase our costs of operations.
In particular, we engage third-party logistics providers to transport our products from
warehouses to offline stores, distributors, pharmacies and end-customers across various channels.
Any disruptions or inefficiencies in our logistics arrangements, whether due to our service
providers’ operational failures, financial distress, labor disputes, capacity constraints, or external
factors, could negatively impact our supply chain, delay order fulfillment and result in increased
distribution costs. We are also exposed to risks related to the improper handling or transportation
of our products by third-party logistics providers.
During the Track Record Period, we also engaged certain ODM and OEM providers to
participate in the production of our products to optimize operation efficiency and diversify our
product portfolio. We select our ODM and OEM providers based on stringent criteria. See “Business
— Our Production — Our Manufacturing Bases” in this prospectus for details. However, we cannot
assure that our ODM and OEM providers will have sufficient capacity to meet the increasing
demand for our products. Any failure to do so could result in delayed launch of new products and
product delivery and harm our market reputation and consumer relationship.
RISK FACTORS
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We are subject to the risks associated with our distributors.
In line with industry practice, we rely on distributors to expand our sales network and product
reach in both domestic and overseas markets. During the Track Record Period, our revenue
generated from sales to distributors amounted to RMB1,573.2 million, RMB1,317.1 million and
RMB1,402.8 million, respectively, accounting for 55.1%, 44.2% and 41.4% of our total revenue
during the respective periods. See “Financial Information — Description of Selected Components
of Consolidated Statements of Profit or Loss and Other Comprehensive Income — Revenue —
Breakdown by Distribution Channels” for more details. As such, our business performance depends
in part on the sales and marketing efforts of our distributors and our ability to maintain stable and
long-term relationships with them. If any of our major distributors fails to maintain or increase the
volume of its purchases from us, or if we are unable to secure additional distributors to meet our
expansion needs, our business and results of operations could be materially and adversely affected.
In particular, the effectiveness of our distributors’ operations depends significantly on their
channel staffing capabilities, including their ability to recruit, train, manage and retain sufficient
and qualified sales and operational personnel. Moreover, we cannot guarantee that our distributors
will strictly comply with the terms of their agreements with us, including compliance with pricing
guidelines, marketing policies, and after-sales support standards. Any failure to do so could expose
us to reputational damage, regulatory risks, customer complaints or claims, and additional costs in
replacing distributors or addressing breaches. Additionally, we cannot assure you that our
distributors possess or will continue to possess adequate resources and capabilities to effectively
market and sell our products, maintain sufficient competitiveness, or avoid conflicts with one
another in overlapping market segments. If our distributors fail to actively promote and sell our
products or underperform in their designated territories, our sales volume, brand reputation, and
overall financial performance may suffer.
Furthermore, during the Track Record Period, certain of our distributors engaged sub-
distributors to broaden coverage in geographic areas or online platforms where they lacked direct
access. We typically do not enter into contractual arrangements with such sub-distributors, thereby
limiting our ability to supervise or enforce our sales policies, quality assurance standards, and
pricing strategies across all channels. Any non-compliance, misconduct or breach by these
sub-distributors may not only impair our brand image and customer trust, but may also lead to
decreased demand for our products, which could have a material and adverse impact on our business
and results of operations. In addition, we face risks associated with managing our multichannel
sales network. However, our multiple sales channels might compete with each other and we cannot
guarantee that our measures will be completely effective, which could have a material and adverse
impact on our business, financial condition, results of operations and prospects.
We face the risk of fluctuations in demand for our products due to public health outbreaks,
which could materially affect our results of operations and financial performance.
As a home care medical devices provider, our business is influenced by the dynamics of public
health outbreaks, which can cause substantial fluctuations in the demand for our products. During
the Track Record Period, we have experienced an increase in sales of select types of medical care
products and health monitory products, driven by increased demands caused by the pandemic
outbreak in China and related policies including mask-wearing protocols, as well as strong
promotion of public awareness on personal hygiene and respiratory system protection. In particular,
we have seen strong sales of (i) health protection products, such as masks and gloves; as well as
infection control products, such as cotton swabs, disinfection products and wet wipes; and (ii)
thermometers, blood oxygen monitors and home testing strips for respiratory infections in the first
quarter of 2023.
Public health outbreaks are highly unpredictable in terms of their onset, duration, and severity.
A new outbreak, whether it is a resurgence of an existing disease or the emergence of a novel
pathogen, could once again trigger a sudden and substantial increase in the demand for our products.
RISK FACTORS
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However, if the global situation regarding public health remains stable or improves further, the
demand for our products may continue to decline. There is no certainty that we can accurately
predict or respond effectively to the fluctuations in demand caused by public health outbreaks. Any
significant and prolonged deviation from our expected demand levels could have a material and
adverse impact on our business, financial condition, and results of operations.
We face risks related to supply shortages and interruptions, long lead times, and price
fluctuations for raw materials and components.
We primarily procure raw materials, components and finished products used in the
manufacturing and sale of our medical products and health management products. During the Track
Record Period, each of our main products require distinct raw materials and we purchase raw
materials on an as-needed basis at market prices. Any operational difficulties, financial instability,
or other unforeseen disruptions affecting our suppliers could result in supply shortages, longer lead
times or increased procurement costs, thereby impacting our production efficiency and ability to
fulfill customer orders.
In addition, we are subject to fluctuations in the prices of raw materials and components,
which may be influenced by various factors beyond our control, such as supply and demand
dynamics, inflation, changes in trade policies, geopolitical events and regulatory interventions. For
example, during the Track Record Period, the procurement costs of the DC motors and compressors
we procured experienced fluctuations of less than 7% and less than 6%, respectively. If we are
unable to pass on increased procurement costs to our customers or to effectively control our cost
structure, our gross margins and profitability may be adversely affected.
Expansion and acquisitions of or investments in our businesses, products, technologies,
production capacity or know-how could subject us to risks and uncertainties.
We continually evaluate and pursue strategic opportunities for acquisitions or investments in
businesses, products, technologies, production capacity, or know-how that we believe will enhance
our product development, R&D capabilities, technology, and distribution network. However, there
can be no assurance that we will be able to successfully execute these expansion and acquisition
plans or complete the relevant transactions as anticipated. Our ability to grow through acquisitions
and investments depends on our ability to identify suitable targets, integrate them into our
operations, and secure necessary financing on reasonable terms. During the acquisitions and
investments, we may face uncertainties in identifying suitable targets and determining appropriate
valuation for potential acquisitions, and there can be no assurance that the acquired businesses or
assets will perform as expected. If any acquisition is unsuccessful or does not achieve its intended
objectives, the anticipated financial or strategic benefits of such acquisition may not materialize,
which could adversely affect our business, financial condition and results of operations.
Following any acquisition or strategic investment, we may face difficulties in integrating the
acquired businesses, operations, technologies, brands, personnel and corporate cultures with our
existing business. Such integration process may be time-consuming and may require significant
management attention and resources. We may also be unable to retain key personnel or maintain
relationships with customers, suppliers or other business partners of the acquired businesses.
Furthermore, we may not be able to successfully realize the anticipated synergies, strategic benefits,
cost savings or operational efficiencies expected from such transactions within the expected
timeframe, or at all. Any failure to effectively integrate acquired businesses or realize expected
synergies may adversely affect our financial performance and operational efficiency. In addition,
acquisitions may dilute our brand positioning or result in inconsistencies in product quality or
service standards if the acquired businesses are not effectively integrated into our existing
management and quality control systems.
RISK FACTORS
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In addition, acquisitions or investments may involve significant valuation risks. We may be
required to recognize goodwill and other intangible assets in connection with such transactions. If
the acquired businesses do not perform as expected, or if there are changes in market conditions,
business prospects or regulatory environment, we may be required to record impairment losses on
goodwill or other acquired intangible assets. Any such impairment could have a material and
adverse impact on our financial condition and results of operations.
Furthermore, we may uncover deficiencies in internal controls, data integrity, product quality,
regulatory compliance, or other liabilities in acquired businesses that were not identified prior to the
acquisition. As a result, we may face penalties, lawsuits, or other liabilities related to these
deficiencies. Any difficulties in the integration of acquired businesses or products, or unexpected
legal and regulatory issues, could materially and adversely impact our business, financial condition,
and operational results.
We rely on our manufacturing and storage facilities, and any significant disruption to our
operations may materially and adversely affect our business and results of operations.
Our business operations depend on the continued operation of our production and storage
facilities located in Changsha, Y ueyang, Nantong and Qidong. These facilities house key
manufacturing processes for a wide range of our core product categories. Any significant disruption
at these sites, whether due to natural disasters, fire, flooding, power or water supply interruptions,
equipment failures, pandemic-related lockdowns, or other unforeseen catastrophic events, could
materially interrupt our ability to produce and deliver products on a timely basis. Our production
lines and equipment are tailored for specific products and processes, and in some cases may be
difficult or time-consuming to replace or relocate. Any major incident affecting our manufacturing
facilities may also damage on-site inventory, delay order fulfillment, and harm our brand reputation,
all of which may have a material adverse impact on our financial performance. Any delay or failure
in maintaining stable operation of our manufacturing network may limit our ability to meet market
demand and could materially and adversely affect our business, results of operations and prospects.
We are subject to environmental, hazardous substance handling, chemical manufacturing,
health and safety laws and regulations, and production standards, and any inability to comply
with such requirements may subject us to liabilities.
Our processing, and production operations are subject to laws, regulations, and administrative
determinations particularly those related to environmental protection, hazardous substance
handling, chemical manufacturing, health and safety, and stringent production standards in the
countries and regions where we operate. In response to the above and awareness of environmental,
social and governance (the “ ESG”) matters, we will integrate risk factors pertaining to
sustainability into our risk matrix to mitigate associated impacts and develop best practices. We
cannot assure that we can effectively implement the ESG governance protocols. Meanwhile, to
comply with extensive environmental laws and regulations in Chinese Mainland, including those
related to air and water quality, sewage management, and public health and safety, we shall obtain
approval for environmental impact assessment reports and environmental acceptance of our
facilities under construction.
We have incurred, and expect to continue incurring, material expenditures to comply with
these laws and regulations. Compliance requirements impose substantial costs and burdens,
potentially leading to delays in obtaining, failure to obtain or renew, or cancelation of government
permits and approvals, all of which could adversely impact our operations. Non-compliance may
result in significant penalties or fines, license revocations, termination of government contracts, or
suspension of operations. During the Track Record Period, we have not received any fines or
penalties for non-compliance with PRC environmental laws, nor have been subject to any
substantial administrative penalties due to breaches of environmental regulations in Chinese
Mainland but there is no assurance that we will not breach the laws and regulations for
environment-related issues in the future.
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Any failure to protect our intellectual property rights could undermine our competitive
position and adversely affect our business prospects. Litigation to protect our intellectual
property rights may be costly and ineffective.
Our success depends in part on our ability to protect our intellectual property rights. We seek
to protect our intellectual property through a combination of patents, trademarks, copyright, and
trade secret laws and contractual arrangements, such as non-disclosure agreements, confidentiality
clauses, and intellectual property assignment provisions. As of the Latest Practicable Date, we had
701 patents, 799 registered trademarks, 127 software copyrights, and 146 patent applications.
Please see “Business — Intellectual Properties” in this prospectus for more details.
However, there is no assurance that such protections will be sufficient to prevent
infringement, misappropriation, or unauthorized use by third parties. We may initiate legal
proceedings to defend our intellectual property rights against any infringement by third parties,
which may be both costly and time-consuming, causing diversion of our management’s attention.
We may also be subject to disputes, claims or litigation involving our intellectual property rights
or third-party intellectual property rights and there may be claims that we infringe third-party
intellectual property rights. Any of these could disrupt our business and divert our management’s
attention from our operations.
Whilst we generally enter into non-disclosure agreements with our key employees and
partners, we cannot guarantee whether they will breach these agreements and leak our know-how,
business secrets or any other commercially sensitive information to our competitors, which will
have a material adverse effect on our business, financial condition and results of operations.
Our future success depends on our ability to retain key management and R&D personnel and
our ability to attract, train and retain talented personnel.
Our success remains dependent on the continued services of our key management and R&D
personnel, as they are in charge of the overall planning, execution of our business and operations
and research and development of products. If any of our Directors, any members of senior
management and/or any key members of our R&D department were to terminate their services or
employment with us, we may not be able to find suitable replacements in a timely manner, at an
acceptable cost or at all.
In addition, as a result of the highly specialized, technical nature of our business, we must
attract, train and retain a sizable workforce comprising highly skilled employees and other key
personnel. If one or more of our highly skilled employees or key personnel were unable or unwilling
to continue their services with us, we might not be able to replace them easily, in a timely manner,
or at all. As of December 31, 2025, we employed 361 R&D personnel. However, the market for
experienced and highly skilled personnel in the home care medical devices industry is highly
competitive. We may have to pay higher salaries and wages and provide greater benefits in order
to attract and retain highly skilled employees or other key personnel that we will need to achieve
our strategic objectives. Our failure to attract, train or retain highly-skilled employees and other key
personnel in numbers that are sufficient to satisfy our needs would materially and adversely affect
our business and the results of operations.
We may not be able to keep up with rapid technological changes and evolving industry
standards and derive the desired benefits from our research and development efforts,
including collaborations with third parties, which may negatively affect our competitiveness
and profitability.
We place significant emphasis on the research, design and development of our products and
respond to evolving healthcare demands and consumer preferences. During the Track Record
Period, our R&D expenditure amounted to RMB114.3 million, RMB106.7 million and RMB98.7
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million in 2023, 2024 and 2025, respectively. To maintain and expand our competitive advantage
in technology, we may devote additional resources to R&D in the future. In addition to our in-house
R&D capabilities, we also engage in joint R&D collaboration with third parties to develop new
technologies and products.
However, the process of designing and developing new medical products is complex, costly
and time-consuming. It requires close coordination among cross-functional teams and may involve
extensive testing, user feedback, compliance assessments and registration with regulatory
authorities. Even if we successfully launch new products or upgrade our existing products, there is
no assurance that they will be accepted by customers or achieve anticipated sales targets and
profitability. Additionally, our existing or potential competitors may develop products that are
similar or superior to ours or offer more competitive pricing that may cause our loss of customers.
If we fail to appropriately respond to these challenges, our significant R&D expenditures may not
yield corresponding benefits, which may materially and adversely affect our business, prospects,
financial condition, and results of operations.
Any litigation, legal and contractual disputes, claims or administrative proceedings against us
could be costly and time-consuming to defend or settle, and could result in negative publicity.
We may from time to time become a party to various litigation, legal disputes, claims,
administrative proceedings or other administrative measures arising in the ordinary course of our
business. Any litigation, legal disputes, claims, administrative proceedings or other administrative
measures may divert our management’s attention and consume their time and our other resources.
We cannot assure you that the outcome of such legal proceedings will not adversely affect our
business, financial condition and results of operations.
Furthermore, any litigation, legal disputes, claims, administrative proceedings or other
administrative measures which are initially not of material importance may escalate and become
important to us, due to a variety of factors. Negative publicity arising from litigation, legal disputes,
claims, administrative proceedings or other administrative measures may damage our reputation and
adversely affect the image of our brands and products. In addition, if any verdict or award is
rendered against us or we are imposed any fines or penalties, we could be required to pay significant
monetary damages, assume other liabilities and even to suspend or terminate the related business
ventures or projects.
Malfunctions or security breaches of our information technology (“IT”) systems, networks
and software could disrupt our operations and negatively impact our business.
Our business operations depend heavily on our IT systems, which support various functions,
including procurement, production planning, inventory and warehouse management, product sales,
financial reporting, and after-sales services. We also rely on integrated IT systems to manage our
operations across multiple online and offline sales channels, including e-commerce platforms,
self-operated stores and third-party distributors. See “Business — Our Information Technology” in
this prospectus for more information. There is no assurance that we will not be subject to any of
those cyber security issues in the future. A major failure, disruption or breach of our IT systems
could lead to business interruption, delays in order processing or fulfillment, financial loss and even
reputational damage, which could adversely impact our results of operations.
We also rely on third-party service providers for certain critical IT functions, including
cloud-based data storage, enterprise resource planning (ERP) software, and maintenance services.
Any failure by these vendors to meet their contractual obligations, or any termination or suspension
of services, could lead to disruptions in our system operations, increased costs, or delays in
migrating to alternative service providers. Moreover, a failure by these vendors to adequately
protect our data could expose us to privacy risks or regulatory penalties.
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Any failure or perceived failure to comply with data privacy and security laws could subject
us to potential liabilities.
We collect and store business data and transaction data generated during or in connection with
our business operations, including our business and transactions with our customers, suppliers and
business partners. See “Business — Data Privacy and Cybersecurity” in this prospectus for further
details. The secure maintenance of such data is critical. We process data in compliance with the
applicable legal requirements to ensure data security. Our operations are subject to a variety of laws
and regulations concerning data privacy and security. For applicable laws and regulations, please
see “Summary of Principal Legal and Regulatory Provisions — Laws and Regulations Relating to
Cybersecurity, Data Security and Personal Information Protection” in Appendix IV to this
prospectus for further details. Failure to comply with the increasing number of data protection laws
in Chinese Mainland, as well as the data security and privacy laws in other jurisdictions where we
intend to operate, could result in significant reputation damage and adversely affect our business
performance.
Failure to comply with applicable advertising laws and regulations when promoting our
products may subject us to potential risks and penalties.
We advertise our brands and products through various online and offline channels, which are
subject to applicable PRC laws and regulations. Under PRC advertising laws and regulations, we
are required to ensure that the contents of our advertisements are in full compliance with applicable
laws and regulations. For example, the advertisements shall not present any false, inaccurate or
misleading information about the products. Moreover, our marketing and promotion of products are
subject to higher standards under PRC laws and regulations, such as the Advertising Law of the
People’s Republic of China (), and the Measures for the Administration
of Internet Advertisements (). If we are found to be in violation of any of
such laws and regulations in the future, we may face administrative penalties, including fines,
revocation of our business licenses and discontinuance of our advertising activities. Moreover,
governmental actions and civil claims may be filed against us for misleading or inaccurate
advertising or other illegal acts violating advertising laws or consumer rights.
Furthermore, if our employees or the third-party distributors or OEM/ODM suppliers we
engage fail to comply with such laws and regulations, or the relevant government authorities, who
have the legal right to exercise discretions in interpreting the laws and regulations, ultimately take
a view that is inconsistent with our understanding in the process of administrative law enforcement,
we may be subject to potential risks and penalties. We may have to spend significant resources in
defending against such actions, and these actions may damage our reputation, result in reduced
revenue, and negatively affect our results of operations.
We are subject to risks associated with engaging KOLs for marketing activities and may be
adversely affected by the evolving regulatory development on marketing activities carried out
by KOLs.
We at times promote our products through collaboration with KOLs for marketing activities
and special events. These KOLs play an important role in enhancing product visibility and brand
recognition through various social media platforms by creating short videos, posts and
livestreaming sessions. We foster strategic collaboration with reputable KOLs in recognition of
their influence in shaping consumer perceptions, preferences and purchasing decisions in the digital
landscape. Any negative publicity involving these KOLs, or a deterioration in the relationships with
these agencies, could adversely affect our brand’s reputation and marketing efforts.
In addition, we cannot assure that our KOLs will remain compliant with applicable laws and
regulations on marketing activities carries out by them. Any misconduct or deterioration of image
by our KOLs, including inappropriate speech, unethical behavior, violation of laws and regulations
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or other negative publicity beyond our control would adversely impact our brand reputation and
product sales. We may also initiate legal proceedings against KOLs for compensation, which could
divert management’s attention and incur additional litigation expenses.
Any failure to make adequate contributions to various employee benefit plans as required by
PRC regulations may subject us to penalty.
Pursuant to the PRC laws and regulations, we are required to participate in the employee
social welfare plan administered by local governments. Such a plan consists of pension insurance,
medical insurance, work-related injury insurance, maternity insurance, unemployment insurance
and housing provident fund. The amount we are required to contribute for each of our employees
under such plan should be calculated based on the employee’s actual salary level of previous year.
During the Track Record Period, we did not make full social insurance and housing provident fund
contributions for certain of our employees, and did not make social insurance and housing provident
fund for a small number of our employees, as required by relevant laws and regulations. As a result,
we may be required to pay the shortfall in social insurance contributions and housing provident fund
contributions within a prescribed time period and even to pay penalties if we fail to do so.
Pursuant to relevant PRC laws and regulations, the under-contribution of social insurance
within a prescribe period may subject us to a daily overdue charge of 0.05% of the delayed payment
amount. If such payment is not made within the stipulated period, the competent authority may
further impose a fine of one to three times of the outstanding amount. Based on the best information
and knowledge of our Directors, the Group has not been subject to any potential fines in relation
to such shortfall during the Track Record Period and up to the Latest Practicable Date.
The Interpretation II of the Supreme People’s Court of Issues Concerning the Application of
Law in the Trial of Labor Dispute Cases (༆
ᙑ(ɚ)) was enacted by the Supreme People’s Court on 31 July 2025 and implemented on 1
September 2025.
During the Track Record Period, we engaged third-party human resource agencies to pay
social insurance primarily as requested by the employees themselves. Such arrangement, although
not uncommon in China, is not in strict compliance with relevant PRC laws and regulations. As
advised by our PRC Legal Advisor, pursuant to applicable PRC laws and regulations, we may be
ordered to pay social insurance premium and housing provident funds for our employees under our
own accounts instead of making payments under third-party accounts. If the third-party human
resources agencies fail to pay the social insurance premium or housing provident funds for and on
behalf of our employees as required under applicable PRC laws and regulations, we may be ordered
to rectify such failure by paying full contributions to social insurance and housing provident funds
for our employees. Any such event would materially and adversely affect our business, financial
condition and results of operations.
We have a certain number of labor dispatch employees and have limited control over them.
Any labor shortages, labor disputes or occurrence of accidents and/or product quality issues
arising in the process of labor dispatching could result in a material and adverse effect on our
business, financial condition and results of operations.
During the Track Record Period, we engaged labor dispatching agencies to support our
business operations and the percentage of dispatched workers did not exceed the maximum
percentage under applicable PRC laws and regulations. In 2023, 2024 and 2025, the number of our
dispatched labor employees were 196, 168 and 192, respectively. While these arrangements may
lower our operation costs, they also reduce our direct control over service quality. Moreover, such
labor dispatching agencies may also experience disruption in their own operation due to labor
strikes or shortages, natural disasters, cost increases or other issues outside of their control. Any
failure of our labor dispatching agencies to perform their responsibilities or to operate in
compliance with all applicable laws and regulations may have a negative impact on crew supply or
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result in disruptions to our operations. In the event of fraud or misconduct by a labor dispatching
agencies, we could also be exposed to material liability and be held responsible for damages, fines,
or penalties which in turn may adversely affect our business, results of operations, financial
condition, and reputation.
We are subject to risks related to our properties.
We lease properties primarily for use as our offices, production facilities, warehouses,
workshops and offline stores. Pursuant to the applicable PRC laws and regulations, property lease
agreements shall be registered with the relevant local housing administrative authorities. As of the
Latest Practicable Date, a portion of our lease agreements for properties in Chinese Mainland had
not been registered with relevant authorities in Chinese Mainland. We cannot assure that we will not
be subject to any penalties arising from the non-registration of lease agreements in the future.
In addition, lessors had not provided title certificates of a portion of properties we leased as
of the Latest Practicable Date. Despite the lack of certain title certificates of our leased properties,
those leased properties are easily replaceable and do not serve as the primary production and
operation sites for us. According to the relevant PRC laws and regulations, our rights as occupant
of these properties may be adversely affected due to the absence of the relevant building ownership
certificates. We cannot assure you that the landlord of these properties have the right to lease the
relevant property to us. As advised by our PRC Legal Advisor, we may not be able to continue to
use such property if the ownership of the property we have leased and/or the validity of such lease
is challenged by third parties. In such a scenario we will have to relocate to other premises, which
could result in additional costs. Should disputes arise due to title encumbrances to such properties
or government action, we may encounter difficulties in continuing to lease such properties and may
be required to relocate in the future.
Our business and prospects depend on the reputation and market perception of our brands.
Any negative publicity concerning our Company, our management team, our brands and
products, or our business partners may materially and adversely affect our brand image,
reputation and results of operations.
Our business performance and future growth are significantly reliant on the reputation,
recognition and consumer trust in our brands, particularly “Cofoe” and other sub-brands such as
“JOYOR HearingCare” and “babaka”. Negative publicity or adverse commentary in the media or
on social media platforms regarding our Company, our products, or the safety, quality or efficacy
of our products, may reduce consumer confidence in our brands and cause reputational harm. We
engage with various stakeholders in our business ecosystem, including distributors, e-commerce
platforms, influencers and healthcare professionals. Any actual or perceived misconduct, false
claims, or negative publicity relating to any of these parties may also have a spillover effect on our
brand image.
In addition, the reputation of participants in the broader healthcare or medical devices industry
is susceptible to public opinion, regulatory scrutiny and consumer sentiment. Negative
developments in the industry, such as product recalls or regulatory violations by other market
players, may have an indirect impact on the perception of our products, even if we are not directly
involved. Our reputation may also be affected by product defects, product liability claims, or
consumer complaints. If any of our products are found to be defective, or if we receive a large
number of consumer complaints or negative online reviews, especially on highly visible platforms
such as Tmall, JD.com or Douyin, our brand image could be significantly harmed. In severe cases,
such incidents may lead to regulatory investigations, administrative penalties or enforcement
actions, which may result in fines, mandatory recalls, public warnings, or other corrective measures
that could materially and adversely affect our business, financial condition and results of
operations.
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Our delivery, return and exchange policies may subject us to additional costs and expenses,
which may adversely impact our financial condition and results of operations.
We have adopted delivery, return and exchange policies to enhance customer experience and
support our multi-channel sales strategy. These include policies that do not always pass on the full
shipping costs to end-customers, and customer-friendly return and exchange mechanisms for both
our self-operated online stores and offline retail channels. While these policies improve customer
satisfaction and brand reputation, they also increase our operational costs. Moreover, customers
may take advantage of our lenient return or exchange policies, including for non-defective products,
which could further increase our logistics and handling costs. In addition, applicable laws and
regulations or changes in industry practices may require us to revise our current return, exchange
and warranty policies, or adopt more consumer-friendly terms. These changes may expose us to
higher fulfillment and after-sales costs, which may not be fully offset by additional revenue.
Product quality is essential to our business. Failure to maintain an effective quality control
system could have a material adverse effect on our business, financial condition and results of
operations. Any product liability claim, product recall or other quality-related risks could
materially and adversely affect our reputation, business, financial condition and results of
operations.
Our reputation, customer trust and long-term success depend heavily on the consistent quality,
safety and performance of our products. Any compromise in product quality may lead to product
returns, recalls, customer complaints and regulatory scrutiny. Such incidents could materially
damage our brand image, erode consumer confidence, and adversely impact our market position and
financial performance. We have implemented a comprehensive quality management system, which
includes R&D quality management, material quality management, process quality management, and
post-marketing quality management. See “Business — Quality Control” in this prospectus for more
details. However, despite these measures, there is no assurance that all product quality issues can
be detected or prevented.
In addition, as a medical product manufacturer, we are exposed to product liability and recall
risks arising from potential defects in product design or manufacturing, improper handling or
transportation, or failure to meet applicable safety standards. Although we maintain stringent
quality control systems and have established quality management systems certified under ISO13485
and other international standards, we cannot assure you that all latent defects can be identified and
rectified before products are delivered to customers. We may also face product complaints or
liability claims arising from circumstances beyond our control, including improper usage by
consumers, inadequate maintenance, or misuse by healthcare professionals.
The sizes of the markets for our products may be smaller than estimated and new market
opportunities may not develop as quickly as we expect, or at all, limiting our ability to
successfully sell our products.
Although, we offer a comprehensive product portfolio that spans across various application
scenarios, including household health monitoring, chronic disease management, rehabilitation
assistance, intelligent respiratory care, TCM therapy, and elderly care, our future growth depends
on the expansion of relevant market segments. However, there is no assurance that the total
addressable markets for our product lines will continue to grow. In particular, consumer preferences
may shift, public procurement budgets may tighten, or demand for certain products may decline due
to saturation or substitution by newer technologies. In addition, increased competition or price
pressures, especially in retail and online channels, may force us to lower our average selling prices,
which could erode our profit margins. We also face the risk of losing market share to existing
competitors or new entrants with differentiated technologies, more extensive distribution networks,
stronger brand recognition or more aggressive pricing strategies. If we are unable to maintain or
expand our market share, or if the market size for our key product categories shrinks or becomes
fragmented, our sales volume and revenue growth may decline.
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We may be unable to obtain financing on favorable terms, or at all, to fund our business
operations, existing and future capital expenditure requirements, acquisition and investment
plans and other funding requirements.
We operate in a capital-intensive industry that requires substantial capital and other long-term
expenditures. To fund our continuing business operations, existing and future capital expenditure
requirements, acquisition and investment plans and other funding requirements, we need sufficient
internal sources of liquidity or access to additional financing from external sources. Our ability to
obtain external financing in the future is subject to a variety of uncertainties, including: (i)
obtaining the necessary regulatory approvals to raise financing in the domestic or international
markets; (ii) our future financial condition, operating results and cash flow; (iii) the condition of
the global and domestic financial markets; and (iv) changes in the monetary policy of the PRC
government with respect to bank interest rates and lending practices and conditions.
If adequate funding is not available to us on favorable terms, or at all, it may materially and
adversely affect our ability to fund our operations, or develop or expand our business. We cannot
assure you that we will not experience any unforeseen circumstances that may adversely affect our
working capital in the future. In addition, future capital raised through issue of our Shares or other
securities may result in a substantial dilution of the interests of our Shareholders.
Our insurance coverage may be insufficient to cover the risks or losses related to our business
and operations.
Our business is subject to a variety of operational risks, including but not limited to
production disruptions due to operational errors, power outages, equipment failures and suspension
due to other risks; operational restrictions imposed by environmental or other regulatory
requirements; social, political and labor unrest, environmental or industrial accidents, and
catastrophic incidents such as fires, earthquakes, explosions, floods or other natural disasters. In
addition, as we may further expand our operations in overseas markets in the future, we may be
exposed to risks related to geopolitical tensions, policy changes and intellectual property and
technology protection. These aforementioned risks may result in, including but not limited to,
damage to or destruction of production facilities, personal injury or casualties, environmental
damage, monetary loss, and legal liability.
We have purchased and maintained insurance policies that we believe are in line with the
industry practice and as required by the relevant laws and regulations. However, there is no
assurance that our insurance will be adequate to cover our exposure to the foregoing risks. Any
uninsured business disruptions may result in our incurring substantial costs and the diversion of
resources, which could have an adverse effect on our business and results of operations.
Any misconduct of our Directors, management, employees, distributors, customers, suppliers
or other related third-parties may subject us to potential liability and negative publicity.
Our business operations and reputation are closely linked to the conduct and integrity of our
Directors, senior management, employees, distributors, customers, suppliers and other business
partners. Although we have established compliance policies, internal controls, and business conduct
guidelines to mitigate misconduct risks, we may not be able to detect or prevent all instances of
inappropriate or unlawful behavior by these parties. Misconduct could include, among others,
violations of applicable laws and regulations, breach of contractual obligations, fraud, corruption,
bribery, data or product manipulation, or unethical commercial practices inconsistent with our
corporate values. Any such misconduct, whether actual or alleged, may expose us to regulatory
investigations, administrative penalties, civil or criminal proceedings, contractual disputes or
termination of key business relationships.
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Any failure to execute effective sales and marketing strategies or adjust such strategies
according to market changes may materially and adversely affect our business, financial
condition and results of operations.
Our business success depends significantly on our ability to attract and retain consumers and
institutional customers through effective sales and marketing strategies. These efforts are essential
to increasing product sales, improving brand visibility, and maintaining market competitiveness.
During the Track Record Period, we invested substantial resources in enhancing our marketing
strategy and leveraged interest-based e-commerce platforms and short video content to increase
consumer engagement and product awareness. However, there is no assurance that our sales and
marketing strategies will always be successful or cost-effective. If we are unable to execute these
strategies efficiently, or if our promotional efforts fail to convert into actual sales or improve brand
loyalty, our profitability and financial performance could be adversely affected.
In addition, our business plans are based on the assumptions of future events which are bound
to entail certain risks and are inherently subject to uncertainties that are beyond our control. The
successful implementation of our business plans may be affected by a number of factors including
the availability of sufficient funds, governmental policies, and regulations relevant to our industry,
the economic conditions, our ability to maintain our existing competitive advantages, our
relationships with our customers, the threat of substitutes and new market entrants. As such, our
financial condition, operating results, growth and prospects may be materially and adversely
affected if our business plans fall short of our expectations.
We may not be able to implement global expansions as planned.
We intend to maintain our competitive advantages by, among others, expanding our global
footprint through promoting overseas sales channels and distribution network establishment. Such
expansion plans and any other future expansion plans would require significant capital investments
in recruitment of additional sales and marketing personnel and engagement of sales and marketing
activities. For details, see “Future Plans and Use of Proceeds”. We expect that we will incur
substantial additional costs. In addition, the success of our global expansion plans depends on a few
factors beyond our control, such as local laws and regulations and customer demand for our
products in overseas local markets. As the success of our business expansion plans depends on
various factors, many of which are beyond our control, there can be no assurance that we will be
successful in implementing our strategies. Even if our strategies are implemented successfully, there
can be no assurance that our strategies will lead to successful achievement of our business
objectives.
Moreover, we may seek to expand our business through potential strategic investments and
acquisition opportunities globally in the future. The success of these endeavors depends on the
availability of, and competition for, suitable targets and opportunities, as well as financial
resources, including available cash and financing capacity. Moreover, future cooperations, strategic
investments, mergers and acquisitions and partnerships may expose us to potential risks, including
the diversion of management attention and resources from our existing business and the inability
to generate sufficient income to offset the costs and expenses.
These endeavors may also result in an increased leverage, sharing of potential legal liabilities
in respect of the target businesses, and increased impairment charges related to goodwill and other
intangible assets. As a result, we cannot assure you that we will be able to achieve the strategic
purpose of any investment, partnership or cooperation, the desired level of control in management
decisions of the partnership or our anticipated investment return from such business expansion. If
we are unable to implement our expansion plans effectively, our business, financial condition and
results of operations may be materially and adversely affected.
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Our business is subject to seasonality fluctuations.
Our results of operations are subject to seasonal fluctuations in consumer demand, which may
be influenced by holiday-related spending patterns, promotional events, and health-related
consumption cycles. We typically experience higher sales during major holidays and shopping
seasons, such as the “618” Mid-Y ear Shopping Festival and the “Double 11” Shopping Festival.
These periods often see a rise in consumer traffic in both our online and offline channels, which may
lead to increased product sales. We expect this seasonality trend to continue in the foreseeable
future, which may cause fluctuations in our quarterly revenue and profitability. Any significant
deviation from expected seasonal sales patterns could materially and adversely affect our business,
financial condition and results of operations.
We are exposed to certain risks inherent in and associated with our export business such as
changes in tariff and trade policies.
During the Track Record Period, we sold some of our products to our overseas customers.
Revenue derived from non-Chinese Mainland markets as a percentage of our total revenue
amounted to 1.7%, 2.0%, and 8.8% in 2023, 2024 and 2025, respectively. We face certain risks
inherent in our export operations and risks associated with our efforts to expand and maintain our
export business, including: (i) the risk of barriers, such as anti-dumping and other tariffs or other
restrictions being imposed on foreign trade; (ii) risks relating to any unfavorable relationship that
may exist between Chinese Mainland and the foreign country to which we sell our products; (iii)
inherent difficulties and delays in contract enforcement and collection of receivables through the
use of foreign legal systems; (iv) volatility in currency exchange rates; (v) the risk that foreign
countries may impose withholding taxes (or otherwise tax our foreign income or place restrictions
on repatriation of profit); (vi) market entry barriers such as strong local competitors that may have
a proximity advantage and local connections, which may prevent us from competing effectively in
new markets; (vii) social unrest, acts of terrorism, war or other armed conflict; (viii) changes in the
political, regulatory, or economic conditions in a foreign country or region; and (ix) the burden of
complying with foreign laws and regulations.
If we are unable to manage any of the risks described above effectively, our ability to maintain
or expand our export business would be impaired, which may in turn materially and adversely affect
our business, financial condition, results of operations and prospects.
Our business may be adversely affected by wars, geopolitical tensions and armed conflicts.
Wars, geopolitical tensions and armed conflicts in various regions, including recent military
conflicts, and wars around the world, including the war involving Iran, have created uncertainties
in the global economic and operating environment. Such developments may lead to fluctuations in
energy prices, disruptions in logistics and transportation, volatility in foreign exchange rates and
changes in regulatory or trade policies, which could affect global business activities and market
conditions. In addition, such uncertainties may affect the stability of global supply chains and the
overall business sentiment, which could in turn influence market conditions and cross-border
commercial activities.
These uncertainties may, directly or indirectly, affect our business operations. Although we
have not experienced any material adverse impact from such events during the Track Record Period,
there can be no assurance that our business, financial condition and results of operations will not
be adversely affected in the future.
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We may encounter interruptions by force majeure events, natural disasters, severe weather
conditions and other incidents that may affect our production and operations.
Our production and operations depend on a continuous and sufficient supply of utilities, such
as electricity, water and gas. If there are any shortages of electricity, water, gas or other utilities in
regions where our production facilities are located, the local government may require our
production facilities to be shut down. Any disruption in the supply of electricity, water or gas at our
production facilities would affect our production, and could cause deterioration or loss of our
products. This could adversely affect our ability to fulfill our orders and consequently may have an
adverse effect on our business and operations. In addition, explosions, fires, earthquakes, natural
disasters or extreme weather, including droughts, floods, excessive cold or heat, typhoons or other
storms could cause power outages, gas or water shortages, damage our production facilities and
transportation channels, any of which could significantly affect our operations. We cannot assure
you that any backup systems will be adequate to protect us from the effects of such events. Any
failure to take adequate measures to mitigate the potential impact of unforeseeable incidents, or to
effectively respond to such incidents if they occur, could adversely affect our business, financial
condition and results of operations.
Our Controlling Shareholders may have substantial influence over the Company and their
interests may not be aligned with the interests of other Shareholders.
Our Controlling Shareholders have substantial influence over our business, including matters
relating to our management, policies and decisions regarding mergers, expansion plans,
consolidations and sales of all or substantially all of our assets, election of Directors and other
significant corporate actions. Immediately following the completion of the Global Offering, our
Controlling Shareholders will be entitled to exercise approximately 47.82% of the voting rights of
the Company. This concentration of ownership may discourage, delay or prevent a change in control
of the Company, which could deprive other Shareholders of an opportunity to receive a premium
for their Shares as part of a sale of the Company and might reduce the price of the H Shares. These
events may occur even if they are opposed by our other Shareholders. In addition, the interests of
our Controlling Shareholders may differ from the interests of our other Shareholders. It is possible
that our Controlling Shareholders may exercise its substantial influence over us and cause us to
enter into transactions or take, or fail to take, actions or make decisions that conflict with the best
interests of our other Shareholders.
The volatile nature of the global or regional economic, political, trade or other factors may
adversely affect our business.
Our business operation is influenced by global and regional macroeconomic and political
conditions, fluctuations in the levels of international and regional trade, changes in maritime and
other transportation patterns, and other factors. Any severe or prolonged downturn globally or
regionally could materially and adversely affect our business, financial condition and results of
operations. Political and trade disputes and trade protectionism may result in imposition of trade
barriers or restrictions, sanctions, boycotts, or embargoes, new or increased tariffs and other factors
such as acts of war, hostilities, epidemics or terrorism, could also adversely affect the international
or regional trade volume and customers demand, which could also make our business and financial
performance suffer.
Additionally, the uncertainty in global economic conditions varies by geographic segment and
can result in substantial volatility in global credit markets. Credit volatility could impact our
working capital for manufacturing, or result in cost changes or interruptions to suppliers whose
components we rely upon if we are unable to access the needed credit for our operations. These
conditions affect our business by reducing prices that our customers may be able or willing to pay
for our products or by reducing the demand for our products, which could in turn negatively impact
our sales and result in a material adverse effect on our business, cash flow, results of operations and
financial condition.
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Changes in the international trade environment, ongoing trade conflicts, geopolitical tension
and instability in the regions where we operate or have significant interests may affect our
business and financial condition.
There have been changes in international trade policies and rising political tensions, which
could reduce levels of trade, investments, technological exchanges and other economic activities
between China and other countries, which would have an adverse effect on global economic
conditions, the stability of global financial markets, and international trade policies. Laws and
regulations related to international trade keep evolving, including those related to import and
export, outbound investment, transfer pricing, etc. These volatile changes could adversely affect the
financial and economic conditions in the jurisdictions in which we and our business partners
operate, which in turn adversely affect our financial condition and results of operations.
Recent changes in U.S. trade policies have created significant uncertainty for global trade. In
April 2025, the U.S. government adopted a two-tier tariff structure: a universal 10% baseline tariff
on all imports to the U.S. and individualized reciprocal higher tariffs on imports from certain
countries and regions, including China, the European Union, and Japan. On April 10, 2025, the U.S.
government suspended reciprocal tariffs for all countries and regions, except China, for a period of
90 days. In April 2025, China and the European Union also announced higher tariff rates on U.S.
goods entering their borders. As our business model involves cross-border trade, these tariff
measures may increase import costs for goods we sell, which could adversely affect our
competitiveness, business, financial condition, or operating results. On May 12, 2025, China and
the U.S. agreed to a temporary de-escalation of bilateral tariffs. The U.S. reduced additional tariffs
on the majority of Chinese exports from 145% to 30%, while China lowered its additional tariffs
on U.S. goods from 125% to 10%. Other planned tariff increases have been temporarily suspended.
On June 10 and 11, 2025, the U.S. government reaffirmed that tariffs on Chinese imports would
remain at a combined rate of 55%, comprising three existing components: a 25% Section 301 tariff
imposed since 2018, a 20% tariff introduced in February 2025, and a 10% reciprocal tariff imposed
on April 2, 2025. As of the Latest Practicable Date, the U.S. and China reached a tentative
agreement to temporarily defer the implementation of 24% reciprocal tariffs for a period of one
year, which is expected to end on November 10, 2026 Although certain low-value shipments may
qualify for the de minimis exemption under U.S. customs regulations, the exemption threshold does
not cover most of our shipments, and thus has limited mitigating effect. If U.S. authorities tighten
eligibility or enforcement, our end customers may still face higher costs.
Any unfavorable government policies on international trade or any restriction on Chinese
companies may affect our ongoing business relationship with international enterprises, consumer
demand for our products, impact our competitive position, or prevent us from being able to conduct
business in certain countries. In addition, our results of operations could be adversely affected if any
such tensions or unfavorable government trade policies harm the Chinese economy or the global
economy in general.
RISKS RELATING TO FINANCIAL POSITION
Our historical financial and operating results during the Track Record Period are not
indicative of future performance, and we may not be able to achieve and sustain the historical
level of revenue and profitability.
Y ou should not rely on our historical results to predict our future financial performance. Our
revenue amounted to RMB2,853.7 million, RMB2,982.9 million and RMB3,387.5 million in 2023,
2024 and 2025, respectively. Our gross profit amounted to RMB1,172.6 million, RMB1,508.7
million and RMB1,751.6 million in 2023, 2024 and 2025, respectively. However, our historical
revenue and gross profit may not be indicative of our future growth. There is inherent risk in using
such historical financial information of us to project or estimate our financial performance in the
future, as they only reflect our past performance. There is no assurance that we will be able to
maintain our historical growth in the future.
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Furthermore, as the market and our business evolve, we may need to adjust our business
strategies, expand into new product categories, invest in technological upgrades, and enhance our
marketing and channel capabilities. These changes may not achieve the expected results and may
have a material and adverse impact on our results of operations and financial condition. Our
expenses may grow faster than our revenue, and our expenses may increase or may be greater than
we expected. We cannot assure you that we will be able to achieve similar results or grow at the
same speed as we did in the past or at all. We may not be able to successfully address these or other
challenges, which could adversely impact our business, results of operations and financial
condition.
Any failure to manage our inventory effectively would increase operating costs and materially
and adversely affect our results of operations, financial condition and cash flows.
We are required to forecast demand for our products and plan our procurement and production
accordingly. Accurate demand forecasting is essential for maintaining appropriate inventory levels
of raw materials, components and finished goods, optimizing production efficiency, reducing
storage costs and ensuring timely product delivery. We determine our inventory levels based on our
experience, customer orders, assessment of demand, and raw material price fluctuations. However,
such assessments are inherently uncertain, and demand for our products may change significantly
between the order date and the projected delivery date. Moreover, our ability to manage inventory
levels may be further challenged by the diversity of our product offerings. These different product
lines may be subject to different demand cycles and supply lead times, which increases the
complexity of inventory planning. Our inventory turnover days were 127 days, 161 days and 149
days in 2023, 2024 and 2025, respectively.
There is no assurance that we will always maintain optimal inventory levels. If we
overestimate demand, we may experience increased storage and holding costs, inventory write-
downs, and potential product obsolescence, particularly in connection with products involving shelf
life, regulatory certification updates or rapid iteration. Conversely, underestimating demand may
result in inventory shortages, production capacity constraints, or delivery delays. Any of these
challenges could materially and adversely affect our business, results of operations, and financial
condition.
The preferential tax treatment and government grants that we currently enjoy may be altered
or terminated, which could have a material adverse effect on our business, financial condition
and results of operations.
During the Track Record Period, the Company and certain of our subsidiaries had been subject
to a preferential tax rate of 15% given their accreditations as “High and New Technology
Enterprise” during the Track Record Period. In addition, certain of our subsidiaries were qualified
as small-scaled minimal profit enterprises and had been subject to a preferential tax rate of 20%
during the Track Record Period. For more details, see “Financial Information — Description of
Selected Components of Consolidated Statements of Profit or Loss and Other Comprehensive
Income — Income Tax Expense” in this prospectus. There is no assurance that Chinese Mainland’s
policies on preferential tax treatments will remain unchanged or that we will continue to qualify for
such preferential rates in the future. If these tax benefits are canceled or discontinued, we may be
subject to the standard enterprise income tax rate of 25%, which could materially and adversely
impact our financial condition and results of operations.
Additionally, we enjoy a number of government grants in China. For 2023, 2024 and 2025, the
total government grants we received amounted to RMB17.0 million, RMB14.8 million, and
RMB30.1 million, respectively. Not all of the government grants received during the Track Record
Period were recurring in nature. There can be no assurance that the government grants that we enjoy
will not be altered or terminated. Any alteration or termination of our current preferential tax
treatments or government grants could have a material adverse effect on our business, financial
condition, results of operations and prospects.
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We may be exposed to credit risks arising from our trade and bills receivables. Failure to
collect our trade receivables in a timely manner or at all could have a material and adverse
impact on our business, financial condition, liquidity and prospects.
Our trade and notes receivables primarily include amounts due from our customers for
products in the ordinary course of business. As of December 31, 2023, 2024 and 2025, our trade and
bills receivables amounted to RMB486.0 million, RMB401.8 million and RMB452.0 million,
respectively. The credit period granted to our customers ranges from 30 to 90 days after receipt of
V A T invoices. See “Financial Information — Discussion of Selected Items from Consolidated
Statements of Financial Position — Trade and Bills Receivables” in this prospectus.
Our trade receivables turnover days were 71 days, 55 days and 46 days in 2023, 2024 and
2025, respectively, which were in line with our credit policy. The decrease of our trade receivables
turnover days during the Track Record Periods was mainly due to our enhanced efforts in collection
controls. We cannot assure you that we will be able to collect all or any of our trade receivables on
time, or at all. The occurrence of such event would materially and adversely affect our financial
condition and results of operations.
We recognized a certain scale of goodwill and other intangible assets during the Track Record
Period. If we determine our goodwill to be impaired, it would adversely affect our financial
condition and results of operations.
Our goodwill amounted to RMB242.4 million, RMB364.3 million and RMB368.9 million as
of December 31, 2023, 2024 and 2025, respectively. Goodwill arising on acquisition of businesses
is measured at cost less accumulated impairment losses. Our other intangible assets amounted to
RMB6.9 million, RMB17.6 million and RMB31.4 million as of December 31, 2023, 2024 and 2025.
We generally determine whether goodwill and other intangible assets is impaired on an annual basis.
In evaluating the potential for impairment of goodwill and other intangible assets, our management
makes a number of assumptions, such as the continuity of the acquired businesses, their future
operating performance, business trends, and market and economic conditions. This requires us to
make subjective assumptions, and there are inherent uncertainties relating to this analysis and our
management’s judgment in assessing the recoverability of the goodwill and other intangible assets.
If any of the assumptions does not materialize, or if the performance of the acquired business is not
consistent with such assumptions, we may be required to write-off part or all of our goodwill and
other intangible assets and record an impairment loss. Any significant impairment of goodwill could
substantially affect our reported earnings in the periods when recognized. In addition, impairment
charges would negatively affect our financial ratios which may limit our ability to obtain external
financings.
Share-based payments may lead to shareholding dilution for our existing Shareholders and
adversely affect our financial performance.
We adopted Employee Incentive Scheme for the benefit of our Directors, senior management,
key technicians, and key employees who, in the opinion of the Board, contribute directly to the
overall business performance and sustainable development of our Company. In 2023, 2024 and
2025, we incurred share-based payment expenses of negative RMB1.8 million, RMB16.0 million
and RMB31.7 million, respectively.
To further incentivize our Directors, senior management, key technicians, and key employees,
we may grant additional share-based payments in the future. The issuance of shares related to such
share-based payments may dilute the shareholding percentage of our existing Shareholders.
Additionally, such share-based payments may increase our expenses, which could have a material
and adverse effect on our financial performance.
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We are exposed to foreign exchange risk.
A substantial portion of our revenues and cost of sales is denominated in Renminbi. However,
as we operate part of our business in the U.S and EU and other international jurisdictions, we have
made and expect to continue to make significant equity and other investments outside of Chinese
Mainland. During the Track Record Period, our revenue from export sales amounted to RMB49.9
million, RMB59.2 million and RMB298.7 million in 2023, 2024 and 2025, respectively, accounting
for 1.7%, 2.0%, and 8.8% of the total revenue. Meanwhile, part of the raw materials required for
our operation were partly sourced from imports, and US dollars, Hong Kong dollars, Singapore
dollars and Japanese Y en, etc., were paid to foreign countries. We are therefore subject to risks
associated with foreign currency exchange fluctuations.
Changes in the value of foreign currencies could increase our Renminbi costs for, or reduce
our Renminbi revenues from, our foreign operations, or affect the prices of our exported products
and the prices of our imported equipment and materials. There is no assurance that future
fluctuations in exchange rates would not have a material adverse impact on our financial condition
and results of operations. If we face significant volatility in these foreign exchange rates and we
cannot procure any specific foreign exchange control measures to mitigate such risks, our results
of operations and financial performance may be adversely affected.
Fluctuations in interest rates may adversely affect our results of operations.
Like many other participants in the home-care medical devices industries, we may rely on
bank borrowings to finance our capital needs for operations and investments. An increase in the
interest rates of our loans may result in a significant increase in our interest expense, adversely
affecting our finance costs, which in turn may affect our business and profitability. If structured
improperly, certain derivative financial instruments may increase our exposure to interest rate
fluctuations.
RISKS RELATING TO CONDUCTING BUSINESS IN COUNTRIES AND REGIONS
WHERE WE OPERATE
Changes in economic, regulatory, political and social conditions could materially and
adversely affect our business and operations.
Our business, financial condition and results of operations may be influenced by the general
political, economic and social conditions in the countries and regions where we operate.
Governments worldwide have implemented, and may continue to introduce, among others, various
policies and measures to encourage the economic growth and guide the allocation of resources. Our
industry in general is affected by macro-economic factors, including international, national,
regional and local economic conditions, trade relationships, employment levels, consumer demand
and discretionary spending. Any changes in these factors, including the frequent changes in US
tariff policies recently may have material and adverse effects on our business, financial condition
and results of operations.
Y ou may experience difficulties in effecting service of legal process and enforcing foreign court
judgments against us and our Directors and senior management.
We are incorporated under the laws of the PRC and majority of our assets are located in
Chinese Mainland. In addition, most of our Directors and officers reside in Chinese Mainland and
their assets are substantially located in Chinese Mainland. As a result, it may be difficult,
complicated and time-consuming for you to effect service of process upon those persons residing
in China. A judgment of a court of another jurisdiction may be reciprocally recognized or enforced
in Chinese Mainland only if the jurisdiction has a treaty with Chinese Mainland or if the jurisdiction
has been otherwise deemed by the courts of Chinese Mainland to satisfy the requirements for
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reciprocal recognition, subject to the satisfaction of other requirements. However, Chinese
Mainland does not have treaties providing for the reciprocal recognition and enforcement of
judgments of courts of certain other jurisdictions.
The legal system for certain geographic markets is developing with uncertainties in
interpretation and enforcement. The legal protections available to you and us may be limited.
Our operations span across various geographic markets, each with its unique legal system.
These legal systems can be broadly categorized into civil law systems, which are primarily based
on written statutes, and common law systems. It is noteworthy that in civil law jurisdictions, prior
court decisions, while used as references, carry limited precedential value, unlike in common law
systems.
We acknowledge the inherent uncertainties within the legal frameworks of some of the
markets we operate. Newly enacted laws and regulations may not comprehensively address all
facets of economic activities in these markets. The interpretation and enforcement of such laws and
regulations are often subject to future implementations, and their applicability to our business
operations remains unsettled. Given that local administrative and court authorities are empowered
to interpret and implement statutory provisions and contractual terms, it can be challenging to
predict the outcomes of administrative and court proceedings, and to ascertain the extent of legal
protection we possess in these markets. It is also worth noting that local courts may exercise
discretion in refusing to enforce foreign or arbitration awards. These uncertainties could potentially
impact our understanding of legal requirements and our capacity to enforce our contractual rights
or claims. Moreover, these regulatory uncertainties may be leveraged through unmerited or
frivolous legal actions, claims concerning third-party conduct, or threats aimed at extracting
payments or benefits from us.
Additionally, many of the legal systems in our operational markets are influenced by their
respective government policies and internal rules. Some of these policies and rules may not be
published promptly or at all, and could have retroactive effects. There are instances where key
regulatory definitions are ambiguous, imprecise, or absent, or where regulatory interpretations
diverge from court interpretations in analogous cases. Consequently, we may inadvertently violate
certain policies or rules, only becoming aware of such violations after the fact. Furthermore,
administrative and court proceedings in some of our markets may be prolonged, leading to
significant costs and diversion of resources and management attention.
We recognize the possibility of new laws and regulations being adopted or interpreted as
applicable to us in our geographic markets and elsewhere, which could impact our businesses and
operations. The industries in which we operate may face increased scrutiny and regulation,
necessitating the allocation of additional legal and other resources to comply with these regulations.
Changes in existing laws or regulations, or the introduction of new laws and regulations in our
markets, could potentially impede the growth of the whole industry and affect our business,
financial condition, and results of operations.
We may be subject to additional regulatory requirements under new laws and regulations on
overseas offerings and listings issued by PRC government authorities.
As the PRC laws and regulations in relation to overseas issuance and listing of shares develop,
we may be required to make filings with or report to CSRC or other PRC regulatory authorities for
the Listing and our future capital raising activities. The relevant laws require that, in relation to the
overseas securities offering and listing activities of domestic enterprises, either in direct or indirect
form, such domestic enterprises, as well as securities companies and securities service institutions
providing relevant securities services, are required to strictly comply with relevant requirements on
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confidentiality and archives management, establish a sound confidentiality and archives system, and
take necessary measures to implement their confidentiality and archives management responsibilities.
Any failure to comply with these rules may materially affect our business, results of operations or
financial conditions.
In addition, we cannot assure you that any new rules or regulations promulgated in the future
will not impose additional requirements or restrictions on us or our financing activities. If it is
determined in the future that additional approval from or filing with the CSRC or other regulatory
authorities or other procedures are required, we may fail to obtain such approval, perform such
filing procedures or meet such other requirements in a timely manner or at all. We may face
sanctions by the CSRC or other PRC regulatory authorities for failure to seek CSRC approval or
other government authorization, or perform filing procedures, for our future financing activities,
and these regulatory authorities may impose fines and penalties on us, limit our operating activities
in the PRC, limit our ability to pay dividends outside the PRC, delay or restrict the repatriation of
the net proceeds from the Global Offering into the PRC or take other actions to restrict our
financing activities, which could have a material adverse effect on our business.
We are a PRC enterprise and we are subject to PRC tax on our global income, and any gains
on the sales of our H Shares. Investors of our H Shares may become subject to PRC taxation
on dividends received from us and gains from the disposition of our H Shares.
We are subject to periodic examinations on fulfillment of our tax obligations under the PRC
tax laws and regulations by PRC tax authorities. Although we believe that in the past, we have acted
in compliance with the requirements under the relevant PRC tax laws and regulations in all material
aspects and established effective internal control measures in relation to accounting regularities, we
cannot assure you that future examinations by PRC tax authorities would not result in fines, other
penalties or action that could adversely affect our business, results of operations, financial condition
and prospects, as well as our reputation.
Individual holders of H Shares who are not residents of Chinese mainland and whose names
appear on the register of members of H Shares (“non-Chinese mainland resident individual
holders”) are subject to PRC individual income tax on dividends received from us. Pursuant to the
Circular on Questions Concerning the Collection of Individual Income Tax Following the Repeal
of Guo Shui Fa [1993] No. 045 (਷೼೯[1993] 045ٙ
) (Guo Shui Han [2011] No. 348) ( ਷೼Ռ[2011] 348 ໮), dated June 28, 2011, issued by the
SA T, dividends paid to non-Chinese mainland resident individual holder of H Shares are generally
subject to individual income tax of the PRC at the withholding tax rate of 10.0%, dependent on
whether there is any applicable tax treaty between Chinese mainland and the jurisdiction in which
the non-Chinese mainland resident individual holder of H Shares resides as well as the tax
arrangement between Chinese mainland and Hong Kong. Non-Chinese mainland resident individual
holders who reside in jurisdictions that have not entered into tax treaties with Chinese mainland are
subject to a 20.0% withholding tax on dividends received from us. For additional information, see
“Appendix VI — Statutory and General Information” in this prospectus. In addition, under the
Individual Income Tax Law of the PRC () and its implementation
regulations, non-Chinese mainland resident individual holders of H Shares are subject to individual
income tax at a rate of 20.0% on gains realized upon the sale or other disposition of H Shares.
However, pursuant to the Circular Declaring that Individual Income Tax Continues to be Exempted
over Income of Individuals from Transfer of Shares (ה
) issued by the MOF and the SA T on March 30, 1998, gains of individuals derived
from the transfer of listed shares in enterprises may be exempt from individual income tax. As of
the Latest Practicable Date, no aforesaid provisions have expressly provided that whether individual
income tax shall be levied from non-Chinese mainland resident individual holders on the transfer
of shares in Chinese mainland resident enterprises listed on overseas stock exchanges, and to our
knowledge, in practice the Chinese mainland tax authorities had not collected individual income tax
on such gains. If such tax is collected in the future, the value of such individual holders’ investments
in H Shares may be materially and adversely affected.
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Under the Enterprise Income Tax Law of the PRC () (the
“EIT Law ”) and its implementation regulations, a non-Chinese mainland resident enterprise is
generally subject to enterprise income tax at a rate of 10.0% with respect to its Chinese
mainland-sourced income, including dividends received from a Chinese mainland company and
gains derived from the disposal of equity interests in a Chinese mainland company, subject to
reductions under any special arrangement or applicable treaty between Chinese mainland and the
jurisdiction in which the non-Chinese mainland resident enterprise resides. See “Appendix VI —
Statutory and General Information” in this prospectus. The interpretation and implementation of the
EIT Law and its implementation regulations by Chinese mainland tax authorities, including whether
and how enterprise income tax on gains derived upon the sale or other disposal of H Shares will be
collected from non-Chinese mainland resident enterprise holders of H Shares, are to be determined
in accordance with the relevant laws and regulations in effect at the time. If such tax is collected
in the future, the value of such non-Chinese mainland resident enterprise holders’ investments in H
Shares may be materially and adversely affected.
We are subject to certain regulatory requirements over foreign currency conversion and
remittance.
We receive a majority of payments from our operations in the PRC in RMB and may need to
convert certain Renminbi into other currencies for payment of dividends, if any, to holders of our
Shares, and to fund our business activities outside of the PRC, among other things. The
convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out
of the PRC are subject to related regulatory requirements. Shortages in the availability of foreign
currency may restrict our ability to remit sufficient foreign currency to pay dividends or other
payments, or otherwise fulfill our foreign currency denominated obligations.
Under current foreign exchange regulations of the PRC, payment of current account items,
including profit distributions and trade and service-related foreign exchange transactions, can be
made in foreign currencies without prior approval from the SAFE or its local branches, through
licensed banks for foreign exchange business, by complying with certain procedural requirements.
If we cannot fulfill the regulatory requirements over foreign currency conversion 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. However, prior registration and other
procedures with competent government authorities are required where Renminbi is to be converted
into foreign currency and remitted out of Chinese mainland to pay capital expenses. Further, there
is no assurance that new regulations will not be promulgated in the future that would have further
requirements on the remittance of Renminbi into or out of the PRC. Any existing and future
requirements on currency exchange may limit our ability to purchase raw materials and components
outside of the PRC or otherwise fund any future business activities that are conducted in foreign
currencies.
RISKS RELATING TO THE GLOBAL OFFERING
We will be concurrently subject to listing and regulatory requirements of Chinese mainland
and Hong Kong.
As we are listed on the Shenzhen Stock Exchange and will be listed on the Main Board in
Hong Kong, we will be required to comply with the listing rules (where applicable) and other
regulatory regimes of both jurisdictions, unless an exemption is available or a waiver has been
obtained. Accordingly, we may incur additional costs and resources in continuously complying with
all sets of listing rules in the two jurisdictions.
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Our A Shares were listed and traded on the Shenzhen Stock Exchange, and the characteristics
of the A share and H share markets may differ.
Our A Shares are listed and traded on the Shenzhen Stock Exchange. Following the Global
Offering, our A Shares will continue to be traded on the Shenzhen Stock Exchange and our H Shares
will be traded on the Stock Exchange. Under current laws and regulations of PRC, without the
approval from the relevant regulatory authorities, our H Shares and A Shares are neither
interchangeable nor fungible, and there is no trading or settlement between the H Share and A Share
markets. With different trading characteristics, the H Share and A Share markets have divergent
trading volumes, liquidity and investor bases, as well as different levels of retail and institutional
investor participation. As a result, the trading performance of our H Shares and A Shares may not
be comparable. Nonetheless, fluctuations in the price of our A Shares may adversely affect the price
of our H Shares, and vice versa. Due to the different characteristics of the H Share and A Share
markets, the historical prices of our A Shares may not be indicative of the performance of our H
Shares. Y ou should therefore not place undue reliance on the trading history of our A Shares when
evaluating the investment decision in our H Shares.
There has been no prior public market for the H Shares and an active trading market for the
H Shares may not develop or be sustained.
Prior to the Global Offering, no public market for the H Shares existed. We cannot assure you
that an active trading market for the H Shares will develop or be sustained after the Global Offering.
The Offer Price for the Shares is expected to be fixed by the Price Determination Agreement, and
may not be indicative of the market price of the H Shares following the completion of the Global
Offering. If an active trading market for the H Shares does not develop or is not sustained after the
Global Offering, the market price and liquidity of Shares could be materially and adversely
affected.
The trading volume and selling price of our H Shares may be volatile, which could result in
substantial losses for investors who purchase our H Shares in the Global Offering.
The trading volume and price of our H Shares may be highly volatile and could fluctuate
widely in response to factors beyond our control. Factors impacting the price and trading volume
of our H Shares include, but are not limited to, actual or anticipated fluctuations in our revenue,
earnings and cash flow, changes in our pricing policy as a result of competition, potential strategic
alliances or acquisitions, the addition or departure of key personnel, changes in ratings by financial
analysts and credit rating agencies, fluctuations in the selling prices and demand for our products,
public perception or negative news about our products, unexpected business disruptions resulting
from natural disasters or power shortages, our inability to obtain or maintain regulatory approval
for our operations, litigation, government investigation or other legal or regulatory proceeding, or
political, economic, financial and social developments in China, Hong Kong and elsewhere in the
world. In addition, the Stock Exchange and other securities markets have, from time to time,
experienced significant price and volume fluctuations that are not related to the operating
performance of any particular company. These fluctuations may also materially adversely affect the
selling price of our H Shares. Moreover, shares of other companies listed on the Stock Exchange
have experienced price volatility in the past, and it is possible that our H Shares may be subject to
changes in price not directly related to our performance.
Future sales or perceived sales of substantial amount of our H Shares in the public market and
conversion of our Domestic Shares into H Shares could materially adversely affect the
prevailing selling price of our H Shares and our ability to raise capital in the future.
Although the H Shares beneficially owned by our Controlling Shareholders are subject to
certain lock-up periods under the Listing Rules and further undertakings in favor of us, however
there is no assurance that our Controlling Shareholders will not dispose of their Shares following
the expiration of the lock-up periods. Future sales or perceived sales of substantial amount of our
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H Shares by us or our Shareholders in the public market could materially adversely affect the
prevailing selling price of our H Shares. In addition, these disposals may make it more difficult for
us to issue new Shares in the future at a time and price we deem appropriate, thereby limiting our
ability to raise further capital. We cannot predict the effect of any significant future disposal on the
market price of our Shares.
Our historical dividends may not be indicative of our future dividend policy, and there can be
no assurance whether and when we will pay dividends in the future.
We have declared dividends in the past. However, there is no assurance that dividends of any
amount will be declared or distributed by us in any year in the future. Under the applicable laws
and regulations of PRC, the payment of dividends may be subject to certain limitations, and the
calculation of our profit under the Accounting Standards for Business Enterprises may differ in
certain respects from the calculation under IFRS. The declaration, payment and amount of any
future dividends are subject to the discretion of our Directors, after taking into account various
factors, including but not limited to our results of operations, financial condition, cash flows, capital
expenditure requirements, market conditions, our strategic plans and prospects for business
development, regulatory restrictions on the payment of dividends and other factors as our Directors
may deem relevant, and subject to the approval at Shareholders’ meeting. Any declaration and
payment as well as the amount of dividends will be subject to our constitutional documents and the
applicable laws and regulations of PRC. No dividend shall be declared or payable except out of our
profits and reserves lawfully available for distribution. Our historical dividends should not be taken
as indicative of our dividend policy in the future.
There can be no assurance of the accuracy or completeness of certain facts, forecasts and other
statistics obtained from official government sources contained in this prospectus.
Certain facts, forecasts and other statistics relating to China, its economic conditions and the
industry in which we operate contained in this prospectus have been derived from official
government sources and publications. We believe the sources of these facts and statistics are reliable
and appropriate, and has no reason to believe that such information is false or misleading or is
rendered so by any omission of facts. We have taken reasonable care in extracting and reproducing
such statistics and facts. However, we cannot guarantee the accuracy of such information. These
facts, forecasts and other statistics have not been prepared nor have been independently verified by
our Company, our Directors, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall
Coordinators, the Joint Global Coordinators, the Joint Bookrunners and the Joint Lead Managers or
any of their respective affiliates or advisors or any other party involved in the Global Offering, and
none of them make any representation as to the correctness, accuracy or completeness of such
information. Collection methods of such information may be flawed or ineffective, or there may be
discrepancies between published information and market practice, which may result in the statistics
being inaccurate or not comparable to statistics produced for other economies. In addition, we
cannot assure you that such information is stated or compiled on the same basis or with the same
degree of accuracy as or consistent with similar statistics presented elsewhere, and such information
may not be complete or up-to-date. In any event, you should consider carefully the importance
placed on such information or statistics.
We may need additional capital, and the sale or issue of additional Shares or other equity
securities could result in additional dilution to our Shareholders.
Notwithstanding our current cash and cash equivalents and the net proceeds from the Global
Offering, we may require additional cash resources to finance our continued growth or other future
developments, including any investments or acquisitions we may decide to pursue. The amount and
timing of such additional financing needs will vary depending on the timing of investments in
and/or acquisitions of new businesses from third parties, and the amount of cash flow from our
operations. If our resources are insufficient to satisfy our cash requirements, we may seek additional
financing through selling additional equity or debt securities or obtaining a credit facility. The sale
RISK FACTORS
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of additional equity securities could result in additional dilution to our Shareholders. The incurrence
of indebtedness would result in increased debt service obligations and could result in operating and
financing covenants that may, among other things, restrict our operations or our ability to pay
dividends. Servicing such debt obligations could also be burdensome to our operations. If we fail
to service the debt obligations or are unable to comply with such debt covenants, we could be in
default under the relevant debt obligations and our liquidity and financial conditions may be
materially and adversely affected.
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, competitive positions, and growth opportunities for existing operations,
plans and objectives of management, certain pro forma information and other matters.
The words “anticipate,” “believe,” “estimate,” “predict,” “could,” “aim,” “potential,”
“continue,” “expect,” “intend,” “may,” “plan,” “seek,” “will,” “would,” “should” and the negative
of these terms and other similar expressions identify a number of these forward-looking statements.
Y ou are cautioned that reliance on any forward-looking statement involves risks and uncertainties
and that any or all of those assumptions could prove to be inaccurate and as a result, the
forward-looking statements based on those assumptions could also be incorrect. In light of these and
other uncertainties, the inclusion of forward-looking statements in this prospectus should not be
regarded as representations or warranties by us that our plans and objectives will be achieved and
these forward-looking statements should be considered in light of various important factors,
including those set forth in this section. Subject to the requirements of the Listing Rules, we do not
intend publicly to update or otherwise revise the forward-looking statements in this prospectus,
whether as a result of new information, future events or otherwise. Accordingly, 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.
Y ou should read the entire prospectus carefully and should not rely on any information
contained in press articles or other media in making investment decisions with respect to our
H Shares.
Prior to the publication of this prospectus, there may have been press and media coverage
regarding us and the Global Offering, which may include certain information not contained in this
prospectus. We have not authorized the disclosure of any such information in the press or other
media. We make no representation as to the appropriateness, accuracy, completeness or reliability
of such information, and disclaim responsibility for such information. To the extent that any such
information is inconsistent or conflicts with the information contained in this prospectus, we
disclaim responsibility for it. Accordingly, prospective investors are cautioned to make their
investment decisions with respect to our H Shares on the basis of the information contained in this
prospectus only and should not rely on any other information. By applying to purchase our H Shares
in the Global Offering, you will be deemed to have agreed that you will not rely on any information
other than that contained in this prospectus.
RISK FACTORS
–5 5–


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In preparation for the Global Offering, our Company has sought and has been granted the
following waivers from strict compliance with the relevant provisions of the Listing Rules and the
following exemption from compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance:
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, we must have a sufficient
management presence in Hong Kong. This normally means that at least two of our executive
Directors must be ordinarily resident in Hong Kong.
Our headquarters and most of our business operations are based, managed and conducted in
the PRC. As our executive Directors play very important roles in our business operation, it is in our
best interest for them to be based in the places where our Group has significant operations. We
consider it practicably difficult and commercially unreasonable for us to arrange for two executive
Directors to ordinarily reside in Hong Kong, either by means of relocation of our executive
Directors to Hong Kong or appointment of additional executive Directors. Therefore, we do not
have, and in the foreseeable future will not have, sufficient management presence in Hong Kong for
the purpose of satisfying the requirements under Rules 8.12 and 19A.15 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has granted
us, a waiver from strict compliance with the requirements under Rules 8.12 and 19A.15 of the
Listing Rules, provided that our Company implements the following arrangements:
(a) we have appointed Mr. Xue Xiaoqiao ( ᑡʃ዗) and Ms. Ha Ching Ching (͍᎑)a so u r
authorized representatives (the “ Authorized Representatives ”) pursuant to Rule 3.05 of
the Listing Rules. The Authorized Representatives will act as our Company’s principal
channel of communication with the Stock Exchange. The Authorized Representatives
will be readily contactable by phone, facsimile and email to promptly deal with enquiries
from the Stock Exchange, and will also be available to meet with the Stock Exchange
to discuss any matter within a reasonable period of time upon request of the Stock
Exchange;
(b) when the Stock Exchange wishes to contact our Directors on any matter, each of the
Authorized Representatives will have all necessary means to contact all of our Directors
(including our independent non-executive Directors) promptly as and when required,
including means to communicate with our Directors when they are traveling. Our
Company will also inform the Stock Exchange as soon as practicable in respect of any
change in the Authorized Representatives in accordance with the Listing Rules. We have
provided the contact details of each Director (such as mobile phone numbers, office
phone numbers (if any), email addresses and fax numbers (if any)) to each of the
Authorized Representatives and the Stock Exchange;
(c) we confirm and will ensure that all Directors who do not ordinarily reside in Hong Kong
possess or can apply for valid travel documents to visit Hong Kong and can meet with
the Stock Exchange within a reasonable period upon the request of the Stock Exchange;
(d) we have appointed Somerley Capital Limited as our 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 results for the first full financial year commencing after the
Listing Date. Our compliance advisor, who will serve as the additional channel of
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–5 6–


--- page 66 ---
communication with the Stock Exchange when the Authorized Representatives are not
available and will have access at all times to the Authorized Representatives, our
Directors and our senior management as prescribed by Rule 3A.23 of the Listing Rules;
and
(e) meetings between the Stock Exchange and our Directors can be arranged through the
Authorized Representatives or our compliance advisor, or directly with our Directors
within a reasonable time frame.
W AIVER IN RESPECT OF APPOINTMENT OF JOINT COMPANY SECRETARY
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company secretary
who, by virtue of his/her academic or professional qualifications or relevant experience, is, in the
opinion of the Stock Exchange, capable of discharging the functions of the company secretary. Note
1 to Rule 3.28 of the Listing Rules provides that the Stock Exchange considers the following
academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159 of
the Laws of Hong Kong); and
(c) a certified public accountant as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong).
Note 2 to Rule 3.28 of the Listing Rules further provides that the Stock Exchange considers
the following factors in assessing the “relevant experience” of the individual:
(a) length of employment with the issuer and other issuers and the roles he/she played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including the
SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement under
Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
Pursuant to paragraph 13 of Chapter 3.10 of the Guide for New Listing Applicants, the Stock
Exchange will consider a waiver application by an issuer in relation to Rules 3.28 and 8.17 of the
Listing Rules based on the specific facts and circumstances. Factors that will be considered by the
Stock Exchange include:
(a) whether the issuer has principal business activities primarily outside Hong Kong;
(b) whether the issuer was able to demonstrate the need to appoint a person who does not
have the Acceptable Qualification (as defined under paragraph 11 of Chapter 3.10 of the
Guide for New Listing Applicants) nor Relevant Experience (as defined under paragraph
11 of Chapter 3.10 of the Guide for New Listing Applicants) as a company secretary; and
(c) why the directors consider the individual to be suitable to act as the issuer’s company
secretary.
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Further, pursuant to paragraph 13 of Chapter 3.10 of the Guide for New Listing Applicants,
such waiver, if granted, will be for a fixed period of time (the “ Waiver Period ”) and on the
following conditions:
(a) the proposed company secretary must be assisted by a person who possesses the
qualifications or experience as required under Rule 3.28 of the Listing Rules and is
appointed as a joint company secretary throughout the Waiver Period; and
(b) the waiver will be revoked if there are material breaches of the Listing Rules by the
issuer.
Our Company has appointed Mr. Xue Xiaoqiao ( ᑡʃ዗)( “ Mr. Xue ”), the executive Director
and our Board secretary, as one of our joint company secretaries. He has considerable experience
in administrative management but presently does not possess any of the qualifications under Rules
3.28 and 8.17 of the Listing Rules, and may not be able to solely fulfill the requirements of the
Listing Rules. Therefore, we have appointed Ms. Ha Ching Ching (͍᎑)( “ Ms. Ha ”), a fellow
member of the Hong Kong Institute of Certified Public Accountants and a member of the Certified
Public Accountants of Australia, who fully meets the requirements stipulated under Rules 3.28 and
8.17 of the Listing Rules to act as the other joint company secretary and to provide assistance to
Mr. Xue for an initial period of three years from the Listing Date to enable Mr. Xue to acquire the
“relevant experience” under Note 2 to Rule 3.28 of the Listing Rules so as to fully comply with the
requirements set forth under Rules 3.28 and 8.17 of the Listing Rules.
Given Ms. Ha’s professional qualification and experience, she will be able to explain to both
Mr. Xue and us the relevant requirements under the Listing Rules and other applicable Hong Kong
laws and regulations. Ms. Ha will also assist Mr. Xue in organizing Board meetings and
Shareholders’ meetings of our Company as well as other matters of our Company which are
incidental to the duties of a company secretary. Ms. Ha is expected to work closely with Mr. Xue
and will maintain regular contact with Mr. Xue, our Directors and the senior management of our
Company. In addition, Mr. Xue will comply with the annual professional training requirement under
Rule 3.29 of the Listing Rules to enhance her knowledge of the Listing Rules during the three-year
period from the Listing Date. He will also be assisted by our compliance advisor and our legal
advisors as to the Hong Kong laws on matters in relation to our ongoing compliance with the Listing
Rules and the applicable laws and regulations.
Since Mr. Xue does not possess the formal qualifications required of a company secretary
under Rule 3.28 of the Listing Rules, 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. Xue may be appointed as a joint company secretary of our
Company. The waiver is valid for an initial period of three years from the Listing Date on the
conditions that (a) Mr. Xue must be assisted by Ms. Ha, who possesses the qualifications and
experience required under Rule 3.28 of the Listing Rules and is appointed as a joint company
secretary throughout the Waiver Period; and (b) the waiver shall be valid for a period of three years
from the Listing Date and will be revoked immediately if and when Ms. Ha ceases to provide such
assistance to Mr. Xue as a joint company secretary or if there are material breaches of the Listing
Rules by our Company.
Before the expiration of the initial three-year period, the qualifications of Mr. Xue will be
re-evaluated to determine whether the requirements as stipulated in Rules 3.28 and 8.17 of the
Listing Rules can be satisfied and whether the need for ongoing assistance will continue. We will
liaise with the Stock Exchange before the expiration of the three-year period to enable it to assess
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–5 8–


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whether Mr. Xue, having benefited from the assistance of Ms. Ha for the preceding three years, will
have acquired the skills necessary to carry out the duties of a company secretary and the relevant
experience within the meaning of Note 2 to Rule 3.28 of the Listing Rules so that a further waiver
will not be necessary.
ALLOCATION OF H SHARES TO EXISTING MINORITY SHAREHOLDERS AND THEIR
CLOSE ASSOCIATES
Rule 10.04 of the Listing Rules requires that a person who is an existing shareholder of a
listing applicant may only subscribe for or purchase any securities for which listing is sought that
are being marketed by or on behalf of a listing applicant either in his/her/its own name or through
nominees if the conditions in Rule 10.03 of the Listing Rules are fulfilled, namely that (i) no
securities are to be offered to the existing shareholders on a preferential basis and no preferential
treatment is given to them in the allocation of the securities; and (ii) the minimum prescribed
percentage of public shareholders required by Rule 19A.13A(2) of the Listing Rules is achieved.
Paragraph 1C(2) of Appendix F1 to the Listing Rules states that, without the prior written consent
of the Stock Exchange, no allocations will be permitted to be made to directors or existing
shareholders of a listing applicant or their close associates, unless the conditions set out in Rules
10.03 and 10.04 are fulfilled.
Chapter 4.15 of the Guide provides that the Stock Exchange will consider granting a waiver
from Rule 10.04 of the Listing Rules and a consent, pursuant to Paragraph 1C(2) of Appendix F1
to the Listing Rules, to allow a listing applicant’s existing shareholders or their close associates to
participate in its initial public offering if any actual or perceived preferential treatment arising from
their ability to influence the listing applicant during the allocation process can be addressed.
Prior to the Listing, our share capital comprises entirely A Shares listed on the Shenzhen Stock
Exchange (“ SZSE ”). As a company listed on the SZSE with its A Shares publicly traded thereon and
with a large public A Shares shareholder base, it would be unduly burdensome for us to seek the
prior consent of the Stock Exchange for each of our minority existing Shareholders or their close
associates who subscribe for the H Shares in the Global Offering.
We have applied for, and the Stock Exchange has granted, a waiver from strict compliance
with Rule 10.04 of, and a consent under Paragraph 1C(2) of Appendix F1 to the Listing Rules to
permit H Shares in the International Offering to be placed to certain existing minority Shareholders
who (i) hold less than 5% of the voting rights in our Company prior to the completion of the Global
Offering and (ii) are not and will not become (upon the completion of the Global Offering) core
connected persons of our Company or the close associates of any such core connected person
(together, the “ Permitted Existing Shareholder ”), on the following conditions:
(a) each Permitted Existing Shareholder to whom our Company may allocate the H Shares
under the International Offering holds less than 5% of the voting rights in our Company
prior to the completion of the Global Offering;
(b) each Permitted Existing Shareholder is not, and will not be, a core connected person of
our Company or any close associate of any such core connected person immediately
prior to or following the Global Offering;
(c) none of the Permitted Existing Shareholders has the power to appoint any Directors nor
have any other special rights in our Company;
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–5 9–


--- page 69 ---
(d) allocation to the Permitted Existing Shareholders and their close associates will not
affect our Company’s ability to satisfy the public float requirement as prescribed by the
Stock Exchange under the waiver in respect of the strict compliance with the
requirements of Rule 19A.13A(2) of the Listing Rules;
(e) to the best knowledge and belief of our Company and the Joint Sponsors, and based on
discussions between our Company and the Overall Coordinators and confirmations
required to be submitted to the Stock Exchange by the Joint Sponsors, we will confirm
to the Stock Exchange that:
a. in case of participation as cornerstone investors, no preferential treatment has
been, nor will be, given to the Permitted Existing Shareholders and/or their close
associates by virtue of their relationship with our Company, other than the
preferential treatment of assured entitlement under a cornerstone investment
following the principles set out in Chapter 4.15 of the Guide, nor is the Permitted
Existing Shareholder in a position to exert influence on the Company to obtain
actual or perceived preferential treatment, and the Permitted Existing
Shareholders’ cornerstone investment agreements do not contain any material
terms which are more favorable to the Permitted Existing Shareholders than those
in other cornerstone investment agreements; or
b. in case of participation as placees, no preferential treatment has been, nor will be
given to the Permitted Existing Shareholders and/or their close associates, nor is
the Permitted Existing Shareholder in a position to exert influence on the Company
to obtain actual or perceived preferential treatment, in the allocation process by
virtue of their relationship with our Company;
(f) in the case of participation as placees, the Overall Coordinators will confirm to the Stock
Exchange that, to the best of their knowledge and belief, no preferential treatment has
been, nor will be, given to any of the Permitted Existing Shareholders or their close
associates by virtue of their relationship with our Company in any allocation in the
International Offering; and
(g) the Joint Sponsors will confirm to the Stock Exchange that based on (a) their discussions
with our Company and the Overall Coordinators; and (b) the confirmations provided to
the Stock Exchange by our Company and the Overall Coordinators, and to the best of
their knowledge and belief, they have no reason to believe that the Permitted Existing
Shareholders and/or their close associates received any preferential treatment in the
allocation process either as cornerstone investors or as placees by virtue of their
relationship with our Company, other than, in the case of participation as cornerstone
investors, the preferential treatment of assured entitlement under a cornerstone
investment following the principles set out in Chapter 4.15 of the Guide, and details of
allocation to the Permitted Existing Shareholders holding 1% or more of the issued share
capital of the Company immediately prior to the completion of the Global Offering will
be disclosed in this prospectus and/or the allotment results announcement, as the case
may be.
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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W AIVER AND EXEMPTION IN RELATION TO THE EMPLOYEE INCENTIVE SCHEME
2024
The Listing Rules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
prescribes certain disclosure requirements in relation to the share options granted by our Company
(the “ Share Options Disclosure Requirements ”):
(a) Rule 17.02(1)(b) of the Listing Rules stipulates that all the terms of a scheme must be
clearly set out in the prospectus. Our Company is also required to disclose in the
prospectus full details of all outstanding options and their potential dilution effect on the
shareholdings upon listing as well as the impact on the earnings per share arising from
the exercise of such outstanding options;
(b) Paragraph 27 of the Appendix D1A of the Listing Rules requires our Company to set out
in the prospectus particulars of any capital of any member of our Group which is under
option, or agreed conditionally or unconditionally to be put under option, including the
consideration for which the option was or will be granted and the price and duration of
the option, and the name and address of the grantee; and
(c) Paragraph 10 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance requires our Company to set out in the prospectus,
among other things, details of the number, description and amount of any shares in or
debentures of our Company which any person has, or is entitled to be given, an option
to subscribe for, together with the certain particulars of the option, namely the period
during which it is exercisable, the price to be paid for shares or debentures subscribed
for under it, the consideration (if any) given or to be given for it or for the right to it and
the names and addresses of the persons to whom it was given.
As of the Latest Practicable Date, our Company granted outstanding options under the
Employee Incentive Scheme 2024 to 327 grantees (excluding the 46 departed employees), including
Directors, senior management and other employees of our Group, to subscribe for an aggregate of
4,481,200 A Shares (excluding an aggregate of 330,800 options held by 46 departed employees
which are subject to cancelation), representing approximately 1.90% of the total issued share capital
immediately upon completion of the Global Offering (assuming the options granted under the
Employee Incentive Scheme 2024 are not exercised), on the terms set out in the paragraph headed
“Statutory and General Information — Further Information about our Directors and Substantial
Shareholders — 5. Employee Incentive Schemes” in the Appendix VI to this prospectus.
Our Company has applied to (i) the Stock Exchange for a waiver from strict compliance with
the requirements under Rule 17.02(1)(b) of and paragraph 27 of Appendix D1A to the Listing Rules;
and (ii) to the SFC for a certificate of exemption under section 342A of the Companies (Winding
Up and Miscellaneous Provisions) Ordinance exempting our Company from strict compliance with
paragraph 10(d) of Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, on the ground that strict compliance with the above requirements would be
unduly burdensome for our Company and the waiver and the exemption would not prejudice the
interest of the investing public for the following reasons:
(a) given that 327 (excluding the 46 departed employees) grantees are involved, strict
compliance with the Share Option Disclosure Requirements in setting out full details of
all the grantees under the Employee Incentive Scheme 2024 in this prospectus would be
costly and unduly burdensome for our Company in light of a significant increase in cost
and time for information compilation and prospectus preparation;
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(b) the grant and exercise in full of the options under the Employee Incentive Scheme 2024
will not cause any material adverse impact on the financial position of our Group. As of
the Latest Practicable Date, save for 2 grantees who are Directors and 4 grantees who
are senior management of our Company with outstanding options to subscribe for an
aggregate of 644,000 A Shares, representing approximately 0.27% of the total issued
share capital immediately upon completion of the Global Offering (assuming the options
granted under the Employee Incentive Scheme 2024 are not exercised), the remaining
321 (excluding the departed employees) grantees are employees of our Group and
Independent Third Parties with outstanding options to subscribe for an aggregate of
3,837,200 A Shares (excluding an aggregate of 330,800 options held by 46 departed
employees which are subject to cancelation), representing approximately 1.63% of the
total issued share capital immediately upon completion of the Global Offering (assuming
the options granted under the Employee Incentive Scheme 2024 are not exercised). Strict
compliance with the applicable Share Option Disclosure Requirements to disclose
names, addresses and entitlements on an individual basis in this prospectus will require
number of additional pages of disclosure that does not provide any material information
to the investing public;
(c) there will not be any new H Shares issued under the Employee Incentive Scheme 2024
as the foregoing plan is an A-share incentive scheme;
(d) lack of full compliance with the above disclosure requirements would not prevent our
Company from providing its potential investors with information for them to make an
informed assessment of the activities, assets, liabilities, financial position, management
and prospects of our Company; and
(e) material information relating to the options under the Employee Incentive Scheme 2024
has been disclosed in this prospectus to provide prospective investors with sufficient
information to make an informed assessment of the potential dilutive effect and impact
on earnings per A Share of the options in making their investment decision, and such
information includes:
(i) a summary of the terms of the Employee Incentive Scheme 2024;
(ii) the aggregate number of Shares subject to the options and the percentage to our
total issued share capital represented by such number of Shares;
(iii) the dilutive effect and the impact on earnings per Share upon full exercise of the
options immediately following completion of the Global Offering (assuming no
other changes are made to the issued share capital of our Company between the
Latest Practicable Date and the Listing);
(iv) full details of the options granted by our Company to (i) Directors, members of
senior management and connected persons of our Company (if any), and (ii) other
grantees who have been granted options to subscribe for an aggregate number of
77,000 or more A Shares, which were outstanding as of the Latest Practicable Date,
on an individual basis, are disclosed in this Prospectus, and such details include all
the particulars required under Rule 17.02(1)(b) and paragraph 27 of Appendix D1A
to the Listing Rules and paragraph 10 of Part I of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance;
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–6 2–


--- page 72 ---
(v) in respect of the options under the Employee Incentive Scheme 2024 granted to
remaining grantees (being the other grantees who are not (i) Directors, members of
senior management and connected persons of the Company, or (ii) other grantees
who have been granted options to subscribe for an aggregate number of 77,000 or
more A Shares, which were outstanding as of the Latest Practicable Date),
disclosure will be made, on an aggregate basis, including (i) their aggregate
number of grantees and number of Shares underlying the options under the
Employee Incentive Scheme 2024; (ii) the consideration (if any) paid for the grant
of the options under the Employee Incentive Scheme 2024; and (iii) the exercise
period of the options and the exercise price of the options granted under the
Employee Incentive Scheme 2024; and
(vi) the particulars of the waiver and exemption granted by the Stock Exchange and the
SFC, respectively.
The Stock Exchange has granted us a waiver from strict compliance with the relevant
requirements under the Listing Rules on the conditions that:
(a) full details of the options under the Employee Incentive Scheme 2024 granted to each
of the Directors, members of senior management and other grantees who have been
granted options to subscribe for an aggregate number of 77,000 or more A Shares will
be disclosed in the paragraph headed “Statutory and General Information — Further
Information about our Directors and Substantial Shareholders — 5. Employee Incentive
Schemes” in Appendix VI to this prospectus on an individual basis as required under the
applicable Share Option Disclosure Requirements;
(b) for the remaining grantees, disclosure will be made, on an aggregate basis, of (i) the
aggregate number of grantees and the number of A Shares underlying the options granted
to them under the Employee Incentive Scheme 2024, (ii) the consideration (if any) paid
for the grant of the options under the Employee Incentive Scheme 2024, and (iii)
exercise period and the exercise price for the options granted under the Employee
Incentive Scheme 2024;
(c) in respect of the options granted by the Company under the Employee Incentive Scheme
2024 to grantees other than those set out in (a) above, disclosure are made, on an
aggregate basis, categorized into lots based on the number of Shares underlying each
individual grantee, being: 1 to 10,000 Shares and 10,001 to 76,999 Shares. For each lot
of Shares under each of the Employee Incentive Scheme 2024, the following details are
disclosed in the prospectus: (1) aggregate number of grantees and number of Shares
subject to the options, (2) the consideration paid for the grant of the options and (3) the
exercise period and the exercise price for the options;
(d) there will be disclosure in the paragraph head “Statutory and General Information —
Further Information about our Directors and Substantial Shareholders — 5. Employee
Incentive Schemes” in Appendix VI to this prospectus for the aggregate number of A
Shares underlying the options under the Employee Incentive Scheme 2024 and the
percentage of our Company’s total issued share capital represented by such number of
A Shares;
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–6 3–


--- page 73 ---
(e) the dilutive effect and impact on earnings per A Share upon full exercise of the options
under the Employee Incentive Scheme 2024 will be disclosed in the paragraph headed
“Statutory and General Information — Further Information about our Directors and
Substantial Shareholders — 5. Employee Incentive Schemes” in Appendix VI to this
prospectus;
(f) a summary of the principal terms of the Employee Incentive Scheme 2024 will be
disclosed in the paragraph headed “Statutory and General Information — Further
Information about our Directors and Substantial Shareholders — 5. Employee Incentive
Schemes” in Appendix VI to this prospectus;
(g) the particulars of the waiver and the exemption will be disclosed in this prospectus;
(h) a full list of all the grantees (including those persons whose details have already been
disclosed in this prospectus) under the Employee Incentive Scheme 2024, containing all
the particulars as required under the applicable Share Option Disclosure Requirements
be made available for public inspection in accordance with Appendix VII to this
prospectus;
(i) further information relating to the grantees who have been granted options is provided
to the Stock Exchange; and
(j) the grant of a certificate of exemption under the Companies (Winding Up and
Miscellaneous Provisions) Ordinance from the SFC exempting our Company from the
disclosure requirements under paragraph 10(d) of Part I of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
The SFC has granted us the certificate of exemption under section 342A of the companies
(Winding Up and Miscellaneous Provisions) Ordinance from strict compliance with paragraph 10(d)
of Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance subject to the conditions that:
(a) on an individual basis, full details of the options granted by the Company under the
Employee Incentive Scheme 2024 to each of the Directors, senior management,
connected persons of our Company and other grantees who have been granted options
to subscribe for an aggregate number of 77,000 A Shares of the Company or more are
disclosed in “Statutory and General Information — Further Information about our
Directors and Substantial Shareholders — 5. Employee Incentive Schemes” in Appendix
VI to this prospectus, such details to include all the particulars required under paragraph
10 of Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance;
(b) in respect of the options granted by the Company under the Employee Incentive Scheme
2024 to grantees other than those set out in (a) above, disclosure are made, on an
aggregate basis, categorized into lots based on the number of Shares underlying each
individual grantee, being: 1 to 10,000 A Shares, 10,001 to 76,999 A Shares. For each lot
of A Shares under the Employee Incentive Scheme 2024, the following details are
disclosed in the prospectus: (1) aggregate number of grantees and number of A Shares
subject to the options, (2) the consideration paid for the grant of the options and (3) the
exercise period and the exercise price for the options;
(c) a full list of all the grantees (including the persons referred to in (a) above) who have
been granted options to subscribe for A Shares under the Employee Incentive Scheme
2024, containing all the details as required in paragraph 10 of Part I of the Third
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–6 4–


--- page 74 ---
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, be
made available for public inspection in accordance with the section headed “Documents
Delivered to the Registrar of Companies and Available on Display” in Appendix VII to
this prospectus; and
(d) the particulars of the exemption will be disclosed in this prospectus, and this prospectus
will be issued on or before April 27, 2026.
Further details of the Employee Incentive Scheme 2024 are set forth in the paragraph headed
“Statutory and General Information — Further Information about our Directors and Substantial
Shareholders — 5. Employee Incentive Schemes” in Appendix VI to this prospectus.
PARTIALLY-EXEMPT CONTINUING CONNECTED TRANSACTION
We have entered into and will continue to engage in certain transactions which would
constitute continuing connected transaction for our Company under the Listing Rules upon Listing.
We have applied to the Stock Exchange for, and the Stock Exchange has granted us, a waiver from
strict compliance with certain requirements set out in Chapter 14A of the Listing Rules for such
continuing connected transaction. For details, see “Connected Transaction” in this prospectus.
DISCLOSURE OF OFFER PRICE
Paragraph 15(2)(c) of Appendix D1A to the Listing Rules provides that the issue price or offer
price of each security must be disclosed in the prospectus. Pursuant to Paragraph 12 of Chapter 4.14
of the Guide, the Stock Exchange also allows an indicative offer price range to be included in the
prospectus, as an alternative to the disclosure of a fixed offer price.
We have applied to the Stock Exchange a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules so that the Company will only disclose the maximum
Offer Price in the Prospectus on the below basis:
(a) The Offer Price will be determined with reference to, among other factors, the closing
price of the Company’s A Shares on the Shenzhen Stock Exchange on the last trading day
on or before the Price Determination Date. Our Company is unable to control the trading
price of our A Shares on the Shenzhen Stock Exchange;
(b) Setting a fixed offer price or an offer price range with a low-end may adversely affect
our ability to price our H Shares in the best interests of our Shareholders and the market
price of the A Shares and the Hong Kong Offer Shares;
(c) Pursuant to paragraphs 9 and 10(b) of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, the amount payable on application and
allotment on each share, and the price to be paid for shares subscribed for, shall be
specified in the Prospectus, respectively. Disclosure of a maximum offer price complies
with the requirements prescribed under paragraphs 9 and 10(b) of Part A the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance by
providing a clear indication of the maximum subscription consideration a potential
investor shall pay for the Offer Shares; and
(d) A maximum Offer Price will be disclosed in this prospectus. This alternative disclosure
approach would not prejudice the interests of the investing public in Hong Kong.
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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--- page 75 ---
The Stock Exchange has granted to us a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules on the conditions that the Prospectus will disclose:
(a) the maximum Offer Price;
(b) the time for the determination of the Offer Price and the form of its publication;
(c) the historical prices of the Company’s A Shares and trading volume on the Shenzhen
Stock Exchange during the Track Record Period and up to the Latest Practicable Date;
(d) the determinants of the final Offer Price; and
(e) the source for investor to access the latest market price of the Company’s A Shares.
See “Structure of the Global Offering — Pricing and Allocation — Determining the Offer
Price” in this prospectus for the historical prices of our A Shares and trading volume on the
Shenzhen Stock Exchange.
W AIVER FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
–6 6–


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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which all of our Directors collectively and individually accept full
responsibility, includes particulars given in compliance 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 is no other matter the omission of which would make any statement in this prospectus
misleading.
CSRC FILING
According to the Overseas Listing Trial Measures, we are required to complete the filing
procedures with the CSRC in connection with the proposed Listing. We submitted a filing to the
CSRC for application for the Listing on August 30, 2025. The CSRC confirmed completion of such
filing on February 28, 2026. No other approvals from the CSRC are required to be obtained for 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 Global Offering
comprises the Hong Kong Public Offering of initially 2,700,000 Offer Shares and the International
Offering of initially 24,300,000 Offer Shares (subject to, in each case, reallocation on the basis
referred to under the section headed “Structure of the Global Offering” in this prospectus).
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 conditions set out herein
and therein. No person is authorized to give any information in connection with the Global Offering
or to make any representation not contained in this prospectus, and any information or
representation not contained herein must not be relied upon as having been authorized by our
Company, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital
Market Intermediaries, any of their respective directors, officers, agents, employees or advisors or
any other party involved in the Global Offering.
Neither the delivery of this prospectus nor any offering, sale or delivery made in connection
with the Offer 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.
See “Structure of the Global Offering” in this prospectus for details of the structure of the
Global Offering.
UNDERWRITING
The Listing is sponsored by the Joint Sponsors. The Hong Kong Public Offering is fully
underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting
Agreement and is subject to us and the Sponsor-Overall Coordinators (for themselves and on behalf
of the Underwriters) agreeing on the Offer Price. The International Underwriting Agreement
relating to the International Offering is expected to be entered into on or around the Price
Determination Date, subject to the determination of the pricing of the Offer Shares. The Global
Offering is managed by the Overall Coordinators.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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If, for any reason, the Offer Price is not agreed among us and the Sponsor-Overall
Coordinators (for themselves 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, see “Underwriting” in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering (including its conditions) are set out in the
sections headed “Structure of the Global Offering” and “Underwriting” 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/her acquisition of Hong Kong Offer Shares to, confirm that
he/she is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares described
in this prospectus.
No action has been taken to permit a public offering of the Offer Shares or the distribution of
this prospectus in any jurisdiction other than Hong Kong. Accordingly, without limitation to the
following, this prospectus may not be used for the purpose 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 for
subscription. The distribution of this prospectus and the offering and sale 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 jurisdictions pursuant to registration with or authorization by the
relevant securities regulatory authorities or an exemption therefrom. In particular, the Offer Shares
have not been offered and sold, and will not be offered and sold, directly or indirectly, in the PRC
or the United States.
APPLICATION FOR LISTING OF THE H SHARES ON THE HONG KONG STOCK
EXCHANGE
We have applied to the Hong Kong Stock Exchange for the granting of listing of, and
permission to deal in, our H Shares to be issued pursuant to the Global Offering.
Except as otherwise disclosed in this prospectus and the A Shares that have been listed on the
Shenzhen Stock Exchange, no part of our Shares 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 as of the
Latest Practicable Date.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of, and
permission to deal in, the H Shares on the Hong Kong Stock Exchange is refused before the
expiration of three weeks from the date of the closing of the application lists, or such longer period
(not exceeding six weeks) as may, within the said three weeks, be notified to our Company by or
on behalf of the Hong Kong Stock Exchange.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares on the Hong
Kong Stock Exchange and compliance with the stock admission requirements of HKSCC, the H
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 H Shares on the Hong Kong
Stock Exchange or on any other date as determined by HKSCC. Settlement of transactions between
participants of the Hong Kong 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.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–6 8–


--- page 78 ---
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS. Investors should seek the advice of their stockbrokers or other professional advisors for
details of the settlement arrangements as such arrangements may affect their rights and interests.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in the section headed
“How to Apply for Hong Kong Offer Shares” in this prospectus.
H SHARE REGISTER OF MEMBERS AND STAMP DUTY
All of the H Shares will be registered on our register of members of H Share to be maintained
by our H Share Registrar, Tricor Investor Services Limited, in Hong Kong. Our principal register
of members will be maintained by us at our headquarters in the PRC.
Dealings in the H Shares registered on the H Share register of members of our Company in
Hong Kong will be subject to Hong Kong stamp duty.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisors as to the taxation implications of subscribing for, purchasing, holding or disposal of, and/or
dealing in the H Shares or exercising rights attached to them. None of us, the Joint Sponsors, the
Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, the Underwriters, any of
their respective directors, officers, employees, partners, agents, advisors or representatives or any
other person or party involved in the Global Offering accepts responsibility for any tax effects on,
or liabilities of, any person resulting from the subscription, purchasing, holding, disposition of, or
dealing in, the H Shares or exercising any rights attached to them.
COMMENCEMENT OF DEALINGS IN THE SHARES
Dealings in the H Shares on the Hong Kong Stock Exchange are expected to commence on
Wednesday, May 6, 2026. The H Shares will be traded in board lots of 100 H Shares each. The stock
code of the Shares will be 1187. Except as otherwise disclosed in this prospectus and the A Shares
that have been listed on the Shenzhen Stock Exchange, no part of our share or debt securities is
listed on or deal in on the Hong Kong Stock Exchange or any other stock exchange and no such
listing or permission to list is being or proposed to be sought in the near future.
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars.
Unless indicated otherwise, (i) the translations between Renminbi and U.S. dollars were made
at the rate of RMB6.8616 to US$1.00, (ii) the translations between Hong Kong dollars and
Renminbi were made at the rate of RMB0.8763 to HK$1.00, and (iii) the translations between U.S.
dollars and Hong Kong dollars were made at the rate of HK$7.8305 to US$1.00.
No representation is made that the amounts denominated in one currency could actually be
converted into the amounts denominated in another currency at the rates indicated or at all.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–6 9–


--- page 79 ---
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, this
prospectus shall prevail. However, for ease of reference, the names of the PRC laws and regulations,
government authorities, institutions, natural persons or other entities (including certain of our
subsidiaries) have been included in this prospectus in both Chinese and English languages. In the
event of any inconsistency, the Chinese versions shall prevail.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Any discrepancies between totals and sums of amounts listed in any table,
chart or elsewhere in this prospectus are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–7 0–


--- page 80 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. ZHANG Min ( ੵઽ) Building 4
No. 249 Wuyi Avenue
Furong District
Changsha City
PRC
Chinese
Mr. ZHANG Zhiming (׼Building 8
Y unda Binhe Commercial Plaza
No. 55, Section 2
Wanjiali Middle Road
Changsha City
PRC
Chinese
Mr. XUE Xiaoqiao ( ᑡʃ዗) Building D7
Yingang Shuijingcheng
Section 3, Wanjiali North Road
Furong District, Changsha City
Hunan Province
PRC
Chinese
Mr. HE Bangjie ( ൭Ԟ௫) Building 8
Zhonglong International
Y uxi Community
No. 188 Guqu South Road
Y uhua District, Changsha City
PRC
Chinese
Independent non-executive Directors
Mr. NING Huabo (تNo. 252 Lushan Road
Y uelu District, Changsha City
PRC
Chinese
Ms. SHEN Nan ( ӏ฻) 10th Floor
L’Wanchai
No.109 Wanchai Road, Wanchai
Hong Kong
Chinese
Mr. Zhou Rong ( մ࿰) Building 30, Zuoan Spring
No. 216 Shuangyong Road
Kaifu District, Changsha City
PRC
Chinese
For details with respect to our Directors, see “Directors and Senior Management” in this
prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–7 1–


--- page 81 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors and Sponsor-Overall
Coordinators
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Center
8 Finance Street, Central
Hong Kong
Overall Coordinators,
Joint Global Coordinators, Joint
Bookrunners,
Joint Lead Managers and
Capital Market Intermediaries
Huatai Financial Holdings (Hong Kong) Limited
62/F, The Center
99 Queen’s Road Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Center
8 Finance Street, Central
Hong Kong
Futu Securities International (Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Legal Advisors to our Company As to Hong Kong and U.S. laws:
O’Melveny & Myers
31/F, AIA Central
1 Connaught Road Central
Hong Kong
As to PRC laws:
Hunan Qiyuan Law Firm
63/F, Shimao Global Financial Center
No. 393 Jianxiang Road
Furong District
Changsha, Hunan Province
PRC
Legal Advisors to
the Joint Sponsors
and Underwriters
As to Hong Kong laws:
Jingtian & Gongcheng LLP
Suites 3203-3209, 32/F, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 82 ---
As to PRC laws:
Jingtian & Gongcheng
45/F, K. Wah Center
1010 Huaihai Road (M), Xuhui District
Shanghai
PRC
Auditors and Reporting
Accountants
Ernst & Y oung
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Suite 2504, Wheelock Square
1717 Nanjing West Road
Shanghai 200040
PRC
Compliance Advisor Somerley Capital Limited
20/F, China Building
29 Queen’s Road Central
Hong Kong
Receiving Bank Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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Registered Office, Headquarters and
Principal Place of Business in the PRC
No. 87, Section 1, Huanbao East Road
Y uhua District
Changsha City, Hunan Province
PRC
Principal Place of Business in Hong Kong Unit B, 22/F, Mai Luen Industrial Building
23-31 Kung Yip Street
Kwai Chung, New Territories
Hong Kong
Company’s Website www.cofoe.com.cn
(Information contained on this website does
not form part of this prospectus)
Joint Company Secretaries Mr. XUE Xiaoqiao ( ᑡʃ዗)
Building D7
Yingang Shuijingcheng
Section 3, Wanjiali North Road
Furong District, Changsha City
Hunan Province
PRC
Ms. HA Ching Ching (͍᎑)
Room 504, 5/F
Cheong Tai
Commercial Building
60-66 Wing Lok Street
Sheung Wan, Hong Kong
Authorized Representatives Mr. XUE Xiaoqiao ( ᑡʃ዗)
Building D7
Yingang Shuijingcheng
Section 3, Wanjiali North Road
Furong District, Changsha City
Hunan Province
PRC
Ms. HA Ching Ching (͍᎑)
Room 504, 5/F
Cheong Tai
Commercial Building
60-66 Wing Lok Street
Sheung Wan, Hong Kong
Audit Committee Ms. SHEN Nan ( ӏ฻) (chairperson)
Mr. NING Huabo (ت)
Mr. ZHANG Zhiming (׼)
Remuneration and Appraisal Committee Mr. ZHOU Rong ( մ࿰) (chairperson)
Mr. ZHANG Zhiming (׼)
Ms. SHEN Nan ( ӏ฻)
CORPORATE INFORMATION
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Nomination Committee Mr. NING Huabo (تchairperson)
Mr. HE Bangjie ( ൭Ԟ௫)
Ms. SHEN Nan ( ӏ฻)
Strategic Committee Mr. ZHANG Min ( ੵઽ) (chairperson)
Mr. ZHANG Zhiming (׼)
Mr. ZHOU Rong ( մ࿰)
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Bankers China Construction Bank
(Changsha Gaoqiao Branch)
F1, Gaoqiao Modern Commercial City
224 Minzhu Road
Y uhua District, Changsha
Hunan, PRC
Bank of Changsha
(Dongcheng Branch)
No. 636, Y uanda First Road
Furong District, Changsha
Hunan, PRC
Bank of China
(Xiangjiang New District Branch)
1/F, Lugu Information Port
658 Lugu Avenue
High-tech Zone, Y uelu District
Changsha, Hunan
PRC
CORPORATE INFORMATION
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The information and statistics set out in this section and other sections of this
Prospectus were extracted from the Frost & Sullivan Report, and from various official
government publications and other publicly available publications. We engaged Frost &
Sullivan to prepare the Frost & Sullivan Report, an independent industry report, in connection
with the Global Offering. The information from official government sources has not been
independently verified by us, the Joint Sponsors, the Sponsor-Overall Coordinators, Overall
Coordinators, Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers,
Underwriters, any of their respective directors and advisors, or any other persons or parties
involved in the Global Offering, and no representation is given as to its accuracy. For more
details of the risks relating to our industry, see “Risk Factors” in this Prospectus.
OVERVIEW OF GLOBAL MEDICAL DEVICE PRODUCT
The global medical device market encompasses a wide range of product categories, including
in vitro diagnostic (IVD), high-value medical consumables, and medical imaging (MI) devices and
other devices, which has witnessed a steady growth in recent years. From 2019 to 2024, the global
medical device market increased from USD446.6 billion to USD623.0 billion, representing a CAGR
of 6.9%. Driven by factors such as accelerating aging population trend, evolving disease spectrums,
rising expenditures on healthcare, and growing demand for enhanced treatment options, the global
medical device market is projected to reach USD869.7 billion by 2030. Home care medical devices
refers to medical equipment, consumables, and other products used by individuals in a home setting
for disease prevention, health monitoring, rehabilitation therapy, health management, or daily
health care. These are typically operated by non-professionals, such as patients or consumers. The
home care medical devices segment reached a market size of USD118.2 billion in 2024, accounting
for 19.0% of the total market. From 2024 to 2030, the global home care medical devices market is
projected to grow at a CAGR of 6.4%, outpacing the growth rate of the global medical device
market.
Global Medical Devices Market, 2019-2030E
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E
18.4% 18.6% 18.7% 18.8% 18.8% 19.0%
2024-2030E
Billion USD
5.7% 6.4%
2019-2024 6.9%
Period
Overall
7.6%
Home Care Medical Devices
CAGR
19.2% 19.3% 19.4% 19.5% 19.6% 19.7%
MI OthersHome Care Medical Devices IVD High-Value Medical ConsumablesHome Care Medical Devices Proportion
82.0
85.4
123.2
60.4
95.6
446.6
85.0
90.1
132.0
63.8
85.7
456.6 99.8
116.7
151.6
70.4
95.0
533.5
105.9
120.6
161.6
73.8
102.8
564.7
114.3
106.3
172.8
83.3
130.3
607.1
118.2
106.9
180.9
87.2
129.8
623.0
124.8
111.4
189.7
91.5
131.8
649.1
132.0
116.2
199.2
96.2
138.6
682.3
140.2
121.4
209.7
101.4
148.2
720.9
149.3
127.0
221.2
107.1
160.3
764.9
159.8
133.0
234.0
113.5
174.3
814.6
171.7
139.5
248.2
120.6
189.7
869.7
Note: The market size is based on revenue.
Source: Expert interview, Annual reports of listed companies, Frost & Sullivan analysis
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The following table describes the breakdown of global medical device market by regions in
2024.
Breakdown of Global Medical Devices Market by Regions, 2024
based on revenue
US
265.7, 42.7%
RoW
61.8, 9.9%
Europe
164.5, 26.4%
China
131, 21%
Billion USD
Source: Expert interview, Annual reports of listed companies, Frost & Sullivan analysis
During the historical period, the medical device industry in China has developed at a faster
pace than its global counterpart, which has grown at a CAGR of 8.6% from 2019 to 2024, reaching
RMB941.7 billion in 2024. The decline in China’s medical device market size in 2024 was
primarily due to a slowdown in the procurement of clinical medical devices, following the
pre-emptive equipment purchases fueled by subsidized loans in 2023. This was further tempered by
tighter regulatory policies affecting high-value medical device sales. However, as these short-term
fluctuations normalize, the market is poised for recovery. Driven by rising demand for preventive
health, the application of digitalization and AI intelligence, the total market is projected to reach
RMB1,326.0 billion by 2030, with a CAGR of 5.9%. Notably, the home care segment, which held
a 21.0% share (RMB198.2 billion) in 2024, is expected to outperform the overall medical device
market with a CAGR of 7.9% through 2030.
Medical Device Market in China, 2019-2030E
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E
19.6% 19.7% 19.8% 20.0% 20.3%
21.0%
2024-2030E
Billion RMB
5.9% 7.9%
2019-2024 8.6%
Period
Overall
10.1%
Home Care Medical Devices
CAGR
21.3% 21.7%
22.2%
22.7%
23.2% 23.6%
122.4
82.4
114.5
88.8
215.4
143.8
103.3
131.2
92.0
259.6
167.4
129.6
151.0
95.4
300.5
188.3
161.6
161.9
100.5
331.4
197.7
129.4
173.2
102.6
370.1
198.2
136.6
184.6
108.3
314.0
207.7
129.5
195.7
113.9
327.1
221.2
127.2
209.5
119.5
340.0
240.0
130.9
226.7
125.2
356.5
261.6
135.5
246.8
130.8
377.4
286.0
140.8
269.7
136.4
401.4
313.1
146.7
295.6
141.9
428.7
623.5
729.9
843.8
943.7 973.1 941.7 973.9 1,017.4 1,079.3
1,152.1
1,234.3
1,326.0
MI OthersHome Care Medical Devices IVD High-Value Medical ConsumablesHome Care Medical Devices Proportion
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Note: The market size is based on revenue.
Source: Expert interview, Annual reports of listed companies, Frost & Sullivan analysis
OVERVIEW OF GLOBAL HOME CARE MEDICAL DEVICES MARKET
At present, home care medical devices span a variety of product categories including home
rehabilitation aid products, medical care supplies, home health monitoring devices, and home
respiratory support devices. In 2024, based on revenue, the aggregated market share of home
rehabilitation aid products, medical care supplies, home health monitoring products, and home
respiratory support devices accounted for approximately 63.3% of the global home care medical
devices market, and it is forecasted to reach 64.1% by 2030.
Breakdown of Global Home Care Medical Devices Market
19.0 (23.2%)19.6 (23.9%)
5.1 (6.2%)
2019 2024 2030E
Billion USD
10.7 (13.1%)
16.4 (20.0%)
3.8 (4.6%)
7.3 (8.9%)
28.8 (24.4%)24.7 (20.9%)
6.8 (5.8%)
16.1 (13.6%)
24.0 (20.3%)
5.9 (5.0%)
43.6 (25.4%)
29.2 (17.0%)
22.6 (13.2%)
34.9 (20.3%)
9.0 (5.2%)
Home Rehabilitation Aid Products
Medical Care Supplies
Home Health Monitoring Products Others
Home Respiratory Support Products
Home Aesthetic Medical Products
Home Physiotherapy Products
11.8 (10.0%) 22.3 (13.0%)
10.1 (5.9%)
Source: Expert interview, Annual reports of listed companies, Frost & Sullivan analysis
From 2019 to 2024, based on revenue, the home care medical devices market in China
increased from RMB122.4 billion to RMB198.2 billion. In 2024, the aggregated market share of
home rehabilitation aid products, medical care supplies, home health monitoring devices, home
respiratory support devices, and TCM physiotherapy products accounted for approximately 65.1%
of the total home care medical devices market in China.
Breakdown of Home Care Medical Devices Market in China
27.2 (22.2%)
36.7 (30.0%)
2019 2024 2030E
Billion RMB
17.4 (14.2%)
20.6 (16.8%)
4.6 (3.8%)
3.8 (3.1%)
Home Rehabilitation Aid Products
Medical Care Supplies
Home Health Monitoring Products Home Aesthetic Medical Products Home Physiotherapy Products
Traditional Chinese Medicine Physiotherapy ProductsHome Respiratory Support Products Others
2.6 (2.1%)
9.6 (7.8%)
46.5 (23.5%)46.8 (23.6%)
30.3 (15.3%)
38.8 (19.6%)
9.0 (4.5%)
4.3 (2.2%)
74.5 (23.8%)58.6 (18.7%)
48.5 (15.5%)34.2 (10.9%)
64.9 (20.7%)
15.3 (4.9%)
8.0 (2.6%)5.9 (3.0%)
9.2 (2.9%)
16.6 (8.4%)
Source: Expert interview, Annual reports of listed companies, Frost & Sullivan analysis
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China’s home care medical device market spans online and offline channels. The online
market share grew significantly from 25% in 2019 to 44.3% in 2024. Driven by the development
of e-commerce, social media, and instant retail, the online penetration is projected to reach 67.1%
by 2030. In 2024, the Group ranked second in the online home care medical device market in China
by revenue.
Growth Drivers of Home Care Medical Devices Market in China
Vigorous development of the “Silver Economy”: In January 2025, the National Development
and Reform Commission (NDRC) and the Ministry of Finance expanded “trade-in” policies,
prompting regions to increase subsidies (up to 30%) for aging-friendly renovations, such as hearing
aids, blood pressure monitors, blood glucose meters, etc. These initiatives have streamlined
applications and expanded product catalogs to include wheelchairs, hearing aids, and rehabilitation
devices. Consequently, supportive policies are driving the robust demand for home care essentials
such as blood pressure monitors, and glucose meters, etc.
High prevalence of chronic diseases and growing public health awareness: The number of
diabetes and cardiovascular disease patients in China are expected to reach 168.5 million and 450.0
million by 2030 respectively. Given that chronic diseases require long-term monitoring and
systematic management, coupled with increasing health awareness, these have boosted the demand
for home care medical devices.
Diversification of sales channels: With the rapid development of e-commerce platforms and
social media, online channels have substantially broadened product distribution by overcoming
geographic constraints and enabling efficient delivery to consumers in both urban and rural markets.
Moreover, these platforms streamline supply chains and lower distribution costs, allowing
consumers to purchase home care medical devices at more competitive prices compared with
traditional offline retail channels.
Future Trends of Home Care Medical Devices Market in China
Intelligent Technology Drives Product Advancement: Catalyzed by the rapid advancements
in artificial intelligence (AI), the Internet of Things (IoT), and big data, the home care medical
devices market in China is experiencing a paradigm shift characterized by the integration of these
cutting-edge technologies. Conventional, single-function devices are transitioning into
comprehensive health management terminals capable of seamless monitoring, analysis,
intervention, and connectivity.
Diversification of consumer groups and scenario segmentation: The home care medical
device market in China now caters to individuals across different age groups by tailoring product
functionality to specific application scenarios. The elderly, as the core consumer group, prioritize
two key needs: reliable chronic disease management and enhanced safety support. By comparison,
the demands from younger generations are steering the market towards preventive health.
Domestic substitution accelerates the robust growth of domestic brands: Empowered by
policy incentives, technological breakthroughs and localized advantages, domestic home care
medical device brands have achieved a strategic shift from mid-to-low-end markets to high-end
segments. They are establishing differentiated competitiveness across dimensions such as price
advantage, after-sales services and scenario adaptability in premium market.
Entry Barriers of Home Care Medical Devices Market in China
Technological and talent barriers: As a multidisciplinary field, the home care medical device
industry demands the seamless integration of biomedical engineering, sensor technology, and
computer science. Driven by rising consumer expectations for precision and intelligence, market
leadership now requires more than just capital, it necessitates long-term R&D iteration.
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Marketing Channel barriers: Establishing a foothold in this industry involves three
interconnected challenges: complex omni-channel integration, high terminal coverage costs, and the
steep threshold for building brand trust. Unlike standard consumer goods, these devices must
balance technical authority with retail convenience. This complexity makes it difficult for new
players to rapidly scale their service networks.
Brand Barrier: Brand image represents a concentrated manifestation of competitiveness in
the medical device market. Leading brands, relying on long-term marketing strategies and market
validation, have established strong user trust, and brand recognition. New entrants find it difficult
to gain consumer recognition within a short period.
Threats and Challenges of Home Care Medical Devices Market in China
Intensified Market Competition: Price competition has become particularly prominent in
certain segments, exerting pressure on corporate profit margins and brand differentiation.
Technological Innovation and Product Upgrading: Rising health awareness and the shift
toward home-based care have prioritized intelligence, portability, and connectivity in the industry.
Technologies such as AI and remote monitoring are redefining industry boundaries, demanding
greater R&D investment and faster product cycles.
Challenges in Market Education and Consumer Trust: The absence of professional guidance
and standardized usage protocols may adversely affect user experience and product repurchase
rates.
Competitive Landscape of Home Care Medical Devices Market in China
The competitive landscape of the home care medical devices market in China is relatively
fragmented. The Group ranked the second in the home care medical devices market in China based
on domestic revenues from home care medical devices in 2024.
Competitive Landscape of Home Care Medical Devices Market in China, 2024
Ranking Company Revenue in 2024 (Billion RMB) Market Share (%)
1 Company A 1 4.8 3.4%
2 The Group 2.9 2.1%
3 Company B 2 2.5 1.8%
4 Company C 3 2.3 1.7%
5 Company D 4 1.7 1.2%
Note: The revenue disclosed represent market players’ domestic revenue from home care medical devices in 2024.
Source: Expert interview, Annual reports of listed companies, Frost & Sullivan analysis
1 Company A is founded in 1998 and headquartered in East China. It is a company primarily engaged in the provision
of home care medical devices, clinical medical products, and related services. The company was listed on the
Shenzhen Stock Exchange in 2008.
2 Company B is founded in 1933 and headquartered in Japan. It is a manufacturer and supplier of automation control
and electronic equipment. The company was listed on the Tokyo Stock Exchange in 1963.
3 Company C is founded in 2002 and headquartered in Central China. It is a company engaged in R&D, production,
and sale of a range of diagnostic products for chronic diseases. The company was listed on the Shenzhen Stock
Exchange in 2012.
4 Company D is founded in 1991 and headquartered in South China. It is a company primarily engaged in the R&D,
production, and sales of cotton-based products. The company was listed on the Shenzhen Stock Exchange in 2020.
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The Group’s competitive advantages are primarily reflected in the following aspects:
Channel Advantage: The Group maintains a vast offline footprint through stable partnerships
with leading pharmacy chains, serving over 200,000 retail pharmacies nationwide, complemented
by almost 670 self-owned direct stores. As a early mover since 2014, the Group consistently holds
a top-tier share of online market revenue.
R&D Advantage: The Group’s innovation strategy aligns R&D with real-world demand. By
leveraging national-level research platforms and a multidisciplinary team, it bridge the gap between
academia and industry. This collaborative ecosystem ensures continuous technological
breakthroughs.
Production Advantage: With self-operated production bases in Changsha, Y ueyang, and
Nantong, the Group ensure full control over the R&D and manufacturing of core products. Through
digital transformation and automation, the Group maximize production efficiency and quality while
significantly reducing manufacturing costs.
OVERVIEW OF GLOBAL AND CHINA’S HOME REHABILITATION AID PRODUCTS
MARKET
Home rehabilitation aids are medical devices designed to support recovery, functional
rehabilitation, and daily health maintenance. These products are essential for restoring physical
function, managing pain, and accelerating post-operative healing, ultimately enhancing the quality
of life for those with chronic conditions. Key categories include wheelchairs, mobility scooters,
hearing and visual aids, etc. From 2019 to 2024, the global home rehabilitation aid products market
grew from USD19.0 billion to USD28.8 billion. The market is projected to grow at a CAGR of
7.1%, reaching USD43.6 billion by 2030.
Global Home Rehabilitation Aid Products Market Breakdown by Regions, 2019-2030E
19.0 20.2
23.8 25.5 27.6 28.8 30.6 32.6 34.9
37.4
40.3
43.6
7.3 7.6
6.9
2.2
10.2 10.5 11.2 11.9 12.7 13.5
14.5
15.6
5.1 5.7
5.9
7.6 8.2 8.7 9.3 9.9 10.7 11.6 12.6 13.8
4.9 5.1
2.0
6.3 6.8 7.1 7.5 7.9 8.4 9.0 9.6 10.3
1.7 1.8
8.9 9.4
2.4 2.5 2.7 2.9 3.1 3.3 3.6 3.9
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E
Period
2019-2024
2024-2030E
Global
8.7%
7.1%
North America
7.5%
6.7%
CAGR
Asia Pacific
11.4%
7.9%
Europe
7.5%
6.5%
Others
8.1%
7.8%
Billion USD
North America Asia Pacific Europe Others
Note: The market size is based on revenue.
Source: Expert interview, Frost & Sullivan analysis
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Home Rehabilitation Aid Products Market in China
China’s demand for home rehabilitation is surging, driven by an aging demographic and a
rising prevalence of chronic conditions such as hypertension, diabetes, and joint disorders.
Furthermore, a significant patient population requires post-surgical recovery for fractures, cardiac
procedures, and neurosurgical interventions. Despite this critical need, China’s rehabilitation
infrastructure remains in a nascent stage compared to the U.S. and Europe. This gap between the
rapidly growing patient base and the current supply of rehabilitation creates massive, untapped
growth potential for China’s home rehabilitation market.
In terms of revenue, the home rehabilitation aid products market in China has grown from
RMB27.2 billion in 2019 to RMB46.5 billion in 2024. Spurred by increasing number of the elderly
and disabled population, rising awareness of health management and increasing disposable income
among residents, the home rehabilitation aid products market in China is forecasted to grow at a
CAGR of 8.2%, reaching RMB74.5 billion by 2030.
The Group ranked the 1st in the home rehabilitation aids products market in China in 2024.
Competitive Landscape of Home Rehabilitation Aid Products Market in China, 2024
Rank Name Revenue in 2024 (billion RMB) Market Share (%)
1 The Group 1.10 2.4%
2 Company A 1.04 2.2%
3 Company  E
5 1.01 2.2%
4 Company F 6 0.66 1.4%
5 Company G7 0.55 1.2%
Others 42.1 90.6%
Note: The revenue disclosed represent market players’ domestic revenue from home rehabilitation aid products in 2024.
Source: Expert interview, Frost & Sullivan analysis
Overview Of Hearing Aid Products Market in China
China faces a significant hearing impairment challenge, with approximately 67 million people
suffering from moderate-to-severe hearing loss. This is particularly prevalent among the elderly,
impacting almost one-third of those aged over 65. In line with the Healthy China 2030 initiative,
the government has prioritized hearing health, with cities like Beijing and Shanghai already
implementing subsidy programs that cover up to 50% of costs for seniors. Despite this, China’s
hearing aid penetration rate remains below 5%, far behind Western markets. This gap represents a
vast untapped market which is projected to hit RMB15.5 billion by 2030, growing at a CAGR of
12.4%. The offline professional fitting services serve as a critical bridge between patients and
effective rehabilitation. By providing personalized assessments and expert follow-up, these services
are essential to ensuring patient satisfaction and driving repurchase rates.
5 Company E is founded in 1990 and headquartered in East China. The company specializes in R&D and production
of wheelchairs and other rehabilitation equipment.
6 Company F is founded in 1947 and headquartered in Switzerland. The company specializes in R&D, manufacturing,
and commercialization of advanced digital hearing aids and FM wireless assistive listening systems. The company
was listed on the SIX Swiss Exchange in 1994.
7 Company G is founded in 2002 and headquartered in South Central China. It is a company that provides rehabilitation
medical products, integrated clinical rehabilitation solutions, and technical support services. The company was listed
on the Shanghai Stock Exchange in 2021.
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Overview of Electric Wheelchair Product Market in China
China’s electric wheelchair market is experiencing robust growth, fueled by a rapidly aging
population (310 million people aged 60 and over in 2024) and evolving healthcare needs. Beyond
traditional home use, electric wheelchairs are increasingly adopted in medical rehabilitation centers,
elderly care facilities, and public spaces, supported by government initiatives aimed at improving
accessibility and senior health.
In 2024, the market size of the electric wheelchair market in China reached RMB6.2 billion,
accounting for 13.3% of the home rehabilitation aid products market in China. It is projected to
exceed RMB10.1 billion by 2030, representing a CAGR of 8.5%. While the penetration rate of
electric wheelchairs in China is currently lower than that in Western countries, this sector is
expected to witness a substantial growth potential driven by government policies support for the
development of the rehabilitation aid products industry and accelerated construction of domestic
rehabilitation centres in different provinces.
National initiatives such as the Healthy Aging strategy and barrier-free environment
regulations have created favorable conditions for market expansion, while local subsidies further
stimulate demand. Furthermore, technological progress is accelerating, with manufacturers
integrating intelligent features such as AI-based obstacle detection, health monitoring, voice
control, and IoT connectivity, often linked to smart elderly care platforms.
Overview of Posture Corrector Product Market in China
The posture corrector market is highly segmented, driven by distinct lifestyle needs. The
white-collar workforce presents a steady demand for solutions to mitigate strain from sedentary
desk work. Meanwhile, younger consumers prioritize functional improvements, aesthetic
appearance, and the correction of poor posture habits.
In 2024, the market size of posture corrector products in China reached RMB1.9 billion. It is
projected to grow at a CAGR of 9.7%, reaching RMB3.3 billion by 2030. Based on the revenues
of “babaka”, the Group ranked the first in China’s posture corrector products market in 2024.
Competitive Landscape of Posture Corrector Products Market in China, 2024
Rank Company Revenue in 2024 (billion RMB) Market Share (%)
1
2
3
4
The Group 0.5 27.2%
Company H
8 0.2 8.5%
Company I9 0.1 5.8%
Company J10 0.1 3.2%
Others 1.0 55.3%
Note: The revenue disclosed represent market players’ domestic revenue from posture corrector products in 2024.
Source: Expert interview, Frost & Sullivan analysis
8 Company H is founded in 2014 and headquartered in South Central China. It is a technology-driven healthcare and
healthy lifestyle solutions provider.
9 Company I is founded in 1902 and headquartered in the United States. It is a diversified technology innovation
enterprise with products spanning multiple sectors including industry, household goods, transportation, construction,
commerce, education, as well as electronics and communications. The company was listed on the New Y ork Stock
Exchange in 1950.
10 Company J is founded in 2014 and headquartered in North China. The company is a comprehensive fitness solutions
provider delivering integrated services including exercise coaching, athletic nutrition planning, and performance gear
purchases.
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OVERVIEW OF GLOBAL AND CHINA’S MEDICAL CARE SUPPLIES MARKET
Medical care supplies encompass products essential for examination, diagnosis, treatment, and
nursing, including dressings, bandages, masks, etc. Produced under sterile standards, these items
are critical for infection control, wound care, and clinical support. In terms of revenue, the global
market expanded from USD10.7 billion in 2019 to USD16.1 billion in 2024. It is projected to reach
USD22.6 billion by 2030 (CAGR of 5.8%). Meanwhile, China’s market grew from USD2.5 billion
in 2019 to USD4.3 billion in 2024 (CAGR of 11.1%). Driven by rising demand for wound care and
chronic disease management, the market is expected to reach USD6.8 billion by 2030.
Competitive Landscape of Medical Care Supplies Market in China, 2024
Ranking Company Revenue in 2024 (billion RMB) Market Share (%)
1C o m p a n y  D 1.43 4.7%
2C o m p a n y  K 11 0.98 3.2%
3C o m p a n y  L 12 0.87 2.9%
4 The Group 0.80 2.6%
5 Company A 0.71 2.3%
Others 25.51 84.2%
Note: The revenue disclosed represent market players’ domestic revenue from medical care supplies in 2024.
Source: Expert interview, Frost & Sullivan analysis
Overview of Ostomy Care Product Market in China
Ostomy bags are essential medical containers for patients following surgeries such as
colostomies, urostomies, or ileostomies. Proper pouch use is critical to postoperative recovery and
long-term quality of life. The market in China is expanding steadily, driven by the rising incidence
of colorectal cancer, bladder cancer, and inflammatory bowel disease. China’s ostomy care products
market valued RMB4.0 billion in 2024, and is projected to reach RMB7.5 billion by 2030 (11.0%
CAGR). Through continued R&D investment, domestic enterprises are rapidly increasing their
market share by enhancing product performance, service quality, and cost efficiency.
In terms of online sales revenue of ostomy care products in 2024, the Group ranked the first
among domestic companies in China.
OVERVIEW OF GLOBAL AND CHINA’S HOME HEALTH MONITORING MARKET
Home health monitoring devices mainly include blood pressure monitoring devices, blood
glucose monitoring devices, blood oxygen monitoring devices, body temperature monitoring
devices, etc..
11 Company K is founded in 1994 and headquartered in East China. It is an integrated medical and healthcare enterprise
combining R&D, manufacturing, and sales to foster synergistic development across the industry. The company was
listed on the Shanghai Stock Exchange in 2018.
12 Company L is founded in 2002 and headquartered in Central China. It is a company specializing in R&D,
manufacturing, and sales of single-use medical consumables and hygiene products. The company was listed on the
Shenzhen Stock Exchange in 2019.
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In terms of revenue, the global home health monitoring market grew from USD16.4 billion in
2019 to USD24.0 billion in 2024. It is projected to reach USD34.9 billion by 2030. Driven by an
aging population, rising chronic disease rates, and greater health awareness, China’s home health
monitoring market grew from USD3.0 billion to USD5.4 billion between 2019 and 2024. It is
expected to hit USD9.1 billion by 2030, reflecting a CAGR of 9.0%.
China’s vast chronic disease population drives a surging demand for home health monitoring
devices. With over 300 million hypertension patients requiring regular blood pressure tracking, and
more than 150 million diabetics needing frequent glucose monitoring. This demand is further
amplified by growing prediabetic individuals, and health-conscious consumers focused on weight
management. Additionally, pulse oximeters have become essential tools for long-term respiratory
and cardiac care. Beyond their critical role in managing conditions like COPD, asthma, and
pneumonia, these devices are increasingly used by health-conscious seniors for early detection and
daily health maintenance.
Competitive Landscape of the Home Health Monitoring Devices Market in China, 2024
Ranking Company Revenue in 2024 (billion RMB) Market Share (%)
1C o m p a n y  C 2.45 6.3%
2 Company A 2.03 5.2%
3C o m p a n y  B 0.98 2.5%
4 Company M13 0.85 2.2%
5 The Group 0.49 1.3%
Others 32.0 82.5%
Note: The revenue disclosed represent market players’ domestic revenue from home health monitoring devices in 2024.
Source: Expert interview, Frost & Sullivan analysis
Overview of the Digital Thermometer Product Market in China
From 2019 to 2024, the digital thermometer market in China increased from RMB0.5 billion
to RMB1.0 billion, representing a CAGR of 13.7%. The digital thermometer market in China is
projected to grow at a CAGR of 7.0%, reaching RMB1.5 billion by 2030. In 2024, the Group ranked
the second with a sales revenue of RMB80 million from digital thermometer products in the market.
Overview of the Blood Glucose and Uric Acid Testing Product Market in China
Due to the high comorbidity between diabetes and hyperuricemia, there is rising demand in
China for integrated testing solutions. China’s blood glucose market grew from RMB4.0 billion in
2019 to RMB6.6 billion in 2024, with a projected CAGR of 8.8% to reach RMB10.9 billion by
2030. China’s uric acid market grew from RMB0.8 billion in 2019 to RMB1.6 billion in 2024, with
a projected CAGR of 9.1% to reach RMB2.8 billion by 2030. Dual-test devices can provide
simultaneous measurements, significantly enhancing clinical efficiency while reducing the burden
on users. As patients increasingly prioritize precision and convenience, the market for dual-test
solutions is poised for steady, long-term growth.
In 2024, the home blood glucose and uric acid dual-test product in China reached RMB0.3
billion, accounting for 0.9% of the home health monitoring devices market in China. The market
is projected to grow at a CAGR of 9.6%, reaching RMB0.6 billion by 2030.
13 Company M is founded in 1888 and headquartered in the United States. It is a medical and healthcare products
company with product lines in nutritional supplements, pharmaceuticals, medical devices, diagnostic instruments, and
reagents. The company was listed on the New Y ork Stock Exchange in 1929.
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OVERVIEW OF GLOBAL AND CHINA’S HOME RESPIRATORY SUPPORT DEVICES
MARKET
Respiratory support devices are categorized into three core segments: ventilators, oxygen
concentrators, and nebulizers, each essential for managing chronic respiratory conditions.
V entilators are primarily used to treat sleep apnea (OSA) and manage respiratory insufficiency
(COPD/asthma). By providing consistent support, they stabilize lung function and significantly
enhance patient quality of life.
Global and China’s Home Respiratory Support Devices Market
In terms of revenue, the global home respiratory support market expanded from USD3.8
billion in 2019 to USD5.9 billion in 2024. It is projected to reach USD9.0 billion by 2030,
representing a CAGR of 7.2%. Driven by a rising prevalence of chronic respiratory diseases and
increased health awareness, China’s home respiratory support market grew from USD0.7 billion to
USD1.3 billion between 2019 and 2024. The market is expected to hit USD2.1 billion by 2030.
China’s respiratory care market is fueled by a rapidly growing patient base. The number of
COPD patients is projected to hit 120.5 million by 2030. Meanwhile, the market for sleep disorders
presents a greater untapped potential: the current diagnosis and treatment rate remains below 1%,
a stark contrast to the 20% rate in the U.S.
Competitive Landscape of the Home Respiratory Support Product Market in China, 2024
Ranking Company Market Share (%)
1 Company A 1.93 21.4%
2 Company N 14 1.26 14.0%
3 Company O 15 0.83 9.2%
4 Company P16 0.75 8.3%
5 Company C 0.51 5.7%
6 Company Q17 0.30 3.3%
7 The Group 0.27 3.0%
8 Company R18 0.25 2.8%
Others 2.9 32.3%
Revenue in 2024 (billion RMB)
Note: The revenue disclosed represent market players’ domestic revenue from home respiratory support products in 2024.
Source: Expert interview, Frost & Sullivan analysis
14 Company N is founded in 1989 and headquartered in the United States. It is a company primarily engaged in the
development, production, and sales of respiratory care equipment. The company was listed on the New Y ork Stock
Exchange in 1995.
15 Company O is founded in 2001 and headquartered in North China. It is a manufacturer of medical devices and
consumable products in the field of respiratory health. The company was listed on the Shenzhen Stock Exchange in
2022.
16 Company P is founded in 1891 and headquartered in Netherlands. It is a multinational medical device company
primarily engaged in the production of lighting equipment, household appliances, and medical systems. The company
was listed on the New Y ork Stock Exchange in 1987.
17 Company Q is founded in 2005 and headquartered in East China. It is a home appliance manufacturing and sales
company. The company was listed on the Shanghai Stock Exchange in 1993.
18 Company R is founded in 1999 and headquartered in North China. It is a company primarily engaged in the research,
development, production, and sales of medical devices. The company was listed on the Shenzhen Stock Exchange in
2009.
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Overview of the Home Ventilator Market in China
As public awareness of respiratory care grows, the improved diagnosis and management of
chronic conditions, such as OSA and COPD, have catalyzed a surge in demand for home-based
respiratory support. From 2019 to 2024, the home ventilator market in China increased from
RMB1.0 billion to RMB2.7 billion, representing a CAGR of 20.8%. The market is projected to grow
at a CAGR of 10.2%, reaching RMB4.8 billion by 2030.
Overview of the Home Oxygen Concentrator Market in China
Home oxygen concentrators are suitable for various populations suffering from hypoxemia,
including patients with chronic respiratory diseases, cardiovascular and cerebrovascular disorders,
as well as specific groups requiring oxygen therapy for health maintenance. The treatment needs of
these populations are expected to further drive the demand for home oxygen concentrators. From
2019 to 2024, the home oxygen concentrator market in China grew from RMB1.0 billion to RMB1.8
billion. The market is projected to grow at a CAGR of 8.7%, reaching RMB2.9 billion by 2030.
OVERVIEW OF TRADITIONAL CHINESE MEDICINE PHYSIOTHERAPY PRODUCTS
INDUSTRY IN CHINA
TCM physiotherapy integrates natural and physical therapies to prevent and treat disease. By
utilizing localized stimulation and neuro-humoral modulation, these interventions improve
circulation, accelerate metabolism, and boost immune function. A rising prevalence of
musculoskeletal disorders has created a surge in demand for home-based pain management, such as
heat and massage therapy. In addition, young professionals suffering from work-related fatigue and
sleep disorders are increasingly adopting daily wellness products.
The Home TCM Physiotherapy Products Market in China
In terms of revenue, the home TCM physiotherapy products market in China increased from
RMB2.6 billion in 2019 to RMB4.3 billion in 2024. The home TCM physiotherapy products market
in China is projected to grow at a CAGR of 10.8%, reaching RMB8.0 billion by 2030.
Competitive Landscape of the Home TCM Physiotherapy Products Market in China, 2024
Ranking Company Revenue in 2024 (billion RMB) Market Share (%)
1 Company S19 0.42 9.8%
2 The Group 0.18 4.2%
3 Company G 0.15 3.4%
4 Company A 0.05 1.1%
Others 3.51 81.5%
Note: The revenue disclosed represent market players’ domestic revenue from home TCM physiotherapy products in 2024.
Source: Expert interview, Frost & Sullivan analysis
19 Company S is founded in 2000 and headquartered in South China. It is a company that integrates traditional Chinese
massage therapy concepts with modern technology, primarily engaged in the R&D, manufacturing, and sales of
massage products.
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MAJOR COST ANALYSIS
The major costs of the home care medical device industry include the cost of raw materials,
procurement, labor, marketing, and R&D.
V ariable Costs (Materials & Procurement): Directly linked to sales volume, these costs
fluctuate based on market prices for raw materials and components. Prices are subject to external
factors, including supply chain dynamics, inflation, trade policies, and geopolitical shifts.
Fixed Costs (Labor): Primarily comprised of salaries and social insurance, labor costs are
relatively rigid and exhibit minimal short-term volatility.
Marketing & Promotion: Expenditures are allocated across both online and offline channels.
As for the Group, a significant portion is dedicated to online platform fees and digital marketing.
R&D Investment: Focused on new product development and technological iteration, R&D
requires substantial upfront capital and follows a long-term return cycle.
SOURCE OF INDUSTRY INFORMATION
In connection with the Global Offering, we have engaged Frost & Sullivan to conduct a
detailed analysis and to prepare an industry report on our markets. Frost & Sullivan is an
independent global market research and consulting company founded in 1961 and is based in the
United States. Services provided by Frost & Sullivan include market assessments, competitive
benchmarking, and strategic and market planning for a variety of industries. We have included
certain information from the Frost & Sullivan Report in this Prospectus because we believe such
information facilitates an understanding of our markets for potential investors. Frost & Sullivan
prepared its report based on its in-house database, independent third-party reports and publicly
available data from reputable industry organizations.
Frost & Sullivan believes that the basic assumptions used in preparing the Frost & Sullivan
Report, including those used to make future projections, are factual, correct and not misleading. We
have agreed to pay Frost & Sullivan a fee of RMB250,000 for the preparation of the Frost &
Sullivan Report. The payment of such amount was not contingent upon our successful listing or on
the content of the Frost & Sullivan Report. Except for the Frost & Sullivan Report, we did not
commission any other industry report in connection with the Global Offering. We confirm that after
taking reasonable care, there has been no adverse change in the market information since the date
of the report prepared by Frost & Sullivan which may qualify, contradict or have an impact on the
information set forth in this section in any material respect.
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We are required to comply with various PRC laws, rules and regulations in many aspects. This
section summarizes the major PRC laws, rules and regulations applicable to our business.
LA WS AND REGULATIONS RELATING TO MEDICAL DEVICES
Regulation and Classification of Medical Devices
Pursuant to the Regulations on the Supervision and Administration of Medical Devices ( ᔼ
ᐕኜ૛္ຖ၍ଣૢԷ) promulgated by the State Council and effective from April 1, 2000, latest
amended on December 6, 2024 and came into effect on January 20, 2025, medical devices are
classified into three different categories, Class I, II and III on the basis of their respective degrees
of risk. Medical devices of Class I refer to such devices with low level of risk, the safety and
effectiveness of which can be ensured through routine administration. Medical devices of Class II
refer to such devices with medium level of risk, the safety and effectiveness of which shall be
strictly controlled. Medical devices of Class III refer to such devices with high level of risk, the
safety and effectiveness of which shall be guaranteed and be subject to strict control through special
administrative measures.
Registration and Filing of Medical Devices
Pursuant to the Administrative Measures for the Registration and Filing of Medical Devices
() promulgated by the State Administration for Market
Regulation (the “ SAMR ”) on August 26, 2021 and took effect on October 1, 2021, medical devices
of Class I are subject to record-filing, while medical devices of Class II and Class III are subject
to registration.
Production and Quality Management of Medical Devices
Pursuant to the Measures for the Supervision and Administration of Medical Device
Production () which was promulgated and implemented by China
Food and Drug Administration (the “ CFDA ”) on July 20, 2004 and became effective on the same
day, and amended by the SAMR on March 10, 2022 and became effective on May 1, 2022, the
production of medical devices implements classified management based on their level of risks. An
entity engaging in the production of Class II and III medical devices shall obtain approval from the
drug supervision and administration department of the province, autonomous region or municipality
where it is located and obtain a production permit for medical devices in accordance with the law;
An entity engaging in the production of Class I medical devices shall file with the drug supervision
and administration department of the city with districts where it is located for the production of
medical devices.
According to the Good Manufacturing Practice for Medical Devices ( ᔼᐕኜ૛͛ପሯඎ၍
ଣ஝ᇍ) which was promulgated by the CFDA on December 29, 2014 and became effective on
March 1, 2015, the manufacturers of medical devices shall, in accordance with the requirements of
the Good Manufacturing Practice for Medical Devices, establish and improve a quality management
system. Manufacturers of medical devices shall, in accordance with the requirements of the Good
Manufacturing Practice for Medical Devices and having taken into account product characteristics,
establish and improve a quality management system that is compatible with the medical devices
produced, and ensure their effective operation.
Operation Permit for Medical Devices
Pursuant to the Measures for the Supervision and Administration of Medical Device Operation
() promulgated by the CFDA on July 30, 2014 and effective from
October 1, 2014, and latest amended by the SAMR on March 10, 2022 and effective from May 1,
2022, the operation of medical devices implements classified management based on their level of
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risks. The operation of medical devices of Class III is subject to permit management, the operation
of medical devices of Class II is subject to record-filing management, while the operation of
medical devices of Class I requires no permit or filing.
Imports and Exports of Medical Devices
Pursuant to the Customs Law of the PRC () promulgated by the
Standing Committee of the National People’s Congress (the “ SCNPC ”) on January 22, 1987,
effective from July 1, 1987 and latest amended on April 29, 2021, the Measures for Record Filing
and Registration of Foreign Trade Operators () promulgated by
the MOFCOM on June 25, 2004 and effective from July 1, 2004, and latest amended on May 10,
2021 and the Administrative Provisions of the Customs of the PRC on Record-Filing of Customs
Declaration Entities () promulgated by the General
Administration of Customs of China on November 19, 2021 and took effect on January 1, 2022,
foreign trade operators engaged in goods or technology import and export are required to go through
the record-filing and registration procedures with the MOFCOM or the agency entrusted by the
MOFCOM.
According to the Administrative Regulations on the Export Sales Certificates of Medical
Devices () issued by the CFDA on June 1, 2015 and
effective from September 1, 2015, the relevant drug regulatory authorities may issue a Medical
Device Product Export Sales Certificate () to a production
enterprise which has obtained a registration certificate and a production permit of medical devices
in China or has completed the filing procedures for the registration and production of medical
devices.
Online Sales and Online Marketing of Medical Devices
According to the Administrative Measures on the Internet Drug Information Service
(Amendments in 2017) (ج2017͍)) promulgated by the CFDA
on November 17, 2017 and effective from the same day, the Internet drug information service refers
to the activities of providing medical information (including medical devices) to Internet users
through the Internet. Advertisements for drugs (including medical devices) published by websites
that provide Internet drug information services must be reviewed and approved by the food and drug
regulatory authorities. Advertisements for drugs (including medical devices) published by websites
that provide Internet drug information services must indicate the advertising approval number.
On December 20, 2017, the CFDA promulgated the Supervision and Administration Measures
of Online Sales of Medical Devices () (the “ Online Medical
Devices Sales Measures ”), which became effective on March 1, 2018. According to the Online
Medical Devices Sales Measures, enterprises engaged in online sales of medical devices must be
medical device manufacturing and operation enterprises with medical devices production permits or
operation licenses or being filed for record in accordance with laws and regulations, unless such
licenses or record-filing is not required by laws and regulations. Pursuant to the Online Medical
Devices Sales Measures, enterprises engaging in online sales of medical devices through its own
website, and the enterprises providing a third-party platform for provision of medical devices online
transaction services shall obtain an Internet Drug Information Services Qualification License ( ʝ
) in accordance with law. Either enterprises engaging in online sales
of medical devices or enterprises providing a third-party platform for provision of medical devices
online transaction services shall take technical measures to ensure the data and materials of medical
devices online sales are authentic, complete and traceable.
According to the Regulations on the Quality Management of Online Sales of Medical Devices
(ᔼᐕኜ૛ၣഖቖਯሯඎ၍ଣ஝ᇍ) promulgated by the National Medical Products
Administration on April 28, 2025 and to be effective on October 1, 2025, operators engaging in
online sales of medical devices shall establish a quality management department commensurate
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with their online sales scope, business model and sales scale. For those conducting wholesale
business of Class II or III medical devices, their quality management department shall also perform
eligibility review and dynamic management of purchasers, and continuously display relevant
qualification information in prominent positions such as the homepage of their website or the main
page of their business activities.
Pursuant to the Online Trading Supervision and Management Measures (္ຖ၍ଣ
) promulgated by the SAMR on March 18, 2025, which became effective on May 1, 2025,
online trading operators shall fully, truly, accurately and timely disclose information about goods
or services to protect consumers’ rights to know and choose. Goods sold or services provided by
online trading operators shall meet the requirements for the protection of personal and property
safety as well as environmental protection, and online trading operators shall not sell goods or
provide services that are prohibited by laws or administrative regulations, harm the national
interests and public interests, or violate public order and good morals. An online trading operator
that conducts online trading activities through online social networking services, online live-
streaming, and other online services shall display information in a conspicuous manner, such as the
goods or services, their actual business operators, and after-sales services, or the link signs to the
above-mentioned information. Pursuant to the Administrative Measures for Online Live-Streaming
Marketing (for Trial Implementation) (ج(༊Б)) promulgated by the
Cyberspace Administration of China, the Ministry of Public Security, the MOFCOM, the Ministry
of Culture and Tourism, the SA T, the SAMR, and the National Radio and Television Administration
on April 16, 2021, which became effective on May 25, 2021, those who engage in online
live-streaming marketing activities shall comply with laws and regulations. Operators of live-
studios and live-streaming marketing personnel engaging in online live-streaming activities shall
comply with laws, regulations and the relevant provisions of the State, follow public order and good
customs, and truthfully, accurately and comprehensively release information on goods or services.
According to the Guidelines on Strengthening the Supervision of Online Live-Streaming
Marketing Activities (ኬจԈ) issued by the SAMR on
November 5, 2020, and the Guidelines on Strengthening the Standardized Management of Online
Live-Streaming Activities (ኬจԈ) jointly issued by the
Cyberspace Administration of China, the National Anti-Pornography and Anti-Illegal Publications
Office, the MIIT, the Ministry of Public Security, the Ministry of Culture and Tourism, the SAMR,
and the National Radio and Television Administration on February 9, 2021, which took effect on
the same day, the legal responsibilities of online platforms, product operators, and online live
streamers are clearly stipulated. According to the Opinions on Further Regulating Online
Live-Streaming Profit-Making Activities and Promoting the Healthy Development of the Industry
(จԈ) promulgated by the Cyberspace
Administration of China, the SA T, and the SAMR on March 25, 2022, which became effective on
the same day, online live streamers and live streaming service providers are strictly prohibited from
selling counterfeit or substandard products via online live-streaming platforms. They should not
promote or drive traffic for clients engaging in live-streaming commerce or other third parties when
they know or should have known that such parties are involved in illegal, non-compliant, or
high-risk activities. In addition, they should not attract traffic or hype popularity through means
such as spreading rumors, false marketing claims, or self-rewarding to induce consumers to make
rewards or purchase goods.
Advertisements of Medical Devices
The Advertising Law of the People’s Republic of China () (the
“Advertising Law ”) was promulgated in 1994 and was latest revised in 2021. The Advertising Law
mainly regulates advertising activities to ensure that advertisements are true, legal and protect the
legitimate rights and interests of consumers. It clarifies the responsibilities of advertisers,
advertising operators, advertising publishers and advertising spokespersons. Advertising content
must be true and legal and must not contain false or misleading content.
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In 2023, the State Administration for Market Regulation issued the Administrative Measures
for Internet Advertising (). The Administrative Measures for Internet
Advertising mainly regulates Internet advertising activities, clarifies the definition and scope of
Internet advertising, and standardizes Internet advertising behaviors.
According to the Interim Administrative Measures for the Review of Advertisements for
Drugs, Medical Devices, Health Food and Formula Food for Special Medical Purposes (e
) promulgated by the
SAMR on December 24, 2019 and effective from March 1, 2020 (replacing the Measures for the
Review of Medical Device Advertisements ()), the content of medical
device advertisements shall be based on the registration certificate or filing certificate. Where the
medical device advertisements involve the name, scope of application, functional mechanism or
structure or composition, etc. of the medical device, they shall not exceed the scope of registration
certificate or filing certificate.
Special Review Procedures for Innovative Medical Devices
In October 2017, the General Office of the CPC Central Committee and the General Office of
the State Council jointly issued the Opinions on Deepening the Reform of the Review and Approval
Systems and Encouraging Innovation on Drugs and Medical Devices (ҷ
จԈ), according to which, the research and development of
innovative medical devices is encouraged.
The Special Review Procedures for Innovative Medical Devices (೻
ҏ) promulgated by the NMPA on November 2, 2018 and effective from December 1, 2018
stipulates the special review procedures for innovative medical devices.
According to the Regulations on the Supervision and Administration of Medical Devices
(2024 Amendments) ( ᔼᐕኜ૛္ຖ၍ଣૢԷ(2024ࠈࡌ)) promulgated by the State Council on
January 4, 2000 and effective from April 1, 2000, amended on December 6, 2024 and effective from
January 20, 2025, the government shall formulate the industrial planning and policies for medical
devices, take the innovation of medical devices as the focus of development, give priority to the
evaluation and approval of innovative medical devices, support the clinical popularization and use
of innovative medical devices and promote the high-quality development of the medical device
industry. The NMPA shall coordinate with the relevant departments under the State Council to
implement the national industrial planning and guidance for medical devices. Furthermore, pursuant
to the Regulations on the Supervision and Administration of Medical Devices (2024 Amendments),
the government shall improve the innovation system for medical devices, support the basic research
and applied research of medical devices, promote the popularization and application of new
technologies for medical devices and support the scientific and technological projects in respect for
the initiation, financing, credit, procurement by public bidding, medical insurance, etc.
Recall, Adverse Event Monitoring and Re-evaluation of Medical Devices
In accordance with Regulations on the Supervision and Administration of Medical Devices,
the state shall establish a monitoring system for adverse events of medical devices, and collect,
analyze, evaluate and control adverse events of medical devices. A registrant or record-filing party
of medical devices shall establish a monitoring system for adverse events of medical devices, be
equipped with a monitoring body and personnel for adverse events suitable for its products, take the
initiative to monitor adverse events of its products, and report the information on investigation,
analysis, evaluation and product risk control to the technical monitoring agency for adverse events
of medical devices (the “ monitoring agency ”) in accordance with the provisions of the drug
regulatory department under the State Council. The manufacturers or business operators and using
entities of medical devices shall assist the registrant or record-filing party of medical devices in
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monitoring adverse events of the medical devices produced, operated or used by them; if any
adverse event of medical devices or suspicious adverse event is found, it shall be reported to the
monitoring agency in accordance with the provisions of the drug regulatory department under the
State Council.
According to the Administrative Measures for the Recall of Medical Devices ( ᔼᐕኜ૛̜
) which was promulgated by the CFDA on January 25, 2017 and took effect on May
1, 2017, depending on the severity of defects of medical devices, the recall of medical devices can
be divided into: (1) Level I recall: the use of the medical device may cause or has caused serious
health hazards; (2) Level II recall: the use of the medical device may cause or has caused temporary
or reversible health hazards; or (3) Level III recall: the medical device is less likely to cause harm
but still needs to be recalled. Medical device manufacturers should determine the level of recall
based on specific conditions and systematically design and organize the implementation of a recall
plan based on the level of recall and the sales and use of medical devices.
LA WS AND REGULATIONS RELATING TO LABOR AND EMPLOYMENT PROTECTION
The Labor Law of the PRC
According to the Labor Law of the PRC () promulgated by the
SCNPC on July 5, 1994, and last amended on December 29, 2018, employers shall establish and
improve their rules and systems to safeguard the rights and interests of employees.
The Labor Contract Law of the PRC and Its Implementation Regulations
The Law of the People’s Republic of China on Labor Contracts ( ʕശɛ͏΍ձ਷௶ਗΥΝ
) (the “ Labor Contract Law ”), which was promulgated by the SCNPC on June 29, 2007,
amended on December 28, 2012 and effective from July 1, 2013, together with the Implementation
Regulations for the Labor Contract Law of the PRC (ૢԷ),
which was promulgated by the State Council on September 18, 2008, regulate parties to the labor
contracts (namely, employers and workers) and contain specific provisions involving the terms of
the labor contract. Pursuant to the Labor Contract Law and its implementation regulations, labor
contracts must be executed in written form.
Laws and Regulations Governing Social Insurance and Housing Provident Funds
Pursuant to the Social Insurance Law of the PRC ()
promulgated by the SCNPC on October 28, 2010, latest amended on December 29, 2018 and
effective on the same date, employers shall apply for social insurance registration with social
insurance agencies within 30 days of establishment and contribute to a number of social insurance
funds for their employees (including funds for basic pension insurance, unemployment insurance,
basic medical insurance, work-related injury insurance and maternity insurance). Employers failing
to pay the social insurance premiums in full and on time may be ordered to make the payment or
make up the difference within a stipulated period. Where the payment is still not made within the
stipulated period, the employers may be imposed fines by relevant administrative authorities.
Pursuant to the Regulations on the Administration of Housing Provident Funds (ʮጐ
၍ଣૢԷ) promulgated by the State Council on April 3, 1999, latest amended on March 24,
2019 and effective on the same date, employers shall register for housing provident fund
contributions with housing provident fund administration centers and establish housing provident
fund accounts for their employees. Employers and employees shall jointly contribute to the housing
provident fund. Contributions made by both employers and employees belong exclusively to the
employees. Where an employer fails to register for housing provident fund contributions or
establish housing provident fund accounts for employees, it will be ordered to complete such
procedures within a prescribed time limit by the housing provident fund administration center;
where such procedures are still not completed within the stipulated time limit, the employer may
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be subject to a fine ranging from RMB10,000 to RMB50,000. The contribution ratio for both
employees and employers shall not be less than 5% of the employee’s monthly average wage from
the previous year. Employers failing to pay or underpay the housing provident funds shall be
ordered to make the payment within a stipulated time limit. Where payment is not made within the
stipulated period, the competent administrative authorities may apply to the people’s courts for
compulsory enforcement.
Pursuant to the Interpretation II of the Supreme People’s Court of Issues Concerning the
Application of Law in the Trial of Labor Dispute Cases (΁ቇ
༆ᙑ(ɚ)) effective on September 1, 2025, where an employer and an employee
agree or the employee undertakes that social insurance contributions need not be paid, the people’s
court shall deem such agreement or undertaking invalid. Where the employer fails to make social
insurance contributions in accordance with the law, and the employee requests to terminate the labor
contract and claim economic compensation in accordance with item 3 under the first paragraph of
Article 38 of the Labor Contract Law, the people’s court shall support such request in accordance
with the law. Where the circumstances specified in the preceding paragraph apply, if the employer
has made up the social insurance contributions in accordance with the law and requests the
employee to return the social insurance compensation already paid, the people’s court shall support
such request in accordance with the law.
Interim Provisions on Labor Dispatch
Pursuant to the Interim Provisions on Labor Dispatch () promulgated
on January 24, 2014 and effective on March 1, 2014, employers may only use dispatched workers
for temporary, auxiliary or substitutive positions, and they shall strictly control the number of
dispatched workers, which shall not exceed 10% of the total number of employees.
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OVERVIEW
We are a provider of home care medical devices in China. According to Frost & Sullivan, in
terms of the 2024 domestic revenue, we ranked second among all home care medical devices
providers in China, with a market share of 2.1%.
Our journey traces back to 2007 when Hunan Haohushi Medical Treatment Appliance Co.,
Ltd. (ʮ̡)( “ Haohushi ”), a subsidiary of our Company, was
established by Mr. Zhang and Ms. Nie (the spouse of Mr. Zhang). In 2009, our predecessor, Hunan
Cofoe Medical Technology Development Co., Ltd. (ʮ̡), was
established. In December 2019, our Company was converted into a joint stock company and was
renamed as Cofoe Medical Technology Co., Ltd. (ʮ̡). Since 2021, our A
Shares have been listed and traded on the ChiNext Market of the Shenzhen Stock Exchange ( ଉέ
ؐwith the stock code 301087.SZ. For details of the background of Mr. Zhang, see
“Directors and Senior Management” of this prospectus.
KEY CORPORATE AND BUSINESS DEVELOPMENT MILESTONES
The following is a summary of our Group’s key corporate and business development
milestones:
2007 Haohushi (a wholly-own subsidiary of our Company) was
established, primarily engaging in the operation of retail stores
for home care medical devices.
2009 The predecessor of the Company, Hunan Cofoe Medical
Technology Development Co., Ltd. (ࠢ
ʮ̡) was established. We adopted “Cofoe” as our own brand for
home care medical devices.
2014 We set up our first online store, Haohushi Medical Device
Flagship Store (ֳon Tmall, becoming one of
the earliest companies in the industry to establish a flagship
store for home care medical devices.
2017 We completed business integration, determined five core
therapeutic domains as our strategic development, and
commenced the capital market activities.
2021 Our A Shares were listed on the ChiNext Market of the Shenzhen
Stock Exchange (stock code: 301087.SZ) and raised
approximately RMB3.7 billion proceeds.
2022 The Changsha Intelligent Equipment Headquarter Base ( ̙ѿᔼ
Ӎᐼ௅ਿή) was set up and put into production,
which substantially enhanced our self-production capacity.
2024 Joyor Hearing, a subsidiary of the Company, experienced rapid
development, with its directly-operated chain of hearing aid
fitting centers ranking the top three in the industry in terms of
the number of chain stores by the end of 2024. We successively
developed and registered new products, including ventilators
and blood glucose and uric acid dual-test strips.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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2025 We completed the acquisitions of Shanghai Huazhou Pressure
Sensitive Adhesive Products Co., Ltd. (Ϟ
ʮ̡) and Humana Medical Systems Limited (ᔼᐕӻ
ʮ̡).
We have established a strategic partnership with Royal Philips
and obtained brand authorization for seven health monitoring
products in the Greater China region, including blood pressure
monitors, blood glucose meters, thermometers, and pulse
oximeters.
MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
Incorporation of our Company
Our Company, then known as Hunan Cofoe Medical Technology Development Co., Ltd. ( ಳ
ʮ̡), was established in the PRC on November 19, 2009 as a limited
liability company with an initial registered capital of RMB2 million. Upon the establishment, our
Company was owned as to (i) 95% by Mr. Zhang, our executive Director, chairman of the Board
and general manager; (ii) 4% by Mr. Zhang Zhiming, our executive Director and vice-chairman of
the Board; and (iii) 1% by Mr. Zeng Ziyun, an employee of our Company and Independent Third
Party.
Early Development and Conversion into a Joint Stock Company
Between the 2009 and 2019, the Company underwent rounds of capital increases and transfers.
Following these changes and immediately before our conversion into a joint stock company as
detailed in the paragraph below, our registered capital increased to RMB100,696,000.
On December 25, 2019, our then Shareholders approved the conversion of our Company from
a limited liability company into a joint stock company with limited liability. Pursuant to the
promoters’ agreement entered into by the then Shareholders on December 25, 2019, all promoters
of our Company (being the then Shareholders) approved the conversion of net asset value
RMB550,696,662.53 of our Company as of October 31, 2019 into 120,000,000 Shares of our
Company with a nominal value of RMB1.00 each, with the amount exceeding our share capital
recorded as capital reserves of our Company. The conversion was completed on December 26, 2019.
Our Company was renamed as Cofoe Medical Technology Co., Ltd. (ʮ̡).
Immediately following the completion of such conversion into a joint stock company, the
shareholding structure of our Company was as follows:
Shareholders Number of Shares Equity interest
(%)
Changsha Xiezihao (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,446,095 54.54
Changsha Keyuan (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,319,139 7.77
Mr. Zhang (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,319,139 7.77
Ms. Nie (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,681,338 2.23
Ningbo Huaige Gongxin V enture Capital Partnership
(Limited Partnership) (௴ุҳ༟Υྫ
Άุ(Υྫ)) (“ Huaige Gongxin ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,103,599 6.75
Mr. Zhang Zhiming (׼)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,591,483 4.66
Guangzhou Danlu V enture Capital Fund Partnership
(Limited Partnership) (Υྫ
Άุ(Υྫ)) (“ Danlu VC ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,676,253 3.90
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Shareholders Number of Shares Equity interest
(%)
Xiangtan Chanxing Dingxin Private Equity Fund
Enterprise (Limited Partnership) (ӷ
Άุ(Υྫ)) (“ Chanxing
Dingxin ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,908,795 3.26
Hunan Cultural Tourist V enture Capital Fund
(Limited Partnership) (ږ
Άุ(Υྫ)) (“ Hunan Cultural Tourist ”) /H1118/H1118/H1118/H11183,896,878 3.25
Changsha Y uhua Economic Development Dingxin
Private Equity Fund Partnership (Limited
Partnership) (Υྫ
Άุ(Υྫ)) (“ Yuhua Economic ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,392,945 1.99
Hunan Bofu Cultural Industry Investment Funds
(Limited Partnership) (ږ
Άุ(Υྫ)) (“ Hunan Bofu ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,335,743 1.95
Ms. Hu Hongxia (ᒳ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,549,217 1.29
Hunan Y anjin Puzi Holding Co., Ltd. (቗ɿ
ʮ̡)( “ Y anjin Puzi ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118779,376 0.65
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,000,000 100.00
Note:
(1) Ms. Nie is the spouse of Mr. Zhang. Changsha Xiezihao was owned as to 90% and 10% by Mr. Zhang and Ms.
Nie, respectively. Mr. Zhang is the executive partner and the general partner of Changsha Keyuan with 5%
partnership interest in Changsha Keyuan and each of Ms. Nie and Mr. Zhang Zhiming (׼is a limited
partner of Changsha Keyuan with 55% and 40% partnership interest in Changsha Keyuan, respectively.
Listing on the ChiNext Market of the Shenzhen Stock Exchange
In October 2021, we completed the listing of our A shares on the ChiNext Market of the
Shenzhen Stock Exchange (ؐwith the stock code 301087.SZ (the “ A Share
Listing ”). In connection with A Share Listing, we issued an aggregate of 40,000,000 A Shares,
accounting for 25% of our Company’s then enlarged share capital immediately following the A
Share Listing. Following the A Share Listing, the share capital of our Company was
RMB160,000,000, and Mr. Zhang, together with Changsha Xiezihao, Changsha Keyuan and Ms.
Nie, was able to exercise approximately 55.22% of our Company’s voting rights.
Subsequent Capital Changes
In March 2022, we granted and issued 375,000 Shares to grantees pursuant to relevant
Employee Incentive Schemes. Upon the completion, the share capital of our Company was
RMB160,375,000.
In June 2022, we increase the share capital of our Company from RMB160,375,000 to
RMB208,487,500 by way of capitalization of the capital reserve of our Company.
In December 2023, we granted and issued 750,750 Shares to grantees pursuant to relevant
Employee Incentive Schemes. Upon the completion, the share capital of our Company was
RMB209,238,250.
In September 2024, we repurchased and canceled 146,250 Shares. Upon the completion of
such repurchase and cancelation, the share capital of our Company was RMB209,092,000
comprising 209,092,000 Shares with a nominal value of RMB1.00 each.
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In August 2025, we repurchased and canceled 195,000 Shares. Upon the completion of such
repurchase and cancelation, the share capital of our Company was RMB208,897,000 comprising
208,897,000 Shares with a nominal value of RMB1.00 each.
EMPLOYEE INCENTIVE SCHEMES
For the purpose of attracting and retaining talents and motivating our employees, we have
established certain Employee Incentive Schemes. Below sets forth the effective schemes as of the
Latest Practicable Date:
(i) on December 21, 2021, our Shareholders passed a resolution to implement Employee
Incentive Scheme 2021 to grant up to 3,000,000 options to eligible participants to
subscribe Shares. These options have a exercise period of no more than 48 months since
the date of the grant. As of the Latest Practicable Date, 3,120,000 options (taking into
account the adjustment pursuant to the Capitalization Issue 2022 and Dividends
Distributions) had been granted. Out of such granted options, 897,000 options has been
exercised, and the remaining 2,223,000 options has been canceled or void. No further
options will be granted under the Employee Incentive Scheme 2021, and no Shares will
be issued pursuant to any options granted thereunder.
(ii) on March 21, 2024, our Shareholders passed a resolution to implement Employee
Incentive Scheme 2024 to grant up to 6,633,000 options to eligible participants to
subscribe Shares. These options have a exercise period of no more than 49 months since
the date of the grant. As of the Latest Practicable Date, all options had been granted. No
other option would be granted under Employee Incentive Scheme 2024. Out of such
granted options, 4,481,200 options are yet to be exercised (excluding an aggregate of
330,800 options held by 46 departed employees which are subject to cancelation).
MAJOR SUBSIDIARIES
As of the Latest Practicable Date, our Group comprised our Company and 99 subsidiaries.
Details of the major subsidiaries of our Company which, among other things, made material
contribution to our results of operations during the Track Record Period, are set out as below.
Name of company
Principal
business activities
Date of
establishment
Jurisdiction of
establishment
Equity Interest
attributable to
our Group
Hunan JOYOR
HearingCare Co.,
Ltd. (਄Ѐᛓɢп
ʮ̡)
(“Joyor Hearing ”) /H1118
Sales of medical
supplies and
equipment
March 1, 2018 PRC 100%
Hunan Keyuan Medical
Equipment Selling
Co., Ltd. (๕
ʮ
̡)( “ Hunan
Keyuan ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sales of medical
supplies and
equipment
January 18,
2010
PRC 100%
Haohushi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Sales of medical
supplies and
equipment
November 27,
2007
PRC 100%
Hunan Cofoe Medical
Equipment Co., Ltd.
(̙ѿᔼᐕண௪Ϟ
ʮ̡)( “ Hunan
Cofoe ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Manufacturing of
medical equipment
and instruments
July 7, 2017 PRC 100%
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Name of company
Principal
business activities
Date of
establishment
Jurisdiction of
establishment
Equity Interest
attributable to
our Group
Acorn Trade
(SHANGHAI) Co.,
Ltd. (׸(ɪऎ)
ʮ̡)( “ Acorn
Trade”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sales of daily
necessities
December 13,
2007
PRC 100%
Changsha Jiannuo
Medical Device Sales
Co., Ltd. (Ӎ਄ፕ
ʮ
̡)( “ Changsha
Jiannuo ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sales of medical
supplies and
equipment
December 30,
2015
PRC 100%
MAJOR ACQUISITIONS AND DISPOSALS
During the Track Record Period and up to the Latest Practicable Date, we did not conduct any
major acquisitions or disposals that would require disclosure under the Listing Rules. However, we
remain committed to pursuing strategic opportunities to enhance our market presence and drive
long-term growth.
OUR LISTING ON THE SHENZHEN STOCK EXCHANGE AND REASONS FOR THE
LISTING ON THE STOCK EXCHANGE
Since 2021, our Company has been listed on the ChiNext Market of the Shenzhen Stock
Exchange (stock code: 301087.SZ). Since our A-Shares Listing and as of the Latest Practicable
Date, our Directors confirmed that we had no instance of material non-compliance with the rules
of the Shenzhen Stock Exchange and other applicable securities laws and regulations of the PRC
in any material respect, and, to the best knowledge of our Directors having made all reasonable
enquiries, there was no material matter that should be brought to the investors’ attention in relation
to our compliance record on the Shenzhen Stock Exchange. As advised by our PRC Legal Advisor
that during the Track Record Period and as of the Latest Practicable Date, we have not been subject
to any material administrative penalties or regulatory measures imposed by relevant PRC securities
regulatory authorities. Based on the independent due diligence conducted by the Joint Sponsors and
our PRC Legal Advisor’s view, nothing has come to the Joint Sponsors’ attention that would
reasonably cause them to cast doubt on our Directors’ confirmation with regard to the compliance
record of our Company on the Shenzhen Stock Exchange in any material respect.
We seek to list our H Shares on the Stock Exchange to accelerate the Company’s
internationalization strategy and overseas business expansion, enhance the Company’s offshore
financing capabilities, and align with the Company’s overall development strategy and operational
needs. See “Business — Development Strategies” and “Future Plans and Use of Proceeds” in this
prospectus for more details.
PUBLIC FLOAT
Rule 19A.13A of the Listing Rules provides that, where a new applicant is a PRC issuer with
other listed shares at the time of listing, this will normally mean that the portion of H shares for
which listing is sought that are held by the public, at the time of listing, must (a) represent at least
10% of the issuer’s total number of issued shares in the class to which H shares belong (excluding
treasury shares); or (b) have an expected market value of not less than HK$3,000,000,000.
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Our A Shares are listed on the Shenzhen Stock Exchange. The total number of the 27,000,000
H Shares to be issued pursuant to the Global Offering represents approximately 11.45% of the total
issued share capital of our Company (without taking into account any A Shares to be issued upon
exercise of the share options granted under the Employee Incentive Schemes). Based on the
maximum Offer Price of HK$39.33 per H Share, the expected market capitalization of the
Company’s H Shares would not exceed HK$3 billion at the time of Listing. Therefore, Rule
19A.13(2)(a) of the Listing Rules applies to the Company, which requires that at least 10% of the
issuer’s total number of issued shares in the class to which H shares belong (excluding treasury
shares). Immediately following the completion of the Global Offering (without taking into account
any A Shares to be issued upon exercise of the share options granted under the Employee Incentive
Schemes), the total number of the 27,000,000 H Shares expected to be held by the public represents
approximately 11.67% of the total issued share capital of our Company (excluding 4,496,131 A
Shares repurchased by our Company as treasury shares as of the Latest Practicable Date), which is
higher than the prescribed percentage of H Shares required to be held in public hands of 10.00%
under Rule 19A.13A(2)(a) of the Listing Rules, thereby satisfying Rule 19A.13A of the Listing
Rules.
FREE FLOAT
Rule 19A.13C of the Listing Rules provides that, where a new applicant is a PRC issuer with
other listed shares at the time of listing, this will normally mean that the portion of H shares for
which listing is sought that are held by the public and not subject to any disposal restrictions
(whether under contract, the Listing Rules, applicable laws or otherwise), at the time of listing,
must: (a) represent at least 5% of the total number of issued shares in the class to which H shares
belong at the time of listing (excluding treasury shares), with an expected market value at the time
of listing of not less than HK$50,000,000; or (b) have an expected market value at the time of listing
of not less than HK$600,000,000.
Based on the maximum Offer Price of HK$39.33 per H Share, the Company will satisfy the
free float requirement under Rule 19A.13C of the Listing Rules.
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OUR SHAREHOLDING AND CORPORATE STRUCTURE IMMEDIATELY BEFORE THE GLOBAL OFFERING
The following chart depicts our simplified corporate and shareholding structure immediately prior to the Global Offering (without taking into acco unt
any A Shares to be issued upon exercise of the share options granted under the Employee Incentive Schemes):
Mr. Zhang(1)
Joyor Hearing
(PRC)
Hunan Keyuan
(PRC)
Haohushi
(PRC)
Changsha Jiannuo
(PRC)
Hunan Cofoe
(PRC)
Acorn Trade
(PRC) Other Subsidiaries(4)
Ms. Nie(1) Changsha
Xiezihao(1)
Changsha
Keyuan(1)
Our Company
(PRC)
Mr. Zhang Zhiming
(׼2)
A Share
Other Shareholders(3)
100%
5.80% 1.67% 40.73% 5.80% 3.48% 42.52%
100% 100%
100%
100% 100%
Notes:
(1) Ms. Nie is the spouse of Mr. Zhang. Changsha Xiezihao was owned as to 90% and 10% by Mr. Zhang and Ms. Nie, respectively. Mr. Zhang is the executive part ner and the general partner
of Changsha Keyuan with 5% partnership interest in Changsha Keyuan and Ms. Nie is a limited partner of Changsha Keyuan with 55% partnership interest in Changsha Keyuan.
(2) Mr. Zhang Zhiming (׼is our executive Director.
(3) Include Directors, namely, Mr. Xue Xiaoqiao ( ᑡʃ዗) and Mr. He Bangjie ( ൭Ԟ௫), each hold approximately 0.02% and 0.02% equity interest of our Company, respectively.
(4) As of the Latest Practicable Date, our other subsidiaries include 93 subsidiaries established in the PRC, Hong Kong, Macau, Singapore and Malaysi a.
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The following chart depicts our simplified corporate and shareholding structure immediately following the completion of the Global Offering witho ut
taking into account any A Shares to be issued upon exercise of the share options granted under the Employee Incentive Schemes:
Joyor Hearing
(PRC)
Hunan Keyuan
(PRC)
Haohushi
(PRC)
Changsha Jiannuo
(PRC)
Hunan Cofoe
(PRC)
Acorn Trade
(PRC) Other Subsidiaries(4)
Our Company
(PRC)
100%
Mr. Zhang(1)
Ms. Nie(1) Changsha
Xiezihao(1)
Changsha
Keyuan(1)
Mr. Zhang Zhiming
(׼2)
H Share
Public Shareholders
5.14% 1.48% 36.07% 5.14% 3.08%
A Share
Other Shareholders(3)
37.64% 11.45% (5)
100% 100%
100%
100% 100%
Notes:
See notes (1) - (4) of the sub-section headed “Our Shareholding and Corporate Structure Immediately before the Global Offering” for details
(5) The calculation is based on the total number of 208,897,000 A Shares (including 4,496,131 A Shares repurchased by our Company as treasury shares) a nd 27,000,000 H Shares in issue
upon completion of the Global Offering (without taking into account any A Shares to be issued upon exercise of the share options granted under the Emplo yee Incentive Schemes).
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OVERVIEW
We are a provider of home care medical devices in China. According to Frost & Sullivan, in
terms of the 2024 domestic revenue, we ranked second among all home care medical devices
providers in China, with a market share of 2.1%. The global home care medical devices industry
is highly competitive, particularly the home rehabilitation aids, home respiratory support products,
and home medical care supplies. According to Frost & Sullivan, the home rehabilitation aids
industry and home medical care products industry in which we operate are highly competitive, each
with over 300 market participants in China.
As of the Latest Practicable Date, our product portfolio encompassed over 200 product types
with over ten thousand SKUs.
We implement a multi-brand marketing strategy to cater to the diverse needs of patients and
customers. Assigning distinctive market positioning and targeted customer groups to each brand,
while ensuring that all of them share a common value that possess our master brand, Cofoe
“
”, we have successfully established a product portfolio comprising a large number of
branded products. To implement our multi-brand marketing strategy, we also acquired brands with
distinguished position in respective product lines, including “babaka (Գ)” for
orthopedic/posture correction products in 2022, and “Huazhou ( ശЋ)” for medical dressing
material in 2025. In 2025, we also established a strategic partnership with Royal Philips, under
which we are authorized to distribute Philips-branded health monitoring products in the Greater
China region. During the Track Record Period, we had primarily 11 proprietary brands and sold
products mainly under 16 third-party brands. For details, see “Business — Sales and Marketing —
Our Brand V alue Promotion — Our Brand Portfolio”. In 2023, 2024 and 2025, the revenue derived
from the sales of our own-brand products amounted to RMB2,101.3 million, RMB2,221.4 million
and RMB2,435.3 million, accounting for 73.6%, 74.5% and 71.9% of our total revenue in the same
year, respectively; while the revenue derived from the sales of third-party brand products amounted
to RMB540.2 million, RMB515.9 million and RMB530.9 million, accounting for 18.9%, 17.3% and
15.7% of our total revenue in the same year, respectively.
During the Track Record Period, we have been actively expanding our presence in overseas
markets and attracted a growing base of loyal users worldwide.
COMPETITIVE STRENGTHS
With nearly 20 Y ears of Dedication to Home Care Medical Devices Industry, We Have
Established Leadership at Many Sectors in China. Our Product Portfolio Can Effectively
Serve Home Care Needs of Consumers and Patients Throughout Their Life Cycle.
We have been focusing on home care medical devices industry since our inception in 2007 and
are dedicated to bringing convenient solutions for consumers and patients looking for quality and
advanced home care medical devices. Leveraging our profound insight of market demands across
different demographic groups, and successful track record in solving complexity and challenges in
relation to different products, we have established strong competitive advantages in many vertical
sectors of home care medical devices industry. According to Frost & Sullivan, we ranked second
among all home care medical devices enterprises in terms of domestic revenues in 2024 in China.
Specifically, in terms of domestic revenue in 2024, our home rehabilitation aids products ranked
first, with a market share of 2.4%. China’s home rehabilitation aids products market accounted for
23.5% of China’s home care medical devices market in 2024.
We believe our strengths and sustainable development prospect are solidly rest upon our
integrated business structure and extensive distribution network across China with global reach,
which allows us to produce and distribute a broad range of quality medical products to consumers
and patients in a highly efficient way, satisfying a great variety of home care needs. In particular,
we strategically focus on five main categories of home care medical products that we believe enjoy
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strong growth potential and significant market demands in line with evolvement of demographic
groups structure and popular life style of modern society. Leveraging our dedicated pursuance on
continuous innovation to improve convenience and function of medical products, backed by our
strong manufacturing capabilities and extensive distribution network, we have successfully
achieved leading market position on multiple specific sectors. According to Frost & Sullivan, in
terms of the 2024 domestic revenue in home care medical devices industry, we ranked first among
all rehabilitation aids products providers in China, 4th among all medical care products providers
in China, 5th among all health monitoring products providers in China, 7th among all respiratory
support products providers in China and second among all TCM physiotherapy providers in China.
Furthermore, we have been actively expanding our presence in overseas markets and attracted
a growing base of loyal users worldwide. Our global footprint now spans over 60 countries and
regions across Asia, Africa, Europe, and the Americas.
Aligning with Our Strategic Commitment to Offer Consumers Convenient Selection of Quality
Home Care Medical Devices with Great Variety of Choices, We Have Developed and Offered
A Product Portfolio of Over 200 Types of Products across Over 10,000 SKUs, Structured
within Five Core Therapeutic Domains.
Leveraging our industry-leading home care medical products portfolio comprising over 200
types of products with over ten thousand SKUs, we are able to effectively serve needs from family
members of different ages. In addition, our successful track record also exhibited our capabilities
of capturing consumers’ trust to be the chosen product provider for evolving home care medical
needs at different stages of their life cycles. This comprehensive coverage, in particular rich
varieties for each type of product designed for different using scenarios, makes our stores the go-to
places for patients and/or consumers to seek one-stop solutions for their related medical needs,
creating strong synergies among different products on both cross-selling opportunities and brand
value promotion.
During the Track Record Period, we continued to expand and optimize our product mix by
launching a series of well-received products exhibiting improved functions that are backed by
advanced technologies, and/or new specification and packaging designed to bring delightful and
convenient use, all of which share a common theme of promoting quality home care environments
for patients and his/her family members. In determining our R&D strategy and product launching
plan, we focus on below factors that we deem essential for successful market leadership, namely:
 Advanced Technology Exhibition . We place particular emphasis on incorporating
innovations supported by the latest technological developments into our products to
improve user experience, real-time tracking and portability and the ability to seamlessly
integrate such products into daily life of citizens of this modern society that featuring
convenience brought up by digital and information technology. For instance, in 2024, we
launched our proprietary blood glucose and uric acid dual-test strip, a home-based POCT
product, which can complete the accurate detection of both blood glucose and uric acid
indicators within 10 seconds with only one test paper and one drop of blood. As a result,
it can provide an efficient solution for management of chronic diseases. In addition, it
is the first blood glucose and uric acid dual-test strip products across the world.
Furthermore, utilizing IoT technology and intelligent features, our wheelchair products
allow patients to enjoy advanced functions like voice interaction, automatic obstacle
avoidance, positioning and navigation. We also equip electronic thermometer with an
independently developed prediction algorithm, enabling accurate temperature
measurement within 15 seconds. To solve challenges associated with “cooling effect”
problem of traditional ear thermometers that are caused by excessively low probe
temperature, we innovatively designed pre-warmed ear thermometer, employing probe-
constant-temperature preheating technology that could rapidly stabilizes the probe at a
set temperature prior to measurement and thereby minimizing ambient-temperature
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interference with ear-canal readings. The outstanding performance, combing aesthetic
product design make our electronic thermometer one of the most well received products
in the market, which ranked second in terms of revenue in 2024 in China.
 High Quality Performance . We set strict performance standards for medical performance
of our products to ensure expected function and therapeutic outcomes in relation to
disease prevention and health management could be precisely delivered. In pursuit of
this target, we invested in R&D on developing and utilization of advanced material and
technology. For instance, in developing medical care products like wound dressing
products, we use our proprietary polyurethane foam layer material that has a loose and
porous structure, which can not only fit the wound softly to reduce tenderness, but also
absorb secretions vertically, effectively preventing skin maceration. In addition, the
hydrocolloid formulation we use for our ostomy skin barrier delivers high-strength
adhesion, corrosion resistance, and low sensitization in one integrated system, which can
maximize the comfort of the human body and improve the quality of life of patients.
 Consumer-Centric Design with Aesthetic V alue . We closely study exact demands
developing choreographing aesthetically refined interfaces, ergonomic materials, and
intuitive packaging to elevate user engagement across diverse scenarios, thereby
enhancing consumers’ adherence through thoughtfully designed interactions. For
instance, to meet market demands for convenient use during traveling, we developed
ready-to-use products such as portable ventilators and nebulizers, individually packaged
cotton swabs, spray-type disinfectants, and single-piece packaged wet wipes,
successfully winning favorable feedback from customers from all age groups. In
addition, we have developed invisible adhesive bandages (which fit the skin better and
are not easy to fall off) and waterproof dressings (which can still protect wounds when
taking a bath) to address key concerns from relevant consumer groups. Our thermometer
and audiometer products have also won MUSE Design Awards Gold Award (USA)
granted by International Awards Associates (IAA), in recognition of their functional
design with visual appeal while ensuring quality performance. By developing and
launching products tailor to the needs of specific demographic groups, we successfully
distinguished our products from generic commodities, and have made each popular hit
product series an entry point to attract and retain relevant consumers into our medical
product portfolio.
During the Track Record Period, we took proactive measures to expand our product portfolio
by launching over 100 new products and/or SKUs, exhibiting our strong commitment on product
innovation based on technology capability, experience in serving clinic needs and insight on
evolving consumer preference. This lays a solid foundation for our sustainable development.
Leveraging Successful Development of Omni-Channel Backed by Strong Technology
Capability, and Our Well-Recognized Brand, We Have Been Leading Development of
Omni-Channel Commercialization of Home Care Medical Devices in China Since Our
Inception and Set Successful Leadership in Many Product Categories.
We are committed to developing and improving our sales network since our inception and
recognize it as an essential anchor for success of our business, because convenient and efficient
delivery of home care medical devices are one of the key pursuance of consumers and patients.
Through years of efforts, we have established a sales network with coverage and deep penetration
in China, with significant overseas reach, which comprises both offline store chains and online
channels. Leveraging this, we are able to effectively attract and serve needs from a broad range of
demographic groups who hold distinctive shopping preferences, making us a preferred choice for
consumers to seek home care related solutions. According to Frost & Sullivan, in 2024, based on
domestic online revenue from home care medical devices, we ranked second in China home care
medical devices market.
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We are one of the first home care medical devices providers in China to obtain online sales
licenses for medical devices and to explore online sales model. To accommodate consumers’
evolving shopping habits and provide a convenient multi-channel shopping experience, we directly
sell our products through our self-owned online stores on major domestic third-party e-commerce
platforms. These stores provide a holistic view of, and facilitate easy access to our products,
enabling consumers to make purchases directly through the platforms at their convenience. As of
the Latest Practicable Date, we have established full coverage across all major e-commerce
platforms, including Tmall, JD.com, Douyin, Rednote, Pinduoduo and YSB. Through years of
online stores operations, we have established a professional e-commerce sales team, covering stages
in e-commerce system, including platform operations, digital marketing and customer services,
which successfully propel us to identify opportunities and adapt to evolving e-commerce market
changes. In 2024, our online sales amounted to RMB1,980.7 million, ranking second among home
care medical devices providers in China. Capitalizing on our category-focused market insight and
industry experience, our strong infrastructure layout ensures swift and efficient logistics
arrangements, and technology-backed analysis capabilities, we have successfully established a
leading position in online sales of home care medical devices across different e-commerce
platforms. In terms of sales in 2025, our branded products ranked first in 10 product categories and
top 3 in 18 product categories in home care medical devices industry on Douyin; ranked top 3 in
25 product categories and top 10 in 43 product categories in home care medical devices industry
on Tmall; and ranked top 3 in 11 product categories and top 10 in 27 product categories in the
industry on JD. Our strong market share and penetration in online sales allows us to make quick
response towards market needs while optimizing costs efficiency.
In the mean time, we fully recognize importance of offline coverage for sales of home care
medical devices, which is particularly essential for those products that require pre-purchase
diagnosis and post-purchase services, such as hearing aids, as well as hospital visitors and
community residents who prefer quick pick-up and convenient pick-up and one-stop selections on
products they need. As of December 31, 2025, we had 668 self-owned stores, among which, 618 of
them were our “JOYOR HearingCare ( ਄Ѐᛓɢ)” centers covering 128 cities across China, where
we offer professional audiology services and selection of great variety of quality hearing aids,
including our proprietary Cofoe brands. According to Frost & Sullivan, in terms of the number of
hearing aid fitting center outlets in China, JOYOR HearingCare ranked among Top 3 in the industry
by the end of 2024. Besides, we also collaborate with reputable third party pharmacy store chain
operators and reliable offline distributors, to fully leverage their market penetration and geographic
coverage to improve sales of our products. As of December 31, 2025, we cooperated with over 80
pharmacy store chain operators that are ranked as “Top 100 pharmacy store chain operators”
according to Frost & Sullivan in China and facilitated distribution of our products to 31 provinces
and municipalities in China through over 200 thousand pharmacy stores. As of the same date, the
number of our offline distributors reached nearly 200 and our distributor network effectively
supplements our cooperation with third party pharmacy store chain operators, constituting a broad
distribution network where we have more direct influence on service quality and product delivery.
In recognizing the critical value of quality services that contribute significantly towards
consumer loyalty and sustainable development of brand value, we treat our marketing and sales
measures as an integrated part of consumer services, to ensure consumers may select the exact type
of products suitable for treatment and care they are looking for when they make purchasing
decision. In addition, our post-sales customer service team may offer necessary follow-up
assistance, proactive feedback collection and quick response to enquiries from users, all of which
are supported by our technology-backed system. These measures assist us to form a well-trusted
consumer relationship and lay a solid foundation for cross-selling opportunities, continuous
production innovation and iteration, as well as mouth-to-mouth recommendations among public.
Furthermore, we actively participated in and/or hold various marketing and sales campaigns that we
deem suitable for our brand image and core corporate value. In particular, our pursuit to establish
us a platform offers a product portfolio that effectively addresses home care medical needs for
consumers and patients of all ages, providing patients and their families with diverse options to
choose from.
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Capitalizing on Our Devotion in Innovative Research and Development, Emphasizing on
In-Depth Integration of intelligent features with Medical Hardware, We Are Able to
Continuously Launch Products Catered to The Most Frontier Market Demands.
Our successful track record and strong growth potential rest upon our commitment to
continuously develop and improve R&D capabilities. We fully recognize the importance of material
science, hardware and software engineering, as well as clinical performance, and have an in-house
R&D team with cross-principle academic background and/or practice experience. Led by our key
scientists, namely Dr. Y ang Quangang and Dr. Xu Binjie, we have also established three research
institutes each focuses on a select area, including medical electronics and rehabilitation medicine,
biosensing and innovative materials, and respiratory support. By setting dedicated R&D teams with
a culture that promotes cross-departmental collaboration, we managed to achieve technology
breakthroughs, as well as new product launching and iterations at different business lines. During
the Track Record Period, our R&D expenditure amounted to RMB114.3 million, RMB106.7 million
and RMB98.7 million, respectively.
These achievements consistently improve public recognition of our brands by translating
satisfied using experience into the brand value of always incorporating advanced features and
intuitive operation into home care medical devices and bring high adding value to consumers and
patients. In particular, we invested in adoption of intelligent features and functions to bring
consumers and patients tailor-made assistance to improve their life quality. For instance, by
utilizing medical-grade sensors and adaptive signal processing algorithms, our non-invasive
ventilators with 47 patents continuously monitor sleep quality of users while autonomously
detecting and correcting respiratory events, including snoring, flow limitation, and central sleep
apnea, through real-time pressure adjustments. Our proprietary technology and algorithm allow us
to effectively eliminate false triggers by dynamically adapting to mask leaks, ensuring therapeutic
integrity. In addition, in developing our hearing aids, we use adaptive noise-cancelation technology
to reduce noise impact and provide frequency-specific compensation, effectively improving
auditory clarity and speech recognition in complex environments like crowded restaurants or traffic
which obtain 19 patents for our hearing aids products.
Furthermore, we believe that, for home care medical products, sustained rapid iteration is
imperative to dynamically address evolving user expectations and outperform competitors to gain
and retain consumer loyalty. To properly deal with related challenges, we streamline the process of
transforming R&D results into products for mass production; while establishing technology-backed
consumer feedback collection and analysis capabilities to ensure we can precisely focus our R&D
efforts on key issues affecting consumers’ expectations. For instance, in developing our ostomy care
products, we carefully studied clinical requirements and key concerns of patients. Based on these
findings, we launched products featuring ostomy care products with upgraded exhaust valves,
which facilitate gas discharge and control the risk of bag swelling; adhesive removers that reduce
pain during peeling; and leak-proof rings that improve leak resistance. In particular, the
hydrocolloid formulation we use for our ostomy skin barrier delivers high-strength adhesion,
corrosion resistance, and low sensitization in one integrated system, which can maximize the
comfort of the human body and improve the quality of life of patients. Through quick product
innovation and iteration, we managed to quickly acquire and expand market share in relevant
sectors by leveraging our strong production and distribution capabilities.
As of the Latest Practicable Date, we held 701 patents. These achievements, together with our
strong manufacturing techniques, allow us to quickly transfer R&D breakthroughs into competitive
features and specifications in products offered to consumers. In 2022, we were awarded as a
“National Intellectual Property Advantage Enterprise (ᗆପᛆᎴැΆุ)” by the CNIPA, in
recognition of our strong R&D track record in home care medical devices industry. In addition,
based on our notable R&D achievements and capabilities of launching innovative products, we were
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awarded the 32nd place in the overall ranking of the “2024 China Medical Device R&D
Comprehensive Strength Ranking” recognized by Pharmaceutical Industry Information Release
Conference in 2024, where we entered into three sub-lists, namely, equipment, consumables and
IVD.
Our Industry-Leading Manufacturing and Logistics Infrastructure That Are Equipped with
Advanced Facilities and Software Systems Allow Us to Continuously Drive Cost Efficiency
Optimization While Enhancing Stringent Quality Control.
We enjoy distinguished competitiveness in terms of strong production capacity and supply
chain management capabilities. Our technology-backed production capacity, embedded in our
production plants equipped with advanced production equipment and automated production lines,
allows us to quickly transform technology breakthroughs designs into quality products while
enjoying competitive affordability. We invested in implementing advanced equipment and latest
technologies to enhance the accuracy and efficiency of our quality inspections including
high-precision robotic vision and AI-based judgment systems. By doing so, we ensure that our
products meet the highest quality standards while effectively reducing waste. As of December 31,
2025, we had four major manufacturing bases in China. In recognizing our advanced manufacturing
capacity, we were awarded as a “National Industrial Design Center (ʕː)” by the
Ministry of Industry and Information Technology of the People’s Republic of China in 2023, and
“an enterprise with excellent national intelligent manufacturing scenarios (౽ঐႡிᎴӸఙ౻
Άุ)” by the Ministry of Industry and Information Technology in 2022. In addition, we have also
been accredited by the Hunan Provincial Department of Industry and Information Technology as the
“Single Champion for Manufacturing in Hunan Province — molecular sieve oxygen concentrators
(ࠏڿ—ʱɿጜՓःዚ)”, “Hunan Provincial Intelligent Manufacturing
Benchmark Workshop (౽ঐႡிᅺ૖ԓග)” in 2024, and “Hunan Provincial Advanced-level
Intelligent Factory (΋ආॴ౽ঐʈᅀ)” in 2025.
In addition, our logistics and supply chain management capability and technology
achievement associated therein are the foundations of our business success. Capitalizing on our
well-developed logistics and warehouse infrastructure, we adopted advanced technologies in
establishing our smart logistics system capable of service automation and operation digitalization.
We invested in developing service automation, setting unmanned logistics capabilities as a key
focus of our operations to achieve optimized cost efficiency. We adopted advanced devices and
software systems, including sorting robots, smart forklifts, automated sorting systems and
goods-to-person systems. In addition, capitalizing on our digitalization systems, we could ensure
seamless integration with, and dynamic management on, third party transportation service
providers, bringing secure and quick solutions. In 2020, we opened up our logistics capabilities and
resources to external customers for home care medical devices related needs, charging fees for
using our warehousing and logistics services. We consider this business line effectively
supplements our main business operations, by allowing us to effectively tap into their business
reach and penetration in covered regions, achieve deep insight into evolving market demands and
consumer preferences, while enhancing our business relationships with relevant leading enterprises.
Our Senior Management Team Has Unparalleled Strategic Vision on, and Long-Term
Devotion in Home Care Medical Devices Industry. Their Leadership and Commitment,
Complemented by Exceptional Organizational Execution, Establishes a Solid Foundation for
Us to Achieve Sustainable Success.
We have a team of dedicated founders and senior management with successful experience in
home care medical industry. With an average of over 20 years of experience in relevant industries
and market sectors, our founder and the core members of our senior management possess a
combination of clinical knowledge, keen market acumen, strong manufacturing management
capability and dedication to make contribution for welfare of consumers and patients.
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Our founder and chairperson, Mr. Zhang Min ( ੵઽ), had over 20 years of experience in home
care medical industry across key areas ranging from product development, IP development and
management, sales and marketing. His leadership, profound industry insights and innovative and
entrepreneurial spirit spearheaded our rapid growth in the past, and will continue to propel our
growth in the future. Our vice chairperson, Mr. Zhang Zhiming (׼had rich experience in
home care medical devices related supply chain, production and logistics, sales, and personnel
management. Our vice president, Mr. Xue Xiaoqiao ( ᑡʃ዗), possessed profound knowledge in
home care medical devices related financing, investment and acquisition, as well as corporate
governance and legal fairs. Our CFO, Mr. Chen Wangpeng (؃had nearly 20 years experience
in financing and accounting management and was accredited as a certified public accountant by the
Chinese Institute of Certified Public Accountants, a tax agent, and a senior accountant. They,
together with other senior management team members, work closely with our founder and
chairperson, led us achieving robust long-term performance across scale, profitability and growth
metrics.
We place a high priority on R&D talent recruitment and believe successful R&D and product
innovation the key to our sustainable development. We aim to build a highly talented R&D team
with an interdisciplinary background and strong expertise. Dr. Y ang Quangang ( ϺΌ፻), the Dean
of our respiratory support research institute, had cross-discipline expertise across electronics, and
semiconductors, ultrasonic micro-motors, artificial intelligence, and medical devices, with
particular focus and rich experience in research, development, and design of wearable respiratory
equipment and systems. He has also served as a reviewer for several internationally renowned
journals and conferences, such as Mechanical Systems and Signal Processing . He obtained doctoral
degree from University of New South Wales in Australia. Dr. Xu Binjie (௫), the Dean of our
biosensing and innovative materials institute, obtained doctoral degree in microbiology from Ohio
State University of the United States. He has been committed to the research and development of
medical devices for health monitoring, and has rich experience in the fields of microbiology,
medical diagnosis, product optimization and industrialization. He has won more than ten domestic
and foreign awards, such as the Silver Award in the iGEM Competition of the Massachusetts
Institute of Technology, USA, and the First Prize in the Annual Conference of Chinese Disinfection
and Infection Control.
Our management team embraces the value of staying current and adheres to a talent-focused
philosophy. They recruit and promote talent, empowering individuals by granting them sufficient
authority and autonomy, space for execution. We regularly implement equity incentive plans to
boost employees’ enthusiasm and initiative, allowing them to share in our growth and achievements.
We believe that the expertise, vision and loyalty of our management team are crucial to our success
and will continue to drive our future growth. With their leadership, combined with our robust R&D
capabilities and diversified product portfolio and customer base, we are confident in our ability to
not only maintain our current market position while actively exploring new growth opportunities
and seizing market prospects.
DEVELOPMENT STRATEGIES
We plan to steadily expand our global coverage while keep strengthening our leadership in
China market, so that we could enhance global influence of “Cofoe” as a leading brand that
represent the concept of quality and convenient personal health management with cost of value. To
achieve this goal, we have formulated the following measures:
Accelerating global expansion to meet the growing demands for high-quality home care
medical devices in overseas markets.
Capitalizing on our established competitiveness in terms of branding, quality product
portfolio, manufacturing capabilities, as well as extensive sales and marketing network that not only
cover China but also enjoy presence in overseas markets, we plan to further improve sales of our
products in overseas markets, with particular focus on those have strong demands and/or growth
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potential, including Southeast Asia and Europe. To achieve this, we intend to continue expanding
our sales channels in overseas markets by building localized operational teams, forging strategic
partnerships with distributors and expanding cross-border e-commerce channels, so that, we may
create an integrated international sales ecosystem that synergizes online and offline channels while
balancing emerging and mature markets, providing strong channel support for the sustainable
growth of overseas revenue. In addition, we plan to actively participate in overseas industry
exhibitions, conferences and seminars to showcase our innovative products and technological
strengths, deepen strategic cooperation with international customers and enhance our influence in
overseas markets.
We will also invest in identifying and studying those home care medical device enterprises
with overseas channel networks and mature product portfolios, as well as distributors enjoying
advantages in regional markets.
Focusing on R&D and product innovation to capture opportunities brought up by market
demands for AI-driven smart functions and pursuit of digitalization across home care medical
devices industry.
We plan to further strengthen our R&D capabilities by developing more high-quality medical
products that meet the demands of global consumers. We plan to keep iterating existing products
while expediate new product development. Our R&D efforts will remain market-driven, with close
collaboration between R&D and business departments to accurately align R&D directions and
continuously improve R&D commercialization efficiency. We will establish a robust R&D pipeline
across various product lines to further consolidate our competitive advantages in a multi-category
product structure and promote balanced and sustainable business development.
We will invest in improving application of AI technology in various home care scenarios by
enhancing integration of AI-empowered functions into home care medical devices. In line with this
strategy, we plan to enhance investment in R&D efforts in relation to areas that are essential for
intelligent diagnosis, remote health monitoring, and personalized health management, such as
device-IoT platform interoperability, task specific algorithm development and optimization,
miniaturization and portability of devices and noise reduction.
Continuously expanding and optimizing the online and offline sales channel network to
maintain industry-leading position in terms of sales and marketing capability.
We plan to further enhance and optimize our established omni-channel sales network that
enjoy strong synergy effect between online and offline channels. For online channels in China, we
plan to keep formulating differentiated operational plans based on specific characteristics of
different e-commerce platforms, while optimizing cross-platform product categories and pricing
management, so that we may improve growth in various product categories, and strive to improve
customer conversion and repurchase rates. In addition, we plan to enhance our brand image in
connection with professional home care through strengthening user engagement at various social
media e-commerce platforms by launching events KOL tours of our manufacturing bases, creating
quality science-based video content and promoting live streaming-based campaign. We will also
enhance cooperation with e-commerce platforms to bring more convenient delivery and shopping
experience, achieving sustainable development and steady growth.
In developing offline sales network, we plan to enhance our cooperation with third party
pharmacy store operators while investing in innovative retail models based on our study on
dynamics of retail markets in China. We will continuously optimize distributor network coverage
to increase our market penetration and improve penetration in important end-markets. Furthermore,
we plan to keep developing innovative and attractive new consumption scenario and retail models,
like those feature quick delivery, convenient pick-up and immersive shopping experience. In
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addition, we will adopt cautious approach in expanding our “JOYOR HearingCare ( ਄Ѐᛓɢ)”
store network with particular focus on identifying and securing premium locations enjoy convenient
consumer and patients visits and good pedestrian flow.
Improving the refined management capabilities and operational efficiency by leveraging
digitalization and information technologies.
We plan to continuously enhance operation efficiency by keep improving application of
digitalization and advanced information technologies throughout each business segment, as well as
further streamlining our business process. We will improve value chain collaboration and cost
reduction measures. In particular, we plan to further strengthen coordination and collaboration
among teams in charge of procurement, production, quality control and logistics, facilitating
seamless intra-group information and data flow. Furthermore, we will enhance cost control
measures, improve production-sales coordination, strengthen our capability to manage production
and warehousing in a dynamic way, striving to build a highly efficient and agile supply chain
system. In addition, for our sales and marketing work, we plan to enhance the application of
AI-empowered tools and big-data analysis capability, so that we may access more accurate analysis
and forecast to improve user acquisition and management cost efficiency, while enhancing our
ability to offer satisfying customer services.
In managing our procurement work, we plan to further optimize our supplier grading
evaluation and dynamic management system, while enhancing quality control on raw materials and
improving inventory control. We also plan to improve dynamic coordination mechanism between
market demand forecast and production planning through leveraging digitalization capabilities, so
that we can achieve rapid order response in a more cost-effective way. We will continue investing
in digitalization of production management and control, with the aim to optimize technological
processes, enhance resource utilization efficiency and product quality, and reduce production costs.
In addition, in order to ensure stringent quality control and improve consumer satisfaction, we plan
to enhance our technology-back capability by conducting real-time monitoring on critical process
parameters and product quality, improving visibility and transparency of our quality traceability
mechanism. To enhance our logistics and warehousing capability, we plan to continue enhancing
digitalized management capabilities and level of automated operation to achieve improved
profitability.
Continuously enhancing brand influence through ensuring premium product quality and
public recognition.
In line with our branding strategy of enhancing global influence of our brands, including
“Cofoe”, we plan to capitalize on our established competitiveness in China and gradually enhancing
global awareness of our brands by connecting our brands with concept of health life, rich collection
of quality products and satisfying services. In particular, we plan to keep promoting public
recognition on us as a platform offering a product portfolio that effectively addresses home care
medical needs for consumers and patients of all ages, providing patients and their families with
diverse device options to choose from. Capitalizing on our product portfolio comprising highly
diversified product categories and large SKUs, many of which carrying advanced technology-
backed functions, we plan to continue launching diversified, multi-tiered branding and marketing
campaigns encompassing television outreach, sports events and campaign sponsorship, and public
welfare initiatives. This approach can also benefit from our established market reputation proved by
large number of positive user feedback that we accumulated through years of efforts. In addition,
we plan to continuously improve the global brand reputation of “Cofoe”, by focusing on improving
consumers experience in overseas markets, along with our efforts in expanding overseas consumer
base in line with expansion of overseas sales network.
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OUR BUSINESS
During the Track Record Period, we derived revenue primarily from R&D, manufacturing and
sales of a broad range of home care medical devices. Capitalizing on our extensive online and
offline sales network, offered consumers and patients a range of home care medical devices,
bringing convenient and quality experience to address their home-based medical needs, effectively
covering home care needs for all family members.
In addition, leveraging our deep industry insight on, and established leading position in home
care medical devices industry, we offer industry peers logistics services and online store
management services. These business lines demonstrate our technological capabilities and
competitive edges, while allowing us to strengthen cooperation with enterprises with leading
positions in select market sectors, laying solid foundation for our sustainable growth.
For details of our revenue, gross profit and gross profit margin by products during the Track
Record Period, please see “Financial Information” to this prospectus.
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The tables below set forth the sales volume and average selling price for key products of each product category of our medical and wellness products
during the Track Record Period:
Y ear Ended December 31,
2023 2024 2025
Sale
volume
Average
selling
price
Percentage
of total
revenue
Sale
volume
Average
selling
price
Percentage
of total
revenue
Sale
volume
Average
selling
price
Percentage
of total
revenue
thousand
unit RMB (%)
thousand
unit RMB (%)
thousand
unit RMB (%)
Sales of medical and wellness products
Rehabilitation Aids products
Orthopedic and posture correction product /H1118/H1118/H1118/H1118/H1118/H1118/H11182,482 80 7.0 2,997 172 17.3 3,624 162 17.3
Hearing aids /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110 1,851 7.1 156 1,817 9.5 210 1,549 9.6
Medical Care Products
Dressing products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,587 2 4.0 68,228 3 6.9 71,998 3 6.3
Infection control products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,420 2 3.8 59,610 2 4.0 70,108 2 4.7
Health Monitoring Products
Thermometer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,854 15 3.1 4,252 17 2.4 5,288 22 3.4
Blood glucose & uric acid monitor /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,517 33 5.2 4,334 31 4.5 4,196 33 4.1
Respiratory Support
Products
V entilator /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 6,090 5.5 16 6,122 3.3 45 2,343 3.1
Nebulizer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118867 99 3.0 785 96 2.5 596 100 1.8
TCM Therapy and Other Products (1)
TCM physiotherapy devices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118272 187 1.8 319 230 2.5 406 287 3.4
Note:
(1) Other products include (i) household and personal care products; (ii) mother and infant products; (iii) daily necessities; and (iv) dietary supp lement products.
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The sales volume of our orthopedic and posture correction products increased from 2023 to
2025, primarily attributable to the increase in sales of the relevant products following our
acquisition of the “babaka (Գ)” brand in 2022. The average selling price of our orthopedic and
posture correction products increased from 2023 to 2024, primarily attributable to our progressive
launch and increased sales contribution of higher-end products, such as seamless posture correction
products. The average selling price of our orthopedic and posture correction products remain
relatively stable at 2024 and 2025.
The sales volume of our hearing aids products increased from 2023 to 2024, primarily driven
by increased sales through offline channels, in line with the continued expansion of our network of
“JOYOR HearingCare” stores. The sales volume of our hearing aids products further increased from
2024 to 2025, primarily attributable to an increase in sale performance of our “JOYOR
HearingCare” stores, driven by enhanced store operational efficiency. The average selling price of
our hearing aids products decreased from 2023 to 2025, primarily due to increased sales of products
with price competitiveness through e-commence channels and our continuous adjustment of product
matrix.
The sales volume and average selling price of our nebulizer products decreased from 2023 to
2025, primarily attributable to a decrease in market demand following the gradual subsiding of the
pandemic.
During the Track Record Period, while setting priority in developing our proprietary brands,
we continue our cooperation with selected third-party brands that we deem supplementary to our
product offerings, particularly those which exhibits innovative technology achievements and/or
premium market reputation. We believe we benefit from this strategy by making our stores the go-to
places for patients and/or consumers to seek one-stop solutions for their related medical needs.
Furthermore, we strategically engage OEM/ODM suppliers to produce selected types of our
branded medical products, particularly those do not carry sophisticated technology specifications
and/or demand advanced manufacturing techniques. In this way, we are able to achieve production
capacity expansion in a more dynamic and cost-efficient way as we deem appropriate, while
focusing on producing products with higher value at our own plants.
For details of our revenue, gross profit and gross profit margin of our products by nature
during the Track Record Period, please see “Financial Information” to this prospectus.
Medical and Wellness Products (ۜ)
As of the Latest Practicable Date, our product portfolio comprised over 200 types of products
with over ten thousand SKUs, covering a great variety of home care needs associated with different
types of diseases treatment, damage therapy, daily health maintenance and life quality improvement
scenarios. Leveraging our dedicated pursuance on continuous innovation to improve convenience
and function of medical products, we have successfully achieved leading market position on
multiple specific sectors.
Rehabilitation Aids Products (
ۜ)
Rehabilitation aids products refer to products designed to improve, substitute, or compensate
for impaired bodily functions, facilitate auxiliary therapeutic interventions, and/or prevent
disability progression. In developing our products, we focus on lightweight specifications and
technology-backed smart controlling systems, to bring consumers convenient and comfortable user
experience in scenarios that we pay particular attention to, including hearing assistance, mobility
support, and posture correction. Leveraging our dedicated efforts in bringing products with high
quality and commitment to offering premium services, we have achieved quick expansion during
the Track Record Period.
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The table below sets out details of our key rehabilitation aids products:
Product Core Technologies and/or Highlighted Features Retail Price (excluding V AT)
Hearing Aids ...
 Our hearing aids have adopted several advanced
technologies, including multi-channel fitting and various
technologies designed to compress sounds and speech-
enhancement in the way to optimize sound output quality
and users’ comfortableness. In addition, our hearing aids
incorporate adaptive noise-cancelation technology to
improve speech recognition in noisy environments while
reducing background noise.
We provide several types of hearing aids, catering to
various levels of hearing loss and user preferences,
ensuring compatibility with diverse customer needs. In
addition, we offer high-end custom hearing aids that
utilize 3D ear impression technology, ensuring a precise
fit to the physiological structure and enhancing wearing
stability and comfort.
RMB2,124 ~ RMB18,071, which is
generally determined by products
technical level, brand, and after-
sales services provided, the degree
of consumers’ hearing loss.
Electric
wheelchair ....
Our electric wheelchairs boast the following features:
 Intelligent Control and Operational Convenience.
Through the integration of multimodal sensors with
algorithms, our wheelchairs achieve stable execution of
basic movements including forward, backward, turning,
and stopping.
 Safety and Stability. We implement active obstacle
avoidance design. Equipped with ultrasonic sensors, our
products can detect nearby obstacles and alert users,
effectively reducing collision risks.
RMB1,895 ~ RMB4,311, which is
generally determined by product
materials, performance
specifications, battery capacity,
and auxiliary functions.
 Age-Friendliness and Practicality. We prioritize
lightweight and portable design in our wheelchairs.
Using lightweight materials such as aluminum alloy
frames, our wheelchairs support folding storage for easy
carrying and storage.
Orthopedic/
Posture
correction
products .....
Our orthopedic and posture correction product boast the
following features:
RMB28 ~ RMB262, which is
generally determined by the
applicable scenario, intensity of
corrective, materials,
and other key specifications of the
product.
 Advanced Material. We utilize advanced technology
materials including high-elastic composite fabrics and
breathable ice silk materials, balancing lightweight
construction with high-strength support to ensure
comfort during extended wear.
 Ergonomic Structure Optimization. Our products feature
precision support design based on the physiological
curvature of the spine. The three-force-bearing surface
system (lumbar-back, back-shoulder, and front-shoulder
areas), achieves three-dimensional corrective force
distribution.
 Invisible and Comfortable. We implement invisible
underwear design and progressive correction logic,
avoiding muscle fatigue or skeletal injury caused by
aggressive stretching.
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Medical Care Products (ۜ)
Medical care products comprise various disposable medical and nursing supplies used for
examination, diagnosis, treatment, and care. During the Track Record Period, we focused on
developing and utilizing advanced material designed to bring comfortable sensation and convenient
user experience. In addition, we also invested in developing products with innovative design,
packaging and aesthetic appearance, to address particular and diversified needs from consumers in
different home care scenarios.
The table below sets out details of our key medical care products:
Product Core Technologies and/or Highlighted Features Retail Price (excluding V AT)
Dressing products .
 Wound Dressing Products . We manufacture wound
dressing products in Class 100,000 cleanroom, suitable
for various non-chronic wounds and postoperative care.
Polyurethane Foam Dressing . This product features a
multi-layer composite structure, reducing pain upon
contact, ensuring secure fixation and painless removal
to avoid secondary injury; and improving breathability
and adhesion stability.
Sodium Hyaluronate Repair Patch . We use sodium
hyaluronate material, thus achieving optimized overall
results.
RMB1 ~ RMB69, which is generally
determined by products functions,
materials, and packaging
specifications.
Ostomy Care
Products .....
We adopt leak-proof sealing structure to facilitate
convenient replacement and odor diffusion reduction,
making it suitable for daily care of postoperative
ostomy patients. The hydrocolloid formulation we use
for our ostomy skin barrier delivers high-strength
adhesion, corrosion resistance, and low sensitization in
one integrated system. Leveraging our technology
breakthroughs in relation to optimized baseplate
adhesives, we managed to steadily take over market
share used to be occupied by overseas brands.
RMB8-RMB109, which is generally
determined by products materials,
required replacement frequency,
and packaging specifications.
Health Monitoring Products (ۜ)
Health monitoring products refer to medical products designed for monitoring human
physiological parameters. With growing public awareness on, and increasing willingness to pay for
timely monitoring on body conditions to improve health management and prevent negative
development of symptoms like high blood pressure, glucose and lipids, market demands for home
care products offering convenient and accurate health monitoring results kept increasing. We pay
particular attention in developing products with convenient design for home care using scenario,
including those products can facilitate multi-test with one device, multi-test with one strip and/or
multi-test with one sample.
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The table below sets out details of our key health monitoring products:
Product Core Technologies and/or Highlighted Features Retail Price (excluding V AT)
Metabolic Disease
Testing
Products .....
Our products offer accurate detection performance and
user-friendly operations. In response to the challenges,
we successfully developed our blood glucose and uric
acid dual-testing product. It can simultaneous measure
glucose and uric acid with a single test strip and one
drop of blood, fully exhibiting our strong technology
R&D and engineering capability. According to Frost &
Sullivan, it is the first blood glucose and uric acid dual
testing strip around the world.
RMB12-RMB92, which is generally
determined by products functions,
and instrument — test strip kit
configuration quantities.
Thermometers ...
Our ear thermometers, with electronic models featuring a
proprietary predictive algorithm that delivers accurate
readings in just 15 seconds. To address the “cold touch”
effect caused by low probe temperatures in traditional
ear thermometers, we have developed an innovative
pre-heated ear thermometer that uses constant-
temperature preheating technology to eliminate ear
canal temperature interference, along with an ambient
temperature compensation system that stabilizes
measurements despite environmental fluctuations such
as indoor — outdoor temperature differences in winter.
RMB10-RMB80, which is generally
determined by products materials,
sensor accuracy and algorithms,
and value-added features.
Respiratory Support Products (ۜ)
Respiratory support products refer to those designed for managing chronic respiratory health
conditions. In recent years, as public interest on high-altitude outdoor activities kept increasing,
there are growing demands for products with portable features and/or integrating designs tailored
for relevant using scenarios. In addition, demands arising from home care scenario or medical
institution-based treatment for sleep apnea-hypopnea syndrome, severe snoring, and respiratory
insufficiency remained strong. Capitalizing on our strong technology capability, in particular our
experts in respiratory support research institute, we have launched a broad range of products
equipped with advanced functions and/or suitable for portable scenarios, successfully wining public
recognitions.
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The table below sets out details of our key respiratory support products:
Product Core Technologies and/or Highlighted Features Retail Price (excluding V AT)
Non-invasive
ventilators ....
We successfully (i) introduced “first-time user mode” for
our ventilators, that allows the ventilator helps users
gradually get adapted through slow pressurization,
avoiding sudden discomfort; and (ii) optimized and
continuously iterated pressure regulation logic of
algorithm to improve the sensitivity of hypopnea event
and snoring event recognition and the timeliness of
pressure output, allowing stable response of our
ventilators in various sleep scenarios.
RMB1,666-RMB3,791, which is
generally determined by the
products motor and noise-reduction
technologies, algorithm
sophistication, and supporting
consumables and accessories.
In addition, we developed cotton-free noise reduction
design, adopting a silicone honeycomb air-channel
noise reduction solution, realizing both quietness and
safety. We also developed ventilator IoT cloud platform
that integrates LLM-backed functions, which can
monitor sleep quality and breathing pattern information.
Nebulizers ......
Utilizing pulsed nebulization technology and intelligent
breath-actuated system, our devices can deliver
precision aerosolization by activating mist emission
during inhalation while halting output during
exhalation. This innovation achieves a clinically
validated 137% drug utilization rate with minimal
wastage. We set three adjustable nebulization rates to
accommodate diverse patient needs, and a suspended
shock-absorbing pump and silencer channels to reduce
operation noise. We introduced various advanced design
to optimize pediatric applications and using experiences
in home care scenarios, including voice guidance,
soothing music therapy, programmable timers, child-
lock safety, and fault protection.
RMB76 ~ RMB376, which is
generally determined by
nebulization technology pathways
the proportion of effective
aerosolized particles the durability
of compressors.
TCM Therapy and Other Products (ۜ)
We offer a broad range of TCM therapy products to meet consumers’ growing demand for
traditional physiotherapy and health preservation, including infrared physiotherapy devices using
infrared radiation for physical therapy, helping to reduce inflammation, relieve pain, and alleviate
muscle spasms; plaster series products that utilize the synergistic effects of far-infrared radiation,
herbal ingredients, and acupoint application technology to relieve chronic pain, promote blood
circulation and metabolism, remove blood stasis, accelerate lactic acid clearance, and alleviate
muscle fatigue; as well as moxibustion products, cupping devices and scraping tools.
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The table below sets out details of our key TCM therapy and other products:
Product Core Technologies and/or Highlighted Features Retail Price (excluding V AT)
Physiotherapy
Devices ......
Our infrared physiotherapy devices combine far-infrared
rays with specific electromagnetic wave therapy,
allowing it to achieve rapid heating to therapeutic
temperature.
RMB119 ~ RMB683, which is
generally determined by products
therapeutic functions, output
power, and brand.
OEM/ODM Business
During the Track Record Period, we are engaged by clients to provide OEM/ODM services in
recognition of our strong manufacturing capability with stringent quality control measures. We
provide both design and manufacturing services, and our OEM/ODM products include standard
products as well as customised variants modified based on customers’ requirements. Under the
ODM model, we collaborate with our customers to develop designs of products and then we
manufacture; whereas under the OEM model, our customers provide us their designs and we are
only responsible for manufacturing. During the Track Record Period, our OEM/ODM business
customers primarily consist of manufacturers of consumer healthcare products, suppliers to chain
supermarkets, and e-commerce trading companies.
Our products are generally customised to meet customers’ specific requirements, including
variations in product configuration, materials and production processes based on different usage
scenarios. For rehabilitation aids products, such as wheelchairs, customer may choose between
different configuration options, including materials, battery capacity and motor types. For medical
care products, customisation may involve variations in base materials and processing techniques
and conditions to meet customer requirements. During the Track Record Period, we primarily
provided this business through our subsidiary, Shanghai Huazhou Pressure Sensitive Adhesive
Products Co., Ltd. (“ʮ̡”) (“ Shanghai Huazhou ”). During the Track
Record Period, we primarily sold rehabilitation aid products (electric wheelchairs) to customers
located in India, Thailand, Turkey and other Asian countries. Following the acquisition of Huazhou
in 2025, we also commenced sales of medical care products, including wound dressings, to
customers located in the United Kingdom and North America.
On December 17, 2024, we entered into the equity transfer agreement and subsequently
completed the transaction in January 2025, acquiring a 94.35% interest in Shanghai Huazhou.
During the Track Record Period, we did not conduct any acquisition that would constitute a major
acquisition under Rule 4.05A of the Listing Rules. Please refer to the section headed “History,
Development and Corporate Structure” for details of our historical acquisitions. We acquired
Shanghai Huazhou in line with our business strategy to establish and enhance a vertically integrated
business structure that allows us to enjoy strong quality and cost-efficiency control, a key
foundation to ensure our sustainable development, particularly for successful development of home
care medical devices where good quality, quick iteration and great value-for-money plays a vital
role to win consumer loyalty. In the meantime, we benefit from this business by optimizing our
product capacity utilization in a dynamic way, while getting access to recent industry trends and
market preferences through offering manufacturing services to relevant clients. Our brand,
“Huazhou”, is positioned to operate under Shanghai Huazhou and its affiliated subsidiaries.
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Other Business
During the Track Record Period, we derived revenue primarily by offering (i) logistics and
warehousing services to third party medical product companies, where we charge clients generally
based on orders of services at a fixed rate. Leveraging our extensive experience in the medical
device sector, customised information systems, and warehousing and logistics facilities, we provide
medical devices companies that lack the capability or qualifications to establish in-house
distribution systems that meet the stringent quality control standards, regulatory compliance
requirements and professional operational requirements; and (ii) online store management services,
where we are engaged by third parties to run online home care medical product stores that they
established on e-commerce platforms and charge them at a fixed rate of service fees and float fees
based on sales performance. Our logistics and warehousing services to third parties are primarily
provided by our subsidiary, Hunan Cangtianxia Intelligent Logistics & Storage Co., Ltd., a
professional smart supply chain service provider registered in Kaifu District, Changsha, Hunan
Province, delivering warehousing and distribution solutions including order processing, inventory
management, transportation and delivery and supply chain optimization. Leveraging its rich service
experience, advanced technology and sophisticated operation management system, we are
recognized as a trustworthy logistics and warehousing services provider for medical products. For
details, please see “— Our Logistics And Supply Chain Management” below.
Medical Device Risk Categories of Our Products
During the Track Record Period, our product portfolio includes home care medical device of
all three risk categories pursuant to the Regulations on the Supervision and Administration of
Medical Devices ( ᔼᐕኜ૛္ຖ၍ଣૢԷ) promulgated by the State Council, exhibiting our
strong technology and quality control capabilities. This lays a solid foundation for our future
development at each vertical sector and quick expansion of product portfolio. Pursuant to applicable
laws and regulations, our products classified as Class I medical devices are required to be filed with
the municipal-level drug administration authorities. Our products classified as Class II medical
devices are required to obtain registration certificates from the provincial-level drug administration
authorities. Our products classified as Class III medical devices are required to obtain registration
certificates from the National Medical Products Administration. According to our PRC legal
adviser, during the Track Record Period and up to the Latest Practicable Date, we have complied
with all applicable laws and regulations regarding regulatory filing and registrations of medical
devices in all material aspects. A portion of our medical device products intended for auxiliary home
treatment for consumers with underlying medical conditions, such as oxygen concentrators,
ventilators, nebulizers and therapeutic devices, are recommended for use under the guidance of a
physician. Such requirement is explicitly stipulated and highlighted within the relevant Instructions
for Use for these products.
The table below sets out breakdown of our revenue by risk categories of our products during
the Track Record Period.
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Sales of medical and wellness
products
Class I (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118409,333 14.3 419,926 14.1 419,980 12.4
Class II (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,714,332 60.1 1,414,635 47.4 1,552,649 45.9
Class III (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,215 6.3 88,019 3.0 125,516 3.7
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337,640 11.8 814,683 27.3 868,087 25.6
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,641,520 92.6 2,737,263 91.8 2,966,232 87.6
OEM/ODM Business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,152 2.2 104,286 3.5 285,410 8.4
Others (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,023 5.2 141,382 4.7 135,857 4.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 100.0 2,982,931 100.0 3,387,499 100.0
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Notes:
(1) mainly comprising stethoscopes, ostomy bag, colling antipyretic patch, cotton balls, bandages, medical tapes, cupping
devices, walking aids and medical crutches, etc.
(2) mainly comprising blood pressure monitors, thermometers, pulse oximeters, blood glucose and uric acid monitoring
devices and test strips, sterile dressings, gauze dressings, sodium hyaluronate repair patches, medical protective
masks, ventilators, oxygen concentrators, nebulizers and infrared therapy devices, etc.
(3) mainly comprising influenza A and influenza B virus antigen test reagents, Mycoplasma pneumoniae antigen test kits,
disposable sterile syringes and injection needles, and disposable insulin pen needles, etc.
(4) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
OUR SALES NETWORK
We sell our products through an extensive sales network integrating offline and online
channels. Our offline channels comprise (i) direct sales primarily via our self-owned stores, (ii)
sales to third party pharmacy chain operators, and (iii) sales to offline distributors. Our online
channels cover e-commerce platforms such as Tmall, JD.com, Douyin, Rednote, Pinduoduo and
YSB through (i) direct sales via online stores, and (ii) sales to online distributors. To the best
knowledge of our Directors, all of our distributors are independent third parties during the Track
Record Period and up to the Latest Practicable Date and none of the distributors is our employee
or former employee. During the Track Record Period, our relationships with our distributors are
seller-buyer relationships. During the Track Record Period, our revenue generated from sales to
distributors were recognized upon control of the asset transferred to the distributors, generally on
delivery of the goods or upon the confirmation by the distributors.
The following table sets forth the breakdown of our revenue by sales channel for the years
indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Online Channels
Online direct sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118775,654 27.2 1,068,881 35.8 1,130,522 33.4
Sales to online distributors /H1118/H1118/H1118/H1118/H1118/H1118/H11181,051,144 36.8 911,804 30.6 1,036,786 30.6
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,826,798 64.0 1,980,685 66.4 2,167,308 64.0
Offline Channels
Offline direct sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118292,661 10.3 351,288 11.8 432,872 12.8
Sales to third party pharmacy store
operators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118468,281 16.4 333,554 11.2 304,464 9.0
Sales to offline distributors /H1118/H1118/H1118/H1118/H1118/H1118/H111853,780 1.9 71,736 2.4 61,588 1.8
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118814,722 28.6 756,578 25.4 798,924 23.6
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,152 2.2 104,286 3.5 285,410 8.4
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,023 5.2 141,382 4.7 135,857 4.0
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 100.0 2,982,931 100.0 3,387,499 100.0
Note:
(1) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
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Online Sales Channel
We conduct our product sales via online channels in two manners, namely (i) direct sales via
our online stores and (ii) sales to online distributors. Building on the solid brand image, product
strengths and consumer trust established in our reliable quality, our online channels remain stable
during the Track Record Period.
Online Direct Sales
To accommodate consumers’ evolving shopping habits and provide a convenient multi-
channel shopping experience, we directly sell our products through our self-owned online stores on
major domestic third-party e-commerce platforms. These stores provide a holistic view of, and
facilitate easy access to our products, enabling consumers to make purchases directly through the
platforms at their convenience. As of the Latest Practicable Date, we had established online stores
on all major e-commerce platforms, including Tmall, JD.com, Douyin, Rednote, Pinduoduo and
YSB. According to Frost & Sullivan, in 2024, based on domestic online revenue from home care
medical devices, we ranked second in China home care medical devices market.
We have entered into agreements with the e-commerce platforms to operate and manage our
online store. The salient terms of our standard agreements with e-commerce platforms mainly
include: (i) duration: the terms of our agreements with e-commerce platforms are typically one year;
(ii) service fees: the e-commerce platforms generally charge us with a service fee both in fixed
amount and as a percentage of sales amount; (iii) termination: the service agreements can generally
be terminated upon prior written notice or in the event of a material breach.
Sales to Online Distributors
In line with market practice, during the Track Record Period, we also engaged online
distributors, mainly e-commerce platforms and online stores operators, to improve our market
coverage and penetration in a cost efficient way, including overseas regions. Some of our online
distributors operate their own stores on the e-commerce platforms and sell our products to end
consumers, whilst some sell our products to other merchants which in turn operate their own stores
on the e-commerce platforms and sell our products to end consumers. Our end customers are mainly
individual customers. As of December 31, 2023, 2024 and 2025, we engaged 26, 32 and 73 online
distributors, respectively. To manage and mitigate potential competition between the our self-
operated online stores on third-party e-commerce platforms and the online stores operated by our
online distributors, we have adopted the following strategies: (i) We maintain control over product
supply prices and recommended retail prices to avoid unhealthy price competition across different
online sales channels; (ii) We offer different products in terms of models and specifications through
our self-operated online stores and those sold by our online distributors, which helps reduce direct
product overlap; (iii) We provide professional pre-sales consultation and after-sales support, which
enhances the overall customer experience through self-operated online channels.
The following table sets out the number of our online distributors and their movements for the
years indicated:
Y ear ended December 31,
2023 2024 2025
As of the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 26 32
Additions of new distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888 5 0
Terminations of existing distributors /H1118/H1118/H1118/H1118/H1118/H1118229
As of the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 32 73
* The reasons for termination of existing distributors during the Track Record Period is that we focus on
developing the distributors with certain scale to optimize our distributor network and expect to build long-term
relationship with our selected distributors.
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Our additions of new distributors increased from 8 in 2024 to 50 in 2025, primarily
attributable to an increase in online distributors with comparatively smaller scale who approached
us to establish distribution cooperation, as we strategically implemented a targeted promotion
initiative for such distributors in 2025 in connection with our newly launched dynamic glucose
monitoring devices, a new category under our uric acid and blood glucose management product
portfolio. We generated revenue of over RMB10.0 million from sales to such distributors in 2025.
In line with market practice, we primarily enter into standard distribution agreements with our
online distributors, which are sales and purchase agreements in nature. The salient terms of the
standard distribution agreements (including consignment agreements) we enter into with online
distributors mainly include: (i) duration: the term of our agreements with online distributors
typically ranges from one year to two years; (ii) payment and credit terms: for sales and purchase
agreements, we generally grant a credit period ranging from 30 days to 90 days; (iii) minimum
purchase requirements: the contract does not specify any minimum purchase quantity. All purchases
are made according to the actual requirements and purchase orders; (iv) product delivery: we shall
arrange the transportation of the goods to distributors. According to our agreement with the
distributors, either the distributors or we shall arrange the transportation of goods to the end
customers. The party responsible for arranging the transportation shall bear the associated costs; (v)
product return: we allow return defective products to us; (vi) termination: online distribution
agreements can be terminated upon contract expiration, due to significant breach by the online
distributor, or if the annual review is unsatisfactory.
According to Frost & Sullivan, our engagement and practice of online distributors are in line
with industry norm.
Offline Sales Channel
We primarily focus on the expansion and enhancement of our store network in offline channels
to reinforce our brand image and positioning. We also collaborate with reputable premium third
party pharmacy chain operators and reliable offline distributors to expand our offline sales
coverage.
Our Self-owned Stores
Our self-owned stores network primarily comprise our “JOYOR HearingCare ( ਄Ѐᛓɢ)”
stores, where we offer a broad range of hearing aids, including our own Cofoe branded products.
Targeting mid-to-high-end hearing aid fitting market sector, we offer precise and tailor-made
hearing solutions for individual consumers. Our “JOYOR HearingCare ( ਄Ѐᛓɢ)” stores generally
have a store area of 60 to 200 square meters, and staffed with well-trained sales team, who have
completed necessary training to provide hearing aids related services, including pre-sales
consultation, hearing testing, hearing aid selection and fitting, effect verification and evaluation,
and after-sales guidance and follow-up. Furthermore, in line with our strategy of offering premium
services, we possess a team of hearing instrument specialists with national certificates, who can
offer highly professional hearing health management services to our clients, through which, we
successfully distinguished us from other industry peers. As of December 31, 2025, we operated a
total of 668 self-owned stores, among which, 618 are “JOYOR HearingCare ( ਄Ѐᛓɢ)” stores
across 128 cities across China. According to Frost & Sullivan, in terms of the number of hearing
aids centers, the JOYOR HearingCare ranks among the top three in the home care medical devices
industry by the end of 2024.
We adopt hearing fitting process following the international standards, which covers entire
chain of hearing health solutions including the establishment of personalized hearing files,
professional hearing aid fitting, and lifelong hearing tracking services. As of December 31, 2025,
we had 878 hearing instrument specialists with certificate, whom we dispatch to our stores to take
charge of hearing fitting work and customer services. In recognition of our high quality of services
and rich industry experience, we have been designated a “Hearing and Language Industry Base ( ᛓ
ɢႧԊପุਿή)” by Beijing Language and Culture University, one of the top linguistics research
institutions in China.
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In addition, we also operate a few offline home care medical devices shopping centers and
retails stores primarily in Hunan province, as well as Guizhou province nearby. These stores either
serve as exhibition hall of our product offerings and development history, such as the shopping
center opened at our headquarter building in Changsha where we provide a range of products
covering the majority of our products, or offer convenient pick-up and access of commonly used
medical products, including oxygen concentrators, ventilators, blood pressure monitors, blood
glucose products, thermometers and wheelchairs, etc., for hospital visitors and residents in nearby
communities, like our retails stores with the trade name of “Goodhushi ( λᚐɻ)”. During the Track
Record Period, we steadily reduced scale of these offline stores, in line with our business strategy
of promoting online sales channel to fit evolving shopping habits of consumers, as well as focusing
on offline sales of products that demand professional value-added services such as hearing aids. As
of December 31, 2025, we operated two home care medical product shopping centers and nine
“Goodhushi ( λᚐɻ)” retails stores.
Furthermore, we expanded our offline store network into Hong Kong upon completing
acquisition of an 87.6% stake in Humana Medical Limited (ʮ̡), a reputable
retailer and wholesaler of medical products in Hong Kong, by the end of June 2025. As of December
31, 2025, through Humana Medical Limited, we operated over 30 medical product retail centers,
seven professional podiatry centers and one extracorporeal counterpulsation treatment center in
Hong Kong.
The following table sets forth the movement in the number of our “JOYOR HearingCare ( ਄
Ѐᛓɢ)” stores during the Track Record Period:
Y ear ended December 31,
2023 2024 2025
As of the beginning of the period /H1118/H1118/H1118/H1118/H1118/H1118411 682 759
Additions of new stores /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118275 136 3
Terminations of existing stores /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 59 144
As of the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118682 759 618
In 2024 and 2025, we terminated 59 and 144 existing stores, respectively, primarily because
we identified these existing stores failed to meet profitability expectations due to insufficient foot
traffic at their locations or limited local market capacity, during our regular performance
evaluations of distribution channels. We strategically terminated such stores to optimize our offline
stores portfolio and enhance operational efficiency. Specifically, by terminating such stores, we
were able to reallocate management, sales and marketing personnels towards stores that achieved
higher profits, thereby improving cash flow and overall profitability of our offline “JOYOR
HearingCare” stores.
The following table sets out the average spending per customer of our “JOYOR HearingCare”
stores during the Track Record Period:
Y ear Ended December 31,
2023 2024 2025
(RMB)
Average spending per customer (1) /H1118/H1118/H1118/H1118/H1118/H1118/H11186,603.2 6,876.0 7,570.0
Note:
(1) Calculated by dividing revenue for the period by total customer traffic for the period.
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The average spending per customer at our “JOYOR HearingCare” stores demonstrated
sustained growth from 2023 to 2024, driven by (i) our enhanced brand recognition and continuous
expansion of our stores network, and (ii) continued product optimization and enrichment of hearing
aids related services we offered at stores. The average spending per customer increased from 2024
to 2025, primarily because we enhanced sales efforts to promote sales of products with price
competitiveness. From 2023 to 2024, our same-store sales decreased by 8.6% primarily because the
new stores we opened in 2023 and 2024 were still in their early operational ramp-up phase and
contributed limited revenue in the respective years. From 2024 to 2025, our same-store sales
increased by 14.8% primarily due to the improved operational efficiency and revenue contribution
from the new stores we opened in 2023 and 2024.
The following table sets out the average daily revenue per store generated through our
“JOYOR HearingCare” stores during the Track Record Period:
Y ear Ended December 31,
2023 2024 2025
(RMB)
Average daily revenue
per store (1)
Stores opened in 2022 and before /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,174.1 1,243.4 1,309.2
Stores opened in 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118567.3 594.7 812.3
Stores opened in 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A 489.0 857.0
Stores opened in 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A N/A 675.1
Note:
(1) Calculated by dividing the revenue generated from stores for a given period by the number of days of operation
for such store in that period.
Sales to third party pharmacy stores
We have established strategic collaboration with reputable third party pharmacy store chain
operators in China, to fully leverage their market penetration and geographic coverage to improve
sales of our products. As of December 31, 2025, we cooperated with over 80 third party pharmacy
store chain operators that are ranked as “Top 100 pharmacy store chain operators” in China, and our
medical products had been sold at over 200 thousand offline pharmacy stores across 31 provinces
and municipalities in China.
The table below sets out the number of cooperated third party pharmacy store chain operators
that are ranked as “Top 100 pharmacy store chain operators” in respective years, and their
movements for the years indicated.
Y ear ended December 31,
2023 2024 2025
As of the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870 72 77
Additions of new pharmacy store chain
operators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118979
Termination of existing pharmacy store
chain operators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118725
As of the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872 77 81
* The reasons for termination of existing distributors during the Track Record Period is that we focus on
developing the distributors with certain scale to optimize our distributor network and expect to build long-term
relationship with our selected distributors.
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In 2023, 2024 and 2025, we ceased collaborations with seven, two and five third-party
pharmacy stores, respectively, who did not meet our expected sales performance or whose
development strategies were no longer in alignment with our development objectives.
The salient terms of our standard agreements with third party pharmacy store chain operators
mainly include: (i) duration: the terms of our agreements with third party pharmacy stores range
from one year to four years; (ii) minimum purchase requirements: we generally do not set minimum
purchase requirements; (iii) product return: after we have duly delivered the goods pursuant to the
contract, the third party pharmacy store shall not return or exchange the goods unless there is a
quality issue. If it is a quality issue, both parties will confirm return or exchange through
negotiation; and (iv) termination: the contract may be terminated by mutual agreement between
both parties or upon expiry.
According to Frost & Sullivan, our engagement and practice of third party pharmacy store
chain operators are in line with industry norm.
Offline Distributors in China
As of December 31, 2023, 2024 and 2025, we engaged 126, 186 and 191 offline distributors
in China, respectively. Our offline distributors are mainly medical device distributors with medical
device distribution qualifications and established sales channels across China, who in turn distribute
our products to regional pharmacy chains, independent pharmacies, and clinics. Our end customers
are mainly individual customers. In 2023, 2024 and 2025, our revenue generated from sales to
offline distributors amounted to RMB53.8 million, RMB71.7 million and RMB61.6 million,
respectively, accounting for 1.9%, 2.4% and 1.8% of our revenue generated from the product sales
of the same years.
The following table sets out the number of our offline distributors in China and their
movements for the years indicated:
Y ear ended December 31,
2023 2024 2025
As of the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111898 126 186
Additions of new distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844 71 20
Terminations of existing distributors /H1118/H1118/H1118/H1118/H1118/H111816 11 15
As of the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118126 186 191
* The reasons for termination of existing distributors during the Track Record Period is that we focus on
developing the distributors with certain scale to optimize our distributor network and expect to build long-term
relationship with our selected distributors.
In 2023, 2024 and 2025, we ceased collaborations with 16, 11 and 15 offline distributors,
respectively, who did not strictly follow our management policies for distributors, did not meet our
expected sales performance, fail to sustain creditworthiness or were not aligned with our
distribution channel development strategies.
The salient terms of our standard distribution agreements with offline distributors mainly
include: (i) duration: the term of our agreements with offline distributors is specified as an annual
framework cooperation agreement; (ii) designated distribution channel: we typically designate
specific hospitals, clinics, pharmacy chains within a particular geographical area to different
distributors. The distributors are not allowed to sell our products outside of their designated
distribution areas. Parties agreed to set a selling price through negotiation; (iii) minimum purchase
requirements: we generally do not set minimum purchase requirements; (iv) sub-distributorship
arrangement: we generally do not prohibit our offline distributor to engage sub-distributors; (v)
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product return: for annual framework cooperation agreements with offline distributors, product
returns are not permitted for nonquality issues after we fulfill the delivery obligation. For
quality-related issues, returns shall be confirmed through mutual negotiation between both parties;
and (vi) termination: for annual framework cooperation agreements with offline distributors, the
agreements can be terminated upon contract expiration, by mutual agreement.
According to Frost & Sullivan, our engagement and practice of offline distributors are in line
with industry norm.
Our Overseas Sales
During the Track Record Period, we sold our products to overseas consumers primarily
through our online sales channels directly. During the Track Record Period, we also sell products
under OEM/ODM business to overseas clients. Our overseas sales covered a wide range of product
categories, including health monitoring products such as our proprietary blood glucose and uric acid
dual-test strips and thermometers, wheelchairs, and wound dressing products.
For the details on our revenue by regions during the Track Record Period, please see
“Financial Information” to this prospectus.
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,803,825 98.3 2,923,780 98.0 3,088,756 91.2
Other countries/regions
Asia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,217 1.4 38,039 1.3 161,166 4.8
South America /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,157 0.1 8,219 0.3 20,126 0.6
Africa /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,643 0.1 2,847 0.1 8,198 0.2
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,074 0.1 5,270 0.2 43,188 1.3
North America /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,709 0.1 4,682 0.2 66,013 1.9
Oceania /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869 0.0 93 0.0 52 0.0
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,870 1.7 59,151 2.0 298,743 8.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 100.0 2,982,931 100.0 3,387,499 100.0
During the Track Record Period, the U.S. Tariffs, including the corresponding tariff policies
introduced by other countries, and export restrictions, assuming they are enforced as proposed, did
not have a material and adverse impact on our business, results of operations and expansion plan,
on the bases that (i) we make very limited direct exports overseas, and therefore has in significant
direct exposure to the tariffs. Specifically, our principal products exported to the European and U.S.
markets were tapes, dressings and other products sold by Huazhou. With respect to EU tariffs,
during the Track Record Period, our products were subject to an EU tariff rate of 6.5%. With respect
to U.S. tariffs, our products were subject to a base tariff rate of 5% plus additional tariffs. Under
a series of tariff policies implemented by the U.S. government in 2025, the applicable additional
tariff rates applicable to our products ranged from 0% to 54%. As a result, during the Track Record
Period and up to the Latest Practicable Date, the total U.S. tariff rates applicable to our products
ranged from 5% to 59%; and (ii) downstream customers, who import the end products purchased
from us into the U.S. and other countries, are responsible for the tariffs.
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Distributor Selection and Management
We have adopted a set of distributor selection criteria and management policies to ensure our
distributors are capable, efficient and well-resourced. Factors considered in distributor selection
include their geographic coverage, experience in handling home care medical devices, scale of
operations, qualifications, existing customer base and market reputation. We regularly review the
performance of distributors through a selection process and annual assessment.
We proactively manage our distributors to comply with the requirements of relevant laws and
regulations. We adopt and implement a suite of distributor management policies to ensure
distributors are in compliance with the legal requirements. Our distributor management policies
typically set out a variety of operational guidelines, including promotion activities, and account
reconciliation mechanism. In addition, we also implement proactive management measures to
mitigate potential competition or market cannibalization among distributors.
We conduct interview and/or on-site visit to understand their inventory level, through which,
we may understand prevailing market conditions and check whether they have sufficient stock level.
We believe these measures, together with terms of agreements with our distributors as mentioned
above, including payment and credit terms, policies on product return, and other distributor
management policies, can effectively mitigate risks associated with potential cannibalization and
channel stuffing. During the Track Record Period, we did not restrict distributors from appointing
sub-distributors and from time to time our distributors may engaged sub-distributors. We did not
enter into sub-distribution agreements with sub-distributors.
We believe that our sales reflect the actual demand from end customers, thus minimizing the
risk of channel stuffing and inventory backlog within the distribution network, as (i) we require our
distributors to report to us on, and to maintain a reasonable level of, their inventory and adjust our
supply to them to prevent channel stuffing accordingly; and (ii) we generally do not grant long
credit periods to distributors or set minimum purchase requirements, encouraging distributors to be
more cautious in their ordering to align their purchases with actual sales patterns and market
demand. We believe such arrangements encourage distributors to order products based on actual
sales forecasts.
In determining the price of products we sold to distributors and third-party pharmacy stores,
we consider the factors including the cost of products, the market price of comparative products,
prevailing competitive dynamics, order volumes, and historical relationship. In addition, we provide
distributors and third-party pharmacy stores with recommended retail pricing guidelines, allowing
them to adjust the designated retail prices within 20% relative to the recommended retail price. As
distributors and third-party pharmacy stores incur operating costs in distribution our products, we
generally sell products to distributors and third-party pharmacy stores at prices lower than our retail
prices through direct sales, allowing them to retain a reasonable profit margin. This pricing
approach helps align the retail prices of products sold through distributors and third-party pharmacy
stores with those sold directly by us, thereby maintaining overall consistency in brand product retail
pricing. In addition, we grant distributors and third-party pharmacy stores pricing flexibility of up
to 20%, enabling them to respond to local competition, customer demographics and promotional
costs.
Our Acquisition of Humana Medical Limited (ʮ̡)
We have completed the acquisition of an 87.6% stake in Humana Medical Limited (ᔼ
ʮ̡) by the end of June 2025. Founded in 1986, Humana Medical Limited has a history
of nearly 40 years. It is a reputable retailer and wholesaler of medical products in Hong Kong
operating over 30 medical product retail centers, seven professional podiatry centers and one
extracorporeal counterpulsation treatment center. We benefit from this acquisition by quickly
exploring into and expand business reach in Hong Kong market leveraging its industry experience
and local resources, further promoting market influence of our brands. In the meantime, we plan to
invest in improving store chain management and supply chain optimization for operations of
Humana Medical Limited, to strengthen synergy between our business operations in China and
overseas.
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RESEARCH AND DEVELOPMENT
During the Track Record Period, we have been focusing on developing high-performance
home care medical devices with emphasis of R&D activities in parallel. We have established an
in-house R&D team of more than 350 staff and three research institutes each focuses on a select
area, including medical electronics and rehabilitation medicine, biosensing and innovative
materials, and respiratory support. Through relentlessly efforts, we have achieved distinguished
R&D breakthroughs across different business lines. Leveraging continued successful innovation
and iteration, we have achieved enhanced competitiveness in existing product portfolio, continuous
expansion of application for new products, and optimization of cost efficiency.
During the Track Record Period, we conduct our product R&D primarily through our in-house
team, and also through collaboration with external research parties, including the Central South
University, Xiangya Second Hospital of Central South University and Beijing Institute of Fashion
Technology. In particular, we collaborated with Xiangya Second Hospital of Central South
University on research projects, such as a machine learning-based pressure-sensing intelligent
correction device aimed at optimizing the force distribution and support structure of our posture
correction products; and artificial intelligence home care products aimed to integrate AI technology
into our nursing bed products, optimizing the product support performance based on human
pressure distribution. As of the Latest Practicable Date, our collaborative research projects with
external research partners are still ongoing and have not resulted in any commercialized products.
We typically enter into collaborative research agreements with external partners. The salient
terms of our collaboration agreement mainly include: (i) intellectual property: the intellectual
property arising from the research and development shall be jointly owned by us and the
collaborating party; (ii) confidentiality: the engaged party is responsible for keeping strict
confidentiality of all the information provided by us, and would be responsible for any breach of
confidentiality. The confidentiality clause applies for two to five years from the provision of
information; (iii) termination: the agreements will be terminated by mutual agreement, or by other
means as set forth in the agreements.
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Key R&D Programs
Our R&D efforts will continue to focus on the intelligentization and lightweighting of products, as well as their close integration with digital medi cal
services. In addition, we will take enhancing the quality of consumer experience and improving long-term treatment compliance as important R&D
directions. We will also continue to conduct research and development on key components of medical products and major AI algorithms to achieve
continuous innovation in five categories of products. As of the Latest Practicable Date, our key on-going R&D projects are set out below:
Product/Technology Key Features Key Applications Status and Expected Market Release Time
Sleep Therapy V entilator Products /H1118We plan to deeply integrate AI technology into our products,
which will realize a full-process innovation from data
collection to annual diagnosis. Users will not only be able
to view ventilator sleep reports, but also obtain AI-
generated health trend analyses and personalized
improvement suggestions.
It can be used for home care scenario or
medical institution-based treatment for
sleep apnea-hypopnea syndrome, severe
snoring, and respiratory insufficiency.
Engineering prototype stage
Around 2026 and 2027
We will optimize the ventilator algorithm, focusing on: (i)
the intelligence of temperature and humidity control,
dynamically adjusting the heating and humidification
output to avoid airway dryness or excessive condensation;
(ii) the leak compensation algorithm.
In addition, we will optimize the mute engineering, safety
design and humanized functions to enhance customers’
user experience.
Portable Oxygen concentrators /H1118/H1118/H1118We plan to develop an AI-Pulse oxygen supply technology,
which identify user’s breathing status in a highly
intelligent way to sense slow and weak breathing through
integrated advanced sensors, based on which, it may use
built-in multi-level sensitivity adjustment to operate at
different status that are suitable for various user groups. In
addition, with the constant flow control algorithm and the
built-in environment sensor, this device automatically
adjusts the operating parameters of the device.
NOT (nocturnal oxygen therapy)
population; AOT (ambulatory oxygen
therapy) population;
SBOT (short-burst oxygen therapy)
population; Population engaging in
plateau outdoor travel and tourism
Engineering prototype stage
2026
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Product/Technology Key Features Key Applications Status and Expected Market Release Time
We plan to make this device a smart terminal for cloud
platform to enhance respiratory health ecosystem, where
users can conveniently observe real-time user breathing
parameters, device flow, oxygen concentration, and device
operation data, generating professional improvement
suggestions.
Immunochromatographic detection
kits for infectious diseases /H1118/H1118/H1118/H1118
Through immunochromatography technology, consumers can
perform infectious disease detection at home, with the
detection range covering infectious diseases, respiratory
system infections, digestive system infections, etc. In
addition to ensuring accuracy, product development also
achieves the optimal user experience for consumers by
optimizing product design, simplifying operating steps,
and adding intelligent functions.
Detection of infectious diseases such as
infectious diseases, respiratory system
infections, and digestive system
infections
As of the Latest Practicable Date, we
have completed applications for medical
device registration for two products,
and have commenced R&D for other
product candidates in this category
Expected to launch between 2026 – 2028
Research on Rapid Detection
Technology for Metabolic
Disease Indicators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We plan to develop a series of technologies and products
focusing on metabolic diseases, including hyperglycemia,
hypertension, hyperlipidemia, and hyperuricemia. We plan
to realize functions such as multi-test with one device,
multi-test with one strip, multi-test with one blood sample,
and multi-test with one urine sample, and achieve
intellectualization, so as to assist consumers quickly
understand their own health status and obtain health
guidance.
Detecting
diseases like hyperglycemia,
hypertension, hyperlipidemia,
hyperuricemia, kidney disease, and
anemia.
Multiple single-item detection products
have been approved for market launch.
We are still researching other product
candidates
Around 2027 and 2028
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Product/Technology Key Features Key Applications Status and Expected Market Release Time
AI-Driven Capability Enhancements
for Power Wheelchairs /H1118/H1118/H1118/H1118/H1118/H1118/H1118
We plan to develop carbon fiber lightweight electric
wheelchairs with a self-weight of no more than 13 kg, as
well as wheelchairs with a high battery life of 100 km. In
addition, we plan to develop AI functions for our
wheelchair products, facilitating voice control, AI image
recognition for automatic obstacle avoidance, positioning
and navigation.
We are also in the process of developing new intelligent
electric wheelchairs with self-driven and self-controlled
wheel hubs, enhancing our market share in high-end
market sector.
Lightweight design facilitates travel, and
AI functions enable personalized
operation, enhancing the intelligence
level of the product.
Testing and sampling stage
Expect to launch between 2026 and 2027
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OUR PRODUCTION
In line with our development strategy, we invested in developing and enhancing automated,
digitalized, and lean manufacturing management across multiple production bases. In particular, we
focus on achieving improvement in cost efficiency by continuously optimizing processes and
formulations, and adopting highly flexible and transparent inventory management policy. In the
meantime, we emphasize on implementing standardized workflow, and technology-backed
automation, through which, we can achieve mass production capability with premium product
consistency.
Our Manufacturing Bases
As of December 31, 2025, we had four major manufacturing bases in China. We strategically
locate our manufacturing bases to places with close proximity to our clients, allowing coverage of,
and quick response to, their production need and supply chain management demands.
Bases Location Descriptions
Changsha Intelligent
equipment headquarter
Base /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changsha, Hunan
province
This plant commenced commercial production
since December 2022 and mainly produce
rehabilitation aids products, health
monitoring products and respiratory support
products.
In addition, this plant also serves as an
advanced logistics hub supporting online
sales and offline distribution of our
products, as well as offering logistics
services to select industry peers.
Y ueyang Smart
Healthcare Plant /H1118/H1118/H1118/H1118/H1118
Y ueyang, Hunan
province
This plant commenced commercial production
since October 2020 and mainly produce
rehabilitation aids products, medical care
products and respiratory support products.
Nantong Jerry Medical
Plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Nantong, Jiangsu
province
This plant commenced commercial production
since December 2020 and mainly produce
wheel chair products.
We implement advanced manufacturing
equipment and highly automated production
technologies in the plant to ensure quality
of our products.
Qidong Huazhou Plant /H1118/H1118Qidong, Jiangsu
province
This plant commenced commercial production
since May 2015 and mainly produce
medical care products.
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The following table sets forth the production capacity and utilization rate of our
manufacturing bases and other related metrics during the years indicated.
For the year ended
December 31,
2023 2024 2025
Medical and Wellness Products
Rehabilitation Aids Products /H1118Production volume Units in thousand 4,202 4,761 5,114
Production
capacity
Units in thousand 5,415 6,118 6,801
Utilization rate (i) % 78% 78% 75%
Medical Care Products /H1118/H1118/H1118/H1118/H1118Production volume Units in thousand 2,971,112 3,661,313 4,414,458
Production
capacity
Units in thousand 3,846,238 4,729,310 5,695,971
Utilization rate (i) % 77% 77% 78%
Health Monitoring Products /H1118Production volume Units in thousand 141,450 143,647 187,665
Production
capacity (ii)
Units in thousand 187,245 188,567 242,988
Utilization rate (i) % 76% 76% 77%
Respiratory Support
Products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Production volume Units in thousand 71,982 53,297 62,342
Production
capacity (ii)
Units in thousand 97,697 71,013 83,381
Utilization rate (i) % 74% 75% 75%
TCM Therapy and Other
Products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Production volume Units in thousand 29,425 19,791 22,668
Production
capacity (ii)
Units in thousand 37,633 26,047 29,159
Utilization rate (i) % 78% 76% 78%
(i) Assuming that the relevant production lines operate 250 days per year and 8 hours per day.
(ii) Calculated based on the total available operating hours of each production line within the standard time frame
multiplied by the standard output per unit of time for each production line.
During the Track Record Period, our overall production capacity increased, primarily due to
(i) our expansion of production capacity to meet the growing market demand for our products; (ii)
in accordance with our development strategy, we increased in-house manufacturing of certain
products previously outsourced, which required higher production capacity; and (iii) our continuous
optimization of production processes to improve production efficiency.
In particular, the production capacity of our TCM therapy and other products production lines
decreased from 2023 to 2024, primarily because we changed certain lower value-added products
from in-house manufacturing to outsourced procurement, in order to reduce production costs and
improve overall production efficiency. The production capacity of our respiratory support product
line decreased from 2023 to 2024, primarily because, based on our assessment of market conditions
and the progress of our research and development efforts, we strategically reduced the production
and sales of certain existing products in preparation for the manufacturing and launch of upgraded
products, to optimizing our product offerings.
While we primarily rely on our in-house production capacity to manufacture our home care
medical devices, we also engage OEM/ODM suppliers to produce select types of our branded
medical products, particularly those do not carry sophisticated technology specifications and/or
demand advanced manufacturing techniques, including walking aids, elbow crutches and canes
under rehabilitation aids products; anti-decubitus mattresses, urine collectors, drainage tubes,
drainage bags and irrigation devices under medical care products; mouth-closing orthotic patches
under respiratory support products; as well as hot compress eye masks, acupuncture needles and
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cupping devices under TCM therapy and other products. In this way, we are able to achieve
production capacity expansion in a more dynamic and cost-efficient way when we deem
appropriate, allowing us to focus on producing products with higher value at our own plants.
The following table sets forth the procurement volume and procurement costs of the our
own-brand products produced by OEM/ODM suppliers during the years indicated:
For the year ended December 31,
2023 2024 2025
Procurement volume ( thousand units )/H1118/H1118/H1118139,949 89,704 102,548
Procurement costs ( RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118411,331 255,223 325,887
The procurement costs of our own-brand products produced by OEM/ODM suppliers
continuous decreased from 2023 to 2024, primarily because (i) we progressively transitioned certain
product lines, including wheelchairs, the infection control series, wound dressings/bandages, and
oral care products, to in-house manufacturing, consistent with our strategic development goal of
enhancing quality control and improving delivery efficiency; and (ii) following the adjustments to
epidemic prevention and control policies, market demand for health protection products such as
antigen rapid test kits, masks, and gloves gradually declined, which allowed us to commensurately
reduce the procurement volume of these products. The procurement costs increased from 2024 to
2025, primarily because we introduced new products, including continuous glucose monitoring
devices and adult care products, through external procurement to enrich our product portfolio.
The procurement volume of our own-brand products produced by OEM/ODM suppliers
slightly increased from 2023 to 2024, primarily due to increased procurement of disposable
consumables products.
The salient terms of the standard agreements with OEM/ODM suppliers mainly include: (i)
terms: the agreement generally has a term ranging from a few months to 2 years; (ii) minimum
purchase commitment: we typically do not set minimum purchase requirement; (iii) logistics
arrangement: our suppliers are generally responsible for arranging delivery of the products to
locations designated by us, and be responsible for any risk of loss or damage upon acceptance; (iv)
termination: we generally have the right to terminate the agreement with supplier who breach the
supply agreement that frustrate the purpose of the agreement and (v) product return: we are entitled
to return the products if the products are defective, and the suppliers are responsible for any fees
incurred by the return.
Manufacturing Process
The charts below set out our key steps of production process of our products.
Blood Pressure Monitor
WarehousingPackagingDynamic and
static testing
Finished
product assembly
Display
inspection
PCBA programming
and semi-finished
product assembly
Material
requisition
V entilator
WarehousingPackagingComplete
machine testing
Product
final assembly
Main board
programming
and testing
Turbine component
assembly
Material
requisition
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Hearing Aids
WarehousingPackagingAcoustic testingFinished
product assembly
Installation and
welding/microphone/
speaker kit
PCBA programming
and testing
Material
requisition
Medical Repair Patch
WarehousingPackagingMicrobial testing FillingFilm foldingSolution preparationMaterial
requisition
The lead time of our products from order to delivery varies significantly based on types and
complexity of relevant products. During the Track Record Period, for each batch of our products,
our lead time range from approximately 30 days to nearly two months.
Our Production Equipment
During the Track Record Period, we source production equipment from diverse suppliers from
China. We rely on our in-house technicians to conduct regular maintenance work to ensure safe and
proper operations of our equipment and production line. During the Track Record Period and as of
the Latest Practicable Date, we did not encounter any major interruptions in the production process
due to facility or equipment failures or malfunction, nor did we incur any major accidents.
OUR LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Capitalizing on our well-developed logistics and warehouse infrastructure, we adopted
advanced software technologies in establishing our smart logistics system capable of service
automation and operation digitalization. We invested in developing service automation, setting
unmanned logistics capabilities as a key focus of our operations to achieve optimized cost
efficiency. We adopted advanced devices and software systems, including sorting robots, smart
forklifts, and automated sorting systems. In addition, capitalizing on our digitalization systems, we
could ensure seamless integration with, and dynamic management on, third party transportation
service providers, bringing secure and quick solutions. Our warehouse is capable of processing
nearly 500 thousand orders per day during peak seasons and our sorting facility can complete tasks
for over 30 thousand parcels per hour.
Utilizing our pallet conveyor Line, batch-wall sorter, intelligent automated storage and
retrieval system, case conveyor line and cross-belt sorters that are backed by software systems, we
are able to handle and sort different types of packages by batches under different warehousing and
logistics operating environments, improving sorting efficiency and accuracy and achieving
automated goods-to-person sorting. Goods-to-person is a modern method of logistics order
fulfillment that combines automated storage with accurate and ergonomic picking processes. By
using an automated storage system to deliver goods to a stationary pickup station where the operator
fills discrete orders, goods-to person sorting significantly reduced the labor required in our
warehouse.
In addition, our high-density storage system consists of hardware equipment and software
systems such as multi-tier stacking crane, hoists, workstations and conveying systems, which
improve storage utilization, efficiency and safety. We have put in place customized racking systems
that allow for product storage on pallets in horizontal rows across vertically stacked levels in an
efficient and secure manner. Our racking systems can accommodate a wide array of different
customer storage needs.
We believe digitalization of our logistics operations and management is critical to enhancing
its accuracy and efficiency and service capabilities. We have developed and/or adopted specialized
information technology and digitalization system to streamline and optimize management on
different sector of logistics and supply chain management, including (i) warehouse management
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system (WMS), which can undertake AI-empowered automated task solutions for goods pick up,
status tracking and order verification, significantly improving real-time inventory visibility; (ii)
warehouse control system (WCS), which can precisely and intelligently schedule and monitor the
box conveyor line and pallet elevator in accordance with WMS instructions to achieve unmanned
management; (iii) electronic business management system (EBMS), which focuses on after-sales
return sorting, by accurately matching return details according to the return orders created by
after-sales customer service, and synchronizing real return details to after-sales customer service in
real time to complete refunds, improving efficiency, accuracy of after-sales processing and
customer satisfaction.
QUALITY CONTROL
To ensure production quality, we have established a full-life-cycle quality management
process, covering modules such as R&D quality management, material quality management,
process quality management, and post-marketing quality management, ensuring the safety and
effectiveness of products. We have also built a sound quality system, successfully passing
certifications of international standard quality systems such as ISO 13485 and ISO 9001.
Meanwhile, the requirements of MDR, CE, TÜV , IVDR, and China’s GMP regulations are
implemented into daily system requirements to maintain the effective operation of the quality
system, safeguarding the compliant sales of products in various regions.
For durable products, such as hearing aids, we generally offer a warranty period, at least of
one year or extended period for those products subject to relevant PRC laws and regulations, while
for consumables, such as plaster series products, their shelf life is about two to three years. During
the Track Record Period and up to the Latest Practicable Date, we did not experience any dispute
in relation to our product quality that caused material and adverse impact to our business operations.
During the Track Record Period and up to the Latest Practicable Date, we have not experienced any
material product return or any product recall incidents that had, or would reasonably be expected
to have, a material adverse impact on our business or operations.
OUR INFORMATION TECHNOLOGY
We believe that information technology is crucial for maintaining our competitive position.
During the Track Record Period, we invested in developing our IT systems to ensure our business
management could enjoy technology-backed benefits in terms of automation, informatization,
intelligence and digitization. During the Track Record Period and up to the Last Practical Date, our
IT systems did not experience any major failures or complete breakdowns that had a significant
adverse impact on our overall business operations.
MARKETING, SALES AND CUSTOMERS
Our Customers
In 2023, 2024 and 2025, our five largest customers in each year during the Track Record
Period contributed 43.8%, 33.7% and 36.1%, respectively, to our total revenue. Sales to our largest
customer in each year during the Track Record Period accounted for 27.0%, 18.9% and 21.9% of
our total revenue for the respective years.
The following tables set forth the details of our five largest customers in each year during the
Track Record Period.
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For the year ended December 31, 2023
No. Customer Customer type Background
Products/services Purchased
from us Revenue
% of total
revenue
(RMB’000)
1 /H1118/H1118/H1118Company A e-commerce platform A public company primarily engages in e-commerce platform operations,
as well as digital business, cloud computing, smart logistics, and
related services in Chinese Mainland, listed on the New Y ork Stock
Exchange. We commenced our business relationship with the customer
since 2017.
All five categories of home care
medical products
769,779 27.0%
2 /H1118/H1118/H1118Company B online distributor A private company primarily engages in medical devices distribution and
brand operation in Chinese Mainland. We commenced our business
relationship with the customer since 2021.
All five categories of home care
medical products
182,240 6.4%
3 /H1118/H1118/H1118Company C e-commerce platform A private company primarily engages in e-commerce for health products,
medical devices, and wellness-related services in Chinese Mainland.
We commenced our business relationship with the customer since
2018.
All five categories of home care
medical products
157,877 5.5%
4 /H1118/H1118/H1118Company D Pharmacy chain
operators
A public company primarily engages in retail chain business for
medicines, medical devices, and health-related products in Chinese
Mainland, listed on the Shanghai Stock Exchange. We commenced our
business relationship with the customer since 2009.
All five categories of home care
medical products
86,342 3.0%
5 /H1118/H1118/H1118Company E Pharmacy chain
operators
A public company primarily engages in retail chain business for
medicines, medical devices, and health-related products in Chinese
Mainland, listed on the Shanghai Stock Exchange. We commenced our
business relationship with the customer since 2009.
All five categories of home care
medical products
53,599 1.9%
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For the year ended December 31, 2024
No. Customer Customer type Background
Products/services Purchased
from us Revenue
% of total
revenue
(RMB’000)
1 /H1118/H1118/H1118Company A e-commerce platform A public company primarily engages in e-commerce platform operations,
as well as digital business, cloud computing, smart logistics, and
related services in Chinese Mainland, listed on the New Y ork Stock
Exchange. We commenced our business relationship with the customer
since 2017.
All five categories of home care
medical products
564,461 18.9%
2 /H1118/H1118/H1118Company B online distributor A private company primarily engages in medical devices distribution and
brand operation in Chinese Mainland. We commenced our business
relationship with the customer since 2021.
All five categories of home care
medical products
202,347 6.8%
3 /H1118/H1118/H1118Company C e-commerce platform A private company primarily engages in e-commerce for health products,
medical devices, and wellness-related services in Chinese Mainland.
We commenced our business relationship with the customer since
2018.
All five categories of home care
medical products
116,233 3.9%
4 /H1118/H1118/H1118Company D Pharmacy chain
operators
A public company primarily engages in retail chain business for
medicines, medical devices, and health-related products in Chinese
Mainland, listed on the Shanghai Stock Exchange. We commenced our
business relationship with the customer since 2009.
All five categories of home care
medical products
74,771 2.5%
5 /H1118/H1118/H1118Company E Pharmacy chain
operators
A public company primarily engages in retail chain business for
medicines, medical devices, and health-related products in Chinese
Mainland, listed on the Shanghai Stock Exchange. We commenced our
business relationship with the customer since 2009.
All five categories of home care
medical products
47,298 1.6%
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For the year ended December 31, 2025
No. Customer Customer type Background
Products/services Purchased
from us Revenue
% of total
revenue
(RMB’000)
1 /H1118/H1118/H1118Company A e-commerce platform A public company primarily engages in e-commerce platform operations,
as well as digital business, cloud computing, smart logistics, and
related services in Chinese Mainland, listed on the New Y ork Stock
Exchange. We commenced our business relationship with the customer
since 2017.
All five categories of home care
medical products
740,468 21.9%
2 /H1118/H1118/H1118Company B online distributor A private company primarily engages in medical devices distribution and
brand operation in Chinese Mainland. We commenced our business
relationship with the customer since 2021.
All five categories of home care
medical products
307,954 9.1%
3 /H1118/H1118/H1118Company C e-commerce platform A private company primarily engages in e-commerce for health products,
medical devices, and wellness-related services in Chinese Mainland.
We commenced our business relationship with the customer since
2018.
All five categories of home care
medical products
76,339 2.3%
4 /H1118/H1118/H1118Company D Pharmacy chain
operators
A public company primarily engages in retail chain business for
medicines, medical devices, and health-related products in Chinese
Mainland, listed on the Shanghai Stock Exchange. We commenced our
business relationship with the customer since 2009.
All five categories of home care
medical products
58,007 1.7%
5 /H1118/H1118/H1118Company E Pharmacy chain
operators
A public company primarily engages in retail chain business for
medicines, medical devices, and health-related products in Chinese
Mainland, listed on the Shanghai Stock Exchange. We commenced our
business relationship with the customer since 2009.
All five categories of home care
medical products
39,348 1.2%
As of the Latest Practicable Date, none of our Directors, their close associates or any of our Shareholder which to the best knowledge of our Directors
owned more than 5% of the issued share capital of our Company, had any interest in our five largest customers in each year during the Track Record Period.
To the best knowledge of our Directors, each of our five largest customers in each year during the Track Record Period was an Independent Third Party.
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Overlapping Customers and Suppliers
During the Track Record Period, all of our major customers were also our suppliers in the
respective years. This is mainly due to the factors that, our major customers are either (i)
e-commerce platforms or online distributors, whom we also engaged for e-commerce platform,
advertising and logistics and warehousing solutions services in recognition of their expertise and
leading positions; or (ii) third-party pharmacy store chain operators, whom we also engaged for
providing sales and marketing services, in recognizing their rich experience and successful track
record in offering these service for home care medical devices.
In 2023, 2024 and 2025, our purchase amount attributable to these customer-suppliers in each
year during the Track Record Period amounted to RMB261.8 million, RMB181.0 million and
RMB254.4 million, respectively, which accounted for 12.1%, 9.4% and 11.2% of our purchases,
respectively.
In addition, during the Track Record Period, certain of our major suppliers in each year during
the Track Record Period were also our customers in respective year. This mainly because, given the
factors mentioned above, (i) two of these suppliers are also leading e-commerce platforms in China
where we conduct online sales of our products; and (ii) one of our major suppliers engaging in
wheelchair products manufacturing business choose to procure wheelchair related parts and
components from us in recognition of our leading market position in this respect. In 2023, 2024 and
2025, our sales amount attributable to these supplier-customers in each year during the Track
Record Period amounted to RMB928.6 million, RMB572.4 million and RMB741.4 million,
respectively, which accounted for 32.5%, 19.2% and 21.9% of our revenue, respectively. In 2023,
2024 and 2025, the gross profit of our products sold to these supplier-customers in each year during
the Track Record Period amounted to RMB331.2 million, RMB232.8 million and RMB383.4
million, and the gross profit margin of such products sold to these supplier-customers in each year
during the Track Record Period were 35.7%, 40.7% and 51.7%, respectively.
According to F&S, the overlapping of our customers and suppliers is common in home care
medical devices industry, where e-commerce platform management, sales and marketing, and
logistics and warehousing services generally demand expertise and professional knowledge on
relevant medical products, which are distinctively different from those related with other types of
goods. As a result, it is not uncommon for enterprises like us to engage relevant e-commerce
platform, online distributors and pharmacy store chain operators to offer ancillary services like
e-commerce store management, sales and marketing, as well as logistics and warehousing solutions.
Our Directors confirm that all transactions with these overlapping customers and suppliers
were conducted in the ordinary course of business, on normal commercial terms, and were not
inter-conditional. The contractual terms were substantially the same as those with our other
customers and suppliers.
Sales and Marketing
We implement a multi-brand marketing strategy to cater to the diverse needs of patients and
customers. Assigning distinctive market positioning and targeted customer groups to each brand,
while ensuring that all of them share a common value that our master brand, Cofoe “
”, we have
successfully established a product portfolio comprising large number of branded products. This
strategy allows our brands enjoy distinguished market recognition in their select sectors, while
effectively complementing each other to cover home care medical products from consumers and
patients at different life stages and/or seeking different solutions re specific disease or restrictions.
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Customer Services
We treat our marketing and sales measures as an integrated part of consumer services, to
ensure consumers may select the exact type of products suitable for treatment and care they are
looking for when they make purchasing decision. For devices with sophisticated functionality
and/or designed to assist post-surgery recovery at home, we also offer video content together with
specific customer service support to ensure consumers and patients can use them safely and
correctly in a home environment. We generally require our customer service team to respond to
enquiries raised by consumers within 24 hours after reception, ensuring satisfactory consumer
experience.
During the Track Record Period and up to the Latest Practicable Date, our online stores have
not received any penalties, while key performance metrics, such as complaint and return rates,
consistently outperformed industry average.
Our Brand V alue Promotion
Furthermore, we actively participated in and/or hold various marketing and sales campaigns
that we deem suit our brand image and core corporate value. In particular, our pursuit to establish
us a platform offers a product portfolio that effectively addresses home care medical needs for
consumers and patients of all ages, providing patients and their families with diverse device options
to choose from. For instance, we have participated healthcare program on CCTV , the leading
telecommunication station in China, upon passing relevant qualification tests and validation
procedures, through which, we managed to convey our scientific and professional brand concepts
to audiences across China. In addition, in recognizing impact on public from hybrid video-social
platforms, we have built strong presence in Douyin, Kuaishou and Xiaohongshu, enhancing user
interactions through methods such as health experts visiting factories and creating popular science
content. We also sponsor public events promoting public awareness on healthcare and conveying
importance on daily care on body conditions, forming a close tie in consumers’ cognition between
health and our brands, including Cofoe and others. For instance, through participating in events like
Mount Everest climbing, the Changsha Marathon, the Changsha Xiangjiang River Crossing Swim,
and the Hunan Provincial Y outh Basketball League, we have expanded the scene connection of
healthy consumption, continuously increased the brand’s popularity among sports vertical groups,
and conveyed the healthy and positive brand spirit.
In addition, we have participated in industry exhibitions such as Arab Health, MEDICA,
CMEF and National Pharmaceutical Trade Fair, showcasing the latest products and cutting-edge
technologies to professional and ordinary audiences. In addition, we engaged with celebrity to
endorse for babaka
, promoting public awareness on importance of “spine protection and
upright walk”, inspiring consumer across different age groups to pay attention to posture health.
Furthermore, we actively fulfill our social responsibilities, and have joined events organized by
institutions such as the China Foundation for Disabled Persons and the China Social Assistance
Foundation to donate medical supplies such as oxygen concentrators, thermometers, blood pressure
monitors, and commode chairs to rural areas and elderly care centers. These measures have
accurately helped the disabled and vulnerable groups, demonstrating our attention and devotion
social responsibility and further enriching the value connotation of the brand. All of these efforts
set out a stringent and dynamic theme of our sales and marketing strategy across our group.
Our Brand Portfolio
We are well aware that in the household medical devices industry, the public’s positive
perception of a brand is a crucial factor for sustainable success, and have been investing in brand
value building. By continuously launching products that feature high quality, deliver outstanding
medical efficacy, cater to the daily needs of family members across all age groups in home settings
with both aesthetic appeal and user-friendly convenience, we have been steadily enhancing
customers’ recognition of Cofoe as the reliable source of range of home care medical devices, while
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trust our other brands with distinguished position in respective product lines, such as “babaka (ߠ
Գ)” for orthopedic/posture correction products, “JOYOR HearingCare ( ਄Ѐᛓɢ)” for hearing
aids and related services, “Jerry Medical ( Λᨷᔼᐕ)” for wheelchair products, “Huazhou ( ശЋ)”
for medical dressing material and products.
Our key brands for home care medical devices. It stands for our commitment
to bringing trusted medical-health products for lifelong wellness. The Chinese character “ ѿ (Fu)”
means “trustworthy” in Chinese, therefore, “ ̙ѿ (Kefu)” signifies “worthy of trust”. The English
trademark “Cofoe” is derived from “Comfortable,” implying a sense of ease and comfort.
Positioned to seamlessly combine innovation and reliability, we deliver high-quality branded
medical products that are characterized by creative design addressing evolving user needs,
advanced technology ensuring clinical efficacy and superior quality compliant with global
standards. We are dedicated to become a the trustworthy source for consumers to seek personal
health management products and solutions, and have been invested in developing and launching a
broad range of home care medical devices exhibiting advanced technologies and convenient
operations at home care scenario.
Founded in 1997, “babaka (Գ)” brand is one of China’s earliest brands
focusing on posture health management. In April 2022, we
acquired this pioneering brand and implemented a strategic repositioning, establishing it as a
“Posture Management Expert”. Focusing on dual domains of Scientific Shaping + Wellness
Aesthetics (ኪ෧Җ+ኪ), we are committed to building an integrated posture health
ecosystem that combines correction, sculpting, and maintenance. This initiative has successfully
expanded public understanding of posture-correcting products, raising awareness of posture
improvement needs across diverse age groups and professions while fostering strong recognition of
“babaka (Գ)” branded products’ functionality and quality.
“JOYOR HearingCare ( ਄Ѐᛓɢ)” is our national hearing service chain
brand focusing on hearing aid fitting services and hearing
rehabilitation. As of December 31, 2025, we operated a total of 618 “JOYOR HearingCare ( ਄Ѐ
ᛓɢ)” stores across 128 cities across China. According to Frost & Sullivan, we are one of the few
enterprises in China that simultaneously owns independently developed hearing aid fitting tools,
hearing aid products, and a chain of hearing aid fitting centers.
Founded in 2013, “Jerry Medical ( Λᨷᔼᐕ)” brand has become a leading
brand in the electric wheelchair industry, with a rich product
system that has obtained domestic registrations and overseas certifications. It boasts a complete
intellectual property system, leading technological R&D capabilities, and efficient manufacturing
processes. Our subsidiary, Jerry Medical Instrument (Shanghai) Co., Ltd, is a high-tech enterprise
and a “specialized, sophisticated, distinctive, and novel ( ਖ਼ၚतอ)” enterprise. Its products have
passed international authoritative certifications including US FDA, UKAS “ISO13485” and “CE”
in Germany.
We acquired our brand “Huazhou ( ശЋ)” in 2025, focusing on high-quality
medical dressing products for hospitals and consumers,
including silicone adhesive bandages, hydrocolloid dressings, foam dressings, and suture-free
tapes. With the brand mission of meeting the health needs of consumers for efficiency, comfort,
safety, and aesthetics in wound healing scenarios, we have built a strong market reputation through
continuous research and development and high-quality production. Our customer base covers
well-known domestic and foreign medical products brand owners, including Fortune 500
companies.
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Our In-House Sales Team
As of December 31, 2025, our sales and marketing team consisted of over 3,000 employees,
supporting our extensive sales network that possesses online coverage, broad offline reach and a
strong team of hearing instrument specialists and orthotists.
During the Track Record Period, as we were engaged in the sale of medical devices, we have
obtained (i) the filing for the operation of Class II medical devices, and (ii) the permit for the
operation of Class III medical devices in accordance with applicable PRC laws and regulations. Our
hearing instrument specialists at our “JOYOR HearingCare ( ਄Ѐᛓɢ)” stores, who are responsible
for the provision of hearing aid related services, have obtained the professional qualification
certificates of hearing aid fitters (ࢪin accordance with applicable PRC laws and
regulations. Our Directors confirm, and our PRC Legal Adviser is of the view, that during the Track
Record Period and up to the Latest Practicable Date, we had complied with the relevant PRC laws
and regulations applicable to our sales activities and sales personnel in all material respects.
We pay close attention to develop and enhance our in-house capability in managing
short-video and livestreaming practice to achieve market position strengthening. By encouraging
and promoting capable staff to join short-video and livestreaming campaigns and host sales events
on platforms, we have created close tie with consumers and established a distinctive advantages that
highly value product quality and effectively mitigate risks associated with reliance with external
KOLs and KOCs. As of December 31, 2025, we had over 10 million followers on Tmall, JD and
Rednote, collectively. Our livestreaming efforts have driven exceptional campaign performance.
In particular, we recognize the importance of utilizing advanced technology in implementing
sales and marketing strategy to optimize cost efficiency and enhance consumer experience. We have
engaged AI-empowered functions to assist our staff to give accurate response to consumers with
trackable records, and prepare quality scripts for short-video and livestreaming events, resulting in
highly promoted working efficiency.
KOL Endorsements
We partner with reputable KOLs who test and endorse our products through short videos,
posts, or livestreaming sessions on popular social media platforms. These endorsements resonate
with their followers and enhance our brand’s visibility and credibility. Our KOL partners are
carefully selected based on their expertise, influence, and alignment with our brand values. By
leveraging their marketing perspectives and creative content, we can reach a wider audience and
foster a deeper connection with our target consumers.
As advised by our PRC Legal Advisor, the PRC government is progressively refining the laws
and regulations associated with KOLs and their operations. See “Regulatory Overview — Online
Sales and Online Marketing of Medical Devices”. Our Directors and our PRC Legal Advisor are of
the view that we have been conducting business in compliance with the relevant laws and
regulations regarding KOL endorsements in all material respects during the Track Record Period
and up to the Latest Practicable Date, considering that: (i) we require the KOLs with whom we
collaborate with to comply with relevant laws and regulations in our agreements with them; (ii) we
have established internal review procedure and conduct regular monitoring to ensure KOL’s
endorsement comply with relevant laws and regulations; and (iii) during the Track Record Period
and up to the Latest Practicable Date, we were not subject to any material administrative penalties
or regulatory measures imposed by relevant PRC authorities regarding our KOL endorsements.
As part of our marketing strategy, we collaborate with KOL agencies to engage KOLs for
promotional activities. The salient terms of the typical agreements with KOL agencies mainly
include: (i) duration: agreements generally range from one month to one year; (ii) service scope:
KOL agencies engage KOLs to conduct marketing campaigns through livestreaming sessions, short
videos, or social media posts to promote our brand and products. We provide promotional materials
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and guidelines, based on which KOLs create and disseminate content such as social media posts,
short videos, posters, or scripts for livestreaming sessions; (iii) fee arrangement: Fees are typically
structured in the following formats: (a) a fixed fee for livestreaming services, and (b) a promotional
service fee in a fixed amount or as a percentage of sales generated; (iv) intellectual property: we
generally retain the intellectual property rights for materials supplied to KOLs for the creation of
promotional content. KOLs typically retain the intellectual property rights for their work products,
excluding materials provided by us. Both parties are obligated to maintain the confidentiality of
trade secrets, including customer and transactional information; (v) product sales and customer
services: we are responsible for providing products for sale and for post-sale customer services and
(vi) termination: agreements can typically be terminated upon expiry, by mutual consent, or in the
event of a substantial breach by either party.
We do not have a significant concentration of KOLs or KOL agencies in terms of the gross
merchandize value (“ GMV”) they contributed during the Track Record Period.
Purchase Rebates
In line with industry practice, we offer rebates to customers in consideration of the long-term
good business relationship with them and to reward their successful achievements on purchase
amount or payment amount. According to our internal policy, rebate are granted once quantity of
products purchased or the payment amount during the period exceeds a threshold specified in
relevant agreements, which are offset against amounts payable by the customer, or when customers
purchase our designated products. The rates of such rebates are determined with reference to the
rates those customers enjoyed historically, and thus vary among relevant customers. Under our
internal policy, such rebates typically amounted to approximately 1% to 5% of the aggregated
procurement amounts during the specified period. During the Track Record Period, 202, 203 and
164 customers qualified to receive rebate respectively, with the total amount of rebate reached
RMB18.7 million, RMB17.1 million and RMB26.5 million, respectively. As advised by F&S, our
practice of, and internal policy in relation to, rebates are generally in line with industry practice.
Pricing
In determining the pricing of our products, we take into account of a broad range of factors,
including strategic value and our business relationship with relevant customer, prevailing market
competition of similar products, costs of raw material price, manufacturing complexity and costs,
as well as our production capacity and backlog. We believe our long-standing relationship, product
quality, wide coverage of product use cases and unique value propositions to customers help us
negotiate for more premium pricing for our products while remaining competitive in the market.
While we promulgate and regularly update guided selling price of our products for our sales team,
we allow them to make flexible adjustment within a specified range to ensure negotiation efficiency.
OUR SUPPLIERS
Major Suppliers
Our major suppliers primarily include suppliers for finished goods and raw materials
providers, services providers, and packaging material suppliers. In 2023, 2024 and the 2025, our
five largest suppliers in each year during the Track Record Period contributed 22.3%, 24.7% and
23.1%, respectively, to our total purchases.
As of the Latest Practicable Date, none of our Directors, their respective close associates or
any of our shareholders (who owned or to the knowledge of the Directors had owned more than 5%
of our issued share capital) had any interest in any of our five largest suppliers in each year during
the Track Record Period. To the best of our knowledge, during the Track Record Period and up to
the Latest Practicable Date, all of our five largest suppliers in each year during the Track Record
Period were Independent Third Parties.
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We believe that our operation is not dependent on any particular supplier. During the Track
Record Period, we maintained multiple suppliers to avoid overreliance on any of suppliers and we
believe there is no significant difficulty to find suitable substitutes for our suppliers.
The salient terms of standard agreements with our raw materials suppliers during the Track
Record Period mainly include: (i) terms: the agreement generally has a term of one year; (ii)
payment and credit terms: we typically are required to settle the payment within 90 days upon the
receipt of invoice and goods; (iii) product liability and warranty period: we are entitled to request
compensation or replacement for defective products at the time of acceptance; (iv) return policy: we
are entitled to return the products if the products are defective, and the suppliers are responsible for
any fees incurred by the return; (v) minimum purchase commitment: we typically do not set
minimum purchase requirement; (vi) logistics arrangement: our suppliers are generally responsible
for arranging delivery of the products to locations designated by us, and be responsible for any risk
of loss or damage upon acceptance and (vii) termination: we generally have the right to terminate
the agreement in the event of a delay in delivery by the suppliers exceeding 30 days.
Raw Material Procurement
Our business requires the procurement of raw materials and we procure from suppliers a
variety of materials necessary for the manufacturing of our products. During the Track Record
Period, we mainly procured our raw materials in Chinese Mainland. We have established a rigorous
procurement and supply system and systematic procurement policies, with which we seek to ensure
the integrity of our raw materials and packaging materials. We have developed an evaluation system
to evaluate our raw material suppliers. We require them to provide their legal qualifications and
product qualification certificates, and only purchase raw materials from qualified suppliers. Our
technology department formulates internal control quality standards for raw materials, auxiliary
materials and packaging materials, and our quality management department is responsible for the
acceptance and inspection of the materials. We will return defective goods to suppliers if we
discover any products that do not conform to our internal requirements to prevent any defective
goods from entering the process of manufacturing.
We generally enter into legally binding framework agreements with our suppliers, based on
which we issue purchase orders for different batch of procurement, where we set price, volume and
other conditions. The suppliers are typically responsible for the delivery of products to our
designated location specified in each purchase order, and we accept goods upon completion of
inspections. The duration of the framework supply agreements typically spans a period of one year.
During the Track Record Period and up to the Latest Practicable Date, we had not experienced
significant difficulties in maintaining reliable sources of supplies, and we expect to be able to
maintain adequate sources of quality supplies in the future.
SEASONALITY
Sales of home care medical devices might be affected by seasonality depending on their
product categories. For instance, in winter, due to climatic factors, the incidence of respiratory
diseases, cardiovascular and cerebrovascular diseases is relatively high, leading to a higher level of
consumption of related home care medical devices. In addition, affected by special periods such as
“618” and “Double Eleven ( ᕐɤɓ)” shopping festivals, online sales may experience a significant
increase. As we continue to enrich our product portfolio, we expect to reduce the impact of
seasonality with increased diversity.
LICENSES, PERMITS AND APPROV ALS
We are required to maintain various licenses, approvals and permits in order to operate our
business. We continually monitor our compliance with these requirements in order to ensure that we
have all such approvals, licenses and permits as are necessary to operate our business.
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As of the Latest Practicable Date, as advised by our PRC Legal Advisor, we had obtained all
material licenses, approvals and permits required for our business operations in the PRC. We had
not experienced any material difficulties in renewing material licenses, permits or approvals during
the Track Record Period and do not expect there to be any material difficulties in renewing them
upon their expiry. For details of our material license, permits and approvals that we have obtained
for our business operations, please see “Appendix VI — Statutory and General Information”.
INTELLECTUAL PROPERTIES
Our success and competitive advantages depend in part on our ability to develop and protect
our core technologies and intellectual property. We own a large portfolio of intellectual properties,
including patents, registered trademarks, software copyrights and domain names in Chinese
Mainland and overseas. Specifically, our research and development efforts have produced 701
patents, 799 registered trademarks, 127 software copyrights, as well as 146 patent applications as
of the Latest Practicable Date. We rely on a combination of patents, copyrights, trademark law, trade
secret protection and confidentiality agreements with customers, suppliers and employees to protect
our intellectual property rights. We have also adopted a set of internal rules for intellectual property
management. Our legal department is primarily responsible for protecting our intellectual
properties. We proactively manage and expand our intellectual property portfolio and use
confidentiality and non-compete agreements to protect our intellectual properties and trade secrets.
A W ARDS AND RECOGNITION
Our leading market position and brand recognition are reflected in the numerous awards we
have received. The following table sets forth a selection of the notable awards and recognitions we
received in the recent years:
Y ear of Award Awards and Recognition Issuing Authority/Institution
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118National Industrial Design Center Ministry of Industry and Information
Technology of the People’s Republic
of China
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Awarded “Top 50 Enterprises in Medical
Devices Industry” in the 2022-2023
China Pharmaceutical Industry Most
Influential List Selection
Pharmaceutical Chamber of Commerce
of All-China Federation of Industry
and Commerce
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118National E-Commerce Demonstration
Enterprise
E-Commerce and Informatization
Department of the Ministry of
Commerce
2023 /H1118/H1118/H1118/H1118/H1118/H1118Top 100 Private Enterprises in Sanxiang People’s Government of Hunan Province
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Top 100 Manufacturing Enterprises in
Hunan
Hunan Enterprise and Industrial
Economy Federation
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118National “Specialized, Refined,
Differential and Innovative” Little
Giant Enterprise in Sports Field
General Office of the General
Administration of Sport of China
2025 /H1118/H1118/H1118/H1118/H1118/H1118Top 30 independent innovation brand in
China Brand V alue Evaluation
China Council for Brand Development
2025 /H1118/H1118/H1118/H1118/H1118/H1118Top 100 Pharmaceutical Enterprises by
Revenue
the Medical and Pharmaceutical Chamber
of Commerce of the All-China
Federation of Industry and Commerce
2025 /H1118/H1118/H1118/H1118/H1118/H1118National Green Factory Ministry of Industry and Information
Technology of the PRC
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COMPETITION
We operate in a highly competitive market. Our ability to maintain and grow our market share
depends on us competing effectively against our competitors. The competitive landscape is shaped
by multiple factors. Despite high barriers to entry, new market participants may emerge, introducing
innovative or cost-effective products that challenge existing players. See “Industry Overview” in
this prospectus for details relating to our competitive landscape. Our Directors believe that we will
maintain our competitiveness over other competitors and our market position by strengthening and
developing our competitive strengths. For more information, please see “— Competitive Strengths”
in this section.
EMPLOYEES
As of December 31, 2025, we had 5,081 employees. The following table sets forth a
breakdown of our employees by function as of December 31, 2025:
Function As of December 31, 2025
Number %
R&D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118361 7.1
IT and supporting /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883 1.6
Finance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888 1.7
Sales and Marketing
– E-commerce business operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118917 18.0
– Offline stores sales team /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579 11.4
– Hearing Instrument Specialists and Orthotists /H1118/H1118/H1118 1,213 23.9
– Logistics and Warehouse Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118523 10.3
Manufacturing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,199 23.6
Administrative /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118 2.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,081 100.0
As of December 31, 2025, our employees located in the Chinese Mainland and other
countries/regions are 4,889 and 192, accounting for 96.2% and 3.8% of our total employees,
respectively.
We use various recruitment methods, including campus recruitment, online recruitment, other
external recruitment channels as well as internal referrals and transfers. We generally offer
employees competitive salaries, performance-based bonuses, and other incentives and continually
refine our remuneration and incentive polices through market research. As required under PRC
labor laws, we participate in various employee social security plans, including housing, pension,
medical, work-related injury, maternity, housing provident funds and unemployment benefit plans,
under which we make contributions at specific percentages of the salaries of our employees. We
have established a system for employee training and development, including general training
covering corporate culture, employee rights and responsibilities, workplace safety, data security and
other logistics aspects.
In line with industry practice, we hire dispatched employees for certain entry-level and
non-technical positions. We regularly review the qualifications of dispatch agencies and specify the
rights and obligations of dispatch agencies, dispatched employees and us in the dispatching
agreements. Our employees are currently represented by our internal labor union. We believe that
we maintain good working relationships with our employees and we did not experience any strikes,
work stoppages, labor disputes or actions which had a material adverse effect on our business and
operations during the Track Record Period and up to the Latest Practicable Date.
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DATA PRIV ACY AND CYBERSECURITY
We collect and store business data, management data and transaction data generated during or
in connection with our business operations, including data related to our business and transactions
with our customers, suppliers and other relevant parties. In order to effectively provide our services,
we may collect and use personal information. We only collect the personal information and data
necessary for the use of our business and transaction.
Our data usage and personal information protection policy, which is provided to every users
of our platform and applications, describes our data security and personal information protection
practices. Specifically, we undertake to manage and use the data collected from users in accordance
with applicable laws and make reasonable efforts to prevent the unauthorized access, breach,
tampering, or loss of personal information. We will desensitize important data with encryption,
masking, or replacement techniques.
We collect and use personal information for the stated purpose as authorized by users, or with
other legal bases as provided by laws and regulations. The personal information and user data we
collect are all stored in cloud data centers deployed within the territory of Chinese Mainland. We
have implemented a set of data-security safeguards, including deploying firewalls, encrypting
stored data, retaining network-operation logs, and assigning role-based access rights. Usually,
employees cannot export users’ personal information and such information is encrypted and may be
accessed only by authorized staff. For all other non-personal data, we apply equally rigorous
protective measures, defining distinct data-processing roles and corresponding permissions in line
with each employee’s responsibilities. In addition, we conduct regular training for employees on
cybersecurity, data security, and privacy protection to continuously strengthen their awareness of
data-security obligations.
Our Directors and data compliance advisor are of the view that, during the Track Record
Period and up to the Latest Practicable Date, we had complied with applicable laws on cybersecurity
and data security in all material respects in Chinese Mainland, where we operate our principal
business. The PRC laws and regulations in relation to cybersecurity, data security and privacy
protection will not have a material adverse impact on our business operations. During the Track
Record Period and up to the Latest Practicable Date, as advised by PRC Legal Adviser, personal
data collected within China is stored and processed domestically, we had not engaged in
cross-border transfer of personal data, and we were not subject to any claims by users or
administrative penalties from regulatory authorities regarding personal information leakage, misuse
or any other related matters, and we had not received any third-party claim against us on the ground
of infringement of such party’s right to data protection as provided by any applicable laws and
regulations. We regularly track laws, regulations and polices in relation to cybersecurity and data
security to ensure our compliance. For details of laws and regulations on cybersecurity, data
security, and privacy protection, see “Summary of Principal Legal and Regulatory Provisions —
Laws and Regulations Relating to Cybersecurity, Data Security and Personal Information
Protection” in Appendix IV to this prospectus.
Attributable to our efforts in ensuring compliance with applicable data production and security
related regulations, during the Track Record Period and up to the Latest Practicable Date, we had
not been subject to any material penalties in relation to applicable date protection and cybersecurity
requirements in all jurisdictions where we operated.
INSURANCE
We believe that our insurance coverage is in line with the industry practice and adequate to
cover our key assets, facilities and liabilities, including but not limited to all property-related risks
insurance, employee-related insurance, employer liability insurance. Our employee-related
insurance includes pension insurance, maternity insurance, unemployment insurance, work-related
injury insurance, medical insurance and housing funds, as required by PRC laws and regulation.
During the Track Record Period and up to the Latest Practicable Date, we did not make any material
insurance claims in relation to our business. See “Risk Factors — Our insurance coverage may be
insufficient to cover the risks or losses related to our business and operations” in this prospectus.
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PROPERTIES
We are headquartered in Changsha, Hunan province, China, and own and lease certain land
parcels and buildings in Chinese Mainland for our business operations. These owned properties are
used for non-property activities as defined under Rule 5.01(2) of the Listing Rules.
Owned Properties
As of the Latest Practicable Date, we owned 5 land parcels with a total site area of 422,435.6
sq.m. and 52 properties with a total gross floor area of 365,492.0 sq.m. in Chinese mainland and
Hong Kong. These properties are primarily used as our production facilities warehouses, offices and
employees dormitories to support our business operations.
Leased Properties
As of the Latest Practicable Date, we leased seven properties from third parties with area
exceeding 1,000 sq.m., with an aggregate gross floor area of approximately 52,883.1 sq.m. in
Chinese mainland and Hong Kong, for use as our offices, production facilities, warehouses, offline
stores, and workshops.
As of December 31, 2025, we have not completed the registration of certain lease agreements
for the above leased properties. Pursuant to the applicable laws and regulations in China, property
lease agreements for leased properties shall be registered with the relevant real estate administration
bureaus in China.
As advised by our PRC Legal Advisor, the lack of registration does not affect the validity and
enforceability of the lease agreements, but we may be subject to fines from RMB1,000 to
RMB10,000 for each such lease agreement for failure to register.
As at December 31, 2025, certain of our above leased properties had not provided us with the
relevant title certificate or proof of lease authorizations. As advised by our PRC Legal Advisor,
without title certificates or proof of authorizations from the relevant lessor or property owner, we
may not be entitled to use the leased property or may be affected by third parties’ claims or
challenges against the relevant lease. Nevertheless, we would not be subject to any administrative
penalties with respect to these properties. During the Track Record Period and up to the Latest
Practicable Date, to the best knowledge of our Directors, our leases with respect to these defective
leased properties had never been challenged by any third parties.
LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
During the Track Record Period and up to the Latest Practicable Date, we were not subject to
any claims, damages or losses which would have a material adverse effect on our financial position
or results of operations as whole. As of the Latest Practicable Date, no material litigation,
arbitration or administrative proceedings had been threatened against us.
Social Insurance and Housing Provident Funds
During the Track Record Period, we did not make full social insurance and housing provident
fund contributions for certain of our employees, as required by relevant laws and regulations,
mainly due to (i) our labor force, especially in sales and production roles, is highly mobile, which
has made it infeasible for us to make full contributions in time for the relevant employees that left
us shortly after joining; (ii) certain employees were not willing to bear their share of social
insurance and housing provident funds strictly in portion to their salary, and (iii) a certain number
of our employees are migrant workers who are typically not willing to participate in the social
welfare schemes of the city where they temporarily reside as such contributions are not transferable
among cities.
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The shortfall amount of contributions of social insurance and housing provident funds was
RMB6.0 million, RMB5.7 million and RMB5.1 million in 2023, 2024 and 2025, respectively. For
the shortfall of social insurance and housing provident funds, as advise by our PRC Legal Adviser,
pursuant to relevant PRC laws and regulations, the under-contribution of social insurance within a
prescribe period may subject us to a daily overdue charge of 0.05% of the delayed payment amount.
If such payment is not made within the stipulated period, the competent authority may further
impose a fine of one to three times of the outstanding amount. We had not made any provision for
the shortfall in our social insurance and housing provident fund contributions during the Track
Record Period and up to the Latest Practicable Date.
As advised by our PRC Legal Advisor, considering that (i) during the Track Record Period and
up to the Latest Practicable Date, we were not aware of any material complaint, litigation or
arbitration brought by any of our employees against us regarding our social insurance and housing
provident fund contributions; (ii) none of the Company nor its major subsidiaries had been subject
to any administrative actions or penalties in relation to social insurance and housing provident fund
contributions during the Track Record Period; (iii) we and our relevant major subsidiaries have
obtained relevant confirmations from or conducted consultations with relevant authorities, the
likelihood that the Company and its major subsidiaries would be subject to material administrative
penalties due to failure to provide full social insurance and housing provident fund contributions is
remote.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)
ESG Governance
We are enhancing our ESG governance structure, with the Board being responsible for ESG
strategy, the management framework and reporting, and material ESG matters. We will set and track
ESG goals and establish a cross-functional ESG working group to identify ESG risks, develop
policies and action plans, and report progress to the Board.
Environmental Matters
1
We comply with applicable environmental and energy conservation laws and regulations,
including the Environmental Protection Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷
) and the Energy Conservation Law of the People’s Republic of China ( ʕശɛ͏
), and the requirements of ISO 14001.
Environmental Management
We have set environmental targets in key areas.
Emission target Based on expected business growth and the planned adoption of
energy-saving and carbon-reduction technologies, and assuming
stable renewable electricity from distributed PV projects at our
facilities, the Group has set the following targets:
Using 2023 as the baseline, the Group targets an 8% reduction in
carbon intensity per unit of output value and 10% green electricity
usage by 2025; by 2030, it aims to peak operational carbon emissions,
reduce carbon intensity by 30%, and increase green electricity usage
to 20%.
1 The environmental data covers the Changsha headquarters, which, as the Group’s principal manufacturing and
operational base, accounts for the majority of its environmental footprint during the Track Record Period and is
therefore considered representative based on the principle of materiality.
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Energy use efficiency
target
Based on an expected stable core business mix, historical energy
consumption trends, and the planned implementation of energy-saving
technologies, the Group has established the following targets:
We are committed to promoting the efficient use of resources and
promise to achieve a energy consumption of no more than 0.0231 tons
of standard coal per output value of RMB10,000 by 2025.
Water efficiency target Based on an expected stable core business mix and the planned
implementation of water-saving projects and technological
improvements during the target period, the Group has established the
following targets:
We are committed to improving water management and water-use
efficiency, and aim to reduce annual water consumption by 1% from
the previous year’s level by 2030 from the 2023 baseline.
Waste reduction target Based on the expectation of stable environmental regulatory
frameworks and continued compliant third-party waste disposal, the
Group has established the following targets:
We are committed to reducing operational waste, disposing of all
waste in full compliance with environmental protection requirements
and applicable laws, and maintaining 100% compliant disposal of
solid waste.
Emissions Management
We strictly abide by the Law of the People’s Republic of China on the Prevention and Control
of Environmental Pollution by Solid Waste (), the
Law of the People’s Republic of China on the Prevention and Control of Water Pollution ( ʕശ
), the Law of the People’s Republic of China on the Prevention and
Control of Air Pollution (). We have formulated internal
management systems such as the Waste Management Regulations (), the Water
Pollution Management Regulations () and the Air Pollution Management
Regulations () to ensure that our solid waste disposal and pollutant
discharges comply with applicable regulations.
We manage solid waste through recycling and by handing it over to qualified hazardous waste
treatment enterprises for disposal, and ensure compliant emissions of exhaust gas and wastewater
through emissions monitoring and the installation of additional treatment facilities.
Our emissions data for previous years are recorded as follows:
Unit 2023 2024 2025
Hazardous waste generated 1 /H1118/H1118/H1118/H1118/H1118/H1118Ton 1.22 2 5.01 2 7.77
Hazardous waste generation
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ton/RMB10,000
revenue
0.000004 0.000017 0.000023
Non-hazardous waste generated 3 /H1118/H1118/H1118Ton 997.00 2,850.00 4 2,105.00
Non-hazardous waste generation
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ton/RMB10,000
revenue
0.003494 0.009554 0.006214
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1 The hazardous waste generated by the Company includes used batteries, contaminated waste, and waste
solvent packaging. The classification and statistical criteria for these wastes are based on the latest version of
the National List of Hazardous Wastes issued by the Ministry of Ecology and Environment of the People’s
Republic of China. Hazardous waste data is sourced from hazardous waste transfer manifests.
2 In 2023, the total amount of hazardous waste generated by the Company decreased year-on-year due to a
decline in product orders involving the generation of hazardous waste. In 2024, the total amount of hazardous
waste generated by the Company increased accordingly due to a significant rebound in product orders
involving the generation of hazardous waste.
3 The non-hazardous waste generated by the Company includes domestic waste, kitchen waste, production
scraps, used packaging, cardboard boxes, etc. Data is sourced from internal records.
4 In 2024, the total amount of non-hazardous waste generated by the Company increased accordingly compared
to that in 2023 due to a significant rebound in product orders involving the generation of non-hazardous waste.
Use of resources
In accordance with the Energy Conservation Law of the People’s Republic of China ( ʕശ
), we have formulated the Energy Management Rules ( ঐ๕၍ଣ஝
௝).
We optimize the operating parameters of natural gas steam boilers, use clean energy, and set
up water conservation reminder signs, while strengthening water- and power-saving measures to
reduce resource consumption.
Our resource use data for previous years are recorded as follows:
Unit 2023 2024 2025
Total energy consumed 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118MWh 10,707.31 2 9,482.54 10,711.74
Energy consumption intensity /H1118/H1118/H1118/H1118/H1118MWh/revenue in
RMB10,000
0.04 0.03 0.03
Water resource consumed /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118m3 157,964.00 3 97,410.00 4 127,367.00
Water resource consumption
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
m3/revenue in
RMB10,000
0.55 0.33 0.38
Packaging material consumed 5 /H1118/H1118/H1118/H1118/H1118Ton 912.00 1,020.00 1,055.00
Packaging material consumption
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ton/revenue in
RMB10,000
0.0032 0.0034 0.0031
1 The direct energy used by the Company is natural gas, and the natural gas consumption link includes canteens
and gas boilers; the indirect energy used by the Company is purchased electricity. Energy-related data is
sourced from electricity/natural gas utility bills.
2 In December 2022, the Headquarters Base of Cofoe Intelligent Equipment was put into use, and the increase
in the number of employees in the new park caused an increase in natural gas consumption of canteens. At the
same time, new gas boilers are installed in the new park to heat the plant area and provide steam for the clean
workshop, causing an increase in total consumption of natural gas. In the same month, the Headquarters Base
of Cofoe Intelligent Equipment was put into use, and a number of new facilities and equipment were
purchased, resulting in an increase in total purchased electricity. At the same time, due to the relocation of the
warehousing and logistics center to the Changsha Park, a new automatic warehousing and sorting system has
been added, causing an increase in total purchased electricity. As a result, these factors led to a significant
increase in total energy consumption in 2023.
3 In December 2022, the Headquarters Base of Cofoe Intelligent Equipment was put into use, and the purchase
of four pure water equipment in the new park caused an increase in water consumption. At the same time, the
warehousing and logistics center was relocated to the Changsha Park, causing an increase in total consumption
of domestic water in 2023. Water consumption data is sourced from water utility bills.
4 In 2024, the Company strengthened the implementation of water-saving measures, including the boiler
circulating water treatment system, upgrading water-efficient fixtures, and optimizing the timed power supply
for pure water equipment, resulting in a decrease in total water consumption.
5 The packaging materials used by the Company include plastic, paper, and metal. Consumption data for
packaging materials is sourced from internal records. In 2023 and 2024, increased production volume and
value of plastic packaging-related products led to higher packaging material consumption of the Company, but
the packaging material consumption intensity remained within a reasonable fluctuation range.
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Addressing climate change
Through our climate risk identification process, we identified physical risks such as extreme
precipitation and extreme weather, and mitigated them by strengthening plant resilience,
establishing an early-warning mechanism, and purchasing climate risk insurance. For transition
risks such as carbon pricing and emissions compliance, we introduced a carbon management system
and a policy-tracking team to ensure ongoing compliance. We also seize opportunities from rising
demand for green products by developing green products deploying distributed photovoltaic
projects to enhance sustainability.
Our greenhouse gas emissions data for previous years are recorded as follows:
Unit 2023 2024 2025
Scope 1 greenhouse gas emissions 1 /H1118/H1118/H1118tCO2-e 927.76 2 854.64 889.18
Scope 2 greenhouse gas emissions 3 /H1118/H1118/H1118tCO2-e 4,021.23 4 3,481.25 4,117.35
Scope 3 greenhouse gas emissions 5 /H1118/H1118/H1118tCO2-e 62,283.71 62,559.77 61,646.04
Total greenhouse
gas emissions
(Scop e 1 + Scope 2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
tCO2-e 4,948.99 4,335.89 5,006.53
Greenhouse gas emission intensity
(Scop e 1 + Scope 2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
tCO2-e/
RMB10,000
revenue
0.017342 0.014536 0.014779
1 The Company’s Scope 1 greenhouse gas emissions mainly come from natural gas consumption, and the natural
gas consumption link includes canteens and gas boilers. The calculation parameters for Scope 1 greenhouse
gas emissions are selected from general documents such as the 2006 IPCC Guidelines for National Greenhouse
Gas Inventories and the Provincial Greenhouse Gas Inventory Guidelines (Trial).
2 In December 2022, the Headquarters Base of Cofoe Intelligent Equipment was put into use, and the increase
in the number of employees in the new park caused an increase in natural gas consumption of canteens. At the
same time, new gas boilers are installed in the new park to heat the plant area and provide steam for the clean
workshop, causing an increase in total consumption of natural gas, thus leading to an increase in the
Company’s Scope 1 greenhouse gas emissions in 2023.
3 The Company’s Scope 2 greenhouse gas emissions mainly come from purchased electricity, and the greenhouse
gas emission factor of purchased electricity is calculated according to the 0.5856 tCO2/MWh stipulated in the
Announcement on the Release of Carbon Dioxide Emission Factors for Electricity in 2022 issued by the
Ministry of Ecology and Environment.
4 In December 2022, the Headquarters Base of Cofoe Intelligent Equipment was put into use, and a number of
new facilities and equipment were purchased, resulting in an increase in total purchased electricity. At the same
time, due to the relocation of the warehousing and logistics center to the Changsha Park, a new automatic
warehousing and sorting system has been added, causing an increase in total purchased electricity. For the
above reasons, the Company’s Scope 2 greenhouse gas emissions increased in 2023.
5 Scope 3 greenhouse gas emissions are indirect emissions related to operations and supply chains. Within our
capabilities, we have collected and calculated the greenhouse gas emissions data of procurement of goods and
services and business travel in Scope 3, which are a major component of our Scope 3 emissions. In the future,
we will gradually expand the collection and statistical scope of emissions data for Scope 3.
Comparison of ESG Performance with Peer Companies
By benchmarking against four listed peer companies 1 with similar business profiles, we found
that our major environment metrics were within the range disclosed by our major peers for 2024.
1 Certain ESG indicators of the peer companies were not directly disclosed; the relevant figures have been
derived through unit conversions or indirect calculations based on the original disclosed data.
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Social Matters
Employees
We comply with the Labor Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷௶ਗ
), the Labor Contract Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷௶ਗΥΝ
), the Employment Ordinance, and the Regulations on the Prohibition of Child Labo. We have
established and implemented internal policies such as the Employee Entry Management System
() and the Employee Resignation Management System (ʈᕎᔖ၍ଣՓ
) to protect employees’ lawful rights and interests. In accordance with the Recruitment and
Engagement Management System (), we strictly prohibit any form of child
labor or forced labor. If any such cases are identified, we will take protective measures to ensure
the safe removal of child labor from the workplace and provide necessary support.
The Company strictly complies with the Production Safety Law of the People’s Republic of
China () and has established the Hazard Source Identification and
Control Procedures ( Κᎈ๕፫ᗆၾછՓ೻ҏ) to safeguard employees’ occupational health and
safety. We provide employees with personal protective equipment, conduct safety training and
emergency drills, and offer health examinations to safeguard their safety and health. During the
Track Record Period, there were no incidents or complaints that had a material adverse effect on
our business, financial condition, or results of operations.
In accordance with the Training Management System (), We provide
customized training according to the level and job requirements of employees.
Supply Chain Management
We have established the Procurement Control Procedures ( મᒅ၍Փ೻ҏ), Packaging
Materials Incoming Inspection Standards (Ꮸ᜕஝ᇍ), Safety Inventory and
Strategic Inventory Management Procedures (೻) and the Supplier
Screening and Evaluation Procedures ( ԶᏐਠ፯኿ၾ൙ᄆ೻ҏ) to ensure procurement
activities aligning with sustainability principles.
We conduct annual supplier assessments, and suppliers that fail to meet our quality
requirements are required to submit improvement reports. We also adhere to the concept of a green
supply chain by prioritizing suppliers with outstanding environmental performance.
Product Responsibility
In accordance with the Advertising Law of the People’s Republic of China ( ʕശɛ͏΍ձ
) and medical device management regulations, we have developed internal systems such
as the Advertising Review System (), the Customer Complaint Handling
Procedures (˒ҳൡஈଣ೻ҏ), and the Process Inspection Management Regulation ( Փ೻
) to safeguard product and service quality. We have also established the Product
Recall Management Procedures (̜Ϋ၍ଣ೻ҏ) to promptly recall defective products
when necessary and improve our processes based on recall reports.
Public Welfare and Charity
Guided by the External Donation Management Measures (), we have
actively engaged in social welfare. In 2024, Cofoe Medical donated a total of RMB5,104,000 to
support the medical and health sector through cash and in-kind donations.
Looking ahead, we will continue to fulfill our corporate social responsibility through
sustained health-related public welfare initiatives.
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RISK MANAGEMENT AND INTERNAL CONTROL
We have established, and currently maintain, risk management and internal control systems
consisting of policies and procedures that we consider appropriate for our business operations. We
are dedicated to continually improving these systems. We have adopted and implemented risk
management policies in various aspects of our business and operations such as legal, operation,
financial reporting, and internal control. Furthermore, we conduct periodic review of the
implementation of our risk management policies and internal control measures to ensure their
effectiveness and sufficiency. We are dedicated to upholding the legal compliance of our operations
and management, safeguarding assets and ensuring the accuracy and completeness of financial
reports and related information. Our commitment extends to enhancing operational efficiency and
effectiveness, thereby fostering the achievement of the company’s strategic development goals.
In particular, to ensure the compliance with relevant laws, regulations and policies in relation
to medical devices advertising, we have adopted the following measures:
 Internal review procedure for advertising content : we have established internal review
procedure to ensure all advertising content complies with relevant laws and regulations.
After the marketing department and the relevant business units submits draft versions of
the proposed advertising content, the internal legal and regulatory team would review
and provide revisions and recommendations to ensure that all content is factual,
transparent, and non-misleading, avoiding any potential violations that could mislead or
deceive consumers. Once the advertising content has been reviewed in accordance of
legal and regulatory advice, it undergoes a final examination by the aforementioned
departments to ensure complete compliance. Only after this review and approval process
is the advertising content authorized for publication.
 Employee training : we conduct training session for marketing, legal, and relevant
business unit employees to keep them informed of current advertising laws and
regulations. We also utilize case studies, including past compliance issues and their
resolutions, to enhance understanding and application of legal standards in day-to-day
operations.
 Regular monitoring : We use monitoring tools to track and review live campaigns,
ensuring they remain compliant as market conditions and regulatory frameworks evolve.
 Continuous improvement : We regularly review and update internal advertising
guidelines to reflect new legal developments and industry trends.
Our Board of Directors is responsible for the establishment and regular updates of our internal
control systems, ensuring they remain aligned with our strategic objectives, while our senior
management monitors the daily implementation of the internal control procedures and measures
with respect to each subsidiaries and functional departments. Our internal audit department jointly
with our Board’s Audit Committee regularly assesses and evaluates our internal controls,
identifying areas of improvement and ensuring compliance with corporate policies.
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BOARD OF DIRECTORS
Our Board currently consists of seven Directors, comprising four executive Directors and
three independent non-executive Directors, namely:
Name Age Position(s)
Time of
appointment as
Director
Time of joining
our Group
Role and
responsibilities
Relationship
with other
Directors and
senior
management
Mr. ZHANG
Min ( ੵઽ) /H1118
46 Executive Director,
chairperson of the
Board and
president
September 2017 November 2007 Responsible for
the overall
management
and operation
of our Group
None
Mr. ZHANG
Zhiming ( ੵ
׼)H1118/H1118/H1118/H1118
47 Executive Director
and vice
chairperson of the
Board
December 2019 June 2007 Responsible for
the supply
chain, sales,
and personnel
management,
and assisting
the chairperson
in coordinating
the Group’s
strategy and
daily operations
None
Mr. XUE
Xiaoqiao
(ᑡʃ዗) /H1118/H1118
45 Executive Director,
secretary of the
Board, vice
president and joint
company secretary
December 2019 June 2018 Responsible for
managing the
Group’s
securities and
legal affairs,
investment and
acquisitions
and intellectual
property
None
Mr. HE
Bangjie ( ൭
Ԟ௫) /H1118/H1118/H1118/H1118
46 Executive Director October 2017 October 2011 Responsible for
supply chain-
related
operations for
Jerry Medical,
Huazhou, and
rehabilitation
product
categories
None
Mr. NING
Huabo ( ྐྵശ
ت)H1118/H1118/H1118/H1118/H1118
46 Independent non-
executive Director
January 2023 January 2023 Responsible for
providing
independent
advice and
judgment to our
Board
None
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Name Age Position(s)
Time of
appointment as
Director
Time of joining
our Group
Role and
responsibilities
Relationship
with other
Directors and
senior
management
Ms. SHEN
Nan ( ӏ฻) /H1118
41 Independent non-
executive Director
August 2025 August 2025 Responsible for
providing
independent
advice and
judgment to our
Board
None
Mr. ZHOU
Rong ( մ
࿰) /H1118/H1118/H1118/H1118/H1118
58 Independent non-
executive Director
January 2026 January 2026 Responsible for
providing
independent
advice and
judgment to our
Board
None
The following sets forth the biographies of our Directors:
Executive Directors
Mr. Zhang Min ( ੵઽ), aged 46, is our executive Director, chairperson of the Board and
president. From November 2007 to December 2019, he served successively as supervisor, director,
and general manager of the Company. From January 2010 to April 2025, he served as the director
and general manager at Hunan Keyuan, and since April 2025, he has been serving as a director
responsible for the business operations and management. Since December 2019, he has been serving
as Director, chairperson of the Board and president of the Company. He was designated as an
executive Director on August 26, 2025. He is responsible for the overall management and operation
of our Group.
Mr. Zhang had over 20 years of experience in home care medical industry across key areas
ranging from product development, IP development and management, and sales and marketing.
From October 2005 to March 2012, he served as the supervisor at Changsha Keyuan Medical
Equipment Co., Ltd. (ʮ̡), a company principally engaged in the sales
of medical equipment, where he was primarily responsible for supervising the company’s business
operations and management, and reviewing its financial status. Since September 2017, he has been
serving as the executive director Changsha Xiezihao, a company principally engaged in investment
activities, where he was primarily responsible for the company’s business operations and
management.
Mr. Zhang obtained his executive master of business administration (EMBA) degree from
Central South University (ɽኪ) in December 2022. He further obtained his executive master
of business administration (EMBA) degree from Tsinghua University ( ૶ശɽኪ) in June 2025.
Mr. Zhang Zhiming (׼)aged 47, is our executive Director and vice chairperson of the
Board. From June 2007 to January 2020, he served successively as sales director, deputy general
manager, and general manager of Hunan Keyuan, and since April 2025, he has been serving as
manager, assisting the director in management. From the establishment of the Company in
November 2009, he served as executive deputy general manager of the Company, responsible for
sales and procurement. From December 2019 to January 2023, he served as director of the
Company. From December 2019 to January 2026, he served as executive vice president of the
Company. Since January 2023, he has been serving as director and vice chairperson of the Board
of the Company. He was designated as an executive Director on August 26, 2025. He is responsible
for the supply chain, sales, and personnel management, and assisting the chairperson in
coordinating the Group’s strategy and daily operations.
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Prior to joining the Group, from March 2004 to June 2007, he served as the government
official at Meicheng Town Government, Anhua County, Yiyang City, Hunan Province.
Mr. Zhang graduated from Hunan Agricultural University (ุ༵ɽኪ) in June 2006,
majoring in agricultural economics and management. Mr. Zhang obtained a master’s degree in
executive master of business administration (EMBA) at The University of Hong Kong in November
2025.
Mr. Xue Xiaoqiao ( ᑡʃ዗), aged 45, is our executive Director, secretary of the Board, vice
president and joint company secretary. He joined the Group in June 2018 and has served as the vice
president of the Company since then. Since December 2019, he has been serving as Director,
secretary of the Board and vice president of the Company. He was designated as an executive
Director on August 26, 2025. He is responsible for managing the Group’s securities and legal
affairs, investment and acquisitions and intellectual property.
Prior to joining the Group, from November 2004 to March 2016, he successively held the
positions including securities affairs representative and head of the board office at China Calxon
Group Co., Ltd. (ʮ̡) (formerly known as Hunan Ava Holdings Co., Ltd. ( ಳ
ʮ̡)) (a company previously listed on the Shenzhen Stock Exchange,
stock code: 000918, which was delisted in July 2023), where he was primarily responsible for
corporate governance, information disclosure, regulatory communication and investor relations
management. From March 2016 to May 2018, he served as the assistant to the general manager,
general manager of the investment and financing company and board secretary at Aerospace Kaitian
Environmental Technology Co., Ltd. (ʮ̡), a company principally
engaged in developing environmental technology, where he was primarily responsible for
investment and acquisitions, as well as bank financing and securities affairs.
Mr. Xue obtained a master’s degree in business administration from Hunan University (ی
ɽኪ) in Hunan in December 2015. He obtained the board secretary certificate (ᗇ
ࣣaccredited by the Shenzhen Stock Exchange in August 2007.
Mr. He Bangjie ( ൭Ԟ௫), aged 46, is our executive Director. He served as assistant to the
general manager and sales director of Hunan Keyuan from November 2011 to January 2019, and as
executive general manager from January 2019 to October 2021, primarily responsible for business
development and marketing. From October 2017 to January 2023, he served as director and vice
president of the Company. Since January 2023, he has been serving as a director of the Company.
He was designated as an executive Director on August 26, 2025. He is responsible for supply
chain-related operations for Jerry Medical, Huazhou, and rehabilitation product categories.
Prior to joining the Group, from June 2003 to November 2011, he served as the manager and
supervisor at Shanghai Qiqiaoban Printing Technology Co., Ltd. (ʮ̡)
(“Shanghai Qiqiaoban ”), a company principally engaged in printing technology, where he was
primarily responsible for the company’s daily operations and business development. From
November 2011 to November 2020, he served as supervisor at Shanghai Qiqiaoban, where he was
primarily responsible for supervising.
Mr. He graduated from Hunan University of Chinese Medicine (ʕᔼᖹɽኪ) in June
2025, majoring in Chinese Materia Medica.
DIRECTORS AND SENIOR MANAGEMENT
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Independent Non-Executive Directors
Mr. Ning Huabo (ت)aged 46, joined the Group as an independent Director in January
2023 and was re-designated as an independent non-executive Director in August 2025. He is
responsible for providing independent advice and judgment to our Board.
Prior to joining the Group, from August 2009 to March 2014, Mr. Ning served as the associate
at Hunan Qiyuan Law Firm (הa law firm principally engaged in legal services,
where he was primarily responsible for legal practice. From April 2014 to February 2016, he served
as the assistant to the director at China Light Industry Changsha Engineering Co., Ltd. ( ʕ਷Ⴠʈ
ʮ̡), a company principally engaged in engineering services, where he was
primarily responsible for legal and commercial matters related to international construction
projects. From February 2016 to October 2021, he served as the partner at Beijing Dacheng
(Changsha) Law Firm ( ̏ԯɽϓ(Ӎ)הa law firm principally engaged in legal
services, where he was primarily responsible for legal practice. Since November 2021, he has been
serving as senior partner at China Commercial (Changsha) Law Firm (ശਠ(Ӎ)ה,)
a law firm principally engaged in legal services, where he is primarily responsible for legal practice.
Since December 2021, he has been serving as independent director at Kaiyuan Education
Technology Group Co., Ltd. (ʮ̡) (a company listed on the Shenzhen
Stock Exchange, stock code: 300338), where he is primarily responsible for providing independent
advice. Since November 2022, he has been serving as independent director at Hunan Kaimeite
Gases Co., Ltd. (ʮ̡) (a company listed on the Shenzhen Stock
Exchange, stock code: 002549), where he is primarily responsible for providing independent
advice.
Mr. Ning obtained a bachelor’s degree in English and a master’s degree in International Law
from Hunan Normal University (ᇍɽኪ) in December 2004 and June 2009, respectively.
Ms. Shen Nan ( ӏ฻), aged 41, joined the Group as an independent non-executive Director
in August 2025. She is responsible for providing independent advice and judgment to our Board.
Prior to joining the Group, from October 2011 to January 2012, Ms. Shen was employed by
Dalian Port and Shipping Industry Fund Management Co., Ltd. (ʮ̡),
a fund management company. From February 2012 to November 2017, Ms. Shen worked at
PricewaterhouseCoopers, where she was primarily responsible for audit, and her last position was
audit manager. From November 2017 to November 2018, she served as the chief financial officer
at China Sino Edu, which runs its domestic entity in Shandong Yingcai University (ʑኪ৫),
a company primarily engaged in university degree education, where she was primarily responsible
for overseeing the company’s capital markets, financial operations, and strategy. Since December
2018, she has joined Gaotu Techedu Inc. (ʮ̡), a technology-driven education
company listed on the New Y ork Stock Exchange (stock code: GOTU), focused on promoting
lifelong learning through AI-powered solutions, as chief financial officer and senior vice president,
mainly responsible for overseeing the company’s capital markets and financial operations.
Ms. Shen received her bachelor’s and master’s degrees in financial management from Dongbei
University of Finance and Economics (̏ৌ຾ɽኪ) in July 2006 and March 2009, respectively.
She further obtained her executive master of business administration (EMBA) degree from Tsinghua
University ( ૶ശɽኪ) in June 2025. She was accredited as a certified public accountant by the
Chinese Institute of Certified Public Accountants in January 2012.
Mr. Zhou Rong ( մ࿰), aged 58, joined the Group as an independent non-executive Director
in January 2026. He is responsible for providing independent advice and judgment to our Board.
Prior to joining the Group, from July 1997 to December 1999, Mr. Zhou worked at Powerise
Software Park Co., Ltd. (ʮ̡), a company mainly engaged in computer software
development and system integration. From January 2000 to July 2003, he served as the general
DIRECTORS AND SENIOR MANAGEMENT
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--- page 170 ---
manager at Hunan Guozhiyun Technology Co., Ltd. (ʮ̡) (formerly known
as Hunan Powerise Digital Technology Co., Ltd. (ʮ̡)), a company
engaged in internet video technology and product R&D, where he was primarily responsible for
overall management. From October 2003 to December 2006, he successively served as the IPTV
R&D director and product director at Excelland RF (Beijing) Limited (ࢤ(̏ԯ)ʮ̡)
(formerly known as UTStarcom (China) Co., Ltd. (UT ౶༺ੰ(ʕ਷)ʮ̡)), a company
primarily engaged in the R&D and promotion of communication system technology and products,
where he was responsible for the R&D and promotion of IPTV products. From August 2018 to
September 2020, he served as the KA marketing director and general manager of Hunan Branch at
CloudMinds Robotics (Beijing) Co., Ltd. ( ༺㌮ዚኜɛ(̏ԯ)ʮ̡), a company primarily
engaged in the R&D and operation of cloud-based intelligent robots, where he was responsible for
the management and promotion of intelligent robot products. Since April 2009, he has been serving
as the chairman, executive director and general manager at Changsha Titai Network Technology
Co., Ltd. (ʮ̡), a company primarily engaged in computer software
development, where he is primarily responsible for overall management. Since April 2022, he has
been serving as the independent director at Shenzhen Dongzheng Optical Technology Co., Ltd. ( ଉ
ʮ̡), a company primarily engaged in the R&D and production of
optical lenses and optoelectronic imaging technology, where he is primarily responsible for
providing independent advice. Since March 2023, he has been serving as the independent director
at Wangshi Technology Co., Ltd. (ʮ̡), a company specialized in the research,
development, production, and sales of data communication network equipment, where he is
primarily responsible for providing independent advice.
Mr. Zhou obtained his bachelor’s in radio technology from Hangzhou Dianzi University (؄
Ҧɽኪ) (formerly known as Hangzhou Institute of Electronic Engineering (ψཥɿʈุ
ኪ৫)) in July 1989. He further obtained his master’s degree in communication and electronic
systems from National University of Defense Technology (ኪҦஔɽኪ)i n
May 1992.
General
Save as disclosed in this section and the paragraph headed “Further Information about Our
Directors and Substantial Shareholders” in Appendix VI to this prospectus, each of our Directors
has confirmed that:
(1) he/she obtained the legal advice referred to under Rule 3.09D of the Listing Rules on
August 13, 2025, and understood his/her obligations as a director of a listed issuer;
(2) he/she does not have any existing or proposed service contract with our Group other than
contracts expiring or determinable by the relevant member of our Group within one year
without payment of compensation (other than statutory compensation);
(3) he/she has no interest in the Shares within the meaning of Part XV of the SFO as of the
Latest Practicable Date;
(4) he/she has not been a director of any other publicly listed company during the three years
prior to the Latest Practicable Date and as of the Latest Practicable Date;
(5) other than being a Director and/or member of our Company’s senior management, he/she
does not have any relationship with any other Directors, senior management or
substantial shareholders of our Company as of the Latest Practicable Date; and
(6) he/she has not completed his/her respective education programs as disclosed in this
section by way of attendance of long distance learning or online courses.
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Each of our independent non-executive Directors has confirmed:
(1) his/her independence after taking into consideration each of the factors referred to under
Rules 3.13(1) to 3.13(8) of the Listing Rules;
(2) that he/she does not have any past or present financial or other interest in the business
of our Company or our subsidiaries, or any connection with any core connected person
of our Company; and
(3) that there are no other factors which may affect his/her independence at the time of
his/her appointment as our independent non-executive Director.
SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management and operation of our
business. The table below sets forth certain information in respect of the senior management of our
Company:
Name Age Position(s)
Time of
appointment as
senior management
Time of joining
our Group
Role and
responsibilities
Relationship
with Directors
and other
senior
management
Mr. ZHANG
Min ( ੵઽ) /H1118
46 Executive Director,
chairperson of the
Board and
president
November 2007 November 2007 Responsible for
the overall
management
and operation
of our Group
None
Mr. XUE
Xiaoqiao
(ᑡʃ዗) /H1118/H1118
45 Executive Director,
secretary of the
Board, vice
president and joint
company secretary
June 2018 June 2018 Responsible for
managing the
Group’s
securities and
legal affairs,
investment and
acquisitions
and intellectual
property
None
Mr. YU
Xiangyu ( ɲ
ജρ) /H1118/H1118/H1118/H1118
44 Vice president August 2022 August 2022 Responsible for
the domestic
marketing
division
None
Mr. CHEN
Wangpeng
(؃)H1118/H1118
45 Chief financial
controller and vice
president
May 2017 May 2017 Responsible for
the Group’s
financial
strategic
planning,
capital
management,
financial
reporting, and
regulatory
compliance
None
DIRECTORS AND SENIOR MANAGEMENT
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Name Age Position(s)
Time of
appointment as
senior management
Time of joining
our Group
Role and
responsibilities
Relationship
with Directors
and other
senior
management
Mr. OUY ANG
Jie ( ᆄජ
௫) /H1118/H1118/H1118/H1118/H1118
42 Vice president January 2023 January 2018 Responsible for
the overall
management of
the Group’s
human
resources and
manufacturing
center
None
Mr. ZUO
Hanqing ( ̸
ڡ)H1118/H1118/H1118/H1118
36 Vice president December 2019 October 2012 Responsible for
sales
None
The following sets forth the biographies of our senior management:
Mr. Zhang Min ( ੵઽ), aged 46, is our executive Director, chairperson of the Board and
president. For further details, see “— Board of Directors — Executive Directors” in this section.
Mr. Xue Xiaoqiao ( ᑡʃ዗), aged 45, is our executive Director, secretary of the Board, vice
president and joint company secretary. For further details, see “— Board of Directors — Executive
Directors” in this section.
Mr. Yu Xiangyu ( ɲജρ), aged 44, is our vice president. He joined our Group in August 2022
and has served as the vice president of the Group since then. He is responsible for the domestic
marketing division.
Prior to joining the Group, from July 2004 to April 2009, Mr. Y u served as the regional sales
manager at ACON Biotech (Hangzhou) Co., Ltd. (Ҧஔ(ψ)ʮ̡), a vitro diagnostic
and healthcare products manufacturer, where he was primarily responsible for sales in the
Zhejiangregion. From May 2009 to July 2022, he served in the rapid diagnostics department of
Abbott (Shanghai) Diagnostic Products Sales Co., Ltd. ( ඩ੃(ɪऎ)ʮ̡), a
company primarily engaged in the sales of diagnostic products. His final role was the national sales
manager for the gastrointestinal tumor product line, primarily responsible for sales.
Mr. Y u obtained a bachelor’s degree in pharmaceutical engineering from Harbin University of
Commerce (ဧᏵਠุɽኪ) in July 2004.
Mr. Chen Wangpeng (؃)aged 45, is our vice president and chief financial officer. From
May 2017 to January 2023, he served as chief financial officer of the Company. Since January 2023,
he has been serving as vice president and chief financial officer of the Company, responsible for the
Group’s financial strategic planning, capital management, financial reporting, and regulatory
compliance.
Prior to joining the Group, from September 2008 to March 2017, Mr. Chen successively held
the positions of audit supervisor, supervising officer, minister, and assistant to the chairman of
supervisors at SANY Group Co., Ltd. (ʮ̡), a company engaged in engineering
equipment manufacturing. From July 2015 to July 2018, he served as the supervisor at Hunan
SANY Kunlun New Energy Co., Ltd. (ʮ̡), a company engaged in gas
supply.
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Mr. Chen obtained a bachelor’s degree in corporate financial management from Hunan
Agricultural University (ุ༵ɽኪ) in 2008. He was accredited as a certified public accountant
by the Hunan Provincial Institute of Certified Public Accountants in April 2014, as a certified tax
agent by the China Certified Tax Agents Association in June 2008, as a certified internal auditor by
the China Institute of Internal Audit and the Human Resources and Social Security Department of
Hunan Province in November 2010, as a senior procurement specialist by the China Federation of
Logistics and Purchasing in December 2014, and as a senior accountant by the Human Resources
and Social Security Department of Hunan Province in December 2023.
Mr. Ouyang Jie ( ᆄජ௫), aged 42, is our vice president. From January 2018 to January 2023,
he served as human resources director, responsible for the overall human resources management of
the Group. Since January 2023, he has been serving as vice president, responsible for the overall
management of the Group’s human resources and manufacturing center.
Prior to joining the Group, from July 2006 to April 2009, Mr. Ouyang worked at Jiuzhitang
Co., Ltd. (ʮ̡) (a company listed on the Shenzhen Stock Exchange, stock code:
000989), where he was primarily responsible for recruitment and performance management. In May
2009, he worked at Zoomlion Heavy Industry Science and Technology Co., Ltd. (΅Ϟ
ʮ̡) (a company listed on the Shenzhen Stock Exchange and Hong Kong Stock Exchange, stock
codes: 000157.SZ and 01157.HK). From May 2010 to December 2017, he served as the human
resources director at Guangdong Haiwu Technology Co., Ltd. (ʮ̡), a company
engaged in the manufacturing of electrical machinery and equipment, where he was primarily
responsible for the overall human resources management of the company. Since January 2022, he
has served as the chairman of the Hunan Bohou Public Welfare Foundation (ږ
ึ), a charitable organization, where he was primarily responsible for the overall management.
Mr. Ouyang obtained a bachelor’s degree in information management and information systems
from Central South University (ɽኪ) in June 2006.
Mr. Zuo Hanqing (ڡ)aged 36, is our vice president. He has successively held the
positions of deputy general manager, supervisor, executive director and general manager of
Guizhou Cofoe Medical Devices Co., Ltd. (ʮ̡) (previously known as
Guizhou Meiwen Medical Devices Co., Ltd. (ʮ̡)) from October 2012 to
October 2017. He was re-designated as vice president of the Company in December 2019 and
responsible for sales.
Mr. Zuo obtained a bachelor’s degree in banking and finance from Nanyang Technological
University in June 2012.
General
Save as disclosed in this section and the paragraph headed “Further Information about Our
Directors and Substantial Shareholders” in Appendix VI to this prospectus, each of our senior
management members has confirmed that:
(1) he/she does not hold and has not held any other positions in our Group and any other
members of our Group as of the Latest Practicable Date;
(2) other than being a member of our Group’s senior management, he/she does not have any
relationship with any Directors, other members of senior management or substantial
shareholders or Controlling Shareholders of our Group as of the Latest Practicable Date;
(3) he/she does not hold and has not held any other directorships in public companies the
securities of which are listed on any securities market in Hong Kong or overseas in the
three years prior to the Latest Practicable Date and as of the Latest Practicable Date; and
DIRECTORS AND SENIOR MANAGEMENT
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(4) he/she has not completed his respective education programs as disclosed in this section
by way of attendance of long distance learning or online courses.
JOINT COMPANY SECRETARIES
Mr. Xue Xiaoqiao ( ᑡʃ዗) was appointed as one of our joint company secretaries in August
2025. For the biographical details of Mr. Xue, see “— Senior Management” in this section.
Ms. Ha Ching Ching (͍᎑), aged 47, was appointed as one of our joint company
secretaries in August 2025. She graduated from The University of Adelaide with a Bachelor of
Commence (Accounting) degree. Ms. Ha is a fellow member of Hong Kong Institute of Certified
Public Accountants and a member of the Certified Public Accountants of Australia. Ms. Ha has over
20 years’ experience in auditing, financial management, tax planning and corporate governance.
Ms. Ha has held senior financial position in several multinational companies, including
commodities, manufacturing and real estate industries. She is the chief financial officer of Danok
Corporate Services Limited currently.
COMPLIANCE ADVISOR
We have appointed Somerley Capital Limited as our compliance advisor pursuant to Rule
3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, the compliance advisor will
advise us on the following circumstances:
 before the publication of any announcements, circulars or financial reports;
 where a transaction, which might be a notifiable or connected transaction under Chapters
14 and 14A of the Listing Rules is contemplated, including share issues, sale or transfer
of treasury shares and share repurchases;
 where we propose to use the proceeds of the Global Offering in a manner different from
that detailed in this prospectus or where our business activities, developments or results
deviate from any forecast, estimate or other information in this prospectus; and
 where the Stock Exchange makes an inquiry of us regarding unusual price movement
and trading volume or other issues under Rule 13.10 of the Listing Rules.
Pursuant to Rule 3A.24 of the Listing Rules, Somerley Capital Limited will, in a timely
manner, inform us of any amendment or supplement to the Listing Rules and new or amended laws
and regulations in Hong Kong applicable to us.
The terms of the appointment shall commence on the Listing Date and end on the date which
we distribute our annual report of our financial results for the first full financial year commencing
after the Listing Date.
BOARD COMMITTEES
We have established the following committees on our Board: an audit committee, a
remuneration and appraisal committee, a nomination committee and a Strategy Committee. The
committees operate in accordance with the terms of reference established by our Board.
Audit Committee
We have established an audit committee with written terms of reference in compliance with
Rule 3.21 of the Listing Rules and paragraph D.3 of part 2 of the Corporate Governance Code as
set out in Appendix C1 to the Listing Rules (the “ Corporate Governance Code ”). The Audit
Committee consists of Ms. SHEN Nan ( ӏ฻), Mr. NING Huabo (تand Mr. ZHANG Zhiming
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(׼with Ms. SHEN Nan ( ӏ฻) being the chairperson of the committee. Ms. SHEN Nan ( ӏ
฻) holds the appropriate accounting or related financial management expertise as required under
Rules 3.10(2) and 3.21 of the Listing Rules.
The primary duties of the Audit Committee are to assist our Board in providing an independent
view of the effectiveness of our financial reporting process, internal control and risk management
systems, overseeing the audit process, and performing other duties and responsibilities as assigned
by our Board, which includes amongst other things:
 proposing to our Board the appointment and replacement of external audit firms;
 supervising the implementation of our internal audit system;
 liaising between our internal audit department and external auditors;
 reviewing our financial information and related disclosures; and
 other duties conferred by our Board.
Remuneration and Appraisal Committee
We have established a remuneration and appraisal committee with written terms of reference
in compliance with Rule 3.25 of the Listing Rules and paragraph E.1 of part 2 of the Corporate
Governance Code. The Remuneration and Appraisal Committee consists of Mr. ZHOU Rong ( մ࿰),
Mr. ZHANG Zhiming (׼and Ms. SHEN Nan ( ӏ฻), with Mr. ZHOU Rong ( մ࿰) being the
chairperson of the committee.
The primary duties of the Remuneration and Appraisal Committee are to develop
remuneration and appraisal policies of our Directors, evaluate the performance, make
recommendations on the remuneration packages of our Directors and senior management and
evaluate and make recommendations on employee benefits, which include amongst other things:
 establishing, reviewing and making recommendations to our Board on our policy and
structure concerning remuneration and appraisal of Directors and senior management
and on the establishment of a formal and transparent procedure for developing policy on
such remuneration and appraisal;
 determining the terms of the specific remuneration package of each Director and
members of senior management;
 reviewing and approving performance-based remuneration by reference to corporate
goals and objectives resolved by our Directors from time to time;
 reviewing and/or approving matters relating to share schemes under Chapter 17 of the
Listing Rules; and
 other duties conferred by our Board.
Nomination Committee
We have established a nomination committee with written terms of reference in compliance
with paragraph B.3 of part 2 of the Corporate Governance Code. The Nomination Committee
consists of Mr. NING Huabo (تMr. HE Bangjie ( ൭Ԟ௫) and Ms. SHEN Nan ( ӏ฻), with
Mr. NING Huabo (تbeing the chairperson of the committee.
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The primary duties of the Nomination Committee are to make recommendations to our Board
in relation to the appointment and removal of Directors which includes, amongst other things:
 reviewing the structure, size and composition of our Board on a regular basis, assisting
our Board in maintaining a board skills matrix, and making recommendations to our
Board regarding any proposed changes;
 identifying, selecting or making recommendations to our Board on the selection of
individuals nominated for directorships;
 assessing the independence of independent non-executive Directors;
 making recommendations to our Board on relevant matters relating to the appointment,
re-appointment and removal of our Directors;
 supporting our Company’s regular evaluation of our Board’s performance; and
 other duties conferred by our Board.
Strategy Committee
Our Board has established a Strategy Committee (the “ Strategy Committee ”) with written
terms of reference. The primary duties of the Strategy Committee are to research on making
recommendations to our Board on our long-term development strategies, major decisions, and
environmental, social and governance matters. The Strategy Committee consists of Mr. ZHANG
Min ( ੵઽ), Mr. ZHANG Zhiming (׼and Mr. ZHOU Rong ( մ࿰), with Mr. ZHANG Min ( ੵ
ઽ) being the chairperson of the committee.
CORPORATE GOVERNANCE
Our Company is committed to achieving high standards of corporate governance with a view
to safeguarding the interests of our Shareholders. To accomplish this, our Company intends to
comply with the corporate governance requirements under the Corporate Governance Code after the
Listing.
Code Provision C.2.1 of the Corporate Governance Code
Under paragraph C.2.1 of the Corporate Governance Code, the roles of chairman and chief
executive should be separate and should not be performed by the same individual. Mr. Zhang Min
is the chairperson of the Board and president of our Company. With profound experience in
management, Mr. Zhang Min is in charge of the overall management and operation of our Group.
Despite the fact that the roles of the chairperson of the Board and president of our Company are both
performed by Mr. Zhang Min which constitutes a deviation from paragraph C.2.1 of the Corporate
Governance Code, our Board considers that vesting the roles of both the chairperson of the Board
and president all in Mr. Zhang Min has the benefit of ensuring consistent leadership and more
effective and efficient overall strategic planning of our Group. The balance of power and authority
is ensured by the operation of our Board, our senior management, each of which comprises
experienced and diverse individuals. Our Board currently comprises four executive Directors and
three independent non-executive Directors. Therefore, our Board possesses a strong independence
element in its composition. Save as disclosed above, our Company intends to comply with all code
provisions under the Corporate Governance Code.
DIRECTORS AND SENIOR MANAGEMENT
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Board Diversity
We seek to achieve board diversity through the consideration of a number of factors, including
but not limited to gender, age, cultural and educational background, ethnicity, professional
experience, skills, knowledge and length of service. We have adopted a board diversity policy (the
“Board Diversity Policy ”) to enhance the effectiveness of our Board and to maintain a high
standard of corporate governance. Pursuant to the Board Diversity Policy, in reviewing and
assessing suitable candidates to serve as a Director, the Nomination Committee will consider a
range of diversity perspectives with reference to our Company’s business model and specific needs,
including but not limited to gender, age, language, cultural and educational background,
professional qualifications, skills, knowledge, industry, regional experience and length of service.
Furthermore, the Nomination Committee is responsible for reviewing the diversity of our Board,
reviewing the Board Diversity Policy from time to time, developing and reviewing measurable
objectives for implementing the Board Diversity Policy, and monitoring the progress on achieving
these measurable objectives in order to ensure that the Board Diversity Policy remains effective.
Our Directors have a balanced mixed of knowledge and skills, including but not limited to
legal, finance, accounting and corporate governance. They obtained degrees in various majors
including business administration and corporate financial management. Furthermore, our Board has
a relatively wide range of ages, ranging from 41 years old to 58 years old, and consists of six male
members and one female members. Our Company has reviewed the membership, structure and
composition of our Board, and is of the opinion that the structure of our Board is reasonable, and
the experience and skills of the Directors in various aspects and fields can enable our Company to
maintain a high standard of operation.
Our Company will, among others, (i) disclose the biographical details of each Director and (ii)
report on the implementation of the Board Diversity Policy (including whether we have achieved
board diversity) in its annual corporate governance report. In particular, our Company will take
opportunities to increase the proportion of female members of our Board when selecting and
recommending suitable candidates for Board appointments to help enhance gender diversity in
accordance with stakeholder expectations and recommended best practices. Our Company also
intends to promote gender diversity when recruiting staff at the mid to senior level so that our
Company will have a pipeline of female senior management and potential successors to our Board.
We believe that such merit-based selection process with reference to our Board Diversity Policy and
the nature of our business will be in the best interests of our Group and our Shareholders as a whole.
COMPETITION
Each of our Directors confirms that as of the Latest Practicable Date, he/she did not have any
interest in a business which competes or is likely to compete, directly or indirectly, with our
business, and requires disclosure under Rule 8.10 of the Listing Rules.
COMPENSATION OF DIRECTORS
We offer our Directors remuneration the form of fees, salaries, allowances, benefits in kind,
performance related bonuses, retirement benefit scheme contribution, and share-based
compensation. Our Directors’ remuneration is determined with reference to the relevant Director’s
experience and qualifications, level of responsibility, performance and the time devoted to our
business, and the prevailing market conditions. Our independent non-executive Directors receive
emolument based on their responsibilities.
The aggregate amounts of remuneration (including fees, salaries, allowances and benefits in
kind, performance related bonuses, pension scheme contributions, and share-based payments)
which were paid or payable to our Directors for the years ended December 31, 2023, 2024 and 2025
were RMB3.7 million, RMB6.6 million and RMB7.9 million, respectively.
DIRECTORS AND SENIOR MANAGEMENT
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It is estimated that the aggregate amount of remuneration (including fees, salaries, allowances,
benefits in kind, performance related bonuses, retirement benefit scheme contribution, and
share-based compensation) payable to our Directors for the year ending December 31, 2026 would
be approximately RMB6.6 million under arrangements in force as of the date of this prospectus.
For the years ended December 31, 2023, 2024 and 2025, there were 1, 2 and 2 Directors
among the five highest paid individuals, respectively. The aggregate amounts of remuneration
(including fees, salaries, allowances and benefits in kind, performance related bonuses, pension
scheme contributions, and share-based payments) which were paid or payable by our Group to our
five highest paid individuals (excluding Directors) for the years ended December 31, 2023, 2024
and 2025 were RMB3.7 million, RMB6.0 million and RMB5.1 million, respectively.
During the Track Record Period, (i) no remuneration was paid to our Directors or the five
highest paid individuals as an inducement to join, or upon joining our Group, (ii) no compensation
was paid to, or receivable by, our Directors, past Directors, or the five highest paid individuals for
the loss of office as a director of any member of our Group or any other office in connection with
the management of the affairs of any member of our Group, and (iii) none of our Directors waived
or agreed to waive any emoluments.
Except as disclosed above, no other payment has been paid, or is payable, by our Group to our
Directors or the five highest paid individuals of our Group during the Track Record Period.
For additional information on remuneration of Directors during the Track Record Period as
well as information on the five highest paid individuals, see notes 8 and 9 to the Accountants’
Report.
DIRECTORS AND SENIOR MANAGEMENT
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OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Mr. Zhang, Ms. Nie (Mr. Zhang’s spouse), Changsha
Xiezihao and Changsha Keyuan, collectively being our Controlling Shareholders, were able to
exercise an aggregate of approximately 54.00% voting rights in our Company. Immediately upon
completion of the Global Offering (without taking into account any A Shares to be issued upon
exercise of the share options granted under the Employee Incentive Schemes), Mr. Zhang, Ms. Nie,
Changsha Xiezihao and Changsha Keyuan are expected to be entitled to exercise an aggregate of
approximately 47.82% voting rights in our Company. Mr. Zhang, Ms. Nie, Changsha Xiezihao and
Changsha Keyuan will remain as our Controlling Shareholders upon the Listing.
As of the Latest Practicable Date, save for the interest in our Group, our Controlling
Shareholders did not have any interest in a business which competes or is likely to compete, directly
or indirectly, with the business of our Group, and which requires disclosure under Rule 8.10 of the
Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Our Directors consider that we are capable of carrying on our business independently of our
Controlling Shareholders and their close associates after the Listing, taking into consideration the
factors below.
Management Independence
Our Board comprises seven Directors, including four executive Directors, and three
independent non-executive Directors. We believe that our Board as a whole, together with our
senior management, is able to perform the managerial role in our Group independently from our
Controlling Shareholders for the following considerations:
(a) each of our Directors is aware of his/her fiduciary duties as a Director which require,
among others, that he/she acts for the benefit of and in the best interests of our Company
and does not allow any conflict between his/her duties as a Director and his/her personal
interests;
(b) our daily management and operation decisions are made by all our executive Directors
and senior management, all of whom have substantial experience in the industry in
which we are engaged and will be able to make business decisions that are in the best
interest of our Group. For details of the industry experience of our senior management,
see “Directors and Senior Management” in this prospectus;
(c) we have appointed three independent non-executive Directors with a view to bringing
independent judgment to the decision-making process of our Board;
(d) in the event that there is a potential conflict of interest arising out of any transaction to
be entered into between our Group and a Director and/or his/her associate, he/she shall
abstain from voting and shall not be counted towards the quorum for the voting; and
(e) we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and our Controlling Shareholders, which would
support our independent management. For further details, see “— Corporate Governance
Measures” in this section.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Operational Independence
We have full rights to make all decisions on, and to carry out, our own business operations
independently. We have our own departments specializing in the respective areas which have been
in operation and are expected to continue to operate independently from our Controlling
Shareholders and its close associates. We hold the licenses, intellectual property rights and
qualifications necessary to carry on our principal business. We also have independent access to
suppliers and customers, and have sufficient capital, facilities and employees to operate our
business independently from our Controlling Shareholders and its close associates.
Based on the above, our Directors believe that we will be able to operate independently from
our Controlling Shareholders and its close associates.
Financial Independence
We have an independent financial system. We make financial decisions according to our own
business needs, and neither our Controlling Shareholders nor its close associates intervene with our
use of funds. We have established an independent finance department with a team of finance staff
and an independent audit, accounting and financial management system.
In addition, we have been and are capable of obtaining financing from third parties without
relying on any guarantee or security provided by our Controlling Shareholders or their close
associates. As of the Latest Practicable Date, there was no loan, advance or guarantee provided by
our Controlling Shareholders or their close associates.
Based on the above, our Directors believe that we are capable of carrying on our business
independently of, and do not place undue reliance on, our Controlling Shareholders and their close
associates after the Listing.
CORPORATE GOVERNANCE MEASURES
Our Directors recognize the importance of good corporate governance in protecting our
Shareholders’ interests. We have adopted the following measures to safeguard good corporate
governance standards and to avoid potential conflicts of interests between our Group and our
Controlling Shareholders:
(a) under the Articles of Association, where a Shareholders’ meeting is to be held for
considering proposed transactions in which our Controlling Shareholders or any of its
respective associates has a material interest, our Controlling Shareholders and its
associates will not vote on the relevant resolutions and shall not be counted in the
quorum for the voting;
(b) our Company has established internal control mechanisms to identify connected
transactions. Upon Listing, if our Company enters into connected transactions with our
Controlling Shareholders or any of its associates, our Company will comply with the
applicable Listing Rules;
(c) our Board consists of a balanced composition of executive Directors and non-executive
Directors (including independent non-executive Directors), with independent non-
executive Directors representing not less than one-third of our Board to ensure that our
Board is able to effectively exercise independent judgment in its decision-making
process and provide independent advice to our Shareholders. Our independent non-
executive Directors individually and collectively possess the requisite knowledge and
experience to perform their duties. They will review whether there is any conflict of
interests between our Group and our Controlling Shareholders and provide impartial and
professional advice to protect the interests of our minority Shareholders;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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(d) where our Directors reasonably request the advice of independent professionals, such as
financial advisors, the appointment of such independent professionals will be made at
our Company’s expenses; and
(e) we have appointed Somerley Capital Limited as our compliance advisor to provide
advice and guidance to us in respect of compliance with the applicable laws in Hong
Kong and the Listing Rules, including various requirements relating to corporate
governance.
Based on the above, our Directors believe that sufficient corporate governance measures have
been put in place to manage conflicts of interests that may arise between our Group and our
Controlling Shareholders and to protect our Shareholders’ interests as a whole after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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PARTIALLY-EXEMPT CONTINUING CONNECTED TRANSACTION
Chumocang Framework Purchase Agreement
Background
As of the Latest Practicable Date, Hunan Chumocang Technology Co., Ltd. (Ҧ
ʮ̡)( “Hunan Chumocang ”) was owned as to 85% equity interest by Mr. Zhang Chao ( ੵ൴),
brother of Mr. Zhang (our executive Director, chairman of the Board and Controlling Shareholder).
As such, Hunan Chumocang is an associate of Mr. Zhang and therefore a connected person of our
Company under the Listing Rules.
Hunan Chumocang and Nantong Chuyuncang New Energy Technology Co., Ltd. (ࡑ
ʮ̡)( “ Nantong Chuyuncang ”, together with Hunan Chumocang, “ Chumocang
Companies ”), a wholly-own subsidiary of Hunan Chumocang, have provided the electricity and
related equipment maintenance service for us for manufacturing of our products during the Track
Record Period as part of our ordinary and usual course of business.
Historical Transaction Amounts
For the years ended December 31, 2023, 2024 and 2025, the total expenses incurred by us in
relation to the provision of electricity by Chumocang Companies was nil, RMB1.6 million and
RMB3.1 million, respectively.
Framework Service Agreement
On April 23, 2026, we entered into a framework purchase agreement with Chumocang
Companies to govern the terms and conditions of the transactions between the Group on one hand
and Chumocang Companies on the other hand in connection with the provision of electricity by
Chumocang Companies (the “ Chumocang Framework Purchase Agreement ”). Pursuant to the
Chumocang Framework Purchase Agreement, Chumocang Companies have agreed to provide
electricity and related equipment maintenance service for the Group. The Chumocang Framework
Purchase Agreement will take effect upon Listing and will be valid until December 31, 2028,
renewable by mutual agreement of the parties, subject to compliance with the requirement under
Chapter 14A of the Listing Rules and all other applicable laws and regulations.
Pricing Policies
Pursuant to the Chumocang Framework Purchase Agreement, the electricity purchase price is
determined with reference to the prevailing electricity benchmark price quoted by State Grid
Corporation of China (ʮ̡)( “ State Grid ”) in the relevant region, with a discount of
approximately 12% to 14%. The State Grid electricity benchmark price is publicly available and
represents the prevailing market price for grid-supplied electricity in the relevant region. Using
such benchmark provides an objective and transparent basis for price determination, the discount
range was determined after arm’s length negotiations, taking into account the stable demand of the
Group and the commercial terms of long-term cooperation. For benchmarking purposes, the
Company has reviewed publicly available disclosures of comparable transactions by A-share listed
companies purchasing photovoltaic electricity from related parties. The discounts observed ranged
from approximately 3% to 15%. The 12% to 14% discount offered by Chumocang Companies falls
within this range and is considered consistent with market practice. Further, service fees relating to
the related equipment maintenance service provided by Chumocang Companies are determined after
arm’s length negotiations with reference to prevailing market rates for comparable services. Where
practicable, the Company obtains quotations or conducts price enquiries with Independent Third
Party service providers to ensure the fees are no less favourable than those available in the market.
CONNECTED TRANSACTION
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Annual Caps
The estimated maximum amount payable by us to Chumocang Companies for each of the three
years ending December 31, 2026, 2027 and 2028 in relation to their provision of service to the
Group shall not exceed RMB4.5 million, RMB4.7 million and RMB5.9 million, respectively.
The proposed annual caps for the three years ending December 31, 2028, being the estimated
total amounts payable by our Group as set out above, are determined with reference to:
(a) our estimation on the demand for the electricity for our manufacturing and productions;
(b) the historical purchase amounts paid to Chumocang Companies by our Group for
purchasing electricity and related equipment maintenance service during the Track
Record Period; and
(c) a reasonable increment of the purchase price payable to Chumocang Companies taking
into account the expected inflation rate for the three years ending December 31, 2028.
Listing Rules Implications
Since one or more of the applicable percentage ratio calculated for the purpose of Chapter 14A
of the Listing Rules for the transactions under the Chumocang Framework Purchase Agreement
exceed 0.1% but are all less than 5% on an annual basis with the total consideration is more than
HK$3 million, the transactions under the Chumocang Framework Purchase Agreements will be
subject to the reporting, annual review and announcement requirements but are exempt from the
independent Shareholders’ approval requirement under Chapter 14A of the Listing Rules.
Reasons for and Benefits of the Transactions with Chumocang Companies
We have continued procurement relationships with Chumocang Companies primarily because
the price of electricity offered by Chumocang Companies has been more cost-effective than State
Grid Corporation of China (ʮ̡) which contributes to cost saving for us. Further, the
related equipment maintenance services bundled with the purchase of electricity leading to a
long-term savings, as Chumocang Companies takes care of scheduling, inspections, and repairs
which is more efficient and cost-effective than third parties service provider in the event that such
service is needed.
INTERNAL CONTROL MEASURES FOR PARTIALLY-EXEMPT CONTINUING
CONNECTED TRANSACTIONS
We have established the following internal review procedures to ensure that the terms for the
partially-exempt continuing connected transactions we have or may have in the future are on normal
commercial terms and no more favorable to the counterparties than terms available to Independent
Third Parties:
 If a comparable market price is available, we shall compare the proposed product price
or service fee with the market price to ensure that the proposed product price or service
fee will not be higher than the selling price of product or service of a similar type or
nature provided by independent third-party suppliers or providers;
 Before selecting a product supplier or services provider, our procurement department
shall obtain price quotations from suppliers or providers. The factors to be considered
by us in conducting internal assessments include price, quality, and value added to us;
 If no comparable market price is available, our procurement department shall conduct
arm’s length negotiation with the relevant connected persons to determine the terms in
line with the relevant pricing policies based on trade cost of the product involved or
value of the relevant service and the actual costs and expenses incurred;
CONNECTED TRANSACTION
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--- page 184 ---
 After arm’s length negotiation with the connected person, our procurement department
will report to our senior management who will approve individual transactions as
appropriate;
 Our internal audit department will regularly collect and monitor the transaction amount
of continuing connected transactions to ensure timely assessment on whether the annual
caps are exceeded; and
 Our independent non-executive Directors will also conduct annual review on the
non-exempt continuing connected transactions to ensure that such transactions have
been entered into on normal commercial terms, are fair and reasonable and conducted
according to the terms of the relevant framework agreement. The auditor of our
Company will also conduct annual review on the pricing and annual cap of the
non-exempt continuing connected transactions.
CONFIRMATION OF DIRECTORS
Our Directors (including our independent non-executive Directors) consider that the
continuing connected transaction described under the sub-section entitled “— Partially-exempt
Continuing Connected Transaction” in this section have been and will be carried out (i) in the
ordinary and usual course of our business, (ii) on normal commercial terms or better and (iii) in
accordance with the respective terms that are fair and reasonable and in the interests of our
Company and our Shareholders as a whole.
Our Directors (including our independent non-executive Directors) are also of the view that
the proposed annual caps of the continuing connected transaction described under the sub-section
entitled “— Partially-exempt Continuing Connected Transaction” in this section are fair and
reasonable and are in the interests of our Company and our Shareholders as a whole.
CONFIRMATION OF THE JOINT SPONSORS
The Joint Sponsors are of the view that the continuing connected transaction described under
the sub-section entitled “— Partially-exempt Continuing Connected Transaction” in this section
have been and will be entered into in the ordinary and usual course of our business, on normal
commercial terms or better, and in accordance with the respective terms that are fair and reasonable
and in the interests of our Company and our Shareholders as a whole; and that the proposed annual
caps of such continuing connected transaction is fair and reasonable, and in the interests of our
Company and our Shareholders as a whole.
W AIVER APPLICATION FOR PARTIALLY-EXEMPT CONTINUING CONNECTED
TRANSACTION
The transactions described under the sub-section entitled “— Partially-exempt Continuing
Connected Transaction” in this section constitute our continuing connected transaction under the
Listing Rules, which are exempt from the independent Shareholders’ approval requirements but
subject to the reporting, annual review, announcement requirements of the Listing Rules.
In respect of the continuing connected transaction, pursuant to Rule 14A.105 of the Listing
Rules, we have applied for, and the Stock Exchange has granted, waivers exempting us from strict
compliance with the announcement requirement under Chapter 14A of the Listing Rules in respect
of the continuing connected transaction as disclosed in “— Partially-exempt Continuing Connected
Transaction” in this section, subject to the conditions that the aggregate amounts of the continuing
connected transaction for each financial year shall not exceed the relevant amounts set forth in the
respective annual caps (as stated above).
CONNECTED TRANSACTION
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So far as our Directors are aware, immediately following the completion of the Global
Offering and without taking into account any A Shares to be issued upon exercise of the share
options granted under the Employee Incentive Schemes, the following persons will have an interest
or short position in the Shares or the underlying Shares which would fall to be disclosed to our
Company and the Hong Kong 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:
Name of Shareholder Nature of interest
Number and type of
Shares to be held after the
Global Offering
Approximate
percentage of
shareholding in the
relevant type of
Shares immediately
prior to the
Global Offering (1)
Approximate
percentage of
shareholding in the
total share capital of
our Company
immediately after the
Global Offering (1)
(%) (%)
Mr. Zhang (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 12,114,881 A Share 5.80 5.14
Interest in spouse 100,680,543 A Share 48.20 42.68
Interest in controlled
corporations
97,194,804 A Share 46.53 41.20
Ms. Nie
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 3,485,739 A Share 1.67 1.48
Interest in spouse 109,309,685 A Share 52.33 46.34
Interest in controlled
corporations
97,194,804 A Share 46.53 41.20
Changsha Xiezihao
(2) /H1118/H1118Beneficial owner 85,079,923 A Share 40.73 36.07
Changsha Keyuan (2) /H1118/H1118/H1118Beneficial owner 12,114,881 A Share 5.80 5.14
Mr. Zhang Zhiming
(׼2)(3) /H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner 7,268,928 A Share 3.48 3.08
Interest in controlled
corporations
12,114,881 A Share 5.80 5.14
Notes:
(1) The calculation is based on the total number of 208,897,000 A Shares and 27,000,000 H Shares in issue upon
completion of the Global Offering (without taking into account any A Shares to be issued upon exercise of the share
options granted under the Employee Incentive Schemes).
(2) Ms. Nie is the spouse of Mr. Zhang. Changsha Xiezihao was owned as to 90% and 10% by Mr. Zhang and Ms. Nie,
respectively. Mr. Zhang is the executive partner and the general partner of Changsha Keyuan with 5% partnership
interest in Changsha Keyuan, Ms. Nie is a limited partner of Changsha Keyuan with 55% partnership interest in
Changsha Keyuan and Mr. Zhang Zhiming (׼is a limited partner of Changsha Keyuan with 40% partnership
interest in Changsha Keyuan. As such, each of Mr. Zhang and Ms. Nie is deemed to be interested in the 85,079,923
A Shares and 12,114,881 A Shares held by Changsha Xiezihao and Changsha Keyuan, respectively, under the SFO.
(3) Mr. Zhang Zhiming (׼is a limited partner of Changsha Keyuan with 40% partnership interest in Changsha
Keyuan. As such, Mr. Zhang Zhiming (׼is deemed to be interested in the 12,114,881 A Shares held by
Changsha Keyuan under the SFO.
For details of the substantial shareholders who 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 any member of our Group other than our Company, see “Further Information
about Our Directors and Substantial Shareholders — 2. Substantial Shareholders” in Appendix VI
to this prospectus.
Save as disclosed herein, our Directors are not aware of any persons who will, immediately
following completion of the Global Offering (without taking into account any A Shares to be issued
upon exercise of the share options granted under the Employee Incentive Schemes), without taking
into account the Offer Shares that may be taken up under the Global Offering, have interests or short
positions in Shares or underlying Shares which would fall to be disclosed 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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--- page 186 ---
This section presents certain information regarding our share capital prior to and upon the
completion of the Global Offering.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the registered share capital of our Company was
RMB208,897,000, comprising 208,897,000 A Shares with a nominal value of RMB1.00 each
(without taking into account any A Shares to be issued upon exercise of the share options granted
under the Employee Incentive Schemes), all of which are listed on the Shenzhen Stock Exchange.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately upon completion of the Global Offering, and without taking into account any A
Shares to be issued upon exercise of the share options granted under the Employee Incentive
Schemes, the share capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage of the
total issued
share capital
(%)
A Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118208,897,000 88.55
H Shares to be issued pursuant to the Global
Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,000,000 11.45
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118235,897,000 100.00
SHARE CLASSES
Upon the completion of the Global Offering, the Shares will consist of A Shares and H Shares.
The A Shares and H Shares are all ordinary Shares in the share capital of the Company. Apart from
certain qualified domestic institutional investors in Chinese mainland, the qualified investors in
Chinese mainland under the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong
Stock Connect (if our H Shares are eligible securities for that purpose) and other persons who are
entitled to hold our H Shares pursuant to relevant PRC Law or upon approvals of any competent
authorities, H Shares generally cannot be subscribed for by or traded between legal or natural
persons in Chinese mainland.
Shenzhen-Hong Kong Stock Connect has established a stock connect mechanism between
Chinese mainland and Hong Kong. Our A Shares can be subscribed for and traded by investors in
Chinese mainland, qualified foreign institutional investors or qualified foreign strategic investors
and must be traded in Renminbi. As our A Shares are eligible securities under the Northbound
Trading Link, they can also be subscribed for and traded by Hong Kong and other overseas investors
pursuant to the rules and limits of Shenzhen-Hong Kong Stock Connect. If our H Shares are eligible
securities under the Southbound Trading Link, they can also be subscribed for and traded by
investors in Chinese mainland in accordance with the rules and limits of Shanghai-Hong Kong
Stock Connect or Shenzhen-Hong Kong Stock Connect.
A Shares and H Shares are regarded as one class of Shares under the Articles of Association
and will rank pari passu with each other in all other respects and, in particular, will rank equally
for all dividends or distributions declared, paid or made after the date of this prospectus. Dividends
in respect of our Shares may be paid by us in Hong Kong dollars or Renminbi. In addition to cash,
dividends may be distributed in the form of Shares.
SHARE CAPITAL
– 177 –


--- page 187 ---
APPROV AL FROM HOLDERS OF A SHARES REGARDING THE GLOBAL OFFERING
We have obtained approval from our A Shareholders to issue H Shares and seek the listing of
the H Shares on the Hong Kong Stock Exchange. Such approval was obtained at the general meeting
of our Company held on August 26, 2025 and is subject to the following conditions:
(i) Size of the Offer
The proposed number of H Shares to be issued shall not be more than 15% of the total issued
share capital of our Company as enlarged by the Global Offering (without taking into account any
A Shares to be issued upon exercise of the share options granted under the Employee Incentive
Schemes).
(ii) Method of Offering
The method of offering shall be by way of a public offer for subscription in Hong Kong and
an international offering to institutional and professional investors.
(iii) Target Investors
The H Shares shall be issued to Hong Kong public investors, other overseas investors who
meet the relevant requirements, qualified domestic investors eligible to invest in overseas securities
according to PRC Law and other investors who comply with the relevant regulatory requirements.
(iv) Price Determination Basis
The issue price of the H Shares will be determined after due consideration of the interests of
existing Shareholders, the acceptance of investors and issuance risks and in accordance with
international practices through the demands for orders and book building process, subject to the
domestic and overseas capital market conditions and by reference to the valuation level of
comparable companies in domestic and overseas markets.
(v) Valid Period
The issue of H Shares and listing of H Shares on the Hong Kong Stock Exchange shall be
completed within 24 months from the date when the Shareholders’ meeting was held on August 26,
2025.
There is no other approved offering plans for any other shares except for the Global Offering.
SHAREHOLDERS’ GENERAL MEETINGS
For details of circumstances under which our Shareholders’ general meetings are required, see
“Summary of the Articles of Association” in Appendix V to this prospectus.
SHARE CAPITAL
– 178 –


--- page 188 ---
THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone Investment
Agreement ” and collectively, the “ Cornerstone Investment Agreements ”) with the cornerstone
investors set out below (each a “ Cornerstone Investor ” and collectively, the “ Cornerstone
Investors ”), pursuant to which the Cornerstone Investors have agreed to, subject to certain
conditions, subscribe, or cause their designated entities to subscribe, at the Offer Price for such
number of Offer Shares (rounded down to the nearest whole board lot of 100 H Shares) that may
be purchased for an aggregate amount of approximately US$48.49 million or HK$379.70 million,
calculated based on the conversion rate of US$1.00 to HK$7.8305 (the “ Cornerstone Placing ”).
The aggregate amount of the investment contributed by the Cornerstone Investors does not include
brokerage, SFC transaction levy, AFRC transaction levy and Hong Kong Stock Exchange trading
fee which the Cornerstone Investors will pay in respect of the International Offer Shares to be
subscribed by them.
Based on the Offer Price of HK$39.33 per H Share, being the maximum Offer Price, the total
number of Offer Shares to be subscribed by the Cornerstone Investors would be 9,654,300 Offer
Shares, representing approximately (i) 35.76% of the H Shares offered pursuant to the Global
Offering; and (ii) 4.09% of our total issued share capital immediately upon completion of the Global
Offering (without taking into account any A Shares to be issued upon exercise of the share options
granted under the Employee Incentive Schemes).
Our Company is of the view that the Cornerstone Investment will help raise the profile of our
Company and to signify that such investors have confidence in our business and prospect. Further,
we believe that we will benefit from the cornerstone investment, taking into account the business
sectors they primarily focus on. Our Company became acquainted with each of the Cornerstone
Investors in its ordinary course of operation through the Group’s business network or through
introduction by the Company’s business partners or Sponsor-Overall Coordinators.
The Cornerstone Placing will form part of the International Offering, and save as otherwise
obtained consent by the Stock Exchange, the Cornerstone Investors will not subscribe for any Offer
Shares under the Global Offering other than pursuant to the Cornerstone Investment Agreements.
The Offer Shares to be subscribed by the Cornerstone Investors will rank pari passu in all respects
with the fully paid Shares in issue and all the H Shares to be subscribed by the cornerstone investors
will be counted towards the public float for the purpose of Rule 8.08 of the Listing Rules.
Immediately following the completion of the Global Offering, the Cornerstone Investors will not
have any Board representation in our Company; and none of the Cornerstone Investors will become
a Substantial Shareholder of our Company. The Cornerstone Investors do not have any preferential
rights in the Cornerstone Investment Agreements compared with other public Shareholders, other
than a guaranteed allocation of the relevant Offer Shares at the Offer Price.
As confirmed by each of the Cornerstone Investors, there are no side arrangements or
agreements between our Company and the Cornerstone Investors or any benefit, direct or indirect,
conferred on the Cornerstone Investors by virtue of or in relation to the Listing, other than a
guaranteed allocation of the relevant Offer Shares at the final Offer Price, following the principles
as set out in Chapter 4.15 of the Guide for New Listing Applicants.
The Cornerstone Investors have agreed to pay for the relevant Offer Shares that they have
subscribed before dealings in the Company’s H Shares commence on the Stock Exchange. There
will be no deferred settlement of the Offer Shares to be subscribed by the Cornerstone Investors.
Since there is no over-allotment option in the International Offering, there will be no delayed
delivery or deferred settlement of Offer Shares to be subscribed by the Cornerstone Investors.
Among the Cornerstone Investors, Vision Capital and CGII (in connection with Vision Capital
OTC Swaps) (as defined below) and Changsha Y ufeng (as defined below) were existing minority
Shareholders of the Company (“ Existing Minority Shareholders ”), respectively, as of the Latest
CORNERSTONE INVESTORS
– 179 –


--- page 189 ---
Practicable Date. As confirmed by the each Existing Minority Shareholders, each of the Existing
Minority Shareholders holds less than 5% of the issued share capital of the Company as of the date
of this prospectus. The Stock Exchange has granted a waiver from strict compliance with the
requirements under Rule 10.04 and consent under Paragraph 1C(2) of Appendix F1 to the Listing
Rules to permit H Shares in the International Offering to be placed to certain existing minority
Shareholders. For further details, please refer to the section headed “Waivers from Strict
Compliance with Listing Rules and Exemption from Compliance with the Companies (Winding Up
and Miscellaneous Provisions) Ordinance — Allocation of H Shares to Existing Minority
Shareholders and Their Close Associates.” Save as otherwise disclosed, to the best of the
knowledge, information and belief of our Company, each of the Cornerstone Investors (and, for
Cornerstone Investors who will subscribe for our Offer Shares through a QDII, each of such QDIIs)
(i) is independent of the Company, its connected persons and their respective associates; (ii) none
of them is accustomed to take and has not taken instructions from the Company, our Directors, chief
executive, the Controlling Shareholders, substantial Shareholders, existing Shareholders or any of
its subsidiaries or their respective close associates in relation to the acquisition, disposal, voting or
other disposition of the Offer Shares; (iii) none of the subscription of the Offer Shares by the them
is directly or indirectly financed by the Company, our Directors, chief executive, the Controlling
Shareholders, substantial Shareholders, existing Shareholders or any of its subsidiaries or their
respective close associates; and (iv) each Cornerstone Investor will be utilizing its internal financial
resources, financial resources of its shareholders or (in the case of Cornerstone Investors which are
funds or investment managers) the assets managed for its investors as its source of funding for the
subscription of the Offer Shares, and it has sufficient funds to settle its respective investment under
the Cornerstone Placing.
To the best knowledge of the Company and the Sponsor-Overall Coordinators, and based on
the indicative interest of investment of the Cornerstone Investors and/or their close associates as of
the date of this prospectus, certain Cornerstone Investors and/or their close associates may
participate in the International Offering as placees and subscribe for further Offer Shares in the
Global Offering. The Company will seek the Stock Exchange’s consent and/or waiver to allow the
Cornerstone Investors and/or their close associates to participate in the International Offering as
placees pursuant to Chapter 4.15 of the Guide for New Listing Applicants. Whether such
Cornerstone Investors and/or their close associates will place orders in the International Offering
are uncertain and will be subject to the final investment decisions of such investors and the terms
and conditions of the Global Offering.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors will
be disclosed in the allotment results announcement of our Company to be published on or around
May 5, 2026.
Set out below forth the details of the Cornerstone Placing, assuming the Offer Price of
HK$39.33 per H Share, being the maximum Offer Price, without taking into account any A Shares
to be issued upon exercise of the share options granted under the Employee Incentive Schemes:
Cornerstone Investors
Total Investment
Amount (1)(2)
Number of
Offer Shares (3)
Approximate %
of the
Offer Shares
Approximate %
of the issued
share capital
(US$ in million)
Lens Technology (HK) Co.,
Limited (Ҧ(ಥ)ࠢ
ʮ̡)( “ Lens Technology
(HK) ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.00 1,990,900 7.37% 0.84%
Changsha Y ufeng Technology
Co., Ltd. (ࠢ
ʮ̡)( “ Changsha Yufeng ”)/H1118 6.99 1,390,700 5.15% 0.59%
CORNERSTONE INVESTORS
– 180 –


--- page 190 ---
Cornerstone Investors
Total Investment
Amount (1)(2)
Number of
Offer Shares (3)
Approximate %
of the
Offer Shares
Approximate %
of the issued
share capital
(US$ in million)
Vision Capital Management
Co., Ltd. (ڦ(मऎ)ӷ෍ਿ
ʮ̡)( “ Vision
Capital ”) and China Galaxy
International Investment
Company Limited (“ CGII ”)
(in connection with Vision
Capital OTC Swaps) /H1118/H1118/H1118/H1118/H1118/H1118/H11186.51 1,296,000 4.80% 0.55%
Panjing Harbourview
Investment Fund ( ᆵԯಥ౻
ږ“() Panjing
Fund ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.00 995,400 3.69% 0.42%
FR M CONSULTING
CO., LTD (“ FR M
CONSULTING ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.00 597,200 2.21% 0.25%
HongKong HQD Industry
Limited (ಥဏ૶༺ྼุϞ
ʮ̡)( “ HQD Industry ”) /H1118 2.50 497,700 1.84% 0.21%
Da Cheng International Asset
Management Company
Limited ( ɽϓ਷ყ༟ପ၍ଣ
ʮ̡)( “ Da Cheng
International ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.00 398,100 1.47% 0.17%
Sinohealth Technology
Holdings Limited (Ҧ
ʮ̡)( “ Sinohealth
Technology ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.00 398,100 1.47% 0.17%
ODI TRUST LIMITED
(“ODI TRUST ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.00 199,000 0.74% 0.08%
Huang Xuelin (؍)
“(Mr. Huang ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.00 995,400 3.69% 0.42%
Dai Jun’an ( Ꮦඓτ)
(“Mr. Dai ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.50 497,700 1.84% 0.21%
Lu Qinchao ( ௔ා൴)
(“Ms. Lu ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.00 398,100 1.47% 0.17%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848.49 9,654,300 35.76% 4.09%
Notes:
(1) The translations between among each of RMB, U.S. dollars and Hong Kong dollars were made based on the exchange
rate as disclosed in the section headed “Information about this Prospectus and the Global Offering” in this prospectus.
The actual investment amount may vary due to the exchange rate prescribed in the relevant Cornerstone Investment
Agreements.
(2) Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy.
(3) Rounded down to the nearest whole board lot of 100 H Shares. The actual number of Offer Shares allocated to each
Cornerstone Investor may vary due to the actual exchange rates determined pursuant to the terms of the Cornerstone
Investment Agreements.
THE CORNERSTONE INVESTORS
The information about our Cornerstone Investors set forth below has been provided by our
Cornerstone Investors in connection with the Cornerstone Placing.
CORNERSTONE INVESTORS
– 181 –


--- page 191 ---
1. Lens Technology (HK)
Lens Technology (HK) is a company incorporated with limited liability under the laws of
Hong Kong and primarily focuses on trade. As of the Latest Practicable Date, Lens Technology Co.,
Ltd. (ʮ̡) (stock code: 6613.HK and 300433.SZ) was held as to approximately
53.07% by Lens Technology (HK). Lens Technology (HK) was wholly owned by Ms. Chau Kwan
Fei (࠭Each of Lens Technology (HK) and Ms. Chau Kwan Fei is an independent third party.
2. Changsha Yufeng
Changsha Y ufeng is a company with limited liability established in the PRC and an
Independent Third Party. As of the Latest Practicable Date, Changsha Y ufeng is owned as 60%, 20%
and 20% by Changsha Y uhua Economic Development V enture Capital Fund Partnership Enterprise
(Limited Partnership) (ΥྫΆุ(Υྫ)) (“ Changsha Yuhua ”),
Changsha Y uhua Industry Investment Co., Ltd. (ʮ̡) and Changsha
Y uhua Entrepreneurship and Innovation Investment Co., Ltd. (ʮ̡),
respectively. The executive partner of Changsha Y uhua is Hunan Y uhua Jinchuang Guidance Private
Fund Management Co., Ltd. (ʮ̡), a company indirectly
wholly owned by Y uhua Economic Development Zone Management Committee (຾᏶ක೯ਜ၍
ึ)( “ Yuhua Committee ”). As of the Latest Practicable Date, Changsha Y uhua has two
limited partners with an aggregate of 98% partnership interest in Changsha Y uhua which is
indirectly owned by Y uhua District Government of Changsha City (ִ݁and
Y uhua Committee with each owns 49% partnership interest in Changsha Y uhua.
3. Vision Capital and CGII (in connection with Vision Capital OTC Swaps)
CGII and China Galaxy Securities Co., Ltd. (“ CGS”) will enter into a series of cross border
delta-one equity OTC swap transactions (collectively, the “ Vision Capital OTC Swaps ”) with each
other and their ultimate client (the “ CGII Ultimate Client (Vision Capital) ”), pursuant to which
CGII will hold the Offer Shares on a non-discretionary basis to hedge the Vision Capital OTC
Swaps while the economic risks and returns of the underlying Offer Shares are ultimately borne by
Vision Capital, subject to customary fees and commissions. The Vision Capital OTC Swaps will be
fully funded by CGII Ultimate Client (Vision Capital). During the terms of the Vision Capital OTC
Swaps, all economic returns of the Offer Shares subscribed by CGII will be passed to the CGII
Ultimate Client (Vision Capital) and all economic loss shall be borne by CGII Ultimate Client
(Vision Capital) through the Vision Capital OTC Swaps, and CGII will not take part in any
economic return or bear any economic loss in relation to the Offer Shares. The Vision Capital OTC
Swaps are linked to the Offer Shares and CGII Ultimate Client (Vision Capital) may, after
expiration of the lock-up period beginning from the date of the relevant cornerstone agreement
entered into between CGII and the Company and ending on the date which is six months from the
Listing Date, request to early terminate the Vision Capital OTC Swaps at its own discretion, upon
which CGII may dispose of the Offer Shares and settle the Vision Capital OTC Swaps in cash in
accordance with the terms and conditions of the Vision Capital OTC Swaps. To the best of CGII’s
knowledge after having made all reasonable inquiries, each of the CGII Ultimate Client (Vision
Capital) is an independent third party of CGII, and the companies which are members of the same
group of CGII, and save as Mr. Liu Y an (֧no single ultimate beneficial owner holds 30% or
more interests in the CGII Ultimate Client (Vision Capital).
The CGII Ultimate Client (Vision Capital) is a limited liability company established in the
PRC, a fund management company focusing on private equity investments with assets under
management amounted to more than RMB10 billion, according to the public information. The
ultimate beneficial owner of CGII Ultimate Client (Vision Capital) is Mr. Liu Y an (֧who is
an Independent Third Party. No other shareholder holds 30% or more of the equity interests in CGII
Ultimate Client (Vision Capital).
CORNERSTONE INVESTORS
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4. Panjing Fund
Panjing Fund is an exempted company incorporated with limited liability in the Cayman
Islands under the Companies Act of the Cayman Islands. Panjing Fund is managed on a
discretionary basis solely by its Investment Manager, Harbourview Investment Pte. Ltd.
(“Harbourview Investment ”), who holds a Capital Markets Services Licence issued by the
Monetary Authority of Singapore.
Harbourview Investment pursues a long-short investment strategy in managing the assets of
Panjing Fund and focuses on equities which are temporarily under-appreciated by the market but
whose companies display great upside potential. Panjing Fund invests in a diverse portfolio
comprising global listed equity securities and equity-related securities. Panjing Fund’s investments
are not subject to any geographic limitation.
XIAO Jian, an Independent Third Party, is the ultimate beneficial owner of Panjing Fund,
holding 100% of its interest. XIAO Jian and HUANG Jinwei, each an Independent Third Party, are
the ultimate beneficial owners of Harbourview Investment, holding 60% and 40% of its interests,
respectively.
As confirmed by Panjing Fund, no sub-fund is involved in this subscription of Offer Shares
under its Cornerstone Investment Agreement.
5. FR M CONSULTING
FR M CONSULTING is a company incorporated in the British Virgin Islands with limited
liability and is principally engaged in investments in the securities market. Its investment portfolio
includes investments in Hong Kong-listed companies in the healthcare and biotechnology and
mining sectors. Mr. Zhang Guofeng ( ੵ਷ቜ), an Independent Third Party, is the ultimate beneficial
owner of FR M CONSULTING. Mr. Zhang is primarily engaged in investment and corporate
management and has also made personal investments in among others, companies operating in the
healthcare and biotechnology industries.
6. HQD Industry
HQD Industry is a company incorporated in Hong Kong with limited liability and is
principally engaged in the import and export trading of electronic products, electronic components,
digital products and sports wearable devices. Mr. Hou Shoushan (ςʆ), an Independent Third
Party, is the ultimate beneficial owner of HQD Industry and holds 100% of its equity interest.
7. Da Cheng International
Established in Hong Kong on March 19, 2009 with registered capital of HK$200 million, Da
Cheng International, a wholly-owned subsidiary of Dacheng Fund Management Company Limited
(“Dacheng Fund ”), strives to provide comprehensive and integrated asset management and
investment consultancy services for its clients. No single ultimate beneficial owner holds 30% or
more interest in Dacheng Fund. Pursuant to the SFO, Da Cheng International was licensed to carry
out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management)
regulated activities, and it obtained the qualification as an investment manager of the National
Social Security Fund in 2015 to serve as an investment manager of the National Council for Social
Security Fund of the People’s Republic of China (ଣԫึ). Da Cheng
International acts as the investment manager or investment advisor, with discretionary investment
power for Da Cheng China Balanced Fund which is managed or sub-managed by Da Cheng
International. No single ultimate beneficial owner holds 30% or more interests in Da Cheng China
Balanced Fund. Da Cheng International has a mature product line, which consists of public funds
(including investments in China’s securities markets and overseas securities markets), private funds
and portfolios of discretionary accounts. Da Cheng International is one of the eleven Hong Kong
CORNERSTONE INVESTORS
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subsidiaries with QFII/RQFII qualifications issued by CSRC and one of the only four holders of the
National Social Security Fund Overseas Investment Manager qualification. In October 2018, Da
Cheng International became one of the first batch to obtain the Hong Kong Stock Connect Overseas
Investment Consultant Qualification.
8. Sinohealth Technology
Sinohealth Technology is a limited liability company incorporated in the Cayman Islands and
listed on the Stock Exchange (stock code: 2361.HK). The ultimate shareholder is Mr. Wu Y ushu.
The company is an AI technology service company based on health industry data elements and
ecosystem resources. Adhering to an “AI-driven” development strategy that leverages the most
comprehensive industrial big data network, ecosystem platform and leading AI technology, the
group focuses on AI agent applications and data value exploration across all healthcare scenarios.
It helps clients such as pharmaceutical manufacturers, pharmacies, hospitals and health
management institutions to improve operational efficiency and decision-making optimisation, and
is committed to building a whole life-cycle health management system, fulfilling the company’s
mission of “developing smart healthcare industry and promoting smart healthy life”.
9. ODI TRUST
ODI TRUST is company registered in the Hong Kong and regulated by the Hong Kong Trustee
Ordinance with no shareholder with more than 30% equity interest in ODI TRUST. ODI TRUST
subscribes the Offer Shares as a proprietary investment. As a professional institution, it provides
services to clients in the capacity of a trustee. The company also holds a Trust or Company Service
Provider (TCSP) license. ODI TRUST is a global integrated financial group, equipped with
comprehensive financial licenses and cross-border financial service capabilities. ODI TRUST is
dedicated to serving high-net-worth individuals, businesses, and financial institutions in the
Asia-Pacific region, becoming their trusted cross-border financial partner.
10. Mr. Huang
Mr. Huang is the chairman of Shenglan Technology Co., Ltd. (ʮ̡)
(“Shenglan Technology ”), a company listed on the Shenzhen Stock Exchange (stock code:
300843). As of the Latest Practicable Date, Mr. Huang held approximately 45.28% of the total
issued share capital of Shenglan Technology and is the ultimate beneficial owner of Shenglan
Technology. Shenglan Technology is a high-tech enterprise principally engaged in the research and
development, manufacturing and sales of electronic connectors and precision components, as well
as new energy vehicle connectors and related components.
11. Mr. Dai
Mr. Dai is an individual investor and an Independent Third Party. Since 2020, Mr. Dai has
been a director and general manager of Lucky Crest Limited, a company incorporated in Hong Kong
with limited liability. Lucky Crest Limited is a wholly-owned subsidiary of VIVO Group, primarily
engaged in global internet-related business, the trading of mobile phones and components, and
investment holding. Mr. Dai has been a shareholder of certain PRC-based consumer electronic
companies. As of the Latest Practicable Date, Mr. Dai has invested certain listed companies with
more than HK$100 million investment portfolio.
12. Ms. Lu
Ms. Lu is an individual investor and an Independent Third Party. Ms. Lu has over 20 years of
experience in fund investment. Ms. Lu is currently the Founder and Executive Partner of
Guangzhou Redhill Equity Investment Management Co., Ltd. (ʮ̡)
(“Redhill Capital ”), focusing on early-stage equity investments in the medical and healthcare
CORNERSTONE INVESTORS
– 184 –


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industry, Redhill Capital has assets under management of nearly RMB2.0 billion. Its investment
portfolio includes but not limited to, Guangzhou Langmu Life Science Technology Co., Ltd. ( ᄿψ
ʮ̡) and Suzhou Liangyihui Network Technology Co., Ltd. (߅
ʮ̡).
CLOSING CONDITIONS
The obligation of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions:
(i) the Hong Kong Underwriting Agreement and the International Underwriting Agreement
being entered into and having become effective and unconditional (in accordance with
their respective original terms or as subsequently waived or varied by agreement of the
parties thereto) by no later than the time and date as specified in the Hong Kong
Underwriting Agreement and the International Underwriting Agreement, and neither the
Hong Kong Underwriting Agreement nor the International Underwriting Agreement
having been terminated;
(ii) the Offer Price having been agreed upon between our Company and the Sponsor-Overall
Coordinators (for themselves and on behalf of the underwriters of the Global Offering);
(iii) the Listing Committee having granted the approval for the listing of, and permission to
deal in, the H Shares (including the H Shares under the Cornerstone Placing) as well as
other applicable waivers and approvals and such approval, permission or waiver having
not been revoked prior to the commencement of dealings in the H Shares on the Stock
Exchange;
(iv) no laws shall have been enacted or promulgated which prohibits the consummation of
the transactions contemplated in the Global Offering or the respective Cornerstone
Investment Agreement, and there being no orders or injunctions from a court of
competent jurisdiction in effect precluding or prohibiting consummation of such
transactions; and
(v) the respective agreements, representations, warranties, undertakings, confirmations and
acknowledgements of the Cornerstone Investors under the respective Cornerstone
Investment Agreement are (as of the date of the Cornerstone Investment Agreement) and
will be (as of the Closing (as defined in the Cornerstone Investment Agreement))
accurate and true in all respects and not misleading and that there is no breach of the
respective Cornerstone Investment Agreement on the part of the relevant Cornerstone
Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each Cornerstone Investor has agreed that without the prior written consent of our Company,
the Joint Sponsors and the Sponsor-Overall Coordinators, it will not, whether directly or indirectly,
at any time during the period of six months following the Listing Date (the “ Lock-up Period ”),
dispose of, in any way, any of the Offer Shares it has purchased, pursuant to the respective
Cornerstone Investment Agreement, save for certain limited circumstances, such as transfers to any
of its wholly-owned subsidiaries who will be bound by the same obligations of the Cornerstone
Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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You should read the following discussion and analysis in conjunction with our audited
consolidated financial information as at and for the years ended December 31, 2023, 2024
and 2025, included in the Accountants’ Report in Appendix I to this prospectus, together with
the respective accompanying notes. Our consolidated financial information has been prepared
in accordance with IFRSs. You should read the entire Accountants’ Report and not merely rely
on the information contained in this section.
The following discussion and analysis contain forward-looking statements that reflect
our current views with respect to future events and financial performance 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. In evaluating our business, you should carefully consider the information
provided in the section headed “Risk Factors” in this prospectus.
OVERVIEW
We are a provider of home care medical devices in China. According to Frost & Sullivan, in
terms of the 2024 domestic revenue, we ranked second among all home care medical devices
providers in China, with a market share of 2.1%.
As of the Latest Practicable Date, our product portfolio encompassed over 200 product
categories with over ten thousand SKUs.
During the Track Record Period, we have been actively expanding our presence in overseas
markets and attracted a growing base of loyal users worldwide. Our global footprint now spans over
60 countries and regions across Asia, Africa, Europe, and the Americas.
BASIS OF PREPARATION
Our Company was established in the PRC as a limited liability company on November 19,
2009 and was converted into a joint stock company with limited liability on December 26, 2019.
See “History, Development and Corporate Structure — Major Shareholding Changes of our
Company”.
The historical financial information has been prepared in accordance with International
Financial Reporting Standards (“ IFRSs ”), which comprise all standards and interpretations
approved by the International Accounting Standards Board (the “ IASB ”). All IFRSs effective for
the accounting period commencing from January 1, 2025, together with the relevant transitional
provisions, have been early adopted by the Group in the preparation of the Historical Financial
Information throughout the Relevant Periods.
The historical financial information has been prepared under the historical cost convention,
except for financial assets at fair value. These financial statements are presented in Renminbi
(“RMB”) and all values are rounded to the nearest thousand except when otherwise indicated.
FINANCIAL INFORMATION
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SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been and will continue to be affected by a number of factors,
including those set out below:
Market Demand for Our Products Portfolio and Competition
Our business expansion and revenue have been and will continue to be significantly affected
by the trend of growth in the demand for our product portfolio, which is affected by the market
growth of home care medical devices. According to Frost & Sullivan, driven by aging population,
rising health awareness and increasing demand for better healthcare among the growing middle
class, the global home care medical devices market is projected to grow at a CAGR of 6.4% from
2024 to 2030, reaching US$171.7 billion by 2030. According to Frost & Sullivan, from 2019 to
2024, the home care medical devices market in China increased from RMB122.4 billion to
RMB198.2 billion. As the number of individuals with chronic diseases in China continues to rise,
together with growing awareness of health management and increasing disposable income among
residents, the home care medical devices market in China is projected to grow at a CAGR of 7.9%,
reaching RMB313.1 billion by 2030. The rising consumer spending power of home care medical
devices worldwide and in China drove the growth in sales of our products throughout the Track
Record Period. As we ranked the second in China’s home care medical devices industry in terms
of revenue in 2024, we believe that our strong brand value, diversified product portfolio, and
well-documented business growth collectively place us in an excellent position to seize the
opportunities in China’s expanding home care medical devices industry.
According to Frost & Sullivan, from 2019 to 2024, the global home rehabilitation aids
products market grew from US$19.0 billion to US$28.8 billion. The market is projected to grow at
a CAGR of 7.1% from 2024 to 2030, reaching US$43.6 billion by 2030. According to Frost &
Sullivan, China possesses a substantial population requiring rehabilitation services, encompassing
post-surgical recovery from procedures such as fracture repair, and interventions. Between 2019 and
2024, the home rehabilitation aids products market in China grew from RMB27.2 billion to
RMB46.5 billion. As the elderly and disabled population in China continues to grow, along with
rising awareness of health management and increasing disposable income among residents, the
home rehabilitation aids products market in China is projected to grow at a CAGR of 8.2% from
2024 to 2030, reaching RMB74.5 billion by 2030. As we ranked first in China’s home rehabilitation
aids products industry by revenue in 2024, we believe we are well positioned to capture the market
growth.
Sales and Distribution Network
We sell and market our products worldwide in over 60 countries and regions. In 2023, 2024
and 2025, revenue generated from distributors was RMB1,573.2 million, RMB1,317.1 million and
RMB1,402.8 million, respectively, representing 55.1%, 44.2% and 41.4% of the total revenue from
the same years, respectively. Our direct sales include sales through our online self-operated stores,
as well as our offline self-operated stores. In 2023, 2024, and 2025, revenue generated from direct
sales was RMB1,068.3 million, RMB1,420.2 million and RMB1,563.4 million, respectively,
accounting for 37.4%, 47.6% and 46.2% of our total revenue of the corresponding years,
respectively.
In addition, during the Track Record Period, our online direct sales increased steadily which
contributed to the increase in our total revenue. As online direct sales have comparatively higher
gross margin and a broader reach of customer base, the significant increase in the revenue
contribution from online direct sales both in absolute amount and as a percentage of our total
revenue throughout the Track Record Period also resulted in improvements in our overall gross
profit margin. As we continue to invest in online marketing efforts, we expect that our online direct
sales to grow further in the future which, in turn, will contribute to our business growth as well as
improve our results of operations in the long run.
FINANCIAL INFORMATION
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Our Ability to Expand and Diversify Product Portfolio Supported by R&D Capabilities
As of the Latest Practicable Date, we had a portfolio of over 200 product types with over ten
thousand SKUs. Our diversified product portfolio enables us to reach and retain a broad, deeply
penetrated customer base across multiple segments. Leveraging our proprietary R&D technology,
we will continuously design and develop and launch new products, expanding our product portfolio
in the future. See “Business — Development Strategies” and “Future Plans and Use of Proceeds”
for details of our future investments in R&D.
Our technological capabilities are crucial to our business operations. In the past periods, we
have made investments in our R&D activities as we continued to (i) focus on the development of
new product, (ii) update and iterate popular existing products, and (iii) develop and iterate our R&D
technology. In 2023, 2024 and 2025, our R&D expenditure amounted to RMB114.3 million,
RMB106.7 million and RMB98.7 million, respectively, accounting for 4.0%, 3.6% and 2.9% of the
total revenue of the corresponding years, respectively. As of December 31, 2025, we have
established an in-house R&D team of over 350 staff and three research institutes each focusing on
a select area, including medical electronics and rehabilitation medicine, biosensing and innovative
materials, and respiratory support. We attribute our sustained technological edge to the ongoing
R&D investments we have made and will continue to make for the long term. Going forward, we
will continuously focus on products research and development and recruit seasoned talents and
experts to maintain our strong R&D capabilities and market leadership. See “Business —
Development Strategies”.
Our Ability to Control our Costs and Expenses
In 2023, 2024 and 2025, our cost of sales amounted to RMB1,681.1 million, RMB1,474.2
million and RMB1,635.9 million, representing 58.9%, 49.4% and 48.3% of the total revenue from
the same years, respectively. Our ability to manage our cost of sales is a significant factor affecting
our results of operations.
Our cost of sales mainly comprised purchase cost of finished products, direct material costs
and direct labor costs of production employee. During the Track Record Period, fluctuations in our
cost of sales did not have a material impact on our gross profit margin. We price our products based
on market demand and regularly monitor the operating data of our products, and as such,
historically, we are able to quickly adjust our strategies to control cost risks in response to changes
in the market and costs. For example, we have procured automated production equipment to reduce
production costs. Additionally, we implement centralized procurement of certain raw materials to
mitigate the associated costs. Fluctuations in the labor costs or any other component of cost of sales
that we are unable to recoup through timely pricing adjustments will directly affect our profitability.
In addition, the effectiveness of our sales and marketing activities is critical to our financial
performance, and our selling and distribution expenses has affected and is expected to continue to
affect our performance. In 2023, 2024 and 2025, our selling and distribution expenses amounted to
RMB740.7 million, RMB973.3 million and RMB1,158.2 million, representing 26.0%, 32.6% and
34.2% of the total revenue from the same years, respectively. Such increase was largely in line with
our business growth and driven by our increased investment in marketing expenses on online
e-commerce platforms and social media. We strive to manage these expenses, such as marketing
expenses, by, among other things, continuously monitoring the return on investment of online
advertising spend and optimizing the placement strategies to enhance the efficiency of our online
marketing expenses. If we fail to manage our sales and marketing expenses, our profitability may
be materially and adversely affected.
FINANCIAL INFORMATION
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MATERIAL ACCOUNTING POLICIES AND CRITICAL JUDGMENTS AND ESTIMATES
Our material accounting policies, estimates and judgments, which are important for an
understanding of our financial condition and results of operations, are set forth in detail in Note 2.3
to the Accountants’ Report in Appendix I to this prospectus.
DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS OF
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
The following table sets forth selected consolidated statement of profit or loss and other
comprehensive income for the years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 2,982,931 3,387,499
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,681,144) (1,474,227) (1,635,894)
Gross Profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,551 1,508,704 1,751,605
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,101 103,427 90,022
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118(740,704) (973,313) (1,158,175)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130,338) (143,955) (196,129)
Research and development expenses /H1118/H1118/H1118/H1118/H1118(114,330) (96,410) (87,284)
Impairment losses on financial
assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,830) (6,857) (1,368)
Fair value (losses)/gains on financial
assets at fair value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,563) 9,400 49,842
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,546) (7,587) (7,383)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,503) (17,912) (16,066)
Share of (loss)/profit of associates /H1118/H1118/H1118/H1118/H1118(130) (3,498) 779
Profit Before Tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118285,708 371,999 425,843
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(32,837) (59,655) (55,527)
Profit for the Y ear /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252,871 312,344 370,316
Revenue
Our revenue amounted to RMB2,853.7 million, RMB2,982.9 million and RMB3,387.5 million
in the years ended December 31, 2023, 2024 and 2025, respectively.
FINANCIAL INFORMATION
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Breakdown by Segments
During the Track Record Period, we generated revenue primarily from the (i) sales of medical
and wellness products, (ii) OEM/ODM business and (iii) others. The following table sets forth a
breakdown of our revenue by segments, both in absolute amounts and as percentages of our
revenue, for the years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Sales of medical and wellness products
Rehabilitation aids products /H1118/H1118/H1118/H1118/H1118/H1118717,795 25.2 1,039,105 34.8 1,178,153 34.8
Medical care products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118734,303 25.7 778,334 26.1 730,155 21.6
Health monitoring products /H1118/H1118/H1118/H1118/H1118/H1118584,621 20.5 476,649 16.0 555,554 16.4
Respiratory support products /H1118/H1118/H1118/H1118/H1118454,803 15.9 264,182 8.9 261,324 7.7
TCM therapy and other products (1) /H1118/H1118149,998 5.3 178,993 6.0 241,046 7.1
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,641,520 92.6 2,737,263 91.8 2,966,232 87.6
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,152 2.2 104,286 3.5 285,410 8.4
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,023 5.2 141,382 4.7 135,857 4.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 100.0 2,982,931 100.0 3,387,499 100.0
Notes:
(1) Other products include (i) household and personal care products; (ii) mother and infant products; (iii) daily
necessities; and (iv) dietary supplement products.
(2) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
During the Track Record Period, revenue from sales of medical and wellness products
accounted for a substantial majority of our total revenue. We categorize the medical and wellness
products that we sold into (i) rehabilitation aids products, (ii) medical care products, (iii) health
monitoring products, (iv) respiratory support products and (v) TCM therapy and other products.
During the Track Record Period, revenue generated from our OEM/ODM business represents
the sales of products we provided under OEM and/or ODM model, in recognizing our strong
manufacturing capability with stringent quality control measures. Our OEM/ODM business
primarily serves overseas customers, focusing on providing customized products to meet their
specific requirements.
During the Track Record Period, revenue from others are mainly revenue generated
from offering (i) logistics and warehousing services to e-commerce platforms, where we charged
clients generally based on orders of services at a fixed rate; and (ii) online store management
services, where we were engaged by third parties to run online home care medical devices stores
that they established on e-commerce platforms and charged them at a fixed rate of service fees and
float fees based on sales performance.
Breakdown by Distribution Channels
During the Track Record Period, we sold our products through direct sales and sales to
distributors. Our direct sales include (i) sales through our online self-operated stores, and (ii) sales
through our offline self-operated stores. Our sales to distributors include (i) sales to online
distributors, (ii) sales to third-party pharmacy store operators, and (iii) sales to offline distributors.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our revenue by distribution channels, in
absolute amount and as a percentage of our total revenue, for the years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Direct sales
Online direct sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118775,654 27.2 1,068,881 35.8 1,130,522 33.4
Offline direct sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118292,661 10.3 351,288 11.8 432,872 12.8
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,068,315 37.5 1,420,169 47.6 1,563,394 46.2
Sales to distributors
Sales to online distributors /H1118/H1118/H1118/H1118/H1118/H1118/H11181,051,144 36.8 911,804 30.6 1,036,786 30.6
Sales to third-party pharmacy store
operators /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118468,281 16.4 333,554 11.2 304,464 9.0
Sales to offline distributors /H1118/H1118/H1118/H1118/H1118/H1118/H111853,780 1.9 71,736 2.4 61,588 1.8
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,573,206 55.1 1,317,094 44.2 1,402,838 41.4
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,152 2.2 104,286 3.5 285,410 8.4
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,023 5.2 141,382 4.7 135,857 4.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 100.0 2,982,931 100.0 3,387,499 100.0
Note:
(1) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
The revenue contribution through our direct sales demonstrated robust growth throughout the
Track Record Period, which was in particular driven by our sales through online self-operated stores
where individual consumers purchased our products from our self-operated online stores on major
domestic third party e-commerce platforms. For details, see “Business — Our Sales Network —
Online Sales Channel — Online Direct Sales”.
 Our revenue from online direct sales increased by 37.8% from RMB775.7 million in
2023 to RMB1,068.9 million in 2024 accounting for 27.2% and 35.8% of our total
revenue for the same years, respectively. The growth in online direct sales in 2024 was
mainly attributable to our enhanced online marketing efforts. Our online direct sales
increased by 5.8% from RMB1,068.9 million in 2024 to RMB1,130.5 million in 2025,
accounting for 35.8% and 33.4% of our total revenue for the same years, respectively.
Such increase was primarily attributable to our enhanced marketing efforts focusing on
key products that we believe have strong market potential.
 Our offline direct sales increased by 20.0% from RMB292.7 million in 2023 to
RMB351.3 million in 2024, and further increased by 23.2% to RMB432.9 million in
2025, accounting for 10.3%, 11.8%, and 12.8% of our total revenue for the same years,
respectively. The overall stable growth in offline direct sales from 2023 to 2024 was
attributable to the increased revenue generated from the sale of our rehabilitation aids
products through our offline self-operated stores, especially our “JOYOR HearingCare
Stores”, increased steadily, resulting from the significant increase in the number of our
offline self-operated stores. The increase in offline direct sales from 2024 to 2025 was
primarily attributable to (i) increased revenue generated from the sale of our
rehabilitation aids products through our offline self-operated stores, driven by our
optimized product portfolio, which led to an increase in the average daily revenue per
store, and (ii) our acquisition of Humana Medical Limited in 2025, which mainly
generated direct sales from its offline self-owned stores.
FINANCIAL INFORMATION
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Our sales to distributors decreased by 16.3% from RMB1,573.2 million in 2023 to
RMB1,317.1 million in 2024 accounting for 55.1% and 44.2% of our total revenue for the same
years, respectively. Our sales to distributors increased by 6.5% from RMB1,317.1 million in 2024
to RMB1,402.8 million in 2025, accounting for 44.2% and 41.4% of our total revenue for the same
years, respectively.
 Sales to online distributors decreased from RMB1,051.1 million in 2023 to RMB911.8
million in 2024 accounting for 36.8% and 30.6% of our total revenue for the same years,
respectively. Our sales to online distributors increased by 13.7% from RMB911.8
million in 2024 to RMB1,036.8 million in 2025, primarily attributable to increased
revenue from our key products driven by our enhanced marketing efforts.
 Offline sales to third party pharmacy store operators decreased by 28.8% from
RMB468.3 million in 2023 to RMB333.6 million in 2024, and further decreased by 8.7%
to RMB304.5 million in 2025, accounting for 16.4%, 11.2%, 9.0% of our total revenue
for the same years, respectively. Such decrease was primarily due to the decrease in sales
volume to offline third-party pharmacy store operators, resulting from a decrease in
purchases by end customers from these offline pharmacy store operators which
coincided with an increase in purchases through online channels.
Breakdown by Nature
The following table sets forth the components of our revenue by amounts and percentages of
our total revenue broken down by nature for the years presented:
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Medical and Wellness Products
Own-brand products – Self-produced /H1118/H1118/H1118/H1118/H1118/H11181,468,754 51.5 1,750,633 58.7 1,754,890 51.8
Own-brand products – Procured products /H1118/H1118/H1118/H1118632,592 22.2 470,726 15.8 680,428 20.1
Third-party brand products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118540,174 18.9 515,904 17.3 530,914 15.7
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,641,520 92.6 2,737,263 91.8 2,966,232 87.6
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,152 2.2 104,286 3.5 285,410 8.4
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,023 5.2 141,382 4.7 135,857 4.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 100.0 2,982,931 100.0 3,387,499 100.0
Note:
(1) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
Revenue from the sales of our self-produced own-brand products increased from RMB1,468.8
million in 2023 to RMB1,750.6 million in 2024, accounting for 51.5% and 58.7% of our total
revenue, respectively. We launched our ventilator products in 2024, which contributed to the
revenue growth of our self-produced own-brand products in 2024. Revenue from our self-produced
own-brand products increased from RMB1,750.6 million in 2024 to RMB1,754.9 million in 2025,
accounting from 58.7% and 51.8% of our total revenue, respectively, primarily attributable to the
continued growth in sales volume of our own-brand products, particularly ventilator products and
thermometers.
FINANCIAL INFORMATION
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Revenue from the sales of our own-brand products procured from third-party suppliers
decreased from RMB632.6 million in 2023 to RMB470.7 million in 2024, accounting for 22.2% and
15.8% of our total revenue, respectively. Such decrease was primarily due to the discontinuation or
reduction of the procurement of certain products, which exhibited limited profitability, from
third-party suppliers followed by a transition to in-house production of such products. Revenue
from our own-brand products procured from third-party suppliers increased from RMB470.7
million in 2024 to RMB680.4 million in 2025, accounting from 15.8% and 20.1% of our total
revenue, respectively, primarily due to the increased sales of certain rehabilitation aids products and
health monitoring products that we launched in 2024, driven by a surge in market demand.
Revenue from the sales of third-party brand products decreased from RMB540.2 million in
2023 to RMB515.9 million in 2024, accounting for 18.9% and 17.3% of our total revenue for the
same years, respectively. The overall decrease from 2023 to 2024 mainly reflected our strategic
transition towards the development, production and marketing of own-brand products. Revenue
from the sales of third-party brand products increased from RMB515.9 million in 2024 to
RMB530.9 million in 2025, accounting for 17.3% and 15.7% of our total revenue for the same
years, respectively. The increase from 2024 to 2025 was primarily attributable to our acquisition of
Humana Medical Limited in 2025, which primarily sell third-party brand products.
Revenue by Geographic Segments
The following table sets forth our revenue by geographic segments for the years indicated.
Geographical location is solely based on the places of registration of our direct sales customers and
distributors, which may not align with the delivery destinations or end markets of our products for
the years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Chinese Mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,803,825 98.3 2,923,780 98.0 3,088,756 91.2
Other countries/regions
Asia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,217 1.4 38,039 1.3 161,166 4.8
South America /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,157 0.1 8,219 0.3 20,126 0.6
Africa /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,643 0.1 2,847 0.1 8,198 0.2
Europe /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,074 0.1 5,270 0.2 43,188 1.3
North America /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,709 0.1 4,682 0.2 66,013 1.9
Oceania /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869 0.0 93 0.0 52 0.0
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,870 1.7 59,151 2.0 298,743 8.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 100.0 2,982,931 100.0 3,387,499 100.0
During the Track Record Period, the Chinese Mainland was our most important geographic
segment by revenue contribution, though our sales were distributed broadly across many regions
globally, mainly Hong Kong, the United States and the United Kingdom. We are committed to
sustaining and broadening our geographically diversified sales network, which positions us to
capitalize promptly on robust regional demand.
FINANCIAL INFORMATION
– 193 –


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Cost of Sales
The following table sets forth a breakdown of our cost of sales by nature, in absolute amounts
and as a percentage of total cost of sales, for the years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 % RMB’000 % RMB’000 %
Purchase cost of finished products /H1118/H1118/H1118/H1118/H1118/H1118634,234 37.7 493,935 33.5 537,650 32.9
Direct material costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118600,607 35.7 615,240 41.7 724,188 44.3
Logistics expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,990 6.6 91,455 6.2 99,043 6.0
Direct labor costs of production employee /H1118/H111887,546 5.2 74,982 5.1 76,393 4.7
Manufacturing overhead /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,238 3.3 55,581 3.8 61,593 3.8
Miscellaneous costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,484 3.7 38,143 2.6 49,286 3.0
Outsourced manufacturing expenses /H1118/H1118/H1118/H1118/H11187,007 0.4 11,658 0.8 8,332 0.5
Other services expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,039 7.3 93,233 6.3 79,409 4.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,681,144 100.0 1,474,227 100.0 1,635,894 100.0
We purchase raw materials on an as-needed basis at market prices. Generally, each of our main
products require distinct raw materials.
Gross Profit and Gross Profit Margin
Breakdown by Segments
The following table sets forth a breakdown of our gross profit and gross profit margin by types
of goods or services for the years indicated:
Y ear Ended December 31,
2023 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 %
Sales of medical and wellness products
Rehabilitation aids products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118347,458 48.4 645,161 62.1 744,635 63.2
Medical care products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118349,327 47.6 414,040 53.2 384,210 52.6
Health monitoring products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118220,838 37.8 196,927 41.3 277,328 49.9
Respiratory support products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118170,114 37.4 102,372 38.8 119,800 45.8
TCM therapy and other products (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,931 34.0 73,736 41.2 108,028 44.8
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,138,668 43.1 1,432,236 52.3 1,634,001 55.1
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,899 12.3 28,319 27.2 61,157 21.4
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,984 17.6 48,149 34.1 56,447 41.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,551 41.1 1,508,704 50.6 1,751,605 51.7
Note:
(1) Other products include: (i) household and personal care products; (ii) mother and infant products; (iii) daily
necessities; and (iv) dietary supplement products.
(2) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
FINANCIAL INFORMATION
– 194 –


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Breakdown by Distribution Channels
The following table sets forth a breakdown of our gross profit and gross profit margin by
distribution channels for the years indicated:
Y ear Ended December 31,
2023 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 %
Direct sales
Online direct sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118375,320 48.4 668,482 62.5 692,703 61.3
Offline direct sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118179,521 61.3 222,114 63.2 273,910 63.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118554,841 51.9 890,596 62.7 966,613 61.8
Sales to distributors
Sales to online distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118409,969 39 394,692 43.3 539,307 52.0
Sales to third-party pharmacy store operators /H1118/H1118/H1118165,943 35.4 132,573 39.8 113,982 37.4
Sales to offline distributors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,915 14.7 14,375 20.0 14,099 22.9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,827 37.1 541,640 41.1 667,388 47.6
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,899 12.3 28,319 27.2 61,157 21.4
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,984 17.6 48,149 34.1 56,447 41.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,551 41.1 1,508,704 50.6 1,751,605 51.7
Note:
(1) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
Breakdown by Nature
Y ear Ended December 31,
2023 2024 2025
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
RMB’000 % RMB’000 % RMB’000 %
Medical and Wellness Products
Own-brand products – Self-produced /H1118/H1118/H1118/H1118/H1118/H1118/H1118671,867 45.7 982,849 56.1 1,017,487 58.0
Own-brand products – Procured products /H1118/H1118/H1118/H1118228,529 36.1 182,182 38.7 325,051 47.8
Third-party brand products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118238,272 44.1 267,205 51.8 291,463 54.9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,138,668 43.1 1,432,236 52.3 1,634,001 55.1
OEM/ODM business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,899 12.3 28,319 27.2 61,157 21.4
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,984 17.6 48,149 34.1 56,447 41.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,551 41.1 1,508,704 50.6 1,751,605 51.7
Note:
(1) During the Track Record Period, we also derived revenue from offering logistics services and online store
management services to clients.
FINANCIAL INFORMATION
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Other Income and Gains
The following table sets forth a breakdown of our other income and gains for the years
indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Other income
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,027 14,754 30,129
Bank interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,305 42,368 26,429
V alue-added tax (“ VAT”)
additional deduction /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,290 7,679 5,632
V A T refund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,189 6,612 11,512
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,551 9,768 6,764
Total other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,362 81,181 80,466
Gains, net
Foreign exchange gains/(losses),
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158 523 (4,141)
Gain on disposal of subsidiaries /H1118/H1118 4,424 – 9,344
Gain on disposal of financial
assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,565 15,843 5,722
Gain/(loss) on disposal of
property, plant and equipment
and intangible assets, net /H1118/H1118/H1118/H1118/H1118 1 5,086 (1,947)
Gain on termination of leases,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,591 794 578
Total gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,739 22,246 9,556
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,101 103,427 90,022
Selling and Distribution Expenses
The following table sets forth a breakdown of our selling and distribution expenses for the
years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Employee payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118258,295 327,382 350,918
Marketing and promotion
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118312,619 435,679 572,453
Amortization and depreciation /H1118/H1118/H1118 61,203 81,682 86,495
Logistic, warehousing and
packaging expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,651 46,458 50,056
Office and utilities expenses /H1118/H1118/H1118/H111831,157 37,098 33,211
Travel and business development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,488 17,527 16,493
Share-based payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7,196 11,038
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,291 20,291 37,511
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118740,704 973,313 1,158,175
FINANCIAL INFORMATION
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Administrative Expenses
The following table sets forth a breakdown of our administrative expenses for the years
indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Employee payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,989 51,797 79,485
Amortization and depreciation /H1118/H1118/H1118 30,997 34,293 40,533
Taxes and other charges /H1118/H1118/H1118/H1118/H1118/H1118/H111817,518 20,039 19,820
Share-based payment (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,807) 4,026 15,303
Office and utilities expenses /H1118/H1118/H1118/H111811,967 9,442 11,095
Professional service fees /H1118/H1118/H1118/H1118/H1118/H1118/H11184,502 5,166 7,616
Bank charges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,899 2,523 3,234
Travel and business development /H1118 5,465 9,190 11,888
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,808 7,479 7,155
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,338 143,955 196,129
Note:
(1) We recorded share-based payment of negative RMB1.8 million in 2023, primarily due to not meeting the
exercise conditions, which led to a reversal of previously recognized share-based payment expenses.
Research and Development Costs
The following table sets forth a breakdown of our research and development costs for the
years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Employee payment /H1118/H1118/H1118/H1118/H111863,558 58,985 57,992
R&D materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,899 16,050 13,300
Technology service fees /H1118 8,384 4,841 1,936
Share-based payment /H1118/H1118/H1118/H1118 – 4,356 4,837
Patent and IP service
fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,984 1,631 1,268
Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,174 5,896 4,187
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,331 4,651 3,764
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118114,330 96,410 87,284
FINANCIAL INFORMATION
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During the Track Record Period, we primarily incurred our R&D expenses internally, while
we also collaborated with universities and external research and development institutions, which
provided R&D services to us. For details of such R&D collaborations, please see “Business —
Research and Development”. The following table sets forth a breakdown of our research and
development costs by source for the years indicated.
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Internally incurred R&D
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118111,767 92,245 86,209
R&D expenses paid to external
service providers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,563 4,165 1,075
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118114,330 96,410 87,284
Our internally incurred R&D expenses decreased from RMB111.8 million in 2023 to
RMB92.2 million in 2024 and further to RMB86.2 million in 2025, primarily due to (i) the
capitalization of certain R&D expenses since 2024. The amounts capitalized were nil, RMB10.2
million and RMB11.4 million in 2023, 2024 and 2025, respectively; and (ii) the termination of
certain R&D projects that we considered to have reduced market potential or unsatisfactory
development progress. In particular, we terminated the development of continuous glucose
monitoring products by end of 2023, for which the related R&D expenses amounted to RMB16.2
million in 2023, primarily because the development of the project had exceeded our expected
timeline for completion and the projected market demand for such product candidate was less
favorable than that of other ongoing R&D projects. We terminated the development of ultrasound
therapy devices and other R&D projects by the end of 2024, for which the related R&D expenses
amounted to RMB3.1 million. We also terminated the development of certain generic testing and
diagnostic kits by the end of 2025, for which the related R&D expenses amounted to RMB0.4
million.
Our Directors are of the view that such decrease in our research and development expenses
during the Track Record Period was consistent with our R&D strategy and capabilities, and
primarily reflected our continued optimization of R&D resource allocation and increased focus on
products with comparatively higher market potential. For instance, as of the Latest Practicable Date,
we have continued to advance our “AI + healthcare” strategy, including the launch of our first
AI-enabled smart ventilator and the establishment of an AI research institute, while maintaining our
focus on enhancing key technology areas such as medical electronics and rehabilitation medicine,
biosensing and innovative materials, and respiratory support.
Fair Value Gains/(Losses) on Financial Assets at Fair Value through Profit or Loss
We recognize the fair value changes on the following types of investments in profits or losses:
(i) unlisted equity investments measured at fair value through profit or loss (“FVTPL”) over which
we had no significant influence, and (ii) low-risk wealth management products issued by banks
whose returns are not guaranteed. We recognized fair value losses on financial assets at FVTPL of
RMB1.6 million in 2023 and fair value gains on financial assets at FVTPL of RMB9.4 million in
2024. We recognized fair value gains on financial assets at FVTPL of RMB49.8 million in 2025.
During the Track Record Period, as part of our investment and treasury policy, we invested in
certain wealth management products issued by licensed banks in PRC. The wealth management
products we purchased during the Track Record Period are all structure deposits and time deposit,
which had a tenure that ranges from six to 12 months.
FINANCIAL INFORMATION
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--- page 208 ---
Impairment Losses on Financial Assets, Net
We recognized impairment loss on financial assets measured at amortized cost arising from
increases in the lifetime expected credit loss allowances calculated for trade receivables and other
receivables. In 2023, 2024 and 2025 , we recognized impairment loss on financial assets, net of
RMB1.8 million, RMB6.9 million and RMB1.4 million, respectively.
Other Expenses
Our other expenses primarily consisted impairment losses on disposal of property and
equipment, impairment losses on goodwill, donations, expenses incurred in connection with
litigation and arbitration and other miscellaneous expenses. In 2023, 2024 and 2025, our other
expenses amounted to RMB9.5 million, RMB7.6 million and RMB7.4 million, respectively.
Finance Costs
The following table sets forth a breakdown of our finance costs for the years indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Interest on interest-bearing bank
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,684 12,786 11,071
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H11184,819 5,126 4,995
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,503 17,912 16,066
The increase in our finance costs from 2023 to 2024 were mainly attributable to the increase
in the aggregate principal amount of interest-bearing borrowings outstanding during the respective
years.
Share of Profits and Losses of Associates
In 2023, 2024 and 2025 we recorded share of losses of associates of RMB0.1 million, RMB3.5
million, and share of profit of associates of RMB0.8 million in relation to the losses and profits of
our investment in associates accounted for using the equity method.
Income Tax Expense
We are subject to income tax on an entity basis on profits arising in or derived from the
jurisdictions in which members of our Group are domiciled and operate.
Under the Enterprise Income Tax Law of the PRC (the “ EIT Law ”) ( ʕശɛ͏΍ձ਷Άุ
) and its implementation regulation, the standard EIT rate of the PRC subsidiaries is
25%. Our Company and almost all of our subsidiaries were established in China and are primarily
subject to the EIT at a rate of 25% on our taxable income. The Company and certain of our
subsidiaries had been subject to a preferential tax rate of 15% given their accreditations as “High
and New Technology Enterprise” during the Track Record Period. Certain of our subsidiaries were
qualified as small-scaled minimal profit enterprises and had been subject to a preferential tax rate
of 20% during the Relevant Periods. For more information, please refer to Note 10 of the
Accountant’s Report as Appendix I to this document.
FINANCIAL INFORMATION
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--- page 209 ---
REVIEW OF HISTORICAL RESULTS OF OPERATIONS
Y ear Ended December 31, 2025 Compared to Y ear Ended December 31, 2024
Revenue
Our revenue increased by RMB404.6 million, or 13.6%, from RMB2,982.9 million in the year
ended December 31, 2024, to RMB3,387.5 million in the year ended December 31, 2025. Such
increase was mainly due to (i) the growth in revenue from our self-owned brand products,
particularly ventilator and thermometers, and (ii) the acquisitions of Shanghai Huazhou and
Humana Medical Limited, which contributed to our revenue growth during the year.
 Rehabilitation aids products: Our revenue generated from the sales of rehabilitation
aids products increased by RMB139.0 million, or 13.4%, from RMB1,039.1 million in
2024, to RMB1,178.2 million in 2025, primarily due to (i) the growth in sales volume
of our signature products, such as orthopedic/posture correction products and hearing
aids; and (ii) increased sales volume driven by our optimized marketing strategies and
increasing market demand.
 Medical care products: Our revenue generated from the sales of medical care products
decreased by RMB48.2 million, or 6.2%, from RMB778.3 million in 2024, to RMB730.2
million in 2025, primarily as we optimized our product mix and strategic focus on
higher-value products that are still at an early stage of market penetration, such as foam
dressings and hydrocolloid dressings.
 Health monitoring products: Our revenue generated from the sales of health monitoring
products increased by RMB78.9 million, or 16.6%, from RMB476.6 million in 2024, to
RMB555.6 million in 2025, primarily due to the increased sales volume of our new
products launched in 2024, such as home testing strips and thermometer, which have
gained significant popularity in the market and boomed relevant sales in 2025.
 Respiratory support products: Our revenue generated from the sales of respiratory
support products decreased by RMB2.9 million, or 1.1%, from RMB264.2 million in
2024, to RMB261.3 million in 2025. Such decrease was primarily attributable to the
decrease in sales volume of ventilator, as we terminated the distribution of third-party
band ventilator products in July 2024, in line with our strategy of steadily promoting our
own-brand products. Concurrently, we launched our own-brand self-produced ventilator
in 2024, which were in the market development stage and have achieved a comparatively
higher sales volume in 2025 as compared to 2024.
 TCM therapy and other products: Our revenue generated from the sales of TCM therapy
and other products increased by RMB62.1 million, or 34.7%, from RMB179.0 million
in 2024, to RMB241.0 million in 2025, primarily due to the increased sales volume of
our TCM physiotherapy devices, resulting from the increased market demand.
 OEM/ODM business: Our revenue generated from the sales of products under
OEM/ODM business increased by RMB181.1 million, or 173.7%, from RMB104.3
million in 2024, to RMB285.4 million in 2025, primarily reflecting the increased
demand of our products under OEM/ODM business in recognizing our strong
manufacturing capability with stringent quality control measures, and our acquisition of
Shanghai Huazhou in January 2025, which further strengthened our capabilities in
operating OEM/ODM business. Our revenue generated from Shanghai Huazhou under
the OEM/ODM business amounted to RMB154.9 million, representing approximately
4.6% of the our total revenue in 2025.
 Others: Our revenue generated from other services decreased by RMB5.5 million, or
3.9%, from RMB141.4 million in 2024 to RMB135.9 million in 2025.
FINANCIAL INFORMATION
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--- page 210 ---
Cost of Sales
Our cost of sales increased by RMB161.7 million, or 11.0%, from RMB1,474.2 million in
2024, to RMB1,635.9 million in 2025, which was primarily due to an increase in direct material
costs of RMB108.9 million, an increase in purchase cost of finished products of RMB43.7 million,
and an increase in miscellaneous costs of RMB11.1 million. Such increases were generally in line
with the growth of our revenue in 2025 as compared to 2024.
Gross Profit and Gross Profit Margin
As a result of the changes in our revenue and cost of sales described above, our gross profit
increased by RMB242.9 million, or 16.1%, from RMB1,508.7 million in the year ended December
31, 2024 to RMB1,751.6 million in the year ended December 31, 2025. Our gross profit margin
improved from 50.6% in 2024 to 51.7% in 2025.
 Rehabilitation aids products: The gross profit of our rehabilitation aids products
increased by RMB99.5 million, or approximately 15.4%, from RMB645.2 million for the
year ended December 31, 2024 to RMB744.6 million for the year ended December 31,
2025, primarily in line with the increase in revenue generated from rehabilitation aids
products. The gross profit margin of our rehabilitation aids products increased from
62.1% in 2024 to 63.2% in 2025, primarily due to the increased sales of products with
comparatively higher gross margins, such as hearing aid products, as we optimized our
product portfolio.
 Medical care products: The gross profit of our medical care products decreased by
RMB29.8 million, or approximately 7.2%, from RMB414.0 million in 2024 to
RMB384.2 million in 2025, primarily in line with the decrease in revenue generated
from our medical care products. The corresponding gross profit margin remained
relatively stable at 53.2% in 2024 and 52.6% in 2025, respectively.
 Health monitoring products: The gross profit of our health monitoring products
increased by RMB80.4 million, or approximately 40.8%, from RMB196.9 million in
2024 to RMB277.3 million in 2025. The corresponding gross profit margin increased
from 41.3% in 2024 to 49.9% in 2025, primarily due to (i) the contribution of our newly
launched products, such as blood glucose and uric acid dual-testing products and
pre-heated ear thermometer, which have comparatively higher gross profit margin, and
(ii) the increased sales of products with comparatively higher gross margins, such as
home testing strips, as we optimized our product portfolio.
 Respiratory support products: The gross profit of our respiratory support products
increased by RMB17.4 million, or approximately 17.0%, from RMB102.4 million in
2024 to RMB119.8 million in 2025. The corresponding gross profit margin increased
from 38.8% in 2024 to 45.8% in 2025. Such improvement was primarily due to our
strategic discontinuation of the distribution of third party-brand ventilator in line with
our strategy of steadily promoting our own-brand products, and the subsequent launch
of our own-brand self-produced ventilator products in July 2024, which boasted a higher
gross profit margin compared to the procured products in 2025.
 TCM therapy and other products: The gross profit of our medicine therapy and other
products increased by RMB34.3 million, or approximately 46.5%, from RMB73.7
million in 2024 to RMB 108.0 million in 2025, primarily due to the increased sales of
iterative products with comparatively higher gross margins, such as TCM physiotherapy
devices and moxibustion therapy. Such evolution in product mix also resulted in an
corresponding increase in the gross profit margins from 41.2% in 2024 to 44.8% in 2025.
FINANCIAL INFORMATION
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--- page 211 ---
 OEM/ODM business: The gross profit of sales of products under OEM/ODM business
increased by RMB32.8 million, or approximately 116.0%, from RMB28.3 million in
2024 to RMB61.2 million in 2025. The corresponding gross profit margin decreased
from 27.2% in 2024 to 21.4% in 2025, primarily due to changes in our product mix
following the acquisition of Shanghai Huazhou, whose products are mainly customized
dressing products such as tapes, adhesive bandages and foam dressings, which generally
carry relatively lower gross profit margins.
 Others: The gross profit of other services increased by 17.2%. The corresponding gross
profit margin increased from 34.1% in 2024 to 41.5% in 2025, primarily due to the
improved gross profit margin of our warehousing services as a result of warehouse
consolidation, improved operating efficiency, cost optimization and a more favorable
customer mix in 2025.
Other Income and Gains
Our other income and gains decreased by RMB13.4 million, or 13%, from RMB103.4 million
for the year ended December 31, 2024 to RMB90.0 million for the year ended December 31, 2025,
primarily due to (i) a decrease in bank interest income of RMB15.9 million, (ii) a decrease in gains
on disposal of financial assets at fair value through profit or loss of RMB10.1 million and (iii) an
increase in foreign exchange losses of RMB4.7 million recorded in 2025, which were partially
offset by (i) an increase in government grants of RMB15.4 million, and (ii) an increase in gains on
disposal of subsidiaries of RMB9.3 million.
Selling and Distribution Expenses
Our selling and distribution expenses increased by RMB184.9 million, or 19.0%, from
RMB973.3 million for the year ended December 31, 2024 to RMB1,158.2 million for the year ended
December 31, 2025, primarily due to (i) an increase in online marketing and promotion expenses
of RMB118.8 million, mainly representing online platform service fees and marketing and
promotion expenses, as we continued to focus on our key product and increased our online
marketing expenses to consolidate and enhance our market share, and (ii) an increase in employee
payments of RMB23.5 million driven by the expansion of our selling and distribution team.
Research and Development Costs
Our research and development costs decreased by RMB9.1 million, or 9.5%, from RMB96.4
million for the year ended December 31, 2024 to RMB87.3 million for the year ended December
31, 2025, mainly due to (i) a decrease in information technology service fees as we reduced
procurement of external information technology services and strengthened our in-house R&D
capabilities; and (ii) a decrease in depreciation and amortization expenses related to R&D, primarily
because depreciation and amortization for certain R&D projects expired in 2025 and we optimized
certain business modules.
Administrative Expenses
Our administrative expenses increased by RMB52.2 million, or 36.2%, from RMB144.0
million for the year ended December 31, 2024 to RMB196.1 million for the year ended December
31, 2025, mainly due to (i) an increase in employee benefits expenses primarily attributable to the
expansion of our administrative personnel, following the acquisitions of Shanghai Huazhou and
Humana Medical Limited, (ii) an increase in share-based payment of 11.3 million in 2025, and (iii)
an increase in amortization and depreciation of RMB 6.2 million.
FINANCIAL INFORMATION
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Fair V alue Gains/(Losses) on Financial Assets at Fair V alue through Profit or Loss (“FVTPL”)
We recognized fair value gains on financial assets at FVTPL of RMB9.4 million in 2024 and
RMB49.8 million in 2025. Such movement was attributable to an increase in fair value through
profit or loss of our equity investments and an increase in our investment amount in wealth
management products.
Impairment Losses on Financial Assets, Net
The impairment losses on financial assets, net decreased by RMB5.5 million, or 80.0%, from
RMB6.9 million for the year ended December 31, 2024 to RMB1.4 million for the year ended
December 31, 2025, primarily due to the decrease in impairment losses recognized for trade
receivables and prepayments as a result of our improved collection of trade receivables.
Other Expenses
Our other expenses, which consist primarily of charitable giving and e-commerce seller
compensation, remain relatively stable at RMB7.6 million and RMB7.4 million as of December 31,
2024 and 2025, respectively.
Finance Costs
Our finance costs decreased by RMB1.8 million, or 10.3%, from RMB17.9 million for the
year ended December 31, 2024 to RMB16.1 million for the year ended December 31, 2025, mainly
due to the decrease in the interest on interest-bearing bank borrowings of RMB1.7 million, driven
by the slight decrease in the aggregate principal amount of bank borrowings.
Share of Profits and Losses of Associates
We had share of losses from associates of RMB3.5 million in 2024 and share of profits from
associates of RMB0.8 million in 2025, in relation to profit and losses from our associates in which
we have investments accounted for using the equity method.
Income Tax Expense
Our income tax expense decreased by RMB4.1 million, or 6.9%, from RMB59.7 million for
the year ended December 31, 2024 to RMB55.5 million for the year ended December 31, 2025.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased by RMB58.0 million, or 18.6%,
from RMB312.3 million in 2024 to RMB370.3 million in 2025.
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Our revenue increased by RMB129.2 million, or 4.5%, from RMB2,853.7 million in 2023 to
RMB2,982.9 million in 2024. Such increase was primarily attributable to the increase in the revenue
generated from the sales of our rehabilitation aids products.
 Rehabilitation aids products: Our revenue generated from the sales of rehabilitation
aids products increased by RMB321.3 million, or approximately 44.8%, from
RMB717.8 million in 2023 to RMB1,039.1 million in 2024, primarily attributable to the
increased sales volume of signature products, orthopedic/posture correction products
and hearing aids. The sales volume of orthopedic/posture correction products through
FINANCIAL INFORMATION
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--- page 213 ---
our online direct sales has increased in 2024, driven by our enhanced marketing efforts
on social media-driven e-commerce platforms, concurrent with the launch of new
orthopedic/posture correction products. The increase in sales volume of hearing aids was
mainly consistent with the expansion of our offline “JOYOR HearingCare” store
network.
 Medical care products: Our revenue generated from the sales of medical care products
increased by RMB44.0 million, or 6.0%, from RMB734.3 million in 2023 to RMB778.3
million in 2024, primarily attributable to the increased sales volume of dressing
products, as our own-brand dressing products continued to gain popularity among
customers.
 Health monitoring products: Our revenue generated from the sales of health monitoring
products decreased by RMB108.0 million, or 18.5%, from RMB584.6 million in 2023 to
RMB476.6 million in 2024, primarily due to the high sales volume of our virus antigen
test strips in the first quarter of 2023, which was driven by the increased demand for
home testing in 2023 due to the pandemic outbreak.
 Respiratory support products: Our revenue generated from the sales of respiratory
support products decreased by RMB190.6 million, or 41.9%, from RMB454.8 million in
2023 to RMB264.2 million in 2024. Such decrease was primarily attributable to (i) the
decline in sales volume of oxygen concentrator, as a decrease in consumer demand for
such devices; and (ii) as we terminated the distribution of third party-brand ventilator
products in July 2024, in line with our strategy of steadily promoting our own-brand
products. Concurrently, we launched our own-produced ventilator in July 2024, which
were in the market development stage and have consequently achieved a lower
comparatively sales volume in 2024.
 TCM therapy and other products: Our revenue generated from the sales of TCM therapy
and other products increased by RMB29.0 million, or 19.3%, from RMB150.0 million
in 2023 to RMB179.0 million in 2024, primarily due to the increased sales volume of our
TCM physiotherapy devices, resulting from our enhanced online marketing efforts.
 OEM/ODM business: Our revenue generated from the sales of products under
OEM/ODM business increased by RMB40.1 million, or approximately 62.5%, from
RMB64.2 million in 2023 to RMB104.3 million in 2024, primarily due to the increased
sales volume of our products under OEM/ODM model, which resulted from our
expansion into additional overseas markets and domestic third party pharmacy operators.
 Others: Our revenue generated from other services decreased by RMB6.6 million, or
4.5%, from RMB148.0 million in 2023 to RMB141.4 million in 2024.
Cost of Sales
Our cost of sales decreased by RMB206.9 million, or 12.3%, from RMB1,681.1 million in
2023 to RMB1,474.2 million in 2024, which was primarily due to (i) a decrease in purchase cost
of finished products of RMB140.3 million, which was largely in line with the decrease in sales
volume of products procured from third party suppliers, (ii) a decrease in other service expenses of
RMB28.8 million, and (iii) a decrease in logistics expenses of RMB19.5 million.
Gross Profit and Gross Profit Margin
As a result of the changes in our revenue and cost of sales described above, our gross profit
increased by RMB336.1 million, or 28.7%, from RMB1,172.6 million in 2023 to RMB1,508.7
million in 2024, and our gross profit margin improved from 41.1% in 2023 to 50.6% in 2024.
FINANCIAL INFORMATION
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 Rehabilitation aids products: The gross profit of our rehabilitation aids products
increased by RMB297.7 million, or approximately 85.7%, from RMB347.5 million in
2023 to RMB645.2 million in 2024, primarily due to (i) the increased sales of our
self-produced products, which yield higher gross margins as compared to procured
products, particularly our orthopedic/posture correction products, driven by our
marketing efforts and the continuous launch of new products, and (ii) the strategic
adjustment of our product mix to bolster sales of high-margin products, such as our
hearing aids products. Such change in product mix also resulted in an increase in the
gross profit margins for medical care products from 48.4% in 2023 to 62.1% in 2024.
 Medical care products: The gross profit of our medical care products increased by
RMB64.7 million, or 18.5%, from RMB349.3 million in 2023 to RMB414.0 million in
2024, which was in line with the increase in the revenue generated from the sales of
medical care products. The corresponding gross profit margin increased from 47.6% in
2023 to 53.2% in 2024, primarily due to the increased sales of own-brand dressing
products that command comparatively higher gross margins as compared to procured
products, such as sodium hyaluronate repair patches and recombinant collagen repair
patches.
 Health monitoring products: The gross profit of our health monitoring products
decreased by RMB23.9 million, or 10.8%, from RMB220.8 million in 2023 to
RMB196.9 million in 2024, generally in line with the decrease in the revenue generated
from our health monitoring products. The corresponding gross profit margin improved
from 37.8% in 2023 to 41.3% in 2024, primarily due to an increase in the sales mix of
higher-margin products, such as thermometers, as we continuously optimized our
product portfolio.
 Respiratory support products: The gross profit of our respiratory support products
decreased by RMB67.7 million, or 39.8%, from RMB170.1 million in 2023 to
RMB102.4 million in 2024, primarily due to our strategic discontinuation of the
distribution of third-party band ventilator in July 2024. We subsequently launched our
own-brand self-produced ventilator products which boasted a higher gross profit margin
compared to the procured products in the six months ended June 30, 2025. therefore, the
gross profit margin of our respiratory support products correspondingly improved from
37.4% in 2023 to 38.8% in 2024.
 TCM therapy and other products: The gross profit of our TCM therapy and other
products increased by RMB22.8 million, or 44.8%, from RMB50.9 million in 2023 to
RMB73.7 million in 2024, primarily due to the increased sales of products with
comparatively higher gross margins, such as TCM physiotherapy devices. Such change
in product mix also resulted in an increase in the gross profit margins for TCM therapy
and other products from 34.0% in 2023 to 41.2% in 2024.
 OEM/ODM business: The gross profit of our products under OEM/ODM business
increased by RMB20.4 million, or approximately 2.6 times, from RMB7.9 million in
2023 to RMB28.3 million in 2024, primarily reflecting the increased demand of our
products under OEM/ODM business in recognizing our strong manufacturing capability
with stringent quality control measures. The corresponding gross profit margin improved
from 12.3% in 2023 to 27.2% in 2024, primarily due to (i) an increase in the revenue
contribution from customized medical care, health monitoring and respiratory support
products, which generated relatively higher gross profit margins, and (ii) an increase in
sales volume of higher-end electric wheelchairs among our rehabilitation aids products.
 Others: The gross profit of other services increased by RMB22.1 million, or 85%, from
RMB26.0 million in 2023 to RMB48.1 million in 2024, while the corresponding gross
profit margin improved from 17.6% in 2023 to 34.1% in 2024. The increase was
primarily attributable to the RMB10.0 million in increased one-off incentives we
received in 2024, resulting from our provision of online store management services.
FINANCIAL INFORMATION
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Other Income and Gains
Our other income and gains decreased by RMB21.7 million, or 17.3%, from RMB125.1
million in 2023 to RMB103.4 million in 2024, mainly due to (i) a decrease in gain on disposal of
financial assets at fair value through profit or loss of RMB27.7 million as the maturity of purchased
wealth management products led to the reclassification of fair value gains on financial assets at
FVTPL, (ii) a decrease in gain on disposal of subsidiaries of RMB4.4 million, due to a one-off gain
recognized in 2023 upon the disposal of a wholly-owned subsidiary of the Group, and (iii) a
decrease in gain on termination of leases, net of RMB3.8 million following the early termination
of leases for certain warehouses in 2023; partially offset by an increase in bank interest income of
RMB8.1 million attributable to the increase in our bank deposit balance.
Selling and Distribution Expenses
Our selling and distribution expenses increased by RMB232.6 million, or 31.4%, from
RMB740.7 million in 2023 to RMB973.3 million in 2024, mainly due to (i) an increase in marketing
and promotion expenses of RMB123.1 million as we enhanced our brand presence on social media
and e-commerce platforms, as well as an increase in platform service fees due to the expansion of
our sales activities on social media platforms which charge higher service fees, and (ii) an increase
in employee payment for sales and marketing personnel of RMB69.1 million driven by the
enlargement of our sales force.
Administrative Expenses
Our administrative expenses increased by RMB13.7 million, or 10.51%, from RMB130.3
million in 2023 to RMB144.0 million in 2024, mainly due to (i) an increase in share-based payment
of RMB5.8 million as we granted equity-settled awards under a new share-based incentive plan in
2024, and (ii) an increase in amortization and depreciation of RMB3.3 million resulting from
additional right-of-use asset amortization arising from the expansion of administrative office space
and additional depreciation of newly purchased office equipment in 2024.
Research and Development Costs
Our research and development costs decreased by RMB17.9 million, or 15.7%, from
RMB114.3 million in 2023 to RMB96.4 million in 2024, mainly due to the capitalization of
RMB10.2 million in research and development expenses.
Fair V alue Gains/(Losses) on Financial Assets at FVTPL
We recognized fair value losses on financial assets at FVTPL of RMB1.6 million in 2023 and
recognized fair value gains on financial assets at FVTPL of RMB9.4 million in 2024. Such
fluctuation was attributable to (i) the recognition of fair value gains in 2024 arising from our equity
investment, measured at FVTPL, resulting from the appreciation in the market price of such equity
investment, and (ii) an increase in investment amount in wealth management products.
Impairment Losses on Financial Assets, Net
The impairment losses on financial assets, net increased by RMB5.1 million, or 283.3%, from
RMB1.8 million in 2023 to RMB6.9 million in 2024. This increase was mainly due to impairment
for trade receivables from certain third party pharmacy stores. The increased in provision coincided
with our strategy of discontinuing direct sales to small-scale third party pharmacy stores and
shifting the related business to local distributors.
FINANCIAL INFORMATION
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Other Expenses
Our other expenses decreased by RMB1.9 million, or 20.0%, from RMB9.5 million in 2023
to RMB7.6 million in 2024. Such movement primarily reflects the expenses arising from litigations
of RMB2.5 million incurred in 2023.
Finance Costs
Our finance costs increased by RMB4.4 million, or 32.6%, from RMB13.5 million in 2023 to
RMB17.9 million in 2024, mainly due to an increase in the interest on interest-bearing bank
borrowings of RMB4.1 million driven by the rise in the aggregate principal amount of
interest-bearing borrowings outstanding during the respective years.
Share of Profits and Losses of Associates
The share of losses of associates increased by RMB3.4 million, or approximately 34.9 times,
from RMB0.1 million in 2023 to RMB3.5 million in 2024, primarily due to the increase in losses
from our associates in which we have investments accounted for using the equity method.
Income Tax Expense
Our income tax expense increased by RMB26.9 million, or 82%, from RMB32.8 million in
2023 to RMB59.7 million in 2024, primarily due to an increase in the profit before tax from 2023
to 2024.
Profit for the Y ear
As a result of the foregoing, our profit for the year increased by RMB59.4 million, or 23.5%,
from RMB252.9 million in 2023 to RMB312.3 million in 2024.
DISCUSSION OF SELECTED ITEMS FROM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The table below sets forth selected information from our consolidated statements of financial
position as of the dates indicated, which have been extracted from our audited consolidated
financial statements included in Appendix I to this prospectus:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
ASSETS
Non-current assets
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,607,743 1,563,690 1,664,984
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,300 27,962
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118372,649 344,955 395,582
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,407 364,342 368,912
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,895 17,557 31,386
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,932
Investment in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,926 61,428 237,336
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,111 89,930 16,013
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,962
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,725 44,975 40,525
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,413,456 2,497,177 2,793,594
FINANCIAL INFORMATION
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--- page 217 ---
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118634,716 659,584 675,499
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486,000 401,839 447,059
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,605 222,218 267,258
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,238 689 2,644
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118851,298 1,357,421 1,016,829
Due from related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,452 5,059 4,334
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,801 99,676 76,042
Cash and bank balance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,625 1,179,004 1,345,657
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,830,735 3,925,490 3,835,322
LIABILITIES
Current liabilities
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391,206 391,391 568,033
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118206,779 206,412 227,536
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,223 29,375 29,073
Due to a related party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,081
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118414,428 662,621 699,830
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,007 54,125 58,313
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,757 17,797 3,900
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,086,400 1,361,721 1,588,766
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,744,335 2,563,769 2,246,556
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,157,791 5,060,946 5,040,150
Non-current liabilities
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H111894,099 125,174 –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,239 61,477 68,037
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,699 15,034 7,750
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,618 55,699 58,592
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210 1,212 –
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,732 – 2,882
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118249,597 258,596 137,261
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,908,194 4,802,350 4,902,889
EQUITY
Equity attributable to owners of the
parent
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,238 209,092 208,897
Treasury shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(166,931) (212,124) (140,471)
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,856,888 4,799,629 4,798,432
4,899,195 4,796,597 4,866,858
Non-controlling interests
/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,999 5,753 36,031
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,908,194 4,802,350 4,902,889
FINANCIAL INFORMATION
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Property, Plant and Equipment
Our property, plant and equipment primarily consisted of (i) buildings, (ii) machinery , (iii)
electronic, office equipment and others, (iv) motor vehicles, (v) general Infrastructure and leasehold
improvements, and (vi) construction in progress.
Our property, plant and equipment decreased from RMB1,607.7 million to RMB1,563.7
million as of December 31, 2024, primarily due to the increase in the depreciation of buildings and
equipment and electronics, which amounted to RMB15.4 million.
Our property, plant and equipment further increased to RMB1,665.0 million as of December
31, 2025, primarily due to the consolidation of the property, plant and equipment of Humana
Medical Limited (“ʮ̡”) (“ Humana Medical Limited ”) and Shanghai
Huazhou Pressure Sensitive Adhesive Products Co., Ltd. (“ʮ̡”)
(“Shanghai Huazhou ”). For details, see “Business — Our Sales Network — Our Acquisition of
Humana Medical Limited” of this prospectus.
Right-of-use Assets
The right-of-use assets mainly related to our leasehold land, office premises and plants.
Leases of buildings generally have lease terms between two to 10 years.
Our right-of-use assets amounted to RMB372.6 million, RMB345.0 million and RMB395.6
million as of December 31, 2023, 2024 and 2025.
Goodwill
Goodwill arising on acquisition of businesses is measured at cost less accumulated
impairment losses. Goodwill represents the future economic benefits arising from other assets
acquired in a business combination that are not individually identified and separately recognized.
As of December 31, 2023, 2024 and 2025, we had goodwill of RMB242.4 million, RMB364.3
million and RMB368.9 million.
We generally determine whether goodwill is impaired at the end of each relevant years. This
requires an estimation of the value in use of the cash-generating units to which the goodwill is
allocated. Our management engaged independent external valuers to assess the recoverable amounts
of the goodwill as at the end of each of the relevant years. The recoverable amount of
cash-generating units has been determined based on a value-in-use calculation using cash flow
projections based on financial budgets covering a five-year period. The cash flows beyond the
five-year period are extrapolated using zero growth rate and the business is assumed that it would
operate perpetually.
Impairment testing of goodwill
Goodwill acquired through business combinations is allocated to the following cash-
generating units for impairment testing:
 Guizhou Cofoe Medical Equipment Co., Ltd. cash-generating unit
 Shandong Cofoe Medical Equipment Co., Ltd. cash-generating unit
 Changsha Jiannuo Medical Device Sales Co., Ltd. cash-generating unit
 Zhuhai Acorn Electronics Technology Co., Ltd. cash-generating unit
 Jerry Medical Instrument (Shanghai) Co., Ltd. cash-generating unit
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 Acorn Trade (SHANGHAI) Co., Ltd. cash-generating unit
 Sichuan Jian’er Hearing Aid Co., Ltd. cash-generating unit
 Sichuan Lixiang Health Technology Co., Ltd. cash-generating unit
 Beijing Haiyinrui Hearing Technology Co., Ltd. cash-generating unit
 Changsha Nuoyake Medical Equipment Sales Co., Ltd. cash-generating unit
 Hunan Zeling Medical Equipment Co., Ltd. cash-generating unit
 Shanghai Tianlaizhiyin Medical Instruments Co., Ltd. cash-generating unit
 Beijing Lingyun Technology Co., Ltd. cash-generating unit
 Inner Mongolia Lingyun Technology Co., Ltd. cash-generating unit
 Shanghai Huazhou Pressure Sensitive Adhesive Products Co., Ltd. cash-generating unit
 Humana Medical Limited cash-generating unit
The carrying amounts of goodwill allocated to each of the cash-generating units are as
follows:
As at December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Guizhou Cofoe Medical Equipment Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,232 1,232 1,232
Shandong Cofoe Medical Equipment Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,551 1,551 1,551
Changsha Jiannuo Medical Device Sales
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882 82 82
Zhuhai Acorn Electronics Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,589 8,589 8,589
Jerry Medical Instrument (Shanghai) Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,989 36,989 36,989
Acorn Trade (SHANGHAI)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118168,293 168,293 168,293
Sichuan Jian’er Hearing Aid Co., Ltd. /H1118/H1118/H111813,008 13,008 13,008
Sichuan Lixiang Health Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118751 751 751
Beijing Haiyinrui Hearing Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,242 10,242 10,242
Changsha Nuoyake Medical Equipment
Sales Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,670 1,670 1,670
Hunan Zeling Medical Equipment Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 64,560 64,560
Shanghai Tianlaizhiyin Medical
Instruments Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 21,135 21,135
Beijing Lingyun Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 24,510 24,510
FINANCIAL INFORMATION
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As at December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Inner Mongolia Lingyun Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,730 11,730
Shanghai Huazhou Pressure Sensitive
Adhesive Products Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,616
Humana Medical Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 954
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,407 364,342 368,912
Management engaged independent external valuers to assess the recoverable amounts of
goodwill as at the end of each year. The recoverable amount of cash-generating units has been
determined based on a value-in-use calculation using cash flow projections based on financial
budgets covering a five-year period. The cash flows beyond the five-year period are extrapolated
using zero growth rate, with the assumption that the business operates perpetually.
The following table sets out the key assumptions adopted by management in the impairment
assessment of major cash-generating units:
As at December 31, 2023
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Instrument
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
(i) (ii) (iii) (iv) (v)
Revenue annual growth
rate — average of the
forecast period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.03% 11.02% 3.00% 3.69% 4.50%
Average gross margin /H1118/H1118/H1118/H111856.83% 16.85% 66.87% 73.40% 68.13%
Pre-tax discount rate /H1118/H1118/H1118/H1118/H111811.92% 10.75% 12.37% 11.29% 9.85%
As at December 31, 2024
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Instrument
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix)
Revenue annual
growth rate –
average of the
forecast period /H1118 10.03% 7.30% 3.00% 6.39% 11.24% 5.25% 5.74% 3.22% 4.09%
Average gross
margin /H1118/H1118/H1118/H111840.99% 19.60% 74.77% 74.47% 63.40% 71.69% 61.48% 71.57% 76.73%
Pre-tax discount
rate /H1118/H1118/H1118/H1118/H1118/H111811.36% 10.87% 13.48% 13.03% 11.56% 11.60% 11.54% 13.43% 12.73%
FINANCIAL INFORMATION
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As at 31 December 2025
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Instrument
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix)
Revenue annual
growth rate —
average of the
forecast period /H1118 5.19% 7.95% 2.25% 7.50% 10.35% 2.75% 4.01% 1.22% 6.52%
Average gross
margin /H1118/H1118/H1118/H111855.95% 21.21% 75.48% 74.01% 47.93% 61.74% 42.35% 76.99% 76.47%
Pre-tax discount
rate /H1118/H1118/H1118/H1118/H1118/H111811.57% 12.13% 13.65% 13.41% 11.50% 11.64% 11.61% 13.86% 13.24%
(i) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Zhuhai Acorn Electronics Technology Co., Ltd. cash-generating unit exceeded its carrying amounts by
RMB8,794,000, RMB1,801,000 and RMB2,678,000 respectively.
(ii) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Jerry Medical Instrument (Shanghai) Co., Ltd. cash-generating unit exceeded its carrying amounts by
RMB2,771,000, RMB3,293,000 and RMB13,132,000 respectively.
(iii) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Acorn Trade (SHANGHAI) Co., Ltd. cash-generating unit exceeded the carrying amounts by
RMB515,360,000, RMB541,701,000 and RMB618,660,000 respectively.
(iv) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Sichuan Jian’er Hearing Aid Co., Ltd. cash-generating unit exceeded the carrying amounts by RMB985,000,
RMB2,716,000 and RMB5,839,000 respectively.
(v) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Beijing Haiyinrui Hearing Technology Co., Ltd. cash-generating unit exceeded the carrying amounts by
RMB604,000, RMB530,000 and RMB1,712,000 respectively.
(vi) As at 31 December 2024 and 2025, based on the value-in-use calculations, the recoverable amount of Hunan
Zeling Medical Equipment Co., Ltd. cash-generating unit exceeded the carrying amounts by RMB3,011,000
and RMB6,109,000 respectively.
(vii) As at 31 December 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Shanghai Tianlaizhiyin Medical Instruments Co., Ltd. cash-generating unit exceeded the carrying amounts by
RMB898,000 and RMB3,725,000 respectively.
(viii) As at 31 December 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of Beijing
Lingyun Technology Co., Ltd. cash-generating unit exceeded the carrying amounts by RMB26,780,000 and
RMB32,007,000 respectively.
(ix) As at 31 December 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of Inner
Mongolia Lingyun Technology Co., Ltd. cash-generating unit exceeded the carrying amounts by
RMB1,345,000 and RMB1,456,000 respectively.
Assumptions were used in the value-in-use calculations of the CGUs for the Relevant Periods.
The key assumptions used in the value in use calculations reflect a combination of internal and
external factors impacting budgeted sales and gross margins and discount rates. The following
describes each key assumption on which management has based its cash flow projections to
undertake impairment testing of goodwill:
Budgeted sales and gross margins — The basis used to determine the value assigned to the
budgeted sales and gross margins is the average results achieved in the year immediately before the
budget year, increased for expected efficiency improvements, and expected market development.
FINANCIAL INFORMATION
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--- page 222 ---
Discount rates — The discount rates used are before tax and reflect specific risks relating to
the relevant units.
The values assigned to the key assumptions on the market development of the cash-generating
units and discount rates are consistent with external information sources.
Sensitivity analysis of goodwill
Management has undertaken a sensitivity analysis on the impairment test of goodwill. The
following table sets forth the hypothetical changes to the budgeted sales, gross margins and discount
rates that would, in isolation, have removed the remaining headroom respectively as at December
31, 2023, 2024 and 2025:
As at December 31, 2023
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Instrument
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Decrease in budgeted sales /H1118 25.54% 0.77% 32.11% 0.35% 2.25%
Decrease in gross margin /H1118/H1118 14.51% 0.13% 21.47% 0.26% 0.71%
Increase in discount rate /H1118/H1118 22.84% 0.22% 41.07% 0.37% 0.43%
As at December 31, 2024
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Instrument
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
Decrease in
budgeted sales /H1118 9.80% 1.20% 16.51% 2.16% 0.90% 1.53% 1.98% 34.29% 1.86%
Decrease in gross
margin /H1118/H1118/H1118/H11184.00% 0.24% 12.34% 1.50% 0.57% 1.09% 1.22% 24.54% 1.43%
Increase in
discount rate /H1118 2.09% 0.35% 34.38% 9.70% 0.33% 0.36% 0.34% 9.44% 7.90%
As at 31 December 2025
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Instrument
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
Decrease in
budgeted sales /H1118 7.90% 4.69% 20.01% 2.96% 4.01% 4.08% 3.47% 19.07% 2.44%
Decrease in gross
margin /H1118/H1118/H1118/H11184.42% 1.02% 15.06% 2.20% 1.85% 2.52% 1.47% 14.68% 1.88%
Increase in
discount rate /H1118 3.19% 1.39% 43.51% 2.44% 1.26% 1.01% 1.50% 15.11% 1.12%
The management has considered and assessed reasonably possible changes for key
assumptions and has not identified any instances that could cause the carrying amount of each CGU
to exceed its respective recoverable amount.
FINANCIAL INFORMATION
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--- page 223 ---
Other Intangible Assets
Our other intangible assets primarily consisted of capitalized R&D costs, software, licenses,
trademarks, copyrights and others. We had other intangible assets of RMB6.9 million, RMB17.6
million and RMB31.4 million as of December 31, 2023, 2024 and 2025. Our other intangible assets
significantly increased from RMB6.9 million as of December 31, 2023 to RMB17.6 million as of
December 31, 2024 reflecting (i) the capitalization of R&D costs amounting to RMB10.2 million,
and (ii) the acquisition of software to support our information technology system upgrading and
business expansion. Our other intangible assets further increased to RMB31.4 million as of
December 31, 2025, primarily due to the capitalization of R&D expenses amounting to RMB11.4
million, and the consolidation of softwares, patents and licences of Shanghai Huazhou and Humana
Medical amounting to RMB6.0 million.
Investment in Associates
Our investment in associates represents our investments accounted for using the equity
method during the Track Record Period. We recorded investment in associates of RMB64.9 million,
RMB61.4 million and RMB237.3 million as of December 31, 2023, 2024 and 2025. For details, see
Note 18 in Appendix I to this prospectus.
Inventories
Our inventories primarily consisted of raw materials, work in progress, semi-finished goods,
finished goods and goods in transit. We generally maintain a sufficient inventory of our principal
raw materials based on market conditions and our order quantity, while we also review our
inventory level on a regular basis to maintain a reasonable level of inventory. We make inventory
impairment provisions in accordance with the lower of cost and net realizable value principle,
primarily with reference to expiry status for inventories with shelf lives and inventory aging for
inventories without shelf lives. As at December 31, 2023, 2024 and 2025, our inventories
represented 16.6%, 16.8% and 17.6% of our current assets, respectively. The following table sets
forth the breakdown of our inventories as of the date indicated:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118202,913 245,555 211,175
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,148 823 6,747
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,184 66,553 70,344
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118435,371 406,258 440,798
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,263 24,205 23,875
721,879 743,394 752,939
Less: allowance for impairment of
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,163 83,810 77,440
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118634,716 659,584 675,499
Our inventories slightly increased by RMB24.9 million, or 3.9%, from RMB634.7 million as
of December 31, 2023 to RMB659.6 million as of December 31, 2024, largely in line with the
further expansion of our business operations. During the same year, our finished goods decreased
by RMB29.1 million, or 6.7%, from RMB435.4 million to RMB406.3 million as we strengthened
store-level inventory management and prioritised the consumption of existing stock to optimize
inventory structure.
FINANCIAL INFORMATION
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--- page 224 ---
Our inventories increased from RMB659.6 million as of December 31, 2024, to RMB675.5
million as of December 31, 2025, primarily attributable to the consolidation of the inventories of
Humana Medical Limited and Shanghai Huazhou. This effect was partially offset by a decrease in
our raw materials resulting from our enhanced management of inventory level.
The following table sets out an aging analysis of our inventories as of the dates indicated:
As of December 31,
2023 2024 2025
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118582,355 558,566 559,261
One to two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,788 105,893 111,941
Two to three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,366 26,130 42,231
Over three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,370 52,805 39,506
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118721,879 743,394 752,939
The following table sets forth a summary of our inventories turnover days for the years
indicated:
Y ear Ended December 31,
2023 2024 2025
Inventories turnover days* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127 161 149
Note:
* Inventories turnover days were calculated based on the arithmetic mean of opening and closing balance of
inventories for the relevant year, divided by our cost of sales for the same year and multiplied by 365 days
for 2023, 2024 and 2025.
Our inventories turnover days were 127 days, 161 days, and 149 days in 2023, 2024 and 2025,
respectively. The increase of our inventories turnover days from 2023 to 2024 was primarily
attributable to (i) larger proportion of direct sales, as direct sales require us to hold inventories until
they are sold to end customers, resulting in relative longer stock turnover days, and (ii) the
increased production and sales of our own-produced products, which changed our product mix and
lengthened the cycle from the receipt of raw materials into inventory to the sale of finished
products. The decrease of our inventories turnover days from 2024 to 2025 was primarily
attributable to the improved production efficiency and enhanced management of inventory level,
which led to faster inventory turnover.
As of February 28, 2026, RMB205.4 million, or 27.3% of our inventories as of December 31,
2025, had been used, consumed or sold. The subsequent utilization rate was primarily attributable
to (i) our strategic stock-up of inventories at the end of 2025 in preparation for the holiday season,
taking into account longer supplier shutdown periods, which resulted in higher inventory levels at
year end, and (ii) a slight decline in sales volume in January 2026 compared to the end of 2025,
following promotional events in prior months.
FINANCIAL INFORMATION
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Trade and Bills Receivables
The following table sets forth the breakdown of our trade receivables as of the dates indicated:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,192
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 260
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,932
Current:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118515,747 420,861 454,615
Bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,938 27,839 40,785
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,685 46,861 48,341
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486,000 401,839 447,059
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486,000 401,839 451,991
Our trading terms with customers are mainly settled in cash or on credit and the credit terms
we offer generally ranges from 30 to 90 days after receipt of V A T invoices. For our online direct
sales and offline direct sales, we generally do not offer any credit period. The credit period granted
for third party pharmacy stores, e-commerce platforms and offline distributors ranges from 30 to 90
days. We seek to maintain strict control over its outstanding receivables to control credit risk.
Overdue balances are reviewed regularly by our management. We do not hold any collateral or other
credit enhancements over our trade receivable balances. Our trade receivables are non-interest-
bearing. Our bills receivable were bank acceptance bills aged within six months.
Our trade and bills receivables decreased from RMB486.0 million as of December 31, 2023
to RMB401.8 million as of December 31, 2024, primarily due to our enhanced management in
relation to outstanding receivables. Our trade and bills receivables increased from RMB401.8
million as of December 31, 2024 to RMB452.0 million as of December 31, 2025, primarily due to
the consolidation of the trade and bills receivables of our subsidiaries following the acquisition of
Humana Medical Limited and Shanghai Huazhou.
The following table sets forth an aging analysis of the trade receivables, based on the invoice
date and net of provisions, as of the dates indicated:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118450,461 342,501 407,399
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,600 55,023 32,158
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,939 4,315 12,434
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486,000 401,839 451,991
FINANCIAL INFORMATION
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The following table sets forth a summary of our trade receivables turnover days for the years
indicated:
Y ear Ended December 31,
2023 2024 2025
Trade receivables turnover days* /H1118/H1118/H1118/H1118/H1118/H1118/H111871 55 46
Note:
* Trade receivables turnover days were calculated based on the average of opening and closing balance of trade
receivables less allowance for impairment for the relevant year, divided by the revenue for the same year and
multiplied by 365 days for 2023, 2024 and 2025.
Our trade receivables turnover days were 71 days, 55 days and 46 days in 2023, 2024 and
2025, respectively, which were in line with our credit policy. The decrease of our trade receivables
turnover days during the Track Record Periods was mainly due to our enhanced efforts in collection
controls and changes in our sales channel mix. In particular, the proportion of revenue generated
from direct sales increased from 37.5% in 2023 to 47.6% in 2024 and 46.2% in 2025, while the
proportion of revenue generated from distributor and retailer channels decreased from 55.1% in
2023 to 44.2% in 2024 and 41.4% in 2025. As direct sales generally did not involve credit terms
and therefore had shorter settlement cycles than sales through distributor and retailer channels, the
increase in the proportion of direct sales contributed to the decrease in our trade receivables
turnover days during the Track Record Period.
We have set up credit control policies and procedures to minimize our credit risk and maintain
control over our outstanding receivables. Our senior management regularly reviews our overdue
balances, and we actively follow up with customers with past due trade receivables. We apply the
simplified approach in IFRS 9 to measures loss allowances for trade receivables at lifetime expected
credit loss, or ECL. We recorded provision for impairment of trade and bills receivables based on
ECL model of RMB41.7 million, RMB46.9 million and RMB48.6 million as of December 31, 2023,
2024 and 2025, respectively. For more details, please see Note 22 to Accountants’ Report set forth
in Appendix I to this document. We believe that we have made sufficient provision for our trade
receivables during the Track Record Period.
As of February 28, 2026, RMB223.7 million, or 44.7% of our trade receivables as of
December 31, 2025, had been settled. Settlements were made on schedule based on the credit terms
granted to our distributors and pharmacy customers, which generally range from 30 to 90 days.
Prepayments, Other Receivables and Other Assets
The following table sets forth the breakdown of our prepayments, deposits and other
receivables as of the dates indicated:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,816 136,538 143,518
Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,058 48,710 62,640
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,980 40,607 47,497
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 17,155
Less: Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,249 3,637 3,552
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,605 222,218 267,258
FINANCIAL INFORMATION
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--- page 227 ---
Our prepayments, deposits, and other receivables decreased by RMB58.4 million, or 20.8%,
from RMB280.6 million as of December 31, 2023 to RMB222.2 million as of December 31, 2024,
primarily due to a decrease in other tax recoverable, arising from the increased amount of deductible
input tax used in 2024. Our prepayments, deposits and other receivables increased from RMB222.2
million as of December 31, 2024 to RMB267.3 million as of December 31, 2025, primarily
attributable to (i) an increase in prepayments for marketing and promotional activities to support the
expansion of our online sales channels, (ii) an increase in receivables from supplier refunds, and
(iii) the recognition of government grants receivable.
As of February 28, 2026, RMB79.3 million, or 29.3% of our prepayments, other receivables
and other assets as of December 31, 2025, had been settled.
Financial Assets at Fair Value Through Profit and Loss (“FVTPL”)
Our financial assets at FVTPL represents our purchase of wealth management products,
mainly representing structured deposits, our investment in unlisted funds and equity investments
over which we had no significant influence.
Our investment policy aims to generate minimum-risk safe returns and limits the investment
of current funds to certain investment-grade financial products that are mostly principal-protected
and highly liquid. Specifically, our investment policies and strategies with respect to financial
products mainly include:(i) we minimize financial risks by matching the maturities of the portfolio
with anticipated operating cash needs, while aiming to generate reasonable investment returns for
the benefits of our shareholders; (ii) we adhere to the principle of prudence in purchasing
investment products; (iii) the proposed investment must not interfere with our business operations
or capital expenditures; and (iv) the financial products are issued by a reputable financial institution
and whether a minimum returns is guaranteed. We make investment decisions related to financial
products on a case-by-case basis after thoroughly considering a number of factors, including the
macro-economic environment, general market conditions, the risk control and credit levels of the
issuing banks, our working capital needs, and the expected profit or potential loss of the investment.
To monitor and control the investment risks associated with our financial product portfolio,
we have adopted a comprehensive set of internal procedures to manage our investment in financial
products. With the authorization of the Board and the supervision by our finance department and
internal audit department, we evaluate and determine the investment plans with respect to financial
products in accordance with our cash management policies and internal approval process. In
addition, our internal audit department is responsible for the daily supervision of the use and
custody of funds for the invested products, and it conducts regular audits and verifications of the
fund usage. Board also have the authority to oversee and inspect the use of funds and may engage
professional organizations for auditing when necessary. Prior to modifying our existing investment
portfolio, the proposal must be approved by our vice president, Mr. Xue Xiaoqiao and CFO, Mr.
Chen Wangpeng. For details of their expertise in this regard, see “Directors and Senior
Management”.
After Listing, our investments in financial products will be subject to compliance with
Chapter 14 of the Listing Rules.
Trade and Bills Payables
Our trade and bills payables primarily represent material costs and expenses payable to our
suppliers. Our trade payables to third parties are non-interest-bearing, and are normally settled on
credit terms of 30 to 90 days after the invoice date. The following table sets forth the details of our
trade and bills payables as of the dates indicated:
Y ear Ended December 31,
2023 2024 2025
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391,206 391,391 568,033
FINANCIAL INFORMATION
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The following table sets forth an aging analysis of the trade payables based on the invoice date
as of the dates indicated:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118378,573 375,074 544,324
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,915 6,027 13,631
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118478 1,710 693
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,240 8,580 9,385
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391,206 391,391 568,033
The following table sets forth a summary of our trade payables turnover days for the years
indicated:
Y ear Ended December 31,
2023 2024 2025
Trade payables turnover days* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885 97 107
Note:
* Trade payables turnover days were calculated based on the average of opening and closing balance of trade
payables for the relevant year, divided by the cost of sales for the same year, and multiplied by 365 days for
2023, 2024 and 2025.
Our trade payables turnover days were 85 days, 97 days and 107 days in 2023, 2024 and 2025,
respectively. The increase of our trade payables turnover days was driven by an increase in
procurement from suppliers, which has resulted in suppliers granting us longer credit terms, coupled
with a reduction in cost of sales resulting from production optimization.
As of February 28, 2026, RMB354.9 million, or 62.5% of our trade payables as of December
31, 2025, had been settled.
Other Payables and Accruals
Our other payables and accruals primarily consisted of payroll and welfare payables, other tax
payables, and other payables. The following table sets forth the breakdown of our other payables
and accruals as of the dates indicated:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Payroll and welfare payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,569 54,814 58,473
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,071 9,598 16,027
Payables relating to purchase of items of
long-term assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,767 76,262 69,210
Repurchase obligation for restricted
A-shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,608 5,704 –
Other payables (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,764 60,034 83,826
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118206,779 206,412 227,536
Note:
(1) Other payables primarily represents accrued expenses and deposits.
FINANCIAL INFORMATION
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--- page 229 ---
Our other payables and accruals remain relatively stable at RMB206.8 million and RMB206.4
million as of December 31, 2023 and 2024, respectively. Our other payables and accruals further
increased to RMB227.5 million as of December 31, 2025, primarily due to the consolidation of
other payables and accruals of our subsidiaries following the acquisition of Humana Medical
Limited and Shanghai Huazhou.
As of February 28, 2026, RMB120.8 million, or 53.1% of our other payables and accruals as
of December 31, 2025, had been settled.
Contract Liabilities
Contract liabilities primarily included advances received to deliver goods. The advances will
be recognized revenue upon delivery of goods.
Our contract liabilities increased from RMB15.2 million as of December 31, 2023 to
RMB29.4 million as of December 31, 2024. Such increase primarily reflects the expansion of our
pre-payment procurement arrangements with certain online e-commerce platform customers,
leading to a corresponding growth in advance receipts recognized as contract liabilities. Our
contract liabilities decreased from RMB29.4 million as of December 31, 2024, to RMB29.1 million
as of December 31, 2025, mainly due to the fulfillment of the relevant contract obligations and the
recognition of revenue.
As of February 28, 2026, RMB22.5 million, or 77.4% of our contract liabilities as of
December 31, 2025, had been recognized as revenue.
Cash and Bank Balances and Restricted Cash
The table below sets forth, as at the dates indicated, a breakdown of our cash and bank
balance, restricted cash and time deposits:
As of December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and Bank Balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,625 1,179,004 1,345,657
Restricted cash (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,801 99,676 76,042
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,569,426 1,278,680 1,421,699
Note:
(1) The restricted cash collateral of RMB74.1 million, RMB82.2 million and RMB63.9 million as at December 31,
2023, 2024 and 2025 at bank serves as a guarantee deposit for bank acceptance.
LIQUIDITY AND CAPITAL RESOURCES
During the Track Record Period and up to the Latest Practicable Date, we funded our cash
requirements principally from cash generated from operating activities, available banking facilities
and net proceeds from the Offering of our A shares. We had cash and bank balances of RMB1,469.6
million, RMB1,179.0 million and RMB1,345.7 million as of December 31, 2023, 2024 and 2025.
With respect to cash management, our objective is to optimize liquidity to gain a better return
for Shareholders in a risk-averse manner. Specifically, we have policies in place to monitor and
manage the settlement of trade receivables. When determining the credit term of a customer or a
distributor, we consider a number of factors, including its cash flow conditions and
creditworthiness. To monitor the settlement of our trade receivables and avoid credit losses, we
conduct annual review of significant customer’s or distributor’s financial performance, which is
primarily based on the amount and aging of the trade receivables due from such customer or
FINANCIAL INFORMATION
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--- page 230 ---
distributor in the respective period. Pursuant to our distribution agreement, when our distributor
fails to make a payment within the credit term, we reserve the right to pursue the distributor for the
corresponding breach of contract liabilities as stipulated in the agreement.
During the Track Record Period and as at the Latest Practicable Date, we did not have any
material default in payment of trade and other payables, bank loans or other financing obligations.
Net Current Assets
The table below sets forth the details of our net current assets as of the dates indicated:
As of December 31,
As of
February 28,
2023 2024 2025 2026
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current assets
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118634,716 659,584 675,499 710,397
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118486,000 401,839 447,059 478,967
Prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,605 222,218 267,258 298,119
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,238 689 2,644 4,304
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118851,298 1,357,421 1,016,829 1,168,410
Due from related parties /H1118/H1118/H1118/H1118/H1118/H1118/H11186,452 5,059 4,334 15,276
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,801 99,676 76,042 62,731
Cash and bank balance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,625 1,179,004 1,345,657 1,017,968
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,830,735 3,925,490 3,835,322 3,756,172
Current liabilities
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118391,206 391,391 568,033 499,755
Other payables and accruals /H1118/H1118/H1118/H1118206,779 206,412 227,536 201,292
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,223 29,375 29,073 30,625
Due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,081 4,506
Interest-bearing bank borrowings /H1118 414,428 662,621 699,830 656,598
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,007 54,125 58,313 52,572
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,757 17,797 3,900 5,312
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11181,086,400 1,361,721 1,588,766 1,450,660
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,744,335 2,563,769 2,246,556 2,305,512
Our net current assets decreased by 6.6% from RMB2,744.3 million as of December 31, 2023
to RMB2,563.8 million as of December 31, 2024, primarily due to an increase in interest-bearing
bank and other borrowings of RMB248.2 million, partially offset by (i) an increase in financial
assets at fair value through profit or loss of RMB506.1 million, (ii) a decrease in cash and bank
balances of RMB290.6 million, and (iii) a decrease in trade and bills receivables of RMB84.2
million.
Our net current assets decreased by RMB317.2 million, or 12.4%, from RMB2,563.8 million
as of December 31, 2024 to RMB2,246.6 million as of December 31, 2025, mainly due to (i) an
increase of RMB176.6 million in trade and bills payables and (ii) disposal of financial assets at fair
value through profit or loss of RMB340.6 million, a substantial portion of proceeds from which was
used for long-term investments, resulting in an increase of RMB175.9 million in investments in
associates, partially offset by an increase of RMB166.7 million in cash and bank balance.
FINANCIAL INFORMATION
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Cash Flow
The following table sets forth a summary of our cash flows information for the years
indicated:
Y ear Ended December 31,
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net cash flows from operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118393,822 663,393 695,726
Net cash flows (used in)/from investing activities /H1118/H1118/H1118/H1118/H1118(45,669) (730,968) (68,960)
Net cash flows used in financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(277,661) (234,240) (468,747)
Net increase/(decrease) in cash and cash equivalents /H1118 70,492 (301,815) 158,019
Cash and cash equivalents at beginning of the year /H1118/H1118/H1118/H11181,370,540 1,441,213 1,139,986
Effect of foreign exchange differences, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181 588 (3,430)
Cash and cash equivalents at end of the year /H1118/H1118/H1118/H1118/H1118/H11181,441,213 1,139,986 1,294,575
Net Cash Flows From Operating Activities
Our net cash from operating activities consists primarily of profit before income tax from our
manufacture and sale of beauty and health products, as adjusted by (i) non-cash and/or
non-operating items, and (ii) movements in working capital.
In 2025, net cash flows from operating activities was RMB695.7 million. Our cash generated
from operations was primarily attributable to our profit before tax of RMB425.8 million, adjusted
by (i) non-cash and non-operating items, which primarily consisted of depreciation of property,
plant and equipment of RMB129.0 million, depreciation of right-of-use assets of RMB72.3 million,
impairment of inventories of RMB32.5 million, and share-based payment expense of RMB31.7
million; and (ii) changes in working capital, which primarily resulted from an increase in trade and
bills payables of RMB176.6 million, a decrease in prepayments, other receivables and other assets
of RMB41.9 million and a decrease in inventories of RMB34.1 million, partially offset by a
decrease in other operating liabilities of RMB76.2 million and an increase in trade and bills
receivables of RMB50.6 million.
In 2024, net cash flows from operating activities was RMB663.4 million. Our cash generated
from operations was primarily attributable to our profit before tax of RMB372.0 million, as adjusted
by (i) non-cash and non-operating items, which primarily consisted of depreciation of property,
plant and equipment of RMB114.4 million and depreciation of right-of-use assets of RMB63.6
million; and (ii) changes in working capital, which primarily resulted from a decrease in trade and
bills receivables of RMB78.9 million and a decrease in prepayments, other receivables and other
assets of RMB74.1 million, partially offset by an increase in inventories of RMB54.5 million.
In 2023, net cash flows from operating activities was RMB393.8 million. Our cash generated
from operations was primarily attributable to our profit before tax of RMB285.7 million, as adjusted
by (i) non-cash and non-operating items, which primarily consisted of depreciation of property,
plant and equipment of RMB99.5 million and depreciation of right-of-use assets of RMB56.6
million; and (ii) changes in working capital, which primarily resulted from a decrease in trade and
bills receivables of RMB131.8 million and a decrease in prepayments, other receivables and other
assets of RMB21.5 million, partially offset by an increase in inventories of RMB156.0 million.
FINANCIAL INFORMATION
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Net Cash Flows (used in)/from Investing Activities
In 2025, net cash used in investing activities was RMB69.0 million, primarily attributable to
(i) purchases of financial assets at fair value through profit and loss of RMB1,870.9 million, (ii)
acquisitions of an associate of RMB175.1 million, and (iii) acquisitions of subsidiaries of
RMB133.1 million, partially offset by proceeds from maturity of financial assets at fair value
through profit and loss of RMB2,263.2 million.
In 2024, net cash flows used in investing activities was RMB731.0 million, primarily
attributable to (i) purchases of financial assets at fair value through profit and loss of RMB1,416.8
million, (ii) purchases of items of property, plant and equipment of RMB112.0 million and (iii)
prepayment for investment in subsidiaries of RMB72.4 million, partially offset by proceeds from
maturity of financial assets through profit and loss of RMB935.9 million.
In 2023, net cash used in investing activities was RMB45.7 million, primarily attributable to
(i) purchases of financial assets at fair value through profit and loss of RMB880.5 million, and (ii)
purchases of items of property, plant and equipment of RMB373.2 million, partially offset by
proceeds from maturity of financial assets through profit and loss of RMB1,314.6 million.
Net Cash Flows Used in Financing Activities
In the year ended December 31, 2025, net cash used in financing activities was RMB468.7
million, primarily attributable to repayment of interest-bearing bank loans of RMB1,249.7 million,
and dividends paid to our shareholders of RMB366.0 million, partially offset by new interest-
bearing bank loans of RMB1,156.4 million.
In 2024, net cash used in financing activities was RMB234.2 million, primarily attributable
to repayment of interest-bearing bank loans of RMB471.0 million and dividends paid to our
shareholders of RMB366.5 million, partially offset by new interest-bearing bank loans of
RMB750.3 million.
In 2023, net cash used in financing activities was RMB277.7 million, primarily attributable
to repayment of interest-bearing bank loans of RMB358.7 million and dividends paid to our
shareholders of RMB245.8 million, partially offset by new interest-bearing bank loans of
RMB543.1 million.
WORKING CAPITAL
Taking into account the financial resources available to us, including our cash and cash
equivalents on hand, operating cash flows, available financing facilities, and the estimated net
proceeds from the Global Offering, our Directors are of the view that we have sufficient working
capital to meet our present requirements and for at least the next 12 months from the date of this
prospectus.
FINANCIAL INFORMATION
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INDEBTEDNESS
Our indebtedness mainly included interest-bearing bank borrowings and lease liabilities
during the Track Record Period. As of February 28, 2026, being the indebtedness date for the
purpose of the indebtedness statement, we had a total indebtedness of RMB772.6 million. The
following table sets forth the breakdown of our indebtedness as of the dates indicated:
As of December 31,
As of
February 28,
2023 2024 2025 2026
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118414,428 662,621 699,830 656,598
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,007 54,125 58,313 52,572
Non-current
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,099 125,174 – –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,239 61,477 68,037 63,416
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118640,773 903,397 826,180 772,586
Interest-Bearing Bank and Other Borrowings
Our interest-bearing bank and other borrowings primarily consisted of bank loans and other
borrowings. The following table sets forth the components of our interest-bearing bank and other
borrowings as of the dates indicated:
As of December 31,
As of
February 28,
2023 2024 2025 2026
RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,052 65,052 59,871 220,059
Bank loans – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Other borrowings – unsecured /H1118/H1118/H1118337,376 483,560 514,877 436,539
Current portion of long-term bank
loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 104,000 125,082 –
Current portion of long-term bank
loans – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,000 10,009 – –
414,428 662,621 699,830 656,598
Non-current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,078 125,174 – –
Bank loans – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,02 1–––
94,099 125,174 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118508,527 787,795 699,830 656,598
FINANCIAL INFORMATION
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As of December 31, 2023, 2024 and 2025, the balance of our interest-bearing bank and other
borrowings were RMB508.5 million, RMB787.8 million and RMB699.8 million. As at February 28,
2026, the latest date for liquidity disclosure, we have unutilized banking facilities of RMB306.2
million.
As of December 31, 2023, 2024 and 2025, the range of the effective interest rate of our bank
loans was 2.60% to 2.90%, 2.50% to 2.70% and 2.08% to 2.15% per annum, respectively. All of our
interest-bearing bank loans and other borrowings are denominated in RMB. For more details, see
Note 33(c) to the Accountants’ Report in Appendix I to this prospectus.
Our Directors confirm that, there was no material covenant on any of our outstanding debt as
of the Latest Practicable Date, and there was no breach of any covenants during the Track Record
Period and up to the Latest Practicable Date. Our Directors further confirm that we did not
experience any difficulty in obtaining bank loans and other borrowings, default in payment of bank
loans and other borrowings or breach of covenants during the Track Record Period and up to the
Latest Practicable Date.
Lease Liabilities
Our lease liabilities are in relation to leasehold land, office premises and plants. As of
December 31, 2023, 2024, 2025 and February 28, 2026, our total lease liabilities (including current
and non-current portions) amounted to RMB132.2 million, RMB115.6 million, RMB126.4 million
and RMB116.0 million, respectively.
Contingent Liabilities
As of December 31, 2023, 2024 and 2025, we did not have any contingent liabilities.
Indebtedness Statement
Except as disclosed in the table above, we did not have any material mortgages, charges,
debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness,
finance lease or hire purchase commitments, liabilities under acceptances (other than normal trade
bills), acceptance credits, which are either guaranteed, unguaranteed, secured or unsecured, or
guarantees or other contingent liabilities as of February 28, 2026. Since February 28, 2026 and up
to the Latest Practicable Date, there had not been any material change to our indebtedness.
CAPITAL EXPENDITURE
During the Track Record Period, our Group incurred capital expenditures of RMB373.2
million, RMB120.5 million and RMB178.1 million in 2023, 2024 and 2025, respectively. Our
capital expenditures comprised cash used in purchase of items of property, plant and equipment and
intangible assets.
CAPITAL COMMITMENTS
As of December 31, 2023, 2024 and 2025, we had capital commitments of RMB51.3 million,
RMB301.0 million and RMB203.7 million, respectively, which were in relation to acquisition of
property, plant and equipment that were contracted but not provided for.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet transactions.
FINANCIAL INFORMATION
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KEY FINANCIAL RATIOS
The table below sets forth our key financial ratios as of the dates indicated:
As of/Y ear Ended December 31,
2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841.1% 50.6% 51.7%
Net profit margin (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.9% 10.5% 10.9%
Return on equity (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.1% 6.4% 7.6%
Current ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.5 2.9 2.4
Gearing ratio (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.4% 25.2% 26.0%
Notes:
(1) Gross profit margin was calculated based on gross profit divided by revenue for the respective year.
(2) Net profit margin was calculated based on net profit after taxes divided by revenue for the respective year.
(3) Return on equity was calculated based on net profit attributable to owners of parent of the respective year,
divided by the arithmetic mean of the opening and closing balances of equity attributable to owners of parent
and multiplied by 100%.
(4) Current ratio was calculated based on the total current assets divided by the total current liabilities as of the
relevant dates.
(5) Gearing ratio was calculated based on total liabilities divided by total assets as of the relevant dates and
multiplied by 100%.
RELATED PARTY TRANSACTIONS
During the Track Record Period, we had entered into certain related party transactions. In
2023, 2024 and 2025, our related party transaction amounted to RMB0.3 million, RMB1.6 million
and RMB4.3 million, respectively. For more details, see Note 43 to the Accountants’ Report in
Appendix I to this prospectus.
Our Directors confirm that, all material related party transactions during the Track Record
Period were conducted on normal commercial terms or such terms that were no less favorable to our
Group than those available to independent third parties and were fair and reasonable and in the
interest of our Shareholders as a whole, and would not distort our results of operations over the
Track Record Period or make our historical results over the Track Record Period not reflective of
our expectations for our future performance.
RISK DISCLOSURES
We are exposed to a variety of financial risks, including foreign currency risk, interest rate
risk, credit risk, and liquidity risk. The directors of the Company manage and monitor these
exposures to ensure appropriate measures are implemented on a timely and effective manner. For
more details, see Note 47 to the Accountants’ Report in Appendix I to this prospectus.
Foreign Currency Risk
We have transactional currency exposures. Such exposures arise from sales or purchases by
operating units in currencies other than the units’ functional currencies. In addition, we have
currency exposures from our cash and cash equivalent. The management of the Company consider
the Group’s exposure to foreign currency risk not significant.
FINANCIAL INFORMATION
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Interest Rate Risk
Our exposure to the risk of changes in market interest rates relates primarily to our debt
obligations with a floating interest rate. Our policy is to manage its interest cost using a mix of fixed
and variable rate debts.
If the interest rate of bank borrowings had increased/decreased by 100 basis points and all
other variables were held constant, our profit after tax, through the impact on floating rate
borrowings, would have increased/decreased by approximately RMB1.2 million, RMB2.9 million
and RMB2.1 million for the years ended December 31, 2023, 2024 and 2025, respectively.
Credit Risk
We trade only with recognized and creditworthy third parties. It is our policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis and our exposure to bad debts is
not significant. For transactions that are not denominated in the functional currency of the relevant
operating unit, we do not offer credit terms without the specific approval. For credit quality and the
maximum exposure to credit risk based on our credit policy, see Note 47 to the Accountants’ Report
in Appendix I to this prospectus.
Liquidity Risk
We monitor and maintain a level of cash and cash equivalents deemed adequate by the
management of the Group to finance the operations and mitigate the effects of fluctuations in cash
flows.
Our objective is to maintain a balance between continuity of funding and flexibility through
the use of bank overdrafts, bank loans, lease liabilities and other interest-bearing loans.
Capital Management
The primary objectives of our Group’s capital management are to safeguard our Group’s
ability to continue as a going concern and to maintain healthy capital ratios in order to support its
business and maximize shareholders’ value.
Our Group manages its capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the
capital structure, our Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. We are not subject to any externally imposed capital requirements.
No changes were made in the objectives, policies or processes for managing capital during the Track
Record Period.
DIVIDENDS AND DIVIDEND POLICY
On May 20, 2022, we paid a final dividend of RMB256.6 million (RMB16.0 per 10 A Shares)
for the year ended December 31, 2021. On May 25, 2023, we paid a final dividend of RMB245.8
million (RMB12.0 per 10 A Shares) for the year ended December 31, 2022. On June 12, 2024, we
paid a final dividend of RMB244.4 million (RMB12.0 per 10 A Shares) for the year ended
December 31, 2023. On October 11, 2024, we paid an interim dividend of RMB122.0 million
(RMB6.0 per 10 A Shares) for six months ended June 30, 2024. On May 30, 2025, we paid a final
dividend of RMB244.1 million (RMB12.0 per 10 A Shares) for the year ended December 31, 2024.
On September 19, 2025, we paid an interim dividend of RMB6 per 10 shares (tax inclusive),
totaling RMB121.9 million for the six months ended June 30, 2025. On March 9, 2026, our board
of directors approved a dividend of RMB12.0 per 10 shares (tax inclusive) for shareholders of our
FINANCIAL INFORMATION
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--- page 237 ---
A share, totaling RMB246.0 million for the year ended December 31, 2025. We plan to submit this
dividend plan to shareholders for approval at the annual general meeting on March 31, 2026.
Currently, we do not intend to adopt a formal dividend policy or a fixed dividend distribution ratio
following the Global Offering.
After completion of the Global Offering, we may distribute dividends in the form of cash or
by other means permitted by our Articles of Association. Any proposed distribution of dividends
shall be formulated by our Board and will be subject to approval of our Shareholders. A decision
to declare or to pay any dividends in the future, and the amount of any dividend, will depend upon
a number of factors, including our earnings and financial condition, operating requirements, capital
requirements, business prospects, statutory, regulatory and contractual restrictions on our
declaration and payment of dividends, and any other factors that our Directors may consider
important.
There is no assurance that dividends of any amount will be declared or be distributed in any
year. Currently, we do not intend to adopt a formal dividend policy or a fixed dividend distribution
ratio following the Global Offering.
PRC laws require that dividends be paid only out of the profit for the year calculated
according to PRC accounting principles, which differ in many aspects from the generally accepted
accounting principles in other jurisdiction, including the IFRSs. According to the applicable PRC
laws and our Articles of Association, we will pay dividends out of our profit after tax only after we
have made the following allocations:
 recovery of the losses incurred in the previous year;
 allocations to the statutory reserve equivalent to 10% of our profit after tax in the event
that the accumulated statutory reserve of the Company has reached more than 50% of the
registered capital of the Company, no allocation is needed;
 allocation to a discretionary common reserve of not less than 10% of our profit after tax
that are approved by a shareholders’ meeting.
LISTING EXPENSE
Listing expenses to be borne by us are estimated to be approximately RMB48.1 million
(HK$54.8 million) (including underwriting commission), at the Offer Price of HK$39.33 per Share
(being the maximum Offer Price), among which (i) underwriting-related expenses, including
underwriting commission and other expenses are approximately RMB15.3 million (HK$17.4
million) and (ii) non-underwriting-related expenses are approximately RMB32.8 million (HK$37.4
million), comprising (a) fees and expenses of legal advisors and accountants of approximately
RMB20.0 million (HK$22.8 million) and (b) other fees and expenses of approximately RMB12.8
million (HK$14.6 million).
We estimate that listing expenses of approximately RMB48.1 million (HK$54.8 million)
(including underwriting commissions of approximately RMB15.3 million (HK$17.4 million), based
on the Offer Price of HK$39.33 per Offer Share) (being the maximum Offer Price) will be incurred
by our Company, approximately RMB2.6 million (HK$2.9 million) of which is expected to be
charged to our statements of profit or loss, and approximately RMB45.5 million (HK$51.9 million)
of which is expected to be deducted from equity as expenses directly attributable to the issue of
Shares. Our listing expenses as a percentage of gross proceeds is 5.2%, assuming an Offer Price of
HK$39.33 per Share (being the maximum Offer Price). The listing expenses above are the latest
practicable estimate for reference only, and the actual amount may differ from this estimate.
FINANCIAL INFORMATION
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UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
For information of our unaudited pro forma statement of adjusted consolidated net tangible
assets, please see Appendix II to this prospectus.
RECENT DEVELOPMENT
Please refer to the paragraph headed “Summary — Recent Development and No Material
Adverse Change” in this prospectus and “Events After the Relevant Periods” in Note 48 to the
Accountants’ Report in Appendix I to this prospectus.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that, up to the date of this prospectus, other than as disclosed above and
under “Recent Development and No Material Adverse Change” in the “Summary” section in this
prospectus, there had been no material adverse change in our financial, operational or prospects
since December 31, 2025, being the latest balance sheet date of our combined financial statements
in the Accountants’ in Appendix I to this prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, there was no circumstance that would give rise to a disclosure
requirement under Rules 13.13 to 13.19 of the Listing Rules.
FINANCIAL INFORMATION
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FUTURE PLANS AND PROSPECTS
See “Business — Development Strategies” in this prospectus for a detailed description of our
future plans.
USE OF PROCEEDS
We estimate the net proceeds of the Global Offering which we will receive, assuming an Offer
Price of HK$39.33 per H Share (being the maximum Offer Price stated in the prospectus), will be
approximately HK$1,007.2 million, after deduction of underwriting fees and commissions and
estimated expenses payable by us in connection with the Global Offering.
In accordance with our strategy, we plan to use the proceeds for the following intended
purposes in the amounts set forth below:
 30.0%, or approximately HK$302.1 million, will be used for global expansion,
including:
o 20.0% or approximately HK$201.4 million will be used to promote overseas sales
channels and distribution network establishment. For B2B channels, we plan to (i)
establish local sales and marketing team to better serve overseas market.
Specifically, we plan to recruit 50 to 80 personnel with experience in medical
device foreign trade and marketing and channel resources in local markets; and (ii)
build awareness of our brands through local social media and exhibitions. For B2C
channels, we will focus on overseas e-commerce platforms, expanding into the
markets of European countries including the United Kingdom and Italy; North
American countries including the United States and Mexico; and Southeast Asian
countries including India, Thailand, and the Philippines. We plan to gradually
promote and sell our health monitor products (e.g. blood pressure monitors,
glucose meters, thermometers, etc.), respiratory support products (e.g. ventilators,
nebulizers, etc.), medical care products (e.g., dressings and patches) and
rehabilitation aids products (e.g. wheelchairs, posture correctors, etc.) across each
overseas market, achieving precise market penetration through a diversified
products offerings.
To implement this strategy, in terms of offline channels, we plan to actively
establish strategic partnerships with overseas pharmacy chains, supermarkets, and
professional medical device distributors in local markets, leveraging their
established distribution channels to penetrate consumer markets. In terms of online
channels, we plan to focus on store operations via Amazon and TikTok platforms
while building branded independent websites in European and North American
markets, and prioritize deployment on popular local ecommerce platforms such as
Lazada and Shopee in Southeast Asian markets. Additionally, to ensure smooth
development of overseas channels, we also plan to (i) complete product
certifications of products, including CE, FDA, and other essential certifications for
target markets; (ii) establish offices or branches in selected overseas markets,
building up localized teams for warehousing, logistics, after-sales service, and
market promotion; and (iii) expand brand awareness through participation in
international exhibitions and collaborations with overseas medical professionals.
Certain products exported by us overseas might be subjected to limited tariff,
however we believe that the tariffs imposed on our products will not have a
material adverse effect on our global expansion. In terms of the U.S. tariffs, the
downstream customers who import our products to the U.S. are responsible to pay
any tariffs imposed by the U.S. government. We have also established long-term
and stable relationships with major local clients, with both parties agreeing to
negotiate cost adjustments arising from tariff fluctuations. In terms of the EU,
given our focus on retail channels and individual consumer segments, rather than
FUTURE PLANS AND USE OF PROCEEDS
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direct participation in large-scale public procurement projects within the EU, we
anticipate that both the EU’s recent and projected future restrictive measures on
Chinese medical device imports will have limited impact on our operations. Given
our limited exposure to tariffs and export control policies concerning our products,
and the consensus with customers to adjust pricing based on tariff fluctuations, we
anticipate that the demand from our direct sales customers, as well as the overall
overseas end-market demand for our products, will not be adversely affected.
Furthermore, we maintain a stringent commitment to the compliance with local
regulatory frameworks in overseas markets. We have established an Overseas
Business Department and a Product Registration Department to conduct rigorous
self-reviews in strict compliance with the regulatory requirements of the relevant
target jurisdictions, covering all mandatory requirements, including product
registration, operating licenses and quality management systems. Meanwhile, we
continuously monitor regulatory and policy developments and enhance our internal
control framework. In respect of export and cross-border business activities, we
strictly comply with the applicable market authorization and licensing
requirements of the PRC and the relevant target countries and regions, and have put
in place a comprehensive risk identification and contingency response mechanism.
o 10.0% or approximately HK$100.7 million will be used for potential strategic
investments and acquisition opportunities globally. Our future investment strategy
is focused on supporting long-term growth by targeting business that demonstrate
strong synergies with our operations. We are interested in well-qualified medical
companies that have advantages on sales channels with reputable brand image and
rich local experience or distributors in Europe or Southeast Asia. The target should
demonstrate significant synergies with our existing product portfolio (for instance,
companies possessing core products and professional marketing capabilities in
areas such as hearing aids, chronic disease management, and home rehabilitation).
The target should also have a strong market presence and comprehensive
operational capabilities in the target regions to support us in establishing or
strengthening our localized sales network.
When evaluating potential business opportunities, we will consider various factors,
including (i) the target company’s brand influence and channel coverage, (ii) the
synergy and competitive edge of the product portfolio, (iii) regional operational
capabilities and supply chain coverage, (iv) financial robustness and growth
potential, including annual operating revenue of no less than US$15 million, and
sustainable profitability, and (v) the valuation of the target company. Specifically,
with reference to a multiple range of 6 to 10 times EBIT, the target company’s
overall valuation shall not exceed US$100 million.
According to F&S, there are over 100 available targets which fit our criteria. As
of the Latest Practicable Date, we had not identified any specific target of
investments or acquisition, or entered into any investment agreement, to which we
will apply these proceeds.
 30.0%, or approximately HK$302.1 million, will be used for our ongoing product
research and development and technological innovation, including our AI and Internet of
Things applications, including:
o 10.0%, or approximately HK$100.7 million, will be used to develop the next-
generation intelligent respiratory and oxygen-generating products, including
building specialized laboratories in Changsha, and recruiting five to eight
professional R&D experts to be based in Changsha, with solid experience in
medical device R&D or development of medical equipment or high-precision
electromechanical systems, as well as conducting innovative experiments and trial
production. Our R&D targets will focus on developing the core components of
FUTURE PLANS AND USE OF PROCEEDS
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intelligent respiratory and oxygen-generating products with proprietary intellectual
properties and improved performance and iterating related algorithm to gain higher
market recognition through user experience improvement.
o 10.0%, or approximately HK$100.7 million, will be used to fund the R&D of our
home-based POCT products. We plan to diversify our testing product portfolio by
expanding the types of diseases our testing strips can cover, such as metabolic
diseases, digestive system diseases, infectious diseases, etc. In particular, we plan
to refine and update our testing technology, including realizing functions such as
multi-test with one device, multi-test with one strip, multi-test with one blood
sample, and multi-test with one urine sample, which could assist consumers
conveniently and quickly understand their own health status and obtain health
guidance accordingly.
o 10.0%, or approximately HK$100.7 million, will be used to upgrade the
digitalization and intelligence functions of our medical products, enhancing
AI-backed and IoT supported functions of various products, as well as developing
wearable smart devices. Through our optimized digitalization and intelligence of
the health care ecosystem, our consumers and patients could track their health
conditions and obtain the personalized analyses and suggestions.
 20.0%, or approximately HK$201.4 million, will be used for expanding our domestic
sales channels and distribution network, including:
o 10.0%, or approximately HK$100.7 million, will be used for strengthening our
online sales channels. We plan to (i) improve our social media e-commerce
platforms channels by content-based promotion activities of our products,
including building our own live streaming team and increasing our sales through
live streaming channels; and (ii) enhance e-commerce channels through
strengthening partnership with e-commerce platforms to increase viewership
exposure of our products in platform promotions, optimizing products combination
and increasing online precise advertisement placement.
o 10.0%, or approximately HK$100.7 million, will be used for further construction
of our offline sales channels, including (i) deepening our strategic cooperation with
major chains and domestic distributors to further expand our business; (ii) entering
pop-up stores built by e-commerce platforms, and expanding our geographical
coverage and (iii) opening new flagship stores, upgrading existing stores and
establishing a dedicated Online-Merge-Offline (OMO) team to integrate our online
and offline sales channels and expand our sales footprint.
 10.0%, or approximately HK$100.7 million, will be used for branding and marketing
activities, including:
o 7.0% or approximately HK$70.5 million will be used for marketing activities,
including (i) cooperating with KOLs who generate significant user traffic on major
e-commerce platforms and social media, and whose content creations align with
our product characteristics, to conduct consumer education and producing
promotional videos on social media platforms, (ii) participating in exhibitions and
academic conference to connect with broader customers group, and (iii) sponsoring
high-profile events, such as sports events and music festivals.
o 3.0% or approximately HK$30.2 million will be used to build brand awareness
through expanding advertisement placement coverage and advertising with
creative promotional contents to enhance brand reputation; and
 10.0%, or approximately HK$100.7 million will be used for the working capital and
general corporate purposes.
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In accordance with our above strategy, we intend to use our proceeds from the Global Offering
for the purposes and in the amounts set forth below:
Y ear ending December 31, Total
Approximate %
of the total
proceeds
2026 2027 2028 (HK$ in million)
Approximate % of the total proceeds
Global expansion /H1118/H1118/H1118/H1118/H1118/H1118/H1118Promote overseas sales
channels and distribution
network establishment
5.9% 6.8% 7.3% 201.4 20.0%
Potential strategic
investments and
acquisition opportunities
globally
5.0% 5.0% – 100.7 10.0%
Product research and
development and
technological innovation /H1118
Develop the next-generation
intelligent respiratory and
oxygen-generating
products
3.0% 3.5% 3.5% 100.7 10.0%
Fund the R&D of our home-
based POCT products
3.0% 3.5% 3.5% 100.7 10.0%
Upgrade the digitalization
and intelligence functions
of our medical products
3.2% 3.7% 3.1% 100.7 10.0%
Expand our domestic sales
channels and distribution
network /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Strengthen our online sales
channels
4.2% 4.8% 5.0% 100.7 10.0%
Further construction of our
offline sales channels
2.1% 1.9% 2.0% 100.7 10.0%
Branding and marketing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Marketing activities 3.0% 2.0% 2.0% 70.5 7.0%
Build brand awareness 1.0% 1.0% 1.0% 30.2 3.0%
Working capital and general
corporate purposes /H1118/H1118/H1118/H1118/H1118
4.0% 3.0% 3.0% 100.7 10.0%
To the extent that the net proceeds from the Global Offering are not immediately applied to
the above purposes, we will only hold such funds in short-term interest-bearing accounts at licensed
commercial banks and/or other authorized financial institutions (as defined under the Securities and
Futures Ordinance or the applicable laws and regulations in other jurisdictions) in Hong Kong. We
will issue an appropriate announcement if there is any material change to the above use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
Huatai Financial Holdings (Hong Kong) Limited
BNP Paribas Securities (Asia) Limited
Futu Securities International (Hong Kong) Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company has agreed to offer the
Hong Kong Offer Shares for subscription by the public in Hong Kong on and subject to the terms
and conditions of the Hong Kong Underwriting Agreement and this prospectus.
Subject to (a) the Stock Exchange granting approval for the listing of, and permission to deal
in, our H Shares to be issued pursuant to the Global Offering as mentioned in this prospectus and
such approval not having been withdrawn; and (b) certain other conditions set out in the Hong Kong
Underwriting Agreement (including, among others, the Sponsor-Overall Coordinators (for
themselves and on behalf of the Underwriters) and the Company agreeing upon the Offer Price), the
Hong Kong Underwriters have agreed, severally but not jointly, to subscribe, or procure subscribers
to subscribe, for the Hong Kong Offer Shares which are being offered but are not taken up under
the Hong Kong Public Offering on the terms and subject to the conditions set out in this prospectus
and the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional on and subject to, among other things,
the International Underwriting Agreement having been executed and becoming unconditional and
not having been terminated in accordance with its terms.
Grounds for Termination
The obligations of the Hong Kong Underwriters to subscribe or procure subscribers for the
Hong Kong Offer Shares under the Hong Kong Underwriting Agreement are subject to termination
by written notice from the Sponsor-Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters), at any time prior to 8:00 a.m. on the Listing Date if:
(a) there develops, occurs, exists or comes into force:
(i) any new law or regulation or any change or development involving a prospective
change in existing law or regulation, or any change or development involving a
prospective change in the interpretation or application thereof by any court or other
competent authority in or affecting Hong Kong, the PRC, the United States or any
other jurisdictions relevant to the Group (each a “ Relevant Jurisdiction ”); or;
(ii) any change or development involving a prospective change or development, or any
event or series of events likely to result in or representing a change or
development, in national or international financial, political, military, industrial,
economic, currency market, fiscal, legal, credit or regulatory or market conditions,
taxation, equity securities or exchange controls or any monetary or trading
settlement system in or affecting any Relevant Jurisdiction or affecting an
investment in the Offer Shares; or
UNDERWRITING
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(iii) any event or series of events in the nature of force majeure (including, without
limitation, acts of government, declaration of a national or international
emergency, large-scale labour disputes, strikes, lock-outs, fire, explosion,
earthquake, volcanic eruption, flooding, tsunami, civil commotion, riots, rebellion,
public disorder, acts of war, acts of terrorism, outbreak or escalation of hostilities,
paralysis of government operations (whether or not responsibility has been
claimed), acts of God, major accident or interruption in transportation, destruction
of power plant, outbreak of diseases or epidemics including, but not limited to,
SARS, swine or avian flu, H5N1, H1N1, H1N7, H7N9, Ebola virus, Middle East
respiratory syndrome (MERS), COVID-19 and such related/mutated forms,
economic sanction, in whatever form) in or directly or indirectly affecting any
Relevant Jurisdiction; or
(iv) any moratorium, suspension or restriction (including, without limitation, any
imposition of or requirement for any minimum or maximum price limit or price
range) in or on trading in securities generally on the Stock Exchange, the New Y ork
Stock Exchange, the NASDAQ Global Market, the Shanghai Stock Exchange or
the Shenzhen Stock Exchange; or
(v) any general moratorium on commercial banking activities in or affecting Hong
Kong (imposed by the Financial Secretary or the Hong Kong Monetary Authority
or other competent Authority), New Y ork (imposed at the U.S. Federal or New
Y ork State level or by any other competent Authority), London, the PRC, the
European Union (or any member thereof) or any of the other Relevant Jurisdictions
(declared by the relevant authorities) or any disruption in commercial banking or
foreign exchange trading or securities settlement or clearance services, procedures
or matters in or affecting any of those places or jurisdictions; or
(vi) a change or development involving a prospective change in or affecting Taxes or
exchange control, currency exchange rates or foreign investment regulations
(including a material devaluation of the Hong Kong dollar or the Renminbi against
any foreign currencies and a change in the system under which the value of the
Hong Kong currency is linked to that of the currency of the United States), or the
implementation of any exchange control, in any of the Relevant Jurisdictions, or
any change or prospective change in Taxation in any Relevant Jurisdiction
adversely affecting an investment in the H Shares; or
(vii) any litigation, dispute, legal action or claim, regulatory investigation or action of
any third party being threatened or instigated against any member of the Group or
any Director or any member of the Group’s senior management; or
(viii) the imposition of economic sanctions, in whatever form, directly or indirectly, in
the Relevant Jurisdictions; or
(ix) any Authority or other regulatory, political body or organisation in any Relevant
Jurisdiction (including, in particular, the CSRC and its local branches and
representative offices) commencing any investigation or other action, or
announcing an intention to investigate or take other action, against any member of
the Group or any Director or any member of the Group’s senior management; or
(x) any order or petition for the winding up of any members of the Group or any
composition or arrangement made by any members of the Group with its creditors
or a scheme of arrangement entered into by any members of the Group or any
resolution for the winding up of any members of the Group or the appointment of
a provisional liquidator, receiver or manager over all or part of the material assets
or undertaking of any members of the Group or anything analogous thereto
occurring in respect of any members of the Group; or
UNDERWRITING
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(xi) any contravention by the Company, any member of the Group, or any Director of
any applicable Laws and regulations or the Listing Rules; or
(xii) any non-compliance of the Hong Kong Prospectus, the CSRC Filings or any other
documents used in connection with the contemplated subscription and sale of the
Offer Shares or any aspect of the Global Offering with the Listing Rules, the CSRC
Rules or any other applicable Law;
which, individually, or in the aggregate, in the sole and absolute opinion of the
Sponsor-Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters), (I) has 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 (II) has or will or may have a material
adverse effect on the assets, liabilities, business, prospects, trading or financial position
of the Group as a whole; or (III) makes or will make it inadvisable or impracticable to
proceed with the Global Offering; or (IV) has or will or may have the effect of making
any part of the Hong Kong Underwriting Agreement (including underwriting) incapable
of performance in accordance with its terms or preventing the processing of applications
and/or payments pursuant to the Global Offering or pursuant to the underwriting thereof;
or
(b) there comes to the notice of the Sponsor-Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters) that:
(i) any statement contained in any of the Offering Documents, the CSRC Filings, the
Operative Documents, the OC Announcements, the Preliminary Offering Circular,
the PHIP 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 (including any supplement or amendment
thereto) (collectively, the “ Offer-Related Documents ”) was, when it was issued,
or has become, untrue, incomplete, inaccurate, incorrect, deceptive or misleading,
unless such untrue or misleading statement is immaterial in the context of the
Global Offering, or that any forecast, estimate, expression of opinion, intention or
expectation contained in any of the Offer-Related Documents is not fair and honest
and based on reasonable grounds or reasonable assumptions with reference to the
facts and circumstances then subsisting; or
(ii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of the Hong Kong Prospectus, constitute a
material omission from, or misstatement in, any of the Offer-Related Documents
and the CSRC Filings; or
(iii) there is any Material Adverse Change; or
(iv) there is an event, act or omission which gives or is likely to give rise to any
liability of the Company or the Controlling Shareholders pursuant to the
indemnities given by any of them under this Agreement or the International
Underwriting Agreement, as applicable; or
(v) there is a breach of, or any event or circumstance rendering untrue, incorrect,
incomplete or misleading in any respect, any of the Warranties given by the
Company and the Controlling Shareholders in this Agreement or the International
Underwriting Agreement, as applicable; or
UNDERWRITING
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(vi) the approval of the Listing Committee of the listing of, and permission to deal in,
the H Shares to be issued pursuant to the Global 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, cancelled, qualified (other than
by customary conditions), revoked or withheld; or
(vii) any person (other than the Joint Sponsors) has withdrawn its consent to the issue
of the Hong Kong Prospectus with the inclusion of its reports, letters and/or legal
opinions (as the case may be) and references to its name included in the form and
context in which it respectively appears; or
(viii) the Company withdraws any of the Offer-Related Documents or the Global
Offering; or
(ix) there is a prohibition on the Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares pursuant to the terms of the Global
Offering; or
(x) the Chairman, any other executive Director or senior management of the Company
whose name is disclosed in the Prospectus is vacating his or her office; or
(xi) any Director or member of senior management of the Company: (a) is charged with
any criminal offence (whether in Hong Kong, the PRC or any other relevant
jurisdiction); or (b) is the subject of any investigation, enforcement action,
administrative penalty or disciplinary measure by any governmental, regulatory or
law enforcement authority (including, without limitation, the CSRC, any stock
exchange (including the Shenzhen Stock Exchange), or any other competent
authority) which, in each case, could reasonably be expected to have a material
adverse effect on the business, operations, management, reputation or listing status
of the Company; or (c) is prohibited by applicable laws or regulations, or by any
competent authority, from acting as a director, supervisor or senior management
member of a company, or is otherwise disqualified from participating in the
management of a company,
(xii) a material portion of the orders placed or confirmed in the bookbuilding process,
or the investment commitments made by any cornerstone investors under
agreements signed with such cornerstone investors, have been withdrawn,
terminated or cancelled,
then, in each case, the Sponsor-Overall Coordinators (for themselves and on behalf of
the Hong Kong Underwriters) may, in their sole and absolute discretion and upon giving
notice to the Company, terminate the Hong Kong Underwriting Agreement with
immediate effect.
Undertakings to the Stock Exchange Pursuant to the Listing Rules
Undertakings 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 equity securities of our Company
(including warrants or other convertible securities) (whether or not of a class already listed) may
be issued or sold or transferred out of treasury or form the subject of any agreement to such an issue,
or sale or transfer out of treasury by our Company within six months from the Listing Date (whether
or not such issue of Shares or securities of our Company, or sale or transfer of shares out of treasury
will be completed within six months from the Listing Date), except (a) pursuant to the Global
Offering; or (b) under any of the circumstances provided under Rule 10.08 of the Listing Rules.
UNDERWRITING
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Undertakings by our Controlling Shareholders
By virtue of Rule 10.07 of the Listing Rules, each of our Controlling Shareholders has
undertaken to the Stock Exchange and to our Company that, except pursuant to the Global Offering,
it will not and will procure that the relevant registered holder(s) (if any) of our Shares in which any
of them has a beneficial interest will not, without the prior written consent of the Stock Exchange
or unless otherwise in compliance with the requirements of the Listing Rules:
(i) in the period commencing from the date by reference to which disclosure of its
shareholdings in our Company is made in this prospectus and ending on the date which
is six months from the Listing Date (the “ First Six-Month Period ”), either directly or
indirectly, 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 they are shown to be the beneficial owner in this prospectus (the “ Relevant
Shares ”); and
(ii) in the period of six months commencing from the expiry of the First Six-Month Period,
either directly or indirectly, 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
Relevant Shares to such extent that, immediately following such disposal, or upon the
exercise or enforcement of such options, rights, interests or encumbrances, it will cease
to be a controlling shareholder (as defined in the Listing Rules) of our Company or a
member of a group of our Controlling Shareholders or would together with the other
Controlling Shareholders cease to be a controlling shareholder (as defined in the Listing
Rules).
Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, each of our Controlling Shareholders
has undertaken to the Stock Exchange and to our Company that within the period commencing from
the date by reference to which disclosure of their shareholdings in our Company is made in this
prospectus and ending on the date which is 12 months from the Listing Date, it will:
(i) when it pledges or charges any Relevant Shares in favor of an authorized institution (as
defined in the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)) pursuant
to Note 2 to Rule 10.07(2) of the Listing Rules, immediately inform our Company in
writing of such pledge or charge together with the number of Relevant Shares so pledged
or charged; and
(ii) when it receives indications, either verbal or written, from the pledgee or chargee of any
Shares that any of the pledge or charged Relevant Shares will be disposed of,
immediately inform our Company in writing of such indications.
Our Company will inform the Stock Exchange in writing as soon as we have been informed
of matters referred in above by any of our Controlling Shareholders and disclose such matters by
way of announcement pursuant to the requirements under the Listing Rules as soon as possible.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Our Company has undertaken to each of the Joint Sponsors, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the
Joint Lead Managers, the Hong Kong Underwriters and the Capital Market Intermediaries, that
except for the offer, allotment, issue and sale of the Offer Shares pursuant to the Global Offering
at any time after the date of the Hong Kong Underwriting Agreement up to and including the date
falling the First Six-Month Period, our Company will not, without the prior written consents of the
Joint Sponsors and the Sponsor-Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) and unless in compliance with the requirements of the Listing Rules:
(i) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to
allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any option,
warrant, contract or right to subscribe for or purchase, grant or purchase any option,
UNDERWRITING
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warrant, contract or right to allot, issue or sell, make any short 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 unconditionally, any
H Shares or other securities of our Company, or any interest in any of the foregoing
(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
purchase, any H Shares or other securities of our Company, as applicable, or any interest
in any of the foregoing), or deposit any H Shares or other securities of our Company,
with a depositary in connection with the issue of depositary receipts; or
(ii) enter into any swap, derivative or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership (legal or beneficial) of any
H Shares or other securities of our Company, or any interest in any of the foregoing
(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
purchase, any H Shares or other securities of our Company, or any interest in any of the
foregoing); or
(iii) enter into any transaction with the same economic effect as any transaction specified in
(i) or (ii) above; or
(iv) offer to or agree to or announce any intention to effect any transaction specified in (i),
(ii) or (iii) above,
in each case, whether any of the transactions specified in (i), (ii) or (iii) above is to be settled by
delivery of H Shares or other securities of our Company, or in cash or otherwise (whether or not
the issue of such H Shares or other securities of our Company will be completed within the First
Six-month Period).
During the period of six months commencing on the date on which the First Six-Month Period
expires (the “ Second Six-Month Period ”), our Company shall not enter into any of the transactions
specified in (i), (ii) or (iii) above or offer to or agree to or announce any intention to enter into any
such transaction, such that any Controlling Shareholder would, directly or indirectly, cease to be a
controlling shareholder (within the meaning defined in the Listing Rules) of our Company. In the
event that our Company enters into any of the transactions specified in (i), (ii) or (iii) above or
offers to or agrees to or announces any intention to enter into any such transaction, our Company
shall take all reasonable steps to ensure that it will not, and no other act of our Company will, create
a disorderly or false market in the securities of the Company.
Undertakings by our Controlling Shareholders
Each of our Controlling Shareholders has jointly and severally agreed and undertaken to each
of the Company, the Joint Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators,
the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries that, except as pursuant to the Global Offering
and the issue of the H Shares thereof, without the prior written consent of the Joint Sponsors and
the Sponsor-Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters)
and unless in compliance with the requirements of the Listing Rules:
(i) it will not, at any time during the First Six-Month Period, (a) 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, make short 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 unconditionally, any Shares or other securities of our
Company or any interest therein (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 purchase, any Shares or any such other securities of
our Company, as applicable), or deposit any Shares or other securities of our Company
with a depositary in connection with the issue of depositary receipts, or (b) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of the
UNDERWRITING
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economic consequences of ownership of any Shares or other securities of our Company
or any interest therein (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 purchase, any Shares or any such other securities of our Company, as
applicable), or (c) enter into any transaction with the same economic effect as any
transaction specified in (a) or (b) above, or (d) offer or contract to offer to or agree to
or announce any intention to enter into any transaction specified in (a), (b) or (c) above,
in each case, whether any of the transactions specified in (a), (b) or (c) above is to be
settled by delivery of Shares or other securities of our Company or in cash or otherwise
(whether or not the issue of such Shares or other securities will be completed within the
First Six-Month Period);
(ii) it will not, during the Second Six-Month Period, enter into any of the transactions
specified in (a), (b) or (c) above or offer to or agree to or announce any intention to enter
into any such transaction if, immediately following any sale, transfer or disposal or upon
the exercise or enforcement of any option, right, interest or encumbrance pursuant to
such transaction, it will cease to be a “Controlling Shareholder” (as defined in the
Listing Rules) of our Company; and
(iii) until the expiry of the Second Six-Month Period, in the event that it/he/she enters into
any of the transactions specified in (a), (b) or (c) above or offers to or agrees to or
announces any intention to enter into any such transaction, it/he/she will take all
reasonable steps to ensure that it will not create a disorderly or false market in the
securities of our Company,
provided that, subject to strict compliance with any requirements of applicable laws (including,
without limitation and for the avoidance of doubt, the requirements of the Stock Exchange or of the
SFC or of any other relevant authority), nothing in the undertakings above shall prevent any of our
Controlling Shareholders from (i) purchasing additional Shares or other securities of our Company
and disposing of such additional Shares or other securities of our Company, (ii) using the Shares
or other securities of our Company or any interest therein beneficially owned by it as security
(including without limitation a charge or a pledge) in favor of an authorized institution (as defined
in the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)) for a bona fide commercial
loan.
Indemnity
We and our Controlling Shareholders have agreed to indemnify, among others, the Joint
Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong Underwriters and the
Capital Market Intermediaries for certain losses which they may suffer, including, among others,
losses arising from the performance of their obligations under the Hong Kong Underwriting
Agreement and any breach by our Company and our Controlling Shareholders of the Hong Kong
Underwriting Agreement.
The International Offering
International Underwriting Agreement
In connection with the International Offering, it is expected that our Company and our
Controlling Shareholders will enter into the International Underwriting Agreement with the Joint
Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators and the International
Underwriters. Under the International Underwriting Agreement, subject to the conditions set forth
therein, the International Underwriters would severally and not jointly agree to purchase, or procure
purchasers to purchase, the Offer Shares being offered pursuant to the International Offering
(subject to, among others, any reallocation between the International Offering and the Hong Kong
Public 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, or is terminated,
the Global Offering will not proceed.
UNDERWRITING
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--- page 250 ---
It is expected that each of our Controlling Shareholders will undertake to the International
Underwriters not to dispose of, or enter into any agreement to dispose of, or otherwise create any
options, rights, interest or encumbrances in respect of any of the Shares held by it in our Company
for a period similar to such undertakings given by them pursuant to the Hong Kong Underwriting
Agreement, which is described in “— Underwriting Arrangements and Expenses — Undertakings
pursuant to the Hong Kong Underwriting Agreement — Undertakings by our Controlling
Shareholders” above.
Commission and Expenses
Our Company will pay an underwriting commission of 1% of the aggregate Offer Price of all
the Offer Shares (the “ Fixed Fees ”). Our Company may also in our sole and absolute discretion pay
any one or all of the Underwriters an additional incentive fee in aggregate of up to 1% of the
aggregate Offer Price for all of the Offer Shares (the “ Discretionary Fees ”). As of the date of this
prospectus, the allocation of a portion of the Fixed Fees remains subject to our Company’s
discretion. For the purposes of the Listing Rules, any unallocated portion of the Fixed Fees will be
tentatively regarded as discretionary fee. Assuming the Discretionary Fees are paid in full, the ratio
of the Fixed Fees and the Discretionary Fees will be approximately 40%:60% (on the basis that the
Discretionary Fees will be fully paid). For any unsubscribed Hong Kong Offer Shares reallocated
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.
The aggregate commissions and fees, together with Stock Exchange listing fees, SFC
transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565%, AFRC transaction levy of
0.00015%, legal and other professional fees and printing and all other expenses payable by us
relating to the Global Offering are currently estimated to amount in aggregate to approximately
HK$54.8 million (based on the maximum Offer Price as stated in this prospectus).
Joint Sponsors’ Fee
An amount of US$500,000 is payable by our Company as sponsor fees to the Joint Sponsors.
INDEPENDENCE OF THE JOINT SPONSORS
The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules.
UNDERWRITERS’ INTERESTS IN OUR COMPANY
Save for the obligations under the Hong Kong Underwriting Agreement and the International
Underwriting Agreement and as disclosed in this prospectus, as at the Latest Practicable Date, none
of the Underwriters has any shareholding or beneficial interests in any member of our Group nor
has any right or option (whether legally enforceable or not) to subscribe for or purchase or to
nominate persons to subscribe for or purchase securities in any member of our Group nor any
interest in the Global Offering.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering (together,
the “ Syndicate Members ”) and their affiliates may each individually undertake a variety of
activities (as further described below) which do not form part of the underwriting process.
UNDERWRITING
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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, funds management, trading, hedging, investing and other
activities for their own account and for the account of others. In the ordinary course of their various
business activities, the Syndicate Members and their respective affiliates may purchase, sell or hold
a broad array of investments and actively trade securities, derivatives, loans, commodities,
currencies, credit default swaps and other financial instruments for their own account and for the
accounts of their customers. Such investment and trading activities may involve or relate to assets,
securities and/or instruments our Company and/or persons and entities with relationships with our
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 issues by Syndicate Members or their affiliates of any listed securities having
the H Shares as their underlying securities, whether on the Stock Exchange or on any other stock
exchange, the 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
hedging activity in the H Shares in most cases.
Such activities may affect the market price or value of our H Shares, the liquidity or trading
volume in our H Shares and the volatility of the price of our H Shares, and the extent to which this
occurs from day to day cannot be estimated.
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 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 trading, price rigging and stock market manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time to
time, and expect to provide in the future, investment banking and other services to our Company
and our affiliates 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 comprises:
(a) the Hong Kong Public Offering of initially 2,700,000 H Shares (subject to reallocation)
in Hong Kong, as described in “— The Hong Kong Public Offering” below; and
(b) the International Offering of initially 24,300,000 H Shares outside the United States in
offshore transactions in reliance on Regulation S, as described in “— The International
Offering” below.
The 27,000,000 H Shares initially being offered in the Global Offering will represent
approximately 11.45% of the total number of issued Shares immediately after completion of the
Global Offering. The underwriting arrangements, and the respective Underwriting Agreements, are
summarized in the section headed “Underwriting” in this prospectus.
Investors may apply for Hong Kong Offer Shares under the Hong Kong Public Offering, or,
if qualified to do so, apply for or indicate an interest in International Offer Shares under the
International Offering, but may not do both.
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Shares Initially Offered
Our Company is initially offering 2,700,000 Hong Kong Offer Shares, representing 10% of the
total number of Offer Shares initially available under the Global Offering, at the Offer Price for
subscription by the public in Hong Kong. Subject to the reallocation of H Shares between the
International Offering and the Hong Kong Public Offering, the Hong Kong Offer Shares will
represent approximately 1.14% of the total number of issued Shares immediately after completion
of the Global Offering.
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as
to institutional and professional investors. Professional investors generally include brokers, dealers
and companies (including fund managers) whose ordinary business involves dealing in shares and
other securities, and corporate entities which regularly invest in shares and other securities.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
several basis under the terms of the Hong Kong Underwriting Agreement and is subject to our
Company and the Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters)
agreeing on the Offer Price. Completion of the Hong Kong Public Offering is subject to the
conditions as set out in “— Conditions of the Global Offering” below.
Allocation
Allocation of the Offer Shares to investors under the Hong Kong Public Offering will be based
solely on the level of valid applications received under the Hong Kong Public Offering. The basis
of allocation may vary, depending on the number of Hong Kong Offer Shares validly applied for
by applicants. Such allocation 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 ballot may
not receive any Hong Kong Offer Shares.
STRUCTURE OF THE GLOBAL OFFERING
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For allocation purposes only, the total number of the Offer Shares initially available under the
Hong Kong Public Offering (after taking account of any reallocation in the number of Offer Shares
allocated between the Hong Kong Public Offering and the International Offering referred to below)
will be divided equally into two pools (with any odd lots being allocated to pool A): pool A and pool
B. Both of which are available on an equitable basis to successful applicants. All valid applications
that have applied for Hong Kong Offer Shares with an aggregate subscription price (excluding
brokerage of 1.0%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and
AFRC transaction levy of 0.00015% payable) of HK$5 million or below will fall into pool A. All
valid applications that have applied for Hong Kong Offer Shares with an aggregate subscription
price (excluding brokerage of 1.0%, SFC transaction levy of 0.0027%, Stock Exchange trading fee
of 0.00565% and AFRC transaction levy of 0.00015% payable) of over HK$5 million and up to the
total value of pool B will fall into pool B.
For the purpose of this sub-section only, the “price” for Offer Shares means the price payable
on application therefor (without regard to the Offer Price as finally determined).
Applicants should be aware that applications in Pool A and applications in Pool B may receive
different allocation ratios. If Hong Kong Offer Shares in one (but not both) of the two pools are
undersubscribed, the surplus Hong Kong Offer Shares will be transferred to the other pool to satisfy
demand in that other pool and be allocated accordingly.
Applicants can only receive an allocation of Hong Kong Offer Shares from either Pool A or
Pool B, but not from both pools. Multiple or suspected multiple applications and any application
for more than 50% of the Hong Kong Offer Shares will be rejected.
Reallocation
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 Sponsor-Overall Coordinators. Subject to the allocation cap described in the preceding
paragraph, the Sponsor-Overall Coordinators may in their discretion reallocate Offer Shares from
the International Offering to the Hong Kong Public Offering to satisfy valid applications under the
Hong Kong Public Offering. In addition, if the Hong Kong Public Offering is not fully subscribed,
the Sponsor-Overall Coordinators will have the discretion (but shall not be under any obligation)
to reallocate to the International Offering all or any unsubscribed Hong Kong Offer Shares in such
amounts as they deem appropriate. In each case, the additional Offer Shares reallocated to the Hong
Kong Public Offering will be allocated between Pool A and Pool B and the number of Offer Shares
allocated to the International Offering will be correspondingly reduced in such manner as the
Sponsor-Overall Coordinators deem appropriate. In the event of reallocation of Offer Shares
between the International Offering and the Hong Kong Public Offering in the circumstances where
(a) the International Offer Shares are fully subscribed or oversubscribed and the Hong Kong Offer
Shares are fully subscribed or oversubscribed irrespective of the number of times; or (b) the
International Offer Shares are undersubscribed and the Hong Kong Offer Shares are fully
subscribed or oversubscribed irrespective of the number of times, then up to 1,350,000 Hong Kong
Offer Shares may be reallocated from the International Offering to the Hong Kong Public Offering,
so that the total number of Offer Shares available for subscription under the Hong Kong Public
Offering will increase up to 4,050,000 Offer Shares, representing approximately 15% of the number
of Offer Shares initially available under the Global Offering. In the circumstance where the
International Offer Shares are fully subscribed or oversubscribed and the Hong Kong Offer Shares
are undersubscribed, there will be no reallocation from the International Offering to the Hong Kong
Public Offering, and no over-allocation of H Shares to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the Guide
and the provision of Paragraph 4.2(b) of Practice Note 18 of the Listing Rules, no mandatory
clawback or reallocation mechanism is required to increase the number of Offer Shares under the
Hong Kong Public Offering to a certain percentage of the total number of Offer Shares offered
under the Global Offering.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and the
International Offering will be disclosed in the results announcement of the Global Offering, which
is expected to be published on Tuesday, May 5, 2026. Where the International Offer Shares are
undersubscribed, if the Hong Kong Offer Shares are also undersubscribed, the Global Offering will
not proceed unless the Underwriters would subscribe 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.
Applications
The Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) may
require any investor who has been offered H Shares under the International Offering, and who has
made an application under the Hong Kong Public Offering, to provide sufficient information to the
Sponsor-Overall Coordinators so as to allow them to identify the relevant applications under the
Hong Kong Public Offering and to ensure that it is excluded from any application for H Shares
under the International Offering.
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application submitted by him/her/it that he/she/it and any
person(s) for whose benefit he/she/it is making the application has not applied for or taken up, or
indicated an interest in, and will not apply for or take up, or indicate an interest in, any International
Offer Shares under the International Offering, and such applicant’s application under the
International Offering are liable to be rejected if the said undertaking and/or confirmation is
breached and/or untrue (as the case may be).
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price of HK$39.33 per Offer Share in addition
to the brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy
payable on each Offer Share. If the Offer Price, as finally determined in the manner described in
“— Pricing and Allocation” below, is less than the maximum Offer Price of HK$39.33 per Offer
Share, appropriate refund payments (including the brokerage, SFC transaction levy, Stock Exchange
trading fee and AFRC transaction levy attributable to the surplus application monies) will be made
to successful applicants (subject to application channels), without interest. Further details are set
out in “How to Apply for Hong Kong Offer Shares”.
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
THE INTERNATIONAL OFFERING
Number of Offer Shares Offered
Subject to the reallocation as described above, the number of Offer Shares to be initially
offered under the International Offering will be 24,300,000, representing 90% of the total number
of Offer Shares initially available under the Global Offering. The International Offering is expected
to be fully underwritten by the International Underwriters subject to the terms and conditions of the
International Underwriting Agreement, and is subject to the Hong Kong Public Offering becoming
unconditional.
STRUCTURE OF THE GLOBAL OFFERING
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Allocation
The International Offering will include selective marketing of Offer Shares to institutional and
professional investors and other investors anticipated to have a sizeable demand for such Offer
Shares in Hong Kong and other jurisdictions outside the United States in offshore transactions in
reliance on Regulation S. Professional investors generally include brokers, dealers, companies
(including fund managers) whose ordinary business involves dealing in shares and other securities
and corporate entities which regularly invest in shares and other securities. The International
Offering is subject to the Hong Kong Public Offering being unconditional.
Allocation of Offer Shares pursuant to the International Offering will be effected in
accordance with the “book-building” process described in “— Pricing and Allocation” below and
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 hold or sell, H Shares, after the Listing. Such allocation is
intended to result in a distribution of the H Shares on a basis which would lead to the establishment
of a solid shareholder base to the benefit of our Company and our Shareholders as a whole.
The Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) may
require any investor who has been offered Offer Shares under the International Offering and who
has made an application under the Hong Kong Public Offering, to provide sufficient information to
the Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) so as to allow
them to identify the relevant applications under the Hong Kong Public Offering and to ensure that
they are excluded from any application of Offer Shares under the International Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may
change as a result of any reallocation of unsubscribed Offer Shares originally included in the Hong
Kong Public Offering.
STABILIZATION
No stabilizing manager will be appointed, and it is anticipated that no stabilization activities
will be carried out in relation to the Global Offering.
PRICING AND ALLOCATION
Determining the Offer Price
The Offer Price for the purposes of the various offerings under the Global Offering will be
fixed between the Company and the Sponsor-Overall Coordinators (for themselves and on behalf of
the Underwriters) on the Price Determination Date, which is expected to be on or before Monday,
May 4, 2026, but in any event no later than 12:00 noon on Monday, May 4, 2026, and the allocation
of the International Offer Shares under the International Offering will be determined shortly
thereafter.
We will determine the Offer Price by reference to, among other factors, the closing price of
the A Shares on the Shenzhen Stock Exchange on the last trading day on or before the Price
Determination Date (which is accessible to the Shareholders and potential investors
at https://www.szse.cn/English/siteMarketData/siteMarketDatas/lookup/index.html?code=301087),
and the Offer Price will not be more than HK$39.33. The historical prices of our A Shares and
trading volume on Shenzhen Stock Exchange are set out below.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 256 ---
Period High Low ADTV
(RMB) (RMB)
Y ear ended December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851.54 34.54 1.65 million
Y ear ended December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843.40 26.70 1.33 million
Y ear ended December 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846.04 30.48 2.12 million
Y ear of 2026
(up to the Latest Practicable Date) /H1118/H1118/H1118/H111861.64 47.57 4.26 million
Note:
(1) Average daily trading volume (“ ADTV ”) represents daily average number of our A Shares traded over the
relevant period.
The final Offer Price, the level of indications of interest in the International Offering, the level
of applications in the Hong Kong Public Offering, the basis of allocations of the Hong Kong Offer
Shares and the results of allocations in the Hong Kong Public Offering are expected to be made
available through a variety of channels in the manner described in “How to Apply for Hong Kong
Offer Shares — B. Publication of Results”.
If, for any reason, our Company and the Sponsor-Overall Coordinators (for themselves and on
behalf of the Underwriters) are unable to reach agreement on the Offer Price at or before 12:00 noon
on Monday, May 4, 2026, the Global Offering will not proceed and will lapse.
Reduction in Number of Offer Shares
The Sponsor-Overall Coordinators (for themselves and on behalf of the other Underwriters)
may, where considered appropriate, based on the level of interest expressed by prospective
professional and institutional investors during the book-building process, and with the consent of
our Company, reduce the number of Offer Shares as stated in this prospectus at any time on or prior
to the morning of the last day for lodging applications under the Hong Kong Public Offering. In
such case, we will, as soon as practicable following the decision to make such reduction, and in any
event not later than the morning of the day which is the last day for lodging applications under the
Hong Kong Public Offering, cause to be announced on the website of our Company at
www.cofoe.com.cn and the website of the Stock Exchange at www.hkexnews.hk , notices of the
reduction, and the cancelation of the Global Offering and relaunch of the offer at the revised number
of Offer Shares.
As soon as practicable after such reduction of the number of Offer Shares, we will also 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 the Hong Kong Offer Shares, applicants should have regard
to the possibility that any announcement of a reduction in the 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, which is Thursday, April 30, 2026. In the absence of any such supplemental or new
prospectus so published, the number of Offer Shares will not be reduced.
Announcement of Offer Price and Basis of Allocations
The final Offer Price, the results of indications of interest in the International Offering, the
results of applications in the Hong Kong Public Offering, the basis of allocations of the Hong Kong
Offer Shares and the results of allocations are expected to be announced on Tuesday, May 5, 2026
on the website of our Company at www.cofoe.com.cn and the website of the Stock Exchange at
www.hkexnews.hk .
STRUCTURE OF THE GLOBAL OFFERING
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UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under
the terms of the Hong Kong Underwriting Agreement and is subject to our Company and the
Sponsor-Overall Coordinators (for themselves and on behalf of the Underwriters) agreeing on the
Offer Price.
We expect to enter into the International Underwriting Agreement relating to the International
Offering on or around the Price Determination Date.
These underwriting arrangements under the Hong Kong Underwriting Agreement and the
International Underwriting Agreement are summarized in “Underwriting” in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptances of all applications for Offer Shares pursuant to the Global Offering will be
conditional on, among others:
(a) the Stock Exchange granting approval for the listing of, and permission to deal in, the
H Shares to be issued pursuant to the Global Offering, and such approval not
subsequently having been revoked prior to the commencement of dealings in the H
Shares on the Stock Exchange;
(b) the Offer Price having been duly agreed between our Company and the Sponsor-Overall
Coordinators (for themselves and on behalf of the Underwriters) on the Price
Determination Date;
(c) the execution and delivery of the International Underwriting Agreement on or around the
Price Determination Date; and
(d) the obligations of the Underwriters under the respective Underwriting Agreements
becoming and remaining unconditional and not having been terminated in accordance
with the terms of the respective agreements,
in each case on or before the dates and times specified in the respective 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 which is 30 days after the date of this prospectus.
If, for any reason, the Offer Price is not agreed between our Company and the Sponsor-Overall
Coordinators (for themselves and on behalf of the Underwriters) by 12:00 noon on Monday, May
4, 2026, the Global Offering will not proceed and will lapse immediately.
The consummation of each of the Hong Kong Public Offering and the International Offering
is conditional upon, among other things, the other offering 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 and the Stock Exchange will be notified immediately. Notice of the lapse
of the Hong Kong Public Offering will be published by our Company on the website of the Stock
Exchange at www.hkexnews.hk and the website of our Company at www.cofoe.com.cn on the next
Business Day following such lapse. In such eventuality, all application monies will be returned,
without interest, on the terms set out in “How to Apply for Hong Kong Offer Shares — D.
Dispatch/Collection of H Share Certificates and Refund of Application Monies”. In the meantime,
all application monies will be held in separate bank account(s) with the receiving bankers or other
bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong
Kong) (as amended).
STRUCTURE OF THE GLOBAL OFFERING
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--- page 258 ---
H Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date
provided that (i) the Global Offering has become unconditional in all respects, and (ii) the right of
termination as described in “Underwriting — Underwriting Arrangements and Expenses — Hong
Kong Public Offering — Grounds for Termination” has not been exercised.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Stock Exchange for the listing of, and permission to deal in, the H
Shares to be issued by us pursuant to the Global Offering.
Except as otherwise disclosed in this prospectus and the A Shares that have been listed on the
Shenzhen Stock Exchange, no part of our Company’s share or loan capital is listed on or dealt in
on any other stock exchange and no such listing or permission to deal is being or proposed to be
sought in the near future.
SHARES WILL BE ELIGIBLE FOR CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares on the Stock
Exchange and compliance with the stock admission requirements of HKSCC, the H 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 H Shares on the Stock Exchange or any
other date HKSCC chooses. Settlement of transactions between participants of the Stock Exchange
(as defined in the Listing Rules) 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 advisors for details of the settlement arrangements as such
arrangements may affect their rights and interests.
All necessary arrangements have been made enabling our H Shares to be admitted into
CCASS.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m.
in Hong Kong on Wednesday, May 6, 2026, it is expected that dealings in the H Shares on the Stock
Exchange will commence at 9:00 a.m. on Wednesday, May 6, 2026. The H Shares will be traded in
board lots of 100 H Shares. The stock code of the H Shares will be 1187.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 259 ---
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 and below are the procedures for application.
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.cofoe.com.cn.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to section 342C of the Companies (Winding
Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you are
applying for:
 are 18 years of age or older; and
 have a Hong Kong address (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 its close associates; or
 are a Director or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Monday, April 27, 2026
and end at 12:00 noon on Thursday, April 30, 2026 (Hong Kong time).
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 /H1118/H1118/H1118www.hkeipo.hk Investors who would
like to receive a
physical H Share
certificate. Hong Kong
Offer Shares
successfully applied
for will be allotted
and issued in your
own name.
From 9:00 a.m. on
Monday, April 27,
2026 to 11:30 a.m.
on Thursday,
April 30, 2026,
Hong Kong time.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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Application Channel Platform Target Investors Application Time
The latest time for
completing full
payment of
application monies
will be 12:00 noon
on Thursday,
April 30, 2026,
Hong Kong time.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our broker or custodian
who is a HKSCC
Participant will submit a
HKSCC EIPO
application on your
behalf through HKSCC’s
FINI system in
accordance with your
instruction.
Investors who would not
like to receive a
physical H 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 may vary by
broker or 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 are given, you shall be deemed 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.
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 severally) 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.
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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.
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country or
jurisdiction
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. HKID card; or
ii. National identification document;
or
iii. Passport; and
 Identity document number
 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. Y ou are also required to declare that the
identity information 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 must be in the individual members’
names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given name,
middle and other names (if any) must be input in the same order as shown on the identity document. 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 document type must be strictly followed and where an individual applicant has a valid
HKID card (including both Hong Kong Residents and Hong Kong Permanent Residents), the HKID number
must be used when making an application to subscribe for shares in a public offer. Similarly for corporate
applicants, a LEI number must be used if an entity has a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will be
required. If the applicant is an investment 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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4. The maximum number of joint account holders on FINI (1) is capped at four in accordance with market practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity document),
the identity document’s issuing country 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 joint
beneficial owner. If you do not include this information, the application will be treated 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 statutory 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 equity 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 capital 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 Sponsor-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.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 100 H Shares
Permitted number of Hong
Kong Offer Shares for
application and amount
payable on
application/successful
allotment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
: Hong Kong Offer Shares are available for
application in specified board lot sizes only.
Please refer to the amount payable associated with
each specified board lot size in the table below.
The maximum Offer Price is HK$39.33 per H
Share.
If you are applying through the HKSCC EIPO
channel, your broker or custodian may require you
to pre-fund your application, in such amount as
determined by the broker or custodian, based on
the applicable laws and regulations in Hong Kong.
Y ou are responsible for complying with any such
pre-funding requirement imposed by your broker
or custodian with respect to the Hong Kong Offer
Shares you applied for.
(1) Subject to change, if the Company’s Articles of Incorporation and applicable company law prescribe a lower cap.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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By instructing your broker or custodian to apply
for the Hong Kong Offer Shares on your behalf
through the HKSCC EIPO Channel, you (and, if
you are joint applicants, each of you jointly and
severally) are deemed to have instructed and
authorized HKSCC to cause HKSCC Nominees
(acting as nominee for the relevant HKSCC
Participants) to arrange payment of the final Offer
Price, brokerage, SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank
account at the designated bank for your broker or
custodian.
If you are applying through the HK eIPO White
Form service, you may refer to the table below for
the maximum amount payable for the number of
Offer Shares you have selected. Y ou must pay the
respective maximum amount payable on
application in full upon application for Hong
Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 3,972.67 2,000 79,453.28 10,000 397,266.43 300,000 11,917,992.91
200 7,945.32 2,500 99,316.61 20,000 794,532.86 400,000 15,890,657.22
300 11,918.00 3,000 119,179.94 30,000 1,191,799.29 500,000 19,863,321.53
400 15,890.65 3,500 139,043.26 40,000 1,589,065.73 600,000 23,835,985.84
500 19,863.32 4,000 158,906.58 50,000 1,986,332.16 700,000 27,808,650.14
600 23,835.99 4,500 178,769.90 60,000 2,383,598.58 800,000 31,781,314.45
700 27,808.65 5,000 198,633.21 70,000 2,780,865.01 900,000 35,753,978.75
800 31,781.32 6,000 238,359.85 80,000 3,178,131.44 1,000,000 39,726,643.06
900 35,753.98 7,000 278,086.50 90,000 3,575,397.87 1,350,000
(1) 53,630,968.12
1,000 39,726.64 8,000 317,813.15 100,000 3,972,664.30
1,500 59,589.96 9,000 357,539.79 200,000 7,945,328.61
(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) while the SFC transaction 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
Y ou 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. Application 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.
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Multiple applications made either through (i) the HK eIPO White Form service, (ii) HKSCC
EIPO channel, or (iii) both channels 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 further for any Offer
Shares.
The H Share Registrar would record all applications into its system and identify suspected
multiple applications with identical names and identification document numbers according to the
Best Practice Note on Treatment of Multiple/Suspected Multiple 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 the 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
Sponsor-Overall Coordinators, as our agent, 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 restrictions 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;
(vi) agree that our Company, the Joint Sponsors, the Sponsor-Overall Coordinators, the
Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Underwriters, the Capital Market Intermediaries, and any of their or
our Company’s respective directors, officers, employees, partners, agents, advisors, and
representatives, and any other parties involved in the Global Offering (collectively, the
“Relevant Persons ”), the H Share Registrar and HKSCC will not be liable for any
information and representations not in this prospectus and any supplement to it;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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(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 H Share Registrar, HKSCC,
HKSCC Nominees, the 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, HKSCC 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 H Share Registrar by way of publication of the results
at the time and in the manner as specified in the paragraph headed “ — B. Publication of
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) Ordinance, 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 and
obligations under the terms and conditions contained in this prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf is not
financed directly or indirectly by our Company, any of the directors, chief executives,
substantial Shareholder(s) or existing shareholder(s) of our Company or any of our
subsidiaries or any of their respective close associates; and (b) you are not accustomed
or will not be accustomed to taking instructions from our Company, any of the directors,
chief executives, substantial shareholder(s) or existing shareholder(s) of our Company
or any of our subsidiaries or any of their respective close associates in relation to the
acquisition, disposal, voting or other disposition of the H 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 Sponsor-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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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(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 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 or the HK eIPO White Form
Service Provider and (2) you have due authority to give electronic application
instructions on behalf of that other person as its agent.
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118/H1118/H1118/H1118from the “Allotment Results”
page on the designated results of
allocations website at
www.tricor.com.hk/ipo/result or
www.hkeipo.hk/IPOResult with a
“search by ID” function.
24 hours, from 11:00 p.m.
on Tuesday, May 5,
2026 to 12:00 midnight
on Monday, May 11,
2026 (Hong Kong time).
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 the
www.tricor.com.hk/ipo/result or
www.hkeipo.hk/IPOResult .
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.cofoe.com.cn which will provide
links to the above mentioned websites
of the H Share Registrar.
No later than 11:00 p.m.
on Tuesday, May 5,
2026 (Hong Kong time).
Telephone /H1118/H1118/H1118/H1118/H1118/H1118+852 3691 8488 — the allocation results
telephone enquiry line provided by the
H Share Registrar.
Between 9:00 a.m. and
6:00 p.m., from
Wednesday, May 6, 2026
to Monday, May 11,
2026 (Hong Kong time)
on a business day.
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For those applying through HKSCC EIPO channel, you may also check with your broker or
custodian from 6:00 p.m. on Monday, May 4, 2026 (Hong Kong time), HKSCC Participants can log
into FINI and review the allotment result from 6:00 p.m. on Monday, May 4, 2026 (Hong Kong
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 final Offer Price, the level of indications of interest
in the Global Offering, the level of applications in the Hong Kong Public Offering and the basis of
allocations of Hong Kong Offer Shares on the Stock Exchange’s website at www.hkexnews.hk and
our website at www.cofoe.com.cn by no later than 11:00 p.m. on Tuesday, May 5, 2026 (Hong Kong
time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou 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:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to section 44A(6) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Sponsor-Overall Coordinators, the H 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 H 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. Y ou may refer to the
paragraph headed “ — A. Application for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited ” in this section on what constitutes multiple applications;
 your application instruction 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;
 we or the Sponsor-Overall Coordinators believe that by accepting your application, it or
we would violate applicable securities or other laws, rules or regulations.
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5. If there is money settlement failure for allotted H Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC Participants
will be required to hold sufficient 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. In the extreme event of money settlement failure
by a HKSCC Participant (or its designated bank), who is acting on your behalf in settling payment
for your allotted H Shares, HKSCC will contact the defaulting HKSCC Participant and its
designated bank to determine the cause of failure and request such defaulting HKSCC Participant
to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected Hong
Kong Offer Shares will be reallocated 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 H 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. DISPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H 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 H Share certificates will be deposited into CCASS as described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will be
issued for sums paid on application.
H Share certificates will only become valid at 8:00 a.m. on the Listing Date, provided that the
Global Offering has become unconditional and the right of termination described in the section
headed “Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public Offering
— Grounds for Termination” has not been exercised. Investors who trade the H Shares on the basis
of publicly available allocation details prior to the receipt of H Share certificates or prior to the H
Share certificates becoming valid evidence of title do so entirely at their own risk.
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
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The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Dispatch/collection of H Share certificate 1
For application of
1,000,000 Hong Kong
Offer Shares
or more /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Collection in person at the H 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 Wednesday, May 6, 2026
(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 H
Share Registrar.
H 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.
Note : If you do not collect your H
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.
For application of less
than 1,000,000 Hong
Kong Offer Shares /H1118/H1118/H1118
Y our H Share certificate(s) will be
sent to the address specified in
your application instructions by
ordinary post at your own risk.
Date : Tuesday, May 5, 2026.
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HK eIPO White Form service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Wednesday, May 6, 2026. Subject to the arrangement
between you and your
broker or custodian.
Responsible party /H1118/H1118/H1118/H1118/H1118H Share Registrar. Y our broker or custodian.
Application monies paid
through single bank
account /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK eIPO White Form e-Auto
Refund payment instructions to
your designated bank account.
Y our 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 /H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be
dispatched to the address as
specified in your application
instructions by ordinary post at
your own risk.
1. Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or
Extreme Conditions in the morning on Tuesday, May 5, 2026 rendering it impossible for the relevant H Share
certificates to be dispatched to HKSCC in a timely manner, the Company shall procure the H Share Registrar
to arrange for delivery of the supporting documents and H Share certificates in accordance with the
contingency arrangements as agreed between them. Y ou may refer to “— E. Severe Weather Arrangements”
in this section.
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Thursday, April 30, 2026, if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions,
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, April 30, 2026.
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 Severe 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.cofoe.com.cn of the revised timetable.
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If a Severe Weather Signal is hoisted on Tuesday, May 5, 2026, the H Share Registrar will
make appropriate arrangements for the delivery of the H Share certificates to the HKSCC
Depository’s service counter so that they would be available for trading on Wednesday, May 6,
2026.
If a Severe Weather Signal is hoisted on Tuesday, May 5, 2026, for application of less than
1,000,000 Hong Kong Offer Shares, the despatch of physical H Share certificate(s) will be made by
ordinary post when the post office re-opens after the Severe Weather Signal is lowered or canceled
(e.g. in the afternoon of Tuesday, May 5, 2026 or on Wednesday, May 6, 2026).
If a Severe Weather Signal is hoisted on Wednesday, May 6, 2026, for application of 1,000,000
Hong Kong Offer Shares or more, physical H Share certificate(s) will be available for collection in
person at the H Share Registrar’s Office after the Severe Weather Signal is lowered or canceled (e.g.
in the afternoon of Wednesday, May 6, 2026 or on Thursday, May 7, 2026).
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the H 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 H 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 H Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by our Company, the H Share Registrar, the receiving bank 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 giving 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 Statement informs the applicant for, and holder of, Hong
Kong Offer Shares, of the policies and practices of our Company and the H Share Registrar in
relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of
Hong Kong).
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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 our Company or its agents and the H 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 H 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 our
Company or the H Share 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 dispatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform our Company
and the H Share Registrar immediately of any inaccuracies in the personal data supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for the
following purposes:
 processing your application and refund cheque and HK eIPO White Form e-Auto
Refund payment instruction(s), where applicable, verification 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 and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the H Shares
including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of our Company;
 verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the H Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from our Company and our subsidiaries;
 compiling statistical information and profiles of the holder of the H Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable our
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which applicants
and holders of the H Shares may from time to time agree.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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4. Transfer of personal data
Personal data held by our Company and the H Share Registrar relating to the applicants for
and holders of Hong Kong Offer Shares will be kept confidential but our Company and the H 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:
 our Company’s appointed agents such as financial advisors, receiving bank and overseas
principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H 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 our Company or the H
Share Registrar in connection with their respective business operation;
 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 performance 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
Our Company and the H 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 dealt
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 our
Company or the H Share Registrar hold their personal data, to obtain a copy of that data, and to
correct any data that is inaccurate. Our Company and the H 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 our Company and the H 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 attention of our joint company secretaries, or the H Share Registrar for the attention
of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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The following is the text of a report, prepared for inclusion in this document, received from
the independent reporting accountants of the Group, Ernst & Young, Certified Public Accountants,
Hong Kong.
⭰㰟㛪姯⸒Ṳ⋀㈧
榀㸖毩歁㵳勘䙮怺 979噆
⤑⏋✱ᷧ⺎ 27㧺
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF COFOE MEDICAL TECHNOLOGY CO., LTD., HUATAI FINANCIAL
HOLDINGS (HONG KONG) LIMITED AND BNP PARIBAS SECURITIES (ASIA) LIMITED
Introduction
We report on the historical financial information of Cofoe Medical Technology Co., Ltd. (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-3 to I-78, which
comprises the consolidated statements of profit or loss, statements of comprehensive income,
statements of changes in equity and statements of cash flows of the Group for each of the years
ended 31 December 2023, 2024 and 2025 (the “Relevant Periods”), and the consolidated statements
of financial position of the Group and the statements of financial position of the Company as at 31
December 2023, 2024 and 2025 and material accounting policy information and other explanatory
information (together, the “Historical Financial Information”). The Historical Financial Information
set on pages I-3 to I-78 forms an integral part of this report, which has been prepared for inclusion
in the prospectus of the Company dated 27 April 2026 (the “Prospectus”) in connection with the
initial listing of the shares of the Company on the Main Board of The Stock Exchange of Hong
Kong Limited (the “Stock Exchange”).
Directors’ responsibility for the Historical 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 set out in note
2.1 to the Historical Financial Information, and for such internal control as the directors 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 (“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.
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’ judgment, 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 accountants consider internal control relevant to the entity’s preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation set
out in note 2.1 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
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 275 ---
effectiveness of the entity’s internal control. Our work also included 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 purposes of the accountants’
report, a true and fair view of the financial position of the Group and the Company as at 31
December 2023, 2024 and 2025 and and of the financial performance and cash flows of the Group
for each of the Relevant Periods in accordance with the basis of preparation set out in note 2.1 to
the Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on the Stock Exchange
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-3 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which contains information about
the dividends declared or paid by the Company in respect of the Relevant Periods.
Ernst & Y oung
Certified Public Accountants
Hong Kong
27 April 2026
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 276 ---
I HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical
Financial Information is based, were audited by Ernst & Y oung in accordance with Hong Kong
Standards on Auditing issued by the HKICPA (the “Underlying Financial Statements”).
The Historical Financial Information is presented in Renminbi (“RMB”) and all values are
rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 277 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
REVENUE /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 2,853,695 2,982,931 3,387,499
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,681,144) (1,474,227) (1,635,894)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,172,551 1,508,704 1,751,605
Other income and gains /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 125,101 103,427 90,022
Selling and distribution expenses /H1118/H1118/H1118/H1118/H1118/H1118(740,704) (973,313) (1,158,175)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130,338) (143,955) (196,129)
Research and development expenses /H1118/H1118/H1118/H1118 (114,330) (96,410) (87,284)
Impairment losses on financial assets,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,830) (6,857) (1,368)
Fair value (losses)/gains
on financial assets at
fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,563) 9,400 49,842
Other expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,546) (7,587) (7,383)
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 (13,503) (17,912) (16,066)
Share of (losses)/profits of associates /H1118/H1118/H1118 (130) (3,498) 779
PROFIT BEFORE TAX /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 285,708 371,999 425,843
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 (32,837) (59,655) (55,527)
PROFIT FOR THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252,871 312,344 370,316
Profit attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118254,280 311,751 371,608
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,409) 593 (1,292)
252,871 312,344 370,316
EARNINGS PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF
THE PARENT
Basic (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 1.24 1.53 1.83
Diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 1.24 1.51 1.81
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 278 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
PROFIT FOR THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252,871 312,344 370,316
Other comprehensive income that may be
reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of foreign
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,068)
Other comprehensive income that will not be
reclassified to profit or loss in subsequent
periods:
Remeasurement of changes in defined benefit
plans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (838)
Income tax effect /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 138
– – (700)
OTHER COMPREHENSIVE INCOME FOR
THE YEAR, NET OF TAX /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,768)
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118252,871 312,344 368,548
Attributable to:
Owners of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118254,280 311,751 370,060
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,409) 593 (1,512)
252,871 312,344 368,548
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 279 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 1,607,743 1,563,690 1,664,984
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 – 10,300 27,962
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 372,649 344,955 395,582
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 242,407 364,342 368,912
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 6,895 17,557 31,386
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 – – 4,932
Investments in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 64,926 61,428 237,336
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 – – 5,962
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 84,111 89,930 16,013
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 34,725 44,975 40,525
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,413,456 2,497,177 2,793,594
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 634,716 659,584 675,499
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 486,000 401,839 447,059
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 280,605 222,218 267,258
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,238 689 2,644
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 851,298 1,357,421 1,016,829
Due from related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843(c) 6,452 5,059 4,334
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 99,801 99,676 76,042
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 1,469,625 1,179,004 1,345,657
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,830,735 3,925,490 3,835,322
CURRENT LIABILITIES
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 391,206 391,391 568,033
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 206,779 206,412 227,536
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 15,223 29,375 29,073
Due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843(c) – – 2,081
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 414,428 662,621 699,830
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 55,007 54,125 58,313
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,757 17,797 3,900
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,086,400 1,361,721 1,588,766
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,744,335 2,563,769 2,246,556
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,157,791 5,060,946 5,040,150
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 280 ---
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 94,099 125,174 –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 77,239 61,477 68,037
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 15,699 15,034 7,750
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 55,618 55,699 58,592
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210 1,212 –
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 6,732 – 2,882
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118249,597 258,596 137,261
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,908,194 4,802,350 4,902,889
EQUITY
Equity attributable to owners of the
parent
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 209,238 209,092 208,897
Treasury shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834 (166,931) (212,124) (140,471)
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835 4,856,888 4,799,629 4,798,432
4,899,195 4,796,597 4,866,858
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,999 5,753 36,031
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,908,194 4,802,350 4,902,889
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 281 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Y ear ended 31 December 2023
Attributable to owners of the parent
Share
capital
Capital
reserve*
Share-based
payment
reserve*
Statutory
reserve*
Treasury
shares
Retained
earnings* Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 33) (note 35) (note 35) (note 35) (note 34) (note 35)
At 1 January 2023 /H1118/H1118208,488 3,884,918 27,787 77,379 (15,739) 837,504 5,020,337 12,566 5,032,903
Profit for the year /H1118/H1118/H1118 ––––– 254,280 254,280 (1,409) 252,871
Total comprehensive
income for the year /H1118 ––––– 254,280 254,280 (1,409) 252,871
Capital injection from
non-controlling
shareholders /H1118/H1118/H1118/H1118/H1118––––––– 1,000 1,000
Acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118––––––– 4 2 4 2
Acquisition of non-
controlling interests /H1118 – ( 3 ) –––– ( 3 ) (3,200) (3,203)
Repurchase of
A-shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (156,323) – (156,323) – (156,323)
V esting of restricted
A-shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118750 37,138 (14,540) – 4,546 – 27,894 – 27,894
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,807) – – – (1,807) – (1,807)
Appropriations to
statutory reserve /H1118/H1118 – – – 17,378 – (17,378) – – –
Dividend declared /H1118/H1118/H1118 –––– 5 8 5 (245,768) (245,183) – (245,183)
At 31 December
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,238 3,922,053 11,440 94,757 (166,931) 828,638 4,899,195 8,999 4,908,194
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 282 ---
Y ear ended 31 December 2024
Attributable to owners of the parent
Share
capital
Capital
reserve*
Share-based
payment
reserve*
Statutory
reserve*
Treasury
shares
Retained
earnings* Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 33) (note 35) (note 35) (note 35) (note 34) (note 35)
At 1 January 2024 /H1118/H1118209,238 3,922,053 11,440 94,757 (166,931) 828,638 4,899,195 8,999 4,908,194
Profit for the year /H1118/H1118/H1118 ––––– 3 1 1,751 311,751 593 312,344
Total comprehensive
income for the year /H1118 ––––– 3 1 1,751 311,751 593 312,344
Capital injection from
non-controlling
shareholders /H1118/H1118/H1118/H1118/H1118––––––– 1 4 4 1 4 4
Acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118––––––– 1,158 1,158
Acquisition of non-
controlling interests /H1118 – (14,254) –––– (14,254) (5,227) (19,481)
Repurchase of
A-shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (50,097) – (50,097) – (50,097)
Cancelation of
restricted A-shares /H1118 (146) (4,231) –––– (4,377) – (4,377)
Reversal of repurchase
obligation for
restricted A-shares /H1118 –––– 4,377 – 4,377 – 4,377
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 15,94 9––– 15,949 86 16,035
Appropriations to
statutory reserve /H1118/H1118 – – – 9,788 – (9,788) – – –
Dividend declared /H1118/H1118/H1118 –––– 5 2 7 (366,474) (365,947) – (365,947)
At 31 December
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,092 3,903,568 27,389 104,545 (212,124) 764,127 4,796,597 5,753 4,802,350
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 283 ---
Y ear ended 31 December 2025
Attributable to owners of the parent
Share
capital
Capital
reserve*
Share-
based
payment
reserve*
Statutory
reserve*
Treasury
shares
Other
reserve*
Retained
earnings* Total
Non-
controlling
interests
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 33) (note 35) (note 35) (note 35) (note 34) (note 35) (note 35)
At 1 January 2025 /H1118/H1118/H1118209,092 3,903,568 27,389 104,545 (212,124) – 764,127 4,796,597 5,753 4,802,350
Profit for the year /H1118/H1118/H1118–––––– 371,608 371,608 (1,292) 370,316
Other comprehensive
income for the year,
net of tax /H1118/H1118/H1118/H1118/H1118/H1118––––– (1,548) – (1,548) (220) (1,768)
Total comprehensive
income for the year /H1118 ––––– (1,548) 371,608 370,060 (1,512) 368,548
Capital injection from
non-controlling
shareholders /H1118/H1118/H1118/H1118/H1118–––––––– 7 0 0 7 0 0
Acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118–––––––– 31,013 31,013
Cancelation of
restricted A-shares /H1118 (195) (5,300) ––––– (5,495) – (5,495)
Reversal of repurchase
obligation for
restricted A-shares /H1118 –––– 5,470 – – 5,470 – 5,470
V esting of restricted
A-shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (21,283) (20,811) – 65,949 – – 23,855 – 23,855
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 42,126 –––– 42,126 77 42,203
Dividend declared /H1118/H1118/H1118–––– 2 3 4– (365,989) (365,755) – (365,755)
At 31 December
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118208,897 3,876,985 48,704 104,545 (140,471) (1,548) 769,746 4,866,858 36,031 4,902,889
* The reserve accounts comprise the consolidated reserves of RMB4,856,888,000, RMB4,799,629,000 and
RMB4,798,432,000 in the consolidated statements of financial position as at 31 December 2023, 2024 and 2025,
respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 284 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118285,708 371,999 425,843
Adjustments for:
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,032 12,651 16,066
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (34,305) (42,368) (26,429)
Dividend distribution costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101 142 71
Fair value losses/(gains) of financial
assets at fair value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,563 (9,400) (49,842)
Gain on disposal of financial assets at
fair value through profit or loss /H1118/H1118/H1118 (43,565) (15,843) (5,722)
Share of losses/(profits) of associates /H1118 130 3,498 (779)
Gain on disposal of subsidiaries /H1118/H1118/H1118/H1118/H111838 (4,424) – (9,344)
(Gains)/losses on disposal of items of
property, plant and equipment and
intangible assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) (5,086) 1,947
Gain on termination of leases, net /H1118/H1118/H1118 (4,591) (794) (578)
Losses on scrap of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,232 409 463
Depreciation of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 99,475 114,438 129,042
Depreciation of right-of-use assets /H1118/H1118/H111815 56,626 63,613 72,295
Amortization of intangible assets /H1118/H1118/H1118/H111817 2,720 2,698 4,955
Amortization of investment properties /H1118 14 – 497 1,741
Impairment of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 51,170 31,896 32,456
Impairment of financial assets /H1118/H1118/H1118/H1118/H1118/H1118 1,830 6,857 1,368
Share-based payment expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,807) 16,035 31,700
Effect of foreign exchange
differences, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(181) (589) 3,430
(Increase)/decrease in inventories /H1118/H1118/H1118/H1118/H1118/H1118(155,956) (54,488) 34,112
Decrease/(increase) in trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118131,774 78,861 (50,583)
Decrease in prepayments, other
receivables and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,503 74,106 41,881
Increase in trade and bills payables /H1118/H1118/H1118/H1118 2,690 184 176,642
Increase/(decrease) in contract
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,986 14,152 (302)
(Decrease)/increase in other operating
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,401) 25,401 (76,188)
Cash generated from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118391,309 688,869 754,245
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,491 31,763 14,364
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,978) (57,239) (72,883)
Net cash flows from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118393,822 663,393 695,726
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 285 ---
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of items of property, plant
and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(373,165) (112,009) (125,078)
Purchases of intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 (60) (8,488) (12,274)
Acquisition of right-of-use assets /H1118/H1118/H1118/H1118/H1118/H111815 – – (40,744)
Proceeds from disposal of items of
property, plant and equipment and
intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,210 1,321 18,202
Receipts of deposits on asset sales /H1118/H1118/H1118/H1118/H1118 – 1,501 –
Purchases of financial assets at fair
value through profit and loss /H1118/H1118/H1118/H1118/H1118/H1118/H111824 (880,457) (1,416,800) (1,870,907)
Proceeds from maturity of financial
assets through profit and loss /H1118/H1118/H1118/H1118/H1118/H1118/H11181,314,575 935,920 2,263,236
Repayment of advances to an associate /H1118 – 1,361 –
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 (12,487) (61,848) (133,128)
Acquisition of an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 (59,800) – (175,129)
Prepayment for investment in
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(65,000) (72,411) –
Disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838 19,515 – 6,862
Rental receipts from investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 – 485 –
Deposit for potential acquisition /H1118/H1118/H1118/H1118/H1118/H111810,000 – –
Net cash flows (used in)/from
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(45,669) (730,968) (68,960)
CASH FLOWS FROM FINANCING
ACTIVITIES
Capital injection from non-controlling
shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000 144 700
New interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118543,078 750,349 1,156,408
Repayment of interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(358,694) (470,978) (1,249,658)
Repayment of other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,800) – –
Dividends paid to the Company’s
shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(245,768) (366,474) (365,989)
Payments for dividend distribution
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(101) (150) (75)
Payments for bank acceptance note
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(56,895) (65,499) –
Refund of deposits for bank acceptance
note /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,167 56,893 65,469
Proceeds from issue of restricted
A-shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,348 – –
Payment for treasury shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(156,323) (50,097) –
Repurchase of unvested restricted
A-shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,377) (5,495)
Acquisition of non-controlling interests /H1118 (3,203) (19,481) –
Proceeds received from vesting of
restricted A-shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 23,855
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(60,325) (56,559) (71,021)
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 286 ---
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,145) (8,011) (5,786)
Payments for listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (17,155)
Net cash flows used in financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(277,661) (234,240) (468,747)
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIV ALENTS /H1118 70,492 (301,815) 158,019
Cash and cash equivalents at beginning
of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,370,540 1,441,213 1,139,986
Effect of foreign exchange differences,
net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181 588 (3,430)
CASH AND CASH EQUIV ALENTS
AT END OF YEAR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,441,213 1,139,986 1,294,575
ANALYSIS OF BALANCES OF
CASH AND CASH EQUIV ALENTS /H1118
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,441,213 1,139,986 1,294,575
Interest receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,412 39,018 51,082
Cash and bank balances as stated in the
consolidated statements of financial
position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,625 1,179,004 1,345,657
APPENDIX I ACCOUNTANTS’ REPORT
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STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 632,730 626,406 702,454
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814 332,930 321,066 310,661
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 97,035 96,154 93,451
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 8,127 18,476 27,587
Investments in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 64,926 61,146 236,773
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 – – 5,962
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 884,150 910,072 1,278,511
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 5,073 88,341 10,038
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 10,090 11,427 3,237
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,035,061 2,133,088 2,668,674
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821 267,430 379,436 369,694
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 32,082 38,361 40,558
Prepayments, other receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 85,467 60,030 77,664
Tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 937
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118850,295 841,753 958,253
Due from related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843(c) 3,193 1,800 –
Due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118581,012 940,410 552,196
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 6,300 16,604 21,224
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 1,168,321 788,950 618,664
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,994,100 3,067,344 2,639,190
CURRENT LIABILITIES
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 190,665 172,935 273,734
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827 84,479 72,187 105,262
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 1,092 720 321
Due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843(c) – – 207
Due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118126,244 122,700 212,088
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H111829 77,052 179,061 184,953
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 9,223 10,508 693
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118384 9,551 –
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118489,139 567,662 777,258
NET CURRENT ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,504,961 2,499,682 1,861,932
TOTAL ASSETS LESS CURRENT
LIABILITIES /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,540,022 4,632,770 4,530,606
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings /H1118/H1118/H1118/H1118/H1118/H111829 94,099 125,174 –
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 – 706 355
Deferred tax liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830 12,449 11,426 –
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831 30,584 30,303 33,186
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832 6,732 – –
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118143,864 167,609 33,541
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,396,158 4,465,161 4,497,065
EQUITY
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833 209,238 209,092 208,897
Treasury shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834 (166,931) (212,124) (140,471)
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835 4,353,851 4,468,193 4,428,639
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,396,158 4,465,161 4,497,065
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 288 ---
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1 CORPORATE INFORMATION
Cofoe Medical Technology Co., Ltd. (the “Company”) is a joint stock company with limited liability established in
the People’s Republic of China (hereinafter referred to as “PRC”). The registered office of the Company is located at No.
87, Section 1, Huanbao East Road, Y uhua District, Changsha City, Hunan Province. The Company’s A shares have been listed
on the Shenzhen Stock Exchange since October 2021.
During the Relevant Periods, the Company and its subsidiaries (together, the “Group”) were principally engaged in
the manufacture, research and development, and sale of medical devices.
At the end of the Relevant Periods, the Company had direct or indirect interests in the following principal
subsidiaries, all of which are private limited liability companies. The particulars of principal subsidiaries are set out below:
Name * Notes
Place and date of
registration and
place of operations
Registered
share capital
Percentage of
equity attributable
to the Company
Principal activitiesDirect Indirect
Hunan Cofoe Medical
Equipment Co., Ltd. /H1118/H1118
(i) PRC/Chinese
mainland
7 July 2017
RMB286,887,200 100 – Manufacturing
Hunan Keyuan Medical
Equipment Selling Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(i) PRC/Chinese
mainland
18 January 2010
RMB120,000,000 100 – Trading
Hunan Haohushi Medical
Treatment Appliance
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(i) PRC/Chinese
mainland
27 November
2007
RMB30,000,000 100 – Trading
Changsha Jiannuo
Medical Device Sales
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(ii) PRC/Chinese
mainland
30 December 2015
RMB1,000,000 – 100 Trading
Hunan JOYOR
HearingCare
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(ii) PRC/Chinese
mainland
1 March 2018
RMB100,000,000 100 – Trading
Acorn Trade
(SHANGHAI) Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(ii) PRC/Chinese
mainland
13 December 2007
RMB93,064,400 100 – Trading
* The English names of the PRC companies above represent management’s best efforts in translating the Chinese
names of these companies as no English names have been registered.
(i) The statutory financial statements of this company for the years ended 31 December 2023 and 2024 prepared
in accordance with the PRC Generally Accepted Accounting Principles (“PRC GAAP”) were audited by BDO
China SHU LUN PAN Certified Public Accountants LLP (ה(౷ஷΥྫ)).
(ii) No audited statutory financial statements of these companies have been prepared for these companies as there
is no statutory requirement to issue statutory financial statements at their place of incorporation.
2.1 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with IFRS Accounting Standards, which
comprise all standards and Interpretations approved by the International Accounting Standards Board (“IASB”). All IFRS
Accounting Standards effective for the accounting period commencing from 1 January 2025, together with the relevant
transitional provisions, have been adopted by the Group in the preparation of the Historical Financial Information throughout
the Relevant Periods.
The financial statements have been prepared under the historical cost convention, except for certain financial
instruments which have been measured at fair value at the end of each of the Relevant Periods.
Basis of consolidation
The Historical Financial Information includes the financial statements of the Company and its Subsidiaries for the
Relevant Periods. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the current
ability to direct the relevant activities of the investee).
APPENDIX I ACCOUNTANTS’ REPORT
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Generally, there is a presumption that a majority of voting rights results in control. When the Company has less than
a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing
whether it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of the parent of the
Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All
intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control described above. A change in the ownership interest of a subsidiary, without
a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities and any
non-controlling interest and recognizes the fair value of any investment retained and any resulting surplus or deficit in profit
or loss. The Group’s share of components previously recognized in other comprehensive income is reclassified to profit or
loss or retained profits, as appropriate, on the same basis as would be required if the Group had directly disposed of the
related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not applied the following new and amended IFRS Accounting Standards, that have been issued but
are not yet effective, in the Historical Financial Information. The Group intends to apply these new and amended IFRS
Accounting Standards, if applicable, when they become effective.
Amendments to IFRS 10 and IAS 28 /H1118/H1118/H1118Sale or Contribution of Assets between an Investor and its
Associate or Joint V enture
3
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118Amendments to the Classification and Measurement of Financial
Instruments 1
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118Contracts Referencing Nature-dependent Electricity 1
IFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial Statements 2
IFRS 19 and its amendments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Subsidiaries without Public Accountability: Disclosures 2
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Translation to a Hyperinflationary Presentation Currency 2
Annual Improvements to IFRS Accounting
Standards — V olume 11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 1
1 Effective for annual periods beginning on or after 1 January 2026
2 Effective for annual/reporting periods beginning on or after 1 January 2027
3 No mandatory effective date yet determined but available for adoption
IFRS 18 replaces IAS 1 Presentation of Financial Statements. While a number of sections have been brought forward
from IAS 1 with limited changes, IFRS 18 introduces new requirements for presentation within the statement of profit or
loss, including specified totals and subtotals. Entities are required to classify all income and expenses within the statement
of profit or loss into one of the five categories: operating, investing, financing, income taxes and discontinued operations
and to present two new defined subtotals. It also requires disclosures about management-defined performance measures in
a single note and introduces enhanced requirements on the grouping (aggregation and disaggregation) and the location of
information in both the primary financial statements and the notes. Some requirements previously included in IAS 1 are
moved to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, which is renamed as IAS 8 Basis of
Preparation of Financial Statements. As a consequence of the issuance of IFRS 18, limited, but widely applicable,
amendments are made to IAS 7 Statement of Cash Flows, IAS 33 Earnings per Share and IAS 34 Interim Financial Reporting.
In addition, there are minor consequential amendments to other IFRS Accounting Standards. IFRS 18 and the consequential
amendments to other IFRS Accounting Standards are effective for annual periods beginning on or after 1 January 2027 with
earlier application permitted. Retrospective application is required. The Group is currently analysing the new requirements
and assessing the impact of IFRS 18 on the presentation and disclosure of the Group’s financial statements.
IFRS 19 allows eligible entities to elect to apply reduced disclosure requirements while still applying the recognition,
measurement and presentation requirements in other IFRS Accounting Standards. To be eligible, at the end of the reporting
period, an entity must be a subsidiary as defined in IFRS 10 Consolidated Financial Statements , cannot have public
accountability and must have a parent (ultimate or intermediate) that prepares consolidated financial statements available for
public use which comply with IFRS Accounting Standards or IFRS Accounting Standards. (See commentary on page (50))
APPENDIX I ACCOUNTANTS’ REPORT
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IFRS 19 was amended in April 2025 to include IFRS Accounting Standards in the eligibility criteria for applying the
standard. The standard was further amended in October 2025 to (i) remove disclosure objectives from IFRS 19; (ii) reduce
the disclosure requirements relating to supplier finance arrangements and a specific class of financial liabilities; and (iii)
replace disclosure requirements relating to management-defined performance measures with a cross-reference to IFRS 18 for
entities that use these measures. Earlier application is permitted. IFRS 19 is not expected to have any significant impact on
the Group’s financial information.
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and Measurement of Financial Instruments
clarify the date on which a financial asset or financial liability is derecognised and introduce an accounting policy option
to derecognise a financial liability that is settled through an electronic payment system before the settlement date if specified
criteria are met. The amendments clarify how to assess the contractual cash flow characteristics of financial assets with
environmental, social and governance and other similar contingent features. Moreover, the amendments clarify the
requirements for classifying financial assets with non-recourse features and contractually linked instruments. The
amendments also include additional disclosures for investments in equity instruments designated at fair value through other
comprehensive income and financial instruments with contingent features. The amendments shall be applied retrospectively
with an adjustment to opening retained profits (or other component of equity) at the initial application date. Prior periods
are not required to be restated and can only be restated without the use of hindsight. Earlier application of either all the
amendments at the same time or only the amendments related to the classification of financial assets is permitted. The
amendments are not expected to have any significant impact on the Group’s financial information.
Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent Electricity clarify the application of the
“own-use” requirements for in-scope contracts and amend the designation requirements for a hedged item in a cash flow
hedging relationship for in-scope contracts. The amendments also include additional disclosures that enable users of
financial statements to understand the effects these contracts have on an entity’s financial performance and future cash flows.
The amendments relating to the own-use exception shall be applied retrospectively. Prior periods are not required to be
restated and can only be restated without the use of hindsight. The amendments relating to the hedge accounting shall be
applied prospectively to new hedging relationships designated on or after the date of the initial application. Earlier
application is permitted. The amendments to IFRS 9 and IFRS 7 shall be applied at the same time. The amendments are not
expected to have any significant impact on the Group’s financial information.
Amendments to IFRS 10 and IAS 28 address an inconsistency between the requirements in IFRS 10 and in IAS 28
in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments
require a full recognition of a gain or loss resulting from a downstream transaction when the sale or contribution of assets
constitutes a business. For a transaction involving assets that do not constitute a business, a gain or loss resulting from the
transaction is recognised in the investor’s profit or loss only to the extent of the unrelated investor’s interest in that associate
or joint venture. The amendments are to be applied prospectively. The previous mandatory effective date of amendments to
IFRS 10 and IAS 28 was removed. However, the amendments are available for adoption now. The amendments are not
expected to have any significant impact on the Group’s financial information.
Annual Improvements to IFRS Accounting Standards — V olume 11 set out amendments to IFRS 1, IFRS 7 (and the
accompanying Guidance on implementing IFRS 7 ), IFRS 9, IFRS 10 and IAS 7. Details of the amendments that are expected
to be applicable to the Group are as follows:
 IFRS 7 Financial Instruments: Disclosures : The amendments have updated certain wording in paragraph B38 of IFRS
7 and paragraphs IG1, IG14 and IG20B of the Guidance on implementing IFRS 7 for the purpose of simplification
or achieving consistency with other paragraphs in the standard and/or with the concepts and terminology used in other
standards. In addition, the amendments clarify that the Guidance on implementing IFRS 7 does not necessarily
illustrate all the requirements in the referenced paragraphs of IFRS 7 nor does it create additional requirements.
Earlier application is permitted. The amendments are not expected to have any significant impact on the Group’s
financial information.
 IFRS 9 Financial Instruments : The amendments clarify that when a lessee has determined that a lease liability has
been extinguished in accordance with IFRS 9, the lessee is required to apply paragraph 3.3.3 of IFRS 9 and recognise
any resulting gain or loss in profit or loss. However, the amendments do not address how a lessee distinguishes
between a lease modification as defined in IFRS 16 and an extinguishment of a lease liability in accordance with IFRS
9. In addition, the amendments have updated certain wording in paragraph 5.1.3 of IFRS 9 and Appendix A of IFRS
9 to remove potential confusion. Earlier application is permitted. The amendments are not expected to have any
significant impact on the Group’s financial information.
 IFRS 10 Consolidated Financial Statements : The amendments clarify that the relationship described in paragraph B74
of IFRS 10 is just one example of various relationships that might exist between the investor and other parties acting
as de facto agents of the investor, which removes the inconsistency with the requirement in paragraph B73 of IFRS
10. Earlier application is permitted. The amendments are not expected to have any significant impact on the Group’s
financial information.
 IAS 7 Statement of Cash Flows : The amendments replace the term “cost method” with “at cost” in paragraph 37 of
IAS 7 following the prior deletion of the definition of “cost method”. Earlier application is permitted. The
amendments are not expected to have any impact on the Group’s financial information.
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2.3 MATERIAL ACCOUNTING POLICIES
Investments in associates
An associate is an entity in which the Group has a long term interest of generally not less than 20% of the equity
voting rights and over which it has significant influence. Significant influence is the power to participate in the financial and
operating policy decisions of the investee, but is not control or joint control over those policies.
The Group’s investments in associates are stated in the consolidated statement of financial position at the Group’s
share of net assets under the equity method of accounting, less any impairment losses.
The Group’s share of the post-acquisition results and other comprehensive income of associates is included in the
consolidated statement of profit or loss and consolidated other comprehensive income, respectively. In addition, when there
has been a change recognized directly in the equity of the associate, the Group recognizes its share of any changes, when
applicable, in the consolidated statement of changes in equity. Unrealized gains and losses resulting from transactions
between the Group and its associates are eliminated to the extent of the Group’s investments in the associates, except where
unrealized losses provide evidence of an impairment of the assets transferred. Goodwill arising from the acquisition of
associates is included as part of the Group’s investments in associates.
Upon loss of significant influence over the associate, the Group measures and recognizes any retained investment at
its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair
value of the retained investment and proceeds from disposal is recognized in profit or loss.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The consideration transferred is measured at
the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred by the Group,
liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued by the Group in
exchange for control of the acquiree. For each business combination, the Group elects whether to measure the
non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets.
All other components of non-controlling interests are measured at fair value. Acquisition-related costs are expensed as
incurred.
The Group determines that it has acquired a business when the acquired set of activities and assets includes an input
and a substantive process that together significantly contribute to the ability to create outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as
at the acquisition date. This includes the separation of embedded derivatives in host contracts of the acquiree.
Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date.
Contingent consideration classified as an asset or liability is measured at fair value with changes in fair value recognized
in profit or loss. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is
accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
recognized for non-controlling interests and any fair value of the Group’s previously held equity interests in the acquiree
over the identifiable assets acquired and liabilities assumed. If the sum of this consideration and other items is lower than
the fair value of the net assets acquired, the difference is, after reassessment, recognized in profit or loss as a gain on bargain
purchase.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for
impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be
impaired. The Group performs its annual impairment test of goodwill as at 31 December. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s
cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating
units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating
units) is less than the carrying amount, an impairment loss is recognized. An impairment loss recognized for goodwill is not
reversed in a subsequent period.
Where goodwill has been allocated to a cash-generating unit (or group of cash-generating units) and part of the
operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying
amount of the operation when determining the gain or loss on the disposal. Goodwill disposed of in these circumstances is
measured based on the relative value of the operation disposed of and the portion of the cash-generating unit retained.
Fair value measurement
The Group measures its certain financial instruments at fair value at the end of the reporting period. Fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell
the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a
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principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market
must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants act in their economic best
interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use
the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is observable, either directly or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than
inventories, deferred tax assets and financial assets), the asset’s recoverable amount is estimated. An asset’s recoverable
amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs of disposal, and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which
the asset belongs.
An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to
the statement of profit or loss in the period in which it arises in those expense categories consistent with the function of the
impaired asset.
An assessment is made at the end of each reporting period as to whether there is an indication that previously
recognized impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable
amount is estimated. A previously recognized impairment loss of an asset other than goodwill is reversed only if there has
been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the
carrying amount that would have been determined (net of any depreciation/amortization) had no impairment loss been
recognized for the asset in prior years. A reversal of such an impairment loss is credited to the statement of profit or loss
in the period in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and 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 of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
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(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity
related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key management personnel services
to the Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation
and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any
directly attributable costs of bringing the asset to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and
maintenance, is normally charged to the statement of profit or loss in the period in which it is incurred. In situations where
the recognition criteria are satisfied, the expenditure for a major inspection is capitalized in the carrying amount of the asset
as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, the Group
recognizes such parts as individual assets with specific useful lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment
to its residual value over its estimated useful life. The estimated useful lives are as follows:
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 to 30 years
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 years
Electronic, office equipment and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 to 5 years
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810 to 15 years
General Infrastructure and leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Shorter of remaining lease terms and
estimated useful lives
Where parts of an item of property, plant and equipment have different useful lives, the cost of that item is allocated
on a reasonable basis among the parts and each part is depreciated separately. Residual values, useful lives and the
depreciation method are reviewed, and adjusted if appropriate, at least at the end of each of the reporting period.
An item of property, plant and equipment including any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement
recognized in the statement of profit or loss in the year the asset is derecognized is the difference between the net sales
proceeds and the carrying amount of the relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not depreciated. It is reclassified to the
appropriate category of property, plant and equipment when completed and ready for use.
Investment properties
Investment properties are interests in land and buildings (including the leasehold property held as a right-of-use asset
which would otherwise meet the definition of an investment property) held to earn rental income and/or for capital
appreciation, rather than for use in the production or supply of goods or services or for administrative purposes, or for sale
in the ordinary course of business. Such properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are measured at historical cost less accumulated depreciation
and provision for any impairment in value. Depreciation is calculated on the straight-line basis over the expected useful life.
Any gains or losses on the retirement or disposal of an investment property are recognized in the statement of profit
or loss in the year of the retirement or disposal.
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired
in a business combination is the fair value at the date of acquisition. The useful lives of intangible assets are assessed to be
either finite or indefinite. Intangible assets with finite lives are subsequently amortized over the useful economic life and
assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period
and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each of the
reporting period.
Intangible assets are amortized on the straight-line basis over the following useful economic lives:
Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 to 10 years
Patents, licences and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 to 10 years
Trade marks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 years
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Research and development expenditure
All research costs are charged to the statement of profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalized and deferred only when the Group can
demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention
to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of
resources to complete the project and the ability to measure reliably the expenditure during the development. Product
development expenditure which does not meet these criteria is expensed when incurred. Capitalized development costs are
stated at cost less any impairment losses.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Group recognizes lease liabilities to make lease payments and right-of-use assets representing
the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognized at the commencement date of the lease (that is the date the underlying asset
is available for use). Right-of-use assets are measured at cost, less accumulated depreciation and any impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount
of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease terms and the estimated useful lives of the assets as follows:
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840 to 50 years
Office premises and plant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 to 10 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
(b) Lease liabilities
Lease liabilities are recognized at the commencement date of the lease at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option
reasonably certain to be exercised by the Group and payments of penalties for termination of a lease, if the lease term
reflects the Group exercising the option to terminate the lease. The variable lease payments that do not depend on an
index or a rate are recognized as an expense in the period in which the event or condition that triggers the payment
occurs.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (that is those leases that have a lease term of 12 months or less from the commencement date and do not
contain a purchase option). It also applies the recognition exemption for leases of low-value assets to leases of office
equipment that is considered to be of low value.
Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a
straight-line basis over the lease term.
Group as a lessor
When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its
leases as either an operating lease or a finance lease.
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset
are classified as operating leases. When a contract contains lease and non-lease components, the Group allocates the
consideration in the contract to each component on a relative stand-alone selling price basis. Rental income is accounted for
on a straight-line basis over the lease term and is included in revenue in the statement of profit or loss due to its operating
nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the
leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as
revenue in the period in which they are earned.
Leases that transfer substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee
are accounted for as finance leases.
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Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through
other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not
contain a significant financing component or for which the Group has applied the practical expedient of not adjusting the
effect of a significant financing component, the Group initially measures a financial asset at its fair value plus in the case
of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a
significant financing component or for which the Group has applied the practical expedient are measured at the transaction
price determined under IFRS 15 in accordance with the policies set out for “Revenue recognition” below.
In order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive
income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount
outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or
loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows,
selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business
model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified
and measured at fair value through other comprehensive income are held within a business model with the objective of both
holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned business
models are classified and measured at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within the period generally established by
regulation or convention in the marketplace are recognized on the trade date, that is, the date that the Group commits to
purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortized cost (debt instruments)
Financial assets at amortized cost are subsequently measured using the effective interest method and are
subject to impairment. Gains and losses are recognized in the statement of profit or loss when the asset is
derecognized, modified or impaired.
Financial assets at fair value through other comprehensive income (debt instruments)
For debt investments at fair value through other comprehensive income, interest income, foreign exchange
revaluation and impairment losses or reversals are recognized in the statement of profit or loss and computed in the
same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in
other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other
comprehensive income is recycled to the statement of profit or loss.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value
with net changes in fair value recognized in profit or loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognized (i.e., removed from the Group’s consolidated statement of financial position) when:
 the rights to receive cash flows from the asset have expired; or
 the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and
either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control
of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has
neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the
Group continues to recognize the transferred asset to the extent of the Group’s continuing involvement. In that case, the
Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that
reflects the rights and obligations that the Group has retained.
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Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective
interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements
that are integral to the contractual terms.
General approach
ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the
next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk
since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly
since initial recognition. When making the assessment, the Group compares the risk of a default occurring on the financial
instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial
recognition and considers reasonable and supportable information that is available without undue cost or effort, including
historical and forward-looking information.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain
cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements
held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
Debt investments at fair value through other comprehensive income and financial assets at amortized cost are subject
to impairment under the general approach and they are classified within the following stages for measurement of ECLs
except for trade receivables which apply the simplified approach as detailed below.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition
and for which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but
that are not credit-impaired financial assets and for which the loss allowance is measured at an
amount equal to lifetime ECLs
Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or
originated credit-impaired) and for which the loss allowance is measured at an amount equal to
lifetime ECLs
Simplified approach
For trade receivables that do not contain a significant financing component or when the Group applies the practical
expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in
calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead recognizes a
loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based
on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group’s financial liabilities include trade and bills payables, other payables and accruals, lease liabilities,
interest-bearing bank and other borrowings.
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Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortized cost (trade and other payables, and borrowings)
After initial recognition, trade and other payables, and interest-bearing borrowings are subsequently measured
at amortized cost, using the effective interest rate method unless the effect of discounting would be immaterial, in
which case they are stated at cost. Gains and losses are recognized in the statement of profit or loss when the liabilities
are derecognized as well as through the effective interest rate amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the effective interest rate. The effective interest rate amortization is included in finance
costs in the statement of profit or loss.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or canceled, or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition
of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is
recognized in the statement of profit or loss.
Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined on the weighted average basis
and, in the case of work in progress and finished goods, comprises direct materials, direct labor and an appropriate proportion
of overheads. Net realizable value is based on estimated selling prices less any estimated costs to be incurred to completion
and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and short-term
highly liquid deposits that are readily convertible into known amounts of cash, subject to an insignificant risk of changes
in value and held for the purpose of meeting short-term cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and
at banks, and short-term deposits as defined above.
Provisions
A provision is recognized when a present obligation (legal or constructive) has arisen as a result of a past event and
it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can
be made of the amount of the obligation.
When the effect of discounting is material, the amount recognized for a provision is the present value at the end of
the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted
present value amount arising from the passage of time is included in finance costs in the statement of profit or loss.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognized outside profit or loss is
recognized outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting
period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
 when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences;
and
 in respect of taxable temporary differences associated with investments in subsidiaries, when the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future.
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Deferred tax assets are recognized for all deductible temporary differences, and the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilized, except:
 when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and
deductible temporary differences; and
 in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets
are only recognized to the extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilized. Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the
extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset
is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the
end of each reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to
set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either
to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Treasury shares
Own equity instruments which are reacquired and held by the Company or the Group (treasury shares) are recognized
directly in equity at cost. No gain or loss is recognized in the statement of profit or loss on the purchase, sale, issue or
cancelation of the Group’s own equity instruments.
Government grants
Government grants are recognized at their fair value where there is reasonable assurance that the grant will be
received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognized as
income on a systematic basis over the periods that the costs, for which it is intended to compensate, are expensed.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to the
statement of profit or loss over the expected useful life of the relevant asset by equal annual instalments or deducted from
the carrying amount of the asset and released to the statement of profit or loss by way of a reduced depreciation charge.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods or services is transferred to the
customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods
or services.
When the consideration in a contract includes a variable amount, the amount of consideration is estimated to which
the Group will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is
estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount
of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is
subsequently resolved.
When the contract contains a financing component which provides the customer with a significant benefit of financing
the transfer of goods or services to the customer for more than one year, revenue is measured at the present value of the
amount receivable, discounted using the discount rate that would be reflected in a separate financing transaction between
the Group and the customer at contract inception. When the contract contains a financing component which provides the
Group with a significant financial benefit for more than one year, revenue recognized under the contract includes the interest
expense accreted on the contract liability under the effective interest method. For a contract where the period between the
payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not
adjusted for the effects of a significant financing component, using the practical expedient in IFRS 15.
(a) Sale of goods
Revenue from the sale of goods is recognized at the point in time when control of the asset is transferred to
the customer, generally on delivery of the goods or upon the confirmation by the customer.
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(b) V olume rebates
Retrospective volume rebates may be provided to certain customers once the quantity of products purchased
during the period exceeds a threshold specified in the contract. Rebates are offset against amounts payable by the
customer. To estimate the variable consideration for the expected future rebates, the most likely amount method is
used for contracts with a single-volume threshold and the expected value method for contracts with more than one
volume threshold. The selected method that best predicts the amount of variable consideration is primarily driven by
the number of volume thresholds contained in the contract. The requirements on constraining estimates of variable
consideration are applied and a refund liability for the expected future rebates is recognized.
(c) Warehousing and transportation services
The Group provides transportation services between its warehouses and customers. The Group recognizes
revenue from transportation services based on the point in time when the goods are delivered, because customers can
only enjoy the benefits of the service after receiving the goods. Therefore, transportation service revenue is
recognized at the time of goods receipt, and the related costs are also recognized when they occur.
Contract liabilities
A contract liability is recognized when a payment is received or a payment is due (whichever is earlier) from a
customer before the Group transfers the related goods or services. Contract liabilities are recognized as revenue when the
Group performs under the contract (i.e., transfers control of the related goods or services to the customer).
Share-based payments
The Group operates several share award schemes. Employees (including directors) of the Group receive remuneration
in the form of share-based payments, whereby employees render services in exchange for equity instruments (“equity-settled
transactions”).
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted. The fair value is determined by an external valuer, further details of which are given in note 36 to the
Historical Financial Information.
The cost of equity-settled transactions is recognized in employee benefit expense, together with a corresponding
increase in equity, over the period in which the service conditions are fulfilled. The cumulative expense recognized for
equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting
period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge
or credit to the statement of profit or loss for a period represents the movement in the cumulative expense recognized as at
the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value
of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of
equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any
other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting
conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award
unless there are also service conditions.
For awards that do not ultimately vest because service conditions have not been met, no expense is recognized. Where
awards include a market or non-vesting condition, the transactions are treated as vesting irrespective of whether the market
or non-vesting condition is satisfied, provided that all other service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the terms had
not been modified, if the original terms of the award are met. In addition, an expense is recognized for any modification that
increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date
of modification. Where an equity-settled award is canceled, it is treated as if it had vested on the date of cancelation, and
any expense not yet recognized for the award is recognized immediately.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per
share.
Other employee benefits
Pension schemes
The employees of the Group who work for Chinese mainland are required to participate in central pension schemes
implemented by the local municipal government. The subsidiaries operating in Chinese mainland are required to contribute
a certain percentage of their payroll costs to the central pension schemes. The contributions are charged to profit or loss as
they become payable in accordance with the rules of the central pension schemes.
The Group operates a defined contribution Mandatory Provident Fund Retirement Benefit Scheme (the “MPF
Scheme”) under the Mandatory Provident Fund Schemes Ordinance for employees of the Group’s subsidiary which operates
in Hongkong. Contributions are made based on a percentage of the employees’ basic salaries and are charged to the statement
of profit or loss as they become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme
are held separately from those of the Group in an independently administered fund. The Group’s employer contributions vest
fully with the employees when contributed into the MPF Scheme.
APPENDIX I ACCOUNTANTS’ REPORT
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Defined benefit plans
The Group’s statutory obligation to pay long service payment in Hong Kong is a defined benefit plan. The cost of
providing benefits relating to long service payment is determined using the projected unit credit actuarial valuation method.
The liability recognised in the consolidated statement of financial position in respect of long service payment is the net
obligation, representing the present value of the future long service payment benefits reduced by entitlements from accrued
benefits arising from MPF contributions made by the Group.
Remeasurements arising from the defined benefit pension plans, comprising
 actuarial gains and losses;
 investment returns associated with the MPF employer contributions and other experience adjustments
(excluding amounts included in net interest on the net defined benefit liability)
are recognised immediately in the consolidated statement of financial position with a corresponding debit or credit to
retained profits through other comprehensive income in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss at the earlier of:
 the date of the plan amendment or curtailment; and
 the date that the Group recognises restructuring-related costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group
recognises the following changes in the net defined benefit obligation under “cost of sales” and “administrative expenses”
in the consolidated statement of profit or loss by function:
 service costs comprising current service costs, past-service costs, gains and losses on curtailments and
non-routine settlements
 net interest expense or income
Borrowing costs
All borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the borrowing of funds.
Dividends
Interim and final dividends are recognized as a liability when they are approved by the shareholders in a general
meeting.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional currency. Each entity
in the Group determines its own functional currency and items included in the financial statements of each entity are
measured using that functional currency. Foreign currency transactions recorded by the entities in the Group are initially
recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies are translated at the functional currency rates of exchange ruling at the end of
the reporting period. Differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of
a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss on change in fair value
of the item (i.e., translation difference on the item whose fair value gain or loss is recognized in other comprehensive income
or profit or loss is also recognized in other comprehensive income or profit or loss, respectively).
The functional currencies of certain overseas subsidiaries are currencies other than the RMB. As at the end of the
reporting period, the assets and liabilities of these entities are translated into RMB at the exchange rates prevailing at the
end of the reporting period and their statements of profit or loss are translated into RMB at the exchange rates that
approximate to those prevailing at the dates of the transactions.
The resulting exchange differences are recognized in other comprehensive income and accumulated in the exchange
fluctuation reserve, except to the extent that the differences are attributable to non-controlling interests. On disposal of a
foreign operation, the cumulative amount in the reserve relating to that particular foreign operation is recognized in the
statement of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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3 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to make judgments, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.
Judgments
In the process of applying the Group’s accounting policies, management has made the following judgments, apart
from those involving estimations, which have the most significant effect on the amounts recognized in the Historical
Financial Information:
Deferred tax assets
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be
available against which the losses can be utilized. Significant management judgment is required to determine the amount of
deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits, together with
future tax planning strategies.
The Group has unrecognized deferred tax assets in respect of tax losses as at 31 December 2023, 2024 and 2025
amounting to RMB99,601,000, RMB84,676,000 and RMB73,741,000, respectively. These losses related to subsidiaries that
have a history of losses, have not expired, and may not be used to offset taxable income elsewhere in the Group. The
subsidiaries have neither any taxable temporary difference nor any tax planning opportunities available that could partly
support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize
deferred tax assets on the tax losses carried forward. Further details on deferred taxes are disclosed in note 30 to the financial
statements.
Classification of financial assets
The classification of financial assets at initial recognition depends on the Group’s business model for managing the
financial assets. In determining the business model, the Group considers how the performance of the business model and the
financial assets held within that business model are evaluated and reported to the Group’s key management personnel, the
risks that affect the performance of the business model (and the financial assets held within) and, in particular, the way those
risks are managed. In determining whether cash flows are going to be realized by collecting the financial assets’ contractual
cash flows, it is necessary for the Group to consider the reason, timing, frequency, and value of sales prior to the maturity
date.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are described below.
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the
value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group
to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount
rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at 31 December 2023,
2024 and 2025 amounting to RMB242,407,000, RMB364,342,000, RMB368,912,000. Further details are given in note 16.
Provision for expected credit losses on trade receivables
The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past
due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer
type and rating, and coverage by letter of credit and other form of credit insurance).
The assessment of the correlation among historical observed default rates, forecast economic conditions and ECLs is
a significant estimate. The amount of ECLs is sensitive to changes in circumstances and forecast economic conditions. The
Group’s historical credit loss experience and forecast of economic conditions may also not be representative of a customer’s
actual default in the future. The information about the ECLs on the Group’s trade receivables is disclosed in note 22 to the
Historical Financial Information.
Impairment of non-financial assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all non-financial assets (including the
right-of-use assets) at the end of each of the Relevant Periods. Indefinite life intangible assets are tested for impairment
annually and at other times when such an indicator exists. Other non-financial assets are tested for impairment when there
are indicators that the carrying amounts may not be recoverable. An impairment exists when the carrying value of an asset
or a cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its
value in use. The calculation of the fair value less costs of disposal is based on available data from binding sales transactions
APPENDIX I ACCOUNTANTS’ REPORT
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in an arm’s length transaction of similar assets or observable market prices less incremental costs for disposing of the asset.
When value in use calculations is undertaken, management must estimate the expected future cash flows from the asset or
cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.
Fair value of unlisted equity investments
The unlisted equity investments have been valued mainly based on a market method as detailed in note 46. The market
method requires the Group to determine the comparable public companies (peers) and select the price multiple. In addition,
the Group makes estimates about the discount for illiquidity and size differences. The Group makes estimates about expected
future cash flows, credit risk, volatility, and applicable discount rates. The Group mainly classifies the fair value of these
investments as Level 3.
Share-based payments
Several employee incentive schemes are operated for the purpose of providing incentives to the Company’s directors
and the Group’s employees. The grant date fair values of the shares of the employee incentive schemes are determined based
on independent valuation. The cumulative expense recognized for equity-settled transactions at the end of each reporting
period until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the
number of equity instruments that will ultimately vest. However, this estimate may be revised if the number of equity
instruments that will ultimately vest changes in the future. Further details are contained in note 36 to the Historical Financial
Information.
4 OPERATING SEGMENT INFORMATION AND REVENUE
For management purposes, the Group has only one reportable operating segment, which is the research and
development, manufacture and sale of medical and wellness products. Since this is the only reportable operating segment
of the Group, no further operating segment analysis thereof is presented.
Geographical information
(a) Revenue from external customers
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,803,825 2,923,780 3,088,756
Other countries/regions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,870 59,151 298,743
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 2,982,931 3,387,499
The revenue information above is based on the locations of the customers.
(b) Non-current assets
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Chinese mainland /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,378,731 2,452,202 2,635,325
Other countries/regions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 117,744
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,378,731 2,452,202 2,753,069
The non-current asset information above is based on the locations of the assets and excludes deferred tax assets.
Information about major customers
Information about external customers from which the revenue amounted to over 10% of the total revenue of the Group
during the years ended 31 December 2023, 2024 and 2025 is set out below:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118769,779 564,461 740,468
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 303 ---
5 REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue from contracts with customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 2,982,931 3,387,499
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Types of goods or services
Sale of goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,705,672 2,841,549 3,251,642
Warehousing and transportation services
and others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,023 141,382 135,857
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 2,982,931 3,387,499
Timing of revenue recognition
Transferred at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,853,695 2,982,931 3,387,499
The following table shows the amounts of revenue recognized in the years ended 31 December 2023, 2024 and 2025
that were included in the contract liabilities at the beginning of each of the Relevant Periods and recognized from
performance obligations satisfied in previous periods:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Revenue recognized that was included in contract
liabilities at beginning of the reporting period:
Sale of products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,237 15,223 29,375
(b) Performance obligations
Information about the Group’s performance obligations is summarized below:
Sale of goods
The performance obligation is satisfied upon the customer’s receipt of the goods. Transaction terms are
primarily settled in cash or on credit, with payment terms varying. For online retail and offline store customers,
payment is typically completed at order placement; however, distributor customers are usually granted a credit period,
requiring payment generally due within 30 to 90 days from the invoice date.
Warehousing and transportation services
The performance obligation is satisfied at the point in time once the services are completed and accepted by
customers. Settlement with customers is primarily on credit, with payment due within 90 days of service delivery
based on monthly reconciled statements.
The management of the Group expects the transaction price (not include variable consideration) allocated to
the remaining performance obligations (unsatisfied or partially unsatisfied) as of the end of each of the Relevant
Periods will be recognised within one year from the end of the respective periods.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 304 ---
Other income and gains
An analysis of other income and gains is as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Other income
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,027 14,754 30,129
Bank interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,305 42,368 26,429
V alue-added tax (“V A T”) additional deduction /H1118/H1118/H1118/H1118 6,290 7,679 5,632
V A T refund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,189 6,612 11,512
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,551 9,768 6,764
Total other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,362 81,181 80,466
Gains, net
Foreign exchange gains/(losses), net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158 523 (4,141)
Gain on disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,424 – 9,344
Gain on disposal of financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,565 15,843 5,722
Gain/(loss) on disposal of property, plant and
equipment and intangible assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 5,086 (1,947)
Gain on termination of leases, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,591 794 578
Total gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,739 22,246 9,556
Total other income and gains, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118125,101 103,427 90,022
6 FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Interest on interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,684 12,786 11,071
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,819 5,126 4,995
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,503 17,912 16,066
7 PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Cost of inventories sold and services
provided* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,681,144 1,474,227 1,635,894
Depreciation of property, plant and
equipment** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 99,475 114,438 129,042
Depreciation of right-of-use assets** /H1118/H1118/H1118/H1118/H111815 56,626 63,613 72,295
Amortization of intangible assets** /H1118/H1118/H1118/H1118/H111817 2,720 2,698 4,955
Impairment of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,170 31,896 32,456
(Reversal of provision)/provision for trade
and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(554) 5,202 769
Provision for impairment of prepayments
and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,384 1,655 599
Donations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,063 5,104 3,317
Fair value losses/(gains) on financial assets
at fair value through profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,563 (9,400) (49,842)
Foreign exchange (gains)/losses, net /H1118/H1118/H1118/H1118/H1118 (158) (523) 4,141
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,305) (42,368) (26,429)
Government grants income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 (17,027) (14,754) (30,129)
Gain on disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H111839 (4,424) – (9,344)
Gain on disposal of financial assets at fair
value through profit
or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(43,565) (15,843) (5,722)
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 305 ---
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Discount on derecognition of bills
receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 4 44–
(Gains)/losses on disposal of property, plant
and equipment and intangible assets, net /H1118 (1) (5,086) 1,947
Gain on disposal of items of right-of-use
assets, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,591) (794) (578)
Auditor’s remuneration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,000 2,000 2,000
Wages, salaries and allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 411,548 448,310 509,575
Pension scheme contributions and social
welfare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,813 101,217 112,937
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,807) 16,035 31,700
* Cost of inventories sold and services provided include impairment of inventories, sales related tax, expenses
relating to depreciation of property, plant and equipment, depreciation of right-of-use assets and staff costs,
which are also included in the respective total amounts disclosed separately above for each of these types of
expenses.
** Depreciation of property, plant and equipment, right-of-use assets and amortization of intangible assets
exclude the amount capitalized in CIP .
8 DIRECTORS’, SUPERVISORS’ AND CHIEF EXECUTIVE’S REMUNERATION
Directors’, supervisors’ and chief executive’s remuneration for the Relevant Period disclosed pursuant to the Listing
Rules, section 383(1)(a), (b), (c) and (f) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure
of Information about Benefits of Directors) Regulation, is as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118247 240 240
Other emoluments:
Salaries, allowances and benefits in kind /H1118/H1118/H1118/H1118/H1118/H1118/H11182,951 4,412 4,583
Performance related bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,141 1,140 984
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848 47 42
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(678) 740 2,026
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,709 6,579 7,875
During the years ended 31 December 2023, 2024 and 2025, certain directors were granted restricted shares, in respect
of their services to the Group, under the share incentive schemes of the Company, further details of which are set out in note
36 to the Historical Financial Information. The difference between the fair value of the shares granted and the subscription
price was recorded in the share-based payment reserve within equity with the corresponding “share-based payment expenses”
in profit or loss over the vesting period. The amounts of the share-based payment expenses during the years ended 31
December 2023, 2024 and 2025 are included in the above directors and chief executive’s remuneration disclosures.
(a) Independent non-executive directors
The fees paid to independent non-executive directors during the years ended 31 December 2023, 2024 and 2025 were
as follows:
Y ear ended 31 December
Notes 2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-executive directors:
Mr. Liu Aiming /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) 80 80 80
Mr. Wen Zhihao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(ii) 80 80 52
Mr. Liu Lin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iii) 7––
Mr. Ning Huabo /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iv) 80 80 80
Ms. Shen Nan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(v) –– 2 8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118247 240 240
(i) Mr. Liu Aiming was appointed in December 2019.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 306 ---
(ii) Mr. Wen Zhihao was appointed in December 2019 and resigned in August 2025.
(iii) Mr. Liu Lin was appointed in December 2019 and resigned in January 2023.
(iv) Mr. Ning Huabo was appointed in January 2023 and resigned in January 2023.
(v) Ms. Shen Nan was appointed in August 2025.
(b) Directors, supervisors and the chief executive
Y ear ended 31 December 2023
Notes Fees
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Pension
scheme
contributions
Share-based
payments
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors:
Mr. Zhang Min /H1118/H1118/H1118/H1118(i) – 342 144 8 – 494
Ms. Nie Juan /H1118/H1118/H1118/H1118/H1118(iv) ––––– –
Mr. Zhang Zhiming /H1118 (ii) – 726 280 8 – 1,014
Mr. He Bangjie /H1118/H1118/H1118/H1118(iii) – 734 280 8 (339) 683
Mr. Xue Xiaoqiao /H1118/H1118(ii) – 734 280 8 (339) 683
Mr. Fang Shengshi /H1118/H1118(v) ––––– –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,536 984 32 (678) 2,874
Supervisors:
Mr. Zeng Ziyun /H1118/H1118/H1118(vi) – 240 144 – – 384
Mr. Zhou Xiaojun /H1118/H1118(vii) ––––– –
Ms. Lu Hongyuan /H1118/H1118(vii) – 3 3––– 3 3
Mr. Zhang Zizhuo /H1118/H1118(viii) – 7 688– 9 2
Ms. Liao Y ufeng /H1118/H1118/H1118(viii) – 6 658– 7 9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 415 157 16 – 588
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,951 1,141 48 (678) 3,462
Y ear ended 31 December 2024
Notes Fees
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Pension
scheme
contributions
Share-based
payments
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors:
Mr. Zhang Min /H1118/H1118/H1118/H1118(i) – 1,198 144 8 – 1,350
Mr. Zhang Zhiming /H1118 (ii) – 1,326 280 8 – 1,614
Mr. He Bangjie /H1118/H1118/H1118/H1118(iii) – 742 280 8 370 1,400
Mr. Xue Xiaoqiao /H1118/H1118(ii) – 742 280 8 370 1,400
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,008 984 32 740 5,764
Supervisors:
Mr. Zeng Ziyun /H1118/H1118/H1118(vi) – 240 144 – – 384
Mr. Zhang Zizhuo /H1118/H1118(viii) – 9 787– 1 1 2
Ms. Liao Y ufeng /H1118/H1118/H1118(viii) – 6 748– 7 9
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 404 156 15 – 575
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,412 1,140 47 740 6,339
Y ear ended 31 December 2025
Notes Fees
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Pension
scheme
contributions
Share-based
payments
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Executive directors:
Mr. Zhang Min /H1118/H1118/H1118/H1118(i) – 1,526 144 8 – 1,678
Mr. Zhang Zhiming /H1118 (ii) – 1,326 280 8 – 1,614
Mr. Xue Xiaoqiao /H1118/H1118(iii) – 724 280 8 1,013 2,025
Mr. He Bangjie /H1118/H1118/H1118/H1118(ii) – 743 280 9 1,013 2,045
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,319 984 33 2,026 7,362
Supervisors:
Mr. Zeng Ziyun /H1118/H1118/H1118(vi) – 1 5 7––– 1 5 7
Mr. Zhang Zizhuo /H1118/H1118(viii) – 6 3–3– 6 6
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 307 ---
Notes Fees
Salaries,
allowances
and benefits
in kind
Performance
related
bonuses
Pension
scheme
contributions
Share-based
payments
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Ms. Liao Y ufeng /H1118/H1118/H1118(viii) – 4 4–6– 5 0
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2 6 4–9– 2 7 3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,583 984 42 2,026 7,635
(i) Mr. Zhang Min was appointed in September 2017.
(ii) Mr. Zhang Zhiming and Mr. Xue Xiaoqiao were appointed in December 2019.
(iii) Mr. He Banagjie was appointed in October 2017.
(iv) Ms. Nie Juan was appointed in September 2017 and resigned in January 2023.
(v) Mr. Fang Shengshi was appointed in December 2019 and resigned in January 2023.
(vi) Mr. Zeng Ziyun was appointed in December 2019 and resigned in August 2025.
(vii) Mr. Zhou Xiaojun and Ms. Lu Hongywan were appointed in December 2019 and resigned in January 2023.
(viii) Mr. Zhang Zizhuo and Ms. Liao Y ufeng were appointed in January 2023 and resigned in August 2025.
There was no arrangement under which a director or the chief executive waived or agreed to waive any remuneration
during the years ended 31 December 2023, 2024 and 2025.
9 FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the years ended 31 December 2023, 2024 and 2025 included 1, 2 and 2
directors, respectively, details of whose remuneration are set out in note 8 above. Details of the remuneration for the
remaining 4, 3 and 3 highest paid employees who are neither a director, supervisor nor chief executive of the Company
during the years ended 31 December 2023, 2024 and 2025 are as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Salaries, allowances and benefits in kind /H1118/H1118/H1118/H1118/H1118/H1118/H11183,079 3,141 2,376
Performance related bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,040 640 760
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829 30 26
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(429) 2,145 1,976
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,719 5,956 5,138
The numbers of non-director, non-supervisor and non-chief executive highest paid employees whose remuneration
fell within the following bands are as follows:
Number of employees
Y ear ended 31 December
2023 2024 2025
Below HK$1,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182––
HK$1,000,000 to HK$2,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213
HK$2,000,000 to HK$3,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–2–
HK$3,000,000 to HK$4,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
HK$4,000,000 to HK$5,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Over HK$5,000,000 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118433
During the years ended 31 December 2023, 2024 and 2025, restricted shares were granted to non-director and
non-chief executive highest paid employees in respect of their services to the Group, further details of which are included
in the disclosures in note 36 to the Historical Financial Information. The fair value of such shares, which has been recognized
in the statement of profit or loss over the vesting period, was determined as at the date of grant and the amount included
in the Historical Financial Information for the years ended 31 December 2023, 2024 and 2025 is included in the above
non-director and non-chief executive highest paid employees’ remuneration disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 308 ---
10 INCOME TAX
The members of the Group which are domiciled and operated are subject to income tax on an entity basis on profits
arising in or derived from the countries/jurisdictions.
Hong Kong
Hong Kong profits tax is calculated at 16.5% on the estimated assessable profits for the Track Record Period.
However, one subsidiary of the Group which is qualifying corporation can elect for the two-tiered profits tax rates regime.
Under the two-tiered profits tax rate regime, the first HK$2,000,000 of assessable profits of the qualifying Group entity
established in Hong Kong SAR are taxed at 8.25% and the remaining profits are taxed at 16.5%.
Chinese mainland
The provision for corporate income tax in Chinese mainland is based on the statutory rate of 25% of the taxable profits
determined in accordance with the Enterprise Income Tax Law, which was approved and became effective on January 1,
2008, except for the Company and certain subsidiaries of the Group in Chinese mainland which are granted tax concession
and are taxed at preferential tax rates.
The Company and Hunan Cofoe Medical Equipment Co., Ltd. were qualified as High and New Technology
Enterprises and enjoyed a preferential income tax rate of 15% during the years ended 31 December 2023, 2024 and 2025.
Hunan Cangtianxia Intelligent Logistics & Storage Co., Ltd., was qualified as High and New Technology Enterprises
and enjoyed a preferential income tax rate of 15% during the years ended 31 December 2023 and 2024.
Qidong Farjoy Medical Materials Co., Ltd. (acquired in 2025), Hunan Kefu Hearing Technology Co., Ltd., and Jerry
Medical Equipment (Nantong) Co., Ltd, were qualified as a High and New Technology Enterprise and enjoyed a preferential
income tax rate of 15% since 2025.
Certain subsidiaries of the Group have applied the Small-Scaled Minimal Profit Corporate Income Tax Preferential
Policy announced by the PRC’s Ministry of Finance and the State Administration of Taxation. From 1 January 2021 to 31
December 2022, the portion of annual taxable income of small and micro enterprises not exceeding RMB1,000,000 was
deducted to 12.5% of the taxable income and subject to income tax at a rate of 20%. From 1 January 2023 to 31 December
2027, the portion of annual taxable income of small and micro enterprises not exceeding RMB1,000,000 was deducted to
25% of the taxable income and subject to income tax at a rate of 20%.
The income tax expense of the Group for the years ended 31 December 2023, 2024 and 2025 is analyzed as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,158 70,570 52,835
Deferred income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,321) (10,915) 2,692
Total tax charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,837 59,655 55,527
A reconciliation of the tax expense applicable to profit before tax at the statutory rate for the countries/jurisdictions
in which the Company and its subsidiaries are domiciled and operating to the tax expense at the effective tax rate is as
follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Profit before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118285,708 371,999 425,843
Tax at the statutory tax rate (15%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,856 55,800 63,876
Effect of different tax rates of subsidiaries /H1118/H1118/H1118/H1118/H1118/H111883 746 9,051
Adjustments in respect of current tax of previous
periods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118504 3,985 1,394
Income not subject to tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,505) – (439)
Expenses not deductible for tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,654 10,837 7,509
Additional deductible allowance for fixed assets,
R&D expenses, and salaries of disabled
employees reduced taxable income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(14,018) (13,015) (11,670)
Tax losses utilized from previous periods /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,885) – (6,360)
Tax losses for which no deferred income tax asset
was recognized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,443 1,715 1,373
Effect on opening deferred tax of increase in rates /H1118/H1118 (1,295) (413) (3,228)
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 309 ---
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Impact of permanent differences arising from share-
based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (5,979)
Tax charge at the Group’s effective tax rate /H1118/H1118/H1118/H1118/H1118/H111832,837 59,655 55,527
11 DIVIDENDS
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Proposed interim — RMB0.60 per ordinary share /H1118/H1118 – 122,037 121,918
Proposed final — RMB1.20 per ordinary share /H1118/H1118/H1118/H1118 244,437 244,071 246,022
The proposed final dividend for the year is subject to the approval of the Company’s shareholders at the annual
general meeting (see note 48).
12 EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
(a) Basic:
The calculation of the basic earnings per share amounts is based on the profit attributable to ordinary equity holders
of the parent, and the weighted average numbers of ordinary shares of 204,771,645, 203,577,948, and 203,500,769
outstanding during the years ended 31 December 2023, 2024 and 2025, respectively.
Y ear ended 31 December
2023 2024 2025
Earnings
Profit attributable to ordinary equity holders of the
parent (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118254,280 311,751 371,608
Shares
Weighted average number of ordinary shares
outstanding used in the basic earnings per share
calculation (’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118204,772 203,578 203,501
Basic earnings per share (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.24 1.53 1.83
(b) Diluted:
The calculation of the diluted earnings per share amounts is based on the profit attributable to ordinary equity holders
of the parent. The weighted average numbers of ordinary shares used in the calculations are the numbers of ordinary shares
outstanding during the years ended 31 December 2023, 2024 and 2025, as used in the basic earnings per share calculation,
and the weighted average numbers of restricted ordinary shares with a contingent non-market performance condition
assumed to have been released upon vesting of all dilutive potential ordinary shares.
Y ear ended 31 December
2023 2024 2025
Earnings
Profit attributable to ordinary equity holders of the
parent (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118254,280 311,751 371,608
Shares
Weighted average number of ordinary shares used in
the basic earnings per share calculation (‘000) /H1118/H1118/H1118 204,772 203,578 203,501
Adjustment for the restricted A shares (’000) /H1118/H1118/H1118/H1118/H1118 88 2,218 1,887
Weighted average number of ordinary shares used in
the diluted earnings per share calculation (’000) /H1118/H1118 204,860 205,796 205,388
Diluted earnings per share (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.24 1.51 1.81
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 310 ---
13 PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
General
infrastructure
and leasehold
improvements Motor vehicles
Electronic,
office
equipment
and others Machinery
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,106,677 107,015 9,998 92,803 163,705 171,392 1,651,590
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(11,009) (46,700) (6,629) (39,029) (26,243) – (129,610)
Net carrying amount /H1118/H1118/H11181,095,668 60,315 3,369 53,774 137,462 171,392 1,521,980
At 1 January 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H11181,095,668 60,315 3,369 53,774 137,462 171,392 1,521,980
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 18,820 4,651 34,432 49,120 94,727 201,750
Disposal of a subsidiary /H1118 – (5,862) – (2,970) (6,069) – (14,901)
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (16) (462) (1,061) (72) (1,611)
Depreciation provided
during the year /H1118/H1118/H1118/H1118/H1118(35,248) (22,609) (1,643) (20,087) (19,888) – (99,475)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118141,467 259 804 2,908 71,278 (216,716) –
At 31 December 2023, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118/H11181,201,887 50,923 7,165 67,595 230,842 49,331 1,607,743
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,248,144 77,648 15,273 123,753 275,954 49,331 1,790,103
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(46,257) (26,725) (8,108) (56,158) (45,112) – (182,360)
Net carrying amount /H1118/H1118/H11181,201,887 50,923 7,165 67,595 230,842 49,331 1,607,743
Buildings
General
infrastructure
and leasehold
improvements Motor vehicles
Electronic,
office
equipment
and others Machinery
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,248,144 77,648 15,273 123,753 275,954 49,331 1,790,103
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(46,257) (26,725) (8,108) (56,158) (45,112) – (182,360)
Net carrying amount /H1118/H11181,201,887 50,923 7,165 67,595 230,842 49,331 1,607,743
At 1 January 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H11181,201,887 50,923 7,165 67,595 230,842 49,331 1,607,743
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,778 130 38,326 11,263 23,803 84,300
Acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118––– 6 9 49– 7 0 3
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (80) (970) (4,714) – (5,764)
Depreciation provided
during the year /H1118/H1118/H1118/H1118(39,696) (19,482) (3,772) (25,811) (26,102) – (114,863)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,797) 331 – 2,839 22,199 (23,001) (8,429)
At 31 December 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H11181,151,394 42,550 3,443 82,673 233,497 50,133 1,563,690
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,232,435 77,946 14,879 168,065 303,480 50,133 1,846,938
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(81,041) (35,396) (11,436) (85,392) (69,983) – (283,248)
Net carrying amount /H1118/H11181,151,394 42,550 3,443 82,673 233,497 50,133 1,563,690
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 311 ---
Buildings
General
infrastructure
and leasehold
improvements Motor vehicles
Electronic,
office
equipment
and others Machinery
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2025
At 1 January 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,232,435 77,946 14,879 168,065 303,480 50,133 1,846,938
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(81,041) (35,396) (11,436) (85,392) (69,983) – (283,248)
Net carrying amount /H1118/H11181,151,394 42,550 3,443 82,673 233,497 50,133 1,563,690
At 1 January 2025, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H11181,151,394 42,550 3,443 82,673 233,497 50,133 1,563,690
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118377 13,336 3,568 7,720 4,594 112,490 142,083
Acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H111866,018 14,630 937 3,788 14,287 – 99,660
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (489) (3,168) (7,348) – (11,005)
Disposal of a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (149) –––– (149)
Depreciation provided
during the year /H1118/H1118/H1118/H1118(45,831) (24,064) (1,947) (26,846) (30,354) – (129,042)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 23,994 (23,994) –
Exchange realignment /H1118 (194) (46) (1) (11) (3) – (255)
At 31 December 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H11181,171,764 46,257 5,511 64,156 238,667 138,629 1,664,984
At 31 December 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,298,480 111,855 18,316 172,633 336,994 138,629 2,076,907
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(126,716) (65,598) (12,805) (108,477) (98,327) – (411,923)
Net carrying amount /H1118/H11181,171,764 46,257 5,511 64,156 238,667 138,629 1,664,984
The Company
Buildings
General
infrastructure
and leasehold
improvements Motor vehicles
Electronic,
office
equipment
and others Machinery
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118794,472 27,569 2,786 26,598 78,608 51,518 981,551
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118– (24,194) (2,279) (10,635) (7,727) – (44,835)
Net carrying amount /H1118/H1118794,472 3,375 507 15,963 70,881 51,518 936,716
At 1 January 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118794,472 3,375 507 15,963 70,881 51,518 936,716
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 274 27 6,604 4,665 29,485 41,055
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (891) (1,275) (42) (2,208)
Depreciation provided
during the year /H1118/H1118/H1118/H1118(16,182) (2,740) (245) (5,794) (7,942) – (32,903)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(312,814) – 82 1,257 39,149 (37,604) (309,930)
At 31 December 2023,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118465,476 909 371 17,139 105,478 43,357 632,730
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118480,810 6,055 2,885 32,178 120,764 43,357 686,049
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(15,334) (5,146) (2,514) (15,039) (15,286) – (53,319)
Net carrying amount /H1118/H1118465,476 909 371 17,139 105,478 43,357 632,730
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 312 ---
Buildings
General
infrastructure
and leasehold
improvements Motor vehicles
Electronic,
office
equipment
and others Machinery
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118480,810 6,055 2,885 32,178 120,764 43,357 686,049
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(15,334) (5,146) (2,514) (15,039) (15,286) – (53,319)
Net carrying amount /H1118/H1118465,476 909 371 17,139 105,478 43,357 632,730
At 1 January 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118465,476 909 371 17,139 105,478 43,357 632,730
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,666 31 2,905 7,753 22,344 34,699
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1) (491) (7,650) – (8,142)
Depreciation provided
during the year /H1118/H1118/H1118/H1118(15,199) (741) (130) (5,878) (12,016) – (33,964)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,08 3––– 18,949 (18,949) 1,083
At 31 December 2024,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118451,360 1,834 271 13,675 112,514 46,752 626,406
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,894 3,311 2,909 33,964 138,499 46,752 707,329
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(30,534) (1,477) (2,638) (20,289) (25,985) – (80,923)
Net carrying amount /H1118/H1118451,360 1,834 271 13,675 112,514 46,752 626,406
Buildings
General
infrastructure
and leasehold
improvements Motor vehicles
Electronic,
office
equipment
and others Machinery
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2025
At 1 January 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,894 3,311 2,909 33,964 138,499 46,752 707,329
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(30,534) (1,477) (2,638) (20,289) (25,985) – (80,923)
Net carrying amount /H1118/H1118451,360 1,834 271 13,675 112,514 46,752 626,406
At 1 January 2025, net
of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118451,360 1,834 271 13,675 112,514 46,752 626,406
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837 3,692 11 3,945 2,707 99,299 109,691
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (8) (31) (148) – (187)
Depreciation provided
during the year /H1118/H1118/H1118/H1118(15,190) (1,146) (46) (5,366) (11,986) – (33,734)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2 (18) 10,393 (10,099) 278
At 31 December 2025,
net of accumulated
depreciation /H1118/H1118/H1118/H1118/H1118/H1118436,207 4,380 230 12,205 113,480 135,952 702,454
At 31 December 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,931 7,002 2,758 37,712 151,730 135,952 817,085
Accumulated
depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118(45,724) (2,622) (2,528) (25,507) (38,250) – (114,631)
Net carrying amount /H1118/H1118436,207 4,380 230 12,205 113,480 135,952 702,454
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 313 ---
14 INVESTMENT PROPERTIES
The Group
Total
RMB’000
31 December 2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
At 1 January 2024, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Transfer from property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,797
Amortization provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(497)
At 31 December 2024, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,300
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,710
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,410)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,300
Total
RMB’000
31 December 2025
At 1 January 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,710
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,410)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,300
At 1 January 2025, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,300
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,518
Amortization provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,741)
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(115)
At 31 December 2025, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,962
At 31 December 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,109
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,147)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,962
The Company
Total
RMB’000
31 December 2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
At 1 January 2023, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Transfer from property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118309,930
Transfer from right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,597
Amortization provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,597)
At 31 December 2023, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332,930
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118345,274
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,344)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332,930
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 314 ---
Total
RMB’000
31 December 2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118345,274
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,344)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332,930
At 1 January 2024, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332,930
Transfer from right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869
Transfer to property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,083)
Transfer to right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(269)
Amortization provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,581)
At 31 December 2024, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,066
At 31 December 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,998
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,932)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,066
Total
RMB’000
31 December 2025
At 1 January 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,998
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,932)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,066
At 1 January 2025, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,066
Amortization provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,405)
At 31 December 2025, net of accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118310,661
At 31 December 2025:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,998
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(33,337)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118310,661
15 LEASES
The Group as a lessee
The Group has lease contracts for various items of buildings. Leases of buildings generally have lease terms between
2 and 10 years. Other equipment generally has lease terms of 12 months or less or is individually of low value. Generally,
the Group is restricted from assigning and subleasing the leased assets outside the Group.
(a) Right-of-use assets
The carrying amounts of right-of-use assets and the movements during the Relevant Periods are as follows:
The Group
Leasehold land
Office premises
and plant Total
RMB’000 RMB’000 RMB’000
31 December 2023
Carrying amount at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118238,691 136,764 375,455
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 87,471 87,471
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,591 1,591
Reassessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (7,383) (7,383)
Early termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (23,030) (23,030)
Disposals of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (3,877) (3,877)
Depreciation charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,032) (52,546) (57,578)
Carrying amount at 31 December 2023 /H1118/H1118/H1118/H1118 233,659 138,990 372,649
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 315 ---
Leasehold land
Office premises
and plant Total
RMB’000 RMB’000 RMB’000
31 December 2024
Carrying amount at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118233,659 138,990 372,649
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 34,343 34,343
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 12,435 12,435
Reassessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 456 456
Early termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (10,637) (10,637)
Depreciation charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,032) (59,259) (64,291)
Carrying amount at 31 December 2024 /H1118/H1118/H1118/H1118 228,627 116,328 344,955
Leasehold land
Office premises
and plant Total
RMB’000 RMB’000 RMB’000
31 December 2025
Carrying amount at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118228,627 116,328 344,955
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,742 63,539 104,281
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 39,573 39,573
Early termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (19,894) (19,894)
Depreciation charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,373) (67,600) (72,973)
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (360) (360)
Carrying amount at 31 December 2025 /H1118/H1118/H1118/H1118 263,996 131,584 395,582
The Company
Leasehold land
Office premises
and plant Total
RMB’000 RMB’000 RMB’000
31 December 2023
Carrying amount at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118130,414 3,927 134,341
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(32,597) – (32,597)
Early termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (213) (213)
Depreciation charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,125) (2,371) (4,496)
Carrying amount at 31 December 2023 /H1118/H1118/H1118/H1118 95,692 1,343 97,035
Leasehold land
Office premises
and plant Total
RMB’000 RMB’000 RMB’000
31 December 2024
Carrying amount at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H111895,692 1,343 97,035
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,490 2,490
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200 – 200
Depreciation charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,065) (1,506) (3,571)
Carrying amount at 31 December 2024 /H1118/H1118/H1118/H1118 93,827 2,327 96,154
Leasehold land
Office premises
and plant Total
RMB’000 RMB’000 RMB’000
31 December 2025
Carrying amount at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H111893,827 2,327 96,154
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 948 948
Depreciation charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,216) (1,435) (3,651)
Carrying amount at 31 December 2025 /H1118/H1118/H1118/H1118 91,611 1,840 93,451
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 316 ---
(b) Lease liabilities
The carrying amounts of lease liabilities and the movements during the Relevant Periods are as follows:
The Group
Office premises
and plant
RMB’000
31 December 2023
Carrying amount at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,241
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,556
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118633
Reassessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,314)
Early termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(21,553)
Disposals of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,811)
Accretion of interest recognized during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,819
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(60,325)
Carrying amount at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,246
Analyzed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,007
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,239
Office premises
and plant
RMB’000
31 December 2024
Carrying amount at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,246
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,349
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,266
Reassessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118475
Early termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(11,301)
Accretion of interest recognized during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,126
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(56,559)
Carrying amount at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,602
Analyzed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,125
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,477
Office premises
and plant
RMB’000
31 December 2025
Carrying amount at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,602
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,917
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,404
Early termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(19,187)
Accretion of interest recognized during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,995
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(360)
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(71,021)
Carrying amount at 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118126,350
Analyzed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,313
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,037
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 317 ---
The Company
Office premises
and plant
RMB’000
31 December 2023
Carrying amount at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,387
Reassessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(286)
Accretion of interest recognized during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Carrying amount at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,223
Analyzed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,223
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Office premises
and plant
RMB’000
31 December 2024
Carrying amount at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,223
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,490
Accretion of interest recognized during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844
Lease relief /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(543)
Carrying amount at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,214
Analyzed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,508
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118706
Office premises
and plant
RMB’000
31 December 2025
Carrying amount at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,214
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343
Accretion of interest recognized during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847
Lease payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,556)
Carrying amount at 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,048
Analyzed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118693
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118355
The maturity analysis of lease liabilities is disclosed in note 47 to the Historical Financial Information.
(c) The amounts recognized in profit or loss in relation to leases are as follows:
The Group
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Depreciation charge of right-of-use assets /H1118/H1118/H1118 57,578 64,291 72,973
Less: Depreciation of leasehold land
capitalized in CIP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118952 678 678
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,626 63,613 72,295
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,819 5,126 4,995
Expense related to
short-term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,866 5,003 5,619
Total amount recognized in profit or loss /H1118/H1118/H1118 65,311 73,742 82,909
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 318 ---
The Company
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Interest on lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122 44 47
Depreciation charge of right-of-use assets /H1118/H1118/H1118 4,496 3,571 3,651
Expense relating to
short-term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118613 62 70
Total amount recognized in profit or loss /H1118/H1118/H1118 5,231 3,677 3,768
(d) The total cash outflows for leases are disclosed in note 39(c) to the Historical Financial Information.
16 GOODWILL
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of year
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118230,643 242,555 364,490
Accumulated impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(148) (148) (148)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118230,495 242,407 364,342
Cost at beginning of year,
net of accumulated impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118230,495 242,407 364,342
Acquisition of subsidiaries
(Note 38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,912 121,935 4,570
Impairment during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Carrying amount at end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,407 364,342 368,912
At end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,555 364,490 369,060
Accumulated impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(148) (148) (148)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,407 364,342 368,912
Impairment testing of goodwill
Goodwill acquired through business combinations is allocated to the following cash-generating units for impairment
testing:
 Guizhou Cofoe Medical Equipment Co., Ltd. cash-generating unit
 Shandong Cofoe Medical Equipment Co., Ltd. cash-generating unit
 Changsha Jiannuo Medical Device Sales Co., Ltd. cash-generating unit
 Zhuhai Acorn Electronics Technology Co., Ltd. cash-generating unit
 Jerry Medical Equipment (Shanghai) Co., Ltd. cash-generating unit
 Acorn Trade (SHANGHAI) Co., Ltd. cash-generating unit
 Sichuan Jian’er Hearing Aid Co., Ltd. cash-generating unit
 Sichuan Lixiang Health Technology Co., Ltd. cash-generating unit
 Beijing Haiyinrui Hearing Technology Co., Ltd. cash-generating unit
 Changsha Nuoyake Medical Equipment Sales Co., Ltd. cash-generating unit
 Hunan Zeling Medical Equipment Co., Ltd. cash-generating unit
 Shanghai Tianlaizhiyin Medical Instruments Co., Ltd. cash-generating unit
 Beijing Lingyun Technology Co., Ltd. cash-generating unit
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 319 ---
 Inner Mongolia Lingyun Technology Co., Ltd. cash-generating unit
 Shanghai Huazhou Pressure Sensitive Adhesive Products Co., Ltd. cash-generating unit
 HUMANA Medical Limited cash-generating unit
The carrying amounts of goodwill allocated to each of the cash-generating units are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Guizhou Cofoe Medical Equipment Co., Ltd. /H1118/H1118/H1118/H1118/H11181,232 1,232 1,232
Shandong Cofoe Medical Equipment Co., Ltd. /H1118/H1118/H1118/H1118 1,551 1,551 1,551
Changsha Jiannuo Medical Device Sales Co., Ltd. /H1118/H1118 82 82 82
Zhuhai Acorn Electronics Technology Co., Ltd. /H1118/H1118/H1118 8,589 8,589 8,589
Jerry Medical Equipment (Shanghai) Co., Ltd. /H1118/H1118/H1118/H1118 36,989 36,989 36,989
Acorn Trade (SHANGHAI)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118168,293 168,293 168,293
Sichuan Jian’er Hearing Aid Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,008 13,008 13,008
Sichuan Lixiang Health Technology Co., Ltd. /H1118/H1118/H1118/H1118 751 751 751
Beijing Haiyinrui Hearing Technology Co., Ltd. /H1118/H1118/H1118 10,242 10,242 10,242
Changsha Nuoyake Medical Equipment Sales Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,670 1,670 1,670
Hunan Zeling Medical Equipment Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118 – 64,560 64,560
Shanghai Tianlaizhiyin Medical Instruments Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 21,135 21,135
Beijing Lingyun Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 24,510 24,510
Inner Mongolia Lingyun Technology Co., Ltd. /H1118/H1118/H1118/H1118 – 11,730 11,730
Shanghai Huazhou Pressure Sensitive Adhesive
Products Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,616
Humana Medical Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 954
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,407 364,342 368,912
Management engaged independent external valuers to assess the recoverable amounts of goodwill as at the end of
each year. The recoverable amount of cash-generating units has been determined based on a value-in-use calculation using
cash flow projections based on financial budgets covering a five-year period. The cash flows beyond the five-year period
are extrapolated using zero growth rate, with the assumption that the business operates perpetually.
The following table sets out the key assumptions adopted by management in the impairment assessment of major
cash-generating units:
As at 31 December 2023
Zhuhai Acorn
Electronics
Technology
Co., Ltd.
Jerry Medical
Equipment
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan Jian’er
Hearing Aid Co.,
Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
(i) (ii) (iii) (iv) (v)
Revenue annual growth
rate — average of the
forecast period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.03% 11.02% 3.00% 3.69% 4.50%
Average gross margin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856.83% 16.85% 66.87% 73.40% 68.13%
Pre-tax discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811.92% 10.75% 12.37% 11.29% 9.85%
As at 31 December 2024
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Equipment
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix)
Revenue annual
growth rate —
average of the
forecast period /H1118 10.03% 7.30% 3.00% 6.39% 11.24% 5.25% 5.74% 3.22% 4.09%
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 320 ---
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Equipment
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix)
Average gross
margin /H1118/H1118/H1118/H111840.99% 19.60% 74.77% 74.47% 63.40% 71.69% 61.48% 71.57% 76.73%
Pre-tax discount
rate /H1118/H1118/H1118/H1118/H1118/H111811.36% 10.87% 13.48% 13.03% 11.56% 11.60% 11.54% 13.43% 12.73%
As at 31 December 2025
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Equipment
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix)
Revenue annual
growth rate —
average of the
forecast period /H1118 5.19% 7.95% 2.25% 7.50% 10.35% 2.75% 4.01% 1.22% 6.52%
Average gross
margin /H1118/H1118/H1118/H111855.95% 21.21% 75.48% 74.01% 47.93% 61.74% 42.35% 76.99% 76.47%
Pre-tax discount
rate /H1118/H1118/H1118/H1118/H1118/H111811.57% 12.13% 13.65% 13.41% 11.50% 11.64% 11.61% 13.86% 13.24%
(i) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Zhuhai Acorn Electronics Technology Co., Ltd. cash-generating unit exceeded its carrying amounts by
RMB8,794,000, RMB1,801,000 and RMB2,678,000 respectively.
(ii) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Jerry Medical Equipment (Shanghai) Co., Ltd. cash-generating unit exceeded its carrying amounts by
RMB2,771,000, RMB3,293,000 and RMB13,132,000 respectively.
(iii) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Acorn Trade (SHANGHAI) Co., Ltd. cash-generating unit exceeded the carrying amounts by
RMB515,360,000, RMB541,701,000 and RMB618,660,000 respectively.
(iv) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Sichuan Jian’er Hearing Aid Co., Ltd. cash-generating unit exceeded the carrying amounts by RMB985,000,
RMB2,716,000 and RMB5,839,000 respectively.
(v) As at 31 December 2023, 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Beijing Haiyinrui Hearing Technology Co., Ltd. cash-generating unit exceeded the carrying amounts by
RMB604,000, RMB530,000 and RMB1,712,000 respectively.
(vi) As at 31 December 2024 and 2025, based on the value-in-use calculations, the recoverable amount of Hunan
Zeling Medical Equipment Co., Ltd. cash-generating unit exceeded the carrying amounts by RMB3,011,000
and RMB6,109,000 respectively.
(vii) As at 31 December 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of
Shanghai Tianlaizhiyin Medical Instruments Co., Ltd. cash-generating unit exceeded the carrying amounts by
RMB898,000 and RMB3,725,000 respectively.
(viii) As at 31 December 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of Beijing
Lingyun Technology Co., Ltd. cash-generating unit exceeded the carrying amounts by RMB26,780,000 and
RMB32,007,000 respectively.
(ix) As at 31 December 2024 and 2025, based on the value-in-use calculations, the recoverable amounts of Inner
Mongolia Lingyun Technology Co., Ltd. cash-generating unit exceeded the carrying amounts by
RMB1,345,000 and RMB1,456,000 respectively.
Assumptions were used in the value-in-use calculations of the CGUs for the Relevant Periods. The key assumptions
used in the value in use calculations reflect a combination of internal and external factors impacting budgeted sales and gross
margins and discount rates. The following describes each key assumption on which management has based its cash flow
projections to undertake impairment testing of goodwill:
Budgeted sales and gross margins — The basis used to determine the value assigned to the budgeted sales and gross
margins is the average results achieved in the year immediately before the budget year, increased for expected efficiency
improvements, and expected market development.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 321 ---
Discount rates — The discount rates used are before tax and reflect specific risks relating to the relevant units.
The values assigned to the key assumptions on the market development of the cash-generating units and discount rates
are consistent with external information sources.
Sensitivity analysis of goodwill
Management has undertaken a sensitivity analysis on the impairment test of goodwill. The following table sets forth
the hypothetical changes to the budgeted sales, gross margins and discount rates that would, in isolation, have removed the
remaining headroom respectively as at 31 December 2023, 2024 and 2025:
As at 31 December 2023
Zhuhai Acorn
Electronics
Technology
Co., Ltd.
Jerry Medical
Equipment
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan Jian’er
Hearing Aid Co.,
Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Decrease in budgeted sales /H1118/H1118/H1118/H1118/H111825.54% 0.77% 32.11% 0.35% 2.25%
Decrease in gross margin /H1118/H1118/H1118/H1118/H1118/H111814.51% 0.13% 21.47% 0.26% 0.71%
Increase in discount rate /H1118/H1118/H1118/H1118/H1118/H111822.84% 0.22% 41.07% 0.37% 0.43%
As at 31 December 2024
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Equipment
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
Decrease in
budgeted sales /H1118 9.80% 1.20% 16.51% 2.16% 0.90% 1.53% 1.98% 34.29% 1.86%
Decrease in gross
margin /H1118/H1118/H1118/H11184.00% 0.24% 12.34% 1.50% 0.57% 1.09% 1.22% 24.54% 1.43%
Increase in
discount rate /H1118 2.09% 0.35% 34.38% 9.70% 0.33% 0.36% 0.34% 9.44% 7.90%
As at 31 December 2025
Zhuhai
Acorn
Electronics
Technology
Co., Ltd.
Jerry
Medical
Equipment
(Shanghai)
Co., Ltd.
Acorn Trade
(SHANGHAI)
Co., Ltd.
Sichuan
Jian’er
Hearing Aid
Co., Ltd.
Beijing
Haiyinrui
Hearing
Technology
Co., Ltd.
Hunan
Zeling
Medical
Equipment
Co., Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing
Lingyun
Technology
Co., Ltd.
Inner
Mongolia
Lingyun
Technology
Co., Ltd.
Decrease in
budgeted sales /H1118 7.90% 4.69% 20.01% 2.96% 4.01% 4.08% 3.47% 19.07% 2.44%
Decrease in gross
margin /H1118/H1118/H1118/H11184.42% 1.02% 15.06% 2.20% 1.85% 2.52% 1.47% 14.68% 1.88%
Increase in
discount rate /H1118 3.19% 1.39% 43.51% 2.44% 1.26% 1.01% 1.50% 15.11% 1.12%
The management has considered and assessed reasonably possible changes for key assumptions and has not identified
any instances that could cause the carrying amount of each CGU to exceed its respective recoverable amount.
17 OTHER INTANGIBLE ASSETS
The Group
Software
Patents, licences
and others Trade marks Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
Cost at 1 January 2023, net of
accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H11183,583 5,198 774 9,555
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186 0–– 6 0
Amortization provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(745) (1,800) (175) (2,720)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,898 3,398 599 6,895
At 31 December 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,900 9,150 874 15,924
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,002) (5,752) (275) (9,029)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,898 3,398 599 6,895
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 322 ---
Software
Patents, licences
and others
Capitalized
development
costs Trade marks Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
Cost at 1 January 2024, net of
accumulated amortization /H1118/H1118/H1118/H11182,898 3,398 – 599 6,895
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,741 593 10,248 20 13,602
Amortization provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(926) (1,839) – (175) (2,940)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,713 2,152 10,248 444 17,557
At 31 December 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,657 9,743 10,248 894 29,542
Accumulated amortization /H1118/H1118/H1118/H1118/H1118(3,944) (7,591) – (450) (11,985)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,713 2,152 10,248 444 17,557
Software
Patents, licences
and others
Capitalized
development
costs Trade marks Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2025
Cost at 1 January 2025, net of
accumulated amortization /H1118/H1118/H1118/H11184,713 2,152 10,248 444 17,557
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,261 5,507 11,387 88 18,243
Amortization provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,035) (2,239) – (3) (4,277)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,378 (4,378) – –
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(137) – – – (137)
At 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,802 9,798 17,257 529 31,386
At 31 December 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,780 19,915 17,257 982 47,934
Accumulated amortization /H1118/H1118/H1118/H1118/H1118(5,978) (10,117) – (453) (16,548)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,802 9,798 17,257 529 31,386
The Company
Software
Patents, licences
and others Trade marks Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
Cost at 1 January 2023, net of
accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H11181,454 3,686 774 5,914
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,198 – 4,198
Amortization provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(302) (1,508) (175) (1,985)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,152 6,376 599 8,127
At 31 December 2023
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,811 11,187 874 14,872
Accumulated amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,659) (4,811) (275) (6,745)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,152 6,376 599 8,127
Software
Patents, licences
and others
Capitalized
development
costs Trade marks Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
Cost at 1 January 2024, net of
accumulated amortization /H1118/H1118/H1118/H11181,152 6,376 – 599 8,127
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,422 594 10,248 19 13,283
Amortization provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(512) (2,247) – (175) (2,934)
At 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,062 4,723 10,248 443 18,476
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 323 ---
Software
Patents, licences
and others
Capitalized
development
costs Trade marks Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2024
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,233 11,781 10,248 894 28,156
Accumulated amortization /H1118/H1118/H1118/H1118/H1118(2,171) (7,058) – (451) (9,680)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,062 4,723 10,248 443 18,476
Software
Patents, licences
and others
Capitalized
development
costs Trade marks Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2025
Cost at 1 January 2025, net of
accumulated amortization /H1118/H1118/H1118/H11183,062 4,723 10,248 443 18,476
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118544 212 11,387 6 12,149
Amortization provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(837) (2,201) – – (3,038)
Transfer /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4,378 (4,378) – –
At 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,769 7,112 17,257 449 27,587
At 31 December 2025
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,777 16,371 17,257 898 40,303
Accumulated amortization /H1118/H1118/H1118/H1118/H1118(3,008) (9,259) – (449) (12,716)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,769 7,112 17,257 449 27,587
18 INVESTMENTS IN ASSOCIATES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Changsha Wanwu Xilian Health Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 282 563
Hunan Guoke Zhitong Technology Co., Ltd. /H1118/H1118/H1118/H1118/H11185,126 5,106 5,083
Shenzhen Enmind Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,800 56,040 57,211
Lizhi Intelligent Technology (Guangzhou) Co., Ltd. /H1118 – – 34,746
Resvent Medical Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 139,733
64,926 61,428 237,336
In December 2023, the Group acquired a 29.38% equity interest in Shenzhen Enmind Technology Co., Ltd., a
domestic company with primarily engaged in the manufacture, research and development, and sale of medical devices, at
a cash consideration of RMB59,800,000. As the voting power of Shenzhen Enmind Technology Co., Ltd. is determined by
subscribed capital contributions under its articles of associations. the Group has the power to participate in the financial and
operating policy decisions and therefore can exercise significant influence over Shenzhen Enmind Technology Co., Ltd.
In September 2025, the Group acquired a 9.18% equity interest in Lizhi Intelligent Technology (Guangzhou) Co., Ltd.
(“Lizhi Intelligent”) by way of capital contribution, and in December 2025 acquired a further 3.27% equity interest by way
of acquisition of existing shares, for an aggregate consideration of RMB37,000,000. Pursuant to relevant shareholder
agreements, the Company is entitled to appoint one out of five directors to the board of Lizhi Intelligent and actively
participate in the daily operational decisions of Lizhi Intelligent. The management concluded that the Company can exercise
significant influence over Lizhi Intelligent. Meanwhile, the Company’s interests in Lizhi Intelligent include preferred rights
which qualify as embedded derivatives and should be accounted for separately, measured at fair value, with changes in fair
value recognized in profit or loss. The Group reclassified the fair value of the preferred rights embedded in the investment
terms in respect of Lizhi Intelligent amounting to RMB1,566,000 to financial assets measured at fair value through profit
or loss.
In December 2025, the Group acquired a 30.74% equity interest in Resvent Medical Technology Co., Ltd. (“Resvent
Medical”), a domestic company primarily engaged in the research and development, manufacture and sale of medical
devices, at a cash consideration of RMB144,099,000. Pursuant to relevant shareholder agreements, the Company is entitled
to appoint one out of five directors to the board of Resvent Medical and actively participate in the daily operational decisions
of Resvent Medical. The management concluded that the Company can exercise significant influence over Resvent Medical.
Meanwhile, the Company’s interests in Resvent Medical include preferred rights which qualify as embedded derivatives and
should be accounted for separately, measured at fair value, with changes in fair value recognized in profit or loss. The Group
reclassified the fair value of the preferred rights embedded in the investment terms in respect of Resvent Medical amounting
to RMB4,405,000 to financial assets measured at fair value through profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 324 ---
The following table illustrates the aggregate financial information of the Group’s associates that are not individually
material:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Share of the associates’ (loss)/profit for the year /H1118/H1118/H1118 (130) (3,498) 779
Share of the associates’ total comprehensive
(loss)/income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130) (3,498) 779
Aggregate carrying amount of the Group’s
investments in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,926 61,428 237,336
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Hunan Guoke Zhitong Technology Co., Ltd. /H1118/H1118/H1118/H1118/H11185,126 5,106 5,083
Shenzhen Enmind Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,800 56,040 57,211
Lizhi Intelligent Technology (Guangzhou) Co., Ltd. /H1118 – – 34,746
Resvent Medical Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 139,733
64,926 61,146 236,773
The following table illustrates the aggregate financial information of the Company’s associates that are not
individually material:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Share of the associates’ (loss)/profit for the year /H1118/H1118/H1118 (130) (3,780) 498
Share of the associates’ total comprehensive
(loss)/income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(130) (3,780) 498
Aggregate carrying amount of the Group’s
investments in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,926 61,146 236,773
19 INVESTMENTS IN SUBSIDIARIES
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Investments, at cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118884,150 910,072 1,278,511
20 OTHER NON-CURRENT ASSETS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayment for property, plant and equipment /H1118/H1118/H1118/H1118 18,520 17,519 16,013
Prepayment for equity acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,000 72,411 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 9 1––
84,111 89,930 16,013
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 325 ---
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayment for property, plant and equipment /H1118/H1118/H1118/H1118 5,073 15,930 10,038
Prepayment for equity acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 72,411 –
5,073 88,341 10,038
21 INVENTORIES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118202,913 245,555 211,175
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,148 823 6,747
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,184 66,553 70,344
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118435,371 406,258 440,798
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,263 24,205 23,875
721,879 743,394 752,939
Less: Allowance for impairment
of inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111887,163 83,810 77,440
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118634,716 659,584 675,499
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,619 191,511 153,265
Semi-finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,783 62,429 59,307
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,426 156,783 182,120
Goods in transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,498 11,410 10,150
313,326 422,133 404,842
Less: Allowance for impairment of inventories /H1118/H1118/H1118/H1118 45,896 42,697 35,148
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267,430 379,436 369,694
22 TRADE AND BILLS RECEIV ABLES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Non-current:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,192
– – 5,192
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 260
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,932
Current:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118515,747 420,861 454,615
Bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,938 27,839 40,785
527,685 448,700 495,400
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,685 46,861 48,341
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486,000 401,839 447,059
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486,000 401,839 451,991
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 326 ---
The Group’s trading terms with its customers are mainly settled in cash or on credit, with the credit period generally
ranging from 30 to 90 days after receipt of V A T invoices. The Group seeks to maintain strict control over its outstanding
receivables to control credit risk. Overdue balances are reviewed regularly by management.
An aging analysis of the trade and bills receivables as at the end of each of the Relevant Periods, based on the invoice
date and net of loss allowance, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118450,461 342,501 407,399
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,600 55,023 32,158
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,939 4,315 12,434
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486,000 401,839 451,991
The movements in the loss allowance for impairment of trade and bills receivables are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,251 41,685 46,861
Impairment losses, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(554) 5,300 3,050
Amount written off as uncollectible /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12) (124) (1,310)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,685 46,861 48,601
The Group applies the simplified approach in calculating expected credit losses for trade and bills receivables. An
impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The
provision rates are based on past due information for groupings of customers that have similar loss patterns. The calculation
reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is
available at the reporting date about past events, current conditions and forecasts of future economic conditions.
Set out below is the information about the credit risk exposure on the Group’s trade and bills receivables using a
provision matrix:
Current to
1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2023
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H11185% 20% 53% 100% 8%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118473,576 38,250 10,527 5,332 527,685
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,115 7,650 5,588 5,332 41,685
Current to
1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2024
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H11185% 20% 50% 100% 10%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118359,065 68,779 8,631 12,225 448,700
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,564 13,756 4,316 12,225 46,861
Current to
1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2025
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H11185% 18% 46% 100% 10%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118426,742 39,296 23,003 11,551 500,592
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,343 7,138 10,569 11,551 48,601
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 327 ---
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,843 35,911 32,164
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,896 7,638 12,501
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,739 43,549 44,665
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,657 5,188 4,107
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,082 38,361 40,558
An aging analysis of the trade and bills receivables as at the end of each of the Relevant Periods, based on the invoice
date and net of loss allowance, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,298 36,230 40,500
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118685 2,059 57
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,099 72 1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,082 38,361 40,558
The movements in the impairment losses on trade receivables and bills receivables are as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
At the beginning of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,741 3,657 5,188
Impairment losses, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,916 1,531 (1,081)
At the end of the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,657 5,188 4,107
Set out below is the information about the credit risk exposure on the Company’s trade receivables and bills
receivables using a provision matrix:
Current to
1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2023
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H11184.7% 20% 61% 100% 10%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,789 856 2,847 247 35,739
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,491 171 1,748 247 3,657
Current to
1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2024
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H11184% 20% 50% 100% 12%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,738 2,574 143 3,094 43,549
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,508 515 71 3,094 5,188
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 328 ---
Current to
1 year 1 to 2 years 2 to 3 years Over 3 years Total
As at 31 December 2025
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H11184% 20% 50% 100% 9%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,197 71 2 2,395 44,665
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,697 14 1 2,395 4,107
23 PREPAYMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,816 136,538 143,518
Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,058 48,710 62,640
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,980 40,607 47,497
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 17,155
Less: Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,249 3,637 3,552
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,605 222,218 267,258
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,934 33,528 40,887
Deposits and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,034 16,896 13,707
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,462 6,861
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 17,155
Less: Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118501 1,856 946
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,467 60,030 77,664
24 FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT AND LOSS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current
Investments in equity instruments at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,458 42,946 155,466
Wealth management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118834,064 1,286,031 802,063
Unlisted funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,776 28,444 59,300
Non-current
Derivative financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,962
851,298 1,357,421 1,022,791
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 329 ---
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Current
Investments in equity instruments at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,458 37,946 147,578
Wealth management products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118833,061 775,363 751,375
Unlisted funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,776 28,444 59,300
Non-current
Derivative financial instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 5,962
850,295 841,753 964,215
The wealth management products were issued by banks in Chinese mainland. They were mandatorily classified as
financial assets at fair value through profit or loss as their contractual cash flows are not solely payments of principal and
interest. The wealth management products include structured deposits and guaranteed floating-return products. The interest
rates of the structured deposits fluctuate within the range of 1.05% to 5.40%, and the interest rates of the guaranteed floating
return products fluctuate within the range of 0% to 5.00%.
25 CASH AND BANK BALANCES AND RESTRICTED CASH
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,625 1,179,004 1,345,657
Restricted cash* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,801 99,676 76,042
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,569,426 1,278,680 1,421,699
Denominated in
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,839 7,455 185,045
HKD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 41 51,692
SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885 – 135
EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,773
MOP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 605
THP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––7
JPY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––7
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,564,502 1,271,184 1,182,435
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,168,321 788,950 618,664
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,300 16,604 21,224
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,174,621 805,554 639,888
Denominated in
USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848 128 26,870
RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,174,573 805,426 613,018
* The restricted cash collateral of RMB74,100,000, RMB82,230,000, and RMB63,886,000 as at 31 December
2023, 2024 and 2025 at bank serves as a guarantee deposit for bank acceptances.
The bank balances and restricted cash are deposited with creditworthy banks with no recent history of default.
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 330 ---
26 TRADE AND BILLS PAYABLES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391,206 391,391 568,033
The trade and bills payables are non-interest-bearing and the suppliers normally grant credit terms of 30 to 90 days
upon receipt of V A T invoices.
An aging analysis of the trade and bills payables as at the end of each of the Relevant Periods, based on the invoice
date, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118378,573 375,074 544,324
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,915 6,027 13,631
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118478 1,710 693
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,240 8,580 9,385
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391,206 391,391 568,033
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,665 172,935 273,734
An aging analysis of the trade and bills payables as at the end of each of the Relevant Periods, based on the invoice
date, is as follows:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118189,377 170,742 265,782
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118882 915 6,436
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859 872 243
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118347 406 1,273
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,665 172,935 273,734
27 OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Payroll and welfare payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,569 54,814 58,473
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,071 9,598 16,027
Payables relating to purchases of items of long-term
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,767 76,262 69,210
Repurchase obligation for restricted A-shares /H1118/H1118/H1118/H1118/H111810,608 5,704 –
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,764 60,034 83,826
206,779 206,412 227,536
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 331 ---
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Payroll and welfare payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,837 17,720 16,408
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,532 1,430 2,984
Payables relating to purchases of items of long-term
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,891 33,708 49,590
Repurchase obligation for restricted A-shares /H1118/H1118/H1118/H1118/H111810,608 5,704 –
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,611 13,625 36,280
84,479 72,187 105,262
28 CONTRACT LIABILITIES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,223 29,375 29,073
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,092 720 321
Contract liabilities include advances received from customers for the sale of goods.
29 INTEREST-BEARING BANK AND OTHER BORROWINGS
The Group
As at 31 December
2023 2024 2025
Effective
interest rate
(%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Current
Bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H11182.60-2.70 2024 65,052 2.60 2025 65,052 2.08-2.15 2026 59,871
Other borrowings –
unsecured /H1118/H1118/H1118/H1118/H1118/H11180.50-2.55 2024 337,376 0.10-1.55 2025 483,560 0.65-1.45 2026 514,877
Current portion of
long-term bank
loans – unsecured /H1118/H1118 2.90 2024 2,000 2.50-2.70 2025 104,000 2.15 2026 125,082
Current portion of
long-term bank
loans – secured /H1118/H1118/H11182.90 2024 10,000 2.55 2025 10,009 – – –
Non-current
Bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H11182.90 2025 84,078 2.50 2026 125,174 – – –
Bank loans – secured /H1118 2.90 2025 10,021 – – – – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118508,527 787,795 699,830
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 332 ---
An alternative approach of disclosing relevant information is illustrated below:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Analyzed into:
Bank loans repayable
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,052 179,061 184,953
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,099 125,174 –
Other borrowings repayable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337,376 483,560 514,877
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118508,527 787,795 699,830
Certain of the Group’s future rights of accounts receivable for the Housing Leasing Project of Cofoe Medical’s
Intelligent Equipment Headquarters Base were pledged to secure bank borrowings of RMB20,021,000, RMB10,009,000 and
nil as at 31 December 2023, 2024 and 2025.
The Group’s other loans are unsecured, with annual interest rates ranging from 2.08% to 2.90%.
The Company
As at 31 December
2023 2024 2025
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Effective
interest
rate (%) Maturity RMB’000
Current
Bank loans – unsecured /H1118
2.60-
2.70 2024 65,052 2.60 2025 65,052 2.08-2.15 2026 59,871
Bank loans – secured /H1118/H1118 ––– ––– –––
Current portion of
long-term bank
loans – unsecured /H1118/H1118/H11182.90 2025 2,000 2.50-2.70 2025 104,000 2.15 2026 125,082
Current portion of
long-term bank
loans – secured /H1118/H1118/H1118/H11182.90 2025 10,000 2.55 2025 10,009 – – –
Non-current
Bank loans – unsecured /H1118 2.90 2025 84,078 2.50 2026 125,174 – – –
Bank loans – secured /H1118/H11182.90 2025 10,021 – – – – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118171,151 304,235 184,953
Certain of the Company’s future rights of accounts receivable for the Housing Leasing Project of Cofoe
Medical’s Intelligent Equipment Headquarters Base were pledged to secured bank borrowings of RMB20,021,000,
RMB10,009,000 and nil as at 31 December 2023, 2024 and 2025.
The Company’s other loans are unsecured, with annual interest rates ranging from 2.08% to 2.90%.
30 DEFERRED TAX
The Group
Deferred tax assets
Lease
liabilities
Losses available
for offsetting
against future
taxable profits
Assets
impairment
provision
Deferred
income
Share-based
compensation Provision
Unrealized
profits from
intercompany
transactions
Remeasurement
of changes in
defined benefit
plans Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H111815,362 4,372 19,070 1,777 4,703 – 176 – 45,460
Deferred tax credited/
(charged) to profit or
loss during the year /H1118 17,419 (1,169) 4,636 660 (2,494) 21 1,956 – 21,029
At 31 December 2023
and 1 January 2024 /H1118 32,781 3,203 23,706 2,437 2,209 21 2,132 – 66,489
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 333 ---
Lease
liabilities
Losses available
for offsetting
against future
taxable profits
Assets
impairment
provision
Deferred
income
Share-based
compensation Provision
Unrealized
profits from
intercompany
transactions
Remeasurement
of changes in
defined benefit
plans Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax credited/
(charged) to profit or
loss during the year /H1118 (27,467) 7,235 654 115 2,845 282 (513) – (16,849)
At 31 December 2024
and 1 January 2025 /H1118 5,314 10,438 24,360 2,552 5,054 303 1,619 – 49,640
Deferred tax credited/
(charged) to profit or
loss during the year /H1118 23,219 (4,208) (1,415) 1,194 1,914 (303) (408) – 19,993
Acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H11181,928 3,905 539 – – – – – 6,372
Deferred tax charged to
equity during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 10,503 – – 138 10,641
At 31 December 2025 /H1118 30,461 10,135 23,484 3,746 17,471 – 1,211 138 86,646
Deferred tax liabilities
Right-of-use
assets
Fair value
adjustment on
financial assets
at fair value
through profit
or loss
Depreciation
allowance in
excess of
related
depreciation
Fair value
adjustment
arising from
acquisitions Others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H1118/H111814,045 661 15,933 83 – 30,722
Deferred tax
charged/(credited) to
profit or loss during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,720 (235) (1,119) 200 176 16,742
At 31 December 2023
and 1 January 2024 /H1118/H1118 31,765 426 14,814 283 176 47,464
Deferred tax
charged/(credited) to
profit or loss during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(27,100) 1,529 (2,133) (107) 46 (27,765)
At 31 December 2024
and 1 January 2025 /H1118/H1118 4,665 1,955 12,681 176 222 19,699
Deferred tax
charged/(credited) to
profit or loss during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,980 2,594 (1,535) (1,495) 141 22,685
Acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H11181,587 – – 9,859 41 11,487
At 31 December 2025 /H1118/H1118 29,232 4,549 11,146 8,540 404 53,871
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of financial
position. The following is an analysis of the deferred tax balances of the Group for financial reporting purposes:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net deferred tax liabilities recognized in the
consolidated statement of financial position /H1118/H1118/H1118/H1118 15,699 15,034 7,750
Net deferred tax assets recognized in the
consolidated statement of financial position /H1118/H1118/H1118/H1118 34,725 44,975 40,525
APPENDIX I ACCOUNTANTS’ REPORT
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The Company
Deferred tax assets
Lease
liabilities
Losses
available for
offsetting
against future
taxable profits
Assets
impairment
provision
Deferred
income
Share-based
compensation
Unrealized
profits from
intercompany
transactions Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H1118 677 2,660 4,542 1,257 2,119 1 11,256
Deferred tax
credited/(charged) to
profit or loss during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(444) (2,660) 2,966 406 (1,232) (1) (965)
At 31 December 2023
and 1 January 2024 /H1118 233 – 7,508 1,663 887 – 10,291
Deferred tax
credited/(charged) to
profit or loss during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134 – (47) (42) 1,439 1 1,485
At 31 December 2024
and 1 January 2025 /H1118 367 – 7,461 1,621 2,326 1 11,776
Deferred tax
credited/(charged) to
profit or loss during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(67) – (1,431) 996 968 (1) 465
Deferred tax charged to
equity during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 5 , 1 1 7– 5 , 1 1 7
At 31 December 2025 /H1118 300 – 6,030 2,617 8,411 – 17,358
Deferred tax liabilities
Right-of-use assets
Fair value
adjustment on
financial assets at
fair value through
profit or loss
Depreciation
allowance in excess
of related
depreciation Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118589 660 12,917 14,166
Deferred tax charged/(credited) to
profit or loss during the year /H1118/H1118/H1118/H1118/H1118(388) (234) (894) (1,516)
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201 426 12,023 12,650
Deferred tax charged/(credited) to
profit or loss during the year /H1118/H1118/H1118/H1118/H1118148 503 (1,526) (875)
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118349 929 10,497 11,775
Deferred tax charged/(credited) to
profit or loss during the year /H1118/H1118/H1118/H1118/H1118 (73) 3,445 (1,026) 2,346
At 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276 4,374 9,471 14,121
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of financial
position. The following is an analysis of the deferred tax balances of the Company for financial reporting purposes:
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Net deferred tax liabilities recognized in the
consolidated statement of financial position /H1118/H1118/H1118/H1118 12,449 11,426 –
Net deferred tax assets recognized in the
consolidated statement of financial position /H1118/H1118/H1118/H1118 10,090 11,427 3,237
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 335 ---
The Group also has unused tax losses arising in Chinese mainland of approximately RMB99,601,000,
RMB84,676,000 and RMB73,741,000 as at the end of each of the Relevant Periods that will expire in one to five years for
offsetting against future taxable profits.
Deferred tax assets have not been recognized in respective of these unused tax losses as they have arisen in
subsidiaries that have been loss-making for some time and it is not considered probable that taxable profits will be available
against which the tax losses can be utilized in the foreseeable future.
31 DEFERRED INCOME
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,618 55,699 58,592
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,584 30,303 33,186
The Group and the Company received government grants related to capital expenditure incurred for property,
plant and equipment. The amounts are deferred and amortized over the estimated useful lives of the respective assets.
32 OTHER NON-CURRENT LIABILITIES
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Long-term payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,732 – –
Long service payment* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,882
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,732 – 2,882
The Company
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Long-term payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,732 – –
* Under the Hong Kong Employment Ordinance, a subsidiary of the Group, Humana Medical Limited has been
continuously employed for more than five years.
(a) The employee is dismissed is dismissed for reasons other than serious misconduct or redundancy;
(b) The employee resigns as a result of being certified by a registered medical practitioner as unfit for the present
job;
(c) The employee resigns at the age of 65 or above;
(d) The employee dies while in office.
APPENDIX I ACCOUNTANTS’ REPORT
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The movements in the present value of the defined benefit obligations are as follows:
Long service payment
At 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Acquisition of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,692
Expenses recognised in profit or loss:
Current service cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311
Interest cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866
Remeasurements recognised in other comprehensive income
Actuarial loss arising from changes in financial assumptions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118838
Other Changes
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25)
At 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,882
The principal actuarial assumptions used as at the end of the reporting period are as follows:
2025
Discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.18%-3.74%
Future salary increases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.26%
A quantitative sensitivity analysis for significant assumptions as at the end of the reporting period is shown below:
Increase in rate
Increase/(decrease)
in defined benefit
obligations Decrease in rate
Increase/(decrease)
in defined benefit
obligations
%%
Discount rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 (282) 1 340
Future salary increases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 24 1 (32)
33 SHARE CAPITAL
The Group and the Company
A summary of movements in the Company’s share capital is as follows:
Number of shares Share capital
RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118208,487,500 208,488
V esting of restricted A-shares (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118750,750 750
As at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,238,250 209,238
Repurchase and cancelation of restricted A-shares (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(146,250) (146)
As at 31 December 2024, 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,092,000 209,092
Repurchase and cancelation of restricted A-shares (c) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(195,000) (195)
As at 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118208,897,000 208,897
Notes:
(a) As of 31 October 2023, the grantees of the Class II Restricted Shares purchased 750,750 shares with a nominal
value of RMB1.00 each with the payment of RMB23,348,000. The share capital was increased by
RMB750,750 and share premium was increased by RMB22,598,000.
(b) The Company convened the 2023 annual general meeting on 20 May 2024, and has approved the Proposal on
Repurchasing and Canceling Certain Restricted Shares, which resolved that the Company repurchased and
canceled 146,250 shares (with a nominal value of RMB1.00 each) as the performance target under above grant
was not satisfied, resulting in a repurchase payment of RMB4,377,000. The Company derecognized the
repurchase obligation correspondingly.
(c) The Company convened the board of directors on 25 April 2025 and has approved the Proposal on
Repurchasing and Canceling Certain Restricted Shares, which resolved that the Company repurchased and
canceled 195,000 shares (with a nominal value of RMB1.00 each) as the performance target under above grant
was not satisfied, resulting in a repurchase payment of RMB5,495,000. The Company derecognized the
repurchase obligation correspondingly.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 337 ---
34 TREASURY SHARES
The Group and the Company
A summary of movements in the Company’s treasury shares is as follows:
Number of shares Treasury shares
RMB’000
As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118487,500 15,739
Repurchase of A-shares* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,202,369 156,323
Repurchase obligation for restricted A-shares** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(146,250) (4,546)
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (585)
As at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,543,619 166,931
Repurchase of A-shares* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,497,362 50,097
Repurchase obligation for restricted A-shares (note 33 (b)) /H1118/H1118/H1118/H1118/H1118(146,250) (4,377)
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (527)
As at 31 December 2024 and 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,894,731 212,124
Repurchase obligation for restricted A-shares (note 33 (c)) /H1118/H1118/H1118/H1118/H1118(195,000) (5,470)
V esting of restricted A-shares*** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,821,000) (65,949)
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (234)
As at 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,878,731 140,471
* The Company repurchased shares for future Share Incentive Plans through centralized price bidding by
self-owned funds, which were recognized as treasury shares as at the end of Relevant Periods.
** On 25 October 2023, 146,250 shares of Class I Restricted Shares granted to a total of 4 participants were
released from lock-up restrictions and the Company derecognized the repurchase obligation amounting to
RMB4,546,125.
*** During the year ended 31 December 2025, 1,821,000 restricted shares (the first batch of 2024 A-Share Stock
Ownership Scheme) were vested, accordingly, treasury shares decreased by RMB65,949,000.
35 RESERVES
The Group
The amounts of the Group’s share premium and other reserves and the movements therein for the years ended 31
December 2023, 2024 and 2025 are presented in the consolidated statements of changes in equity.
(a) Capital reserve
The capital reserve of the Group mainly included the excess of the consideration received for subscription of
the registered capital of the Company and the effect of implementation and unlocking of restricted shares. Details of
the movement in capital reserve are set out in the consolidated statements of changes in equity of the Historical
Financial Information.
(b) Share-based payment reserve
The share-based payment reserve represents the equity-settled share awards as set out in note 36 to the
Historical Financial Information.
(c) Statutory reserve
In accordance with the Company Law of the PRC, companies registered in the PRC are required to allocate
10% of the statutory after-tax profits to the statutory reserve until the cumulative total of the reserve reaches 50% of
the company’s registered capital. Subject to approval from the relevant PRC authorities, the statutory reserve may be
used to offset any accumulated losses or increase the registered capital of the companies. The statutory reserve is not
available for dividend distribution to equity holders of the PRC companies.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 338 ---
The Company
The amounts of the Company’s reserves and the movements therein for the years ended 31 December 2023, 2024 and
2025 are presented as follows:
Capital
reserve
Share-based
payment reserve Statutory reserve
Retained
earnings Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,885,107 27,787 77,379 414,772 4,405,045
Total comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 173,783 173,783
V esting of restricted A shares /H1118/H1118/H111837,138 (14,540) – – 22,598
Share-based payment expenses /H1118/H1118 – (1,807) – – (1,807)
Appropriations to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 17,378 (17,378) –
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (245,768) (245,768)
At 31 December 2023 and
1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,922,245 11,440 94,757 325,409 4,353,851
Total comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 469,012 469,012
Cancelation of restricted A-shares /H1118 (4,231) – – – (4,231)
Share-based payment expenses /H1118/H1118 – 16,035 – – 16,035
Appropriations to statutory
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 9,788 (9,788) –
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (366,474) (366,474)
At 31 December 2024 and
1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,918,014 27,475 104,545 418,159 4,468,193
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 337,012 337,012
Cancelation of restricted A-shares /H1118 (5,300) – – – (5,300)
Reversal of repurchase obligation
for restricted A-shares /H1118/H1118/H1118/H1118/H1118/H1118–––––
V esting of restricted A-shares /H1118/H1118/H1118(21,283) (20,811) – – (42,094)
Share-based payment expenses /H1118/H1118 – 36,817 – – 36,817
Dividend declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (365,989) (365,989)
At 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,891,431 43,481 104,545 389,182 4,428,639
36 SHARE-BASED PAYMENTS
2021 A-Share Stock Ownership Scheme
Pursuant to the A-Share incentive scheme for 2021 approved at the meeting of the board of directors on 29 December
2021 (the “2021 A-Share Stock Ownership Scheme”), the Company granted 375,000 shares of Class I Restricted Shares and
2,025,000 shares of Class II Restricted Shares to certain eligible participants. After completion of the capitalization of capital
reserve (see note 33(b)), the total number of granted shares increased by 720,000. The granted price was RMB43.57 per
share. The vesting periods for shares granted are 12 months, 24 months and 36 months from the date of completion of
registration of the granted shares. According to the Company’s performance appraisal and individual performance appraisal,
30%, 40% and 40% of shares will be vested respectively. Additionally, the recipients of the restricted shares are prohibited
from transferring the vested restricted shares to any third party for a period of 6 months from the date the vesting conditions
are met. During the Relevant Periods, 975,650, 1,192,100, and nil shares were forfeited. During the Relevant Periods,
897,000, nil, and nil shares were vested.
2024 A-Share Stock Ownership Scheme
Pursuant to the A-Share incentive scheme for 2024 approved at the meeting of the board of directors on 21 March
2024 (the “2024 A-Share Stock Ownership Scheme”), the Company granted 6,333,000 shares of Class II Restricted Shares
to certain eligible participants during the Relevant Periods. The granted price was RMB16.60 per share. The vesting periods
for shares granted are 13 months, 25 months and 37 months from the date of completion of registration of the granted shares.
According to the Company’s performance appraisal and individual performance appraisal, 30%, 35% and 35% of shares will
be vested respectively. On 18 March 2025, the Company granted the remaining 300,000 reserved restricted shares. The
granted price was RMB14.85 per share. The vesting periods for the shares granted are 15 months and 27 months from the
date of completion of registration of the granted shares. According to the Company’s performance appraisal and individual
performance appraisal, 50% and 50% of shares will be vested respectively. Additionally, the recipients of the restricted
shares are prohibited from transferring the vested restricted shares to any third party for a period of 6 months from the date
the vesting conditions are met. For the year ended 31 December 2024 and 2025,129,000 and 186,400 shares were forfeited,
and nil and 1,821,000 shares were vested.
The shares under the A-share stock ownership schemes outstanding were 4,496,600 as at the end of reporting period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 339 ---
The fair value of the Class I awarded shares was calculated based on the market price of the Company’s shares at the
respective grant date. The fair value of the Class II awarded shares was determined by using the Black-Scholes Model.
The total share-based payment expenses recognized in the statements of profit or loss and other comprehensive
income for shares under the A-share stock ownership schemes are approximately negative RMB1,807,000, RMB16,035,000,
and RMB31,700,000 for the Relevant Periods.
37 BUSINESS COMBINATION
During the year ended 31 December 2023, the Group completed the following business combinations.
The fair values of the identifiable assets and liabilities of the subsidiaries as at the dates of acquisitions were as
follows:
Note
Beijing Haiyinrui
Hearing
Technology
Co., Ltd.
Changsha Nuoyake
Medical
Equipment Sales
Co., Ltd. Total
RMB’000 RMB’000 RMB’000
(i) (ii)
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118314 1,240 1,554
Other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118514 133 647
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,604 – 1,604
Other current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,855) (43) (1,898)
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(411) – (411)
Total identifiable net assets at fair value /H1118/H1118 166 1,330 1,496
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(42) – (42)
Goodwill on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 10,242 1,670 11,912
Total consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,366 3,000 13,366
Satisfied by cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,366 3,000 13,366
(i) On 1 August 2023, the Group acquired a 75% interest in Beijing Haiyinrui Hearing Technology Co., Ltd. from
a third party with the consideration of RMB10,366,000. Beijing Haiyinrui Hearing Technology Co., Ltd. is
engaged in hearing aid fitting and maintenance. The acquisition was made as part of the Group’s strategy to
enhance its hearing healthcare network and professional service capabilities.
The fair values of the trade receivables as at the date of acquisition amounted to RMB62,000. The gross
contractual amounts of trade receivables were RMB62,000, of which trade receivables of nil are expected to
be uncollectible.
(ii) On 1 December 2023, the Group acquired a 100% interest in Changsha Nuoyake Medical Equipment Sales Co.,
Ltd. from a third party with the consideration of RMB3,000,000. Changsha Nuoyake Medical Equipment Sales
Co., Ltd. is engaged in the sale of medical devices. The acquisition was made as part of the Group’s strategy
to expand its market share.
The fair values of the trade receivables as at the date of acquisition amounted to RMB2,000. The gross
contractual amounts of trade receivables were RMB2,000, of which trade receivables of nil are expected to be
uncollectible.
During the year ended 31 December 2024, the Group completed the following business combinations. The fair values
of the identifiable assets and liabilities of the subsidiaries as at the date of acquisition were as follows:
Note
Hunan Zeling
Medical
Equipment Co.,
Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing Lingyun
Technology Co.,
Ltd.
Inner Mongolia
Lingyun
Technology Co.,
Ltd. Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(i) (ii) (iii) (iv)
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,400 457 4,300 1,491 13,648
Other current assets /H1118/H1118/H1118/H1118 1,860 3,023 6,362 1,391 12,636
Other non-current assets /H1118 3,751 5,066 2,455 1,891 13,163
Other current liabilities /H1118/H1118 (5,110) (5,305) (5,993) (3,616) (20,024)
Other non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,959) (2,372) (1,126) (596) (6,053)
Total identifiable net
assets at fair value /H1118/H1118/H1118 5,942 869 5,998 561 13,370
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 340 ---
Note
Hunan Zeling
Medical
Equipment Co.,
Ltd.
Shanghai
Tianlaizhiyin
Medical
Instruments
Co., Ltd.
Beijing Lingyun
Technology Co.,
Ltd.
Inner Mongolia
Lingyun
Technology Co.,
Ltd. Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(i) (ii) (iii) (iv)
Non-controlling interests /H1118 – (174) (900) (84) (1,158)
Goodwill on acquisition /H1118/H111816 64,560 21,135 24,510 11,730 121,935
Total consideration /H1118/H1118/H1118/H1118 70,502 21,830 29,608 12,207 134,147
Satisfied by cash /H1118/H1118/H1118/H1118/H1118/H1118 70,502 21,830 29,608 12,207 134,147
(i) On 1 January 2024, the Group acquired a 100% interest in Hunan Zeling Medical Equipment Co., Ltd. from
a third party with the consideration of RMB70,502,000. Hunan Zeling Medical Equipment Co., Ltd. is engaged
in aid fitting, hearing rehabilitation services, and audiological testing. The acquisition was made as part of the
Group’s strategy to enhance its hearing healthcare network.
The fair values of the trade receivables and other receivables as at the date of acquisition amounted to
RMB363,000 and RMB266,000, respectively. The gross contractual amounts of trade receivables and other
receivables were RMB382,000 and RMB280,000, respectively, of which trade receivables of RMB19,000 and
other receivables of RMB14,000 are expected to be uncollectible.
(ii) On 1 February 2024, the Group acquired an 80% interest in Shanghai Tianlaizhiyin Medical Instruments Co.,
Ltd. from a third party with the consideration of RMB21,830,000. Shanghai Tianlaizhiyin Medical Instruments
Co., Ltd. is engaged in aid fitting, hearing rehabilitation services, and audiological testing. The acquisition was
made as part of the Group’s strategy to expand its hearing healthcare network.
The fair values of the other receivables as at the date of acquisition amounted to RMB310,000. The gross
contractual amounts of other receivables were RMB326,000, of which other receivables of RMB16,000 are
expected to be uncollectible.
(iii) On 1 June 2024, the Group acquired an 85% interest in Beijing Lingyun Technology Co., Ltd. from a third
party with the consideration of RMB29,608,000. Beijing Lingyun Technology Co., Ltd. is engaged in the sale
of medical devices. The acquisition was made as part of the Group’s strategy to expand its hearing healthcare
network.
The fair values of the trade receivables and other receivables as at the date of acquisition amounted to
RMB2,975,000 and RMB1,284,000, respectively. The gross contractual amounts of trade receivables and other
receivables were RMB3,054,000 and RMB1,295,000, respectively, of which trade receivables of RMB79,000
and other receivables of RMB11,000 are expected to be uncollectible.
(iv) On 1 June 2024, the Group acquired an 85% interest in Inner Mongolia Lingyun Technology Co., Ltd. from
a third party with the consideration of RMB12,207,000. Inner Mongolia Lingyun Technology Co., Ltd is
engaged in the sale of medical devices. The acquisition was made as part of the Group’s strategy to the Group’s
strategy to expand its hearing healthcare network.
The fair values of the trade receivables and other receivables as at the date of acquisition amounted to
RMB23,000 and RMB702,000, respectively. The gross contractual amounts of trade receivables and other
receivables were RMB24,000 and RMB707,000, respectively, of which trade receivables of RMB1,000 and
other receivables of RMB5,000 are expected to be uncollectible.
During the year ended 31 December 2025, the Group completed the following business combinations. The fair values
of the identifiable assets and liabilities of the subsidiaries as at the date of acquisition were as follows:
Note
Shanghai Huazhou
Pressure Sensitive
Adhesive Products
Co., Ltd.
Humana
Medical Limited Total
RMB’000 RMB’000 RMB’000
(i) (ii)
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863,629 35,941 99,570
Other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,567 89,274 162,841
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,084 108,681 175,765
Other current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,478) (30,069) (68,547)
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,140) (21,937) (38,077)
Total identifiable net assets at fair value /H1118/H1118 149,662 181,890 331,552
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 341 ---
Note
Shanghai Huazhou
Pressure Sensitive
Adhesive Products
Co., Ltd.
Humana
Medical Limited Total
RMB’000 RMB’000 RMB’000
(i) (ii)
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,457) (22,556) (31,013)
Goodwill on acquisition /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816 3,617 953 4,570
Total Consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118144,822 160,287 305,109
Satisfied by cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118144,822 160,287 305,109
(i) On 1 January 2025, the Group acquired an 94% interest in Shanghai Huazhou Pressure Sensitive Adhesive
Products Co., Ltd. from a third party with the consideration of RMB144,822,000. Shanghai Huazhou Pressure
Sensitive Adhesive Products Co., Ltd. is engaged in the manufacture and sale of rubber products. The
acquisition was made as part of the Group’s strategy to enhance its healthcare network and professional service
capabilities.
The fair values of the trade receivables and other receivables as at the date of acquisition amounted to
RMB42,167,000 and RMB697,000, respectively. The gross contractual amounts of trade receivables and other
receivables were RMB44,387,000 and RMB734,000, respectively, of which trade receivables of
RMB2,220,000 and other receivables of RMB37,000 are expected to be uncollectible.
(ii) On 30 June 2025, the Group acquired an 87.6% interest in Humana Medical Limited from a third party with
the consideration of RMB160,287,000. Humana Medical Limited is engaged in manufacturing and sales of
rubber products. The acquisition was made as part of the Group’s strategy to enhance its healthcare network
and professional service capabilities.
The fair values of the trade receivables and other receivables as at the date of acquisition amounted to
RMB22,804,000 and RMB6,549,000, respectively. The gross contractual amounts of trade receivables and
other receivables were RMB24,004,000 and RMB9,236,000, respectively, of which trade receivables of
RMB1,200,000 and other receivables of RMB2,687,000 are expected to be uncollectible.
The analysis of the cash flows in respect of the acquisition of the subsidiaries during the years ended 31 December
2023, 2024 and 2025 is as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Total acquisition consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,366 134,147 305,109
Less: Cash and bank balances acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,554 13,648 99,570
Outstanding and included in other payables /H1118/H1118/H1118/H1118/H1118/H1118 –––
Cash paid in the current year for acquisition of
subsidiaries in prior years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118675 6,349 –
Cash prepaid in the prior year for acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (65,000) (72,411)
Net cash paid in respect of the business
combinations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,487 61,848 133,128
Since the acquisition, the above 2 subsidiaries acquired in 2023 contributed RMB2,500,000 to the Group’s revenue
and RMB132,000 to the consolidated profit for the year ended 31 December 2023. Had the combination taken place at the
beginning of the year, the revenue from continuing operations of the Group and the profit of the Group for the year ended
31 December 2023 would have been RMB2,836,663,000 and RMB253,998,000, respectively.
Since the acquisition, the above 4 subsidiaries acquired in 2024 contributed RMB49,677,000 to the Group’s revenue
and RMB12,412,000 to the consolidated profit for the year ended 31 December 2024. Had the combination taken place at
the beginning of the year, the revenue from continuing operations of the Group and the profit of the Group for the year ended
31 December 2024 would have been RMB2,982,650,000 and RMB317,646,000, respectively.
Since the acquisition, the above 2 subsidiaries acquired in 2025 contributed RMB262,350,000 to the Group’s revenue
and RMB11,273,000 to the consolidated profit for the year ended 31 December 2025. Had the combination taken place at
the beginning of the year, the revenue from continuing operations of the Group and the profit of the Group for the year ended
31 December 2025 would have been RMB3,484,551,000 and RMB344,764,000, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 342 ---
38 DISPOSAL OF SUBSIDIARIES
As at 31 December As at 31 December
2023 2025
RMB’000 RMB’000
Net assets disposed of:
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118365 3,138
Other current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,763 510
Other non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,250 392
Other current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,590) (3,384)
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,332) –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,456 656
Gain on disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,424 9,344
Total consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,880 10,000
Satisfied by:
Cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,880 10,000
(i) On 31 December 2023, the Group disposed of Shenzhen Cofoe Biotechnology Co., Ltd to Shenzhen Enmind
Technology Co., Ltd. with the consideration of RMB19,880,000.
(ii) On 24 January 2025, the Group disposed of Hunan Zongmou Network Technology Co., Ltd. to Hangzhou
Knowledge Matrix Information Technology Co., Ltd. with the consideration of RMB10,000,000.
An analysis of the net inflow of cash and cash equivalents in respect of the disposals of subsidiaries is as follows:
As at 31 December As at 31 December
2023 2025
RMB’000 RMB’000
Cash consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,880 10,000
Cash and bank balances disposed of /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(365) (3,138)
Net inflow of cash and cash equivalents in respect of
the disposal of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,515 6,862
39 NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the Relevant Periods, the Group had non-cash additions to right-of-use assets and lease liabilities of
RMB86,556,000, RMB34,349,000 and RMB55,917,000, respectively, in respect of lease arrangements for buildings.
(b) Changes in liabilities arising from financing activities
Interest-bearing
bank and other
borrowings Lease liabilities Dividends payable
Other payables-
restricted stock
repurchase
obligation
RMB’000 RMB’000 RMB’000 RMB’000
On 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118324,775 136,241 – 15,739
Changes from financing cash flow /H1118/H1118/H1118 180,241 (60,325) (245,768) 23,348
V esting of restricted A-shares /H1118/H1118/H1118/H1118/H1118/H1118– – – (27,894)
Dividends declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 245,768 (585)
Decrease resulted from non-cash
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,173) – – –
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 86,556 – –
Additions as a result of acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6 3 3––
Reassessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (9,314) – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (21,553) – –
Disposals of subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (4,811) – –
Accretion of interest recognized during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,684 4,819 – –
On 31 December 2023 and 1 January
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118508,527 132,246 – 10,608
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 343 ---
Interest-bearing
bank and other
borrowings Lease liabilities Dividends payable
Other payables-
restricted stock
repurchase
obligation
RMB’000 RMB’000 RMB’000 RMB’000
Changes from financing cash flow /H1118/H1118/H1118 271,360 (56,559) (366,474) (4,377)
Dividends declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 366,474 (527)
Decrease resulted from non-cash
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,878) – – –
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 34,349 – –
Additions as a result of acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,266 – –
Reassessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 4 7 5––
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (11,301) – –
Accretion of interest recognized during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,786 5,126 – –
On 31 December 2024 and 1 January
2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118787,795 115,602 – 5,704
Changes from financing cash flow /H1118/H1118/H1118 (99,036) (71,021) (365,989) (5,495)
Dividends declared /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 365,989 (234)
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 55,917 – –
Additions as a result of acquisition of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 40,404 – –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (19,187) – –
Exchange realignment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (360) – –
Accretion of interest recognized during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,071 4,995 – –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 2 5
On 31 December 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118699,830 126,350 – –
(c) Total cash outflows for leases
The total cash outflows for leases included in the consolidated statements of cash flows are as follows:
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Within operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,866 5,003 5,619
Within financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,325 56,559 71,021
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,191 61,562 76,640
40 COMMITMENTS
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Contracted, but not provided for Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,270 300,983 203,671
41 CONTINGENT LIABILITIES
As at the end of the Relevant Periods, neither the Group nor the Company had any significant contingent liabilities.
42 PLEDGE OF ASSETS
Details of the Group’s assets pledged for the Group’s bank facilities are included in note 25 and note 29 to the
Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 344 ---
43 RELATED PARTY TRANSACTIONS
(a) Name and relationship of a related party
Name of related party Relationship with the Group
Hunan Guoke Zhitong Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
Changsha Wanwu Xilian Health Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
Shenzhen Enmind Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
Shenzhen Cofoe Biotechnology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
Hunan Cangtianxia Health Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
Hunan Kefeng Supply Chain Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
Shenzhen Rongxin Medical Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate
Changsha Keyuan Tongchuang Enterprise Management Center
(Limited Partnership) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Shareholder of the company
Hunan Chumo Cang Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity controlled by close relatives of
Mr. Zhang Min
Nantong Chuyuncang New Energy Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity controlled by close relatives of
Mr. Zhang Min
Yiyang Kangfu Commercial Management Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Other enterprise controlled by an entity
of the same parent company
Hunan Zongmou Network Technology Co., Ltd* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118A subsidiary disposed of in 2025
* As the outstanding balances as at 31 December 2025 comprise of amounts related to the transactions when the
entity were related, the corresponding outstanding balances are disclosed in related parties disclosures.
(b) Transaction with related parties
The Group
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Sales of goods or services
Associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 107 62
Purchase of goods or services
Associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320 – 1,163
Entity controlled by close relatives of Mr. Zhang
Min /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,633 3,100
Other enterprise controlled by an entity of the same
parent company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 3 6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320 1,633 4,299
Transaction with the related party was carried out in accordance with the terms and conditions mutually agreed by
the parties involved.
(c) Other transactions with related parties
On 31 December 2023, the Group disposed of a subsidiary, Shenzhen Cofoe Biotechnology Co., Ltd to Shenzhen
Enmind Technology Co., Ltd. with the consideration of RMB19,880,000, based on an internal valuation of the business
performed by the directors of the Company. Further details of the transaction are included in note 38 to the Historical
Financial Information.
(d) Outstanding balances with related parties
The Group
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Due from related parties
Associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,452 5,059 4,165
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 345 ---
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
A subsidiary disposed of in 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 9 0
Entity controlled by close relatives of Mr. Zhang
Min /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 7 4
Other enterprise controlled by an entity of the same
parent company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,452 5,059 4,334
Due to related parties
Associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,814
Entity controlled by close relatives of Mr. Zhang
Min /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 232
A subsidiary disposed of in 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 3 5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,081
The outstanding balances with related parties are all trade in nature.
(e) Compensation of key management personnel of the Group
Y ear ended 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Fees
Salaries, allowances and benefits in kind /H1118/H1118/H1118/H1118/H1118/H1118/H11186,219 7,763 7,943
Performance related bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,001 2,000 1,944
Pension scheme contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875 79 76
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,542) 1,624 4,662
Total compensation paid to key management
personnel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,753 11,466 14,625
Further details of directors’ and supervisors’ emoluments are included in note 8 to the Historical Financial
Information.
44 FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant Periods
were as follows:
The Group
Financial assets
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial assets at fair value through profit or loss /H1118 851,298 1,357,421 1,022,791
Financial assets at fair value through other
comprehensive income
Bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,271 27,781 25,043
Financial assets at amortized cost:
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118474,729 374,058 426,948
Due from related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,193 1,800 5
Financial assets included in prepayments and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,063 42,043 49,044
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,625 1,179,004 1,345,657
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,801 99,676 76,042
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,961,980 3,081,783 2,945,530
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 346 ---
Financial liabilities
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Financial liabilities at amortized cost:
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391,206 391,391 568,033
Due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,081
Financial liabilities included in other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,121 141,895 149,701
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118508,527 787,795 699,830
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,246 115,602 126,350
Other non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,732 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,183,832 1,436,683 1,545,995
45 TRANSFERS OF FINANCIAL ASSETS
Transferred bills receivable that are derecognized in their entirety
The Group endorsed certain bills receivable accepted by banks (the “Derecognized Bills”) to certain of its suppliers
in order to settle the trade payables due to such suppliers with carrying amounts in aggregate of RMB45,520,000,
RMB64,201,000 and RMB58,199,000 as at 31 December 2023, 2024 and 2025, respectively. Some bills receivable accepted
by banks (the “Discounted Bills”) were discounted with carrying amounts of RMB5,500,000 on 31 December 2023,
respectively. The Derecognized Bills with maturities ranging from 1 to 6 months are considered to have very low credit risk.
In accordance with the Law of Negotiable Instruments in the PRC, the holders of the Derecognized Bills may exercise the
right of recourse against any, several or all the persons liable for the Derecognized Bills regardless including the Group of
the order of precedence (the “Continuing Involvement”). In the opinion of the management, the Group has transferred
substantially all the risks and rewards relating to the Derecognized Bills. Accordingly, it has derecognized the full carrying
amounts of the Derecognized Bills and the associated trade payables. The maximum exposure to loss from the Group’s
Continuing Involvement in the Derecognized Bills and the undiscounted cash flows to repurchase these Derecognized Bills
is equal to their carrying amounts. In the opinion of management, the fair values of the Group’s Continuing Involvement in
the Derecognized Bills are not significant. No gains or losses were recognized from the Continuing Involvement during the
Relevant Periods.
Transferred bills receivable that are not derecognized in their entirety
The Group endorsed bills receivable with carrying amounts of RMB666,000, RMB58,000 and RMB10,200,000 (the
“Endorsed Bills”) to some suppliers to the settle accounts payable, due to such suppliers as at 31 December 2023, 2024 and
2025, respectively. In the opinion of the management, the Group retains significant risks and rewards, including the risk of
default associated with the Endorsed Bills and Discounted Bills, and therefore the Group continues to recognize the full
carrying amounts of the Endorsed Bills, Discounted Bills, related trade payables and short-term borrowings.
46 FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, restricted cash, trade and bills receivables,
financial assets included in prepayments, other receivables and other assets, financial assets at fair value through profit or
loss, trade and bills payables, financial liabilities included in other payables and accruals, lease liabilities and current portion
of interest-bearing bank and other borrowings approximate to their carrying amounts largely due to the short-term maturities
of these instruments. The non-current portion of interest-bearing bank and other borrowings approximates to their carrying
amounts mainly due to the floating interest rate.
The Group’s finance department headed by the finance manager is responsible for determining the policies and
procedures for the fair value measurement of financial instruments. The finance manager reports directly to the chief financial
officer. At each reporting date, the finance department analyzes the movements in the values of financial instruments and
determines the major inputs applied in the valuation. The valuation is reviewed and approved by the chief financial officer.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The Group invests in financial assets at fair value through profit or loss, which represent structured deposit products
issued by banks. The fair values are based on cash flows discounted using the expected yield rate.
The Group has bills receivable measured at fair value through other comprehensive income. The Group has estimated
the fair value of these bills receivable by using a discounted cash flow valuation model based on the market interest rates
of instruments with similar terms and risks.
APPENDIX I ACCOUNTANTS’ REPORT
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Below is a summary of significant unobservable inputs to the valuation of financial instruments which are measured
at fair value as at the end of each of the Relevant Periods:
Financial assets
Fair value
hierarchy
Mainly valuation
techniques
Significant
unobservable inputs
Sensitivity of fair
value to the input
Investments in unlisted
funds at fair value /H1118/H1118Level 3 Net asset value of
underlying
investments value
N/A N/A
Unlisted equity
investments at fair
value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Level 3 Market approach Discounts for lack
of marketability
(“DLOM”)
5% increase/decrease in
probability would
result in increase/
decrease in fair value
by RMB173,000,
RMB2,147,000 and
RMB9,183,000 at the
end of each of the
Relevant Periods
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:
Assets measured at fair value
As at 31 December 2023
Fair value measurement using
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable
inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 834,064 17,234 851,298
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 11,271 – 11,271
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 845,335 17,234 862,569
As at 31 December 2024
Fair value measurement using
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable
inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,286,031 71,390 1,357,421
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 27,781 – 27,781
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,313,812 71,390 1,385,202
As at 31 December 2025
Fair value measurement using
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable
inputs
(Level 1) (Level 2) (Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at fair value through
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,192 802,063 218,536 1,022,791
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 25,043 – 25,043
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,192 827,106 218,536 1,047,834
APPENDIX I ACCOUNTANTS’ REPORT
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47 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise interest-bearing bank and other borrowings, financial assets at
fair value through profit or loss and cash and bank balances. The main purpose of these financial instruments is to raise
finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables and
trade and bills payables, which arise directly from its operations.
The main risks arising from the Group’s financial instruments are foreign currency risk, credit risk and liquidity risk.
The board of directors reviews and agrees to policies for managing each of these risks and they are summarized below.
Foreign currency risk
The Group has transactional currency exposures. Such exposures arise from sales or purchases by operating units in
currencies other than the units’ functional currencies. In addition, the Group has currency exposures from its cash and cash
equivalent. The management of the Company considers the Group’s exposure to foreign currency risk to be insignificant.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s debt obligations
with a floating interest rate. The Group’s policy is to manage its interest cost using a mix of fixed and variable rate debts.
If the interest rate of bank borrowings had increased/decreased by 100 basis points and all other variables were held
constant, the profit after tax of the Group, through the impact on floating rate borrowings, would have increased/decreased
by approximately RMB1,192,000, RMB2,872,000 and RMB2,073,000 for the years ended 31 December 2023, 2024 and
2025, respectively.
Credit risk
The Group trades only with recognized and creditworthy third parties. It is the Group’s policy that all customers who
wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on
an ongoing basis and the Group’s exposure to bad debts is not significant. For transactions that are not denominated in the
functional currency of the relevant operating unit, the Group does not offer credit terms without the specific approval.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s credit policy,
which is mainly based on past due information unless other information is available without undue cost or effort, and
year-end staging classification as at the end of each of the Relevant Periods.
The amounts presented are gross carrying amounts for financial assets.
As at 31 December 2023
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118– – – 527,685 527,685
Due from related parties /H1118/H1118/H1118/H1118/H1118/H11183,36 1––– 3,361
Financial assets included in
prepayments, other receivables
and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,24 1––– 57,241
– Doubtful** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,084 30 – 1,114
Restricted cash*
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,80 1––– 99,801
Cash and bank balances
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,469,625 – – – 1,469,625
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,630,028 1,084 30 527,685 2,158,827
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 349 ---
As at 31 December 2024
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118– – – 448,700 448,700
Due from related parties /H1118/H1118/H1118/H1118/H1118/H11182,00 0––– 2,000
Financial assets included in
prepayments, other receivables
and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,84 4––– 43,844
– Doubtful** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,436 30 – 3,466
Restricted cash*
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,67 6––– 99,676
Cash and bank balances
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,179,004 – – – 1,179,004
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,324,524 3,436 30 448,700 1,776,690
As at 31 December 2025
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118– – – 500,592 500,592
Due from related parties /H1118/H1118/H1118/H1118/H1118/H11185–––5
Financial assets included in
prepayments, other receivables
and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,68 1––– 49,681
– Doubtful** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,299 30 – 2,329
Restricted cash*
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,04 2––– 76,042
Cash and bank balances
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,345,657 – – – 1,345,657
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,471,385 2,299 30 500,592 1,974,306
* For trade receivables to which the Group applies the simplified approach for impairment, information based
on the provision matrix is disclosed in note 22 to the Historical Financial Information.
** The credit quality of the financial assets included in prepayments, other receivables and other assets is
considered to be “normal” when they are not past due and there is no information indicating that the financial
assets had a significant increase in credit risk since initial recognition. Otherwise, the credit quality of the
financial assets is considered to be “doubtful”.
Further quantitative data in respect of the Group’s exposure to credit risk arising from trade receivables are disclosed
in note 22 to the Historical Financial Information.
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management of the
Group to finance the operations and mitigate the effects of fluctuations in cash flows.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts, bank loans, lease liabilities and other interest-bearing loans.
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 350 ---
The maturity profile of the Group’s financial liabilities as at the end of each of the Relevant Periods, based on the
contractual undiscounted payments, is as follows:
On demand
or less than
1 year
Between 1 and
2 years
Between 2 and
3 years
Between 3 and
5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2023
Trade and bills payables /H1118 391,20 6–––– 391,206
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118418,744 94,22 1––– 512,965
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H111859,979 33,430 19,905 20,558 10,180 144,052
Financial liabilities
included in other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,12 1–––– 145,121
Other non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6,73 2––– 6,732
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,015,050 134,383 19,905 20,558 10,180 1,200,076
On demand
or less than
1 year
Between 1 and
2 years
Between 2 and
3 years
Between 3 and
5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2024
Trade and bills payables /H1118 391,39 1–––– 391,391
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118667,212 125,52 1––– 792,733
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H111858,023 30,462 16,630 12,706 6,315 124,136
Financial liabilities
included in other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118141,89 5–––– 141,895
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,258,521 155,983 16,630 12,706 6,315 1,450,155
On demand
or less than
1 year
Between 1 and
2 years
Between 2 and
3 years
Between 3 and
5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2025
Trade and bills payables /H1118 568,03 3–––– 568,033
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118700,53 0–––– 700,530
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H111861,183 37,973 17,179 11,852 4,307 132,494
Financial liabilities
included in other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,46 8–––– 149,468
Due to related parties /H1118/H1118 2,08 1–––– 2,081
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,481,295 37,973 17,179 11,852 4,307 1,552,606
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as a going
concern and to maintain healthy capital ratios in order to support its business and maximize shareholders’ value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and
the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. The Group is not subject to any externally
imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during
the Relevant Periods.
As at 31 December
2023 2024 2025
RMB’000 RMB’000 RMB’000
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,335,997 1,620,317 1,726,027
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,244,191 6,422,667 6,628,916
Gearing ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821% 25% 26%
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 351 ---
48 EVENTS AFTER THE RELEV ANT PERIODS
The Proposal of “2025 Annual Dividend Plan” was approved in the 2nd meeting of the third session of director’s
meeting. It was agreed that the Company will distribute cash dividends amounting to RMB246,022,000. Based on the total
share capital of 208,897,000 shares, excluding 3,878,731 shares held in the repurchase account, the effective share base is
205,018,269 shares. A cash dividend of RMB12.0 (tax inclusive) per 10 shares will be distributed to all shareholders. Such
proposed final dividend is subject to the approval of the Company’s shareholders at the annual general meeting.
III SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of its
subsidiaries in respect of any period subsequent to 31 December 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 352 ---
The following information sets out in this appendix does not form part of the Accountants’
Report from Ernst & Young, Certified Public Accountants, Hong Kong, the Reporting Accountants,
as set out in Appendix I to this prospectus, and is included herein for illustrative purpose only. The
unaudited pro forma financial information should be read in conjunction with “Financial
Information” and the Accountants’ Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets has been
prepared in accordance with Rule 4.29 of the Hong Kong Listing Rules and with reference to
Accounting Guideline 7 “Preparation of Pro Forma Financial Information for inclusion in
Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants for
illustration purposes only, and is set out here to illustrate the effect of the Global Offering on our
consolidated net tangible assets as of 31 December 2025 as if it had taken place on 31 December
2025.
The unaudited pro forma adjusted consolidated net tangible assets have been prepared for
illustrative purposes only and because of its hypothetical nature, it may not give a true picture of
the financial position of the Group had the Global Offering been completed as of 31 December 2025
or any future dates. It is prepared based on our consolidated net tangible assets as of 31 December
2025 as set out in the Accountants’ Report as set out in Appendix I to this prospectus and adjusted
as described below.
Consolidated
net tangible
assets of
the Group
attributable to
owners of the
Company as at
31 December
2025
Estimated net
proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated
net tangible
assets
attributable to
owner of the
Company
Unaudited pro forma
adjusted consolidated net
tangible assets per Share
RMB’000 RMB’000 RMB’000 RMB HK$
(note 1) (note 2) (note 3) (note 4)
Based on an Offer Price
of HK$39.33 per
Share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,466,560 882,975 5,349,535 23.06 26.32
Notes:
1. The consolidated net tangible assets of the Group attributable to owners of the Company as at 31 December
2025 is based on consolidated net assets of attributable to owners of the Company as at 31 December 2025
of approximately RMB4,866,858,000 after deducting of other intangible assets of RMB31,386,000 and
goodwill of RMB368,912,000 as of 31 December 2025 set out in the Accountants’ Report in Appendix I to this
prospectus.
2. The estimated net proceeds from the Global Offering are based on the Offer Price at the indicative Price of
HK$39.33 per Share (being the maximum Offer Price), after deduction of the underwriting fees and other
related expenses payable by the Group (excluding the listing expenses that have been charged to profit or loss
during the Track Record Period) and do not take into account any A Shares to be issued upon exercise of the
share options granted under the Employee Incentive Schemes. The estimated net proceeds from the Global
Offering are converted from Hong Kong dollars into Renminbi at an exchange rate of HK$1.0 to RMB0.8763.
No representation is made that the Hong Kong dollar amounts have been, could have been or may be converted
to Renminbi, or vice versa, at that rate or any other rates or at all.
3. The unaudited pro forma adjusted consolidated net tangible assets attributable to owners of the Company and
the amounts per share are arrived at after the adjustments referred to note 2 above and on the basis that
232,018,269 shares (excluding 3,878,731 treasury shares held as at 31 December 2025) in issue assuming that
Global Offering had been completed on 31 December 2025.
4. For the purpose of this unaudited pro forma statement of adjusted net tangible assets, the balances stated in
RMB are converted into HK$ at the rate of HK$1.00 to RMB0.8763.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 353 ---
5. The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company as shown on page II-1 have not been adjusted to illustrate the effect of the following:
The Proposal of “2025 Annual Dividend Plan” was approved in the 2nd meeting of the third session of
director’s meeting. It was agreed that the Company will announce a dividend of RMB246,022,000 to the
existing shareholders prior to the Listing based on the Company’s retained profits as of 31 December 2025.
Had the payment of the dividend been made on 31 December 2025, the unaudited pro forma adjusted
consolidated net tangible assets of the Group would decrease from RMB5,349,535,000 to RMB5,103,513,000,
based on the maximum Offer Price of HK$39.33 per Share, and the unaudited pro forma adjusted consolidated
net tangible assets of the Group attributable to owners of the Company as at 31 December 2025 per Share
would be RMB22.00 (equivalent to HK$25.11) based on a maximum Offer Price of HK$39.33 per Share.
Except for the information as disclosed above, no other adjustments have been made to the unaudited pro
forma adjusted consolidated net tangible assets. These amounts are converted from Renminbi to Hong Kong
dollars or Hong Kong dollars to Renminbi at an exchange rate of HK$1.00 to RMB0.8763. No representation
is made that Renminbi/Hong Kong dollars amount have been, could have been or may be converted to Hong
Kong dollars/Renminbi at that rate or at all.
6. No other adjustment has been made to the unaudited pro forma adjusted consolidated net tangible asset of the
Group to reflect any trading result or other transactions entered into subsequent to 31 December 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 354 ---
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
⭰㰟㛪姯⸒Ṳ⋀㈧
榀㸖毩歁㵳勘䙮怺 979噆
⤑⏋✱ᷧ⺎ 27㧺
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
The following is the text of a report, prepared for inclusion in this document, received from
the independent reporting accountants of the Company, Ernst & Young, Certified Public
Accountants, Hong Kong, for the purpose of incorporation in this prospectus.
To the Directors of Cofoe Medical Technology Co., Ltd.
We have completed our assurance engagement to report on the compilation of unaudited pro
forma financial information of Cofoe Medical Technology Co., Ltd. (the “Company”) and its
subsidiaries (hereinafter collectively referred to as the “Group”) by the directors of the Company
(the “Directors”) for illustrative purposes only. The unaudited pro forma financial information
consists of the unaudited pro forma consolidated net tangible assets as at 31 December 2025, and
related notes as set out on pages II-1 and II-2 of the prospectus dated 27 April 2026 (the
“Prospectus”) issued by the Company (the “Unaudited Pro Forma Financial Information”). The
applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma
Financial Information are described in Appendix II.
The Unaudited Pro Forma Financial Information has been compiled by the Directors to
illustrate the impact of the global offering of shares of the Company on the Group’s financial
position as at 31 December 2025 as if the transaction had taken place at 31 December 2025. As part
of this process, information about the Group’s financial position, has been extracted by the
Directors from the Group’s financial statements for the period ended 31 December 2025, on which
an accountants’ report has been published.
Directors’ responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited 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
(“AG”) 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars
issued by the Hong Kong Institute of Certified Public Accountants (the “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
behavior.
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for
Firms that Perform Audits 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
management 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 Unaudited Pro Forma Financial Information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial information
used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to
those to whom those reports were addressed by us at the dates of their issue.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 355 ---
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 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 Unaudited Pro Forma Financial Information in accordance with
paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any reports
or opinions on any historical financial information used in compiling the Unaudited Pro Forma
Financial Information, nor have we, in the course of this engagement, performed an audit or review
of the financial information used in compiling the Unaudited Pro Forma Financial Information.
The purpose of the Unaudited Pro Forma Financial Information included in the Prospectus is
solely to illustrate the impact of the global offering of shares of the Company on unadjusted
financial information of the Group as if the transaction had been undertaken at an earlier date
selected for purposes of the illustration. Accordingly, we do not provide any assurance that the
actual outcome of the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used by the Directors in the compilation of the
Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the
significant effects directly attributable to the transaction, and to obtain sufficient appropriate
evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the Unaudited Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to the
reporting accountants’ understanding of the nature of the Group, the transaction in respect of which
the Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement
circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma
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:
(a) the Unaudited Pro Forma Financial Information has 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 purpose of the Unaudited Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Ernst & Y oung
Certified Public Accountants
Hong Kong
27 April 2026
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1. TAXATION OF SECURITIES HOLDERS
The taxation of income and capital gains of holders of H Shares are subject to the laws and
practices of the PRC and of jurisdictions in which holders of H Shares are resident or otherwise
subject to tax. The following summary of certain relevant taxation provisions is based on current
laws and practices, is subject to change and does not constitute legal or tax advice. The discussion
does not deal with all possible tax consequences relating to an investment in the H Shares, nor does
it take into account the specific circumstances of any particular investor, some of which may be
subject to special regulation. Accordingly, you should consult your own tax advisor regarding the
tax consequences of an investment in the H Shares. The discussion is based upon laws and relevant
interpretations in effect as of the date of this prospectus, all of which are subject to change and may
have retrospective effect.
This discussion does not address any aspects of the PRC or Hong Kong taxation other than
income tax, capital tax, value-added tax, stamp duty and estate duty. Prospective investors are urged
to consult their financial advisers regarding the PRC, Hong Kong and other tax consequences of
owning and disposing of H Shares.
A. The PRC Taxation
Taxation on Dividends
Individual Investors
Pursuant to the Individual Income Tax Law of the PRC ()
(the “IIT Law”), which was latest amended on August 31, 2018, and the Implementation
Regulations for the Individual Income Tax Law of the PRC (݄
ૢԷ), which was latest amended on December 18, 2018, dividends distributed by PRC
enterprises are subject to a PRC withholding tax levied at a flat rate of 20%. For a foreign individual
who is not a resident of the PRC, the receipt of dividends from an enterprise in the PRC is normally
subject to a withholding tax of 20% unless specifically exempted by the tax authority of the State
Council or reduced by relevant tax treaty.
Pursuant to the Notice of State Administration of Taxation (the “SA T”) on Issues Concerning
the Administration of Individual Income Tax Collection after the Annulment of the Document Guo
Shui Fa [1993] No. 045 (਷೼೯[1993]045੻೼ᅄ၍
) issued by the SA T on June 28, 2011, domestic non- foreign-invested enterprises
issuing shares in Hong Kong may, when distributing dividends, withhold individual income tax at
the rate of 10%. For the individual holders of H Shares receiving dividends who are citizens of
countries that have entered into a tax treaty with the PRC with tax rates lower than 10%, the
non-foreign-invested enterprise whose shares are listed in Hong Kong may apply on behalf of such
holders for enjoying the lower preferential tax treatments, and, upon approval by the tax authorities,
the amount which is over withheld will be refunded. For the individual holders of H shares
receiving dividends who are citizens of countries that have entered into a tax treaty with the PRC
with tax rates higher than 10% but lower than 20%, the non-foreign-invested enterprise is required
to withhold the tax at the agreed rate under the treaties, and no application procedures will be
necessary. For the individual holders of H Shares receiving dividends who are citizens of countries
without taxation treaties with the PRC or otherwise, the non-foreign invested enterprise is required
to withhold the tax at a rate of 20%.
Enterprise Investors
In accordance with the Enterprise Income Tax Law of the PRC (੻
) (the “EIT Law”) effective as of December 29, 2018 and the Implementation Regulations for
the Enterprise Income Tax Law of the PRC (ૢԷ), which
was last amended on December 6, 2024 and came into effect on January 20, 2025, a non-resident
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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enterprise is generally subject to a 10% enterprise income tax on PRC-sourced income (including
dividends received from a PRC resident enterprise that issues shares in Hong Kong), if such
non-resident enterprise does not have an establishment or place in the PRC or has an establishment
or place in the PRC but the PRC-sourced income is not connected with such establishment or place
in the PRC. The withholding tax may be reduced pursuant to applicable treaties for the avoidance
of double taxation. Such income tax for non-resident enterprises are deducted at source, where the
payer of the income are required to withhold the income tax from the amount to be paid to the
non-resident enterprise when such payment is made or due.
The Circular on Issues Relating to the Withholding of Enterprise Income Tax by PRC Resident
Enterprises on Dividends Paid to Overseas Non-PRC Resident Enterprise Shareholders of H Shares
(Guo Shui Han [2008] No. 897) (͏ΆุΣྤ̮H˾ϔ˾
(਷೼Ռ[2008]897 ໮)) which was issued by the SA T on November
6, 2008, further clarified that a PRC-resident enterprise must withhold corporate income tax at a
rate of 10% on dividends paid to non-PRC resident enterprise shareholders of H Shares with respect
to the dividends of 2008 and onwards. In addition, the Response to Questions on Levying Enterprise
Income Tax on Dividends Derived by Non-resident Enterprise from Holding Stock such as B-shares
(Guo Shui Han [2009] No. 394) (͏Άุ՟੻Bה
ҭᔧ(਷೼Ռ[2009]394 ໮)) which was issued by the SA T on July 24, 2009 and
effective on the same date, further provides that any PRC-resident enterprise that is listed on
overseas stock exchanges must withhold enterprise income tax at a rate of 10% on dividends of
2008 and onwards that it distributes to non-resident enterprises. Such tax rates may be further
modified pursuant to the tax treaty or agreement that China has concluded with a relevant
jurisdiction, where applicable.
Pursuant to the Arrangement between the Mainland 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 (ᅄ೼ձԣ˟ਊဍ೼
τર) signed on August 21, 2006, the PRC Government may levy taxes on the dividends paid
by a PRC company to Hong Kong residents (including natural persons and legal entities) in an
amount not exceeding 10% of total dividends payable by the PRC company. If a Hong Kong
resident directly holds 25% or more of the equity interest in a PRC company, then such tax shall
not exceed 5% of the total dividends payable by the PRC company. Pursuant to the Fourth Protocol
of the SA T to the Arrangement between the Mainland and Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to
Taxes on Income (׵<ᅄ೼ձԣ˟ਊ
τર>) effective as of December 29, 2015, the abovementioned provisions are
not applicable to any arrangement which is primarily made for the purpose of obtaining the above
taxation benefits. The application of the dividend clause of tax agreements is subject to the
requirements of PRC tax law and regulation, such as the Notice of the SA T on the Issues Concerning
the Application of the Dividend Clauses of Tax Agreements (ٰ֛
) (Guo Shui Han [2009] No. 81).
Tax Treaties
Investors who are not PRC residents and reside in countries which have entered into avoidance
of double taxation treaties with the PRC are entitled to a reduction of the withholding taxes imposed
on the dividends received from PRC companies. The PRC has entered into arrangements for the
avoidance of double taxation with a number of countries and regions including but not limited to
Hong Kong, Macau, Australia, Canada, France, Germany, Japan, Malaysia, the Netherlands,
Singapore, the United Kingdom and the United States. Non-PRC resident enterprises entitled to
preferential tax rates in accordance with the relevant income tax treaties or arrangements are
required to apply to the PRC tax authorities for a refund of the withholding tax in excess of the
agreed tax rate, and the refund payment is subject to approval by the PRC tax authorities.
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Taxation on Share Transfer
VAT and Local Additional Tax
Pursuant to the Circular on Fully Implementing the Pilot Reform for the Transition from
Business Tax to V alue-added Tax () (Cai Shui
[2016] No. 36) ((ৌ೼[2016]36 ໮)) (hereinafter
referred to as “Circular 36”), which was implemented on May 1, 2016, entities and individuals
engaged in the services sale in the PRC are subject to V A T and “engaged in the services sale in the
PRC” means that the seller or buyer of the taxable services is located in the PRC. Circular 36 also
provides that transfer of financial products, including transfer of the ownership of marketable
securities, shall be subject to V A T at 6% on the taxable revenue (which is the balance of sales price
upon deduction of purchase price), for a general or a foreign V A T taxpayer. However, individuals
who transfer financial products are exempt from V A T.
According to these regulations, if the holder is a nonresident individual, the PRC V A T is
exempted from the sale or disposal of H shares; if the holder is a nonresident enterprise and the
H-share buyer is an individual or entity located outside China, the holder is not necessarily required
to pay the PRC V A T, but if the H-share buyer is an individual or entity located in China, the holder
may be required to pay the PRC V A T. However, in view of no clear regulations, whether the
non-Chinese resident enterprises are required to pay the PRC V A T for the disposal of H shares, there
is still uncertainty in the interpretation and application of the above provisions.
At the same time, V A T payers are also required to pay urban maintenance and construction tax,
education surtax and local education surcharge (hereinafter collectively referred to as “Local
Additional Tax”), which shall usually equal to 12% of the V A T payable (if any).
Income tax
Individual Investors
According to the IIT Law and its implementation provisions, gains realized on the sale of
equity interests in PRC resident enterprises are subject to the income tax at a rate of 20%.
Pursuant to the Circular of the MOF and the SA T on Declaring that Individual Income
Tax Continues to be Exempted over Income of Individuals from the Transfer of Shares (Cai Shui
Zi [1998] No. 61) (ஷ
(ৌ೼ο[1998]61 ໮)) issued by the MOF and SA T on March 30, 1998, from January 1, 1997,
income of individuals from transfer of the shares of listed enterprises continues to be exempted
from individual income tax. The SA T has not expressly stated whether it will continue to exempt
tax on income of individuals from transfer of the shares of listed enterprises in the latest amended
IIT Law and its implementation provisions.
However, on December 31, 2009, the MOF, the SA T and the CSRC jointly issued the Circular
on Relevant Issues Concerning the Collection of Individual Income Tax over the Income Received
by Individuals from Transfer of Listed Shares Subject to Sales Limitation (Cai Shui [2009] No.
167) ((ৌ೼[2009]167 ໮)),
which provides that individuals’ income from transferring listed shares on certain domestic
exchanges shall continue to be exempted from individual income tax, except for certain shares
which are subject to sales limitations as defined in the Supplementary Circular on Relevant Issues
Concerning the Collection of Individual Income Tax over the Income Received by Individuals from
Transfer of Listed Shares Subject to Sales Limitation (Cai Shui [2010] No. 70) (ɛᔷᜫɪ
(ৌ೼[2010]70 ໮)). As at the Latest
Practicable Date, the aforesaid provisions have not expressly provided that individual income tax
shall be collected from non-PRC resident individuals on the transfer of shares of PRC resident
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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enterprises listed on overseas stock exchanges. To the knowledge of the Company, in practice, the
PRC tax authorities have not collected income tax from non-PRC resident individuals on gains from
the transfer of shares of PRC resident enterprises listed on overseas stock exchanges.
Enterprise Investors
In accordance with the EIT Law and its implementation provisions, a non-resident enterprise
is generally subject to a 10% enterprise income tax on PRC-sourced income, including gains
derived from the disposal of equity interests in a PRC resident enterprise, if it does not have an
establishment or place in the PRC or has an establishment or place in the PRC but the PRC-sourced
income is not connected with such establishment or place. Such income tax for non-resident
enterprises is deducted at source, where the payer of the income is required to withhold the income
tax from the amount to be paid to the non-resident enterprise when such payment is made or due.
Such tax may be reduced or exempted pursuant to relevant tax treaties or agreements on avoidance
of double taxation.
Stamp Duty
Pursuant to the Interim Regulations of the PRC on Stamp Duty (೼ᅲ
БૢԷ) effective on October 1, 1998 and amended on January 8, 2011, the Implementation Rules
for the Interim Regulations of the PRC on Stamp Duty (୚
) effective on October 1, 1988, and the Stamp Tax Law of the PRC (೼
) issued on June 10, 2021 and effective on July 1, 2022, PRC stamp duty only applies to
documents executed or received within the PRC, having legally binding force in the PRC and
protected under the PRC laws, thus the requirements of the stamp duty imposed on the transfer of
shares of PRC listed companies shall not apply to the acquisition and disposal of H Shares by
non-PRC investors outside of the PRC. Upon the Stamp Tax Law of the PRC coming into effect on
July 1, 2022, the Provisional Regulations of the PRC on Stamp Duty shall be abolished
simultaneously.
Estate Duty
As of the date of this prospectus, no estate duty has been levied in the PRC under the PRC
laws.
B. Hong Kong Taxation
Tax on Dividends
Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable
in Hong Kong in respect of dividends paid by the Company.
Capital Gains and Profit Tax
No tax is imposed in Hong Kong in respect of capital gains from the sale of H Shares.
However, trading gains from the sale of the H Shares by persons carrying on a trade, profession or
business in Hong Kong, where such gains are derived from or arise in Hong Kong from such trade,
profession or business will be subject to Hong Kong profits tax, which is currently imposed at the
maximum rate of 16.5% on corporations and at the maximum rate of 15% on unincorporated
businesses. Certain categories of taxpayers (for example, financial institutions, insurance
companies and securities dealers) are likely to be regarded as deriving trading gains rather than
capital gains unless these taxpayers can prove that the investment securities are held for long-term
investment purposes.
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Trading gains from sales of the H Shares effected on the Hong Kong Stock Exchange will be
considered to be derived from or arise in Hong Kong. Liability for Hong Kong profits tax would
thus arise in respect of trading gains from sales of H Shares effected on the Hong Kong Stock
Exchange realized by persons carrying on a business of trading or dealing in securities in Hong
Kong.
Stamp Duty
Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher of the
consideration for or the market value of the H Shares, will be payable by the purchaser on every
purchase and by the seller on every sale of any Hong Kong securities, including H Shares (in other
words, a total of 0.2% is currently payable on a typical sale and purchase transaction involving H
Shares). In addition, a fixed stamp duty of HK$5.00 is currently payable on any instrument of
transfer of H Shares. Where one of the parties is a resident outside Hong Kong and does not pay
the ad valorem duty due by it, the duty not paid will be assessed on the instrument of transfer (if
any) and will be payable by the transferee. If no stamp duty is paid on or before the due date, a
penalty of up to 10 times the duty payable may be imposed.
Estate Duty
The Revenue (Abolition of Estate Duty) Ordinance 2005 abolished estate duty in respect of
deaths occurring on or after February 11, 2006.
2. PRINCIPAL TAXATION OF THE COMPANY IN THE PRC
Enterprise Income Tax
According to the Enterprise Income Tax Law of the People’s Republic of China ( ʕശɛ͏
), enterprises and other income-generating organizations (hereinafter
collectively referred to as “enterprises”) within the territory of the People’s Republic of China are
the taxpayers of enterprise income tax and shall pay enterprise income tax in accordance with the
provisions of the EIT Law. The Enterprise Income Tax rate is 25%.
Enterprises are classified into resident enterprises and non-resident enterprises. A non-resident
enterprise that does not have an establishment or place of business in the PRC, or has an
establishment or place of business in the PRC but the income has no actual connection to such
establishment or place of business, shall pay enterprise income tax on its income within the PRC
and withhold at source, where the payer is the withholding agent. The tax shall be withheld by the
withholding agent from the payment or due payment every time it is paid or due. Meanwhile, any
gains realized on the transfer of shares by such investors are subject to enterprise income tax and
shall be withheld at source if such gains are regarded as income derived from the transfer of
property within the PRC.
VAT
According to the Interim Regulations of the PRC on V alue-Added Tax ( ʕശɛ͏΍ձ਷ᄣ
೼ᅲБૢԷ) which was promulgated by the State Council on December 13, 1993, and latest
amended on November 19, 2017, and the Implementation Rules for the Interim Regulations of the
PRC on V alue-added Tax () which was promulgated
by the MOF on December 25, 1993 and latest amended on October 28, 2011, all enterprises and
individuals that engage in the sale of goods, the provision of processing, repair and replacement
services, sales of service, intangible assets and real estate and the importation of goods within the
territory of the PRC shall pay value-added tax. The tax rate for taxpayers engaging in sale of
services shall be 6% and the tax rate for taxpayers engaging in sale of goods shall be 17%, unless
otherwise stipulated. With the V A T reforms in the PRC, the rate of V A T has been changed several
times.
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Pursuant to the Implementation Rules of Pilot Reform for Transition from Business Tax to
VAT () which was promulgated on March 23, 2016, and latest
amended on March 20, 2019, unless otherwise provided in the implementation rules, taxpayers
incurring taxable activities are generally subject to a 6% V A T. The Notice on the Adjustment to V A T
Rates (Cai Shui [2018] No. 32) ((ৌ೼[2018]32 ໮)), which was
promulgated by the MOF and the SA T on April 4, 2018 and became effective on May 1, 2018,
adjusted the applicative rate of V A T, and the deduction rates of 17% and 11% applicable to the
taxpayers who have V A T taxable sales activities or imported goods are adjusted to 16% and 10%,
respectively. According to the Announcement on Relevant Policies for Deepening V alue-Added Tax
Reform (Announcement [2019] No. 14 of the MOF, the SA T and the General Administration of
Customs) (ʮѓ(೼ਕᐼ҅ʿऎᗫᐼ໇ʮѓ[2019]14
໮)), which was promulgated by the MOF, the SA T and the General Administration of Customs on
March 20, 2019 and became effective on April 1, 2019, the V A T rates of 16% and 10% applicable
to the taxpayers who have V A T taxable sales activities or imported goods are adjusted to 13% and
9%, respectively.
3. FOREIGN EXCHANGE
On January 29, 1996, the State Council promulgated the new Regulations of the PRC for
Foreign Exchange Control ( ʕശɛ͏΍ձ਷̮ි၍ଣૢԷ) (the “Foreign Exchange Control
Regulations”), which became effective on April 1, 1996. The Foreign Exchange Control
Regulations classifies all international payments and transfers into current account items and capital
account items. Most of the current account items are no longer subject to the SAFE’s approval,
while capital account items still are. The Foreign Exchange Control Regulations was subsequently
amended on January 14, 1997 and August 1, 2008. The latest amended Foreign Exchange Control
Regulations clearly states that the State will not impose any restriction on international payments
and transfers under the current account items.
On June 20, 1996, the PBOC promulgated the Regulations on the Settlement and Sale of and
Payment in Foreign Exchange () (the “Settlement Regulations”)
which became effective on July 1, 1996. The Settlement Regulations abolished all other restrictions
on convertibility of foreign exchange under current account items, while retaining the existing
restrictions on foreign exchange transactions under capital account items.
According to the Announcement on Reforming the RMB Exchange Rate Regime (PBOC
Announcement [2005] No. 16) (ʮѓ(ʕ਷ɛ͏ვБʮѓ
[2005]16 ໮)), issued by the PBOC on July 21, 2005, from the same date, the PRC began to
implement a managed floating exchange rate system in which the exchange rate would be
determined based on market supply and demand and adjusted with reference to a basket of
currencies. The Renminbi exchange rate was no longer pegged to the U.S. dollar. The PBOC would
publish the closing price of foreign currencies such as U.S. dollar against Renminbi in the interbank
foreign exchange market after the closing of the market on each working day, which will be used
as the central parity for the transactions of such foreign currency against Renminbi exchange rate
on the following working day.
Starting from January 4, 2006, the PBOC introduced over-the-counter transactions into the
interbank spot foreign exchange market for the purpose of improving the formation mechanism of
the central parity of Renminbi exchange rates, and the practice of matching was kept at the same
time. In addition to the above, the PBOC introduced the market-maker rule to provide liquidity to
the foreign exchange market. On July 1, 2014, the PBOC further improved the formation
mechanism of the RMB exchange rate by authorizing the China Foreign Exchange Trade System to
make inquiries with the market makers before the interbank foreign exchange market opens every
day for their offered quotations which are used as samples to calculate the central parity of the RMB
against the USD of the current day, which shall be finally decided on the weighted average of the
prices of all market makers after excluding the highest and lowest quotations, and announce it at
9:15 a.m. on each working day. On August 11, 2015, the PBOC announced to improve the central
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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parity quotations of RMB against the U.S. dollar by authorizing market-makers to provide central
parity quotations to the China Foreign Exchange Trading Center with reference to the interbank
foreign exchange market closing rate of the previous day, the supply and demand for foreign
exchange as well as changes in major international currency exchange rates.
On August 5, 2008, the State Council promulgated the revised Foreign Exchange Control
Regulations (the “Revised Foreign Exchange Control Regulations”), which has made substantial
changes to the foreign exchange supervision system of the PRC. First, the Revised Foreign
Exchange Control Regulations have adopted an approach of balancing the inflow and outflow of
foreign exchange. Foreign exchange income received overseas can be repatriated or deposited
overseas, and foreign exchange and foreign exchange settlement funds under the capital account are
required to be used only for purposes as approved by the competent authorities and foreign
exchange administrative authorities. Second, the Revised Foreign Exchange Control Regulations
has improved the mechanism for determining the RMB exchange rate based on market supply and
demand. Third, the Revised Foreign Exchange Control Regulations has enhanced the monitoring of
cross-border foreign currency fund flows. In the event that revenues and costs in connection with
international transactions suffer or may suffer a material misbalance, or the national economy
encounters or may encounter a severe crisis, the Sate may adopt necessary safeguard or control
measures. Fourth, the Revised Foreign Exchange Control Regulations has enhanced the supervision
and administration of foreign exchange transactions and grant extensive authorities to SAFE to
enhance its supervisory and administrative powers.
According to relevant PRC laws, PRC enterprises (including foreign-invested enterprises)
which need foreign exchange for transactions relating to current account items may, without the
approval of the SAFE, effect payment for their foreign exchange accounts at the designated foreign
exchange banks with the support of valid receipts and proof. Foreign-invested enterprises which
need foreign exchange for the distribution of profits to their shareholders and PRC enterprises
which, in accordance with regulations, are required to pay dividends to their shareholders in foreign
exchange (such as the Company) may, on the strength of resolutions of the board of directors or the
shareholders’ meeting approving the distribution of profits, effect payment from their foreign
exchange accounts or convert and pay dividends at the designated foreign exchange banks.
On October 23, 2014, the State Council promulgated the Decisions on Matters including
Canceling and Adjusting a Batch of Administrative Approval Items (Guo Fa [2014] No. 50) ( ਷ਕ৫
(਷೯[2014]50໮)), which canceled the approval
requirement by the SAFE and its branches for the repatriation and settlement of foreign exchange
of overseas-raised funds through overseas listing.
On December 26, 2014, the SAFE issued the Notice of the SAFE on Issues Concerning the
Foreign Exchange Administration of Overseas Listing (ྤ̮ɪ̹̮ි၍ଣϞ
), pursuant to which a domestic company shall, within 15 working days from the
date of the end of its overseas listing issuance, register the overseas listing with the SAFE’s local
branch at the place of its incorporation; and the proceeds from an overseas listing maybe remitted
to the domestic account or deposited in an overseas account, but the use of the proceeds shall be
consistent with the content of the prospectus and other disclosure documents.
On February 13, 2015, the SAFE issued the Notice of the SAFE on Further Simplifying and
Improving the Foreign Exchange Management Policies for Direct Investment (Hui Fa [2015] No.
13) ((ි೯[2015]13 ໮)),
which came into effect on June 1, 2015. The Notice cancels the foreign exchange registration
approval under domestic direct investment and foreign exchange registration approval under
overseas direct investment, and requires the banks to review and carry out foreign exchange
registration under domestic direct investment and foreign exchange registration under overseas
direct investment directly. The SAFE and its branches shall implement indirect supervision over
foreign exchange registration of direct investment via the banks.
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According to the Notice of SAFE on Revolutionizing and Regulating Capital Account
Settlement Management Policies (Hui Fa [2016] No. 16) (ձ஝ᇍ༟͉
(ි೯[2016]16 ໮)) which was promulgated by the SAFE and
implemented on June 9, 2016, foreign currency earnings in capital account that relevant policies of
willingness exchange settlement have been clearly implemented on (including the recalling of
raised capital by overseas listing) may undertake foreign exchange settlement in the banks
according to actual business needs of the domestic institutions. The tentative percentage of foreign
exchange settlement for foreign currency earnings in capital account of domestic institutions is
100%, subject to adjust of the SAFE in due time in accordance with international revenue and
expenditure situations.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
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This Appendix contains a summary of laws and regulations on companies and securities in the
PRC as well as the additional regulatory provisions of the Stock Exchange on joint stock limited
companies of the PRC. The principal objective of this summary is to provide potential investors
with an overview of the principal laws and regulations applicable to us. This summary is with no
intention to include all the information which may be important to the potential investors. For
discussion of laws and regulations specifically governing the business of our Company, see
“Regulatory Overview”.
PRC LA WS AND REGULATIONS
PRC Legal System
The PRC legal system is based on the Constitution of the PRC () (the
“Constitution”) and is made up of written laws, administrative regulations, local regulations,
separate regulations, autonomous regulations, rules and regulations of departments, rules and
regulations of local governments, international treaties of which the PRC Government is a
signatory, and other regulatory documents. Court verdicts do not constitute binding precedents.
However, they may be used as judicial reference and guidance.
According to the Constitution and the Legislation Law of the PRC (2023 Amendment) ( ʕ
جج2023͍)) (the “Legislation Law”), the NPC and the Standing Committee
of the NPC are empowered to exercise the legislative power of the State. The NPC has the power
to formulate and amend basic laws governing civil and criminal matters, state organs and other
matters. The Standing Committee of the NPC is empowered to formulate and amend laws other than
those required to be enacted by the NPC and to supplement and amend any parts of laws enacted
by the NPC during the adjournment of the NPC, provided that such supplements and amendments
are not in conflict with the basic principles of such laws.
The State Council is the highest organ of the PRC administration and has the power to
formulate administrative regulations based on the Constitution and laws.
The people’s congresses of provinces, autonomous regions and municipalities and their
respective standing committees may formulate local regulations based on the specific circumstances
and actual requirements of their own respective administrative areas, provided that such local
regulations do not contravene any provision of the Constitution, laws or administrative regulations.
The ministries and commissions of the State Council, the PBOC, the State Audit
Administration as well as the other organs endowed with administrative functions directly under the
State Council may, in accordance with the laws as well as the administrative regulations, decisions
and orders of the State Council and within the limits of their power, formulate rules.
The people’s congresses of cities divided into districts and their respective standing
committees may formulate local regulations in terms of urban and rural development and
management, environmental protection, and historical culture protection based on the specific
circumstances and actual requirements of such cities, which will become enforceable after being
reported to and approved by the standing committees of the people’s congresses of the relevant
provinces or autonomous regions but such local regulations shall conform with the Constitution,
laws, administrative regulations, and the relevant local regulations of the relevant provinces or
autonomous regions. People’s congresses of national autonomous areas have the power to enact
autonomous regulations and separate regulations in light of the political, economic and cultural
characteristics of the nationality (nationalities) in the areas concerned.
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The people’s governments of the provinces, autonomous regions, and municipalities directly
under the central government and the cities divided into districts or autonomous prefectures may
enact rules, in accordance with laws, administrative regulations and the local regulations of their
respective provinces, autonomous regions or municipalities.
The Constitution has supreme legal authority and no laws, administrative regulations, local
regulations, autonomous regulations or separate regulations may contravene the Constitution. The
authority of laws is greater than that of administrative regulations, local regulations and rules. The
authority of administrative regulations is greater than that of local regulations and rules. The
authority of local regulations is greater than that of the rules of the local governments at or below
the corresponding level. The authority of the rules enacted by the people’s governments of the
provinces or autonomous regions is greater than that of the rules enacted by the people’s
governments of the city divided into districts or autonomous prefecture within the administrative
areas of the provinces and the autonomous regions.
The NPC has the power to alter or annul any inappropriate laws enacted by its Standing
Committee, and to annul any autonomous regulations or separate regulations which have been
approved by its Standing Committee but which contravene the Constitution or the Legislation Law.
The Standing Committee of the NPC has the power to annul any administrative regulations that
contravene the Constitution and laws, to annul any local regulations that contravene the
Constitution, laws or administrative regulations, and to annul any autonomous regulations or local
regulations which have been approved by the standing committees of the people’s congresses of the
relevant provinces, autonomous regions or municipalities directly under the central government, but
which contravene the Constitution and the Legislation Law. The State Council has the power to alter
or annul any inappropriate ministerial rules and rules of local governments. The people’s congresses
of provinces, autonomous regions or municipalities directly under the central government have the
power to alter or annul any inappropriate local regulations enacted or approved by their respective
standing committees. The people’s governments of provinces and autonomous regions have the
power to alter or annul any inappropriate rules enacted by the people’s governments at a lower level.
According to the Constitution and the Legislation Law, the power to interpret laws is vested
in the Standing Committee of the NPC. According to the Decision of the Standing Committee of the
NPC Regarding the Strengthening of Interpretation of Laws (׵
Ӕᙄ) passed on June 10, 1981, the Supreme People’s Court of the PRC (the
“Supreme People’s Court”) has the power to give general interpretation on questions involving the
specific application of laws and decrees in court trials. The State Council and its ministries and
commissions are also vested with the power to give interpretation of the administrative regulations
and department rules which they have promulgated. At the regional level, the power to give
interpretations of the local regulations as well as administrative rules is vested in the regional
legislative and administrative organs which promulgate such regulations and rules.
PRC Judicial System
Under the Constitution and the PRC Law on the Organization of the People’s Courts (2018
Revision) (ج2018ࠈࡌ)), the PRC judicial system is made up of
the Supreme People’s Court, the local people’s courts and special people’s courts.
The local people’s courts are comprised of the primary people’s courts, the intermediate
people’s courts and the higher people’s courts. The higher people’s courts supervise the primary and
intermediate people’s courts. The people’s procuratorates also have the right to exercise legal
supervision over the civil proceedings of people’s courts of the same level and lower levels. The
Supreme People’s Court is the highest judicial organ in the PRC. It supervises the judicial
administration of the people’s courts at all levels.
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The PRC Civil Procedure Law (2023 Amendment) (ج2023ࡌ
͍)) (the “Civil Procedure Law”), which was adopted in 1991 and amended in 2007, 2012, 2017,
2021 and 2023, sets forth the criteria for instituting a civil action, the jurisdiction of the people’s
courts, the procedures to be followed for conducting a civil action and the procedures for
enforcement of a civil judgment or order. All parties to a civil action conducted within the PRC must
comply with the Civil Procedure Law. Generally, a civil case is initially heard by a local court of
the municipality or province in which the defendant resides. The parties to a contract may, by
express agreement, select a judicial court where civil actions may be brought, provided that the
judicial court is either the plaintiff’s or the defendant’s domicile, the place of execution or
implementation of the contract or the place of the object of the action, provided that the provisions
of this law regarding the level of jurisdiction and exclusive jurisdiction shall not be violated.
A foreign national or enterprise generally has the same litigation rights and obligations as a
citizen or legal person of the PRC. If a foreign country’s judicial system limits the litigation rights
of PRC citizens and enterprises, the PRC courts may apply the principle of reciprocity to the
citizens and enterprises of that foreign country within the PRC.
If any party to a civil action refuses to comply with a judgment or ruling made by a people’s
court or an award made by an arbitration panel in the PRC, the other party may apply to the people’s
court for the enforcement of the same. There are time limits of two years imposed on the right to
apply for such enforcement. If a person fails to satisfy a judgment made by the court within the
stipulated time, the court will, upon application by either party, enforce the judgment in accordance
with the law.
A party seeking to enforce a judgment or ruling of a people’s court against a party who is not
personally or whose property is not within the PRC may apply to a foreign court with jurisdiction
over the case for recognition and enforcement of the judgment or ruling. Where a judgment or ruling
made by a foreign court which has come into legal effect requires recognition and enforcement by
a people’s court, a party may apply directly to the intermediate people’s court which has jurisdiction
for recognition and enforcement, or the foreign court may, pursuant to the provisions of the
international treaty concluded or acceded to by the country of the foreign country and the People’s
Republic of China or under the principle of reciprocity, request for recognition and enforcement by
the people’s court.
Laws and Regulations Relating to Production Safety
Pursuant to the Production Safety Law of the PRC ()
promulgated by the SCNPC on June 29, 2002, and amended in August 2009, August 2014 and June
2021 respectively, to strengthen production safety supervision and management, and prevent and
reduce production safety accidents to safeguard the lives and property of the people, and promote
the sustained and sound economic and social development, the state has established systematic and
principled provisions at the legislative level on production safety guarantees for production and
business operation entities, the production safety rights and obligations of employees, production
safety supervision and administration, emergency response and rescue, investigation and handling
of production safety accidents, as well as corresponding legal liabilities
Laws and Regulations Relating to Product Quality
Pursuant to the Product Quality Law of the PRC () which was
promulgated by the SCNPC on February 22, 1993, became effective on September 1, 1993 and last
amended and became effective on December 29, 2018, for all activities of production and sale of
any product within the territory of the PRC, the manufacturers and sellers shall be liable for product
quality in accordance with the Product Quality Law. In the event of a violation of any legal
provisions of the Product Quality Law, manufacturers and sellers may be fined, suspended of
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operation, confiscated of any products illegally manufactured or sold and the proceeds gained
therefrom or stripped of business licenses, and where the circumstances are serious, criminal
liability shall be pursued. Consumers or other victims suffering personal injuries or property
damage resulting from defects in commodities may demand compensation either from the sellers or
from the manufacturers. If the liability lies with the manufacturers, the sellers shall have the right
to recover the compensation from the manufacturers after paying the compensation, or vice versa.
The Civil Code of the PRC (Պ) adopted by the NPC on May 28,
2020 and came into effect on January 1, 2021 stipulates the liability of manufacturers or sellers for
personal injuries or property damage inflicted upon victims resulting from defects in products
during the production, sales and circulation processes.
Laws and Regulations Relating to Cybersecurity, Data Security and Personal Information
Protection
The Cybersecurity Law of the PRC () (the “Cybersecurity
Law”) was promulgated by the SCNPC on October 28, 2025 and effective from January 1, 2026.
According to the Cybersecurity Law, network operators must comply with laws and regulations and
fulfill their obligations to safeguard cybersecurity while conducting business operations and
providing services.
The PRC Data Security Law (), which was promulgated by
the SCNPC on June 10, 2021 and took effect on September 1, 2021, provides that China shall
establish a data classification and grading protection system, formulate the important data catalogs
to enhance the protection of important data. The conduct of data processing activities shall be in
compliance with the provisions of laws and administrative regulations, establishing and completing
a data security management system for the entire workflow, organizing and conducting data security
education and training, adopting corresponding technical measures and other necessary measures to
ensure data security, strengthening risk monitoring, taking immediate disposition measures and
promptly reporting to relevant authorities when data security incidents occur. Processors of
important data shall specify the person responsible for data security and management agencies,
implement data security protection responsibilities, periodically conduct risk assessment of such
data processing activities as provided and submit risk assessment reports to the relevant authorities.
Relevant authorities shall formulate measures governing the cross-border transfer of important data.
Should any company illegally provide important data overseas in violation of the PRC Data
Security Law and other applicable regulations, it may be subject to administrative sanctions,
including but not limited to penalties, monetary fines, and/or suspension of relevant business
operations or revocation of business licenses.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the
PRC () (the “Personal Information Protection Law”), which
took effect on November 1, 2021, which integrates the scattered rules with respect to personal
information rights and privacy protection. The Personal Information Protection Law aims at
protecting the personal information rights and interests, regulating the processing of personal
information, ensuring the orderly and free flow of personal information in accordance with the law,
and promoting the reasonable use of personal information. Personal information, as defined in the
Personal Information Protection Law, refers to information related to identified or identifiable
natural persons and recorded by electronic or other means, but excluding the anonymized
information. The Personal Information Protection Law provides the circumstances under which a
personal information processor could process personal information, which include but not limited
to, where the consent of the individual concerned is obtained and where it is necessary for the
conclusion or performance of a contract to which the individual is a contractual party. It also
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stipulates certain specific rules with respect to the obligations of a personal information processor,
such as to inform the purpose and method of processing to the individuals, and the obligation of the
third party who has access to personal information by way of co-processing or delegation.
On September 24, 2024, the State Council promulgated the Administration Regulations on
Cyber Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ), which took effect on January 1, 2025. The
Administration Regulations on Cyber Data Security provides that where the network data
processing activities of a network data processor affect or may affect national security, a national
security review shall be conducted in accordance with relevant national provisions.
Regulations on Cybersecurity Review
On December 28, 2021, the Cyberspace Administration of China (the “CAC”), the NDRC, the
Ministry of Industry and Information Technology of the People’s Republic of China (the “MIIT”)
and ten other Chinese regulatory authorities jointly promulgated the Cybersecurity Review
Measures (), which took effect on February 15, 2022. The Cybersecurity
Review Measures mandate cybersecurity reviews under the following three circumstances: (i) when
critical information infrastructure operators procure network products or services that affect or may
affect national security; (ii) when network platform operators carry out data processing activities
that affect or may affect national security; and (iii) when network platform operators possessing
personal information of more than 1,000,000 individuals pursue overseas listings.
Laws and Regulations Relating to Foreign Investment and Overseas Investment
The Company Law
The Company Law of the People’s Republic of China () (the
“Company Law”), which was promulgated by the Standing Committee of the National People’s
Congress (the “SCNPC”) on December 29, 1993, revised on December 29, 2023 and effective from
July 1, 2024, governs all companies incorporated in China. The Company Law regulates the
establishment, operation, corporate structure and governance of corporate entities in China, as well
as the qualifications and obligations of company directors and senior management personnel.
According to the Company Law, where laws on foreign investment have other stipulations, such
stipulations shall prevail.
Laws and Regulations on Foreign Investment
The Foreign Investment Law of the PRC () was promulgated
by the NPC on March 15, 2019 and came into effect on January 1, 2020. On December 26, 2019,
the State Council promulgated the Implementation Regulations for the Foreign Investment Law of
the PRC (ૢԷ), which came into effect on January 1, 2020.
On December 30, 2019, the MOFCOM and the SAMR promulgated the Measures on Reporting of
Foreign Investment Information (), which came into effect on January
1, 2020.
Investment activities in the PRC by foreign investors and foreign-invested enterprises shall
comply with the Special Administrative Measures for the Access of Foreign Investment (Negative
List) (2024 Edition) (݄(૶ఊ)(2024و)) (the “Negative Lists
(2024 Edition)”) promulgated by the NDRC and the MOFCOM on September 6, 2024 and came into
effect on November 1, 2024, and the Catalog of Industries for Encouraging Foreign Investment
(2022 Edition) ( ོᎸ̮ਠҳ༟ପุͦ፽(2022و)) (the “Encouraging Catalog (2022
Edition)”) promulgated by the NDRC and the MOFCOM on October 26, 2022 and came into effect
on January 1, 2023. Under the Negative List (2024 Edition) and the Encouraging Catalog (2022
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Edition), foreign investment projects are categorized as encouraged, restricted and prohibited.
Foreign investment projects not included in the Negative Lists (2024 Edition) fall into the category
of permitted foreign investment projects.
Laws and Regulations on Overseas Investment
Pursuant to the Regulations on Foreign Exchange Administration of the Overseas Direct
Investment of Domestic Institutions () promulgated by
the SAFE on July 13, 2009 and effective from August 1, 2009, upon obtaining approval for relevant
investment, a Chinese mainland enterprise shall apply for foreign exchange registration for its
overseas direct investments. As previously noted, the administrative approval for foreign exchange
registration under overseas direct investment has been abolished by the Notice on Further
Simplifying and Improving the Policies for Foreign Exchange Administration of Direct Investments
() promulgated by the SAFE on February
13, 2015 and implemented on June 1, 2015. Banks are entitled to review and carry out foreign
exchange registration under overseas direct investment directly.
Pursuant to the Administrative Measures for Overseas Investment ()
promulgated by the MOFCOM on March 16, 2009, amended on September 6, 2014 and effective
from October 6, 2014, the MOFCOM and its provincial counterparts are responsible for
administering and supervising overseas investments. Overseas investments by enterprises involving
sensitive countries or regions, or sensitive industries, shall be subject to approval administration.
For other categories of overseas investments, enterprises shall file records with the competent
commerce authorities.
Pursuant to the Administrative Measures for Overseas Investment of Enterprises ( Άุྤ̮
) promulgated by the NDRC on December 26, 2017 and effective from March 1,
2018, domestic investing enterprises conducting overseas investments shall comply with the
approval or filing procedures required by competent authorities. Where the direct investing entity
is a local enterprise in Chinese mainland and the Chinese investment amount is below USD300
million in a non-sensitive overseas investment project, the filing authority shall be the provincial-
level department of the NDRC in the investing entity’s place of registration. Where enterprises
invest in overseas entities to conduct overseas reinvestment, they shall report relevant information
to the competent commerce authorities after completing overseas statutory procedures.
Laws And Regulations Relating To Environmental Protection In China
Laws and Regulations on Environmental Impact Assessment
Pursuant to the Environmental Protection Law of the PRC ()
promulgated by the SCNPC on December 26, 1989, amended on April 24, 2014 and effective as of
January 1, 2015, entities causing environmental pollution or other public hazards shall adopt
effective measures to prevent and control pollution and hazards. Pollution prevention and control
facilities shall be designed, constructed and put into operation simultaneously with the main body
of the production or business operation facilities generating pollution. Pollution prevention and
control facilities must comply with the requirements specified in the approved documents regarding
environmental impact assessment and shall not be dismantled or left idle without authorization.
Pursuant to the Environmental Impact Assessment Law of the PRC ( ʕശɛ͏΍ձ਷ᐑྤᅂ
) promulgated by the SCNPC on October 28, 2002, and latest amended on December 29,
2018, and the Provisions on Classified Examination and Approval of Environmental Impact
Assessment Documents for Construction Projects (2009 Revision) (ணධͦᐑྤᅂᚤ൙ᄆ˖΁
֛2009ࠈࡌ)) enacted by the Ministry of Environmental Protection of the PRC on
January 16, 2009 and effective on March 1, 2009, the environmental impact assessments for
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construction projects shall be categorized according to the degree of environmental impact. For
projects with significant environmental impacts, the environmental impact report shall include a
comprehensive assessment of potential environmental impacts. For projects with minor
environmental impacts, the environmental impact form shall contain a general analysis or
evaluation of environmental impacts. For projects with minor environmental impacts, an
environmental impact registration form may substitute for an environmental impact assessment.
Pursuant to the Regulations on the Environmental Protection Management of Construction
Projects (ᚐ၍ଣૢԷ) promulgated by the State Council on December 29,
1998, revised on July 16, 2017 and effective on October 1, 2017, for projects requiring the
preparation of an environmental impact report or environmental impact form, the project developer
shall submit the environmental impact report or environmental impact form to the competent
authorities for approval prior to project commencement. Construction shall not be commenced
without approved environmental impact report or environmental impact form.
Furthermore, under the Regulations on the Environmental Protection Management of
Construction Projects, supporting environmental protection facilities for construction projects may
be put into production or use only after passing acceptance inspection. Facilities that have not
undergone inspection or have failed acceptance inspection are prohibited from being put into
production or use.
Laws and Regulations on Pollution Prevention and Control
According to the Law on Prevention and Control of Water Pollution of the PRC ( ʕശɛ͏
), which was promulgated by the SCNPC on May 11, 1984, and last amended
on June 27, 2017, enterprises that discharge industrial wastewater or medical sewage directly or
indirectly into water bodies shall obtain a pollutant discharge permit.
According to the Law on Air Pollution Prevention and Control of the PRC ( ʕശɛ͏΍ձ
), which was promulgated by the SCNPC on September 5, 1987, and last
revised on October 26, 2018 with effect from the same day, the ecological environmental protection
authorities of local people’s governments at or above the county level shall implement unified
supervision and management of air pollution prevention and control. Enterprises that discharge
industrial waste gas shall obtain a pollutant discharge permit and shall monitor the air pollutants
emitted in accordance with relevant provisions and monitoring norms of the State, and preserve the
original monitory records.
On December 24, 2021, the SCNPC promulgated the Law on the Prevention and Control of
Noise Pollution of the PRC (), which came into effect on June
5, 2022. Pursuant to the Law on the Prevention and Control of Noise Pollution of the PRC,
enterprises, public institutions and other producers and business operators that emit industrial noise
shall take effective measures to reduce vibration and noise and obtain a pollutant discharge permit
or fill in a pollutant discharge registration form. Entities subject to pollutant discharge permit
management shall not emit industrial noise without a pollutant discharge permit and shall prevent
and control noise pollution according to the requirements of the pollutant discharge permit.
According to the Law on Prevention and Control of Environment Pollution Caused by Solid
Wastes of the PRC () promulgated by the SCNPC on
October 30, 1995, amended on April 29, 2020 and implemented on September 1, 2020, the
prevention and control of environmental pollution by solid wastes shall be in adherence to the
principle of liability for pollution.
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Laws and Regulations on Pollutant Discharge Permits
Pursuant to the Regulations on the Administration of Pollutant Discharge Permits ( રϮ஢
̙၍ଣૢԷ) issued by the State Council on January 24, 2021 and implemented on March 1, 2021,
enterprises, public institutions and other producers and business operators that are subject to
pollutant discharge permit management in accordance with laws. The pollutant discharge permit
serves as the primary basis for ecological and environmental supervision over discharge entities.
Laws and Regulations Relating to Intellectual Property Rights
Regulations on Computer Software Copyright
Pursuant to the Copyright Law of the PRC () promulgated by
the SCNPC on September 7, 1990, latest amended on November 11, 2020 and effective from June
1, 2021, copyright includes personal rights such as the right of publication and the right of
authorship as well as property rights such as the right of reproduction and the right of distribution.
Works include computer software, artistic works, engineering design drawings, product design
drawings, other graphic works, model works, and more.
Pursuant to the Regulations on Computer Software Protection (ᚐૢԷ)
promulgated by the State Council on June 4, 1991, latest amended on January 30, 2013 and effective
from March 1, 2013, and the Measures for the Registration of Computer Software Copyright (ࠇ
) promulgated by the National Copyright Administration on February
20, 2002 and latest amended on June 18, 2004, the National Copyright Administration is mainly
responsible for the registration and management of software copyright in China and recognizes the
China Copyright Protection Center as the software registration organization. The China Copyright
Protection Center shall grant certificates of registration to computer software copyright applicants
in compliance with the regulations.
Regulations on Trademark
According to the Trademark Law of the PRC () promulgated by
the SCNPC on August 23, 1982, latest amended on April 23, 2019 and effective from November 1,
2019 and the Implementation Regulations for the Trademark Law of the PRC ( ʕശɛ͏΍ձ਷
ૢԷ) which was issued by the State Council on August 3, 2002, amended on April 29,
2014 and came into effect on May 1, 2014, the Trademark Office under the SAMR (the “Trademark
Office”) takes charge of trademark registration. The trademark registrant enjoys exclusive rights to
its registered trademark, which is protected by law. The validity period of a registered trademark
is ten years, calculated from the date of approval, and is renewable upon expiration.
Regulations on Patent
According to the Patent Law of the PRC (), which was
promulgated by the SCNPC on March 12, 1984, latest amended on October 17, 2020 and came into
effect from June 1, 2021 and the Implementation Rules for the Patent Law of the PRC ( ʕശɛ
), which was latest amended by the State Council on December 11, 2023
and came into effect from January 20, 2024, invention patent shall be valid for 20 years, utility
model patent shall be valid for 10 years and design patent shall be valid for 15 years, all from the
date of application.
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Regulations on Domain Names
According to the Administrative Measures for Internet Domain Names ( ʝᑌၣਹΤ၍ଣ፬
), which was promulgated by the MIIT on August 24, 2017 and came into effect from
November 1, 2017, the MIIT is responsible for supervision and administration of domain name
services in the PRC. Communication administrative bureaus at provincial levels shall conduct
supervision and administration of the domain name services within their respective administrative
jurisdictions. Domain name registration services shall, in principle, be subject to the principle of
“first apply, first register”. A domain name registrar shall, in the process of providing domain name
registration services, ask the applicant for which the registration is made to provide authentic,
accurate and complete identity information on the holder of the domain name and other domain
name registration related information.
Laws and Regulations Relating to Construction And Leasing
Construction Work Planning Permit
According to the Urban and Rural Planning Law of the PRC (ඊ஝ྌ
) promulgated by the SCNPC on October 28, 2007, last amended and effective on April 23,
2019, in order to construct buildings, structures, roads, pipelines and other engineering projects in
an area covered by city or town planning, the relevant construction entity or individual shall apply
for a construction work planning permit from a competent urban and rural planning administrative
department of the people’s government at the municipal or county level or to the people’s
government of town as recognized by the people’s government of a province.
Construction Permit
According to the Construction Law of the PRC () promulgated by
the SCNPC on November 1, 1997, last amended and effective on April 23, 2019, a construction
entity shall, prior to the commencement of a construction project, apply for a construction permit
from a competent construction administrative department of the people’s government at or above
the county level of the place where the project is located pursuant to relevant regulations.
Fire Control
Pursuant to the Fire Control Law of the PRC () promulgated by
the SCNPC on April 29, 1998 and latest amended on April 29, 2021, for special construction
projects stipulated by the housing and urban-rural development authority of the State Council, the
construction entity 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,
the construction entity shall, at the time of applying for the construction permit or approval for work
commencement report, provide the fire safety design drawings and technical materials which satisfy
the construction needs. According to the Interim Regulations on Administration of Examination and
Acceptance of Fire Control Design of Construction Projects (᜕ϗ၍ଣᅲ
) 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 spot check system would be applied.
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Completion Inspection and Acceptance
According to the Regulations on the Quality Management of Construction Projects (ணʈ
೻ሯඎ၍ଣૢԷ) promulgated by the State Council on January 30, 2000, and last amended on
April 23, 2019, construction entities shall, within 15 days from the date of passing the completion
inspection and acceptance, submit the construction project completion inspection and acceptance
report to the competent construction administration department or other relevant authorities for
record-filing.
Laws and Regulations Relating to Leasing
According to the Civil Code, an owner of immovable or movable property is entitled to
possession, use, earnings, and disposal of such property in accordance with the law. Subject to the
consent of the lessor, the lessee may sublease the leased premises to a third party. Where a lessee
subleases the premises, the lease contract between the lessee and the lessor remains valid. The
lessor is entitled to terminate the lease if the lessee subleases the premises without the consent of
the lessor. In addition, if the ownership of the leased premises changes during the lessee’s
possession in accordance with the terms of the lease contract, the validity of the lease contract shall
not be affected. Pursuant to the Civil Code, if the mortgaged property has been leased and
transferred for occupation prior to the establishment of the mortgage right, the original tenancy
shall not be affected by such mortgage right.
On December 1, 2010, the Ministry of Housing and Urban-Rural Development promulgated
the Administrative Measures on Leasing of Commodity Housing (),
which became effective from February 1, 2011. According to such measures, the party concerned
is required to complete property leasing registration and filing formalities within 30 days from
execution of the property lease contract with the construction (real estate) administrative authority
of the people’s government of the municipality directly under the Central Government, city or
county at the place where the leased property is located. A party in violation of the regulations may
be ordered to rectify within a stipulated period, and if the party fails to rectify, a fine ranging from
RMB1,000 to RMB10,000 may be imposed on each lease agreement.
Laws and Regulations Relating to Securities Issuance and Overseas Listing
Laws and Regulations on Securities Issuance
The Securities Law of the PRC () (the “Securities Law”), which
was promulgated by the SCNPC on December 29, 1998, latest amended on December 28, 2019 and
took effect on March 1, 2020, comprehensively regulating activities in the PRC securities market
including issuance and trading of securities, takeovers by listed companies, securities exchanges,
securities companies and the duties and responsibilities of securities regulatory authorities. The
Securities Law further regulates that a domestic enterprise issuing securities overseas directly or
indirectly or listing their securities overseas shall comply with the relevant provisions of the State
Council and for subscription and trading of shares of domestic companies using foreign currencies,
detailed measures shall be stipulated by the State Council separately. The CSRC is the securities
regulatory body set up by the State Council to supervise and administer the securities market
according to law, maintain order in the market, and ensure the market operates in a lawful manner.
Currently, the issue and trading of H shares are principally governed by the regulations and rules
promulgated by the State Council and the CSRC.
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Regulations on Overseas Listing
On February 17, 2023, 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 ( ྤʫΆุྤ̮೯
) (the “Overseas Listing Trial Measures”) together with 5 supporting
guidelines (together with the Overseas Listing Trial Measures, collectively referred to as the
“Overseas Listing Regulations”). PRC domestic companies that seek to offer and list securities 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 overseas listing is submitted.
On February 24, 2023, the CSRC and three other relevant government authorities jointly
promulgated the Provisions on Strengthening Confidentiality and Archives Administration of
Overseas Securities Offering and Listing by Domestic Companies (̋੶ྤʫΆุྤ̮೯Бᗇ
) (the “Provision on Confidentiality”), which took
effect on March 31, 2023. Pursuant to the Provision on Confidentiality, where a domestic enterprise
provides or publicly discloses any document or material involving state secrets and working secrets
of state agencies to relevant securities companies, securities service agencies, overseas regulatory
authorities and other entities and individuals, it shall report to the competent department with the
examination and approval authority for approval in accordance with the law, and submit to the
secrecy administration department of the same level for filing. The working papers formed within
the territory of the PRC by the securities companies and securities service agencies that provide
corresponding services for the overseas issuance and listing of domestic enterprises shall be kept
within the territory of the PRC, and cross-border transfer shall go through the examination and
approval formalities in accordance with the relevant provisions of the State.
Regulations on Foreign Exchange
The Regulations on the Administration of Foreign Exchange of the PRC ( ʕശɛ͏΍ձ਷
̮ි၍ଣૢԷ) (the “Foreign Exchange Administration Regulations”) promulgated by the State
Council on January 29, 1996 and latest amended on August 5, 2008 is the principal regulation
governing foreign currency exchange in China. Under the Foreign Exchange Administration
Regulations, RMB is freely convertible for payments of current account items without approval
from the SAFE. However, RMB is not freely convertible for capital account items such as overseas
direct investment, capital transfer, securities investment, derivative products and loans, unless prior
approval from the SAFE is obtained.
Pursuant to the Notice of the SAFE on Reforming the Administration of Foreign Exchange
Settlement of Capital Fund of Foreign-invested Enterprises (̮ਠҳ༟
) (the “SAFE Circular 19”) which was promulgated by the
SAFE and latest amended on March 23, 2023, and the Notice of the SAFE on Reforming and
Standardizing the Foreign Exchange Settlement Management Policy of Capital Account (̮
) (the “SAFE Circular 16”) which was
promulgated by the SAFE and latest amended on December 4, 2023, the flow and use of the RMB
capital converted from foreign currency denominated registered capital of a foreign-invested
company is regulated such that RMB capital may not be used for business beyond its business scope
or to provide loans to non-affiliated parties unless otherwise permitted under its business scope.
On October 23, 2019, the SAFE promulgated the Notice of the SAFE on Further Facilitating
Cross-Board Trade and Investment (ஷ
) (the “SAFE Circular 28”), which was partially amended on December 4, 2023. The notice
lifted the restrictions on domestic equity investment with capital funds by foreign-invested
enterprises not engaged in investment businesses, allowing them to legally conduct equity
investment on the premise of conforming to the Negative List, ensuring the target investment
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projects being authentic and complying with the laws of the PRC. According to the Notice of the
SAFE on Optimizing Administration of Foreign Exchange to Support the Development of
Foreign-related Business () (the
“SAFE Circular 8”) issued by the SAFE on April 10, 2020 and became effective on June 1, 2020,
eligible enterprises are allowed to make domestic payments by using their capital, foreign credits
and the income under capital accounts of overseas listing, without providing materials to the bank
in advance for authenticity verification on an item-by-item basis, provided that their utilized capital
shall be authentic and in line with provisions, and conform to the prevailing administrative
regulations related to the use of income under capital accounts. The bank concerned shall conduct
spot checks afterwards in accordance with the relevant requirements.
Laws and Regulations Relating to Anti-Monopoly And Anti-Unfair COMPETITION
Anti-Monopoly Law
The currently effective Anti-Monopoly Law of PRC () (the
“Anti-Monopoly Law”) was promulgated by the SCNPC on August 30, 2007, latest amended on
June 24, 2022 and came into force on August 1, 2022.
On March 10, 2023, the SAMR promulgated the Provisions on Prohibition of Monopoly
Agreements (), the Provisions on Prohibiting Abuse of Dominant Market
Positions (), and the Provisions on the Examination of
Concentrations of Undertakings ().
Anti-unfair Competition Law
According to the Anti-Unfair Competition Law of the PRC (ن
) (the “Anti-Unfair Competition Law”) which was promulgated by the SCNPC on September
2, 1993, last revised on June 27, 2025 and will come into effect on October 15, 2025, operators shall
comply with the principle of voluntariness, equality, fairness, integrity and abide by laws and
business ethics in production and business operations. Under the Anti-Unfair Competition Law,
unfair competition refers to an operator who disrupts the market competition order and damages the
legitimate rights and interests of other operators or consumers in violation of the Anti-Unfair
Competition Law in their production and business operations. Operators who violate the
Anti-Unfair Competition Law shall bear corresponding civil, administrative or criminal
responsibilities depending on the specific circumstances.
Laws and Regulations Relating to Tax
Enterprise Income Tax
In accordance with the Enterprise Income Tax Law of the PRC (੻
) (the “EIT Law”) which was promulgated by the SCNPC on March 16, 2007, latest amended
on December 29, 2018 and took effect on the same date and the Implementation Regulations for the
Enterprise Income Tax Law of the PRC (ૢԷ) (the
“Implementation Regulations for the EIT Law”) which was promulgated by the State Council on
December 6, 2007, latest amended on December 6, 2024 and implemented on January 20, 2025, a
uniform income tax rate of 25% will be applied to resident enterprises and non-resident enterprises
that have established institutions and premises in China. Besides enterprises established within the
PRC, enterprises established in accordance with the laws of other judicial districts whose “de facto
management bodies” are within the PRC are considered “resident enterprises” and subject to the
uniform 25% enterprise income tax rate for their income derived from both inside and outside the
PRC. Corporate income tax for key advanced and new technology enterprises supported by PRC
shall be at a reduced tax rate of 15%.
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In accordance with the Administrative Measures on Accreditation of High-tech Enterprises
() which was promulgated by the Ministry of Science and
Technology, the MOF and the SA T on April 14, 2008, amended on January 29, 2016 and came into
effect on January 1, 2016, high-tech enterprises referred to in these Measures may declare and claim
tax incentives pursuant to the EIT Law and its implementation regulations, the Law of the PRC on
the Administration of Tax Collection (), the Implementation
Rules for the Law of the PRC on the Administration of Tax Collection ( ʕശɛ͏΍ձ਷೼ϗᅄ
), etc., and the qualifications of an accredited high-tech enterprise shall be
valid for three years from the date of issuance of the certificate.
V alue-added Tax
In accordance with the Interim Regulations of the PRC on V alue-added Tax ( ʕശɛ͏΍ձ
೼ᅲБૢԷ) which was promulgated by the State Council on December 13, 1993 and
latest amended on November 19, 2017, and the Implementation Rules for the Interim Regulations
of the PRC on V alue-added Tax () which was
promulgated by the MOF and the SA T on December 25, 1993 and latest amended on October 28,
2011, entities or individuals engaging in sale of goods, provision of processing services, provision
of repair and replacement services, sale of services, transfer of intangible assets, transfer of
immovable property, importation of goods in China shall pay value-added tax. The applicable V A T
rates are generally 17% on sales of goods, 6% on provision of services and 3% for small-scale
taxpayers.
On April 4, 2018, the MOF and the SA T jointly issued the Notice of the MOF and the SA T
on the Adjustment of V A T Rates (),
pursuant to which, the taxable sales or imported goods previously subject to V A T rates of 17% and
11% respectively are adjusted to 16% and 10%, respectively. Pursuant to the Announcement of the
MOF, the SA T and the General Administration of Customs on Relevant Policies for Deepening V A T
Reform (ʮѓ) which became
effective on April 1, 2019, the taxable sales or imported goods previously subject to V A T rates of
16% and 10% are further adjusted to 13% and 9%, respectively.
Dividends Distribution
Pursuant to the Individual Income Tax Law of the PRC ()
which was most recently amended by the SCNPC on August 31, 2018 and came into effect on
January 1, 2019, and the Implementation Regulations for the Individual Income Tax Law of the PRC
(ૢԷ) which was most recently amended by the State
Council on December 18, 2018 and came into effect on January 1, 2019, dividends distributed by
PRC enterprises are subject to individual income tax levied at a flat rate of 20%. For a foreign
individual who is not a resident of the PRC, the receipt of dividends from an enterprise in the PRC
is normally subject to individual income tax of 20% unless specifically exempted by the tax
authority of the State Council or reduced by relevant tax treaty.
The EIT Law and the Implementation Regulation for the EIT Law provides that since January
1, 2008, an enterprise income tax rate of 10% will normally be applicable to dividends declared to
non-PRC resident investors which do not have an establishment or place of business in the PRC,
or which have such establishment or place of business but the relevant income is not effectively
connected with the establishment or place of business, to the extent such dividends are derived from
sources within the PRC, unless any such non-PRC resident investors’ jurisdiction of incorporation
has a tax treaty with China that provides for a preferential withholding arrangement.
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Non-resident investors residing in jurisdictions which have entered into treaties or
adjustments for the avoidance of double taxation with the PRC might be entitled to a reduction of
the Chinese EIT imposed on the dividends received from PRC companies.
The Company Law, Overseas Listing Trial Measures and Guidelines on the Bylaws
A joint stock limited company which was incorporated in the PRC and seeking a listing on the
Stock Exchange is mainly subject to the following laws and regulations in the PRC:
 The PRC Company Law (2023 Amendment) (ج2023͍))
which was promulgated by the Standing Committee of the NPC on December 29, 1993,
came into effect on July 1, 1994, amended on December 25, 1999, August 28, 2004,
October 27, 2005, December 28, 2013, October 26, 2018 and December 29, 2023
respectively and the latest amendment of which was implemented on July 1, 2024.
 The Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies () (the “Overseas
Listing Trial Measures”) and five relevant guidelines which were promulgated by the
CSRC on February 17, 2023 pursuant to Securities Law of the PRC, came into effect on
March 31, 2023, and were applicable to the direct and indirect overseas share offering
and listing of domestic companies; and
 The Guidelines on the Bylaws of Listed Companies (ˏ) (the
“Guidelines on the Bylaws”) which were latest amended and came into effect on March
28, 2025 by the CSRC. The related Guidelines on the Bylaws are set out in the Articles
of Association of the Company, the summary of which is set out in the section entitled
“Appendix V — Summary of the Articles of Association” in this document.
General
A joint stock limited company refers to an enterprise legal person incorporated under the
Company Law with its registered capital divided into shares of equal par value. The liability of its
shareholders is limited to the amount of shares held by them and the company is liable to its debts
for an amount equal to the total value of its assets.
A joint stock limited company shall conduct its business in accordance with laws and
administrative regulations. It may invest in other limited liability companies and joint stock limited
companies and its liabilities with respect to such invested companies are limited to the amount
invested. If it is provided by law that the joint stock limited company shall not be a contributor that
undertakes joint and several liabilities for the debts of the invested companies, such provisions shall
apply accordingly.
Incorporation
A joint stock limited company may be incorporated by promotion or public subscription.
A joint stock limited company may be incorporated by a minimum of one but not more than
200 promoters, and at least half of the promoters must have residence within the PRC. The
promoters must convene an inaugural meeting within 30 days after the full payment of the shares
to be issued at the time of the establishment of the company, and must give notice to all subscribers
or make an announcement of the date of the inaugural meeting 15 days before the meeting. The
inaugural meeting may be convened only with the presence of subscribers holding a majority of the
voting rights. At the inaugural meeting, matters including the adoption of articles of association and
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the election of members of the board of directors and members of the board of supervisors of the
company will be dealt with. All resolutions of the meeting require the approval of subscribers with
more than half of the voting rights present at the meeting.
Within 30 days after the conclusion of the inaugural meeting, the board of directors must
authorize a representative to apply to the registration authority for registration of the establishment
of the joint stock limited company. A company is formally established, and has the status of a legal
person, after the business license has been issued by the relevant registration authority.
If a promoter does not contribute in accordance with the shares subscribed for by it or if the
actual value of the non-monetary property contributed as capital is significantly less than the shares
subscribed for, the other promoters shall be jointly and severally liable with it to the extent of the
shortfall in the capital contribution.
Share Capital
The promoters of a company can make capital contributions in cash or in non-monetary assets
which can be valued in currency and transferable according to law, such as physical items,
intellectual property rights, land use rights, equity interests, creditor’s rights and so on, except for
properties that are prohibited from being used as capital contributions under the provisions of laws
and administrative regulations.
If capital contribution is made other than in cash, valuation and verification of the property
contributed must be carried out and converted into shares.
The shares issued by a company shall be registered shares.
The Overseas Listing Trial Measures provide that domestic enterprises that are listed overseas
may raise funds and distribute dividends in foreign currencies or Renminbi.
Under the Overseas Listing Trial Measures, for a domestic company directly offering and
listing overseas, shareholders of its domestic unlisted shares applying to convert such shares into
shares listed and traded on an overseas trading venue shall conform to relevant regulations
promulgated by the CSRC, and authorize the domestic company to file with the CSRC on their
behalf. The domestic unlisted shares mentioned in the preceding paragraph refer to the shares that
have been issued by domestic enterprises but have not been listed or listed for trading on domestic
exchanges. Domestic unlisted shares shall be centrally registered and deposited with domestic
securities registration and settlement institutions. The registration and settlement arrangements of
overseas listed shares shall be subject to the provisions of overseas listing places.
The share offering price may be equal to or greater than nominal value, but shall not be less
than nominal value.
The transfer of shares by shareholders should be conducted via the legally established stock
exchange or in accordance with other methods as stipulated by the State Council. Transfer of shares
by a shareholder must be made by means of an endorsement or by other means stipulated by laws
or administrative regulations.
Shares issued by a company prior to the public offering of its shares shall not be transferred
within one year from the date of listing of the shares of the company on a stock exchange. Directors,
supervisors and senior management of a company shall declare to the company their holdings of the
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company’s shares and the status of changes therein, and shall not transfer over 25% of the shares
held by each of them in the company each year during the term of office determined at the time of
assumption of office or transfer any share of the company held by each of them within one year after
the listing date.
Transfers of shares may not be entered in the register of shareholders within 20 days before
the date of a shareholders’ general meeting or within five days before the record date set for the
purpose of distribution of dividends.
Allotment and Issue of Shares
All issue of shares of a joint stock limited company shall be based on the principles of equality
and fairness. The same class of shares must carry equal rights. Shares issued at the same time and
within the same class must be issued on the same conditions and at the same price. It may issue
shares at par value or at a premium, but it may not issue shares below the par value.
Domestic enterprises issued and listed overseas shall file with the CSRC in accordance with
the Overseas Listing Trial Measures, submit filing reports, legal opinions and other relevant
materials, and truthfully, accurately and completely explain shareholder information and other
information. Where a domestic enterprise directly issues and is listed overseas, the issuer shall file
with the CSRC. If a domestic enterprise is indirectly listed overseas, the issuer shall designate a
major domestic operating entity as the domestic responsible person and file with the CSRC.
Registered Shares
Under the Company Law, the shareholders may make capital contributions in cash, or
alternatively may make capital contributions with valuated non-monetary property that may be
valued in monetary term and may be transferred in accordance with the law, such as physical items,
intellectual property rights, land-use rights, equity interests, creditor’s rights and so on, except for
properties that are prohibited from being used as capital contributions under the provisions of laws
and administrative regulations. Pursuant to the Overseas Listing Trial Measures, domestic
enterprises that are listed overseas may raise funds and distribute dividends in foreign currencies
or Renminbi.
Under the Company Law, the shares issued by a company shall be registered shares. A joint
stock company shall maintain a register of shareholders to be kept at the company, stating the
following matters:
 the name and domicile of each shareholder;
 the type of shares subscribed by each shareholder and the number of shares;
 the serial numbers of the share certificate, if issued in paper form; and
 the date on which each shareholder acquired the shares.
Increase of Share Capital
According to the Company Law, when the joint stock limited company issues new shares,
resolutions shall be passed by a shareholders’ general meeting, approving the class and number of
the new shares, the issue price of the new shares, the commencement and end of the new share
issuance and the class and amount of new shares to be issued to existing shareholders. In the case
of the issue of shares without par value, more than half of the proceeds of issue of the new shares
is to be included in the registered capital.
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When a company offers shares to the public, it shall be registered by the securities regulatory
authority under the State Council and announce a prospectus. When the shares issued by the
company are fully paid up, a public announcement shall be made accordingly.
Reduction of Share Capital
A company may reduce its registered capital in accordance with the following procedures
prescribed by the Company Law:
 it shall prepare a balance sheet and a property list;
 the reduction of registered capital shall be approved by a shareholders’ general meeting;
 it shall inform its creditors of the reduction in capital within 10 days and publish an
announcement of the reduction in the newspaper or the National Enterprise Credit
Information Publicity System within 30 days from the date of the resolution on the
reduction;
 creditors may within 30 days after receiving the notice, or within 45 days of the public
announcement if no notice has been received, require the company to pay its debts or
provide guarantees covering the debts.
Repurchase of Shares
According to the Company Law, a joint stock limited company may not purchase its shares
other than for one of the following purposes: (i) to reduce its registered capital; (ii) to merge with
another company that holds its shares; (iii) to grant its shares for carrying out an employee stock
ownership plan or equity incentive plan; (iv) to purchase its shares from shareholders who request
and are against the resolution regarding the merger or division with other companies at a
shareholders’ general meeting; (v) use of shares for conversion of convertible corporate bonds
issued by the company; and (vi) the share buyback is necessary for a listed company to maintain
its company value and protect its shareholders’ equity.
The purchase of shares on the grounds set out in (i) and (ii) above shall require approval by
way of a resolution passed by the shareholders’ general meeting. For a company’s share buyback
under any of the circumstances stipulated in (iii), (v) or (vi) above, a resolution of the company’s
board of directors shall be made by a two-third majority of directors attending the meeting
according to the provisions of the company’s articles of association or as authorized by the
shareholders’ general meeting.
Following the purchase of shares in accordance with (i), such shares shall be canceled within
10 days from the date of purchase. The shares shall be assigned or deregistered within six months
if the share buyback is made under the circumstances stipulated in either (ii) or (iv). The shares held
in total by a company after a share buyback under any of the circumstances stipulated in (iii), (v)
or (vi) shall not exceed 10% of the company’s total outstanding shares, and shall be assigned or
deregistered within three years.
Listed companies making a share buyback shall perform their obligation of information
disclosure according to the provisions of the Securities Law. If a listed company purchases its
shares under any of the circumstances stipulated in (iii), (v) or (vi) hereof, centralized trading shall
be adopted publicly.
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Transfer of Shares
Shares held by shareholders may be transferred in accordance with the relevant laws and
regulations. Pursuant to the Company Law, transfer of shares by shareholders shall be carried out
at a legally established securities exchange or in other ways stipulated by the State Council. No
modifications of registration in the share register caused by transfer of registered shares shall be
carried out within 20 days prior to the convening of shareholder’s general meeting or five days prior
to the base date for determination of dividend distributions. However, where there are separate
provisions by law on alternation of registration in the share register of listed companies, those
provisions shall prevail.
The obligations of a shareholder include the obligation to abide by the company’s articles of
association, to pay the subscription moneys in respect of the shares subscribed for and in accordance
with the form of making capital contributions, to be liable for the company’s debts and liabilities
to the extent of the amount of his or her subscribed shares and any other shareholders’ obligation
specified in the company’s articles of association.
Shareholders’ General Meetings
The shareholders’ general meeting is the organ of authority of the company, which exercises
its powers in accordance with the Company Law.
Under the Company Law, the shareholders’ general meeting exercises the following principal
functions:
 to elect and change directors and supervisors, and to decide on matters relating to the
remuneration of directors and supervisors;
 to examine and approve reports of the board of directors;
 to examine and approve reports of the board of supervisors;
 to examine and approve the company’s profit distribution plan and loss recovery plan;
 to decide on any increase or reduction of the company’s registered capital;
 to decide on the issue of bonds by the company;
 to decide on issues such as merger, division, dissolution and liquidation of the company
and change of company form;
 to amend the company’s articles of association; and
 other powers as provided for in the articles of association.
Shareholders’ annual general meetings are required to be held once every year. Under the
Company Law, an extraordinary shareholders’ general meeting is required to be held within two
months after the occurrence of any of the following:
 the number of directors is less than the number stipulated by the law or less than two
thirds of the number specified in the articles of association;
 the aggregate losses of the company which are not recovered reach one-third of the
company’s total share capital;
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 when shareholders alone or in aggregate holding 10% or more of the company’s shares
request the convening of an extraordinary general meeting;
 whenever the board of directors deems necessary;
 when the board of supervisors proposes; or
 other circumstances as provided for in the articles of association.
Under the Company Law, shareholders’ general meetings shall be convened by the board of
directors, and presided over by the chairman of the board of directors. In the event that the chairman
is incapable of performing or does not perform his duties, the meeting shall be presided over by the
vice chairman. In the event that the vice chairman is incapable of performing or not performing his
duties, a director nominated by more than half of directors shall preside over the meeting.
Where the board of directors is incapable of performing or not performing its duties of
convening the shareholders’ general meeting, the board of supervisors shall convene and preside
over such meeting in a timely manner. In case the board of supervisors fails to convene and preside
over such meeting, shareholders alone or in aggregate holding more than 10% of the company’s
shares for 90 days consecutively may unilaterally convene and preside over such meeting.
Under the Company Law, notice of shareholders’ general meeting shall state the time and
venue of and matters to be considered at the meeting and shall be given to all shareholders 20 days
before the meeting. Notice of extraordinary shareholder’s general meetings shall be given to all
shareholders 15 days prior to the meeting. Under the Guidelines on the Bylaws, after the notice of
the general meeting of shareholders is issued, the general meeting of shareholders shall not be
postponed or canceled without justifiable reasons, and the proposals listed in the notice of general
meeting of shareholders shall not be canceled. In the event of postponement or cancelation, the
convener shall make an announcement and explain the reasons at least two working days before the
original meeting date.
There is no specific provision in the Company Law regarding the number of shareholders
constituting a quorum in a shareholders’ general meeting. Pursuant to the Guidelines on the Bylaws,
the board of directors and the Secretary of the board of directors will cooperate with the general
meeting of shareholders convened by the board of supervisors or shareholders. The board of
directors will provide the register of shareholders on the date of equity registration. Moreover, when
a general meeting of shareholders is held, all directors, supervisors and the secretary of the board
of directors of the company shall attend the meeting, and managers and other senior management
personnel shall attend the meeting as nonvoting delegates.
Pursuant to the Company Law, shareholders who individually or jointly hold more than 1% of
the company’s shares may put forward interim proposals and submit them to the convener in writing
10 days before the general meeting of shareholders. The convener shall issue a supplementary
notice of the general meeting of shareholders within two days after receiving the proposal and
announce the contents of the interim proposal.
Under the Company Law, shareholders present at shareholders’ general meeting have one vote
for each share they hold, except the shareholders of classified shares, save that shares held by the
company are not entitled to any voting rights.
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Pursuant to the provisions of the articles of association or a resolution of the shareholders’
general meeting, the accumulative voting system may be adopted for the election of directors and
supervisors at the shareholders’ general meeting. Under the accumulative voting system, each share
shall be entitled to vote equivalent to the number of directors or supervisors to be elected at the
shareholders’ general meeting and shareholders may consolidate their voting rights when casting a
vote.
Pursuant to the Company Law and the Guidelines on the Bylaws, resolutions of the
shareholders’ general meeting shall be adopted by more than half of the voting rights held by the
shareholders present at the meeting. However, resolutions of the shareholders’ general meeting
regarding the following matters shall be adopted by more than two-thirds of the voting rights held
by the shareholders present at the meeting: (i) amendments to the articles of association; (ii) the
increase or decrease of registered capital; (iii) equity incentive plan; (iv) the company purchases or
sells major assets within one year or any guaranty provided to others by the company within one
year exceeds 30% of the company’s total audited assets in the latest period; (v) the merger, division,
dissolution, liquidation or change in the form of the company; (vi) other matters stipulated by laws,
administrative regulations or the articles of association, as well as other matters considered by the
shareholders’ general meeting, by way of an ordinary resolution, to be of a nature which may have
a material impact on the company and should be adopted by a special resolution.
Under the Company Law, meeting minutes shall be prepared in respect of decisions on matters
discussed at the shareholders’ general meeting. The chairman of the meeting and directors attending
the meeting shall sign to endorse such minutes. The minutes shall be kept together with the
shareholders’ attendance register and the proxy forms.
Board
Under the Company Law, a joint stock limited company is required to establish a board of
directors. A joint stock limited company that is of small size or has a small number of shareholders
may not have a board of directors and may have one director who exercises the powers and
functions of the board of directors as provided for in the Company Law. Members of the board of
directors may include representatives of the employees of the company, who shall be democratically
elected by the company’s staff at the staff representative assembly, general staff meeting or
otherwise. The term of a director shall be stipulated in the articles of association, but no term of
office shall last for more than three years. Directors may serve consecutive terms if re-elected. A
director shall continue to perform his duties in accordance with the laws, administrative regulations
and articles of association until a duly re-elected director takes office, if re-election is not conducted
in a timely manner upon the expiry of his term of office, or if the resignation of directors results
in the number of directors being less than the quorum.
Under the Company Law, the board of directors mainly exercises the following powers:
 to convene the shareholders’ general meetings and report on its work to the shareholders’
general meetings;
 to implement the resolutions passed in shareholders’ general meetings;
 to decide on the company’s business plans and investment proposals;
 to formulate the company’s profit distribution proposals and loss recovery proposals;
 to formulate proposals for the increase or reduction of the company’s registered capital
and the issuance of corporate bonds;
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 to prepare plans for the merger, division, dissolution and change in the form of the
company;
 to decide on the setup of the company’s internal management organization;
 to appoint or dismiss the company’s manager and decide on his/her remuneration and,
based on the manager’s recommendation, to appoint or dismiss any deputy manager and
financial officer of the company and to decide on their remunerations;
 to formulate the company’s basic management system; and
 to exercise any other power under the articles of association.
Board Meetings
Under the Company Law, meetings of the board of directors of a joint stock limited company
shall be convened at least twice a year. Notice of meeting shall be given to all directors and
supervisors 10 days before the meeting. Interim board meetings may be proposed to be convened
by shareholders representing more than 10% of voting rights, more than one-third of the directors
or the board of supervisors. The chairman shall convene and preside over such meeting within 10
days after receiving such proposal. Meetings of the board of directors shall be held only if half or
more of the directors are present. Resolutions of the board of directors shall be passed by more than
half of all directors. Each director shall have one vote for resolutions to be approved by the board
of directors. Directors shall attend board meetings in person. If a director is unable to attend a board
meeting, he may appoint another director by a written power of attorney specifying the scope of the
authorization to attend the meeting on his behalf.
If a resolution of the board of directors violates the laws, administrative regulations or the
articles of association, and as a result of which the company sustains serious losses, the directors
participating in the resolution are liable to compensate the company. However, if it can be proved
that a director expressly objected to the resolution when the resolution was voted on, and that such
objection was recorded in the minutes of the meeting, such director may be exempted from that
liability.
Chairman of the Board
Under the Company Law, the board of directors shall appoint a chairman and may appoint a
vice chairman. The chairman and the vice chairman are elected with approval of more than half of
all the directors. The chairman shall convene and preside over board meetings and examine the
implementation of board resolutions. The vice chairman shall assist the work of the chairman. In
the event that the chairman is incapable of performing or not performing his duties, the duties shall
be performed by the vice chairman. In the event that the vice chairman is incapable of performing
or not performing his duties, a director nominated by more than half of the directors shall perform
his duties.
Qualification of Directors
The Company Law provides that the following persons may not serve as a director:
 a person who is unable or has limited ability to undertake any civil liabilities;
 a person who has been convicted of an offense of corruption, bribery, embezzlement or
misappropriation of property, or the destruction of socialist market economy order; or
who has been deprived of his political rights due to his crimes, in each case where less
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than five years have elapsed since the date of completion of the sentence; If he/she has
been pronounced on a suspended sentence, the period of two years has not elapsed since
the expiration of the suspension of sentence;
 a person who has been a former director, factory manager or manager of a company or
an enterprise that has entered into insolvent liquidation and who was personally liable
for the insolvency of such company or enterprise, where less than three years have
elapsed since the date of the completion of the bankruptcy and liquidation of the
company or enterprise;
 a person who has been a legal representative of a company or an enterprise that has had
its business license revoked due to violations of the law and has been ordered to close
down by law and the person was personally responsible, where less than three years have
elapsed since the date of revocation of business license and the order for closure; or
 a person who is listed as a dishonest person subject to enforcement by the people’s court
due to his/her failure to pay off a relatively large amount of due debts.
Other circumstances under which a person is disqualified from acting as a director are set out
in the Guidelines on the Bylaws.
Manager and Senior Management
Under the Company Law, a company shall have a manager who shall be appointed or removed
by the board of directors.
The manager shall exercise his/her powers in accordance with provisions of the articles of
association or as authorized by the board of directors. The manager attends board meetings.
According to the Company Law, senior management shall mean the manager, deputy
manager(s), person-in-charge of finance, board secretary (in case of a listed company) of a company
and other personnel as stipulated in the articles of association.
Duties of Directors, Supervisors and Senior Management
Directors, supervisors and senior management of the company are required under the
Company Law to comply with the relevant laws, regulations and the articles of association.
Directors, supervisors and senior management have fiduciary and diligent duties to the company
and should take measures to avoid any conflict between their own interests and the interests of the
company and not make use of their powers to obtain improper benefits. Directors, supervisors and
senior management have a duty of diligence to the company and should exercise reasonable care in
performing their duties in the best interests of the company, as would normally be expected of a
manager.
Directors, supervisors and senior management are prohibited from:
 misappropriating company property or funds;
 depositing the company’s capital into accounts under his/her own name or the name of
other individuals;
 giving bribes or accepting any other illegal proceeds by taking advantage of his/her
power;
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 taking commissions from the transactions between the company and any other person
into his/her own pocket;
 unauthorized divulgence of confidential business information of the company; or
 other acts in violation of their fiduciary duty to the company.
Directors, supervisors and senior management, who directly or indirectly enter into contracts
or conduct transactions with the company, shall report to the board of directors or the shareholders’
general meeting on matters relating to the entering into of such contracts or the conduct of such
transactions, which shall be approved by a resolution of the board of directors or the shareholders’
general meeting in accordance with the provisions of the articles of association of the company.
Directors, supervisors and senior management shall not use the convenience of their positions
to seek business opportunities belonging to the company for themselves or others, except in the
following circumstances: i) after reporting to the board of directors or the shareholders’ general
meeting and a resolution by the board of directors or the shareholders’ general meeting in
accordance with the articles of association of the company has been passed; or ii) the company is
unable to take advantage of the business opportunity in accordance with the provisions of the laws,
administrative regulations or the articles of association of the company.
A director, supervisor or senior management who contravenes any law, regulation or the
company’s articles of association in the performance of his duties resulting in any loss to the
company shall be personally liable for the damages to the company.
Finance and Accounting
Under the Company Law, a company shall establish financial and accounting systems
according to laws, administrative regulations and the regulations of the financial department of the
State Council and shall at the end of each financial year prepare a financial and accounting report
which shall be audited by an accounting firm as required by law. The company’s financial and
accounting report shall be prepared in accordance with provisions of the laws, administrative
regulations and the regulations of the financial department of the State Council.
Pursuant to the Company Law, a joint stock limited company shall prepare and make its
financial and accounting reports available at the company for inspection by the shareholders at least
20 days before the convening of an annual general meeting of shareholders. A joint stock limited
company which has issued shares to the public must also publish its financial and accounting
reports.
When distributing each year’s after-tax profits, it shall set aside 10% of its after-tax profits
into a statutory common reserve fund (except where the fund has reached 50% of its registered
capital).
If its statutory common reserve fund is not sufficient to make up losses of the previous year,
profits of the current year shall be applied to make up losses before allocation is made to the
statutory common reserve fund pursuant to the above provisions.
After allocation of the statutory common reserve fund from after-tax profits, it may, upon a
resolution passed at the shareholders’ general meeting, allocate discretionary common reserve fund
from after-tax profits.
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The remaining after-tax profits after making up losses and allocation of common reserve fund
shall be distributed in proportion to the number of shares held by the shareholders, unless otherwise
stipulated in the articles of association. Shares held by the company shall not be entitled to any
distribution of profit.
The premium received through issuance of shares at prices above par value and other incomes
required by the financial department of the State Council to be allocated to the capital reserve fund
shall be allocated to the company’s capital reserve fund.
The company’s reserve fund shall be applied to make up losses of the company, expand its
business operations or be converted to increase the registered capital of the company. Where the
reserve fund of a company is used for making up losses, the discretionary reserve and statutory
reserve shall be firstly used. If losses still cannot be made up, the capital reserve can be used
according to the relevant provisions. Upon the conversion of statutory common reserve fund into
capital, the balance of the statutory common reserve fund shall not be less than 25% of the
registered capital of the company before such conversion.
The company shall have no other accounting books except the statutory accounting books. Its
assets shall not be deposited in any accounts opened in the name of any individual.
Appointment and Dismissal of Accounting Firms
Pursuant to the Company Law, the appointment or dismissal of accounting firms responsible
for the auditing of the company shall be determined by shareholders’ general meeting, board of
directors or board of supervisors in accordance with provisions of articles of association. The
accounting firm should be allowed to make representations when the shareholders’ general meeting,
board of directors or the board of supervisors conducts a vote on the dismissal of the accounting
firm. The company should provide true and complete accounting evidences, books, financial and
accounting reports and other accounting data to the accounting firm it employs without any refusal,
withholding and misrepresentation.
The Guidelines on the Bylaws provide that the company guarantees to provide true and
complete accounting vouchers, accounting books, financial accounting reports and other accounting
materials to the employed accounting firm, and shall not refuse, conceal or falsely report. And the
audit fee of the accounting firm shall be decided by the general meeting of shareholders.
Distribution of Profits
According to the Company Law, a company shall not distribute profits before losses are
covered and the statutory common reserve is drawn.
Amendments to Articles of Association
Any amendments to the company’s articles of association must be made in accordance with
the procedures set out in the company’s articles of association. In relation to matters involving the
company’s registration, its registration with the authority must also be changed.
Dissolution and Liquidation
According to the Company Law, a company shall be dissolved by reason of the following:
(i) the term of its operations set down in the articles of association has expired or other events
of dissolution specified in the articles of association occurred; (ii) the shareholders’ general meeting
has resolved to dissolve the company; (iii) the company is dissolved by reason of merger or
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division; (iv) the business license is revoked, or the company is ordered to close down or be
dissolved; or (v) the company is dissolved by the people’s court in response to the request of
shareholders holding shares that represent more than 10% of the voting rights of all its shareholders,
on the grounds that the company suffers significant hardship in its operation and management that
cannot be resolved through other means, and the ongoing existence of the company would bring
significant losses for shareholders. If any of the situations as mentioned in the preceding paragraph
arises, a company shall publicize the situations through the National Enterprise Credit Information
Publicity System within ten days.
In the event of (i) or (ii) above, a company may carry on its existence by amending its articles
of association or by a resolution of the shareholders’ general meeting if it has not distributed its
assets to its shareholders yet. The amendment of the articles of association or resolution of a
shareholders’ general meeting in accordance with provisions set out above shall require approval of
more than two thirds of voting rights of shareholders attending a shareholders’ general meeting.
Where the company is dissolved in the circumstances described in subparagraphs (i), (ii), (iv),
or (v) above, a liquidation group shall be established. The directors shall be the liquidation obligors
of the company and form a liquidation group to carry out liquidation within 15 days after the
occurrence of an event of dissolution.
The members of the company’s liquidation group shall be composed of its directors except
where the articles of association provide otherwise or the shareholders resolve to elect another
person. If a liquidation group is not established within the stipulated period or fails to carry out the
liquidation after its formation, any interested party may apply to the people’s court and request the
court to appoint relevant personnel to form the liquidation group. The people’s court should accept
such application and form a liquidation group to conduct liquidation in a timely manner.
The liquidation group shall exercise the following powers during the liquidation period:
 to liquidate the company’s assets and to prepare a balance sheet and an inventory of the
assets;
 to notify creditors through notice or public announcement;
 to deal with the company’s outstanding businesses related to liquidation;
 to pay any tax overdue as well as tax amounts arising from the process of liquidation;
 to claim credits and pay off debts;
 to distribute the company’s remaining assets after its debts have been paid off; and
 to represent the company in civil lawsuits.
The liquidation group shall notify the company’s creditors within 10 days after its
establishment and issue public notices in newspapers or on the National Enterprise Credit
Information Publicity System within 60 days. A creditor shall lodge his claim with the liquidation
group within 30 days after receiving notification, or within 45 days of the public notice if he did
not receive any notification. A creditor shall state all matters relevant to his creditor rights in
making his claim and furnish evidence. The liquidation group shall register such creditor rights. The
liquidation group shall not make any debt settlement to creditors during the period of claim.
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Upon liquidation of properties and the preparation of the balance sheet and inventory of
assets, the liquidation group shall draw up a liquidation plan to be submitted to the shareholders’
general meeting or people’s court for confirmation.
The company’s remaining assets after payment of liquidation expenses, wages, social
insurance expenses and statutory compensation, outstanding taxes and debts shall be distributed to
shareholders according to their shareholding proportion. It shall continue to exist during the
liquidation period, although it can only engage in any operating activities that are related to the
liquidation. The company’s properties shall not be distributed to the shareholders before repayments
are made in accordance with the foregoing provisions.
Upon liquidation of the company’s properties and the preparation of the balance sheet and
inventory of assets, if the liquidation group becomes aware that the company does not have
sufficient assets to meet its liabilities, it must apply to the people’s court for a declaration for
bankruptcy.
Following such declaration, the liquidation group shall hand over all matters relating to the
liquidation to the bankruptcy administrator designated by the people’s court.
Upon completion of the liquidation, the liquidation group shall submit a liquidation report to
the shareholders’ general meeting or the people’s court for verification. Thereafter, the report shall
be submitted to the registration authority of the company in order to apply for deregistration.
The members of the liquidation group are obliged to perform their liquidation duties with
fidelity and diligence. The members of the liquidation group shall be liable for damages caused to
the company if they are negligent in performing their liquidation duties. A member of the
liquidation group is liable to indemnify the company and its creditors in respect of any loss arising
from his intentional or gross negligence.
Overseas Listing
According to the Overseas Listing Trial Measures, where an issuer makes an overseas initial
public offering or listing, it shall file with the CSRC within 3 working days after submitting the
application documents for overseas issuance and listing. If an issuer issues securities in the same
overseas market after overseas issuance and listing, it shall file with the CSRC within 3 working
days after the completion of the issuance. If an issuer issues and lists in other overseas markets after
overseas issuance and listing, it shall be filed in accordance with the provisions of the first
paragraph of this article. Moreover, if the filing materials are complete and meet the requirements,
the CSRC shall complete the filing within 20 working days from the date of receiving the filing
materials, and publicize the filing information through the website. If the filing materials are
incomplete or do not meet the requirements, the CSRC shall inform the issuer of the materials to
be supplemented within 5 working days after receiving the filing materials. The issuer shall
supplement the materials within 30 working days.
Loss of Share Certificates
If a share certificate is lost, stolen or destroyed, the relevant shareholder may apply, in
accordance with the relevant provisions set out in the Civil Procedure Law, to a people’s court to
declare such certificate invalid. After the people’s court declares the invalidity of such certificate,
the shareholder may apply to the company for a replacement share certificate.
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Suspension and Termination of Listing
The Company Law has deleted provisions governing suspension and termination of listing.
The PRC Securities Law (2019 Revision) (ج2019ࠈࡌ)) has also deleted
provisions regarding suspension of listing. Where listed securities fall under the delisting
circumstances stipulated by the stock exchange, the stock exchange shall terminate its listing and
trading in accordance with the business rules.
According to the Overseas Listing Trial Measures, in case of active or compulsory termination
of listing, the issuer shall report the specific situation to the CSRC within 3 working days from the
date of occurrence and announcement of the relevant matters.
Merger and Demerger
Companies may merge through merger by absorption or through the establishment of a newly
merged entity. If it merges by absorption, the company which is absorbed shall be dissolved. If it
merges by forming a new corporation, both companies will be dissolved.
Securities Law and Regulations
The PRC has promulgated a number of regulations that relate to the issue and trading of shares
and disclosure of information. In October 1992, the State Council established the Securities
Committee and the CSRC. The Securities Committee is responsible for coordinating the drafting of
securities regulations, formulating securities-related policies, planning the development of
securities markets, directing, coordinating and supervising all securities- related institutions in the
PRC and administering the CSRC. The CSRC is the regulatory arm of the Securities Committee and
is responsible for the drafting of regulatory provisions of securities markets, supervising securities
companies, regulating public offers of securities by PRC companies in the PRC or overseas,
regulating the trading of securities, compiling securities related statistics and undertaking relevant
research and analysis. In April 1998, the State Council consolidated the two departments and
reformed the CSRC.
The Interim Regulations on the Administration of Share Issuance and Trading (ୃ೯Бၾ
၍ଣᅲБૢԷ) deal with the application and approval procedures for public offerings of
equity securities, trading in equity securities, the acquisition of listed companies, deposit, clearing
and transfer of listed equity securities, the disclosure of information with respect to a listed
company, investigation, penalties and dispute settlement.
The PRC Securities Law took effect on July 1, 1999 and was revised on August 28, 2004,
October 27, 2005, June 29, 2013, August 31, 2014 and December 28, 2019, respectively. This is the
first national securities law in the PRC, which is divided into 14 chapters and 226 articles
regulating, among other things, the issue and trading of securities, takeovers by listed companies,
securities exchanges, securities companies and the duties and responsibilities of the State Council’s
securities regulatory authorities. The PRC Securities Law comprehensively regulates activities in
the PRC securities market. Article 224 of the PRC Securities Law provides that domestic enterprises
shall comply with the relevant provisions of the State Council to list its shares outside the PRC.
Currently, the issue and trading of foreign issued shares are mainly governed by the rules and
regulations promulgated by the State Council and the CSRC.
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Arbitration and Enforcement of Arbitral Awards
The Arbitration Law of the PRC (2017 Amendment) (ج2017͍))
(the “Arbitration Law”) was passed by the Standing Committee of the NPC on August 31, 1994,
became effective on September 1, 1995 and was amended on August 27, 2009 and September 1,
2017. Under the Arbitration Law, an arbitration committee may, before the promulgation by the
PRC Arbitration Association of arbitration regulations, formulate interim arbitration rules in
accordance with the Arbitration Law and the Civil Procedure Law. Where the parties have by
agreement provided arbitration as the method for dispute resolution, the people’s court will refuse
to handle the case except when the arbitration agreement is declared invalid.
Under the Arbitration Law and the Civil Procedure Law, an arbitral award is final and binding
on the parties. If a party fails to comply with an award, the other party to the award may apply to
the people’s court for enforcement. A people’s court may refuse to enforce an arbitral award made
by an arbitration commission if there is any irregularity on the procedures or composition of
arbitrators specified by law or the award exceeds the scope of the arbitration agreement or is outside
the jurisdiction of the arbitration commission.
A party seeking to enforce an arbitral award of PRC arbitration panel against a party who, or
whose property, is not within the PRC, may apply to a foreign court with jurisdiction over the case
for enforcement. Similarly, an arbitral award made by a foreign arbitration body may be recognized
and enforced by the PRC courts in accordance with the principles of reciprocity or any international
treaty concluded or acceded to by the PRC. The PRC acceded to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (the “New Y ork Convention”) adopted on June 10,
1958 pursuant to a resolution of the Standing Committee of the NPC passed on December 2, 1986.
The New Y ork Convention provides that all arbitral awards made in a state which is a party to the
New Y ork Convention shall be recognized and enforced by all other parties to the New Y ork
Convention, subject to their right to refuse enforcement under certain circumstances, including
where the enforcement of the arbitral award is against the public policy of the state to which the
application for enforcement is made. It was declared by the Standing Committee of the NPC
simultaneously with the accession of the PRC that (i) the PRC will only recognize and enforce
foreign arbitral awards on the principle of reciprocity and (ii) the PRC will only apply the New Y ork
Convention in disputes considered under PRC laws to arise from contractual and non-contractual
mercantile legal relations.
An arrangement was reached between Hong Kong and the Supreme People’s Court for the
mutual enforcement of arbitral awards. On June 18, 1999, the Supreme People’s Court adopted the
Arrangements of the Supreme People’s Court on the Mutual Enforcement of Arbitral Awards
between the Mainland and the Hong Kong Special Administrative Region (ʫ
τર), which became effective on February 1, 2000 and
was amended by the Supplemental Arrangement of the Supreme People’s Court for the Mutual
Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative
Region (2021) (໾̂τર
(2021) ). In accordance with this arrangement, awards made by PRC arbitral authorities under the
Arbitration Law can be enforced in Hong Kong, and Hong Kong arbitration awards are also
enforceable in the PRC.
Judicial judgment and its enforcement
According to the Arrangement of the Supreme People’s Court between the Mainland and the
HKSAR on Reciprocal Recognition and Enforcement of the Decisions of Civil and Commercial
Cases under Consensual Jurisdiction (ʝႩ̙ձ
τર) (the “Arrangement”) promulgated by the
Supreme People’s Court on July 3, 2008 and implemented on August 1, 2008, in the case of final
judgment, defined with payment amount and enforcement power, made between the court of PRC
and the court of the Hong Kong Special Administrative Region in a civil and commercial case with
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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written jurisdiction agreement, any party concerned may apply to the People’s Court of Chinese
mainland or the court of the Hong Kong Special Administrative Region for recognition and
enforcement based on this Arrangement. “Choice of court agreement in written” refers to a written
agreement defining the exclusive jurisdiction of either the People’s Court of Chinese mainland or
the court of the Hong Kong Special Administrative Region in order to resolve dispute with
particular legal relation occurred or likely to occur by the party concerned. Therefore, the party
concerned may apply to the Court of Chinese mainland or the court of the Hong Kong Special
Administrative Region to recognized and enforce the final judgment made in Chinese mainland or
Hong Kong that meet certain conditions of the aforementioned regulations.
On January 18, 2019, the PRC Supreme People’s Court and the Hong Kong government signed
the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative
Region (τર) (the “New
Arrangement”), which seeks to establish a mechanism with greater clarity and certainty for
recognition and enforcement of judgments in wider range of civil and commercial matters between
Hong Kong and the PRC. The New Arrangement discontinued the requirement for a choice of court
agreement for bilateral recognition and enforcement. The New Arrangement came into effect on
January 29, 2024.
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This Appendix mainly provides investors with an overview of the Articles of Association. As
the following information is in summary form, it does not contain all the information that may be
important to investors.
SHARE ISSUES
The shares of the Company shall be issued in an open, fair and equal manner. Each share of
the same class shall rank pari passu with each other. Shares of a class in each issuance shall be
issued under the same terms and at the same price. Each of the shares shall be subscribed for at the
same price by subscribers.
INCREASE, DECREASE AND REPURCHASE OF SHARES
According to the operation and development needs of the Company, subject to the laws and
regulations, the Company may increase the capital by the following ways upon approval of separate
resolutions at the general meeting:
(i) issuing shares to unspecified parties;
(ii) issuing shares to specific targets;
(iii) distribution of bonus shares to existing shareholders;
(iv) converting the reserve funds into share capital;
(v) other means approved by the laws, administrative regulations, securities regulatory
authorities of the place where the shares of the Company are listed and stock exchanges.
Our Company may decrease our registered share capital and shall comply with the procedures
stipulated in the Company Law of the People’s Republic of China (“Company Law”) and other
relevant regulations as well as the Articles of Association.
REPURCHASE OF SHARES
The Company shall not acquire its own shares, except in any of the following circumstances:
(i) to reduce the registered capital of the Company;
(ii) to merger with other companies holding shares in the Company;
(iii) to use shares for employee shareholding schemes or as equity incentives;
(iv) to acquire the shares of shareholders (upon their request) who vote against any
resolution adopted at any general meetings regarding the merger or division of the
Company;
(v) to use the shares to satisfy the conversion of the convertible corporate bonds into shares
issued by the Company;
(vi) to safeguard corporate value and shareholders’ interests as the Company deems
necessary.
Where the Company acquires its shares under the circumstances prescribed in items (iii), (v)
or (vi) as set out above, such acquisition shall be conducted through public centralized trading.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 394 ---
Where the Company acquires its shares under the circumstances prescribed in items (i) and (ii)
as set out above, such acquisition shall be resolved at a general meeting. Where the Company
acquires its shares under the circumstances prescribed in items (iii), (v) and (vi) as set out above,
such acquisition shall be resolved at a Board meeting attended by at least 2/3 of the directors in
accordance with the applicable securities regulatory rules of the place where the shares of the
Company are listed.
Where the Company acquires its shares under the circumstances prescribed in item (i) as set
out above, such shares shall be canceled within ten days from the date of acquisition. Where the
shares are acquired under the circumstances prescribed in items (ii) and (iv) as set out above, such
shares shall be transferred or canceled within six months. Where the shares are acquired under the
circumstances prescribed in items (iii), (v) and (vi) as set out above, the total number of the shares
held by the Company shall not exceed 10% of the total issued shares, and such shares shall be
transferred or canceled within three years. If there are other provisions in the laws, regulations and
the securities regulatory rules of the place where the shares of the Company are listed on matters
relating to the share repurchases, such provisions shall prevail.
TRANSFER OF SHARES
Shares of the Company shall be transferred in accordance with the laws.
The Directors and senior management of the Company shall notify the Company of their
holdings of shares in the Company and the changes therein. The shares transferrable by them during
each year of their tenures as determined at the time of appointment shall not exceed 25% of their
total holdings of shares of the same class in the Company. The shares in the Company held by them
shall not be transferred within one year from the date on which the Company’s shares are listed for
trading. The shares in the Company held by them shall not be transferred within half a year from
their departure from the Company. In the event that the securities regulatory rules of the place
where the shares of the Company are listed provide otherwise in respect of the restrictions on the
transfer, such rules shall prevail.
When shareholders holding more than 5% of the shares, Directors and senior management
officers of the Company sell their shares or other equity securities within six months from the
acquisition of such shares, or purchase shares within six months from the disposal of such shares,
the resulting gains are owned by the Company and the Board of Directors of the Company shall
recover its resulting gains. However, the disposal of such shares by securities companies holding
more than 5% of the shares as a result of the outstanding shares acquired under underwriting, and
other circumstances stipulated by the CSRC are excluded. If there are other securities regulatory
rules of the place where the shares of the Company are listed, those regulations shall prevail.
The shares or other equity securities held by the Directors, senior management officers and
natural person shareholders referred to in the preceding paragraph shall include the shares or other
equity securities held by their spouse, parents, children, and those held through the accounts of
others.
Shareholders may require the Board of Directors of the Company to comply with the above
requirement within 30 days if the Board of Directors fails to do so. In the event that the Board of
Directors of the Company fails to rectify the situation within the said timeline, shareholders may
file a legal action to the people’s court in their own name for safeguarding the interests of the
Company. If the Board of Directors of the Company fails to comply with the above requirement,
relevant responsible Directors shall bear joint liability pursuant to the laws.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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SHAREHOLDERS AND GENERAL MEETINGS
Shareholders
The Company shall set up a register of shareholders based on the certificates provided by the
securities registration agency. The register of shareholders shall be sufficient evidence proving the
holding of the shares of the Company by a shareholder. A shareholder shall enjoy rights and assume
obligations as per the class of the shares held by them. Shareholders holding the same class of
shares shall enjoy the same rights and assume the same obligations.
The original register of shareholders of H shares listed in Hong Kong shall be kept in Hong
Kong and made available for inspection by shareholders, but the Company may suspend the
registration of shareholders in accordance with the applicable laws and regulations and the
securities regulatory rules of the place where the shares of the Company are listed. Any person who
is a shareholder registered on the register of shareholders of H shares or who requests his/her/its
name be entered in the register of shareholders of H shares may, if his/her/its share certificate
relating to the shares is lost, apply to the Company for a replacement share certificate in respect of
such shares. Application by a holder of overseas listed shares, who has lost his/her/its share
certificate, for a replacement share certificate may be dealt with in accordance with the law of the
place where the original register of shareholders of overseas listed shares is maintained, the rules
of the stock exchange or other relevant regulations.
Shareholders of the Company shall enjoy the following rights:
(i) to receive dividends and other distributions in proportion to the number of shares held;
(ii) to request, convene, hold, preside over, participate or send proxy to attend general
meetings and exercise corresponding rights to vote in accordance with the law;
(iii) to monitor, make suggestions on or question the Company’s operation;
(iv) to transfer, donate or pledge shares in his/her/its possession in accordance with the law,
administrative regulations, and provisions of the Articles of Association;
(v) to inspect and duplicate the Articles of Association, the register of shareholders, minutes
of general meetings, resolutions of the meetings of the Board of Directors, and financial
and accounting reports. Shareholders who meet the requirements may inspect the
Company’s accounting books and certificates;
(vi) in the event of the termination or liquidation of the Company, to participate in the
distribution of remaining assets of the Company in proportion to the number of shares
held;
(vii) the shareholders disagreeing with the merger or separation resolution made by the
general meeting are entitled to ask the Company to acquire their shares;
(viii) other rights conferred by laws, administrative regulations, departmental rules, the
securities regulatory rules of the place where the shares of the Company are listed and
the Articles of Association.
Shareholders demanding inspection or duplication of the relevant information or copies of the
materials mentioned in the preceding provision shall provide the Company with written documents
evidencing the class and number of shares of the Company they hold. Upon verification of the
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shareholder’s identity, the Company shall provide such information at the shareholder’s request in
accordance with the Company Law, the Securities Law of the People’s Republic of China
(“Securities Law”), and other relevant laws, administrative regulations, and the Articles of
Association.
If a resolution passed at the Company’s general meeting or the Board meeting violates laws
or administrative regulations, shareholders have the right to institute proceedings before a people’s
court to render the resolution invalid. If the procedures for convening, or the method of voting at,
a general meeting or a Board meeting violate laws, administrative regulations or the Articles of
Association, or a resolution violates the Articles of Association, shareholders are entitled to institute
proceedings before a people’s court to rescind such resolution within 60 days of the adoption of
such resolution, unless the procedures for convening, or the method of voting at, a general meeting
or a Board meeting only contains a minor defect without a substantial impact on the resolution.
In the event of any loss caused to our Company as a result of violation of any laws,
administrative regulations or Articles of Association by the Directors or senior management (other
than members of the Audit Committee) when performing their duties in our Company, the
Shareholders holding more than 1% shares separately or jointly for over 180 consecutive days may
submit a written request to the Audit Committee to file an action with the people’s court. Where the
Audit Committee violates laws, administrative regulations or the Articles of Association in their
duty performance and cause loss to our Company, the Shareholders may submit a written request
to the Board of Directors to file an action with the people’s court.
In the event that the Audit Committee or the Board of Directors refuse to file an action upon
receipt of the Shareholders’ written request specified in the preceding paragraph, or fail to file an
action within 30 days upon receipt thereof, or in the event that the failure to immediately file an
action in an emergency case will cause irreparable damage to the interests of our Company, the
Shareholder(s) specified in the preceding paragraph may, in their own name, directly file an action
to the court for the interest of our Company.
In the event of a director or senior management person violates laws, administrative
regulations or our Company’s Articles of Association, thereby damaging the interests of the
Shareholder(s), the Shareholders holding more than 1% shares separately or jointly for over 180
consecutive days may file an action with the court.
In the event of a director or senior management person violates laws, administrative
regulations or our Company’s Articles of Association, thereby damaging the interests of the
Shareholder(s), the Shareholder(s) may file an action with the court.
The obligations of Shareholders are as follows:
(i) To abide by laws, administrative regulations, securities regulatory rules of the place
where the shares of the Company are listed and the Articles of Association;
(ii) To provide Share capital according to the Shares subscribed for and Share participation
methods;
(iii) Not to return Shares unless prescribed otherwise in laws and administrative regulations;
(iv) Not to abuse Shareholders’ rights to infringe upon the interests of the Company or other
Shareholders; not to abuse the Company’s status as an independent legal entity or the
limited liability of Shareholders to damage the interests of the Company’s creditors;
(v) To perform other duties prescribed in laws, administrative regulations, securities
regulatory rules of the place where the shares of the Company are listed and the Articles
of Association.
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Any Shareholder who abuses Shareholders’ rights and causes the Company or other
Shareholders to suffer a loss shall be liable for making compensation in accordance with the law.
Any Shareholder who abuses the status of the Company as an independent legal entity or the limited
liability of Shareholders to evade debts and seriously damages the interests of the Company’s
creditors shall assume joint and several liability for the Company’s debts.
CONTROLLING SHAREHOLDERS AND ACTUAL CONTROLLERS
Controlling shareholders and actual controllers of the Company shall comply with the
following provisions:
(i) to exercise their rights as shareholders in accordance with the law and not abuse their
control or use their affiliation to prejudice the legitimate interests of the Company or
other shareholders;
(ii) to strictly implement the public statements and undertakings made and shall not change
or waive them;
(iii) to fulfill information disclosure obligations in strict accordance with the relevant
regulations, to proactively cooperate with the Company in information disclosure and to
inform the Company in a timely manner of material events that have occurred or are
proposed to occur;
(iv) not to appropriate the Company’s funds in any way;
(v) not to order, instruct or request the Company and relevant personnel to provide
guarantees in violation of laws and regulations;
(vi) not to make use of the Company’s undisclosed material information to gain benefits, not
to disclose in any way undisclosed material information relating to the Company, and not
to engage in insider trading, short-swing trading, market manipulation and other illegal
and unlawful acts;
(vii) not to prejudice the legitimate rights and interests of the Company and other
shareholders through unfair related transactions, profit distribution, asset restructuring,
foreign investment or any other means;
(viii) to ensure the integrity of the Company’s assets, and the independence of personnel,
finance, organization and business, and not to affect the independence of the Company
in any way;
(ix) a controlling shareholder and actual controller of the company shall not directly or
through investment holding, equity participation, joint venture, consortium or other
forms, operate any business that is the same, similar or competitive with the company’s
principal business by his/her own or for the account of others; a senior management
personnel shall not serve as a senior officer of companies or corporations that operate
in the same, similar, or competitive business as the company’s principal business;
(x) other provisions of laws, administrative regulations, the CSRC, securities regulatory
rules of the place where the shares of the Company are listed and the Articles of
Association.
Where a controlling shareholder or actual controller of the Company instructs a director or
senior management to engage in an act that is detrimental to the interests of the Company or the
shareholders, he/she shall be jointly and severally liable with such director or senior management.
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GENERAL RULES OF THE GENERAL MEETING
The General Meeting is the organ of authority of the Company, and shall exercise the
following functions and powers in accordance with the law:
(i) to elect and replace directors who are not employee representatives, and to decide on
matters relating to the remuneration of directors;
(ii) to consider and approve the reports of the Board;
(iii) to consider and approve the Company’s profit distribution plans and loss recovery plans;
(iv) to resolve on the increase or reduction of the registered capital of the Company;
(v) to resolve on the issue of securities or bonds of the Company;
(vi) to resolve on the merger, division, dissolution, liquidation or change of corporate form
of the Company;
(vii) to amend the Articles of Association;
(viii) to resolve on the appointment and dismissal of the accounting firm that undertakes the
auditing activities of the Company;
(ix) to consider and approve the guarantee matters stipulated in Article 38 of the Articles of
Association;
(x) to consider the purchase or disposal of material assets within one year with an amount
exceeding 30% of the latest audited total assets of the Company;
(xi) to consider and approve the change in use of proceeds;
(xii) to consider share incentive schemes and employee share ownership schemes;
(xiii) to consider any related party transactions between the Company and related parties,
whose amount is more than RMB30 million and accounts for more than 5% of the
absolute value of the latest audited net assets of the Company;
(xiv) to consider and approve the following material purchase or sales of assets (excluding the
purchase of raw materials, fuels and power related to daily operations, or the sale of
products, commodities and other assets related to daily operations), external investment
(including entrusted financial management, investment in subsidiaries, etc., other than
the purchase of wealth management products from banks or the establishment or capital
increase of wholly-owned subsidiaries), leasing in or leasing out of assets, signing of
management contracts (including entrusted or trusted operation, etc.), giving or
receiving assets as gift (excluding gift of cash assets), restructuring of claims or debts,
transfer of research and development projects, signing of license agreements, waiver of
rights (including waiver of preemption rights, priority subscription rights, etc.) and other
transactions:
1. the total assets involved in the transaction account for 50% or more of the latest
audited total assets of the Company, and if the total assets involved in the
transaction have both book value and appraised value, the higher of which shall be
used for calculation;
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2. the operating revenue related to the subject matter of the transaction (such as
equity interests) for the most recent financial year accounts for 50% or more of the
Company’s audited operating revenue for the same period, with the absolute
amount exceeding RMB50 million;
3. the net profit in connection with the subject matter of transaction (such as equity
interests) for the most recent financial year accounts for 50% or more of the
Company’s audited net profit for the same period, with the absolute amount
exceeding RMB5 million;
4. the transaction amount of the transaction (including the debt and expenses)
accounts for 50% or more of the Company’s latest audited net assets, with the
absolute amount exceeding RMB50 million;
5. the profit derived from the transaction accounts for 50% or more of the Company’s
audited net profit for the most recent financial year, with the absolute amount
exceeding RMB5 million.
(xv) to consider other matters required by laws, administrative regulations, departmental
rules, the securities regulatory rules of the place where the shares of the Company are
listed or the Articles of Association to be decided by the General Meeting.
The General Meeting may authorize the Board of Directors to make a resolution on the
issuance of bonds of the Company. Unless otherwise stipulated in the laws, administrative
regulations, and securities regulatory rules of the place where the shares of the Company are listed,
the aforesaid functions and powers of the General Meeting shall not be exercised by the Board of
Directors or other bodies and individuals through any form of authorization.
The following acts of the Company’s external guarantees shall be considered and approved by
the General Meeting:
(i) any single guarantee with an amount exceeding 10% of the Company’s latest audited net
assets;
(ii) any guarantee provided after the total amount of guarantee provided by the Company
and its controlling subsidiary has exceeded 50% of the Company’s latest audited net
assets;
(iii) any guarantee to be provided to guarantee recipients whose asset-to-liability ratio is over
70%;
(iv) guarantee where the amount of guarantee provided in 12 consecutive months exceeds
50% of the Company’s latest audited net assets, with the absolute amount exceeding
RMB50 million;
(v) any guarantee provided after the total amount of guarantee provided by the Company
and its controlling subsidiary has exceeded 30% of the Company’s latest audited total
assets;
(vi) guarantee where the amount of guarantee provided in 12 consecutive months exceeds
30% of the Company’s latest audited total assets;
(vii) any guarantee provided to shareholders, de facto controllers, and their related parties;
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--- page 400 ---
(viii) other guarantees that meet the requirements of laws, regulations, securities regulatory
rules of the place where the shares of the Company are listed or the Articles of
Association.
The General Meetings are classified into annual general meetings and extraordinary general
meetings. The annual general meeting shall be convened once a year and be held within six months
of the end of the previous fiscal year.
In any of the following circumstances, the Company shall convene an extraordinary general
meeting within two months from the date of the occurrence of the circumstance:
(i) when the number of directors falls short of the statutory number specified in the
Company Law or is less than two-thirds of the number specified in the Articles of
Association;
(ii) when the unrecovered losses of the Company amount to one-third of the total share
capital;
(iii) when shareholders individually or together holding 10% or more of the shares of the
Company request to hold such a meeting;
(iv) when the Board of Directors deems it necessary;
(v) when the Audit Committee proposes to hold such a meeting;
(vi) other circumstances as stipulated by laws, administrative regulations, departmental
rules, the securities regulatory rules of the place where the shares of the Company are
listed or the Articles of Association.
In the event that an extraordinary general meeting is convened at the request of the securities
regulatory rules of the place where the shares of the Company are listed, the effective date of the
extraordinary general meeting may be adjusted in accordance with the securities regulatory rules of
the place where the shares of the Company are listed.
CONVENING OF GENERAL MEETINGS
The Board of Directors shall convene the general meeting on time within the specified period
as stipulated in the Articles of Association. Subject to the consent of more than half of all the
independent directors, the independent directors have the right to propose to the Board of Directors
to convene an extraordinary general meeting. With regard to the proposal made by the independent
directors for convening an extraordinary general meeting, the Board of Directors shall, in
accordance with the laws, administrative regulations, securities regulatory rules of the place where
the shares of the Company are listed and the Articles of Association, provide a written response
indicating whether it agree or disagree to convene the extraordinary general meeting within 10 days
upon receipt of the proposal. Where the Board of Directors agrees to convene the general meeting,
a notice of convening such meeting shall be issued within 5 days after the resolution of the Board
of Directors is made. Where the Board of Directors does not agree to convene the extraordinary
general meeting, it shall provide reasons and make an announcement.
The Audit Committee is entitled to propose to the Board of Directors to convene an
extraordinary general meeting and such proposal shall be made in writing to the Board of Directors.
The Board of Directors shall, in accordance with laws, administrative regulations, securities
regulatory rules of the place where the shares of the Company are listed and the Articles of
Association, give a written reply on whether or not it agrees to convene the extraordinary general
meeting within 10 days upon receipt of the proposal. Where the Board of Directors agrees to
convene the extraordinary general meeting, a notice of convening such meeting shall be issued
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--- page 401 ---
within 5 days after the resolution of the Board of Directors is made. Any change to the original
proposal in the notice shall be subject to the approval of the Audit Committee. Where the Board of
Directors does not agree to convene the extraordinary general meeting or fails to reply within 10
days after receipt of the proposal, it shall be deemed to be unable to perform or fail to perform the
duty of convening the general meeting, and the Audit Committee may convene and preside over the
meeting by itself.
Shareholders who individually or jointly hold more than 10% of the Company’s shares are
entitled to request the Board of Directors to convene an extraordinary general meeting and such
requisition shall be made in writing to the Board of Directors The Board of Directors shall, in
accordance with laws, administrative regulations, securities regulatory rules of the place where the
shares of the Company are listed and the Articles of Association, give a written reply on whether
or not it agrees to convene the extraordinary general meeting within 10 days upon receipt of the
requisition.
Where the Board of Directors agrees to convene the extraordinary general meeting, a notice
of convening such meeting shall be issued within 5 days after the resolution of the Board of
Directors is made. Any change to the original requisition in the notice shall be subject to the
approval of relevant shareholders. Where the Board of Directors does not agree to convene the
extraordinary general meeting or fails to reply within 10 days after receipt of the requisition,
shareholders who individually or jointly hold more than 10% of the Company’s shares shall have
the right to propose the Audit Committee to convene the extraordinary general meeting and such
requisition shall be made in writing to the Audit Committee.
Where the Audit Committee agrees to convene the extraordinary general meeting, a notice of
convening such meeting shall be issued within 5 days after receipt of the requisition. Any change
to the original requisition in the notice shall be subject to the approval of relevant shareholders. If
the Audit Committee fails to issue the notice of the meeting within the specified period, it shall be
deemed that the Audit Committee does not convene and preside over the general meeting.
Shareholders who individually or jointly hold more than 10% of the Company’s shares for more
than 90 consecutive days may convene and preside over the general meeting by themselves.
If the general meeting is convened by the Audit Committee or shareholders on their own, it
shall notify the Board of Directors in writing and file a record with the Shenzhen Stock Exchange
at the same time. Before the announcement of the resolution of the general meeting, the
shareholding of shareholders who convene the meeting shall not be less than 10%. The Audit
Committee or the shareholders who convene the meeting shall submit the relevant evidentiary
materials to the Shenzhen Stock Exchange when issuing the notice of the general meeting and the
announcement of the resolution of the general meeting.
Where the Audit Committee or the shareholders convene a general meeting on their own, the
necessary expenses incurred thereof shall be borne by the Company.
PROPOSALS AND NOTICES OF GENERAL MEETING
When the Company convenes a general meeting, the Board of Directors, the Audit Committee
and shareholders who individually or jointly hold more than 1% of the Company’s shares shall be
entitled to put forward proposals to the Company.
Shareholders who individually or jointly hold more than 1% of the Company’s shares may
submit provisional proposals in writing to the convener 10 days prior to the convening of the
general meeting. The convener shall issue a supplementary notice of the general meeting within 2
days upon receipt of the proposals to announce the contents of the provisional proposal and submit
the provisional proposals to the general meeting for consideration, however, except for the
provisional proposals that violates the requirements of the laws, administrative regulations,
securities regulatory rules of the place where the shares of the Company are listed or the Articles
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--- page 402 ---
of Association, or are not within the terms of reference of the general meeting. If the general
meeting needs to be postponed due to the issuance of a supplementary notice of the shareholders’
meeting according to the securities regulatory rules of the place where the shares of the Company
are listed, the convening of the general meeting shall be postponed according to the securities
regulatory rules of the place where the shares of the Company are listed.
Except as provided in the preceding paragraph, the convener shall not change the proposals
set out in the notice of the general meeting or add any new proposal after the said notice is served.
Proposals not set out in the notice of the general meeting or not complying with the Articles
of Association shall not be voted on or resolved at the general meeting.
The convener shall notify all shareholders by announcement at least 21 days prior to the
convention of an annual general meeting, or at least 15 days prior to the convention of an
extraordinary general meeting. The Company shall not include the date of convention of meeting
into the calculation of starting and ending time.
Notice of the general meeting shall contain:
(i) the date, venue and duration of the meeting;
(ii) matters and proposals submitted for consideration at the meeting;
(iii) a clear statement that: each shareholder is entitled to attend the general meeting in
person, or appoint one or more proxies who need not be shareholders of the Company,
to attend and vote on his/its behalf;
(iv) the date of record for the determination of shareholders who are entitled to attend the
general meeting;
(v) name and telephone number of permanent contact person;
(vi) time and procedures for voting online or by other means.
HOLDING OF GENERAL MEETINGS
All shareholders whose names appear on the register of members on the record date or their
proxies are entitled to attend the general meeting and exercise their voting rights in accordance with
the relevant laws, regulations, securities regulatory rules of the place where the shares of the
Company are listed and the Articles of Association, unless individual shareholders are required to
abstain voting from individual matter as stipulated by the securities regulatory rules of the place
where the shares of the Company are listed.
Shareholders may attend a general meeting in person, or may appoint a proxy to attend and
vote on his/her behalf.
An individual shareholder that attends the meeting in person shall produce his or her own
identity card or other valid documents or proof evidencing his or her identity. If he or she appoints
a proxy to attend the meeting on his or her behalf, the proxy shall produce his or her own valid proof
of identity and the power of attorney issued by the shareholder.
Shareholder who is a corporation shall attend and vote at a meeting by its legal representative
or a proxy appointed by the legal representative. If the legal representative attends the meeting, he
or she shall produce his or her own identity card and a valid proof of his or her legal representative
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--- page 403 ---
status. If a proxy has been appointed to attend the meeting, such proxy shall present his or her own
identity card and the power of attorney issued by the legal representative of the shareholder as a
corporation, except for shareholder who is a recognized clearing house and its nominees.
If the shareholder is a recognized clearing house, it may authorize one or more persons it
deems fit to act as its representative at any general meeting or any meeting of creditors; however,
if more than one person is so authorized, the power of attorney shall specify the number and class
of shares in respect of which each such person is so authorized. A person so authorized may exercise
rights on behalf of the recognized clearing house (or its nominees) (no shareholding voucher,
notarized authorization and/or further evidence of the duly authorization is required), as if such
person is an individual shareholder of the Company.
VOTING AND RESOLUTIONS AT GENERAL MEETINGS
Resolutions of the general meeting include ordinary resolutions and special resolutions. An
ordinary resolution at a general meeting shall be passed by one half or above of the voting rights
held by shareholders (including their proxies) attending and entitled to vote at the general meeting.
A special resolution at a general meeting shall be passed by two-thirds or above of the voting rights
held by shareholders (including their proxies) attending and entitled to vote at the general meeting.
The following matters shall be resolved by an ordinary resolution at a general meeting:
(i) work reports of the Board;
(ii) plans formulated by the Board for the distribution of profits and for making up losses;
(iii) appointment and removal of the members of the Board, their remunerations and methods
of payment;
(iv) matters other than those required by the laws and administrative regulations and the
securities regulatory rules of the place(s) where the shares of the Company are listed or
by the Articles of Association to be adopted by special resolution.
The following matters shall be resolved by a special resolution at a general meeting:
(i) the increase or reduction of share capital of the Company;
(ii) the split, spin-off, merger, dissolution and liquidation of the Company;
(iii) amendments to the Articles of Association;
(iv) the acquisition or disposal of major assets or guarantees within one year exceeds 30%
of the Company’s latest audited total assets;
(v) equity incentive plan;
(vi) any other matters as required by the laws, administrative regulations, the securities
regulatory rules of the place where the shares of the Company are listed or the Articles
of Association, and any other matters considered by the general meeting, by way of an
ordinary resolution, to be of a nature which may have a material impact on the Company
and should be adopted by a special resolution.
A shareholder (including proxy) may exercise voting rights in accordance with the number of
shares carrying the right to vote and each share shall have one vote.
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--- page 404 ---
When significant matters affecting the interests of the minority shareholders are considered at
the general meeting, the votes cast by minority investors shall be counted separately. The results of
separate counting shall be disclosed to the public in a timely manner.
The shares held by the Company have no voting rights, and that part of the shareholding shall
not be counted as the total number of shares with voting rights held by shareholders attending the
meeting.
If a shareholder purchases voting shares of the Company in violation of the provisions of
Article 63(1) and (2) of the Securities Law, the voting rights of such shares in excess of the
prescribed proportion shall not be exercised for a period of thirty-six months after the purchase and
shall not be counted as part of the total number of voting shares present at the general meeting.
The Board of the Company, independent directors, shareholders holding more than 1% of the
shares carrying voting rights or investor protection agencies established in accordance with laws,
administrative regulations or requirements of the CSRC may publicly solicit shareholders’ voting
rights. The specific voting intentions and other information shall be fully disclosed to the persons
whose voting rights are being solicited when soliciting shareholders’ voting rights. It is forbidden
to solicit shareholders’ voting rights with compensation or compensation in disguised form. The
Company shall not impose a minimum shareholding proportion limit on the solicitation of voting
rights except for statutory conditions.
DIRECTORS AND THE BOARD OF DIRECTORS
General provisions in relation to directors
A director of the Company who is a natural person shall not act as the director of the Company
under any of the following circumstances:
(i) lacking or having limited capacity to engage in civil juristic acts;
(ii) having been sentenced to any criminal penalty due to an offense of corruption, bribery,
encroachment of property, misappropriation of property or disrupting the economic
order of the socialist market; or having ever been deprived of political rights due to any
crime, with less than 5 years having elapsed since the completion date of the execution
of the penalty, or having been granted probation, with less than 2 years having elapsed
since the completion date of the probation period;
(iii) acting as a director, factory director or general manager of a company or enterprise that
has been bankrupt and liquidated, whereby the director is personally liable for the
bankruptcy of such company or enterprise, with 3 years having not elapsed since the
completion date of the bankruptcy and liquidation of the company or enterprise;
(iv) acting as the legal representative of a company or enterprise, but the business license of
this company or enterprise has been revoked and this company or enterprise has been
ordered to close due to a violation of the law, whereby the director is personally liable
for the revocation, with 3 years having not elapsed since the revocation date of the
business license thereof;
(v) classified as a dishonest person subject to enforcement due to significant outstanding
debts that have become due but have not been paid;
(vi) prohibited from entering the securities market by the CSRC with the penalty period not
yet expired;
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--- page 405 ---
(vii) recognized by stock exchanges as unsuitable for serving as a director or senior
management officer of a company, with the disciplinary action period not yet expired;
(viii) other circumstances as stipulated by the laws, administrative regulations, departmental
regulation, and other securities regulatory rules of the places where the Company’s
shares are listed.
Directors shall comply with laws, administrative regulations, and the articles of association,
and owe fiduciary duties to the Company. They shall take measures to avoid conflicts of interest
between themselves and the Company, and shall not exploit their positions to seek improper
benefits. Directors owe the following fiduciary duties to the Company:
(i) They shall not misappropriate Company property or embezzle Company funds;
(ii) They shall not deposit Company funds into accounts opened in their personal names or
in the names of other individuals;
(iii) They shall not solicit or accept bribes or other illegal benefits through their authority;
(iv) They shall not directly or indirectly enter into contracts or transactions with the
Company unless they have reported to the Board of Directors or the General meeting and
obtained approval through a resolution of the General meeting or the Board of Directors
in accordance with the articles of association;
(v) They shall not exploit their positions to seize business opportunities that rightfully
belong to the Company for their own benefit or the benefit of others, except that such
opportunities are reported to the Board of Directors or General meeting and approved by
a resolution of the General meeting; or the Company is legally, administratively, or
under its articles of association unable to pursue such opportunities;
(vi) They shall not engage in any business competing with the Company, either on their own
behalf or for others, unless they have reported to the Board of Directors or General
meeting and obtained approval through a resolution of the General meeting;
(vii) They shall not retain commissions derived from transactions between third parties and
the Company;
(viii) They shall not disclose Company secrets without authorization;
(ix) They shall not harm the Company’s interests through their affiliated relationships;
(x) They shall comply with other fiduciary duties stipulated by laws, administrative
regulations, departmental rules, securities regulatory rules of the place where the shares
of the Company are listed and the articles of association.
Any income obtained by Directors in violation of this provision shall be returned to the
Company. Directors who cause losses to the Company through such violations shall be liable for
compensation.
Any contract or transaction entered into between the Company and immediate family members
of Directors, senior management personnel, enterprises directly or indirectly controlled by
Directors, senior management personnel, or their immediate family members, and other connected
persons affiliated with Directors or senior management personnel, shall be governed by Article 90,
Paragraph 1(iv) of the articles of association.
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--- page 406 ---
The Directors shall abide by the provisions of laws, administrative regulations and the articles
of association, and have a diligent obligation to the Company, and shall perform their duties in the
best interests of the Company and with the reasonable care normally due by the management. The
Directors have the following diligent obligations to the Company:
(i) to exercise the rights granted by the Company in a prudent, serious and diligent manner
to ensure that the Company’s business activities comply with the requirements of
national laws, administrative regulations and various national economic policies, and
that the business activities do not exceed the business scope specified in the business
license;
(ii) to ensure that they have sufficient time and energy to participate in the affairs of the
Company, to read the Company’s operations and financial reports and the news on the
Company carefully, to timely understand and continue to pay attention to the Company’s
business operation and management and the significant matters that have occurred or
may occur to the Company and their impacts, and to report the problems in the business
activities to the Board in a timely manner, and not to shirk responsibility on the grounds
of not directly engaging in operation and management, or not knowing it;
(iii) to, in principle, attend the Board in person, to prudently judge the risks and benefits that
may arise from the matters considered; those who are unable to attend the Board in
person for reasons shall prudently select the trustees, the authorized matters and
decision-making intention shall be specific and clear, and shall not be delegated with full
authority;
(iv) to promptly report to the Board and supervise the Company’s performance of its
information disclosure obligations when it learns that the Company’s shareholders, de
facto controllers and their associates have misappropriated the Company’s assets, abused
their control and other circumstances that harm the interests of the Company or other
shareholders;
(v) to treat all the shareholders equally and fairly;
(vi) to sign written confirmation opinions on the securities offering documents and regular
reports of the Company so as to ensure that the information disclosed by the Company
is true, accurate and complete. Where the directors are unable to ensure the truthfulness,
accuracy and completeness of the content of the securities offering documents and
regular reports or holding dissenting views, their opinions and reasons shall be stated in
the written confirmation and disclosed by the Company. Directors and senior
management may directly apply for disclosure if the Company fails to disclose;
(vii) to truthfully provide the Audit Committee with relevant information and materials, and
shall not hinder the Audit Committee from exercising its functions and powers;
(viii) to prudently judge the risks and benefits that may arise from the matters considered by
the Board of the Company, and to express clear opinions on the matters discussed; if
voting against or abstaining from voting at the Board of the Company, the reasons, basis,
suggestions or measures for improvement for the voting intention, shall be clearly
disclosed;
(ix) to read the financial and accounting reports of the Company carefully, pay attention to
whether there are any material errors or omissions in the preparation of the financial and
accounting reports, whether major accounting data and financial indicators fluctuate
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-14 –


--- page 407 ---
significantly and whether the explanations for the fluctuations are reasonable; if there
are doubts about the financial and accounting reports, they shall take the initiative to
investigate or request the board of directions to supplement the required materials or
information;
(x) to actively promote the Company’s standardized operation, to urge the Company to
fulfill its information disclosure obligations in accordance with laws and regulations, to
timely correct and report violations of the Company, and to support the Company in
fulfilling its social responsibilities;
(xi) not to provide any form of convenience or assistance that is detrimental to the legitimate
rights and interests of the Company or shareholders to any organization or individual and
their acquisition actions that are intended to or are implementing a hostile takeover of
the Company;
(xii) to comply with other obligations of diligence stipulated in laws, administrative
regulations, departmental rules, securities regulatory rules of the place where the shares
of the Company are listed and the Articles of Association.
The Company has established a director resignation management system to clarify the
safeguards for unfulfilled public commitments and other outstanding matters. When the resignation
of a Director takes effect or the term of office expires, all transfer procedures shall be completed
to the board of directors, and the fidelity obligations of the director to the Company and the
Shareholders shall not be automatically discharged after the end of the term of office, but shall
remain valid for one year after the resignation of the director takes effect or the term of office
expires. Its obligation to keep the Company’s trade secrets confidential shall survive the termination
of its duties until such time as the secrets become public information. The Directors’ responsibilities
in the performance of their duties during their term of office shall not be relieved or terminated by
reason of their departure from office.
BOARD OF DIRECTORS
The Board of Directors consists of seven Directors, three of whom are independent Directors.
The Board of Directors exercises the following powers:
(i) To convene the general meeting and report on work to the general meeting;
(ii) Implement the resolutions of the general meeting;
(iii) Determine the business and investment plans of our Company;
(iv) Devise the earnings distribution and loss offset plans of our Company;
(v) Formulate the plans for increasing or decreasing our Company’s registered capital, the
issuance of corporate bonds or other securities, as well as the listing of the stock of our
Company;
(vi) Formulate plans for major acquisitions of the Company, the buy-back of shares of our
Company, corporate merger, separation, dissolution and changing the form of our
Company;
(vii) Determine such matters as the Company’s external investment, purchase or sale of
assets, asset pledge, external guarantee, entrusting wealth management, connected
transaction and external donation within the scope authorized by the general meeting;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 408 ---
(viii) Decide on the setup of our Company’s internal management organization;
(ix) To decide on matters such as appointment or dismissal of the Company’s president and
the secretary of the Board and on their compensation and incentives/disincentives; to
decide on matters such as appointment or dismissal of the Company’s vice president,
chief financial officer and other senior management and on their compensation and
incentives/disincentives based on the nominations by the president;
(x) Set the basic management systems of our Company;
(xi) Make the modification plan to the Articles of Association;
(xii) Manage the disclosure of company information;
(xiii) Request to the general meeting of shareholders to hire or replace the accounting firm
auditing for the company;
(xiv) Attend to the work report of our Company’s president and review the work of the
president;
(xv) Other powers and duties authorized by the laws, administrative regulations, regulations
of the authorities, other securities regulatory rules of the place where the shares of the
Company are listed and the Articles of Association.
If any Director has connection with the enterprise or individual involved in the resolution
made at a Board meeting, the said Director shall report to the Board of Directors in writing in a
timely manner and shall not vote on the said resolution for himself/herself or on behalf of another
Director. The Board meeting may be held when more than half of the non-connected Directors
attend the meeting. The resolution of the Board meeting shall be passed by more than half of the
non-connected Directors. If the number of non-connected Directors attending the meetings is less
than three, the issue shall be submitted to the general meeting for consideration. If there are any
additional restrictions on Directors’ participation in and voting at Board meetings in accordance
with laws and regulations and the securities regulatory rules of the place where the shares of the
Company are listed, such provisions shall prevail.
INDEPENDENT DIRECTORS
The Company establishes a mechanism for special meeting attended solely by independent
directors. Related party transactions should be pre-approved by the special meeting of independent
directors before being submitted to the Board of Directors for consideration.
The Company shall hold special meetings of independent directors on a regular or ad hoc
basis. Matters listed in items (1) to (3) of the paragraph 1 of Article 122 and Article 123 of the
Articles of Association shall be considered at a special meeting of independent directors.
The special meetings of independent directors may study and discuss other matters of our
Company as needed.
The special meetings of independent directors shall be convened and presided over by an
independent director jointly elected by a majority of the independent directors; in the event that the
convener fails to or is unable to perform his/her duties, two or more independent directors may
convene and elect a representative to preside over the meeting on their own.
Minutes of the special meetings of independent directors shall be prepared as required, with
the inclusion of the opinions of the independent directors, who shall sign to confirm the minutes of
the meetings.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-16 –


--- page 409 ---
The Company shall facilitate and support the convening of special meetings of independent
directors.
SPECIAL COMMITTEES OF THE BOARD
The Board of the Company has established an Audit Committee. The Audit Committee
consists of three members, who are directors not holding senior management positions in the
Company. Among them, there are two independent directors, and shall be convened by a
professional possessing accounting or financial management expertise as required by the securities
regulatory rules of the place where the shares of the Company are listed among the independent
directors.
The Board of the Company has established other special committees such as the Strategy
Committee, the Nomination Committee, the Remuneration and Appraisal Committee, etc., which
perform their duties in accordance with the Articles and the authorization of the Board. The
proposals of the special committees shall be submitted to the Board for review and decision-
making. The working procedures of the special committees shall be formulated by the Board.
SENIOR MANAGEMENT MEMBERS
The Company has one president, who is appointed or dismissed by the Board. The Company
has one executive vice president and certain vice presidents, who are appointed or dismissed by the
Board based on the nomination by the president. The president, executive vice president, vice
president, chief financial officer and secretary of the Board are the senior management members of
the Company.
The president is responsible to the Board and exercises the following authorities:
(i) preside over the production, operation and management work of the Company, organize
the implementation of the resolutions of the Board, and report the work to the Board;
(ii) organize the implementation of the Company’s annual business plan and investment
plan;
(iii) draft the Company’s internal management organization setup plan;
(iv) draft the Company’s basic management system;
(v) formulate the specific rules and regulations of the Company;
(vi) propose to the Board the appointment or dismissal of the Company’s executive vice
president, vice president and chief financial officer;
(vii) decide on the appointment or dismissal of management personnel other than those whose
appointment or dismissal shall be decided by the Board;
(viii) to draft the salaries, benefits, rewards and penalty for the staff of the Company, and to
decide on the appointment or dismissal of employees of the Company;
(ix) to propose to convene the meeting of the Board;
(x) other duties and powers as conferred by the securities regulatory rules of the place where
the shares of the Company are listed, the Articles of Association or the Board.
The president shall attend the meetings of the Board.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-17 –


--- page 410 ---
The Company has a secretary of the Board, who is responsible for the preparation of the
meetings of the general meeting and the Board of the Company, the custody of documents, the
management of the Company’s shareholder information, and handling matters related to
information disclosure, etc.
The secretary of the Board shall comply with the relevant provisions of laws, administrative
regulations, departmental rules and regulations and the Articles.
FINANCIAL ACCOUNTING SYSTEM, PROFIT DISTRIBUTION AND AUDIT
Financial and Accounting System
The Company shall submit an annual financial report to the competent authorities of CSRC
and the stock exchange within 4 months after the end of each fiscal year, submit and disclose its
interim report to the competent authorities of CSRC and the stock exchange within 2 months after
the end of the first half of each accounting year.
The above-mentioned annual report and interim report are prepared in accordance with
relevant laws, administrative regulations and the securities regulatory rules of the place where the
shares of the Company are listed.
The Company shall have no other accounting books except the statutory accounting books. Its
assets shall not be deposited in any accounts opened in the name of any individual.
When distributing profits after taxation of the year, the Company shall set aside 10% of its
profits for the Company’s statutory reserve until the fund has reached 50% or more of the
Company’s registered capital.
When the Company’s statutory reserve is not sufficient to make up for the Company’s losses
for the previous years, the profits of the current year shall first be used to cover the losses before
any allocation is set aside for the statutory reserve pursuant to the preceding provision.
After making allocations to the statutory reserve from its profits after taxation, the Company
may, upon passing a resolution at a general meeting, make further allocations from its profits after
taxation to the discretionary reserve.
After the Company covers its losses and makes allocations to its reserve, the remaining profits
after taxation shall be distributed in proportion to the number of shares held by the shareholders,
except for those which are not distributed in a proportionate manner as provided by the Articles of
Association.
If the general meeting resolves to distribute any profits to the shareholders in violation of the
Company Law, the shareholders shall return such profits distributed to the Company, and if any
losses are caused thereby to the Company, the shareholders, as well as any directors, and senior
officers responsible for the violation, shall be liable for compensation.
The Company shall not distribute any profits in respect of the shares held by it.
The Company is required to appoint one or more receiving agent(s) in Hong Kong for
shareholders of H shares. The receiving agent(s) shall receive and hold on behalf of such
shareholders of H shares any dividends allocated to H shares and other amounts payable by the
Company, and transmit such payments to such shareholders of H shares. The receiving agent(s)
appointed by the Company shall satisfy the requirements under the laws and regulations and the
securities regulatory rules of the place where the shares of the Company are listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-18 –


--- page 411 ---
The provident fund of the Company is appropriated for purpose of making up the losses or
expanding production and operation of the Company or being capitalized.
When using the Company’s reserves to cover its losses, any discretionary reserve and statutory
reserve balances shall first be used to cover such losses; if there is still a shortfall, the capital
reserve may be used in accordance with regulations.
In any capitalization of the statutory provident fund, the remaining statutory provident fund
shall not be less than twenty-five percent (25%) of the Company’s registered capital immediately
prior to such capital increase through provident fund transfer
After the shareholders make a decision for distribution of profits in general meeting, or after
the Board of Directors formulates a specific plan in accordance with the conditions and upper limit
of the interim dividend for the next year that approved by the annual general meeting of
shareholders, the Board of Directors must finish distributing the dividends (or shares) within two
months.
INTERNAL AUDIT
The Company shall implement an internal audit system and clarify the leadership system,
duties and authorities, staffing, financial support, application of audit results, and accountability.
The internal audit institution of the Company shall conduct supervision and inspection on the
Company’s business activities, risk management, internal control, financial information and other
matters.
APPOINTMENT OF ACCOUNTING FIRM
The Company shall appoint an accounting firm in compliance with the Securities Law and the
securities regulatory rules of the place where the shares of the Company are listed to conduct
accounting statements audit, net assets verification and other related consulting services for a term
of one year, which may be renewed.
The appointment and selection of the Company’s accounting firm shall be decided by the
general meeting. The Board of Directors shall not appoint the accounting firm until it is decided by
the general meeting.
The Company shall undertake to provide its accounting firm with true and complete
accounting vouchers, accounting books, financial reports and other accounting information, and
shall not reject, conceal or misstate any information.
The audit fee payable to an accounting firm shall be decided by the general meeting.
When the Company intends to dismiss or not to reappoint an accounting firm, it shall give 15
days prior notice to the accounting firm. When a general meeting of the Company votes on the
dismissal of the accounting firm, the firm shall be allowed to represent its opinions.
Where the accounting firm resigns, it shall state to the general meeting whether the Company
has improper circumstances.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-19 –


--- page 412 ---
MERGER, DIVISION, CAPITAL INCREASE, CAPITAL REDUCTION, DISSOLUTION
AND LIQUIDATION
Merger, Division, Capital Increase and Capital Reduction
The merger of the Company may take the form of either merger by absorption or merger by
establishment of a new entity. Merger of two or more companies through establishment of a new
company is merger by establishment of a new entity, and the parties to the merger shall be
dissolved.
In the event of a merger, the parties to the merger shall enter into a merger agreement and
prepare balance sheets and inventories of assets. The Company shall notify its creditors within 10
days after the date of the Company’s resolution on merger and shall make an announcement in the
designated information disclosure media within 30 days after the date of the Company’s resolution
on merger. Creditors may demand the Company to repay debts or provide corresponding security
within 30 days upon receipt of such notice or 45 days from the date of announcement in case of
receiving no such notice.
Upon the merger, claims and debts of each of the merged parties shall be assumed by the
company which survives the merger or the newly established company resulting from the merger.
When the Company is divided, its assets shall be split accordingly. In the event of a division
of the Company, the Company shall prepare a balance sheet and an inventory of assets. The
Company shall notify its creditors within 10 days after the date of the Company’s resolution on
division and shall make an announcement in the media designated by the Company or the National
Enterprise Credit Information Publicity System within 30 days after the date of the Company’s
resolution on division.
The Company shall prepare a balance sheet and an inventory of assets when it intends to
reduce its registered capital. The Company shall notify the creditors within 10 days upon resolution
on reduction of registered capital by the general meeting and make announcement thereof in the
media designated by the Company or the National Enterprise Credit Information Publicity System
within 30 days. Creditors may demand the Company to repay debts or provide corresponding
security within 30 days upon receipt of such notice or 45 days from the date of announcement in
case of receiving no such notice.
When the Company reduces its registered capital, it shall reduce the amount of capital
contribution or shares in proportion to the shareholders’ capital contribution or shareholding, unless
otherwise stipulated by the laws or the Articles of Association.
When the merger or division of the Company involves changes in registered particulars, such
changes shall be registered with the registration authority of the Company in accordance with the
laws. When the Company is dissolved, the Company shall cancel its registration in accordance with
the laws. When a new company is established, its establishment shall be registered in accordance
with the laws.
In case of increase or reduction of registered capital of the Company, the Company shall
legally complete the formalities for change registration with the registration authority of the
Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-20 –


--- page 413 ---
DISSOLUTION AND LIQUIDATION
The Company shall be dissolved for the following reasons:
(i) the term of its operations as is stipulated in the Articles of Association has expired or
other events of dissolution specified in the Articles of Association have occurred;
(ii) the general meeting resolves to dissolve the Company;
(iii) dissolution is necessary due to merger or division of the Company;
(iv) the Company’s business license is revoked, the Company is ordered to close down or be
revoked in accordance with the law;
(v) where the operation and management of the Company falls into serious difficulties and
its continued existence would cause material losses to shareholders, the shareholders
holding above 10% of the total voting rights of the Company may apply to the people’s
court to dissolve the Company if there are no other solutions.
If the Company encounters the reasons for dissolution as stipulated in the preceding
paragraph, it shall publicize the reasons for dissolution through the National Enterprise Credit
Information Publicity System within ten days.
Where the Company falls under the circumstances of items (i) and (ii) above and has not
distributed any property to shareholders, it may continue to exist by amending the Articles of
Association or by a resolution of the general meeting.
Amendments to the Articles of Association in accordance with the provisions of the preceding
paragraph or by resolution of the general meeting shall be approved by more than two-thirds of the
voting rights held by the shareholders attending the general meeting.
If the Company is dissolved pursuant to item (i), (ii), (iv) or (v) above, it shall be liquidated.
The Directors, being the liquidation obligors of the Company, shall form a liquidation committee
for liquidation within 15 days from the date of occurrence of the cause for dissolution. The
liquidation committee shall comprise the Directors, unless the Articles of Association provide
otherwise or it is resolved at a general meeting to elect another person(s).
The liquidation committee shall notify creditors within 10 days from the date of its
establishment, and publish an announcement in the designated media and periodicals or the National
Enterprise Credit Information Publicity System within 60 days. Creditors shall declare their claims
to the liquidation committee within 30 days from the date of receiving the notice, or within 45 days
from the date of announcement in case they have not received the notice.
If the liquidation committee discovers that the assets of the Company are insufficient to repay
its debts after sorting out the assets of the Company and preparing a balance sheet and an inventory
of assets, it shall apply to the people’s court for bankruptcy liquidation in accordance with the law.
After the people’s court accepts the bankruptcy application, the liquidation committee shall hand
over the liquidation matters to the bankruptcy administrator designated by the people’s court.
In case the Company is declared to be insolvent according to the laws, liquidation shall be
processed in accordance with the laws on corporate bankruptcy.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-21 –


--- page 414 ---
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The Company shall amend the Articles of Association under any of the following
circumstances:
(i) after the amendments are made to the Company Law or relevant laws, administrative
regulations and securities regulatory rules of the place where the shares of the Company
are listed, the provisions of the Articles of Association are in conflict with the amended
laws, administrative regulations or securities regulatory rules of the place where the
shares of the Company are listed;
(ii) there is a change in the situation of the Company, which is inconsistent with the matters
recorded in the Articles of Association;
(iii) the general meeting decides to amend the Articles of Association.
The amendments to the Articles of Association adopted by the general meeting shall be
submitted to the competent authorities for approval if they are subject to approval by the competent
authorities. If there is any change relating to the registered particulars of the Company, application
shall be made for registration of the changes in accordance with the laws.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-22 –


--- page 415 ---
FURTHER INFORMATION ABOUT OUR COMPANY
1. Incorporation of Our Company
Our Company was established as a limited liability company in the PRC on November 19,
2009 and was converted into a joint stock company with limited liability on December 26, 2019
under the laws of the PRC. As of the Latest Practicable Date, the registered share capital of our
Company was RMB208,897,000 divided into 208,897,000 Shares with a nominal value of RMB1.00
each.
Our Company has established a place of business in Hong Kong at Unit B, 22/F, Mai Luen
Industrial Building, 23-31 Kung Yip Street, Kwai Chung, New Territories, Hong Kong, and has
registered as a non-Hong Kong company in Hong Kong under Part 16 of the Companies Ordinance
on September 9, 2025. Ms. Ha Ching Ching (͍᎑) has been appointed as our authorized
representative for the acceptance of service of process in Hong Kong whose correspondence address
is Room 504, 5/F, Cheong Tai Commercial Building, 60-66 Wing Lok Street, Sheung Wan,
Hong Kong.
2. Changes in Share Capital of Our Company
When our Company was converted into a joint stock liability company with limited liability
under the PRC Company Law in December 2019, our initial registered capital was
RMB120,000,000, divided into 120,000,000 Shares with a nominal value of RMB1.00 each.
In December 2023, we granted and issued 750,750 Shares to grantees pursuant to relevant
Employee Incentive Schemes.
In September 2024, we repurchased 146,250 Shares. Upon the completion of such repurchase,
the share capital of our Company is RMB209,092,000 comprising 209,092,000 Shares with a
nominal value of RMB1.00 each.
In August 2025, we repurchased 195,000 Shares. Upon the completion of such repurchase, the
share capital of our Company is RMB208,897,000 comprising 208,897,000 Shares with a nominal
value of RMB1.00 each.
As of the Latest Practicable Date, the registered share capital of our Company was
RMB208,897,000 comprising 208,897,000 A Shares with a nominal value of RMB1.00 each.
For further details on the historical change of share capital of our Company, see “History,
Development and Corporate Structure” in this prospectus. Save as disclosed above, there has been
no alteration in our share capital within two years immediately preceding the date of this
prospectus.
3. Changes in the Share Capital of Our Subsidiaries
There has been no alteration in the share capital of our subsidiaries within two years
immediately preceding the date of this prospectus.
4. Resolutions of the Shareholders
Pursuant to a general meeting of our Company held on August 26, 2025, the following
resolutions, among others, were passed by our Shareholders:
(a) the issue by our Company of H Shares of a nominal value of RMB1.00 each and that
such H Shares be listed on the Hong Kong Stock Exchange;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 416 ---
(b) that the number of H Shares to be issued shall not be more than 15% of the total issued
share capital of our Company as enlarged by the Global Offering (without taking into
account any A Shares to be issued upon exercise of the share options granted under the
Employee Incentive Schemes);
(c) subject to the completion of the Global Offering, the adoption of the Articles of
Association which shall become effective on the Listing Date, and the authorization to
the Board to amend the Articles of Association in accordance with the requirements of
the relevant laws and regulations and the Listing Rules; and
(d) authorization of our Board to handle all relevant matters relating to, among other things,
the issue and listing of the H Shares.
FURTHER INFORMATION ABOUT THE BUSINESS OF OUR COMPANY
1. Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the ordinary
course of business) within the two years immediately preceding the date of this prospectus that are
or may be material:
(a) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, Lens Technology (HK) Co., Limited (Ҧ(ಥ)ʮ̡) (“Lens
Technology (HK)”), Huatai Financial Holdings (Hong Kong) Limited (ٰ(࠰
ಥ)ʮ̡) and BNP Paribas Securities (Asia) Limited (਷ˋኇᗇՎ(ݲ)ʮ
̡), pursuant to which Lens Technology (HK) agreed to subscribe for such number of H
Shares at the Offer Price in an aggregate investment amount of Hong Kong dollar
equivalent of US$10,000,000 (exclusive of the brokerage, AFRC transaction levy, SFC
transaction levy and Stock Exchange trading fee in respect of such number of H Shares);
(b) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, Changsha Y ufeng Technology Co., Ltd. (ʮ̡) (“Changsha
Y ufeng”), Huatai Financial Holdings (Hong Kong) Limited (ٰ(ಥ)ʮ
̡) and BNP Paribas Securities (Asia) Limited (਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant
to which Changsha Y ufeng agreed to subscribe for such number of H Shares at the Offer
Price in an aggregate investment amount of Hong Kong dollar equivalent of
US$6,990,000 (exclusive of the brokerage, AFRC transaction levy, SFC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(c) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, China Galaxy International Investment Company Limited (“CGII”), Huatai
Financial Holdings (Hong Kong) Limited (ٰ(ಥ)ʮ̡) and BNP
Paribas Securities (Asia) Limited (਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant to which
CGII agreed to subscribe for such number of H Shares at the Offer Price in an aggregate
investment amount of Hong Kong dollar equivalent of US$6,510,000 (exclusive of the
brokerage, AFRC transaction levy, SFC transaction levy and Stock Exchange trading fee
in respect of such number of H Shares) and hold such Offer Shares on a non-
discretionary basis to hedge a series of cross-border delta-one OTC equity swap
transactions entered into by CGII, China Galaxy Securities Co., Ltd. (ٰ
ʮ̡) and Vision Capital Management Co., Ltd. (ڦ(मऎ)ʮ
̡);
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 417 ---
(d) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, Panjing Harbourview Investment Fund (ږPanjing
Fund”), Huatai Financial Holdings (Hong Kong) Limited (ٰ(ಥ)ʮ
̡) and BNP Paribas Securities (Asia) Limited (਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant
to which Panjing Fund agreed to subscribe for such number of H Shares at the Offer
Price in an aggregate investment amount of Hong Kong dollar equivalent of
US$5,000,000 (exclusive of the brokerage, AFRC transaction levy, SFC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(e) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, FR M CONSULTING CO., LTD (“FR M CONSULTING”), Huatai Financial
Holdings (Hong Kong) Limited (ٰ(ಥ)ʮ̡) and BNP Paribas
Securities (Asia) Limited (਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant to which FR M
CONSULTING agreed to subscribe for such number of H Shares at the Offer Price in an
aggregate investment amount of Hong Kong dollar equivalent of US$3,000,000
(exclusive of the brokerage, AFRC transaction levy, SFC transaction levy and Stock
Exchange trading fee in respect of such number of H Shares);
(f) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, HongKong HQD Industry Limited (ʮ̡) (“HQD
Industry”), Huatai Financial Holdings (Hong Kong) Limited (ٰ(ಥ)ࠢ
ʮ̡) and BNP Paribas Securities (Asia) Limited (਷ˋኇᗇՎ(ݲ)ʮ̡),
pursuant to which HQD Industry agreed to subscribe for such number of H Shares at the
Offer Price in an aggregate investment amount of Hong Kong dollar equivalent of
US$2,500,000 (exclusive of the brokerage, AFRC transaction levy, SFC transaction levy
and Stock Exchange trading fee in respect of such number of H Shares);
(g) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, Da Cheng International Asset Management Company Limited ( ɽϓ਷ყ༟ପ
ʮ̡) (“Da Cheng International”), Huatai Financial Holdings (Hong Kong)
Limited (ٰ(ಥ)ʮ̡) and BNP Paribas Securities (Asia) Limited (ج
਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant to which Da Cheng International agreed to
subscribe for such number of H Shares at the Offer Price in an aggregate investment
amount of Hong Kong dollar equivalent of US$2,000,000 (exclusive of the brokerage,
AFRC transaction levy, SFC transaction levy and Stock Exchange trading fee in respect
of such number of H Shares);
(h) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, Sinohealth Technology Holdings Limited (ʮ̡)
(“Sinohealth Technology”), Huatai Financial Holdings (Hong Kong) Limited (ፄ
ٰ(ಥ)ʮ̡) and BNP Paribas Securities (Asia) Limited (਷ˋኇᗇՎ(ݲ)
ʮ̡), pursuant to which Sinohealth Technology agreed to subscribe for such
number of H Shares at the Offer Price in an aggregate investment amount of Hong Kong
dollar equivalent of US$2,000,000 (exclusive of the brokerage, AFRC transaction levy,
SFC transaction levy and Stock Exchange trading fee in respect of such number of H
Shares);
(i) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, ODI TRUST LIMITED (“ODI TRUST”), Huatai Financial Holdings (Hong
Kong) Limited (ٰ(ಥ)ʮ̡) and BNP Paribas Securities (Asia)
Limited (਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant to which ODI TRUST agreed to
subscribe for such number of H Shares at the Offer Price in an aggregate investment
amount of Hong Kong dollar equivalent of US$1,000,000 (exclusive of the brokerage,
AFRC transaction levy, SFC transaction levy and Stock Exchange trading fee in respect
of such number of H Shares);
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 418 ---
(j) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, Huang Xuelin (؍Mr. Huang”), Huatai Financial Holdings (Hong
Kong) Limited (ٰ(ಥ)ʮ̡) and BNP Paribas Securities (Asia)
Limited (਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant to which Mr. Huang agreed to
subscribe for such number of H Shares at the Offer Price in an aggregate investment
amount of Hong Kong dollar equivalent of US$5,000,000 (exclusive of the brokerage,
AFRC transaction levy, SFC transaction levy and Stock Exchange trading fee in respect
of such number of H Shares);
(k) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, Dai Jun’an ( Ꮦඓτ) (“Mr. Dai”), Huatai Financial Holdings (Hong Kong)
Limited (ٰ(ಥ)ʮ̡) and BNP Paribas Securities (Asia) Limited (ج
਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant to which Mr. Dai agreed to subscribe for such
number of H Shares at the Offer Price in an aggregate investment amount of Hong Kong
dollar equivalent of US$2,500,000 (exclusive of the brokerage, AFRC transaction levy,
SFC transaction levy and Stock Exchange trading fee in respect of such number of H
Shares);
(l) the cornerstone investment agreement dated April 23, 2026 entered into among the
Company, Lu Qinchao ( ௔ා൴) (“Ms. Lu”), Huatai Financial Holdings (Hong Kong)
Limited (ٰ(ಥ)ʮ̡) and BNP Paribas Securities (Asia) Limited (ج
਷ˋኇᗇՎ(ݲ)ʮ̡), pursuant to which Ms. Lu agreed to subscribe for such
number of H Shares at the Offer Price in an aggregate investment amount of Hong Kong
dollar equivalent of US$2,000,000 (exclusive of the brokerage, AFRC transaction levy,
SFC transaction levy and Stock Exchange trading fee in respect of such number of H
Shares); and
(m) the Hong Kong Underwriting Agreement.
2. Intellectual Property Rights
(a) Trademarks
As of the Latest Practicable Date, we have registered the following trademarks which we
consider to be material to our business:
No. Owner
Registration
No.
Place of
Registration Trademark Class Expiry Date
1 /H1118/H1118/H1118the Company 306990887 Hong Kong
 5, 10, 35 August 7,
2035
2 /H1118/H1118/H1118the Company 81608193 PRC
 35 April 27,
2035
3 /H1118/H1118/H1118the Company 81405232 PRC
 10 May 13,
2035
4 /H1118/H1118/H1118the Company 81168134 PRC
 35 June 13,
2035
5 /H1118/H1118/H1118the Company 81164142 PRC
 10 June 13,
2035
6 /H1118/H1118/H1118the Company 80536285 PRC
 35 February 13,
2035
7 /H1118/H1118/H1118the Company 80536285 PRC
 5 February 13,
2035
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 419 ---
No. Owner
Registration
No.
Place of
Registration Trademark Class Expiry Date
8 /H1118/H1118/H1118the Company 80538886 PRC
 10 May 20,
2035
9 /H1118/H1118/H1118the Company 80536285 PRC
 10 February 13,
2035
10 /H1118/H1118the Company 80538886 PRC
 3 May 20,
2035
11 /H1118/H1118the Company 80538886 PRC
 5 May 20,
2035
12 /H1118/H1118the Company 80536285 PRC
 3 February 13,
2035
13 /H1118/H1118the Company 80538886 PRC
 35 May 20,
2035
14 /H1118/H1118the Company 80139649 PRC
 3 April 20,
2035
15 /H1118/H1118the Company 80139649 PRC
 10 April 20,
2035
16 /H1118/H1118the Company 80139649 PRC
 5 April 20,
2035
17 /H1118/H1118the Company 78739513 PRC
 35 January 27,
2035
18 /H1118/H1118the Company 78739513 PRC
 9 January 27,
2035
19 /H1118/H1118the Company 78739513 PRC
 10 January 27,
2035
20 /H1118/H1118the Company 78739513 PRC
 5 January 27,
2035
21 /H1118/H1118the Company 78739513 PRC
 3 January 27,
2035
22 /H1118/H1118the Company 78340117 PRC
 25 October 20,
2034
23 /H1118/H1118the Company 78313298 PRC
 35 October 20,
2034
24 /H1118/H1118the Company 78332288 PRC
 28 November
20, 2034
25 /H1118/H1118the Company 74905329 PRC
 5 April 20,
2034
26 /H1118/H1118the Company 74905329 PRC
 10 April 20,
2034
27 /H1118/H1118the Company 72674363 PRC
 3 June 13,
2034
28 /H1118/H1118the Company 72674363 PRC
 10 June 13,
2034
29 /H1118/H1118the Company 72674363 PRC
 5 June 13,
2034
30 /H1118/H1118the Company 70742066 PRC
 37 February 27,
2034
31 /H1118/H1118the Company 70742066 PRC
 35 February 27,
2034
32 /H1118/H1118the Company 60158853 PRC
 3 April 13,
2032
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 420 ---
No. Owner
Registration
No.
Place of
Registration Trademark Class Expiry Date
33 /H1118/H1118the Company 60151096 PRC
 3 April 20,
2032
34 /H1118/H1118the Company 60158853 PRC
 5 April 13,
2032
35 /H1118/H1118the Company 60151096 PRC
 5 April 20,
2032
36 /H1118/H1118the Company 44224515 PRC
 10 January 13,
2031
37 /H1118/H1118the Company 44224515 PRC
 44 January 13,
2031
38 /H1118/H1118the Company 44221109 PRC
 10 April 6,
2031
39 /H1118/H1118the Company 39039787 PRC
 10 March 13,
2030
40 /H1118/H1118the Company 39045994 PRC
 5 March 13,
2030
41 /H1118/H1118the Company 39033108 PRC
 10 March 13,
2030
42 /H1118/H1118the Company 36909341 PRC
 10 March 20,
2030
43 /H1118/H1118the Company 36764850 PRC
 35 January 27,
2030
44 /H1118/H1118the Company 22521842 PRC
 28 February 13,
2028
45 /H1118/H1118the Company 20368426 PRC
 10 August 6,
2027
46 /H1118/H1118the Company 20088907 PRC
 10 July 13,
2027
47 /H1118/H1118the Company 19149259 PRC
 5 March 27,
2027
48 /H1118/H1118the Company 18918946 PRC
 12 February 20,
2027
49 /H1118/H1118the Company 16827906 PRC
 5 June 20,
2026
50 /H1118/H1118the Company 15543678 PRC
 10 December 6,
2035
51 /H1118/H1118the Company 15305540 PRC
 5 January 6,
2036
52 /H1118/H1118the Company 15305540 PRC
 10 January 6,
2036
53 /H1118/H1118the Company 15305540 PRC
 12 January 6,
2036
54 /H1118/H1118the Company 10325841 PRC
 10 February 20,
2033
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 421 ---
No. Owner
Registration
No.
Place of
Registration Trademark Class Expiry Date
55 /H1118/H1118the Company 9609603 PRC
 7 July 13,
2032
56 /H1118/H1118the Company 7529548 PRC
 10 October 27,
2030
57 /H1118/H1118Goodhushi 14349370 PRC
 35 May 27,
2035
58 /H1118/H1118Goodhushi 13621236 PRC
 35 February 13,
2035
59 /H1118/H1118Goodhushi 12115990 PRC
 35 July 20,
2034
60 /H1118/H1118Goodhushi 15474893 PRC
 5 December
13, 2035
61 /H1118/H1118Goodhushi 19035093 PRC
 10 March 6,
2027
62 /H1118/H1118Goodhushi 15474836 PRC
 10 December
13, 2035
63 /H1118/H1118Goodhushi 17971732 PRC
 39 November
6, 2026
64 /H1118/H1118Goodhushi 17971731 PRC
 39 November
6, 2026
65 /H1118/H1118Goodhushi 15437293 PRC
 12 January 20,
2036
66 /H1118/H1118Hunan Keyuan 13300429 PRC
 10 August 20,
2035
67 /H1118/H1118Hunan Keyuan 13388769 PRC
 10 February 6,
2035
68 /H1118/H1118Hunan Keyuan 12802996 PRC
 35 April 6,
2035
69 /H1118/H1118Hunan Keyuan 13621287 PRC
 35 August 20,
2035
70 /H1118/H1118Hunan Keyuan 14770477 PRC
 35 July 6, 2035
71 /H1118/H1118Hunan Keyuan 12115991 PRC
 35 July 20,
2034
(b) Domain Names
As of the Latest Practicable Date, we have registered the following domain names which we
consider to be material to our business:
No. Owner Domain name Registration date
1. /H1118/H1118/H1118Our Company cofoe.com.cn May 9, 2014
2. /H1118/H1118/H1118Our Company cofoe.com July 15, 2012
3. /H1118/H1118/H1118Hunan Haohushi Medical
Treatment Appliance Co., Ltd.
(λᚐɻᔼᐕኜ૛ஹᕁ຾ᐄ
ʮ̡)
hhsyl.com
August 19, 2013
4. /H1118/H1118/H1118Hunan JOYOR HearingCare Co.,
Ltd. (ࠢ
ʮ̡)
jianerting.com March 4, 2015
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 422 ---
(c) Patents
As of the Latest Practicable Date, we have registered the following patents which we consider
to be material to our business.
No. Patent Registered owner Registration No. Type of patent Application Date
1 /H1118/H1118/H1118An Automatic Detection
Device and Method for
Electronic
Sphygmomanometers
Our Company 201910437539.6 Invention May 24, 2019
2 /H1118/H1118/H1118An Electrochemical
Measurement Method
Our Company 202110312613.9 Invention March 24,
2021
3 /H1118/H1118/H1118A Water Temperature
Control Method for a
Humidification Water
Tank of a Breathing
Apparatus and the
Corresponding Device
Our Company 202111001171.2 Invention August 30,
2021
4 /H1118/H1118/H1118A V entilator Fan Driving
Method and V entilator
Equipment
Our Company 202111236619.9 Invention October 23,
2021
5 /H1118/H1118/H1118A Two-Stage Centrifugal
Impeller Fan for a
V entilator Air Boosting
System
Our Company 202111552049.4 Invention December 17,
2021
6 /H1118/H1118/H1118Blood pressure measuring
device and its linear
model coefficient self-
correction method and
system
Our Company 202211692039.5 Invention December 28,
2022
7 /H1118/H1118/H1118Testing and Calibration
Method and System for
Electrochemical
Biosensors
Our Company 202310006184.1 Invention January 4,
2023
8 /H1118/H1118/H1118Metabolic Index Detection
Method, System and
Electrochemical
Measurement System
Our Company 202310113959.5 Invention February 15,
2023
9 /H1118/H1118/H1118Hematocrit Correction
Method, System and
Electrochemical
Measurement System
Our Company 202310708966.X Invention June 15, 2023
10 /H1118/H1118A Posture Correction Belt Our Company 202222394244.5 Utility Model September 9,
2022
11 /H1118/H1118A Posture Correction Belt Our Company 202320113146.1 Utility Model January 17,
2023
12 /H1118/H1118A Blood Glucose and Uric
Acid Test Strip with
Hematocrit Correction
Function
Our Company 202320142978.6 Utility Model February 7,
2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 423 ---
No. Patent Registered owner Registration No. Type of patent Application Date
13 /H1118/H1118A Integrated Machine for
Blood Pressure and Blood
Glucose Detection
Our Company 202320248415.5 Utility Model February 17,
2023
14 /H1118/H1118Respiratory Support
Equipment and Its
Temperature Control
Circuit
Our Company 202321342889.2 Utility Model May 30, 2023
15 /H1118/H1118A Photochemical Detection
Module Mounting
Structure and Multi-
Parameter Detector
Our Company 202321367220.9 Utility Model May 31, 2023
16 /H1118/H1118A V entilation Tube Fixing
Assembly and V entilator
Our Company 202322719640.5 Utility Model October 10,
2023
17 /H1118/H1118A Nebulizer Our Company 202322821141.7 Utility Model October 20,
2023
18 /H1118/H1118A Heat Preservation
Structure for an Ear
Thermometer and the Ear
Thermometer
Our Company 202323025683.X Utility Model November 9,
2023
19 /H1118/H1118Air Intake Structure and
V entilation Therapy
Equipment
Our Company 202323327409.8 Utility Model December 6,
2023
20 /H1118/H1118Air Intake Structure and
V entilation Therapy
Equipment
Our Company 202323327379.0 Utility Model December 6,
2023
21 /H1118/H1118Chamber Communication
Channel Structure and
V entilation Therapy
Equipment
Our Company 202323313266.5 Utility Model December 6,
2023
22 /H1118/H1118V entilation Therapy
Equipment
Our Company 202323313285.8 Utility Model December 6,
2023
23 /H1118/H1118V entilation Therapy
Equipment
Our Company 202323321876.X Utility Model December 6,
2023
24 /H1118/H1118A Noise Reduction Device
for a Fan and a V entilator
Equipped Therewith
Our Company 202323314888.X Utility Model December 6,
2023
25 /H1118/H1118Electronic
Sphygmomanometer (65B)
Our Company 201630052401.1 Design Patent February 25,
2016
26 /H1118/H1118Electronic
Sphygmomanometer (65C)
Our Company 201630052403.0 Design Patent February 25,
2016
27 /H1118/H1118Sphygmomanometer (75C) Our Company 201630081624.0 Design Patent March 21,
2016
28 /H1118/H1118Sphygmomanometer (65E) Our Company 201630136733.8 Design Patent April 21, 2016
29 /H1118/H1118Sphygmomanometer (75B) Our Company 201630136731.9 Design Patent April 21, 2016
30 /H1118/H1118Body-Shaping Garment
(babaka U+)
Our Company 201630419124.3 Design Patent August 24,
2016
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 424 ---
No. Patent Registered owner Registration No. Type of patent Application Date
31 /H1118/H1118Body-Shaping Garment
(babaka U9)
Our Company 201630419125.8 Design Patent August 24,
2016
32 /H1118/H1118Portable Oxygen
Concentrator
Our Company 202430385496.3 Design Patent June 22, 2024
33 /H1118/H1118Pipeline Connector Our Company 202430385470.9 Design Patent June 22, 2024
34 /H1118/H1118Nebulizer (D21) Our Company 202430385458.8 Design Patent June 22, 2024
35 /H1118/H1118Ear Thermometer (80A) Our Company 202430420197.9 Design Patent July 5, 2024
36 /H1118/H1118Waterproof Intimate Patch
for Swimming
Our Company 202430446963.9 Design Patent July 17, 2024
37 /H1118/H1118Posture Correction Belt (UP) Our Company 202430454740.7 Design Patent July 19, 2024
38 /H1118/H1118Forehead Thermometer
(Bear Claw)
Our Company 202430479475.8 Design Patent July 30, 2024
39 /H1118/H1118Fetal Doppler (Wireless
Split-Type)
Our Company 202430589407.7 Design Patent September 14,
2024
40 /H1118/H1118Posture Correction Belt Our Company 202430660134.0 Design Patent October 19,
2024
41 /H1118/H1118A Manual Nursing Bed Hunan Cofoe 202320927040.5 Utility Model April 23, 2023
42 /H1118/H1118An Electric Nursing Bed Hunan Cofoe 202321013119.3 Utility Model April 28, 2023
43 /H1118/H1118A Household Nursing Bed Hunan Cofoe 202321013138.6 Utility Model April 28, 2023
44 /H1118/H1118Nursing Bed (KD-BC-CJ01) Hunan Cofoe 202330260397.8 Design Patent May 6, 2023
45 /H1118/H1118Nursing Bed (KD-DHC-J02) Hunan Cofoe 202330260382.1 Design Patent May 6, 2023
46 /H1118/H1118Electric Nursing Bed Hunan Cofoe 202430156777.1 Design Patent March 25,
2024
47 /H1118/H1118Manual Nursing Bed Hunan Cofoe 202430156992.1 Design Patent March 25,
2024
48 /H1118/H1118Electric Nursing Bed (J10) Hunan Cofoe 202430544934.6 Design Patent August 27,
2024
49 /H1118/H1118Electric Nursing Bed (J30) Hunan Cofoe 202430545164.7 Design Patent August 27,
2024
50 /H1118/H1118Electric Nursing Bed Hunan Cofoe 202430677517.9 Design Patent October 26,
2024
51 /H1118/H1118A Hair Removal Device Our Company 202310580094.3 Invention May 23, 2023
52 /H1118/H1118A Sliding Protection Device
for the Air Outlet of a
V entilator
Our Company 202311308075.1 Invention October 10,
2023
53 /H1118/H1118A V entilation Tube Fixing
Assembly and V entilator
Our Company 202311308100.6 Invention October 10,
2023
54 /H1118/H1118A Zero-Point V oltage Output
Offset Control Circuit for
a Sensor and a Sensor
Zero-Point V oltage
Calibration Method
Our Company 202411382043.0 Invention September 30,
2024
55 /H1118/H1118
A Preparation Method for a
Glucose Oxidase Sensor
with a Porous-Structured
Outer Membrane
Our Company 202311057381.2 Invention August 22,
2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 425 ---
No. Patent Registered owner Registration No. Type of patent Application Date
56 /H1118/H1118A Fusion-Based Sound
Signal Noise Reduction
Processing Method and
Device for Hearing Aids
Hunan Cofoe
Hearing
Technology
Co., Ltd.
202310079098.3 Invention January 29,
2023
(d) Copyrights
As of the Latest Practicable Date, we had registered the following copyrights, which we
consider to be material to our business:
No. Copyright Name Registered Owner Registration No. Category Registration Date
Place of
Registration
1 /H1118/H1118/H1118Mesh Nebulizer Software
(ၣόᗯʷኜழ΁)
Our Company 2022SR1411284 Software
copyright
October 24,
2022
PRC
2 /H1118/H1118/H1118Blood Glucose Meter
Development Software
Based on Sonix
SN8P2988 (ጫ
SN8P2988Аጟᄃක
೯ழ΁)
Our Company 2023SR0256051 Software
copyright
February 17,
2023
PRC
3 /H1118/H1118/H1118Software for Dual-Port
Integrated Blood
Glucose & Uric Acid
Tester ( ᕐɹАጟ҇აɓ
᜗ዚழ΁)
Our Company 2022SR1413599 Software
copyright
October 25,
2022
PRC
4 /H1118/H1118/H1118Automated Fixture
Software for Blood
Glucose Meters ( Аጟ
Ոழ΁)
Our Company 2022SR1413600 Software
copyright
October 25,
2022
PRC
5 /H1118/H1118/H1118Sitting Posture Reminder
Software (౤፴ኜ
ழ΁)
Our Company 2022SR1413601 Software
copyright
October 25,
2022
PRC
6 /H1118/H1118/H1118Oxygen Concentrator
Software with
Intelligent V oice
Function (̌
Ⴁःዚழ΁)
Our Company 2023SR0721857 Software
copyright
June 26, 2023 PRC
7 /H1118/H1118/H1118Software for Electronic
Korotkoff Sound
Auscultation
Sphygmomanometer
(Arm-Type) (ˤ
ழ΁(ᑑ
ό))
Our Company 2023SR0759131 Software
copyright
June 29, 2023 PRC
8 /H1118/H1118/H1118Software for Full-Digital
Frequency-Shifting
Hearing Aid ( Όᅰο୅
᎖пᛓኜழ΁)
Our Company 2023SR0759136 Software
copyright
June 29, 2023 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 426 ---
No. Copyright Name Registered Owner Registration No. Category Registration Date
Place of
Registration
9 /H1118/H1118/H1118Dynamic Testing Fixture
Software for
Sphygmomanometer
(Wrist-Type) (ਗ
Ոழ΁(ഡό))
Our Company 2023SR1035446 Software
copyright
September 11,
2023
PRC
10 /H1118/H1118/H1118Software for Tunnel-Type
Electronic
Sphygmomanometer
(ழ
΁)
Our Company 2023SR0759130 Software
copyright
June 29, 2023 PRC
11 /H1118/H1118/H1118Software for Intense
Pulsed Light Therapy
Device (ᐕ
ᄃழ΁)
Our Company 2023SR0877310 Software
copyright
August 1,
2023
PRC
12 /H1118/H1118/H1118Software for Finger-
Clamp Pulse Oximeter
(ѰόএรАःᄃழ
΁)
Our Company 2023SR0936353 Software
copyright
August 15,
2023
PRC
13 /H1118/H1118/H1118Software for Chronic
Disease Multi-
Parameter Detector ( ࿔
षεਞᅰᏨ಻ᄃழ΁)
Our Company 2023SR0941989 Software
copyright
August 16,
2023
PRC
14 /H1118/H1118/H1118System Software for HCT
Blood Glucose & Uric
Acid Integrated Tester
(HCT Аጟ҇აɓ᜗಻
༊ᄃӻ୕ழ΁)
Our Company 2023SR0940096 Software
copyright
August 16,
2023
PRC
15 /H1118/H1118/H1118System Software for
Blood Glucose &
Ketone Integrated
Tester ( АጟА●ɓ᜗ዚ
ӻ୕ழ΁)
Our Company 2023SR0941325 Software
copyright
August 16,
2023
PRC
16 /H1118/H1118/H1118Calibration Fixture
Software for Blood
Glucose & Blood
Pressure Tester ( АጟА
Ոழ΁)
Our Company 2023SR0941234 Software
copyright
August 16,
2023
PRC
17 /H1118/H1118/H1118Cofoe ERP System ( ̙ѿ
ERP
ӻ୕)
Our Company 2024SR0431319 Software
copyright
March 26,
2024
PRC
18 /H1118/H1118/H1118Software for Electronic
Sphygmomanometer
(Wrist-Type) ( ཥɿАᏀ
ழ΁(ഡό))
Our Company 2024SR0597638 Software
copyright
May 6, 2024 PRC
19 /H1118/H1118/H1118Cofoe AirLink APP ( ̙ѿ
AirLinkAPP)
Our Company 2024SR1266051 Software
copyright
August 29,
2024
PRC
20 /H1118/H1118/H1118Cofoe Software for Blood
Glucose & Blood
Pressure Integrated
Machine ( ̙ѿАጟА
Ꮐɓ᜗ዚழ΁)
Our Company 2024SR2089937 Software
copyright
December 16,
2024
PRC
Save as disclosed above, as of the Latest Practicable Date, there was no other trade or service
mark, patent, intellectual or industrial property right which was material in relation to our business.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 427 ---
3. Licenses, permits and approvals
The table below sets forth a summary of the material license, permits and approvals that we
have obtained for our business operations as of the Latest Practicable Date:
Licenses/Permits/Approvals Issuing Authority Issue Date Expiry Date (1)
Sanitary License for
Disinfection Product
Manufacturers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Health Commission of Hunan Province October 23, 2025 November 8,
2029
Pollution Discharge
Registration for Stationary
Pollution Sources /H1118/H1118/H1118/H1118/H1118/H1118
Ministry of Ecology and Environment of the
PRC
August 31, 2023 August 30, 2028
Pollution Discharge
Registration for Stationary
Pollution Sources /H1118/H1118/H1118/H1118/H1118/H1118
Ministry of Ecology and Environment of the
PRC
May 22, 2025 May 21, 2030
Medical Device Manufacture
License /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hunan Medical Products Administration May 14, 2024 May 14, 2029
Medical Device Manufacture
License /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hunan Medical Products Administration October 22, 2024 November 6,
2029
Medical Device Manufacture
License /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hunan Medical Products Administration February 13,
2026
January 12, 2031
Customs Import and Export
Consignor and Consignee
Record /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Xingsha Customs of the People’s Republic of
China
April 17, 2020 Permanent
Customs Import and Export
Consignor and Consignee
Record /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y ueyang Customs of the People’s Republic of
China
May 10, 2021 Permanent
Customs Declaration Unit
Registration Certificate /H1118/H1118/H1118
Xingsha Customs of the People’s Republic of
China
March 20, 2018 Permanent
Customs Declaration Unit
Registration Certificate /H1118/H1118/H1118
Xingsha Customs of the People’s Republic of
China
March 11, 2015 Permanent
Online Sales Filing Record /H1118/H1118Changsha Administration for Market Regulation October 18, 2024 N/A
Online Sales Filing Record /H1118/H1118Changsha Administration for Market Regulation March 18, 2025 N/A
Online Sales Filing Record /H1118/H1118Changsha Administration for Market Regulation August 28, 2024 N/A
Online Sales Filing Record /H1118/H1118Changsha Administration for Market Regulation September 9,
2025
N/A
Online Sales Filing Record /H1118/H1118Changsha Administration for Market Regulation October 18, 2024 N/A
Online Sales Filing Record /H1118/H1118Changsha Administration for Market Regulation October 13, 2022 N/A
Online Sales Filing Record /H1118/H1118Changsha Administration for Market Regulation October 19, 2022 N/A
Class I Medical Device
Operation Filing Certificate
Changsha Administration for Market Regulation May 31, 2024 N/A
Class II Medical Device
Operation Filing Certificate /H1118
Changsha Administration for Market Regulation October 10, 2024 N/A
Class II Medical Device
Operation Filing Certificate /H1118
Y ueyang Administration for Market Regulation September 18,
2023
N/A
Class II Medical Device
Operation Filing Certificate /H1118
Changsha Administration for Market Regulation August 13, 2025 N/A
Class II Medical Device
Operation Filing Certificate /H1118
Changsha Administration for Market Regulation June 19, 2024 N/A
Class II Medical Device
Operation Filing Certificate /H1118
Changsha Administration for Market Regulation October 10, 2024 N/A
Class II Medical Device
Operation Filing Certificate /H1118
Changsha Administration for Market Regulation December 5, 2023 N/A
Class II Medical Device
Operation Filing Certificate /H1118
Changsha Administration for Market Regulation September 9,
2022
N/A
Class II Medical Device
Operation Filing
Certificates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changsha Administration for Market Regulation September 9,
2022
N/A
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-13 –


--- page 428 ---
Licenses/Permits/Approvals Issuing Authority Issue Date Expiry Date (1)
Class II Medical Device
Operation Filing
Certificates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changsha Administration for Market Regulation May 17, 2024 N/A
Medical Device Operation
License /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changsha Administration for Market Regulation October 10, 2024 October 26, 2026
Medical Device Operation
License /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changsha Administration for Market Regulation December 2, 2024 January 6, 2030
Medical Device Operation
License /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changsha Administration for Market Regulation October 10, 2024 November 17,
2029
Medical Device Operation
License /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changsha Administration for Market Regulation December 5, 2023 May 17, 2026
Medical Device Operation
License /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Changsha Administration for Market Regulation April 25, 2023 May 13, 2028
Note:
(1) “N/A” represents licenses that do not have an expiration date and will remain valid unless revoked.
FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Disclosure of Interests
Save as disclosed below, immediately following completion of the Global Offering (without
taking into account any A Shares to be issued upon exercise of the share options granted under the
Employee Incentive Schemes), so far as our Directors are aware, none of our Directors and chief
executive has any interest or short positions in our Shares, underlying Shares or debentures of our
Company or any associated corporations (within the meaning of Part XV of the SFO) which will
have to be notified to our Company and the Hong Kong Stock Exchange pursuant to Divisions 7
and 8 of Part XV of the SFO (including interests and short positions which are taken or deemed to
have under such provisions 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 contained in the Listing Rules.
Name Position
Capacity/
nature of
interest
Number and
class of
Shares held
Approximate
percentage of
shareholding in
the relevant
proportion of
Shares (1)
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company (2)
(%) (%)
Mr. Zhang (2) /H1118/H1118/H1118Executive
Director,
chairperson
of the Board
and
president
Beneficial
owner
12,114,881
A Share
5.80 5.14
Interest in
spouse
100,680,543
A Share
48.20 42.68
Interest in
controlled
corporations
97,194,804
A Share
46.53 41.20
Mr. Zhang
Zhiming
(׼)
3) /H1118/H1118
Executive
Director and
vice
chairperson
of the Board
Beneficial
owner
7,268,928
A Share
3.48 3.08
Interest in
controlled
corporations
12,114,881
A Share
5.80 5.14
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-14 –


--- page 429 ---
Name Position
Capacity/
nature of
interest
Number and
class of
Shares held
Approximate
percentage of
shareholding in
the relevant
proportion of
Shares (1)
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company (2)
(%) (%)
Mr. Xue
Xiaoqiao
(ᑡʃ዗) /H1118/H1118/H1118/H1118
Executive
Director,
secretary of
the Board,
vice
president
and joint
company
secretary
Beneficial
owner
108,750
A Share
0.05 0.05
Mr. He Bangjie
(൭Ԟ௫) /H1118/H1118/H1118/H1118
Executive
Director
Beneficial
owner
108,750
A Share
0.05 0.05
Notes:
(1) The calculation is based on the total number of 208,897,000 A Shares upon Listing.
(2) The calculation is based on the total number of 235,897,000 Shares (without taking into account any A Shares to be
issued upon exercise of the share options granted under the Employee Incentive Schemes) in issue upon Listing.
(3) Changsha Xiezihao was owned as to 90% and 10% by Mr. Zhang and Ms. Nie, respectively. Mr. Zhang is the
executive partner and the general partner of Changsha Keyuan with 5% partnership interest in Changsha Keyuan, Ms.
Nie Juan (ࢇis a limited partner of Changsha Keyuan with 55% partnership interest in Changsha Keyuan and Mr.
Zhang Zhiming (׼is a limited partner of Changsha Keyuan with 40% partnership interest in Changsha Keyuan.
Mr. Zhang is deemed to be interested in the 85,079,923 A Shares and 12,114,881 A Shares held by Changsha Xiezihao
and Changsha Keyuan, respectively, under the SFO.
(4) Mr. Zhang Zhiming (׼is a limited partner of Changsha Keyuan with 40% partnership interest in Changsha
Keyuan. As such, Mr. Zhang Zhiming (׼is deemed to be interested in the 12,114,881 A Shares held by
Changsha Keyuan under the SFO.
2. Substantial Shareholders
For the information on the persons who will, immediately following the completion of the
Global Offering, have interests or short positions in our Shares or underlying Shares which would
be required to be disclosed to our Company and the Hong Kong Stock Exchange under the
provisions of Divisions 2 and 3 of Part XV of the SFO, see “Substantial Shareholders” in this
prospectus.
Save as set out below, our Directors are not aware of any other person (other than our
Directors or chief executive) who will, immediately following completion of the Global Offering,
directly or indirectly, be 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 any member of our Group other
than our Company:
Our subsidiary
Person with 10% or more
interest
Approximate
percentage of
the interest in
the subsidiary
(%)
Jerry Medical Instrument (Shanghai) Co.,
Ltd. ( Λᨷᔼᐕኜ૛(ɪऎ)ʮ̡) /H1118/H1118/H1118/H1118/H1118
Chen Jianguo (਷) 13.84
Shanghai Jerry Investment
Partnership Enterprise
(Limited Partnership)
(ɪऎΛᨷҳ༟ΥྫΆุ
(Υྫ))
10.06
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-15 –


--- page 430 ---
Our subsidiary
Person with 10% or more
interest
Approximate
percentage of
the interest in
the subsidiary
(%)
Hunan Kefu Xinchi Medical Technology
Co., Ltd. (ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Liu Y ang ( ᄎජ) 49.00
Inner Mongolia Lingyun Technology Co.,
Ltd. (ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Beijing Lingyun Technology Co., Ltd. ( ̏ԯ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Hohhot Lingyun Listening Technology Co.,
Ltd. (ʮ̡) /H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Beijing Y oushengde Medical Equipment Co.,
Ltd. (ʮ̡) /H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Shenyang Leting Technology Co., Ltd. ( ᓨජ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Tongliao Lingyun Medical Technology Co.,
Ltd. (ʮ̡) /H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Beijing Wode Xinsheng Medical Equipment
Co., Ltd. (ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Nanjing Lingyun Listening Technology Co.,
Ltd. (ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Ulanhot Lingyun Medical Equipment Co.,
Ltd. (ʮ̡)/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Baotou Lingyun Hearing Technology Co.,
Ltd. (ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Xilinhot Lingyun Hearing Medical
Equipment Co., Ltd. (खत̹୩ᗲᛓᙂ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Bayannur Lingyun Hearing Medical
Equipment Co., Ltd. (ὔဧ୩ᗲᛓᙂᔼ
ʮ̡ ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Beijing Lingyun Hearing Medical Equipment
Co., Ltd. (ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ai Shuangli ( Ўᕐл) 15.00
Sichuan Jian’er Hearing Aid Co., Ltd. ( ̬ʇ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Li Y an ( ҽඨ) 20.00
Hunan Tianlaizhiyin Hearing Aid Co., Ltd.
(ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jin Kai (௱) 20.00
Xiamen Sanjia San Hearing Aid Fitting
Service Co., Ltd. (ɧ̋ɧпᛓኜ᜕ৣ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jin Kai (௱) 20.00
Shanghai Zhisheng Medical Equipment Co.,
Ltd. (ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jin Kai (௱) 20.00
Xiamen Tianlai Zhiyin Medical Equipment
Co., Ltd. (ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jin Kai (௱) 20.00
Shanghai Tianlai Zhiyin Medical Instrument
Co., Ltd. (ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jin Kai (௱) 20.00
Y a’an Yi’er Hearing Aid Co., Ltd. ( ඩτूЀ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Li Y an ( ҽඨ) 20.00
Shanghai Ruiting Trading Co., Ltd. ( ɪऎቚ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jin Kai (௱) 20.00
Chengdu Liyin Hearing Aids Co., Ltd. ( ϓே
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Li Y an ( ҽඨ) 20.00
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-16 –


--- page 431 ---
Our subsidiary
Person with 10% or more
interest
Approximate
percentage of
the interest in
the subsidiary
(%)
Jerry Medical Instrument (Nantong) Co.,
Ltd. ( Λᨷᔼᐕኜ૛(ஷ)ʮ̡) /H1118/H1118/H1118/H1118/H1118
Chen Jianguo (਷) 13.84
Shanghai Jerry Investment
Partnership Enterprise
(Limited Partnership)
(ɪऎΛᨷҳ༟ΥྫΆุ
(Υྫ))
10.06
Jiangsu Zhizun Intelligent Equipment Co.,
Ltd. (ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chen Jianguo (਷) 13.84
Shanghai Jerry Investment
Partnership Enterprise
(Limited Partnership)
(ɪऎΛᨷҳ༟ΥྫΆุ
(Υྫ))
10.06
Jerry Rehabilitation Equipment Nantong Co.,
Ltd. (ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chen Jianguo (਷) 13.84
Shanghai Jerry Investment
Partnership Enterprise
(Limited Partnership)
(ɪऎΛᨷҳ༟ΥྫΆุ
(Υྫ))
10.06
Beijing Haiyinrui Hearing Technology Co.,
Ltd. (ʮ̡) /H1118/H1118/H1118/H1118/H1118
Hu Bing (ж) 25.00
Shanghai Aomang Electronic Technology
Co., Ltd. (ʮ̡) /H1118/H1118/H1118
Chen Jianguo (਷) 13.84
Shanghai Jerry Investment
Partnership Enterprise
(Limited Partnership)
(ɪऎΛᨷҳ༟ΥྫΆุ
(Υྫ))
10.06
Jerry Trading (Shanghai) Co., Ltd. ( Λᨷਠ
൱(ɪऎ)ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chen Jianguo (਷) 13.84
Shanghai Jerry Investment
Partnership Enterprise
(Limited Partnership)
(ɪऎΛᨷҳ༟ΥྫΆุ
(Υྫ))
10.06
Beijing Lingfeng Hearing Technology Co.,
Ltd. (ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hu Bing (ж) 25.00
Hunan Knowledge Matrix Information
Technology Co., Ltd. (
ࢹڦ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hangzhou Knowledge
Matrix Information
Technology Co., Ltd.
(Ҧ
ʮ̡)
35.00
Hangzhou Knows Friends
Information Technology
Partnership Enterprise
(Limited Partnership)
(ࢹڦࡁ
ҦΥྫΆุ(Υ
ྫ))
10.00
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-17 –


--- page 432 ---
3. Service Contracts
Each of our Directors has entered into a service contract with our Company. The principal
particulars of these service contracts comprise (a) a term of three years commencing from the date
of appointment; and (b) termination provisions in accordance with their respective terms. Our
Directors may be re-appointed subject to Shareholders’ approval.
Save as disclosed above, none of our Directors has or is proposed to have entered into any
service contract with any member of our Group (excluding contracts expiring or determinable by
any member of our Group within one year without payment of compensation other than statutory
compensation).
4. Remuneration of Directors
Save as disclosed in the section headed “Directors and Senior Management” in this prospectus
and note 8 to the Accountants’ Report, for the years ended December 31, 2023, 2024 and 2025, none
of our Directors received other remunerations of benefits in kind from us.
5. Employee Incentive Schemes
On December 21, 2021 and March 21, 2024, our Shareholders meeting has approved and
adopted Employee Incentive Scheme 2021 and Employee Incentive Scheme 2024, respectively. As
of the Latest Practicable Date, 3,120,000 options (taking into account the adjustment pursuant to the
Capitalization Issue 2022 and Dividends Distributions) had been granted under the Employee
Incentive Scheme 2021. Out of such granted options, 897,000 options has been exercised, and the
remaining 2,223,000 options has been canceled or void. No further options will be granted under
the Employee Incentive Scheme 2021, and no Shares will be issued pursuant to any options granted
thereunder.
The following is a summary of the principal terms of the Employee Incentive Scheme 2024.
Given no further share options will be granted under the Employee Incentive Scheme 2024 after the
Global Offering, the terms of the Employee Incentive Scheme 2024 is not subject to the provisions
of Chapter 17 of the Listing Rule.
(i) Purpose
The purpose of the Employee Incentive Scheme 2024 is to improve our Group’s incentive
mechanism and incentivize our Group’s employees to achieve a sustained and healthy development
of our Group. The Employee Incentive Scheme 2024 is implemented to align the interests of the
Shareholders with the interests of our Group and key employee which will benefit the sustained
development of our Group.
(ii) Administration
The Employee Incentive Scheme 2024 is subject to the approval of the Shareholders’ meeting
and administration of the Board.
(iii) Participants
The participants of the Employee Incentive Scheme 2024 include Directors, members of
senior managements, mid-level management and key personnels. The scope of participants excludes
independent Directors, supervisors, ultimate beneficial owners, and Shareholders who individually
or collectively hold 5% or more of the equity interest of our Company and their respective spouse,
parents and children.
(iv) Maximum number of options
The shares underlying the options to be granted under the Employee Incentive Scheme 2024
is A Shares to be issued by our Company to the selected participants. Each option granted represents
the right to purchase one A Share within the exercise period at the exercise price. The maximum
number of options that can be granted under the Employee Incentive Scheme 2024 is 6,633,000.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-18 –


--- page 433 ---
(v) Date of grant and duration of the incentive plan
The date on which the options are granted shall be a trading day determined by the Board
within 60 days after the date of approval of the Employee Incentive Scheme 2024 by the
Shareholders’ meeting. The grant of options shall be approved by the Board, registered and
announced within 60 days after the approval of the Employee Incentive Scheme 2024 by the
Shareholders’ meeting. The Employee Incentive Scheme 2024 shall be valid commencing from the
date of the first grant of the options to all options no longer than 60 months.
(vi) Conditions to the grant of options
The options under the Employee Incentive Scheme 2024 will only be granted to selected
participants if the following conditions are fulfilled:
(a) with respect to our Company, none of the following circumstances having occurred:
(1) An audit report with an adverse opinion or a disclaimer of opinion has been issued
by the reporting accountant with respect to our Company’s accountant’s report for
the most recent fiscal year;
(2) An audit report with an adverse opinion or a disclaimer of opinion has been issued
by the reporting accountant with respect to the internal control report contained in
accountant’s report for the most recent fiscal year;
(3) Our Company has not distributed dividends in accordance with the laws and
regulations, our Articles of Association or our public commitment within the last
36 months after its listing;
(4) Applicable laws and regulations prohibit the implementation of any share incentive
scheme; or
(5) Any other circumstances determined by the CSRC.
(b) with respect to a grantee, none of the following circumstances having occurred:
(1) The grantee has been regarded as an inappropriate person by the stock exchange
within the last 12 months;
(2) The grantee has been regarded as an inappropriate person by the CSRC or its local
office within the last 12 months;
(3) The grantee has been punished or prohibited from entering into the securities
market by the CSRC or its local office within the last 12 months;
(4) The grantee is not qualified to serve as a director or senior management according
to the PRC Company Law;
(5) The grantee is prohibited from participating in any incentive plan of listed
companies according to applicable laws and regulations; or
(6) Any other circumstances determined by the CSRC.
No consideration is payable by the grantees for the grants of the options.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-19 –


--- page 434 ---
(vii) Exercise of options
Options may be exercised by a grantee provided that (i) the conditions set out under paragraph
(vi) above are fulfilled at the time of exercise of options; and (ii) the annual assessment and
performance targets as set out under the Employee Incentive Scheme 2024 are achieved.
The exercise price for the option to be granted under Employee Incentive Scheme 2024 shall
be RMB16.60 per share (without taking into account the Dividend Distributions).
The exercise schedule of the options granted are either:
(a) exercisable in tranches of 30% or 35% in each of the three exercise periods that occur
between the first trading date after the 13-month anniversary from the date of grant and
the last trading day up to the 49-month anniversary of the date of grant;
(b) exercisable in tranches of 30% or 35% in each of the three exercise periods that occur
between the first trading date after the 12-month anniversary from the date of grant and
the last trading day up to the 48-month anniversary of the date of grant; or
(c) exercisable in tranches of 50% in each of the two exercise periods that occur between
the first trading date after the 15-month anniversary from the date of grant and the last
trading day up to the 39-month anniversary of the date of grant.
The grantees must exercise their options within the validity period of the respective options.
Upon the expiry of the validity period, options granted but not exercised will cease to be exercisable
and shall be canceled by our Company.
(viii) Outstanding options
As of the Latest Practicable Date, the number of A Shares underlying the outstanding options
granted under the Employee Incentive Scheme 2024 amounted to 4,481,200 A Shares (excluding an
aggregate of 330,800 options held by 46 departed employees which are subject to cancelation),
representing approximately 1.90% of the issued Shares immediately following the completion of the
Global Offering (assuming no changes to our issued and outstanding shares between the Latest
Practicable Date and the Global Offering and without taking into account of any A Shares to be
issued upon exercise of the share options granted under the Employee Incentive Schemes). As of
the Latest Practicable Date, the outstanding options were held by 327 grantees (excluding the
departed employees). Assuming full exercise of all outstanding options granted under the Employee
Incentive Scheme 2024, the issued and outstanding shareholding of the Shareholders immediately
following completion of the Global Offering will be diluted by approximately 1.86%.
The following table summarizes the number of underlying A Shares of the outstanding options
granted to our Directors, senior management members or other connected persons and grantees who
have been granted an outstanding options to subscribe for 77,000 or more A Shares under the
Employee Incentive Scheme 2024 as of the Latest Practicable Date.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-20 –


--- page 435 ---
Name of grantee
Position held at
our Company Address Date of Grant
Exercise
Price (2) Consideration (2)
Number of
A Shares
underlying the
outstanding
options
granted Exercise period
Approximate
percentage of
issued Shares
immediately
after
completion of
the Global
Offering
(RMB
per Share)
(RMB
per Share) (%)
Lu Hongyuan
(৫) /H1118/H1118/H1118
General manager of
procurement
center
Area 2, Hehuayan
Village, Xinzhou
Town, Xiangtan City,
Hunan Province, PRC
March 21, 2024 11.92 11.92 280,000 Please refer to the
Note 1 below
0.12
Nie Y ali
(ᔗԭɢ) /H1118/H1118/H1118
Party committee
secretary
Building 1, No. 31
Gangkou Street,
Lusong District,
Zhuzhou City, Hunan
Province, PRC
March 21, 2024 11.92 11.92 273,000 Please refer to the
Note 1 below
0.12
Liu Lin ( ᄎ೙) /H1118/H1118Assistant to
president
Unit 5, Building 47,
Anxiangli, Chaoyang
District, Beijing, PRC
March 21, 2024 11.92 11.92 210,000 Please refer to the
Note 1 below
0.09
QUANGANG
Y ANG /H1118/H1118/H1118/H1118
Dean Unit 4, Building C8,
Chuyangyuan,
Greentown
Guihuacheng, Y uhua
District, Changsha
City, Hunan Province,
PRC
March 21, 2024 11.92 11.92 196,000 Please refer to the
Note 1 below
0.08
Xue Xiaoqiao
(ᑡʃ዗) /H1118/H1118/H1118
Executive Director,
secretary of the
Board, vice
president and
joint company
secretary
Building D7, Yingang
Shuijingcheng, Section
3, Wanjiali North
Road, Furong District,
Changsha City, Hunan
Province, PRC
March 21, 2024 11.92 11.92 140,000 Please refer to the
Note 1 below
0.06
He Bang jie
(൭Ԟ௫) /H1118/H1118/H1118
Executive Director Building 8, Zhonglong
International Y uxi
Community, No. 188
Guqu South Road,
Y uhua District,
Changsha City, PRC
March 21, 2024 11.92 11.92 140,000 Please refer to the
Note 1 below
0.06
Huang Xiao
(රወ) /H1118/H1118/H1118/H1118
General manager of
e-commerce
business division
Jinlong Village,
Changshou Town,
Pingjiang County,
Hunan Province, PRC
March 21, 2024 11.92 11.92 140,000 Please refer to the
Note 1 below
0.06
Xu Zhaobo
(تםࢱ)H1118/H1118/H1118
Customer manager Xujiali, Shui’an Village,
Ruoheng Town,
Wenling City, Zhejiang
Province, PRC
March 21, 2024 11.92 11.92 140,000 Please refer to the
Note 1 below
0.06
Wei Xianjun
(ࠏ)H1118/H1118/H1118
Assistant to
president
Building 3,
Mingxingyuan, No.
139 Guitang Road,
Y uhua District,
Changsha City, Hunan
Province, PRC
March 21, 2024 11.92 11.92 109,200 Please refer to the
Note 1 below
0.05
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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--- page 436 ---
Name of grantee
Position held at
our Company Address Date of Grant
Exercise
Price (2) Consideration (2)
Number of
A Shares
underlying the
outstanding
options
granted Exercise period
Approximate
percentage of
issued Shares
immediately
after
completion of
the Global
Offering
(RMB
per Share)
(RMB
per Share) (%)
Chen Wangpeng
(؃)H1118/H1118/H1118
Chief financial
controller and
vice president
No. 4 Fanzheng Street,
Furong District,
Changsha City, PRC
March 21, 2024 11.92 11.92 91,000 Please refer to the
Note 1 below
0.04
Y u Xiangyu
(ɲജρ) /H1118/H1118/H1118
Vice president Building 9, Taoyuan
Chunju, Xihu District,
Hangzhou City, PRC
March 21, 2024 11.92 11.92 91,000 Please refer to the
Note 1 below
0.04
Ouyang Jie
(ᆄජ௫) /H1118/H1118/H1118
Vice president Building A8, Guihua
City, No. 508
Changsha Avenue,
Y uhua District,
Changsha City, PRC
March 21, 2024 11.92 11.92 91,000 Please refer to the
Note 1 below
0.04
Zuo Hanqing
(ڡ)H1118/H1118/H1118
Vice president Building 8, Xiangjiang
Y ujing Garden, No. 69
Shuangwan Road,
Kaifu District,
Changsha City, PRC
March 21, 2024 11.92 11.92 91,000 Please refer to the
Note 1 below
0.04
Luo Xiaoyun
(ᖯወථ) /H1118/H1118/H1118
General manager of
hearing aid
business division
No. 8 Piaomao Lane,
Tianxin District,
Changsha City, Hunan
Province, PRC
March 21, 2024 11.92 11.92 91,000 Please refer to the
Note 1 below
0.04
Li Leiluo
(ҽଢ଼ໝ) /H1118/H1118/H1118
General manager of
marketing and
deputy general
manager of
hearing aid
business division
Group 12, Nanshi
Village, Nanshi Town,
Xingping City, Shaanxi
Province, PRC
March 21, 2024 11.92 11.92 91,000 Please refer to the
Note 1 below
0.04
Wang Xifeng
(ࢤ)H1118/H1118/H1118
General manager of
innovation
business division
Honglichang,
Honglichang Group,
Longpanzhou Village,
Wangling Town, Y ou
County, Zhuzhou City,
Hunan Province, PRC
March 21, 2024 11.92 11.92 91,000 Please refer to the
Note 1 below
0.04
Chen Hailong
(௓ऎᎲ) /H1118/H1118/H1118
Assistant to vice
president
No. 28, Area 7, Lane
3118 Yindu Road,
Minhang District,
Shanghai, PRC
March 21, 2024 11.92 11.92 77,000 Please refer to the
Note 1 below
0.03
Notes:
(1) 30%, 35% and 35% of the share options granted under the Employee Incentive Scheme 2024 on March 21, 2024 will
vest in each of the three exercise periods that occur between the first trading date after the 13-month anniversary from
the date of grant and the last trading day up to the 49-month anniversary of the date of grant, respectively.
(2) Taking into account the Dividend Distributions.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-22 –


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The table below sets forth the details of options granted to other grantees (excluding the
abovementioned 2 Directors, 4 members of senior management and 11 staff members of our
Company) under the Employee Incentive Scheme 2024 which were outstanding as of the Latest
Practicable Date:
Number of
grantees Date of grant
Number of
A Shares
underlying the
outstanding
options Exercise price (6) Exercise period
A Share
underlying the
outstanding
options as a
percentage of
issued Shares
immediately
after completion
of the Global
Offering (1)
(RMB) (%)
Employee Incentive Scheme
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
278(2)(7)(8) March 21, 2024 1,855,000 11.92 Please refer to the
Note 3 below
0.79
35(4)(7)(8) March 18, 2025 284,000 11.92 Please refer to the
Note 5 below
0.12
Notes:
(1) The calculation is based on the assumption that no new Shares are issued under the Employee Incentive Scheme 2024,
and no other changes are made to the issued share capital of our Company between the Latest Practicable Date and
the Global Offering.
(2) Exclude the 44 departed employees.
(3) 30%, 35% and 35% of the share options granted under the Employee Incentive Scheme 2024 on March 21, 2024 will
be exercisable in each of the three exercise periods that occur between the first trading date after the 13-month
anniversary from the date of grant and the last trading day up to the 49-month anniversary of the date of grant,
respectively.
(4) Exclude the 3 departed employee.
(5) 50% and 50% of the share options granted under the Employee Incentive Scheme 2024 will be exercisable in each
of the two exercise periods that occur between the first trading date after the 15-month anniversary from the date of
grant and the last trading day up to the 39-month anniversary of the date of grant, respectively.
(6) Taking into account the Dividend Distributions.
(7) the disclosure in table below categorized based on the number of A Shares underlying each individual grantee, being:
1 to 10,000 A Shares and 10,001 to 76,999 A Shares under each Employee Incentive Schemes:
Date of Grant
Range of outstanding A Shares under
options granted
Number of
grantees
Number of A
Shares underlying
the outstanding
options
A Share underlying
the outstanding
options as a
percentage of
issued Shares
immediately after
completion of the
Global Offering
(%)
March 21, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H11181 to 10,000 A Shares 244 1,262,800 0.54
10,001 to 76,999 A Shares 34 592,200 0.25
March 18, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H11181 to 10,000 A Shares 28 157,000 0.07
10,001 to 76,999 A Shares 7 127,000 0.05
(8) three employees were granted under the Employee Incentive Scheme 2024 on both March 21, 2024 and March 18,
2025.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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--- page 438 ---
6. Disclaimers
(a) Save as disclosed in this section and the section headed “History, Development and
Corporate Structure” in this prospectus, none of our Directors or any of the parties listed
in the paragraph headed “— Other Information — 5. Qualifications of Experts” in this
Appendix is:
(i) interested in our promotion, or in any assets which have been, within two years
immediately preceding the date of this prospectus, acquired or disposed of by or
leased to us, or are proposed to be acquired or disposed of by or leased to any
member of our Company; or
(ii) materially interested in any contract or arrangement subsisting at the date of this
prospectus which is significant in relation to our business;
(b) Save in connection with the Hong Kong Underwriting Agreement and the International
Underwriting Agreement, none of the parties listed in the paragraph headed “— Other
Information — 5. Qualifications of Experts” in this Appendix:
(i) is interested legally or beneficially in any shares in any member of our Group; or
(ii) has any right (whether legally enforceable or not) to subscribe for or to nominate
persons to subscribe for any securities in any member of our Group;
(c) Save as disclosed in this section and the section headed “Directors and Senior
Management” in this prospectus, none of our Directors is a director or employee of a
company that has an interest in the share capital of our Company which, once the H
Shares are listed on the Hong Kong Stock Exchange, would have to be disclosed
pursuant to Divisions 2 and 3 of Part XV of the SFO; and
(d) So far as is known to our Directors, none of our Directors or their respective close
associates (as defined under the Listing Rules) or Shareholders who owns more than 5%
of the issued shares of our Company has any interests in the five largest customers or
the five largest suppliers of our Group.
OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to impose
on our Company or any of our subsidiaries under the laws of the PRC.
2. Litigation
As of the Latest Practicable Date, no member of our Group was involved in any litigation,
arbitration or claim of material importance, and, so far as we are aware, no litigation, arbitration
or claim of material importance is pending or threatened against any member of our Group, which
would have a material adverse effect on our financial condition or results of operations, taken as
a whole.
3. Joint Sponsors
The Joint Sponsors have made an application on behalf of our Company to the Hong Kong
Stock Exchange for the listing of, and permission to deal in, our H Shares. All necessary
arrangements have been made to enable the securities to be admitted into CCASS.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-24 –


--- page 439 ---
The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules. The Joint Sponsors will receive a fee of US$0.5 million to act as a
sponsor to our Company in connection with the Global Offering.
4. Preliminary Expenses
As of the Latest Practicable Date, our Company has not incurred material preliminary
expenses.
5. Qualifications of Experts
The qualifications of the experts (as defined under the Listing Rules and the Companies
(Winding Up and Miscellaneous Provisions) Ordinance) who have given opinions and/or advice in
this prospectus are as follows:
Name Qualifications
Huatai Financial Holdings
(Hong Kong) Limited /H1118/H1118/H1118/H1118/H1118
Licensed corporation under the SFO to conduct type 1
(dealing in securities), type 2 (dealing in futures
contracts), type 3 (leveraged foreign exchange trading),
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
BNP Paribas Securities (Asia)
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Licensed to conduct Type 1 (dealing in securities), Type 2
(dealing in futures contracts), Type 4 (advising on
securities) and Type 6 (advising on corporate finance) of
regulated activities as defined under the SFO
Ernst & Y oung /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Certified Public Accountants and Registered Public
Interest Entity Auditor
Hunan Qiyuan Law Firm /H1118/H1118/H1118/H1118/H1118Company’s PRC legal advisor
Frost & Sullivan (Beijing)
Inc., Shanghai Branch Co. /H1118/H1118
Independent industry consultant
6. Consents
Each of the experts as referred to in the paragraph headed “— Other Information — 5.
Qualifications of Experts” in this Appendix has given and has not withdrawn its respective written
consents to the issue of this prospectus with the inclusion of certificates, letters, opinions or reports
and the references to its name included herein in the form and context in which it respectively
included.
7. Taxation of Holders of H Shares
(a) Hong Kong
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty. The current
rate charged on each of the purchaser and seller is 0.1% of the consideration or, if higher, the fair
value of the H Shares being sold or transferred.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-25 –


--- page 440 ---
(b) Consultation with Professional Advisors
Potential investors in the Global Offering are urged to consult their professional tax advisors
if they are in any doubt as to the taxation implications of subscribing for, purchasing, holding or
disposing of or dealing in our H Shares (or exercising rights attached to them). None of our
Company, our Directors, Joint Sponsors, Sponsor-Overall Coordinators, Overall Coordinators, Joint
Global Coordinators, Joint Bookrunners and Joint Lead Managers, or any other person or party
involved in the Global Offering accept responsibility for any tax effects on, or liabilities of, any
person, resulting from the subscription, purchase, holding or disposal of, dealing in or the exercise
of any rights in relation to our H Shares.
8. No Material Adverse Change
Our Directors confirm that, as of the date of this prospectus, there has been no material
adverse change in the financial or trading position of our Company since December 31, 2025 (being
the latest balance sheet date of our consolidated financial statements as set out in the Accountants’
Report).
9. Promoters
The promoters of our Company are all then 13 shareholders of our Company as of December
25, 2019 before our conversion into a joint stock company with limited liability. Save as disclosed
in the section headed “History, Development and Corporate Structure” in this prospectus, within the
two years preceding the date of this prospectus, no cash, securities or other benefit has been paid,
allotted or given or is proposed to be paid, allotted or given to any promoter in connection with the
Global Offering and the related transactions described in this prospectus.
10. Restrictions on Repurchase
For details, please refer to the sections headed “Appendix IV — Summary of Principal Legal
and Regulatory Provisions” and “Appendix V — Summary of the Articles of Association” to this
prospectus.
11. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance of it, 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.
12. Bilingual Prospectus
The English and Chinese language versions of this prospectus are being published separately,
in reliance upon the exemption provided under section 4 of the Companies (Exemption of
Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws
of Hong Kong).
13. Miscellaneous
Save as otherwise disclosed in this prospectus:
(a) within the two years preceding the date of this prospectus, (i) our Company has not
issued nor agreed to issue any share or loan capital fully or partly paid either for cash
or for a consideration other than cash; and (ii) no commission, discount, brokerage or
other special term has been granted in connection with the issue or sale of any shares of
our Company;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-26 –


--- page 441 ---
(b) no Share or loan capital of our Company, if any, is under option or is agreed
conditionally or unconditionally to be put under option;
(c) our Company has not issued nor agreed to issue any founder shares, management shares
or deferred shares;
(d) our Company has no outstanding convertible debt securities or debentures;
(e) there is no arrangement under which future dividends are waived or agreed to be waived;
(f) there has been no interruption in our business which may have or have had a significant
effect on the financial position in the last 12 months;
(g) our Company is a joint stock limited company and is subject to the PRC Company Law.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-27 –


--- page 442 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to a copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(i) a copy of the material contracts referred to in the paragraph headed “Further Information
about the Business of Our Company — 1. Summary of Material Contracts” in Appendix
VI to this prospectus; and
(ii) the written consents referred to in the paragraph headed “Other Information — 6.
Consents” in Appendix VI to this prospectus.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the Hong
Kong Stock Exchange at www.hkexnews.hk and our website at www.cofoe.com.cn during a period
of 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report prepared by Ernst & Y oung, the text of which is set out in
Appendix I to this prospectus;
(c) the audited consolidated financial statements of our Group for the years ended December
31, 2023, 2024 and 2025;
(d) the report prepared by Ernst & Y oung on the unaudited pro forma financial information
of our Group, the text of which is set out in Appendix II to this prospectus;
(e) the industry report issued by Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.
referred to in the section headed “Industry Overview” in this prospectus;
(f) the PRC legal opinion issued by Hunan Qiyuan Law Firm, our legal advisor as to PRC
law, in respect of, among other things, the general matters of our Group under the PRC
laws;
(g) the material contracts referred to in the paragraph headed “Further Information about the
Business of Our Company — 1. Summary of Material Contracts” in Appendix VI to this
prospectus;
(h) the service contracts referred to in the paragraph headed “Further Information about Our
Directors and Substantial Shareholders — 3. Service Contracts” in Appendix VI to this
prospectus;
(i) the written consents referred to in the paragraph headed “Other Information — 6.
Consents” in Appendix VI to this prospectus; and
(j) the PRC Company Law, the PRC Securities Law, Guidelines on the Bylaws of Listed
Companies (ˏ).
DOCUMENT A V AILABLE FOR INSPECTION
A list of grantees under the Employee Incentive Scheme 2024, containing all details as
required under the Listing Rules and the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, will be available for inspection at the office of O’Melveny & Myers, at 31/F, AIA
Central, 1 Connaught Road Central, Hong Kong during normal business hours up to and including
the date which is 14 days from the date of this prospectus.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
– VII-1 –


--- page 443 ---
可孚醫療科技股份有限公司
Cofoe Medical Technology Co., Ltd.*
